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649 Phil. 610


[ G.R. No. 186560, November 17, 2010 ]




Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioner Government Service Insurance System (GSIS) seeks the nullification of the Decision[1] dated October 28, 2008 and the Resolution[2] dated February 18, 2009 of the Court of Appeals (CA) in CA-G.R.  SP No. 101811.

Respondent Fernando P. de Leon retired as Chief State Prosecutor of the Department of Justice (DOJ) in 1992, after 44 years of service to the government. He applied for retirement under Republic Act (R.A.) No. 910, invoking R.A. No. 3783, as amended by R.A. No. 4140, which provides that chief state prosecutors hold the same rank as judges. The application was approved by GSIS. Thereafter, and for more than nine years, respondent continuously received his retirement benefits, until 2001, when he failed to receive his monthly pension.[3]

Respondent learned that GSIS cancelled the payment of his pension because the Department of Budget and Management (DBM) informed GSIS that respondent was not qualified to retire under R.A. No. 910; that the law was meant to apply only to justices and judges; and that having the same rank and qualification as a judge did not entitle respondent to the retirement benefits provided thereunder. Thus, GSIS stopped the payment of respondent's monthly pension.[4]

Respondent wrote GSIS several letters but he received no response until November 9, 2007, when respondent received the following letter from GSIS:

Dear Atty. De Leon:

This is in response to your request for resumption of pension benefit.

It appears that you retired under Republic Act No. 910 in 1992 from your position as Chief State Prosecutor in the Department of Justice. From 1992 to 2001, you were receiving pension benefits under the said law. Beginning the year 2002, the Department of Budget and Management through then Secretary Emilia T. Boncodin already refused to release the funds for your pension benefit on the ground that Chief State Prosecutors are not covered by R.A. 910. This conclusion was later on affirmed by Secretary Rolando G. Andaya, Jr. in a letter dated 6 June 2006.

In view of these, you now seek to secure benefits under Republic Act No. 660 or any other applicable GSIS law.

We regret, however, that we cannot accede to your request because you have chosen to retire and in fact have already retired under a different law, Republic Act No. 910, more than fifteen (15) years ago. There is nothing in the GSIS law which sanctions double retirement unless the retiree is first re-employed and qualifies once again to retire under GSIS law. In fact, Section 55 of Republic Act No. 8291 provides for exclusivity of benefits which means that a retiree may choose only one retirement scheme available to him to the exclusion of all others.

Nonetheless, we believe that the peculiarities of your case is a matter that may be jointly addressed or threshed out by your agency, the Department of Justice, and the Department of Budget and Management.

Very truly yours,

Senior Vice President

Social Insurance Group[5]

Respondent then filed a petition for mandamus before the CA, praying that petitioner be compelled to continue paying his monthly pension and to pay his unpaid monthly benefits from 2001. He also asked that GSIS and the DBM be ordered to pay him damages.[6]

In the assailed October 28, 2008 Decision, the CA resolved to grant the petition, to wit:

WHEREFORE, the petition is GRANTED. The GSIS is hereby ordered to pay without delay petitioner Atty. Fernando de Leon, his monthly adjusted pension in accordance with other applicable law not under RA 910. It is also ordered to pay the back pensions which should also be adjusted to conform to the applicable law from the time his pension was withheld.


The CA found that GSIS allowed respondent to retire under R.A. No. 910, following precedents which allowed non-judges to retire under the said law.  The CA said that it was not respondent's fault that he was allowed to avail of the benefits under R.A. No. 910; and that, even if his retirement under that law was erroneous,  respondent was, nonetheless, entitled to a monthly pension under the GSIS Act.  The CA held that this was not a case of double retirement, but merely a continuation of the payment of respondent's pension benefit to which he was clearly entitled.  Since the error in the award of retirement benefits under R.A. 910 was not attributable to respondent, it was incumbent upon GSIS to continue defraying his pension in accordance with the appropriate law which might apply to him. It was unjust for GSIS to entirely stop the payment of respondent's monthly pension without providing any alternative sustenance to him.[8]

The CA further held that, under R.A. No. 660, R.A. No. 8291, and Presidential Decree (P.D.) No. 1146, respondent is entitled to a monthly pension for life.  He cannot be penalized for the error committed by GSIS itself.  Thus, although respondent may not be qualified to receive the retirement benefits under R.A. No. 910, he is still entitled to a monthly pension under R.A. No. 660, P.D. No. 1146, and R.A. No. 8291.[9]

Petitioner GSIS is now before this Court, assailing the Decision of the CA and the Resolution denying its motion for reconsideration.

