ChanRobles Virtual law Library

chanrobles.com - PHILIPPINE SUPREME COURT RESOLUTIONS - ON-LINE

cralaw_scresolutions_separator.NHAD

[G.R. No. 161357. June 6, 2006]

ELENA P. DYCAICO v. SOCIAL SECURITY SYSTEM AND SOCIAL SECURITY COMMISSION

En Banc

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated JUNE 6, 2006

G.R. No. 161357 (Elena P. Dycaico v. Social Security System and Social Security Commission)

The Social Security System (SSS) and Social Security Commission (SSC) filed their respective Motions for Reconsideration of the Court's Decision dated November 30, 2005 declaring as void the proviso "as of the date of his retirement" in Section 12-B(d) of Republic Act No. 8282 (RA 8282) for being contrary to the due process and equal protection clauses of the Constitution. The Court further held that the SSS could not deny the claim of petitioner Elena P. Dycaico for survivor's pension on the basis of this invalid proviso.

Briefly, the facts are restated as follows:

Bonifacio S. Dycaico was a member of the SSS since January 24, 1980. In his self-employed data record, he named Elena P. Dycaico (the petitioner) and their eight children as his beneficiaries. At that time, Bonifacio and the petitioner were not married. Bonifacio was considered retired in June 1989 and began receiving his monthly pension since then until he passed away on June 19, 1997. However, a few months before he died, or on January 6, 1997, he married the petitioner.

Upon Bonifacio's death, the petitioner filed with the SSS an application for survivor's pension. Her application was denied on the ground that under Section 12-B(d) of RA 8282 she could not be considered a primary beneficiary of Bonifacio as of the date of his retirement. The said provision reads:

Sec. 12-B. Retirement Benefits. -

x x x x

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. ...

In the Court's Decision dated November 30, 2005, now sought to be reconsidered, the proviso "as of the date of his retirement" was struck down for violating the due process and equal protection clauses of the Constitution.

In gist, the Court ruled that the proviso violates the equal protection clause of the Constitution because it impermissibly discriminates against those dependent spouses whose respective marriages to the SSS members were contracted after the latter's retirement. The petitioner and those similarly situated, who belong to this group of dependent spouses, are not entitled to survivor's pension under Section I2-B(d) of RA 8282 by reason of the subject proviso. Further, the due process clause of the Constitution is infringed by the proviso because it outrightly deprives those dependent spouses who married the SSS members after their retirement of the survivor's pension, a property interest, without giving them an opportunity to be heard. Their disqualification is based on the conclusive or "irrebutable" presumption created by the proviso that marriages contracted after retirement are sham marriages or solely for the purpose of securing the benefits under RA 8282. These dependent spouses are not afforded any opportunity to refute the presence of the illicit purpose.

The SSS filed its Motion for Reconsideration alleging that the assailed Decision of the Court "if not corrected, poses a strong threat to the financial viability of the SSS" and that "the SSS anticipates the possibility of some unscrupulous members who might contract spurious marriage after the contingency (retirement) to enable their spouse to claim the benefits under RA 8282 upon their anticipated death." [1] cralaw In support of this allegation, the SSS submitted the Report of Rizaldy T. Capulong, its Assistant Vice-President and Deputy Chief Actuary, on the possible effect of the assailed Decision on the SSS fund.

The SSS argues that, like the beneficiary in a life insurance policy, the beneficiary under RA 8282 must have an insurable interest upon the occurrence of the contingency. In the case of the petitioner, she was only the common-law spouse of Bonifacio when he retired, which was the contingent event, according to the SSS, and, therefore, no insurable interest existed. The SSS cites Article 2012 of the Civil Code which provides that "any person forbidden from receiving any donation under Article 739 [2] cralaw cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him." RA 8282 similarly prohibits a common-law spouse from being named as a beneficiary of the member.

It is further contended that RA 8282 is the governing contract between the SSS and its members, and the entitlement to benefits is dependent upon the conditions and requirements set forth therein. Section I2-B(d), in particular, provides that the survivor's pension of a deceased retired member is given only to primary beneficiaries as of the latter's date of retirement. The petitioner was not yet married to Bonifacio when the latter retired; hence, no inchoate right to the benefit accrued to the petitioner because she was not a primary beneficiary as required under RA 8282.

