A.M. No. 190. October 18, 1977. RE: CLAIMS FOR BENEFITS OF THE HEIRS OF THE LATE MARIO V. CHANLIONGCO, FIDELA B. CHANLIONGCO, MARIO B. CHANLIONGCO II, MA. ANGELINA C. BUENAVENTURA and MARIO C. CHANLIONGCO, JR., claimants.
FACTS:

This administrative matter involves the claims for retirement and other benefits filed by the heirs of the late Atty. Mario V. Chanliongco, a court attorney who died on July 12, 1976, at over 63 years of age with more than 38 years of government service. The claimants are his widow, Dra. Fidela B. Chanliongco; his legitimate son, Mario B. Chanliongco II; and two duly recognized illegitimate children, Ma. Angelina C. Buenaventura and Mario Chanliongco, Jr. The deceased died intestate without designating a beneficiary for his retirement benefits in his GSIS application. The GSIS had already released the life insurance proceeds and retirement premium refund. The remaining amounts to be settled by the Supreme Court, as his last employer, were the retirement gratuity under R.A. No. 1616 and the money value of his terminal leave, unpaid salary, and a 10% salary adjustment.

ISSUE

The primary issue is how to lawfully distribute the deceased’s retirement gratuity and the money value of his terminal leave and other unpaid compensation among his surviving heirs.

RULING

The Court approved the distribution as recommended. For the retirement gratuity, amounting to ₱78,140.10, the Court adopted the GSIS computation and distribution scheme based on the rules of legal succession and the legitimes of compulsory heirs. Since the decedent died intestate without a named beneficiary, the retirement benefits formed part of his estate. Applying the rules on legitimes, the legitimate child (Mario II) received one-half (8/16) of the gratuity. The widow received one-fourth (4/16) as her legitime. The remaining one-fourth, constituting the free portion, was divided equally between the two illegitimate children, each receiving one-eighth (2/16).
Regarding the net proceeds of the terminal leave, unpaid salary, and adjustment (totaling ₱13,505.45 after lawful deductions), the Court ruled these were conjugal property, as they constituted compensation for services rendered. Consequently, one-half was awarded to the widow as her conjugal share. The remaining half, belonging to the decedent’s estate, was distributed to all legal heirs using the same ratio applied to the retirement gratuity: 8/16 to the legitimate son, 4/16 to the widow, and 2/16 to each illegitimate child. The Court ordered the Finance Officer to disburse the specified amounts to each claimant immediately.