SSS LAW

SOCIAL SECURITY COMMISSION, petitioner, vs. EDNA A. AZOTE, respondent

FACTS: On June 19, 1992, respondent Edna and Edgardo, a member of
the Social Security System (SSS), were married in civil rites at the Regional Trial Court, Branch
9, Legazpi City, Albay (RTC). Their union produced six children born from 1985 to 1999. On
April 27, 1994, Edgardo submitted Form E-4 to the SSS with Edna and their three older
children as designated beneficiaries. Thereafter or on September 7, 2001, Edgardo submitted
another Form E-4 to the SSS designating his three younger children as additional
beneficiaries.
On January 13, 2005, Edgardo passed away. Shortly thereafter, Edna filed her claim for death
benefits with the SSS as the wife of a deceased-member. It appeared, however, from the SSS
records that Edgardo had earlier submitted another Form E-4 on November 5, 1982
with a different set of beneficiaries, namely: Rosemarie Azote (Rosemarie), as his spouse; and
Elmer Azote (Elmer), as dependent, born on October 9, 1982. Consequently, Edna's claim was
denied. Her children were adjudged as beneficiaries and she was considered as the legal
guardian of her minor children. The benefits, however, would be stopped once a child would
attain the age of 21.
On March 13, 2007, Edna filed a petition with the SSC to claim the death benefits, lump sum
and monthly pension of Edgardo. She insisted that she was the legitimate wife of Edgardo. In
its answer, the SSS averred that there was a conflicting information in the forms submitted by
the deceased. Summons was published in a newspaper of general circulation directing
Rosemarie to file her answer. Despite the publication, no answer was filed and Rosemarie was
subsequently declared in default.
In the Resolution, dated December 8, 2010, the SSC dismissed Edna's petition for lack of
merit. Citing Section 24 (c) of the SS Law, it explained that although Edgardo filed the Form E-
4 designating Edna and their six children as beneficiaries, he did not revoke the designation of
Rosemarie as his wife-beneficiary, and Rosemarie was still presumed to be his legal wife.
The SSC further wrote that the National Statistics Office (NSO) records revealed that the
marriage of Edgardo to one Rosemarie Teodora Sino was registered on July 28, 1982.
Consequently, it opined that Edgardo's marriage to Edna was not valid as there was no
showing that his first marriage had been annulled or dissolved. The SSC stated that there
must be a judicial determination of nullity of a previous marriage before a party could enter
into a second marriage.
In an order, dated June 8, 2011, the SSC denied Edna's motion for reconsideration. It
explained that it was incumbent upon Edna to prove that her marriage to the deceased was
valid, which she failed to do. It further opined that Rosemarie could not be merely presumed
dead, and that death benefits under the SSS could not be considered properties which may be
disposed of in a holographic will.
In the assailed August 13, 2013 Decision, the CA reversed and set aside the resolution and
the order of the SSC. It held that the SSC could not make determination of the validity or
invalidity of the marriage of Edna to Edgardo considering that no contest came from either
Rosemarie or Elmer. The CA explained that Edna had established her right to the benefits by
substantial evidence, namely, her marriage certificate and the baptismal certificates of her
children. It ruled that Edgardo made a deliberate change of his wife-beneficiary in his 1994 E-
4 form, as such was clearly his voluntary act manifesting his intention to revoke his former
declaration in the 1982 E-4 form. The 1994 E-4 form submitted by Edgardo,
designating Edna as his wife, superseded his former declaration in his 1982 E-4 form. Hence,
the present petition.

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ISSUE: Whether or not Edna Azote is entitled to the SSS death benefits as the wife
deceased member.
HELD: NO. The petition is meritorious. The law in force at the time of Edgardo's death was
Republic Act (R.A.) No. 8282, the amendatory law of R.A. No. 1161 or the
"Social Security Law." It is a tax-exempt social security service designed to
promote social justice and provide meaningful protection to members and their beneficiaries
against the hazards of disability, sickness, maternity, old age, death, and other contingencies
resulting in loss of income or financial burden. As a social security program of the
government, Section 8 (e) and (k) of the said law expressly provides who would be entitled to
receive benefits from its deceased-member, to wit: SEC. 8. Terms Defined. For purposes of
this Act, the following terms shall, unless the context indicates otherwise, have the following
meanings: (e) Dependents The dependents shall be the following: (1) The legal
spouse entitled by law to receive support from the member; (2) The legitimate, legitimated
or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has
not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is
congenitally or while still a minor has been permanently incapacitated and incapable of self-
support, physically or mentally; and (3) The parent who is receiving regular support from the
member.
(k) Beneficiaries The dependent spouse until he or she remarries, the dependent
legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary
beneficiaries of the member: Provided, That the dependent illegitimate children shall be
entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted
children: Provided, further, That in the absence of the dependent legitimate, legitimated
children of the member, his/her dependent illegitimate children shall be entitled to one
hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be
the secondary beneficiaries of the member. In the absence of all the foregoing, any other
person designated by the member as his/her secondary beneficiary. (Emphasis supplied)
Applying Section 8 (e) and (k) of R. A. No. 8282, it is clear that only the legal spouse of the
deceased-member is qualified to be the beneficiary of the latter's SS benefits. In this case,
there is a concrete proof that Edgardo contracted an earlier marriage with another individual
as evidenced by their marriage contract. Edgardo even acknowledged his married status
when he filled out the 1982 Form E-4 designating Rosemarie as his spouse.
It is undisputed that the second marriage of Edgardo with Edna was celebrated at the time
when the Family Code was already in force. Article 41 of the Family Code expressly states: Art.
41. A marriage contracted by any person during subsistence of a previous marriage shall
be null and void, unless before the celebration of the subsequent marriage, the prior spouse
had been absent for four consecutive years and the spouse present has a well-founded belief
that the absent spouse was already dead. In case of disappearance where there is danger
under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence
of only two years shall be sufficient.
For the purpose of contracting a subsequent marriage under the preceding paragraph, the
spouse present must institute a summary proceeding as provided in this Code for the
declaration of presumptive death of the absentee, without prejudice to the effect of
reappearance of the absent spouse.
Using the parameters outlined in Article 41 of the Family Code, Edna, without doubt, failed to
establish that there was no impediment or that the impediment was already removed at the
time of the celebration of her marriage to Edgardo. Settled is the rule that "whoever claims
entitlement to the benefits provided by law should establish his or her right thereto by
substantial evidence." Edna could not adduce evidence to prove that the earlier marriage of
Edgardo was either annulled or dissolved or whether there was a declaration of Rosemarie's
presumptive death before her marriage to Edgardo. What is apparent is that Edna was the
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second wife of Edgardo. Considering that Edna was not able to show that she was the legal
spouse of a deceased-member, she would not qualify under the law to be the beneficiary of
the death benefits of Edgardo.
