Derkum v. Pension and Investment Board
REITERATIONFacts
The Antecedents: Petitioner Adam C. Derkum served the Government of the Philippine Islands under the Bureau of Education for many years. On October 3, 1927, he was retired from the service at his own request, receiving an annuity of P2,000 per annum under Act No. 3050, the Teachers' Pension Law. Procedural History: On December 6, 1929, Act No. 3629 was approved, amending Act No. 3050 by raising the limitation on annuities from P4,000 to P6,000. Petitioner requested the respondent Pension and Investment Board to apply this new Act to him and grant him the increased benefit. The respondent denied his request, as did the Governor-General. The Petition: Petitioner brought an original action for mandamus in the Supreme Court to compel the respondent to pay him an increased annuity under the provisions of Act No. 3050 as amended by Act No. 3629, contending that the new Act applied to his case despite his prior retirement.
Issue(s)
Whether Act No. 3629, which amended the Teachers' Pension Law, applies retroactively to an employee who was already retired prior to its enactment. Whether a retired employee has a vested right to future increases in annuities provided by subsequent amendatory legislation.
Ruling
The petition for a writ of mandamus is denied without special pronouncement as to costs.
Ratio Decidendi
On the issue of retroactive application of the amendatory act: The Court held that an amendatory act will not be given retroactive construction unless required in express terms or by clear implication. The general rule is that an amendment to a section of an Act does not affect those already retired but will continue to be governed by the original statute. The Court emphasized that when a statute is amended by declaring that it shall read in a given way, the amendment has no retroactive force. Proceedings instituted, orders made, and judgments rendered before the passage of the amendment are to be governed by the original statute. The new provisions are understood as enacted at the time the amended act takes effect, and the provisions of the original statute that are repealed are considered as having been the law from the time they were first enacted. The Court noted that the language of Act No. 3629, particularly Section 2 as amended in connection with Section 1, used the future tense, indicating it applied to persons eligible for retirement after the amendment, not those already retired. The petitioner's retirement was a consummated fact prior to the amendment. On the issue of vested rights to future annuity increases: The Court affirmed that while an employee's annuity is not a mere gratuity and becomes a matter of right upon fulfilling the law's conditions, the rights of a person retired are determined by the law as it stood at the date of retirement. Therefore, a retired employee has no vested right to the benefits of subsequent laws. The Court reasoned that the Philippine Government was fulfilling its obligation to the petitioner, which became crystallized and determinable upon his retirement. A contract is not ordinarily affected by an amendment of the law under which it arose. The Legislature's subsequent generosity to those to be retired in the future was a matter of policy solely for its determination. If the Legislature had intended to grant the new benefits to those already separated from the service, a clause to that effect would have been included. The Court acknowledged the resulting inequality but stated that the remedy rested with the Legislature.
Main Doctrine
An amendatory act will not be given retroactive construction unless required in express terms or by clear implication, and proceedings instituted, orders made, and judgments rendered before the passage of the amendment are to be governed by the original statute. A retired employee has no vested right to the benefits of subsequent laws.