The SSS takes exception to the Court's application to the present case of the ruling in Government Service Insurance System v. Montesclaros . [3] cralaw In the said case, the Court invalidated the proviso in Presidential Decree No. 1146 which stated that the "dependent spouse shall not be entitled to said pension if his marriage with the pensioner is contracted within three years before the pensioner qualified for the pension." It was held that this proviso violated the due process and equal protection clauses of the Constitution. According to the SSS, the said proviso differs from the subject proviso in Section 12-B(d) of RA 8282 because in the former (the proviso in PD 1146) the restriction was imposed before the occurrence of the contingency or retirement of the member. There was thus no substantial distinction between those dependent spouses whose respective marriages to GSIS members were contracted within three (3) years prior to the latter's retirement and those whose marriages were contracted beyond three (3) years prior to retirement, which rendered the same violative of the equal protection clause of the Constitution.

The SSS theorizes that, in contrast, the restriction occasioned by the proviso "as of the date of his retirement" in Section 12-B(d) in RA 8282 is imposed after the occurrence of the contingency. There is allegedly a substantial distinction between the two groups of dependent spouses since the interest of the SSS member over his pension is perfected only upon the happening of the contingency, an interest which is certainly subject to the regulations and limitations imposed by the SSS.

The SSS likewise disagrees with the Court's characterization of retirement benefits as property interest of the pensioner as well as his or her surviving spouse. It quotes the following pronouncement in Social Security System v. Davac : [4] cralaw

[T]he benefits accruing from membership in the Social Security System do not form part of the properties of the conjugal partnership of the covered member. They are disbursed from a public special fund created by Congress in pursuance to the declared policy of the Republic to develop, establish gradually and perfect a social security system which x x x shall provide protection against the hazards of disability, sickness, old age and death.

x x x x

[It] appears that the benefit receivable under the Act is in the nature of a special privilege or an arrangement secured by the law, pursuant to the policy of the State to provide social security to the workingmen. The amounts that may thus be received cannot be considered as property earned by the member during his lifetime. His contribution to the fund, it may be noted, constitutes only an insignificant portion thereof. Then, the benefits are specifically declared not transferable, and exempted from tax, legal processes, and lien. Furthermore, in the settlement of claims thereunder the procedure to be observed is governed not by the general provisions of law, but by rules and regulations promulgated by the Commission. Thus, if money is payable to the estate of a deceased member, it is the Commission, not the probate or regular court that determines the person or persons to whom it is payable. That the benefits under the Social Security Act are not intended by the lawmaking body to form part of the estate of the covered members may be gathered from the subsequent amendment to Section 15 thereof. x x x [5] cralaw

The SSS thus posits that the pension under RA 8282 cannot be considered as the members' protected property or contractual rights which can no longer be regulated by the SSS. Otherwise, the SSS will merely be a custodian of the members' fund without an arm to carry out the purpose for which it was created.

Finally, the SSS maintains that the petitioner was afforded due process as shown by the fact that she was given the opportunity to file her claim and to prove her case before the SSS and SSC. Unfortunately, the petitioner failed to adduce evidence and prove her case in both venues.

For its part, the SSC, through the Office of the Solicitor General, submits that the proviso "as of the date of his retirement" does not violate the equal protection clause of the Constitution because it is applied uniformly and equally to all dependent spouses of SSS members who contracted their respective marriages after the latter's retirement.

The SSC opines that RA 8282 respects the sanctity of marriage as an institution and, consequently, provides that only the legitimate spouse is classified and is entitled to support. The petitioner could not have qualified as a primary beneficiary notwithstanding her designation as such by Bonifacio because she was not his legal spouse at that time. Mere designation does not confer legitimacy to the union, nor does it ipso facto confer upon her a primary beneficiary status.

