Summary: Vda de Consuegra vs. Government Service Insurance System (GR L-28093, 30 January 1971)

Vda de Consuegra vs. Government Service Insurance System
[GR L-28093, 30 January 1971]
En Banc, Zaldivar (J): 10 concur

Facts: The late Jose Consuegra, at the time of his death, was employed as a shop foreman of the office of the District Engineer in the province of Surigao-del Norte. In his lifetime, Consuegra contracted two marriages, the first with Rosario Diaz, solemnized in the parish church of San Nicolas de Tolentino, Surigao, Surigao, on 15 July 1937, out of which marriage were born two children, namely, Jose Consuegra, Jr. and Pedro Consuegra, but both predeceased their father; and the second, which was contracted in good faith while the first marriage was subsisting, with Basilia Berdin, on 1 May 1957 in the same parish and municipality, out of which marriage were born seven children, namely, Juliana, Pacita, Maria Lourdes, Jose, Rodrigo, Lenida and Luz, * all surnamed Consuegra. Being a member of the Government Service Insurance System (GSIS) when Consuegra died on 26 September 1965, the proceeds of his life insurance under policy 601801 were paid by the GSIS to Basilia Berdin and her children who were the beneficiaries named in the policy. Having been in the service of the government for 22.5028 years, Consuegra was entitled to retirement insurance benefits in the sum of P6,304.47 pursuant to Section 12(c) of Commonwealth Act 186 as amended by Republic Acts 1616 and 3836. Consuegra did not designate any beneficiary who would receive the retirement insurance benefits due to him. Rosario Diaz, the widow by the first marriage, filed a claim with the GSIS asking that the retirement insurance benefits be paid to her as the only legal heir of Consuegra, considering that the deceased did not designate any beneficiary with respect to his retirement insurance benefits. Basilia Berdin and her children, likewise, filed a similar claim with the GSIS, asserting that being the beneficiaries named in the life insurance policy of Consuegra, they are the only ones entitled to receive the retirement insurance benefits due the deceased Consuegra. Resolving the conflicting claims, the GSIS ruled that the legal heirs of the late Jose Consuegra were Rosario Diaz, his widow by his first marriage who is entitled to one-half, or 8/16, of the retirement insurance benefits, on the one hand; and Basilia Berdin, his widow by the second marriage and their seven children, on the other hand, who are entitled to the remaining one-half, or 8/16, each of them to receive an equal share of 1/16. Dissatisfied with the foregoing ruling and apportionment made by the GSIS, Basilia Berdin and her children filed on 10 October 1966 a petition for mandamus with preliminary injunction in the Court of First Instance of Surigao del Norte (Special Proceeding 1720) naming as respondents the GSIS, the Commissioner of Public Highways, the Highway District Engineer of Surigao del Norte, the Commissioner of Civil Service, and Rosario Diaz, praying that they (Basilia Berdin, et al.) be declared the legal heirs and exclusive beneficiaries of the retirement insurance of the late Jose Consuegra, and that writ of preliminary injunction be issued restraining implementation of the adjudication made by the GSIS. On 7 March 1967, the court of First Instance of Surigao rendered judgment, holding that when two women innocently and in good faith are legally united in holy matrimony to the same man, they and their children, born of said wedlock, will be regarded as legitimate children and each family be entitled to one half of the estate. The court thus declared that Basilia Berdin Vda. de Consuegra and Juliana, Pacita, Maria Lourdes, Jose Jr., Rodrigo, Lenida and Luis, all surnamed Consuegra, beneficiary and entitled to 1/2 of the retirement benefit in the amount of P6,304.47) due to the deceased Jose Consuegra from the GSIS or the amount of P3,152.235 to be divided equally among them in the proportional amount of 1/16 each. Likewise, Rosario Diaz Vda. de Consuegra is hereby declared beneficiary and entitled to the other half of the retirement benefit of the late Jose Consuegra or the amount of P3,152.235. Basilia Berdin and her children appealed (on purely questions of law).

