PEDRO SAN DIEGO, PETITIONER, VS. THE AUDITOR GENERAL, RESPONDENT.

Petitioner Pedro San Diego, a lieutenant colonel in the Armed Forces
of the Philippines, was retired from the service on March 8, 1948
pursuant to Section 22 (g) of Commonwealth Act No. 1, as amended, due
to physical disability, and received the corresponding’ lump sum
gratuity of P16,335.00.

From November 1, 1951 to October 15, 1953, he was employed by the
Philippine Council for United States Aid—hereinafter referred to as
Philcusa—as Purchasing Officer, at an annual compensation of P6,000.00.
On June 21, 1952, Republic Act No. 803, amending Sections 3 and 14 of
Republic Act No. 340, became effective to give certain servicemen the
right to choose between an increased lump sum gratuity, and a lifetime
monthly pension retroactive to the date of their separation from the
service. Exercising said right, petitioner elected and was granted the
latter option effective as of March 8, 1948, the date of his
retirement, and was forthwith given the accumulated pensions to which
he was entitled under the law, deducting therefrom the gratuity of
P16.335.00 received by him, as stated heretofore, under Section 22 (g)
of Commonwealth Act No. 1, as amended.

Respondent Auditor General, however, applying Section 7-1(9) of Commonwealth Act No. 246 and our ruling in Peralta vs.
Auditor General (100, Phil., 1051), withheld payment of petitioner’s
pensions corresponding to the period of his employment in the Philcusa
until and unless he refunded his Philcusa salary. Hence this appeal.

The issue to be resolved is whether or not petitioner may retain
that portion of the lump sum gratuity he had received upon retirement,
corresponding to the period of his employment with Philcusa—from
November 1, 1951 to October 15, 1953—without having to refund the
salary he received from the latter corresponding to the same period.

Petitioner claims that Section 7-1 (9) of Commonwealth Act No. 246, as amended, which provides the following:

“Compensation of persons receiving pension—A person
receiving life pension, annuity, or gratuity from the government of the
Commonwealth of the Philippines, or any province, city, municipality,
or other subdivision thereof, or from any government-owned or
controlled entity or enterprise, who is reappointed to any position the
appropriation for the salary of which is provided from funds of the
said Commonwealth Government or any province, city, municipality, or
other subdivision thereof, or from any government-owned or controlled
entity, or enterprise, shall have the option to receive either the
compensation for the position, or the pension, gratuity, or annuity;
but in no case shall he receive both”.

covers a case where the person who is to re-enter the government
service is actually receiving a pension. Inasmuch as when he was
employed by Philcusa he had already received a gratuity, and thereafter
received not a pension but the salary for the office to which he was
appointed, the prohibition does not apply to him.

We find petitioner’s contention to be without merit.

In the Peralta case, supra, We said, inter alia:

“So that a retired government officer or employee
who re-enters the service of the Government cannot receive both the
pension, annuity or gratuity and the compensation for the position upon
re-entering the Government service. He must elect between receiving the
pension, annuity, or gratuity and the compensation for the position
upon re-entering the service of the Government. Pension, annuity, or
gratuity is granted by the Government to its officers .and employees in
recognition of past services rendered, designed primarily to provide
for old age and disability of persons in its employment. Congress in
enacting Republic Act No. 340, known as the Armed Forces Retirement
Act, had this primordial aim in mind—to provide for old age and
disability, to encourage officers and enlisted men to render honest,
faithful and efficient service in the Armed Forces, Section 2 of the
said Act grants to a retiring officer or enlisted man of the Armed
Forces the option to choose between a lump-sum gratuity and an annual
retirement pay payable in monthly installments. To sustain the
petitioner’s theory that he could receive the full compensation
provided for the position upon re-entering the service of the
Government and keep the lump-sum gratuity which he had received,
because he has already spent it all and because he is not receiving a
life pension, a life annuity, or a life gratuity, would be contrary to
the above quoted provisions of Commonwealth Act No, 246, * * * so that
the gratuity paid to the petitioner in Hump sum comes under the above
quoted provisions of Commonwealth Act No. 246. To hold that upon
re-entering the government service those who receive retirement pay in
Installments must elect between the pension, annuity or gratuity and
the compensation because they cannot receive both; whereas, those who
have received it in lump sum may still receive the compensation for the
office or employment upon re-entering the.service, would be a clear
disregard of the prohibition to receive both the compensation and the
pension, annuity or gratuity,”

It is further argued that the option granted by Republic Act No. 803
mentioned above must be exercised upon re-entry into the Government
service, and that inasmuch as petitioner received his monthly
pension—after exercising the option—only after he had resigned from
Philcusa, he is not covered by the prohibition.

This is likewise untenable.

The obvious purpose of the law is to prevent the payment of
compensation and pension to any official or employee of the government
for the same period of time. The decisive factor is the fact that the
period for which pension is received or is due is identical to the
period for which salary is received. Under the law, the pensioner is
not entitled to have both the pension and the salary for that period
(Peralta vs. Auditor General supra).

Lastly, that petitioner was not receiving pension but had already
received it at the time of his employment with Philcusa makes no
difference. If the ruling applies to a case where the officer or
employee re-entering government service was actually receiving pension,
monthly or otherwise, it should apply, a fortiori, to the ease of an
officer or employee re-entering public service who had already received
in full the pension or gratuity to which. he was entitled under the law.

Wherefore, the ruling appealed from is affirmed, with costs.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera, Regala and Makalintal, JJ., concur.