The existence of two Form E-4s designating, on two different dates, two different women as
his spouse is already an indication that only one of them can be the legal spouse. As can be
gleaned from the certification issued by the NSO, there is no doubt that Edgardo married
Rosemarie in 1982. Edna cannot be considered as the legal spouse of Edgardo as their
marriage took place during the existence of a previously contracted marriage. For said reason,
the denial of Ednas claim by the SSC was correct. It should be emphasized that the SSC
determined Edna's eligibility on the basis of available statistical data and documents on their
database as expressly permitted by Section 4 (b) (7) of R.A. No. 8282.It is of no moment that
the first wife, Rosemarie, did not participate or oppose Edna's claim. Rosemarie's non-
participation or her subsequent death on November 11, 2004 did not cure or legitimize the
status of Edna.
SOCIAL SECURITY COMMISSION and SOCIAL SECURITY
SYSTEM, Petitioner, vs.TERESA G. FAVILA, Respondent.
FACTS: On August 5, 2002, respondent Teresa G. Favila (Teresa) filed a Petition 6 before
petitioner SSC docketed as SSC Case No. 8-15348-02. She averred therein that after she was
married to Florante Favila (Florante) on January 17, 1970, the latter designated her as the sole
beneficiary in the E-1 Form he submitted before petitioner Social Security System (SSS),
Quezon City Branch on June 30, 1970. When they begot their children Jofel, Floresa and
Florante II, her husband likewise designated each one of them as beneficiaries. Teresa further
averred that when Florante died on February 1, 1997, his pension benefits under the SSS were
given to their only minor child at that time, Florante II, but only until his emancipation at age
21. Believing that as the surviving legal wife she is likewise entitled to receive Florantes
pension benefits, Teresa subsequently filed her claim for said benefits before the SSS. The
SSS, however, denied the claim in a letter dated January 31, 2002, hence, the petition.
In its Answer, SSS averred that on May 6, 1999, the claim for Florantes pension benefits was
initially settled in favor of Teresa as guardian of the minor Florante II. Per its records, Teresa
was paid the monthly pension for a total period of 57 months or from February 1997 to
October 2001 when Florante II reached the age of 21. The claim was, however, re-adjudicated
on July 11, 2002 and the balance of the five-year guaranteed pension was again settled in
favor of Florante II.8 SSS also alleged that Estelita Ramos, sister of Florante, wrote a
letter9 stating that her brother had long been separated from Teresa. She alleged therein that
the couple lived together for only ten years and then decided to go their separate ways
because Teresa had an affair with a married man with whom, as Teresa herself allegedly
admitted, she slept with four times a week. SSS also averred that an interview conducted in
Teresas neighborhood in Tondo, Manila on September 18, 1998 revealed that although she
did not cohabit with another man after her separation with Florante, there were rumors that
she had an affair with a police officer. To support Teresas non-entitlement to the benefits
claimed, SSS cited the provisions of Sections 8(k) and 13 of Republic Act (RA) No. 1161, as
amended otherwise known as Social Security (SS) Law.
ISSUE: Whether or not Teresa is a primary beneficiary in contemplation of the
Social Security Law as to be entitled to death benefits accruing from the death of
Florence.
HELD: We find merit in the petition. The law in force at the time of Florantes death was RA
1161. Section 8 (e) and (k) of said law provides: Section 8. Terms Defined. For the purposes of
this Act, the following terms shall, unless the context indicates otherwise, have the following
meanings: (e) Dependent The legitimate, legitimated or legally adopted child who is
unmarried, not gainfully employed and not over twenty-one years of age, or over twenty-one
years of age, provided that he is congenitally incapacitated and incapable of self-support,
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physically or mentally; the legitimate spouse dependent for support upon the
employee; and the legitimate parents wholly dependent upon the covered employee for
regular support.
(k) Beneficiaries The dependent spouse until he remarries and dependent children, who
shall be the primary beneficiaries. In their absence, the dependent parents and, subject to the
restrictions imposed on dependent children, the legitimate descendants and illegitimate
children who shall be the secondary beneficiaries. In the absence of any of the foregoing, any
other person designated by the covered employee as secondary beneficiary.
From the above-quoted provisions, it is plain that for a spouse to qualify as a primary
beneficiary under paragraph (k) thereof, he/she must not only be a legitimate spouse but also
a dependent as defined under paragraph (e), that is, one who is dependent upon the member
for support. Paragraphs (e) and (k) of Section 8 of RA 1161 are very clear. "Hence, we need
only apply the law. Under the principles of statutory construction, if a statute is clear, plain
and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation. This plain meaning rule or verba legis, derived from the maxim index animo
sermo est (speech is the index of intention), rests on the valid presumption that the words
employed by the legislature in a statute correctly express its intent by the use of such words
as are found in the statute. Verba legis non est recedendum, or, from the words of a statute
there should be no departure.
Here, there is no question that Teresa was Florantes legal wife. What is at point, however, is
whether Teresa is dependent upon Florante for support in order for her to fall under the term
"dependent spouse" under Section 8(k) of RA 1161.What the SSC relies on in concluding that
Teresa was not dependent upon Florante for support during their separation for 17 years was
its findings that Teresa maintained an illicit relationship with another man. Teresa however
counters that such illicit relationship has not been sufficiently established and, hence, as the
legal wife, she is presumed to be continually dependent upon Florante for support.
We agree with Teresa that her alleged affair with another man was not sufficiently established.
The Memorandum of SSS Senior Analysts Liza Agilles and Jana Simpas reveals that it was
Florante who was in fact living with a common law wife, Susan Favila (Susan) and their three
minor children at the time of his death. Susan even filed her own claim for death benefits with
the SSS but same was, however, denied.
While SSC believes that the foregoing constitutes substantial evidence of Teresas amorous
relationship, we, however, find otherwise. It is not hard to see that Estelitas claim of Teresas
cohabitation with a married man is a mere allegation without proof. Likewise, the interviews
conducted by SSS revealed rumors only that Teresa had an affair with a certain police officer.
Notably, not one from those interviewed confirmed that such an affair indeed existed. "The
basic rule is that mere allegation is not evidence and is not equivalent to proof. Charges based
on mere suspicion and speculation likewise cannot be given credence." "Mere uncorroborated
hearsay or rumor does not constitute substantial evidence." Remarkably, the Memorandum
itself stated that there is not enough proof to establish Teresas alleged relationship with
another man since they did not live as husband and wife.
In this case, aside from Teresas bare allegation that she was dependent upon her husband for
support and her misplaced reliance on the presumption of dependency by reason of her valid
and then subsisting marriage with Florante, Teresa has not presented sufficient evidence to
discharge her burden of proving that she was dependent upon her husband for support at the
time of his death. She could have done this by submitting affidavits of reputable and
disinterested persons who have knowledge that during her separation with Florante, she does
not have a known trade, business, profession or lawful occupation from which she derives
income sufficient for her support and such other evidence tending to prove her claim of
dependency. While we note from the abovementioned SSS Memorandum that Teresa
submitted affidavits executed by Napoleon Favila and Josefina Favila, same only pertained to
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the fact that she never remarried nor cohabited with another man. On the contrary, what is
clear is that she and Florante had already been separated for about 17 years prior to the
latters death as Florante was in fact, living with his common law wife when he died. Suffice it
to say that "[w]hoever claims entitlement to the benefits provided by law should establish his
or her right thereto by substantial evidence." Hence, for Teresas failure to show that despite
their separation she was dependent upon Florante for support at the time of his death, Teresa
cannot qualify as a primary beneficiary.Hence, she is not entitled to the death benefits
accruing on account of Florantes death.
