G.R. No. L-39835 - PVAO vs. Anover

The Philippine Veterans Affairs Office (PVAO) was sued by Dionisio Estudillo, a veteran claimant, seeking specific performance in the form of differential pensions and allowances for his minor children based on his service-connected disability.
The petition arose from a decision of the former Court of First Instance of Rizal, Branch V, Quezon City, which ordered PVAO to pay the claimed benefits pursuant to Section 9 of Republic Act (RA) No. 65 as amended by RA 1920 and RA 5753.
The decision also ordered attorney’s fees and costs against the PVAO.

Estudillo, an enlisted man and member of a recognized guerilla organization, was involved in the liberation efforts during World War II and later contracted bronchitis (and initially alleged pulmonary tuberculosis) as a consequence of his military service.
He filed a disability claim on April 22, 1950 under Section 9 of RA 65, which originally provided for a life pension of fifty pesos a month for those permanently incapacitated; however, his claim was approved at a reduced rate of P25.00 per month.
Subsequent legislative amendments increased the pension:

RA 1920 (implemented effective July 1, 1963) increased the basic pension for permanently incapacitated veterans from P50.00 to P100.00 plus an allowance of P10.00 per month for each unmarried minor child.
RA 5753 (effective June 22, 1969) further increased the pension from P100.00 to P200.00 for those permanently incapacitated.

Despite these amendments, Estudillo’s pension was only raised incrementally—to P50.00 and later to P60.00—because his disability was re-rated as 60%, with the admitted fact, via the joint stipulation, that he was not permanently incapacitated.

Estudillo argued, relying on precedents such as Begosa and Teoxon, that even with a partial rating, his permanent disability should entitle him to the full benefits of the law.
PVAO contended that the statutory benefits are expressly limited to veterans who are “permanently incapacitated” from work, and since Estudillo’s incapacity is only 60% (and not permanent), he is not entitled to the full pension differential and additional allowances.
PVAO also raised defenses on the issues of prescription and appropriations, asserting that some of Estudillo’s claims had prescribed under Article 1144 of the Civil Code and that there were no appropriated funds available to cover the increased pension orders.
A joint stipulation of facts was submitted by the parties, which clearly stated the factual basis for the claims, including Estudillo’s non-permanent disability as determined by the PVAO’s ratings.

Whether Estudillo, whose disability rating is 60% and not a permanent incapacitation, is entitled to the full benefits under Section 9 of RA 65 and its subsequent amendatory acts (RA 1920 and RA 5753), which include the differential pensions and allowances for his minor children.
Whether the claims for additional differential pensions filed by Estudillo have already prescribed under the prescriptive period provided by law.
Whether the lower court properly ordered the PVAO to pay attorney’s fees and costs when sued in its official capacity.