GSIS admits that respondent received monthly pensions from August 1997 until December 2001. Thereafter, the DBM refused to remit the funds for respondent's pension on the ground that he was not entitled to retire under R.A. No. 910 and should have retired under another law, without however specifying which law it was.[10] It appears that the DBM discontinued the payment of respondent's pension on the basis of the memorandum of the Chief Presidential Legal Counsel that Chief Prosecutors of the DOJ are not entitled to the retirement package under R.A. No. 910.

Because of the discontinuance of his pension, respondent sought to convert his retirement under R.A. No. 910 to one under another law administered by GSIS.[11] However, this conversion was not allowed because, as GSIS avers, R.A. No. 8291 provides that conversion of one's retirement mode on whatever ground and for whatever reason is not allowed beyond one year from the date of retirement.

GSIS assails the CA's Decision for not specifying under which law respondent's retirement benefits should be paid, thus making it legally impossible for GSIS to comply with the directive.[12]  It then raises several arguments that challenge the validity of the appellate court's decision.

GSIS argues, first, that the CA erred in issuing a writ of mandamus despite the absence of any specific and clear right on the part of respondent, since he could not even specify the benefits to which he is entitled and the law under which he is making the claim.[13]

Second, GSIS alleges that it had refunded respondent's premium payments because he opted to retire under R.A. No. 910, which it does not administer. Thus, GSIS posits that the nexus between itself and respondent had been severed and, therefore, the latter cannot claim benefits from GSIS anymore.[14]

Third, GSIS contends that the CA erred in concluding that respondent would not be unjustly enriched by the continuation of his monthly pension because he had already benefited from having erroneously retired under R.A. No. 910. GSIS points out that it had refunded respondent's premium contributions. When the Chief Presidential Legal Counsel concluded that respondent was not entitled to retire under R.A. No. 910, it was implicit recognition that respondent was actually not entitled to the P1.2 million lump sum payment he received, which he never refunded.[15]

Fourth, GSIS points out that the CA erred in concluding that respondent was not seeking conversion from one retirement mode to another. It reiterates that R.A. No. 8291 expressly prohibits conversion beyond one year from retirement. To compel GSIS to release respondent's retirement benefits despite the fact that he is disqualified to receive retirement benefits violates R.A. No. 8291, and would subject its officials to possible charges under R.A. No. 3019, the Anti-Graft and Corrupt Practices Act.

Fifth, GSIS contends that respondent is not entitled to the retirement benefits under R.A. No. 8291 because, when he retired in 1992, the law had not yet been enacted. The retirement laws administered by GSIS at that time were R.A. No. 660, R.A. No. 1616, and P.D. No. 1146.

Lastly, GSIS argues that the writ of mandamus issued by the CA is not proper because it compels petitioner to perform an act that is contrary to law.

Respondent traverses these allegations, and insists that he has a clear legal right to receive retirement benefits under either R.A. No. 660 or P.D. No. 1146.[16] He claims that he has met all the conditions for entitlement to the benefits under either of the two laws.[17]  Respondent contends that the return of his contributions does not bar him from pursuing his claims because GSIS can require him to refund the premium contributions, or even deduct the amount returned to him from the retirement benefits he will receive.[18]  He also argues that resumption of his monthly pension will not constitute unjust enrichment because he is entitled to the same as a matter of right for the rest of his natural life.[19]

Respondent accepts that, contrary to the pronouncement of the CA, he is not covered by R.A. No. 8291.  He, therefore, asks this Court to modify the CA Decision, such that instead of Section 13 of R.A. No. 8291, it should be Section 12 of P.D. No. 1146 or Section 11 of R.A. No. 660 to be used as the basis of his right to receive, and the adjustment of, his monthly pension.

Furthermore, respondent argues that allowing him to retire under another law does not constitute "conversion" as contemplated in the GSIS law. He avers that his application for retirement under R.A. No. 910 was duly approved by GSIS, endorsed by the DOJ, and implemented by the DBM for almost a decade. Thus, he should not be made to suffer any adverse consequences owing to the change in the interpretation of the provisions of R.A. No. 910. Moreover, he could not have applied for conversion of his chosen retirement mode to one under a different law within one year from approval of his retirement application, because of his firm belief that his retirement under R.A. No. 910 was proper - a belief amply supported by its approval by GSIS, the favorable endorsement of the DOJ, and its implementation by the DBM.[20]

The petition is without merit.

Initially, we resolve the procedural issue.

GSIS contends that respondent's petition for mandamus filed before the CA was procedurally improper because respondent could not show a clear legal right to the relief sought.

