Case Summary (G.R. No. 206987)
Petitioner
GSIS, through its Cebu City Branch, denied respondent’s claim for survivorship pension under PD 1146 on the ground that Section 18 contains a proviso disqualifying a dependent spouse who contracted marriage with the pensioner within three years before the pensioner qualified for pension.
Respondent
Milagros O. Montesclaros, widow of late Sangguniang Bayan member and GSIS pensioner Nicolas Montesclaros, who was designated as sole beneficiary in the pensioner’s retirement application and subsequently claimed survivorship pension after his death.
Key Dates
Marriage of Nicolas and Milagros: 10 July 1983. Nicolas’s last day of service: 17 February 1985. GSIS approval of retirement: 31 January 1986 (effective 17 February 1984 as recorded). Nicolas died: 22 April 1992. GSIS denied survivorship claim: 8 June 1992. Trial court decision in favor of Milagros: 9 November 1994. Court of Appeals affirmed: 13 December 2000. Supreme Court decision: July 14, 2004.
Applicable Law
Primary statutory framework: Presidential Decree No. 1146 (Revised Government Service Insurance Act of 1977) — notably Sections 16, 17, and 18 concerning survivorship benefits and the proviso in Section 18. Subsequent statutory development: Republic Act No. 8291 (Government Service Insurance Act of 1997), which deleted the three-year proviso and, by its implementing rules, permits a surviving spouse’s marriage immediately prior to the member’s death to be accepted unless proven to be solemnized solely to obtain benefits. Constitutional provisions invoked: Section 1, Article III, 1987 Constitution (due process and equal protection).
Facts
Nicolas, a 72-year-old widower, married Milagros (then 43) on 10 July 1983. Nicolas applied for retirement benefits under PD 1146 effective 18 February 1985 and designated Milagros as sole beneficiary. GSIS approved retirement benefits with an effective date recorded as 17 February 1984. Nicolas died in 1992; Milagros filed for survivorship pension but GSIS denied the claim invoking the Section 18 proviso that disqualifies a dependent spouse who married the pensioner within three years before the pensioner qualified for pension.
Procedural History
Milagros filed a special civil action for declaratory relief in the Regional Trial Court (RTC) challenging the proviso’s validity. The RTC declared her eligible for survivorship pension, holding that retirement benefits are onerous acquisitions and conjugal property under Articles 115 and 117 of the Family Code, and that the three-year proviso was repealed by the Family Code as a later inconsistent law. GSIS appealed; the Court of Appeals affirmed the RTC decision. GSIS then sought review by certiorari before the Supreme Court.
Issue Presented
Whether the proviso in Section 18 of PD 1146 — disqualifying a dependent spouse from survivorship pension if the marriage was contracted within three years before the pensioner qualified for pension — is valid under the Constitution (specifically, whether it violates due process and equal protection), and relatedly whether retirement benefits are conjugal property and whether the Family Code repealed the proviso.
Court of Appeals’ Ruling (as summarized)
The Court of Appeals agreed with the trial court that retirement benefits are not purely gratuitous but are deferred compensation and therefore constitute onerous acquisitions and form part of conjugal property (given mandatory employee contributions). The CA affirmed that the proviso was inconsistent with the Family Code and thus inapplicable to deny survivorship pension.
Supreme Court’s Core Holding
The Supreme Court held the three-year proviso in Section 18 of PD 1146 unconstitutional and void for violating the due process and equal protection guarantees of the 1987 Constitution. Consequently, GSIS could not deny Milagros’s survivorship claim based on that proviso.
Rationale — Retirement Benefits as Property Interest
The Court emphasized the mandatory nature of GSIS contributions (employee deductions and employer share), characterizing GSIS pensions as part of contractual compensation rather than gratuity. Because employee participation is compulsory and the pension arises from salary deductions and employer contributions, retirees acquire vested property interests in pension benefits once eligibility is met. Such vested pension rights are protected by due process and cannot be forfeited without notice and hearing.
Rationale — Denial of Due Process
The Court found the proviso to be an unduly oppressive rule that confiscates survivorship benefits from a dependent spouse who married within the three-year period before the pensioner qualified for pension, without providing any procedural safeguards (notice or opportunity to be heard). This arbitrary forfeiture conflicts with PD 1146’s declared purposes — including guaranteeing benefits and expanding survivorship protection to dependents — and therefore violates the due process clause.
Rationale — Violation of Equal Protection
Applying the equal protection principles for statutory classifications, the Court analyzed whether the proviso constituted a reasonable classification related to a legitimate legislative purpose. Although a statute may reasonably require a minimum marriage duration in limited contexts to deter sham marr
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The Case
- Petition for review on certiorari from the Decision of the Court of Appeals in CA-G.R. CV No. 48784, dated 13 December 2000, which affirmed the judgment of the Regional Trial Court, Branch 21, Cebu City, awarding survivorship pension to Milagros O. Montesclaros.