The SSC expounds that the petitioner was only the common-law spouse of Bonifacio when he retired and, therefore, not qualified to be his dependent and primary beneficiary under Section 8 (e) and (k) of RA 8282. Nowhere in the law is a common-law spouse, even if designated, qualified to be a beneficiary. The petitioner's subsequent marriage to Bonifacio allegedly had no retroactive effect except as to the legitimation of their children.

The SSC asserts that the viability of the Social Security Fund is "the single most valid argument against the declaration of unconstitutionality of the proviso "as of the date of his retirement." [6] cralaw The stability of the SSS must be assured and the actuarial soundness of its reserve fund must be guaranteed.

Echoing the stance of the SSS, the SSC contends that the case of Montesclaros [7] cralaw is not squarely applicable to the present case because Section 12-B(d) does not require a surviving spouse to be married to a member for at least three (3) years prior to the latter's retirement. The provision only requires that the marriage should have taken place anytime prior to retirement. The legitimacy of the relationship of the surviving spouse to the member at the time of the first contingency is a condition sine qua non since the legal spouse's inchoate right to the survivor's pension benefit accrues from the member's retirement. Like the SSS, the SSC cites the case of Davac [8] cralaw in contending that the social security benefits are special privileges and cannot be considered as property interest of the members.

The SSS and the SSC thus urge the Court to reconsider its Decision dated November 30, 2005.

The Motions for Reconsideration are bereft of merit.

The Court shall first address the concern that the invalidation of the proviso "as of the date of his retirement" in Section I2-B(d) of RA 8282 would adversely affect the SSS fund as to cause its possible depletion. As stated by the SSC, this is "the single most valid argument against the declaration of unconstitutionality" of the subject proviso. This argument is hardly persuasive. The Report of its Assistant Vice-President and Deputy Chief Actuary attached by the SSS to its Motion for Reconsideration admits that it is based on "theoretical computations only since we have no actual data currently available to use as a basis for its actual computation. In particular, the retiree pensioners' database of the Actuarial Department does not have information on civil status." [9] cralaw At best, therefore, the argument on the possible depletion of the fund is purely speculative or conjectural, utterly devoid of any basis.

Further, the Court does not subscribe to the scenario envisioned by the SSS of "the possibility of some unscrupulous members who might contract spurious marriage after the contingency (retirement) to enable their spouse[s] to claim the benefits under RA 8282." This view reveals a rather cynical and disdainful attitude towards the men and women who diligently toil and contribute a portion of their monthly earnings to the fund in order that they, as well as their beneficiaries, would have some relief in the event of disability, illness, death and other contingencies resulting in the loss of income. The Court does not believe that these men and women would be so unscrupulous as to enter into sham marriages after retirement just so their respective partners to the chicanery would enjoy the survivorship pension under RA 8282.

Even granting arguendo that there are such unscrupulous members, the burden is on the SSS to prove that marriages contracted after retirement were so entered for an illicit purpose, i.e., solely for the purpose of receiving the benefits under RA 8282. The outright disqualification of surviving spouses whose respective marriages to the SSS members were valid, albeit contracted after the latter's retirement, from entitlement to the survivorship pension by reason of the proviso "as of the date of his retirement" in Section 12-B(d) is repugnant not only to the due process and equal protection clauses of the Constitution, but also to its social justice policy.

That the fund has to be protected has been considered by the Court as a trite excuse [10] cralaw and, in this case, it is not a cogent argument vis-a-vis the constitutional infringements occasioned by the subject proviso.

The SSS and SSC likewise harp on the fact that when Bonifacio designated the petitioner as one of his beneficiaries, together with their children, they were not married at that time. Accordingly, the designation is allegedly void. However, it should be pointed out that the petitioner's entitlement to the survivor's pension does not arise from such designation. Rather, her entitlement to survivorship pension is based on the fact that, at the time of Bonifacio's death, she was his dependent spouse. In other words, regardless of the said invalid designation, the petitioner was the dependent spouse of Bonifacio by reason of their valid marriage to each other.