ROMARICO J. MENDOZA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.
FACTS: That sometime during the month of August 1998 to July 1999, in the City of Iligan,
Philippines, and within the jurisdiction of this Honorable Court, the said accused, being
then the proprietor of Summa Alta Tierra Industries, Inc., duly registered employer with the
Social Security System (SSS), did then and there willfully, unlawfully and feloniously fail and/or
refuse to remit the SSS premium contributions in favor of its employees amounting to
P421,151.09 to the prejudice of his employees. Contrary to and in violation of Sec. 22(a) and
(d) in relation to Sec. 28 of Republic Act No. 8282, as amended (emphasis and underscoring
supplied) The monthly premium contributions of SATII employees to SSS which petitioner
admittedly failed to remit covered the period August 1998 to July 1999 3amounting to
P421,151.09 inclusive of penalties.
After petitioner was advised by the SSS to pay the above-said amount, he proposed to settle it
over a period of 18 months which proposal the SSS approved by Memorandum of September
12, 2000. Despite the grant of petitioner's request for several extensions of time to settle the
delinquency in installments, petitioner failed, hence, his indictment. Petitioner sought to
exculpate himself by explaining that during the questioned period, SATII shut down due to the
general decline in the economy. Finding for the prosecution, the trial court, as reflected above,
convicted petitioner, disposing as follows: WHEREFORE, premises considered, the Court
finds Romarico J. Mendoza, guilty as charged beyond reasonable doubt. Accordingly,
he is hereby meted the penalty of 6 years and 1 day to 8 years. The accused is further
ordered to pay the Social Security System the unpaid premium contributions of his employees
including the penalties in the sum of P421, 151.09.
And as also reflected above, the Court of Appeals affirmed the trial court's decision, by
Decision of July March 5, 2007, it noting that the Social Security Act is a special law, hence,
lack of criminal intent or good faith is not a defense in the commission of the proscribed act.
The appellate court brushed aside petitioner's claim that he is merely a conduit of SATII and,
therefore, should not be held personally liable for its liabilities. It held that petitioner, as
President, Chairman and Chief Executive Officer of SATII, is the managing head who is liable
for the act or omission penalized under Section 28 (f) of the Social Security Act.
Petitioner contended in his motion for reconsideration that Section 28 (f) of the Act which
reads:(f) If the act or omission penalized by this Act be committed by an association,
partnership, corporation or any other institution, its managing head, directors or partners
shall be liable for the penalties provided in this Act for the offense. Should be interpreted as
follows: If an association, the one liable is the managing head; if a partnership, the ones liable
are the partners; and if a corporation, the ones liable are the directors. (Underscoring
supplied)The appellate court denied petitioner's motion, hence, the present petition for review
on certiorari.
Petitioner maintains, inter alia, that the managing head or president or general manager of a
corporation is not among those specifically mentioned as liable in the above-quoted Section
28 (f). And he calls attention to an alleged congenital infirmity in the Information in that he
was charged as "proprietor" and not as director of SATII. Further, petitioner claims that the
lower courts erred in penalizing him with six years and one day to eight years of
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imprisonment considering the mitigating and alternative circumstances present, namely: his
being merely vicariously liable; his good faith in failing to remit the contributions; his payment
of the premium contributions of SATII out of his personal funds; and his being economically
useful, given his academic credentials, he having graduated from a prime university in Manila
and being a reputable businessman.
ISSUE:
HELD: Remittance of contribution to the SSS under Section 22 (a) of the Social Security Act is
mandatory. United Christian Missionary Society v. Social Security Commission explicitly
explains: No discretion or alternative is granted respondent Commission in the enforcement of
the law's mandate that the employer who fails to comply with his legal obligation to
remit the premiums to the System within the prescribed period shall pay a penalty
of three 3% per month. The prescribed penalty is evidently of a punitive character,
provided by the legislature to assure that employers do not take lightly the State's
exercise of the police power in the implementation of the Republic's declared policy 'to
develop, establish gradually and perfect a social security system which shall be suitable to the
needs of the people throughout the Philippines and (to) provide protection to employers
against the hazards of disability, sickness, old age and death. In this concept, good faith
or bad faith is rendered irrelevant, since the law makes no distinction between an
employer who professes good reasons for delaying the remittance of premiums and another
who deliberately disregards the legal duty imposed upon him to make such remittance. From
the moment the remittance of premiums due is delayed, the penalty immediately
attaches to the delayed premium payments by force of law. Failure to comply with the
law being malum prohibitum, intent to commit it or good faith is immaterial.
The provision of the law being clear and unambiguous, petitioner's interpretation that a
"proprietor," as he was designated in the Information, is not among those specifically
mentioned under Sec. 28 (f) as liable, does not lie. For the word connotes management,
control and power over a business entity.
There is thus, as Garcia v. Social Security Commission Legal and Collection enjoins, . . . no
need to resort to statutory construction [for] Section 28(f) of the Social Security
Law imposes penalty on:(1) the managing head; (2) directors; or (3) partners, for offenses
committed by a juridical person.
The term "managing head" in Section 28 (f) is used, in its broadest connotation, not to any
specific organizational or managerial nomenclature. To heed petitioner's reasoning would
allow unscrupulous businessmen to conveniently escape liability by the creative adoption of
managerial titles.
The proper penalty for this specific offense committed by petitioner is, however, provided
in Section 28 (h) of the same Act which reads: Sec. 28. Penal Clause. (h) Any employer who
after deducting the monthly contributions or loan amortizations from his employee's
compensation, fails to remit the said deductions to the SSS within thirty (30) days from the
date they became due shall be presumed to have misappropriated such contributions or loan
amortizations and shall suffer the penalties provided in Article Three hundred fifteen
[Art. 315] of the Revised Penal Code.
Article 315 of the Revised Penal Code provides that the penalty in this case should
be:. . . prision correccional in its maximum period to prision mayor in its minimum period, if
the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if such
amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its
maximum period, adding one year for each additional 10,000 pesos; but the penalty which
may be imposed shall not exceed twenty years. In such cases, and in connection with the
accessory penalties which may be imposed and for the purpose of the other provisions of this
Code, the penalty shall be termed prision mayor or reclusion temporal, as the case may be;
6
Since the above-quoted Sec. 28 (h) of the Social Security Act (a special law) adopted the
penalty from the Revised Penal Code, the Indeterminate Sentence Law also finds application.
YOLANDA SIGNEY, petitioner, vs. SOCIAL SECURITY SYSTEM, EDITHA ESPINOSA-
CASTILLO, and GINA SERVANO, representative of GINALYN and
RODELYNSIGNEY, respondents.|||
FACTS: Rodolfo Signey, Sr., a member of the SSS, died on 21 May 2001. In his member's
records, he had designated Yolanda Signey (petitioner) as primary beneficiary and his four
children with her as secondary beneficiaries. On 6 July 2001, petitioner filed a claim for death
benefits with the public respondent SSS. She revealed in her SSS claim that the deceased
had a common-law wife, Gina Servano (Gina), with whom he had two minor children namely,
Ginalyn Servano (Ginalyn), born on 13 April 1996, and Rodelyn Signey (Rodelyn), born on 20
April 2000.