- Supreme Court decision penned by Justice Carpio, J., resolving constitutionality of a proviso in Section 18 of Presidential Decree No. 1146 (PD 1146).
- Final disposition: petition denied; the proviso in Section 18 of PD 1146 declared void for violating the constitutional guarantees of due process and equal protection of the laws; GSIS cannot deny Milagros O. Montesclaros’ survivorship benefits on the basis of that proviso; no pronouncement as to costs.
Relevant Dates and Case Identifiers
- G.R. No.: 146494.
- Date of Supreme Court decision: July 14, 2004.
- Court of Appeals Decision: 13 December 2000.
- Trial court judgment: 9 November 1994 (declaring Milagros eligible for survivorship pension).
- Dates related to parties and benefits: marriage on 10 July 1983; last day of actual service of pensioner Nicolas Montesclaros on 17 February 1985; GSIS approved retirement (effective 17 February 1984 according to GSIS approval) on 31 January 1986; Nicolas’ death on 22 April 1992; GSIS denial of survivorship claim on 8 June 1992; Milagros filed special civil action on 2 October 1992.
Parties and Positions
- Petitioner: Government Service Insurance System (GSIS), Cebu City Branch.
- Respondent: Milagros O. Montesclaros (surviving spouse claimant).
- GSIS position: Denied survivorship pension under the proviso of Section 18, PD 1146, which disqualifies a dependent spouse who contracted marriage with the pensioner within three years before the pensioner qualified for the pension.
- Milagros’ position at trial and on appeal: Entitled to survivorship pension; challenged validity of Section 18 proviso as inconsistent with Family Code and constitutionally infirm.
- Noted procedural fact: On 10 January 2003 Milagros informed the Court she accepted the GSIS decision disqualifying her and was no longer interested in pursuing the case; GSIS nonetheless urged the Court to decide on the merits. The Supreme Court proceeded to resolve the constitutional questions because the issue affects others and implicates public interest.
Material Facts
- Nicolas Montesclaros was a Sangguniang Bayan member and a 72-year-old widower when he married Milagros Orbiso (43 years old) on 10 July 1983.
- Nicolas filed for retirement benefits with GSIS on 4 January 1985, designating Milagros as sole beneficiary.
- GSIS records: Nicolas’ last day of actual service was 17 February 1985; GSIS approved his application on 31 January 1986 stating effective retirement date as 17 February 1984 and granted lump sum for first five years and monthly annuity thereafter.
- Nicolas died on 22 April 1992. Milagros filed a survivorship pension claim which GSIS denied on 8 June 1992 invoking Section 18 proviso disqualifying a dependent spouse who contracted marriage within three years before the pensioner qualified for the pension.
- Trial court found retirement benefits to be onerous and conjugal; declared Milagros eligible and ordered GSIS to pay benefits with interest. Court of Appeals affirmed.
Procedural History
- Administrative claim to GSIS: denied (8 June 1992).
- Special civil action for declaratory relief filed by Milagros in trial court (2 October 1992).
- Trial court judgment (9 November 1994): declared Milagros eligible for survivorship pension, ordered payment with interest; trial court relied on Family Code Articles 115 and 117 to characterize retirement benefits as onerous and conjugal and held Section 18 proviso repealed or inconsistent with the Family Code.
- Court of Appeals: affirmed trial court decision (13 December 2000).
- GSIS filed petition for review on certiorari to the Supreme Court (G.R. No. 146494).
- Supreme Court: denied petition; declared proviso void; remanded effect that GSIS cannot deny claim on the basis of that proviso.
Issues Presented
- Whether Section 16 of PD 1146 entitles Milagros to survivorship pension.
- Whether retirement benefits form part of conjugal property.
- Whether Articles 254 and 256 of the Family Code repealed Section 18 of PD 1146 (as argued at trial).
- Main constitutional issue resolved by the Supreme Court: the validity of the proviso in Section 18 of PD 1146 which disqualifies a dependent spouse from survivorship pension if marriage was contracted within three years before the pensioner qualified for the pension.
Statutory Provisions Invoked (as quoted or summarized in the decision)
- PD 1146 Section 16: defines survivorship benefits and components — basic survivorship pension (50% of basic monthly pension) and dependent’s pension (not exceeding 50% of basic monthly pension) payable under GSIS rules.
- PD 1146 Section 17: sets out survivorship benefits upon death of a member, qualifying conditions, guaranteed periods for basic monthly pension and survivorship pension, distribution rules among spouse and children, and secondary beneficiaries entitlements.
- PD 1146 Section 18: governs death of a pensioner and contains the proviso at issue: "the dependent spouse shall not be entitled to said pension if his marriage with the pensioner is contracted within three years before the pensioner qualified for the pension." Also provides that where death occurs during lump-sum period, survivorship pension paid after expiration of such period; applies to pensioners living as of the Act’s effectivity with survivorship benefit based on monthly pension at time