Borromeo v. Government Service Insurance System
REITERATIONFacts
The Antecedents: Petitioner, Fortunato V. Borromeo, a retired associate justice of the Court of Appeals, received a gratuity of P24,000.00 on December 15, 1949, under Act No. 2589. Subsequently, after the enactment of Republic Act 1057, which amended Republic Act 910, petitioner applied for retirement benefits under these new provisions. The respondent, Government Service Insurance System (GSIS), found him entitled to a lump sum payment equivalent to his salary for five years, totaling P60,000.00, but deducted the P24,000.00 gratuity previously received. Procedural History: Petitioner filed an action for mandamus in the Court of First Instance of Cebu to compel the GSIS to pay the full P60,000.00 without deduction. The trial court sustained the legality of the deduction. The Petition: Petitioner appealed the decision of the Court of First Instance, arguing that the gratuity received under Act 2589 should not be deducted from his retirement benefits under Republic Acts 910 and 1057.
Issue(s)
Whether the gratuity received by petitioner under Act 2589 is deductible from the retirement benefits to which he is entitled under Republic Acts 910 and 1057.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance, upholding the legality of the deduction. The Court ruled that the gratuity received under Act 2589 is deductible from the retirement benefits under Republic Acts 910 and 1057.
Ratio Decidendi
On the issue of deductibility of gratuity from retirement benefits: The Court ruled in the affirmative. Section 1 of Act 2589 explicitly states that any officer or employee entitled to its benefits who is also entitled to benefits from any pension fund created by the Philippine Legislature must designate which benefits they wish to receive, and shall be entitled only to the chosen benefits. Republic Act 910, as amended, clearly constituted a pension fund or plan. Therefore, when petitioner applied for benefits under Republic Act 910, as amended, he implicitly made his choice, meaning the gratuity already received under Act 2589 must be deducted from the more extensive benefits under the later acts. The gratuity received under Act 2589 was in consideration of petitioner's services, just as the retirement benefits under Republic Acts 910 and 1057 were for the same services. Allowing petitioner to receive full benefits under the later laws in addition to the gratuity already received would amount to double compensation for the same services. The general rule in construing pension and gratuity laws, in the absence of express provisions to the contrary, is to prevent double compensation. The Court found the reasoning in Espejo vs. The Auditor General applicable, stating that if services prior to a certain date are credited for retirement annuity, then any retirement benefits received prior to that date should be charged to the account to prevent double benefit. The fact that Acts 910 and 1057 were enacted after petitioner's retirement under Act 2589 does not override the State's policy against double pensions for the same services, especially since the later laws do not expressly provide for such an exception.
Main Doctrine
A gratuity received under Act 2589 is deductible from retirement benefits subsequently claimed under Republic Acts 910 and 1057, to prevent double compensation for the same government service, absent express provisions to the contrary in the later laws.