G.R. No. L-21642 - Social Security System vs. Davac

Petronilo Davac was a former employee of Lianga Bay Logging Co. Inc. and became a member of the Social Security System (SSS) on September 1, 1957.
He was assigned SSS I.D. No. 08-007137 and accomplished SSS Form E-1 (Member’s Record) on November 21, 1957, where he designated respondent Candelaria Davac as his beneficiary, indicating their relationship as “wife.”

Petronilo Davac died on April 5, 1959, prompting the filing of death benefit claims by both respondents, Candelaria Davac and Lourdes Tuplano.
It was revealed through submitted claims and supporting documents that Petronilo Davac had contracted two marriages:

First marriage with Lourdes Tuplano on August 29, 1946, with whom he had a child, Romeo Davac.
Second marriage with Candelaria Davac on January 18, 1949, with whom he had a minor daughter, Elizabeth Davac.

Due to these conflicting claims regarding the death benefits, the processing was held in abeyance, which ultimately led the SSS to file a petition requiring the respondents to interplead and litigate their respective claims.

On February 25, 1968, the Social Security Commission issued a resolution declaring respondent Candelaria Davac as the person entitled to receive the death benefits payable for the death of Petronilo Davac.
Dissatisfied with the Commission’s resolution, respondent Lourdes Tuplano appealed the decision.

Section 13 of Republic Act No. 1161, as amended by Republic Act No. 1792, provided that the beneficiary “as recorded” by the employee’s employer is entitled to the death benefits.
The Court, in a previous decision (Tecson vs. Social Security System), emphasized that the clear and explicit provisions of the law must be applied, regardless of the underlying public policy objectives.
Appellant argued that the designation was invalid on the grounds of:

Contravention of the Civil Code provisions, particularly in relation to the disqualification for life insurance beneficiaries under Articles 2012 and 739.
Deprivation of the lawful wife’s share in the conjugal property and legitime rights in inheritance.

It was contended that the benefits from the Social Security System, being analogous to life insurance proceeds, should be governed by similar qualifications and disqualifications.
However, the Court noted:

The disqualification under Article 739 (concubinage) did not apply since there was no evidence that Candelaria Davac had knowledge of Petronilo Davac’s prior marriage.
The benefits were drawn from a public special fund established by Congress, which was not part of the conjugal partnership or the estate of the member.

Additional statutory provisions (e.g., Section 21 of the Social Security Act and the amended Section 15) confirmed the non-transferability and special nature of these benefits, establishing that the designated beneficiary, if valid, exclusively receives the benefit.

Whether the designation of respondent Candelaria Davac as beneficiary in the SSS records, despite her status as the second wife, is valid under the Social Security Act.
Whether the alleged contravention of the Civil Code (regarding disqualification due to concubinage allegations) renders the designation null and void.

Whether the death benefits, being a statutory privilege from a public special fund, are subject to the laws of succession or are solely governed by the provisions of the Social Security Act.
Whether the benefits form a part of the conjugal partnership or estate, thereby affecting the rights of the legally wedded first wife.

Whether the clear and explicit language of Section 13, Republic Act No. 1161 (and its amendments), mandates that the beneficiary “as recorded” is entitled to the benefits, irrespective of other conflicting interests.
Whether prior precedents, such as Tecson vs. Social Security System, are controlling in affirming the Commission’s decision.