The Court disagrees with petitioner.  The CA itself acknowledged that it would not indulge in technicalities to resolve the case, but focus instead on the substantive issues rather than on procedural questions.[21]  Furthermore, courts have the discretion to relax the rules of procedure in order to protect substantive rights and prevent manifest injustice to a party.

The Court has allowed numerous meritorious cases to proceed despite inherent procedural defects and lapses. Rules of procedure are mere tools designed to facilitate the attainment of justice.  Strict and rigid application of rules which would result in technicalities that tend to frustrate rather than to promote substantial justice must always be avoided.[22]

Besides, as will be discussed hereunder, contrary to petitioner's posture, respondent has a clear legal right to the relief prayed for.  Thus, the CA acted correctly when it gave due course to respondent's petition for mandamus.

This case involves a former government official who, after honorably serving office for 44 years, was comfortably enjoying his retirement in the relative security of a regular monthly pension, but found himself abruptly denied the benefit and left without means of sustenance.  This is a situation that obviously cries out for the proper application of retirement laws, which  are in the class of social legislation.

The inflexible rule in our jurisdiction is that social legislation must be liberally construed in favor of the beneficiaries.[23] Retirement laws, in particular, are liberally construed in favor of the retiree[24] because their objective is to provide for the retiree's sustenance and, hopefully, even comfort, when he no longer has the capability to earn a livelihood. The liberal approach aims to achieve the humanitarian purposes of the law in order that efficiency, security, and well-being of government employees may be enhanced.[25]  Indeed, retirement laws are liberally construed and administered in favor of the persons intended to be benefited, and all doubts are resolved in favor of the retiree to achieve their humanitarian purpose.[26]

In this case, as adverted to above, respondent was able to establish that he has a clear legal right to the reinstatement of his retirement benefits.

In stopping the payment of respondent's monthly pension, GSIS relied on the memorandum of the DBM, which, in turn, was based on the Chief Presidential Legal Counsel's opinion that respondent, not being a judge, was not entitled to retire under R.A. No. 910. And because respondent had been mistakenly allowed to receive retirement benefits under R.A. No. 910, GSIS erroneously concluded that respondent was not entitled to any retirement benefits at all, not even under any other extant retirement law. This is flawed logic.

Respondent's disqualification from receiving retirement benefits under R.A. No. 910 does not mean that he is disqualified from receiving any retirement benefit under any other existing retirement law.

The CA, however, incorrectly held that respondent was covered by R.A. No. 8291.  R.A. No. 8291 became a law after respondent retired from government service. Hence, petitioner and even respondent agree that it does not apply to respondent, because the law took effect after respondent's retirement.

Prior to the effectivity of R.A. No. 8291, retiring government employees who were not entitled to the benefits under R.A. No. 910 had the option to retire under either of two laws: Commonwealth Act No. 186, as amended by R.A. No. 660, or P.D. No. 1146.

In his Comment, respondent implicitly indicated his preference to retire under P.D. No. 1146, since this law provides for higher benefits, and because the same was the latest law at the time of his retirement in 1992.[27]

Under P.D. No. 1146, to be eligible for retirement benefits, one must satisfy the following requisites:

Section 11. Conditions for Old-Age Pension.

(a) Old-age pension shall be paid to a member who:

(1) has at least fifteen years of service;
(2) is at least sixty years of age; and
(3) is separated from the service.

Respondent had complied with these requirements at the time of his retirement. GSIS does not dispute this.  Accordingly, respondent is entitled to receive the benefits provided under Section 12 of the same law, to wit:

Section 12. Old-Age Pension.

(a) A member entitled to old-age pension shall receive the basic monthly pension for life but in no case for a period less than five years: Provided, That, the member shall have the option to convert the basic monthly pensions for the first five years into a lump sum as defined in this Act: Provided, further, That, in case the pensioner dies before the expiration of the five-year period, his primary beneficiaries shall be entitled to the balance of the amount still due to him. In default of primary beneficiaries, the amount shall be paid to his legal heirs.

To grant respondent these benefits does not equate to double retirement, as GSIS mistakenly claims.  Since respondent has been declared ineligible to retire under R.A. No. 910, GSIS should simply apply the proper retirement law to respondent's claim, in substitution of R.A. No. 910.  In this way, GSIS would be faithful to its mandate to administer retirement laws in the spirit in which they have been enacted, i.e., to provide retirees the wherewithal to live a life of relative comfort and security after years of service to the government. Respondent will not receive --- and GSIS is under no obligation to give him --- more than what is due him under the proper retirement law.

It must be emphasized that P.D. No. 1146 specifically mandates that a retiree is entitled to monthly pension for life.  As this Court previously held:

Considering the mandatory salary deductions from the government employee, the government pensions do not constitute mere gratuity but form part of compensation.