Issue [1]: Whether Basilia Berdin Vda. de Consuegra. who were the beneficiaries named in the life insurance should automatically be considered the beneficiaries to receive the retirement insurance benefits, to the exclusion of Rosario Diaz, when the deceased Jose Consuegra failed to designate the beneficiaries in his retirement insurance.

Held [1]: NO. If Consuegra had 22.5028 years of service in the government when he died on 26 September 1965, it follows that he started in the government service sometime during the early part of 1943, or before 1943. In 1943, Commonwealth Act 186 was not yet amended, and the only benefits then provided for in said Act were those that proceed from a life insurance. Upon entering the government service Consuegra became a compulsory member of the GSIS, being automatically insured on his life, pursuant to the provisions of CA 186 which was in force at the time. During 1943 the operation of the GSIS was suspended because of the war, and the operation was resumed sometime in 1946. When Consuegra designated his beneficiaries in his life insurance he could not have intended those beneficiaries of his life insurance s also the beneficiaries of his retirement insurance because the provisions on retirement insurance under the GSIS came about only when CA 186 was amended by RA 660 on 16 June 1951. Hence, it cannot be said that cause Basilia Berdin et al. were designated beneficiaries Consuegra's life insurance they automatically became beneficiaries also of his retirement insurance.

Issue [2]: Whether the GSIS and the trial court are correct in ruling that each of the wives who contracted marriage to the same man in good faith are each entitled to half of the retirement insurance benefits.

Held [2]: YES. In the case of the proceeds of a life insurance, the same are paid to whoever is named the beneficiary in the life insurance policy. As in the case of a life insurance provided for in the Insurance Act (Act 2427, as amended), the beneficiary in a life insurance under the GSIS may not necessarily be an heir of the insured. The insured in a life insurance may designate any person as beneficiary unless disqualified to be so under the provisions of the Civil Code. And in the absence of any beneficiary named in the life insurance policy, the proceeds of the insurance will go to the estate of the insured. Retirement insurance is primarily intended for the benefit of the employee — to provide for his old age, or incapacity, after rendering service in the government for a required number of years. If the employee reaches the age of retirement, he gets the retirement benefits even to the exclusion of the beneficiary or beneficiaries named in his application for retirement insurance. The beneficiary of the retirement insurance can only claim the proceeds of the retirement insurance if the employee dies before retirement. If the employee failed or overlooked to state the beneficiary of his retirement insurance, the retirement benefits will accrue his estate and will be given to his legal heirs in accordance with law, as in the case of a life insurance if no beneficiary is named in the insurance policy. The GSIS, therefore, had correctly acted when it ruled that the proceeds of the retirement insurance of the late Jose Consuegra should divided equally between his first living wife Rosario on the one hand, and his second wife Basilia Berdin his children by her, on the other; and the lower court did not commit error when it confirmed the action of the GSIS, it being accepted as a fact that the second marriage of Jose Consuegra to Basilia Berdin was contracted in good faith. The lower court has correctly applied the ruling of this Court in the case of Lao, et al. vs. Dee Tim, et al., 45 Phil. 739. In the recent case of Gomez vs. Lipana, L-23214, June 30, 1970, the Court, in construing the rights of two women who were married to the same man — a situation more or less similar to the case of Basilia Berdin and Rosario Diaz — held "that since the defendant's first marriage has not been dissolved or declared void the conjugal partnership established by that marriage has not ceased. Nor has the first wife lost or relinquished her status as putative heir of her husband under the new Civil Code, entitled to share in his estate upon his death should she survive him. Consequently, whether as conjugal partner in a still subsisting marriage or as such putative heir she has an interest in the husband's share in the property here in dispute. " And with respect to the right of the second wife, this Court observed that although the second marriage can be presumed to be void ab initio as it was celebrated while the first marriage was still subsisting, still there is need for judicial declaration of such nullity. And inasmuch as the conjugal partnership formed by the second marriage was dissolved before judicial declaration of its nullity, "[t]he only just and equitable solution in this case would be to recognize the right of the second wife to her share of one-half in the property acquired by her and her husband, and consider the other half as pertaining to the conjugal partnership of the first marriage."

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