Petitioner's declaration was confirmed when Gina herself filed a claim for the same death
benefits on 13 July 2001 in which she also declared that both she and petitioner were
common-law wives of the deceased and that Editha Espinosa (Editha) was the legal wife .In
addition, in October 2001, Editha also filed an application for death benefits with the SSS
stating that she was the legal wife of the deceased.
The SSS, through a letter dated 4 December 2001, denied the death benefit claim of
petitioner. However, it recognized Ginalyn and Rodelyn, the minor children of the deceased
with Gina, as the primary beneficiaries under the SSS Law. The SSS also found that the 20
March 1992 marriage between petitioner and the deceased was null and void because of a
prior subsisting marriage contracted on 29 October 1967 between the deceased and Editha,
as confirmed with the Local Civil Registry of Cebu City.
Thereafter, petitioner filed a petition with the SSC in which she attached a waiver of
rights executed by Editha whereby the latter waived "any/all claims from National Trucking
Forwarding Corporation (NTFC) under the supervision of National Development Corporation
(NDC), Social Security System (SSS) and other (i)nsurance (b)enefits due to the deceased
Rodolfo Signey Sr., who died intestate on May 21, 2001 at Manila Doctors," and further
declared that "I am legally married to Mr. Aquilino Castillo and not to Mr. Rodolfo P. Signey Sr."
In a Resolution dated 29 January 2003, the SSC affirmed the decision of the SSS. The SSC
gave more weight to the SSS field investigation and the confirmed certification of marriage
showing that the deceased was married to Editha on 29 October 1967, than to the aforestated
declarations of Editha in her waiver of rights. It found that petitioner only relied on the waiver
of Editha, as she failed to present any evidence to invalidate or otherwise controvert the
confirmed marriage certificate. The SSC also found, based on the SSS field investigation
report dated 6 November 2001 that even if Editha was the legal wife, she was not qualified to
the death benefits since she herself admitted that she was not dependent on her deceased
husband for support inasmuch as she was cohabiting with a certain Aquilino Castillo.
Considering that petitioner, Editha, and Gina were not entitled to the death benefits, the SSC
applied Section 8 (e) and (k) of Republic Act (RA) No. 8282, the SSS Law which was in force at
the time of the member's death on 21 May 2001, and held that the dependent legitimate and
illegitimate minor children of the deceased member were also considered primary
beneficiaries. The records disclosed that the deceased had one legitimate child, Ma.
Evelyn Signey, who predeceased him, and several illegitimate children with petitioner and
with Gina. Based on their respective certificates of live birth, the deceased SSS member's four
illegitimate children with petitioner could no longer be considered dependents at the time of
his death because all of them were over 21 years old when he died on 21 May 2001, the
youngest having been born on 31 March 1978. On the other hand, the deceased SSS
member's illegitimate children with Gina were qualified to be his primary beneficiaries for

7
they were still minors at the time of his death, Ginalyn having been born on 13 April 1996,
and Rodelyn on 20 April 2000.
ISSUE: Whether or not petitioner has a superior legal right over the SSS benefits as
against the illegitimate minor children of the deceased
HELD: NO. As to the issue of who has the better right over the SSS death benefits, Section 8
(e) and (k) of R.A. No. 8282 is very clear. Hence, we need only apply the law. Under the
principles of statutory construction, if a statute is clear, plain and free from ambiguity, it must
be given its literal meaning and applied without attempted interpretation. This plain meaning
rule or verba legis, derived from the maxim index animi sermo est (speech is the index of
intention), rests on the valid presumption that the words employed by the legislature in a
statute correctly express its intent by the use of such words as are found in the statute. Verba
legis non est recedendum, or, from the words of a statute there should be no departure.
Section 8 (e) and (k) of R.A. No. 8282 provides: SEC. 8. Terms Defined. For the purposes of
this Act, the following terms shall, unless the context indicates otherwise, have the following
meanings:(e) Dependents The dependent shall be the following:(1) The legal spouse
entitled by law to receive support from the member;2) The legitimate, legitimated, or
legally adopted, and illegitimate child who is unmarried, not gainfully employed and
has not reached twenty-one years (21) of age, or if over twenty-one (21) years of age,
he is congenitally or while still a minor has been permanently incapacitated and incapable of
self-support, physically or mentally; and 3) The parent who is receiving regular support from
the member.
(k) Beneficiaries The dependent spouse until he or she remarries, the dependent
legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary
beneficiaries of the member: Provided, That the dependent illegitimate children shall be
entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted
children: Provided, further, That in the absence of the dependent legitimate, legitimated or
legally adopted children of the member, his/her dependent illegitimate children shall be
entitled to one hundred percent (100%) of the benefits. In their absence, the dependent
parents who shall be the secondary beneficiaries of the member. In the absence of all of
the foregoing, any other person designated by the member as his/her secondary
beneficiary.
SEC. 13. Death Benefits. Upon the death of a member who has paid at least thirty-six (36)
monthly contributions prior to the semester of death, his primary beneficiaries shall be
entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his
secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36)
times the monthly pension. If he has not paid the required thirty-six (36) monthly
contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit
equivalent to the monthly pension times the number of monthly contributions paid to the SSS
or twelve (12) times the monthly pension, whichever is higher. (Emphasis supplied).
Whoever claims entitlement to the benefits provided by law should establish his or her right
thereto by substantial evidence. Since petitioner is disqualified to be a beneficiary and
because the deceased has no legitimate child, it follows that the dependent illegitimate minor
children of the deceased shall be entitled to the death benefits as primary beneficiaries. The
SSS Law is clear that for a minor child to qualify as a "dependent," the only requirements are
that he/she must be below 21 years of age, not married nor gainfully employed.
In this case, the minor illegitimate children Ginalyn and Rodelyn were born on 13 April 1996
and 20 April 2000, respectively. Had the legitimate child of the deceased and Editha survived
and qualified as a dependent under the SSS Law, Ginalyn and Rodelyn would have been
entitled to a share equivalent to only 50% of the share of the said legitimate child. Since the

8
legitimate child of the deceased predeceased him, Ginalyn and Rodelyn, as the only qualified
primary beneficiaries of the deceased, are entitled to 100% of the benefits.

SOCIAL SECURITY SYSTEM, petitioner, vs. TERESITA JARQUE VDA. DE

BAILON, respondent.|||
FACTS: On April 25, 1955, Clemente G. Bailon (Bailon) and Alice P. Diaz (Alice) contracted
marriage in Barcelona, Sorsogon. More than 15 years later or on October 9, 1970, Bailon filed
before the then Court of First Instance (CFI) of Sorsogon a petition to declare Alice
presumptively dead.
By Order of December 10, 1970, the CFI granted the petition, disposing as follows:
WHEREFORE, there being no opposition filed against the petition notwithstanding the
publication of the Notice of Hearing in a newspaper of general circulation in the country, Alice
Diaz is hereby declared to [sic] all legal intents and purposes, except for those of
succession, presumptively dead. Close to 13 years after his wife Alice was declared
presumptively dead or on August 8, 1983, Bailon contracted marriage with
Teresita Jarque (respondent) in Casiguran, Sorsogon.
