CESAR SARMIENTO, PETITIONER, VS. THE INTERMEDIATE APPELLATE COURT, HON. REGINA G. ORDOÑEZ-BENITEZ, AS THE PRESIDING JUDGE OF BRANCH XLVII OF THE REGIONAL TRIAL OF MANILA, PHILIP…

Sarmiento versus Intermediate Appellate Court

The Case

This is a petition brought by Cesar Sarmiento against the Intermediate Appellate Court, now the Court of Appeals, and against two judges of the Regional Trial Court of Manila, Judge Regina Ordonez-Benitez and Judge Ricardo Diaz, together with his wife Norma Sarmiento as private respondent. The petition asks the Supreme Court to reverse the appellate court's dismissal of two separate petitions for certiorari and prohibition. In the first, Cesar questions the order of Judge Ordonez-Benitez freezing his retirement benefits with the Philippine National Bank pending the resolution of his wife's claim for support. In the second, he questions the default judgment of Judge Diaz awarding one half of those same retirement benefits to his wife. The case matters because it fixes the rule that retirement benefits are exempt from attachment, garnishment, execution, and every other legal process, and that they are the separate property of the retiree-spouse.

Procedural History

In the first case, Norma Sarmiento sued her husband Cesar for support in May 1977 before the Juvenile and Domestic Relations Court. After the reorganization of the judiciary in 1983, the case was assigned to Branch Forty-Seven of the Regional Trial Court of Manila, presided over by Judge Ordonez-Benitez. On March 1, 1984, that court rendered judgment ordering Cesar to pay monthly support. Norma moved for execution pending appeal, and Cesar filed a notice of appeal. On May 3, 1984, Judge Ordonez-Benitez issued an order directing the Philippine National Bank not to release any amount due Cesar without the court's authority. Cesar then filed a petition for certiorari and prohibition before the Intermediate Appellate Court, which denied the petition for lack of merit and dismissed the case. His motion for reconsideration was denied.

In the second case, Norma brought a separate action in August 1984 for a declaration that the retirement benefits due Cesar from the Philippine National Bank were conjugal and that one half belonged to her. The case was assigned to Branch Twenty-Seven of the Regional Trial Court of Manila, presided over by Judge Diaz. Cesar failed to appear at the pretrial conference, and the trial court declared him in default. On February 20, 1986, judgment was rendered ordering the bank to deliver one half of the retirement benefits to Norma and ordering Cesar to pay attorney's fees and costs. Cesar did not appeal but instead filed a petition for certiorari and prohibition, which the appellate court likewise dismissed. Both dismissals are now before the Supreme Court in this joint petition.

Facts

Norma Sarmiento sued her husband Cesar for support in May 1977. The case eventually reached Branch Forty-Seven of the Manila Regional Trial Court, which on March 1, 1984 ordered Cesar to pay five hundred pesos monthly as support, commencing from May 1977, with the monthly support from April 1984 onward to be deposited with the cashier of the Regional Trial Courts. The decision expressly provided that support shall be immediately payable notwithstanding any appeal.

Norma moved for execution pending appeal, and Cesar filed a notice of appeal. On May 3, 1984, Judge Ordonez-Benitez issued an order directing the Philippine National Bank to release no amount due Cesar without authority from the court until final disposition of the case. Later, Norma moved to require the bank to deliver the accrued support out of Cesar's retirement benefits as a former employee of the bank.

Meanwhile, in August 1984, Norma filed a second action seeking a declaration that the retirement benefits were conjugal and that one half belonged to her. Because Cesar failed to appear at the pretrial conference, he was declared in default, and judgment was rendered ordering the bank to deliver one half of the retirement benefits to Norma, and ordering Cesar to pay ten thousand pesos in attorney's fees and the costs of suit.

Issues

• Whether or not Cesar was justified in resorting to the extraordinary remedies of certiorari and prohibition after the trial court refused to give due course to his appeal.
• Whether or not the order of Judge Ordonez-Benitez directing the Philippine National Bank not to release the retirement benefits due Cesar without the court's authority is valid.
• Whether or not the default judgment of Judge Diaz ordering the bank to deliver one half of the retirement benefits to Norma is valid.

Applicable Provisions

Section 26 of Commonwealth Act Number 186, as amended, provides:

Section 26. Exemption from legal process and Liens. No policy of life insurance issued under this Act, or the proceeds thereof, when paid to any member thereunder, nor any other benefit granted under this Act, shall be liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of such member, or his beneficiary, or any other person who may have a right thereunder, either before or after payment; nor shall the proceeds thereof, when not made payable to a named beneficiary, constitute a part of the estate of the member for payment of his debt: Provided, however, That this section shall not apply when obligations or indebtedness to the System and the employer are concerned, nor when the retirement annuity is assigned to any person, corporation, association or bank or other financial institution, which is hereby authorized.

This provision is the basis for the Court's holding that retirement benefits cannot be frozen, attached, or delivered to satisfy a spouse's claim.

Article 148 of the Civil Code provides:

Article 148. In cases of doubt, all property acquired by the spouses during the marriage shall be presumed to be conjugal property.

The Court cites this provision in treating retirement benefits as a gratuity and thus the separate property of the retiree-spouse.

Ruling

On the first issue, the Court held that Cesar was not justified in resorting to certiorari and prohibition. Under the present rules, an appeal is perfected upon the expiration of the last day to appeal by the mere filing of a notice of appeal, and the approval of the court is not required. It is the appellant's duty to cause the clerk to transmit the record, and he cannot simply fold his arms and wait. Since appeal was available to Cesar and he had in fact initiated it but did not pursue it, certiorari and prohibition were not proper substitutes.

On the second issue, the Court found merit in Cesar's stand. The freeze order of Judge Ordonez-Benitez falls squarely within the restrictive provisions of Section 26 of Commonwealth Act Number 186, as amended, which speaks of any other benefit granted under the Act, of other process, and of any legal or equitable process or operation of law. The order clearly violates that provision and is therefore illegal and improper.

On the third issue, the Court held that the default judgment of Judge Diaz also comes within the prohibition, because in effect it is likewise a freeze order. The directive to deliver one half of the retirement benefits is doubly illegal, because retirement benefits have been adjudged as gratuities or reward for lengthy and faithful service and should be treated as the separate property of the retiree-spouse.

Doctrine

Retirement benefits granted under Commonwealth Act Number 186, as amended, are exempt from attachment, garnishment, execution, and every other legal or equitable process. No court may freeze them or order them delivered to satisfy the claim of a spouse. They are a gratuity and a reward for lengthy and faithful service, and as such they are the separate property of the retiree-spouse. Certiorari and prohibition are extraordinary remedies and cannot substitute for an appeal that was available and was in fact initiated but not pursued.

Disposition

The petitions were granted, and the records were remanded to the trial courts of origin for further proceedings.

Remember This

The single line worth memorizing is that retirement benefits are a gratuity and the separate property of the retiree-spouse, exempt from attachment, garnishment, and every other legal process. Examiners use this case to test the exemption of retirement benefits from execution and the rule that certiorari and prohibition cannot substitute for a lost appeal.