The SSS and the SSC classify the survivorship pension applied for by the petitioner as a death benefit. Hence, the contingency [11] cralaw that gives rise to the petitioner's entitlement thereto is the death of Bonifacio, not his retirement, as erroneously asserted by 'the SSS and the SSC. At the time when the contingency occurred, i.e., Bonifacio's death, the petitioner was his "primary beneficiary" following Section 8(k) of RA 8282 which enumerates the primary beneficiaries of the member as follows:

(1) the dependent spouse until he or she remarries;

(2) the dependent legitimate, legitimated or legally adopted, and illegitimate children.

In relation thereto, Section 8(e) thereof qualifies the dependent spouse and dependent children as follows:

(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.

There is no question that the petitioner was the dependent spouse of Bonifacio who was likewise his legal spouse entitled by law to receive support from him. Accordingly, as Bonifacio's primary beneficiary at the time of his death, the petitioner is entitled to the survivor's pension under RA 8282.

The SSS likens the beneficiary under RA 8282 to the beneficiary in a life insurance policy. It then cites Article 2012 of the Civil Code which provides that "any person forbidden from receiving any donation under Article 739 cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him." The analogy and cited provisions of law are not quite apt. On this point, the Court stated in Davac :

Without deciding whether the naming of a beneficiary of the benefits accruing from membership in the Social Security System is a donation, or that it creates a situation analogous to the relation of an insured and the beneficiary under a life insurance, it is enough, for the purpose of the instant case, to state that the disqualification mentioned in Article 739 is not applicable to herein Candelaria Davac because she was not guilty of concubinage, there being no proof that she had knowledge of the previous marriage of her husband. [12] cralaw

In the same manner, it is not necessary in this case to resolve whether a beneficiary under RA 8282 partakes the nature of a beneficiary in life insurance policy and, therefore, the same qualification and disqualifications should be applied. As earlier intimated, the petitioner's entitlement to the survivor's pension is not by reason of Bonifacio's designation of her as his beneficiary but because at the time of his death, she was his dependent spouse and, consequently, his primary beneficiary. In any case, Article 739 [13] cralaw of the Civil Code is not likewise applicable to the present case because, and this should be stressed, the SSS and SSC have not established that the petitioner was guilty of concubinage. What only appears from the records of the present case is that from 1980, when Bonifacio designated the petitioner as one of his beneficiaries, up to 1997, they lived together as common-law spouses. There is nothing in the records, however, that shows that Bonifacio and the petitioner were guilty of adultery and concubinage, respectively. It has not been established that prior to his marriage to the petitioner, Bonifacio had a valid and subsisting marriage with another woman.

Relying on Davac , the SSS and SSC disagree with the Court's characterization of the retirement benefits and survivorship pension as property interest falling within the ambit of the due process clause of the Constitution. The SSS and SSC have clearly misread Davac . A careful perusal thereof reveals that the Court therein merely declared that death benefits do not form part of the conjugal partnership of the covered member. It did not, in any way, make any pronouncement that death benefits are not considered property interest.

A review of the facts obtaining in Davac would readily show its inapplicability to the present case. Petronilo Davac became a member of the SSS on September 1, 1957. He designated Candelaria Davac as his beneficiary indicating in the SSS form that he filed on November 21, 1957 that she was his "wife''. Petronilo died less than two years later on April 5, 1959. It appeared that he contracted two marriages during his lifetime, the first with claimant Lourdes Tuplano on August 29, 1946; and the second with claimant Candelaria on January 18, 1949. Both Lourdes and Candelaria filed their respective claims for death benefits with the SSS.

The SSC declared Candelaria as the person entitled to receive the death benefits payable for the death of Petronilo. Lourdes questioned the said decision alleging that the designation of Candelaria, the bigamous "wife," was null and void because (1) it contravenes the provisions of the Civil Code; and (2) it deprives the lawful wife of her share in the conjugal property as well as of her own and her child's legitimate in the inheritance.

The Court affirmed the SSC's decision as it declared Candelaria to be the person entitled to receive the death benefits. It reasoned that under the law in force at the time, [14] cralaw the beneficiary "as recorded" by the employee's employer is the one entitled to the death benefits of the covered employee. It ruled that the disqualification mentioned in Article 739 was not applicable to Candelaria because she was not guilty of concubinage, there being no proof that she had knowledge of the previous marriage of her husband. It also dismissed the second contention of Lourdes, i.e., that she was deprived of her share in the conjugal property, by holding that death benefits do not form part of the properties of the conjugal partnership of the covered member. In short, under the law then in effect, if there was a named beneficiary and the designation was not invalid, it was not the heirs of the employee who are entitled to receive the benefits.