On January 30, 1998, Bailon, who was a member of the Social Security System (SSS) since
1960 and a retiree pensioner thereof effective July 1994, died. Respondent thereupon filed a
claim for funeral benefits, and was granted P12,000 by the SSS. Respondent filed on March
11, 1998 an additional claim for death benefits which was also granted by the SSS on April 6,
1998.
Cecilia Bailon-Yap (Cecilia), who claimed to be a daughter of Bailon and one Elisa Jayona
(Elisa) contested before the SSS the release to respondent of the death and funeral benefits.
She claimed that Bailon contracted three marriages in his lifetime, the first with Alice, the
second with her mother Elisa, and the third with respondent, all of whom are still alive; she,
together with her siblings, paid for Bailon's medical and funeral expenses; and all the
documents submitted by respondent to the SSS in support of her claims are spurious.
In support of her claim, Cecilia and her sister Norma Bailon Chavez (Norma) submitted an
Affidavit dated February 13, 1999 verring that they are two of nine children of Bailon and Elisa
who cohabited as husband and wife as early as 1958; and they were reserving their right to
file the necessary court action to contest the marriage between Bailon and respondent as
they personally know that Alice is "still very much alive."
Atty. Marites C. de la Torre of the Legal Unit of the SSS Bicol Cluster, Naga City recommended
the cancellation of payment of death pension benefits to respondent and the issuance of an
order for the refund of the amount paid to her from February 1998 to May 1999 representing
such benefits; the denial of the claim of Alice on the ground that she was not dependent upon
Bailon for support during his lifetime; and the payment of the balance of the five-year
guaranteed pension to Bailon's beneficiaries according to the order of preference provided
under the law, after the amount erroneously paid to respondent has been collected.
In a separate letter dated September 7, 1999, the SSS advised respondent of the cancellation
of her monthly pension for death benefits in view of the opinion rendered by its legal
department that her marriage with Bailon was void as it was contracted while the latter's
marriage with Alice was still subsisting; and the December 10, 1970 CFI Order declaring Alice
presumptively dead did not become final, her "presence" being "contrary proof" against the
validity of the order. It thus requested respondent to return the amount of P24,000
representing the total amount of monthly pension she had received from the SSS from
February 1998 to May 1999.
In the meantime, respondent informed the SSS that she was returning, under protest, the
amount of P12,000 representing the funeral benefits she received, she alleging that Norma

9
and her siblings "forcibly and coercively prevented her from spending any amount during
Bailon's wake." After the SSS filed its Answer to respondent's petition, and the parties filed
their respective Position Papers, one Alicia P. Diaz filed an Affidavit dated August 14, 2002
with the SSS Naga Branch attesting that she is the widow of Bailon; she had only recently
come to know of the petition filed by Bailon to declare her presumptively dead; it is not true
that she disappeared as Bailon could have easily located her, she having stayed at her
parents' residence in Barcelona, Sorsogon after she found out that Bailon was having an
extramarital affair; and Bailon used to visit her even after their separation.
ISSUE: Whether or not the mere appearance of the absent spouse declared
presumptively dead automatically terminates the subsequent marriage.
HELD: Under the foregoing provision of the Civil Code, a subsequent marriage contracted
during the lifetime of the first spouse is illegal and void ab initio unless the prior marriage is
first annulled or dissolved or contracted under any of the three exceptional circumstances. It
bears noting that the marriage under any of these exceptional cases is deemed valid "until
declared null and void by a competent court." It follows that the onus probandi in these cases
rests on the party assailing the second marriage. In the case at bar, as found by the CFI, Alice
had been absent for 15 consecutive years when Bailon sought the declaration of her
presumptive death, which judicial declaration was not even a requirement then for purposes
of remarriage.
Under the Civil Code, a subsequent marriage being voidable, it is terminated by final
judgment of annulment in a case instituted by the absent spouse who reappears or by either
of the spouses in the subsequent marriage.
Under the Family Code, no judicial proceeding to annul a subsequent marriage is necessary.
Thus Article 42 thereof provides:Art. 42. The subsequent marriage referred to in the preceding
Article shall be automatically terminated by the recording of the affidavit of
reappearance of the absent spouse, unless there is a judgment annulling the previous
marriage or declaring it void ab initio.
A sworn statement of the fact and circumstances of reappearance shall be recorded in the
civil registry of the residence of the parties to the subsequent marriage at the instance of any
interested person, with due notice to the spouses of the subsequent marriage and
without prejudice to the fact of reappearance being judicially determined in case such fact is
disputed. The termination of the subsequent marriage by affidavit provided by the above-
quoted provision of the Family Code does not preclude the filing of an action in court to prove
the reappearance of the absentee and obtain a declaration of dissolution or termination of the
subsequent marriage.
If the absentee reappears, but no step is taken to terminate the subsequent marriage, either
by affidavit or by court action, such absentee's mere reappearance, even if made known to
the spouses in the subsequent marriage, will not terminate such marriage. Since the second
marriage has been contracted because of a presumption that the former spouse is dead, such
presumption continues inspite of the spouse's physical reappearance, and by fiction of law, he
or she must still be regarded as legally an absentee until the subsequent marriage is
terminated as provided by law.
It bears reiterating that a voidable marriage cannot be assailed collaterally except in a direct
proceeding. Consequently, such marriages can be assailed only during the lifetime of the
parties and not after the death of either, in which case the parties and their offspring will be
left as if the marriage had been perfectly valid. Upon the death of either, the marriage cannot
be impeached, and is made good ab initio. In the case at bar, as no step was taken to nullify,
in accordance with law, Bailon's and respondent's marriage prior to the former's death in
1998, respondent is rightfully the dependent spouse-beneficiary of Bailon.

10
PICOP RESOURCES, INC., petitioner, vs. SOCIAL SECURITY COMMISSION and MATEO
A. BELIZAR, respondents
FACTS: On October 28, 2004, herein respondent Mateo A. Belizar (Belizar) filed SSC Case No.
11-15788-04 before the Social Security Commission (SSC), his co-respondent in this Petition,
to establish his actual period of employment with herein petitioner PICOP Resources,
Inc. 6 and compel the latter to remit unpaid Social Security System (SSS) premium
contributions, in order that he may collect his SSS retirement benefits
Petitioner was continuously employed as a preventive maintenance mechanic by respondent
Bislig Bay Lumber Co., Inc./PICOP from 1966 to 1978. This finding is moored primarily on the
positive and straightforward testimonies of the petitioner's witnesses, namely: Ramon A.
Osaraga, and his brother, Anastacio Belizar, who, being co-employees of the petitioner within
the same department of the respondent company, testified on the basis of their personal
knowledge that the petitioner was, indeed, continuously employed by the respondent
company during the said period.
Thus, in the petitioner's case, his work as a Preventive Maintenance Mechanic from 1966 to
1978 at the mechanical and electrical section and/or light and heavy equipment department
of the respondent company, which to date is engaged in the industry of paper production on a
mammoth scale, is both necessary and desirable in the latter's usual trade or business.