In a pension plan where employee participation is mandatory, the prevailing view is that employees have contractual or vested rights in the pension where the pension is part of the terms of employment. The reason for providing retirement benefits is to compensate service to the government. Retirement benefits to government employees are part of emolument to encourage and retain qualified employees in the government service. Retirement benefits to government employees reward them for giving the best years of their lives in the service of their country.

Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees' pension statute. No law can deprive such person of his pension rights without due process of law, that is, without notice and opportunity to be heard.[28]

It must also be underscored that GSIS itself allowed respondent to retire under R.A. No. 910, following jurisprudence laid down by this Court.

One could hardly fault respondent, though a seasoned lawyer, for relying on petitioner's interpretation of the pertinent retirement laws, considering that the latter is tasked to administer the government's retirement system. He had the right to assume that GSIS personnel knew what they were doing.

Since the change in circumstances was through no fault of respondent, he cannot be prejudiced by the same. His right to receive monthly pension from the government cannot be jeopardized by a new interpretation of the law.

GSIS' argument that respondent has already been enormously benefited under R.A. No. 910 misses the point.

Retirement benefits are a form of reward for an employee's loyalty and service to the employer, and are intended to help the employee enjoy the remaining years of his life, lessening the burden of having to worry about his financial support or upkeep. A pension partakes of the nature of "retained wages" of the retiree for a dual purpose: to entice competent people to enter the government service; and to permit them to retire from the service with relative security, not only for those who have retained their vigor, but more so for those who have been incapacitated by illness or accident.[29]

Surely, giving respondent what is due him under the law is not unjust enrichment.

As to GSIS' contention that what respondent seeks is conversion of his retirement mode, which is prohibited under R.A. No. 8291, the Court agrees with the CA that this is not a case of conversion within the contemplation of the law. The conversion under the law is one that is voluntary, a choice to be made by the retiree.  Here, respondent had no choice but to look for another law under which to claim his pension benefits because the DBM had decided not to release the funds needed to continue payment of his monthly pension.

Respondent himself admitted that, if the DBM had not suspended the payment of his pension, he would not have sought any other law under which to receive his benefits. The necessity to "convert" was not a voluntary choice of respondent but a circumstance forced upon him by the government itself.

Finally, GSIS would like this Court to believe that because it has returned respondent's premium contributions, it is now legally impossible for it to comply with the CA's directive.

Given the fact that respondent is ineligible to retire under R.A. No. 910, the refund by GSIS of respondent's premium payments was erroneous. Hence, GSIS can demand the return of the erroneous payment or it may opt to deduct the amount earlier received by respondent from the benefits which he will receive in the future. Considering its expertise on the matter, GSIS can device a scheme that will facilitate either the reimbursement or the deduction in the most cost-efficient and beneficial manner.

The foregoing disquisition draws even greater force from subsequent developments. While this case was pending, the Congress enacted Republic Act No. 10071,[30] the Prosecution Service Act of 2010.  On April 8, 2010, it  lapsed into law without the signature of the President,[31] pursuant to Article VI, Section 27(1) of the Constitution.[32]

Section 24 of R.A. No. 10071 provides:

Section 24. Retroactivity. - The benefits mentioned in Sections 14 and 16 hereof shall be granted to all those who retired prior to the effectivity of this Act.

By virtue of this express provision, respondent is covered by R.A. No. 10071. In addition, he is now entitled to avail of the benefits provided by Section 23, that "all pension benefits of retired prosecutors of the National Prosecution Service shall be automatically increased whenever there is an increase in the salary and allowance of the same position from which he retired."

Respondent, as former Chief State Prosecutor, albeit the position has been renamed "Prosecutor General,"[33] should enjoy the same retirement benefits as the Presiding Justice of the CA, pursuant to Section 14 of R.A. No. 10071, to wit:

Section 14. Qualifications, Rank and Appointment of the Prosecutor General. - The Prosecutor General shall have the same qualifications for appointment, rank, category, prerogatives, salary grade and salaries, allowances, emoluments, and other privileges, shall be subject to the same inhibitions and disqualifications, and shall enjoy the same retirement and other benefits as those of the Presiding Justice of the Court of Appeals and shall be appointed by the President.[34]

Furthermore, respondent should also benefit from the application of  Section 16 of the law, which states:

Section 16. Qualifications, Ranks, and Appointments of Prosecutors, and other Prosecution Officers. - x x x.

