Title
IN RE: Chanliongco
Case
A.M. No. 190-RET
Decision Date
Oct 18, 1977
Heirs of deceased government attorney claim retirement benefits; SC rules distribution follows intestate succession, with terminal leave treated as conjugal property, ensuring legitimes for widow, legitimate, and illegitimate children.

Case Digest (A.M. No. 190-RET)
Expanded Legal Reasoning Model

Facts:

  • Background and Parties
    • The case involves the claims for retirement benefits filed by the heirs of the late Atty. Mario V. Chanliongco, who was an attorney of the Supreme Court and had rendered over 38 years of government service.
    • At the time of his death on July 12, 1976, Atty. Chanliongco was more than 63 years of age and had no pending criminal, administrative, or disbarment cases, nor did he have any money or property accountability.
    • The claimant group is composed of:
      • Fidela B. Chanliongco – the widow, a legally recognized claimant.
      • Mario B. Chanliongco II – the only legitimate son.
      • Ma. Angelina C. Buenaventura – an illegitimate child born to Angelina B. Crespo and duly recognized by the decedent.
      • Mario Chanliongco, Jr. – another illegitimate child, currently 17 years of age.
  • Nature of the Benefits
    • The benefits due from the deceased’s government service include:
      • Retirement benefits.
      • Money value of terminal leave, which covers unused vacation and sick leave.
      • Life insurance proceeds.
      • Refund of retirement premiums.
    • The life insurance proceeds and refund of retirement premiums had already been released by the Government Service Insurance System (GSIS), leaving only the retirement benefits and the money value of terminal leave for further settlement.
  • Applicable Law and Procedural Background
    • The benefits are governed by Republic Act No. 1516, as amended by RA No. 4986, with the rules given effect by the Supreme Court’s resolution dated August 19, 1976, effective July 12, 1976.
    • As Atty. Chanliongco died intestate and had omitted the nomination of a beneficiary in his GSIS membership application, his retirement benefits accrue to his estate, to be distributed among his legal heirs in accordance with intestate succession, similar to the distribution of life insurance proceeds when no beneficiary is designated.
    • The determination in Vda. de Consuegra vs. GSIS (L-28093, Jan. 30, 1971) supports this approach.
  • GSIS Computation and Distribution Details
    • Retirement Gratuity Calculation:
      • Total creditable service: 37.57169 years.
      • Highest salary rate: ₱1,558.33 per month.
      • Gratuity equivalent: 50.14338 months.
      • Total computed retirement gratuity: ₱7,140.10.
    • Distribution Among Legal Heirs:
      • Fidela B. Chanliongco (widow).
      • Mario B. Chanliongco II (legitimate son).
      • Ma. Angelina C. Buenaventura and Mario Chanliongco, Jr. (illegitimate children).
    • The GSIS determination outlines the shares as:
      • 8/16 share for Mario B. Chanliongco II.
      • 4/16 share for Fidela B. Chanliongco.
      • 2/16 share each for the two illegitimate children.
  • Calculation of Money Value of Terminal Leave and Associated Items
    • Components Included:
      • Unpaid salary for July 8–12, 1976 at a monthly rate of ₱1,416.66, amounting to ₱228.49.
      • A 10% salary adjustment for the period July 1–12, 1976, amounting to ₱54.84.
      • The computed money value of terminal leave for the period from July 13, 1976, to September 14, 1977, at ₱1,558.33 per month, totaling ₱21,962.54.
    • Deductions Applied:
      • Withholding tax of ₱1,400.00.
      • An outstanding account with the Supreme Court Savings & Loan Association amounting to ₱7,340.42.
      • The net amount available for distribution, after deductions, is ₱13,505.45.
    • Treatment as Conjugal Property:
      • The money value of unused terminal leave plus unpaid salary and adjustment is considered part of conjugal property.
      • Consequently, one-half is allocated to the widow as her conjugal share, while the remaining half is distributed among the legal heirs according to the proportions used for the retirement benefits.
  • Final Order of Payment
    • The Court directed the Finance/Disbursing Officer to immediately pay:
      • Fidela B. Chanliongco her combined share from both the retirement gratuity and her respective portion as a legal heir and conjugal partner.
      • Mario B. Chanliongco II, his computed share based on 8/16 of the retirement gratuity plus his respective portion from the money value of terminal leave.
      • Ma. Angelina C. Buenaventura and Mario Chanliongco, Jr., each receiving their respective 2/16 share plus their corresponding portion from the terminal leave computation.
  • Additional Considerations
    • The treatment of the unpaid salary and terminal leave as part of the conjugal partnership is based on the principle that compensation for services rendered (such as vacation and sick leave) does not constitute a gratuity.
    • The decision was rendered en banc with several concurring opinions emphasizing proper adherence to the rules on legitime and legal succession.

Issues:

  • Whether the GSIS’s computation of the retirement gratuity, including the applicable creditable service and corresponding rates, was properly applied according to law.
  • Whether, in the absence of a nominated beneficiary, the retirement benefits should automatically accrue to the decedent’s estate and be distributed under the rules of intestate succession.
  • How the money value of terminal leave, unpaid salary, and the corresponding 10% salary adjustment should be calculated, especially considering their treatment as conjugal property.
  • Whether the method of distribution among the widow, legitimate child, and illegitimate children conforms to the rules on legitime and legal succession as provided by the Civil Code.
  • The appropriateness of deducting certain amounts such as withholding tax and outstanding debts before arriving at the net proceeds available for distribution.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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