Despite the designation by the respondent of the petitioner's position in the certifications of
employment that it issued as a mere "casual Mechanic Helper" and/or Casual Mechanic I, the
repeated and continuous need for his services constitutes evidence of the necessity and
indispensability of his services to the respondent and on the basis of the aforementioned legal
authorities, his employment is regarded as regular.
Considering that the respondent only remitted 22 monthly SS contributions for and in behalf
of the petitioner despite his continuous employment from November 1966 to December 1978,
the respondent is liable to pay the unremitted SS contributions corresponding to the said
period, as well as the 3% per month penalty imposed thereon for late payment until fully paid,
pursuant to Section 22(a) of R.A. No. 8282 or the Social Security Act of 1997. Moreover, since
the petitioner has reached the retirement age of sixty (60) on October 9, 2001, it appearing in
his SSS records that he was born on October 9, 1941, the respondent is also liable to pay
damages pursuant to Section 24(b) of the same law for failure to remit any contribution due
prior to the date of contingency resulting into the reduction of benefits equivalent to the
difference between the amount of benefit to which the employee member or his beneficiary is
entitled to receive had the proper contributions been remitted to the SSS and the amount
payable on the basis of the contributions actually remitted. WHEREFORE, PREMISES
CONSIDERED, the Commission finds, and so holds, that respondent PICOP RESOURCES, INC. is
liable to pay the SSS, within thirty (30) days from receipt hereof.
In a Petition for Review filed with the CA and docketed as CA-G.R. SP No. 110724, petitioner
sought reversal of the above SSC dispositions, arguing that the latter committed grave abuse
of discretion in declaring that Belizar was employed by it until 1978, and in giving more
weight to Belizar's testimonial evidence instead of its documentary evidence.
ISSUE: WHETHER OR NOT petitioner avail of the provisions of RA 9903
HELD: NO. RA 9903, or the Social Security Condonation Law of 2009, provides: Section
2. Condonation of Penalty. Any employer who is delinquent or has not remitted all
contributions due and payable to the Social Security System (SSS), including those with
pending cases either before the Social Security Commission, courts or Office of the Prosecutor
involving collection of contributions and/or penalties, may within six (6) months from the
effectivity of this Act: (a) remit said contributions; (b) submit a proposal to pay the same in
installments, subject to the implementing rules and regulations which the Social Security
Commission may prescribe: Provided, That the delinquent employer submits the
11
corresponding collection lists together with the remittance or proposal to pay installments:
Provided, further, That upon approval and payment in full or in installments of contributions
due and payable to the SSS, all such pending cases filed against the employer shall be
withdrawn without prejudice to the refiling of the case in the event the employer fails to remit
in full the required delinquent contributions or defaults in the payment of any installment
under the approved proposal.
In order to avail of the benefits under the said law, the employer must pay " all contributions
due and payable" to the SSS, and not merely a portion thereof. In petitioner's case, it paid
only the delinquent contributions corresponding to Belizar's account.
Had the PRI applied for condonation of penalties under R.A. No. 9903 involving only
one employee, Mateo Belizar, the same would be deniedconsidering that the
availment of the condonation of penalty program under R.A. 9903 should be for all
employees of the delinquent employer.
SSS Circular No. 2010-004, Series of 2010, which provides for the implementing rules and
regulations of RA 9903, states that "[a]ny employer who is delinquent or has not
remitted all contributions due and payable to the SSS may avail of" the condonation program
under the law. In order to be covered by the program, the employer must a) "[r]emit within
the period of the Program the full amount of the delinquent contributions through
any SSS Branch with tellering facility or authorized collection agents of the SSS e.g., banks,
payment centers," or b) "[s]ubmit a proposal . . . within the period of the Program to
pay the delinquent contributions in installment to the SSS Branch having jurisdiction
over its place of business or household address." 23 It would appear from the February 28,
2013 Certification issued by the SSS Bislig City Branch that petitioner failed to pay the full
amount of its delinquent contributions; nor did it submit a proposal to pay the same in
installments. Therefore, petitioner has not placed itself under the coverage of RA 9903.
"The clear intent of the law is to grant condonation only to employers with delinquent
contributions or pending cases for their delinquencies and who pay their delinquencies within
the six (6)-month period set by the law." It was never the intention of RA 9903 to give the
employer the option of remitting and settling only some of its delinquencies, and not all; of
paying the lowest outstanding delinquencies and ignoring the most burdensome; of choosing
the course of action most beneficial to it, while leaving its employees and government to
enjoy the least desirable outcome. If this were so, then the purpose of the law would be
defeated.
To repeat, the clear implication of the February 28, 2013 SSS Certification is that petitioner did
not settle its delinquencies in full. Well into the present proceedings, petitioner has failed to
disprove such fact. For this reason, it cannot avail of the benefits under RA 9903. "Laws
granting condonation constitute an act of benevolence on the government's part, similar to
tax amnesty laws; their terms are strictly construed against the applicants." If petitioner
desires to be covered under RA 9903, it must show that it is qualified to avail of its provisions.
This it failed to do, and for this reason, it may not escape payment of its adjudged liabilities
under the SSC's February 4, 2009 Resolution.
Having gone into the very heart of the case and resolved the main issue that needed to be
addressed, the Court finds no need to dwell on the other matters raised by the parties. The
resolution thereof cannot alter the inevitable outcome; on the other hand, these issues have
become unessential and irrelevant. Since this Court has declared that petitioner did not
qualify for availment of the provisions of RA 9903, it must therefore answer for its adjudged
liabilities as determined by the SSC in its February 4, 2009 Resolution.
GSIS LAW

12
GERSIP ASSOCIATION, INC., LETICIA ALMAZAN, ANGELA NARVAEZ, MARIA B.
PINEDA, LETICIA DE MESA AND ALFREDO D. PINEDA, petitioners, vs. GOVERNMENT
SERVICE INSURANCE SYSTEM, respondent.|||
FACTS: Respondent GSIS is a social insurance institution created under Commonwealth Act
No. 186, tasked with providing and administering a pension fund for government employees
and managing the General Insurance Fund. On March 19, 1981, the GSIS Board of Trustees
(GSIS Board) approved the proposed GSIS Provident Fund Plan (Plan) to provide
supplementary benefits to GSIS employees upon their retirement, disability or separation from
the service, and payment of definite amounts to their beneficiaries in the event of death. It
likewise adopted the "Provident Fund Rules and Regulations" (PFRR) which became effective
on April 1, 1981.
Under the Plan, employees who are members of the Provident Fund (Fund) contribute through
salary deduction a sum equivalent to five percent (5%) of their monthly salary while
respondent's monthly contribution is fixed at 45% of each member's monthly salary. A
Committee of Trustees (Committee) appointed by respondent administers the Fund by
investing it "in a prudent manner to ensure the preservation of the Fund capital and the
adequacy of its earnings."