Any increase after the approval of this Act in the salaries, allowances or retirement benefits or any upgrading of the grades or levels thereof of any or all of the Justices or Judges referred to herein to whom said emoluments are assimilated shall apply to the corresponding prosecutors.

Lastly, and most importantly, by explicit fiat of R.A. No. 10071, members of the National Prosecution Service have been granted the retirement benefits under R.A. No. 910, to wit:

Section 25. Applicability. - All benefits heretofore extended under Republic Act No. 910, as amended, and all other benefits that may be extended by the way of amendment thereto shall likewise be given to the prosecutors covered by this Act.

Hence, from the time of the effectivity of R.A. No. 10071, respondent should be entitled to receive retirement benefits granted under R.A. No. 910.

Consequently, GSIS should compute respondent's retirement benefits from the time the same were withheld until April 7, 2010 in accordance with P.D. No. 1146; and his retirement benefits from April 8, 2010 onwards in accordance with R.A. No. 910.

A final note. The Court is dismayed at the cavalier manner in which GSIS handled respondent's claims, keeping respondent in the dark as to the real status of his retirement benefits for so long. That the agency tasked with administering the benefits of retired government employees could so unreasonably treat one of its beneficiaries, one who faithfully served our people for over 40 years, is appalling. It is well to remind GSIS of its mandate to promote the efficiency and welfare of the employees of our government, and to perform its tasks not only with competence and proficiency but with genuine compassion and concern.

WHEREFORE, the foregoing premises considered, the Decision dated October 28, 2008 and the Resolution dated February 18, 2009 of the Court of Appeals in CA-G.R. SP No. 101811 are hereby AFFIRMED WITH MODIFICATION.  Government Service Insurance System is   ORDERED to (1) pay respondent's retirement benefits in accordance with P.D. No. 1146, subject to deductions, if any, computed from the time the same were withheld until April 7, 2010; and (2) pay respondent's retirement benefits in accordance with R.A. No. 910, computed from April 8, 2010 onwards.

In order that respondent may not be further deprived of his monthly pension benefits, this Decision is IMMEDIATELY EXECUTORY.


Carpio, (Chairman), Peralta, Abad, and Villarama, Jr.*, JJ., concur.

* Additional member in lieu of Associate Justice Jose Catral Mendoza per Raffle dated January 11, 2010.

[1] Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Jose C. Mendoza (now a member of this Court) and Sesinando E. Villon, concurring; rollo, pp. 29-38.

[2] Id. at 40-47.

[3] Id. at 30.

[4] Id.

[5] Id. at 31-32.

[6] Id. at 32.

[7] Id. at 37-38.

[8] Id. at 35.

[9] Id. at 37.

[10] Id. at 15.

[11] Id.

[12] Id. at 12.

[13] Id. at 17.

[14] Id. at 19.

[15] Id. at 21.

[16] Id. at 78.

[17] Id.

[18] Id. at 81-82.

[19] Id. at 84.

[20] Id. at 85-86.

[21] Id. at 33.

[22] Vallejo v. Court of Appeals, 471 Phil. 670, 684 (2004). (Citations omitted.)

[23] See Buena Obra v. Social Security System, 449 Phil. 200 (2003).

[24]  Profeta v. Drilon, G.R. No. 104139, December 22, 1992, 216 SCRA 777.

[25] Department of Budget and Management v. Manila's Finest Retirees Association, Inc., G.R. No. 169466, May 9, 2007, 523 SCRA 90, 104, citing Request of Clerk of Court Tessie L. Gatmaitan, 372 Phil. 1, 7-8 (1999).

[26] Re:  Monthly Pension of Judges and Justices, A.M. No. 90-9-019-SC, October 4, 1990, 190 SCRA 315, 320.

[27] Rollo, p. 79.

[28] GSIS, Cebu City Branch v. Montesclaros, 478 Phil. 573, 583-584 (2004). (Citations omitted.)

[29] Conte v. Palma, 332 Phil. 20, 34-35 (1996). (Citations omitted.)

[30] An Act Strengthening and Rationalizing the National Prosecution Service.

[31] (visited on October 19, 2010).

[32] Section 27. (1) Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same he shall sign it; otherwise, he shall veto it and return the same with his objections to the House where it originated, which shall enter the objections at large in its Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it shall be sent, together with the objections, to the other House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members of that House, it shall become a law. In all such cases, the votes of each House shall be determined by yeas or nays, and the names of the Members voting for or against shall be entered in its Journal. The President shall communicate his veto of any bill to the House where it originated within thirty days after the date of receipt thereof, otherwise, it shall become a law as if he had signed it. (Emphasis supplied.)

[33] R.A. No. 10071, Sec. 17.

[34] Emphasis supplied.

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