It bears reiterating that unlike in Davac , in the present case, the petitioner's entitlement to the survivor's pension is based on the fact that she was Bonifacio's dependent spouse at the time of his death and, therefore, his primary beneficiary in consonance of the definition of the term under Section 8 (e) and (k) of RA 8282.

As explained by the Court in the Decision of November 30, 2005, the retirement and death benefits, including the survivor's pension, in RA 8282 are property interest in the sense that the members who have contributed to the SSS fund cannot be deprived of the pension and death benefits without due process of law. On account of the employees' mandatory contributions to the said fund, these benefits have ceased to be considered as mere gratuity but form part of employees' contractual compensation. A protected interest in retirement benefits arises when the employee actually retires. [15] cralaw At that point, a retiree who meets the eligibility requirements acquires an interest protected by the due process clause in benefits at the level provided by the law in effect at the time he or she becomes eligible. [16] cralaw Following the demise of her husband, a widow's right to receive a pension is also an element of the husband's contractual compensation. [17] cralaw It is the light that the retirement and death benefits, including the survivor's pension, in RA 8282 are property interest protected by the due process clause of the Constitution. As the dependent spouse of Bonifacio entitled by law to receive support from him, the petitioner has indubitably acquired a property interest in the survivor's pension. As such, compassion for the petitioner in this case is not a dole out but a right. [18] cralaw

The subject proviso's infringement of the due process and equal protection clauses of the Constitution has already been amply discussed by the Court in the Decision of November 30, 2005. It sees no need to reiterate the same.

WHEREFORE, the respective Motions for Reconsideration of the Social Security System and the Social Security Commission are DENIED with FINALITY. They are DIRECTED to release forthwith petitioner Elena P. Dycaico's survivor's benefits upon finality of the Decision in this case.

Very truly yours,

(Sgd.) MA. LUISA D. VILLARAMA
Clerk of Court


Endnotes:

[1] cralaw Rollo , p. 120.

[2] cralaw Infra.

[3] cralaw G.R. No. 146494, July 14, 2004, 434 SCRA 441.

[4] cralaw No. L-21642, 17 SCRA 863 (1966).

[5] cralaw Id. at 866-867.

[6] cralaw Rollo , p. 178.

[7] cralaw Supra note 3.

[8] cralaw Supra note 4.

[9] cralaw Rollo , p. 137.

[10] cralaw See Jacang v. Employees' Compensation Commission, G.R. No. 151893, October 20, 2005, 473 SCRA 520.

[11] cralaw Section 8 (1) of RA 8282 defines "contingency" as "the retirement, death, disability, injury or sickness, and maternity of the member."

[12] cralaw Supra note 3, at 866.

[13] cralaw The provision reads in part:

Art. 739. The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of donation.

[14] cralaw The applicable provision of law then, Section 13 of RA 1161, as amended by RA 1792, stated:

Sec. 13. Upon the covered employee's death or total and permanent disability under such conditions as the Commission may define, before becoming eligible for retirement and if either such death or disability is not compensable under the Workman's Compensation Act, he, or in case of his death, his beneficiaries as recorded by his employer shall be entitled to the following benefit: x x x"

[15] cralaw See American Postal Workers Union v. U.S. Postal Service, 707 F.2d 548.

[16] cralaw Id.

[17] cralaw Henry v. em>Los Angeles (1962, 2d Dist), 201 Cal.App.2d 299.

[18] cralaw See Social Security Commission v. Court of Appeals, G.R. No. 152058. September 27, 2004, 439 SCRA 239.


Back to Home | Back to Main

 

CLICK HERE FOR THE LATEST SUPREME COURT JURISPRUDENCE

PHILIPPINE SUPREME COURT DECISIONS

QUICK SEARCH

cralaw

 







chanrobles.com

ChanRobles Legal Resources:

ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com