Out of the earnings realized by the Fund, twenty percent (20%) of the proportionate earnings
of respondent's contributions is deducted and credited to a General Reserve Fund (GRF) and
the remainder is credited to the accounts of the members in proportion to the amounts
standing to their credit at the beginning of each quarter. Upon retirement, members are
entitled to withdraw the entire amount of their contributions and proportionate share of the
accumulated earnings thereon, and 100% of respondent's contributions with its proportionate
earnings.
On March 30, 2001, petitioner GERSIP Association, Inc. (GERSIP), composed of retired GSIS
employees and officers, wrote the President and General Manager of respondent requesting
the liquidation and partition of the GRF. In his letter-reply dated August 14, 2001, then
President and General Manager Winston F. Garcia explained that there exists a trust relation
rather than co-ownership with respect to the Fund. He stressed that the PFRR authorizes a
reduction of 20% earnings for the GRF, not a total liquidation of the fund itself. Moreover, the
GRF, being an integral part of the Fund, must be maintained as a general policy to serve its
purpose of providing supplementary benefits to retired, separated and disabled GSIS
employees and, in the event of death, payment of definite amounts to their beneficiaries.
On October 27, 2004, the GSIS Board denied the petition for lack of merit. It held that the
execution of the Trust Agreement between respondent and the Committee is a clear indication
that the parties intended to establish an express trust, not a co-ownership, with respondent as
Trustor, the Committee as Trustee of the Fund and the members as Beneficiaries. As to the
GRF, the Board said that it answers only for the contingent claims mentioned in Section 8,
Article IV and there is no requirement in the PFRR for the accounting and partition of GRF.
ISSUE: Resolution of the present controversy hinges on the determination of the
nature of the funds contributed and its accumulated earnings under the Plan.
HELD: A provident fund is a type of retirement plan where both the employer and employee
make fixed contributions. Out of the accumulated fund and its earnings, employees receive
benefits upon their retirement, separation from service or disability.
The GSIS Provident Fund was established through Resolution No. 201 of the GSIS Board. The
GSIS Board likewise adopted a set of rules and regulations (PFRR) to govern the membership,
fund contributions and investment, payment of benefits and the trustees.
Respondent's contention that it had thereby created an express trust was upheld by the GSIS
Board and the CA. The appellate court further ruled that the rules on co-ownership do not
13
apply and there is nothing in the PFRR that allows the distribution of the GRF in proportion to
the members' share therein. We sustain the rulings of the GSIS Board and CA.
Trust is the legal relationship between one person having an equitable ownership in property
and another person owning the legal title to such property, the equitable ownership of the
former entitling him to the performance of certain duties and the exercise of certain powers
by the latter. A trust fund refers to money or property set aside as a trust for the benefit of
another and held by a trustee. Under the Civil Code, trusts are classified as either express or
implied. An express trust is created by the intention of the trustor or of the parties, while an
implied trust comes into being by operation of law.
There is no doubt that respondent intended to establish a trust fund from the employees'
contributions (5% of monthly salary) and its own contributions (45% of each member's
monthly salary and all unremitted Employees Welfare contributions). We cannot accept
petitioners' submission that respondent could not impose terms and conditions on the
availment of benefits from the Fund on the ground that members already own respondent's
contributions from the moment such was remitted to their account. Petitioners' assertion that
the Plan was a purely contractual obligation on the part of respondent is likewise mistaken.
Republic Act No. 8291, otherwise known as "The Government Service Insurance System Act of
1997," mandated respondent to maintain a provident fund subject to rules and regulations it
may adopt. Thus: SECTION 41. Powers and Functions of the GSIS. The GSIS shall exercise
the following powers and functions:(s) to maintain a provident fund, which consists of
contributions made by both the GSIS and its officials and employees and their earnings, for
the payment of benefits to such officials and employees or their heirs under such terms
and conditions as it may prescribe;
Here, petitioners as beneficiaries of the Fund contend that they became co-owners of the
entire Fund including respondent's contributions and its accumulated earnings. On this
premise, they demand a proportionate share in the GRF which was deducted from the
earnings on respondents' contributions.
Under the PFRR, however, the GRF is allocated for specific purposes and not intended for
distribution to members. Section 8, Article IV thus provides: Section 8. Earnings. At the
beginning of each quarter, the earnings realized by the Fund in the previous quarter just
ended shall be credited to the accounts of the members in proportion to the amounts
standing to their credit as of the beginning of the same quarter after deducting therefrom
twenty per cent (20%) of the proportionate earnings of the System's contributions, which
deduction shall be credited to a General Reserve Fund. Whenever circumstances warrant,
however, the Committee may reduce the percentage to be credited to the General Reserve
Fund for any given quarter; provided that in no case shall such percentage be lower than five
per cent (5%) of the proportionate earnings of the System's contributions for the quarter.
When and as long as the total amount in the General Reserve Fund is equivalent to at least
ten per cent (10%) of the total assets of the Fund, the Committee may authorize all the
earnings for any given quarter to be credited to the members.
The General Reserve Fund shall be used for the following purposes:(a) To cover the deficiency,
if any, between the amount standing to the credit of a member who dies or is separated from
the service due to permanent and total disability, and the amount due him under Article V,
Section 4; (b) To make up for any investment losses and write-offs of bad debts, in
accordance with policies to be promulgated by the Board; (c) To pay the benefits of separated
employees in accordance with Article IV, Section 3; and (d) For other purposes as may be
approved by the Board, provided that such purposes is consistent with Article IV, Section 4.
It is clear that while respondent's monthly contributions are credited to the account of each
member, and the same were received by petitioners upon their retirement, they were entitled
to only a proportionate share of the earnings thereon. The benefits of retiring members of the
14
Fund are covered by Section 1 (b), Article V which states: (b) Retirement. In the event the
separation from the System is due to retirement under existing laws, such as P.D. 1146, R.A.
660 or R.A. 1616, irrespective of the length of membership to the Fund, the retiree shall be
entitled to withdraw the entire amount of his contributions to the Fund, as well as the
corresponding proportionate share of the accumulated earnings thereon, and in addition,
100% of the System's contributions, plus the proportionate earnings thereon.
We find nothing illegal or anomalous in the creation of the GRF to address certain
contingencies and ensure the Fund's continuing viability. Petitioners' right to receive
retirement benefits under the Plan was subject to well-defined rules and regulations that were
made known to and accepted by them when they applied for membership in the Fund.
Petitioners have the right to demand for an accounting of the Fund including the GRF. Under
Section 5, Article VIII of the PFRR, the Committee is required to prepare an annual report
showing the income and expenses and the financial condition of the Fund as of the end of
each calendar year. Said report shall be submitted to the GSIS Board and shall be available to
members. There is, however, no allegation or evidence that the Committee failed to comply
with the submission of such annual report, or that such report was not made available to
members.
GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. FERNANDO
P. DE LEON, respondents
FACTS: 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.
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.
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

15
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.
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.
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.
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. Petitioner GSIS is now before this Court, assailing the
Decision of the CA and the Resolution denying its motion for reconsideration.
ISSUE: Whether or not Respondent is entitled to a monthly pension.
HELD: The inflexible rule in our jurisdiction is that social legislation must be liberally
construed in favor of the beneficiaries. Retirement laws, in particular, are liberally construed
in favor of the retiree 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. 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.
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. 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.
