G.R. No. L-376; September 1, 1947
Amanda T. Abad Santos, recurrente, vs. El Auditor General y El Government Service Insurance System, recurridos.

FACTS

Before the Pacific War, the late Chief Justice Jose Abad Santos had acquired a life insurance policy (No. 21, 21-A and 21-B) from the Government Service Insurance System (GSIS) under Commonwealth Act No. 186 , with a face value of P17,673 and his wife, Amanda Teopaco de Abad Santos, as the beneficiary. Chief Justice Abad Santos was executed by the Japanese forces on May 7, 1942. To compensate his family, Commonwealth Act No. 708 was approved, granting his widow a gratuity equivalent to three years’ salary as Chief Justice (P48,000), with a proviso that “upon the approval of this Act no other gratuity under existing law or laws shall be granted to the late Chief Justice.” Subsequently, the beneficiary claimed the proceeds of the life insurance policy from the GSIS. The respondents, the Auditor General and the GSIS, refused payment. They argued that the insurance benefits under Commonwealth Act No. 186 constitute a “gratuity.” Therefore, since the widow had already received the gratuity under Commonwealth Act No. 708 , she was barred by its proviso from receiving any other gratuity, including the insurance proceeds. The petitioner appealed this denial.

ISSUE

Whether the life insurance benefits granted to government officials and employees under Commonwealth Act No. 186 (the GSIS insurance policy) should be considered a “gratuity” such that its payment to the beneficiary is prohibited by the proviso in Commonwealth Act No. 708 .

RULING

No. The insurance policy is not a gratuity but a contract founded upon valuable consideration. The Court ruled in favor of the petitioner, Amanda T. Abad Santos. The insurance contract was entered into by Chief Justice Abad Santos in 1937, with premiums paid partly by him and partly by the government. His death in 1942 made the policy immediately due and payable to the designated beneficiary. This right vested upon his death and is a contractual obligation, not a mere bounty or gift from the government. Commonwealth Act No. 708 was a separate, subsequent legislative grant intended as a compassionate award for his patriotism and martyrdom. The proviso in Act No. 708 , which bars “any other gratuity,” refers only to similar gratuitous payments or pensions granted by law out of generosity, not to vested contractual rights acquired under a valid insurance contract for which premiums have been paid. Therefore, the petitioner, as beneficiary, is entitled to receive the proceeds of the life insurance policy (P17,673) in addition to the gratuity of P48,000 granted under Commonwealth Act No. 708 .