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.
16
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.
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, the Prosecution Service
Act of 2010. On April 8, 2010, it lapsed into law without the signature of the
President, pursuant to Article VI, Section 27 (1) of the Constitution.
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
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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
GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs.
MARILOU ALCARAZ, respondent
FACTS: Bernardo was employed for almost twenty-nine (29) years by the Metro Manila
Development Authority (MMDA) in Makati City. He worked at the MMDA as laborer, Metro Aide
and Metro Aide I.
Sometime in February 2004, Bernardo was diagnosed with Pulmonary Tuberculosis (PTB) and
Community Acquired Pneumonia (CAP). On May 13, 2004, he was confined at the Ospital ng
Makati. He was discharged on May 19, 2004 with the following diagnosis: Acute Diffuse
Anterolateral Wall Myocardial Infarction, Killips IV-1, CAP High Risk, PTB III and Diabetes
Mellitus Type 2.
On January 15, 2005, Bernardo was found dead at the basement of the MMDA building. His
body was brought to the Southern Police District Crime Laboratory in Makati City for an
autopsy. Medico-Legal Officer Ma. Cristina B. Freyra performed the autopsy and concluded
that Bernardo died of Myocardial Infarction, old and recent. 7 Bernardo's widow, Marilou,
subsequently filed a claim for death benefits with the Government Service Insurance
System (GSIS)
The GSIS denied the claim for death benefits on the ground that myocardial infarction, the
cause of Bernardo's death, was directly related to diabetes which is not considered a work-
connected illness; hence, its complications, such as myocardial infarction, are not work-
related.
Marilou appealed to the ECC which affirmed the GSIS ruling. Aggrieved, she sought relief from
the CA through a petition for review under Rule 43 of the Rules of Court, contending that (1)
the ECC misappreciated the facts. She argued that even if the underlying cause of Bernardo's
death was diabetes, the illness was acquired in the course of his employment and was further
aggravated by the nature of his work; and (2) the ECC gravely abused its discretion for giving
scant consideration to the medical findings on Bernardo's true condition prior to his death. In
its challenged decision, the CA granted the petition and set aside the ECC ruling. It opined
that while myocardial infarction is not among the occupational diseases listed under Annex
"A" of the Amended Rules on Employees Compensation, the ECC, pursuant to Resolution No.
432, laid down conditions under which cardio-vascular diseases can be considered as work-
related and therefore compensable
ISSUE: Whether or not Bernardos illness is compensable
HELD: YES. Bernardo died after almost three decades of service with the MMDA (July 1, 1976
to January 15, 2005). His death occurred within his employer's premises, at the basement of
the MMDA building while he was at work. The GSIS and the ECC denied the claim of his widow
for death benefits on the ground that his death was due to myocardial infarction which they
declared to be non-compensable; they opined that it is not work-related as it is simply a
complication of diabetes mellitus. They pointed out that diabetes mellitus is not in the list of

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occupational diseases and, for this reason, its complications such as myocardial infarction, are
not work-related.
We disagree with the GSIS's position. The conclusions of the two agencies totally
disregarded the stressful and strenuous conditions under which Bernardo toiled for almost 29
long years as a laborer and as a metro aide. By so doing, they closed the door to other
influences that caused or contributed to Bernardo's fatal heart problem an ailment
aggravated with the passage of time by the risks present in the difficult working conditions
that Bernardo had to bear from day to day in his employment.
The CA vividly captured Bernardo's hazardous working environment (the streets of Makati
City) and its effects on his health when it stated: Petitioner contends that the ECC erred in
ruling that petitioner is not entitled to claim benefits for her husband's death. She pointed out
that as early as May 3, 2004, the deceased was already complaining of shortness of breath
and dizziness; that despite such condition, he still continued performing his work until he was
confined at the Ospital ng Makati from May 13 to 19, 2004 where he was diagnosed with
Acute Diffuse Anterlateral Wall Myocardial Infarction; that the short intervening period
between his confinement at the hospital and his last day of duty with the MMDA on January
14, 2005, indicate that he had been suffering from such disease at the time that he was
employed; that his [everyday] exposure under the sweltering heat of the sun during summer
and his constant exposure to rain during the rainy season, aggravated by his contact to
smoke emitted by vehicles passing as he cleaned the streets of Makati, are enough proofs of
the strenuous nature of his work; that his everyday exposure to these elements not only
resulted to his developing myorcardial infarction, but also aggravated pre-existing illness
which were pulmonary tuberculosis and community acquired pneumonia.
While diabetes mellitus was indeed a complicating factor in Bernardo's health condition and
indisputably aggravated his heart problem, we cannot discount other employment factors,
mental and physical, that had been indisputably present; they contributed, if not as a direct
cause of the heart condition itself, as aggravation that worsened and hastened his fatal
myocardial infarction.
For instance, it is undisputed that Bernardo was earlier diagnosed with CAP which could also
be a predisposing factor to myocardial infarction. There is also stress due to the nature of
Bernardo's work. As Marilou pointed out, this Court recognized that stress could influence the
onset of myocardial infarction.
Cardio-vascular disease
compensable
With the resolution, it should be obvious that by itself, a heart disease, such as myocardial
infarction, can be considered work-related, with or without the complicating factors of other
non-occupational illnesses. Thus, the Court so ruled in Raises v. ECC, where it emphasized
that the incidence of acute myocardial infarction, whether or not associated with a non-listed
ailment, is enough basis for compensation.
Resolution No. 432 provides (as one of the conditions) that a heart disease is compensable if
it was known to have been present during employment, there must be proof that an acute
exacerbation was clearly precipitated by the unusual strain by reason of the nature of his
work. Based on the evidence on record, we find as the CA did, that the nature of Bernardo's
duties and the conditions under which he worked were such as to eventually cause the onset
of his myocardial infarction. The stresses, the strain, and the exposure to street pollution and
to the elements that Bernardo had to bear for almost 29 years are all too real to be ignored.
They cannot but lead to a deterioration of health, particularly with the contributing factors of
diabetes and pulmonary disease.

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Bernardo had in fact been a walking time bomb ready to explode towards the end of his
employment days. Records show that the debilitating effect of Bernardo's working conditions
on his health manifested itself several months before his death. As early as May 3, 2004,
Bernardo was already complaining of shortness of breath and dizziness. From May 13 to 19,
2004, he had to be confined at the Ospital ng Makati and was diagnosed with acute
myocardial infarction which caused his death on January 15, 2005 while he was at work. To be
sure, a reasonable mind analyzing these facts cannot but arrive at the conclusion that the
risks present in his work environment for the entire duration of his employment precipitated
the acute myocardial infarction that led to his death.
We thus find no merit in the petition. The CA committed no reversible error nor any grave
abuse of discretion in awarding death benefits to Bernardo's heirs. As a final point, we take
this occasion to reiterate that as an agency charged by law with the implementation of social
justice guaranteed and secured by the Constitution the ECC (as well as the GSIS and the
SSS) should adopt a liberal attitude in favor of the employees in deciding claims for
compensability, especially where there is some basis in the facts for inferring a work-
connection to the accident or to the illness. This is what the Constitution dictates.

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