GR L 13493; (March, 1960) (Digest)
G.R. No. L-13493; April 30, 1960
LUCIANO DE LA ROSA, petitioner-appellee, vs. THE GOVERNMENT SERVICE INSURANCE SYSTEM, respondent-appellant.
FACTS
Petitioner Luciano de la Rosa was Chief of Section in the Legal Aid Office of the Department of Justice. His position was abolished, and he was laid off on January 1, 1951. He received a gratuity of P3,045 pursuant to Executive Order No. 392 and Republic Act No. 422 . On December 14, 1951, he applied for retirement under Republic Act No. 660 , which was granted on June 20, 1952. Under this retirement, he was entitled to a lump sum payment of P6,787.80 for the first five years. However, respondent GSIS deducted the previously received gratuity of P3,045, paying only the balance of P2,864.40, citing Section 26, paragraph 2, of Republic Act No. 660 . Petitioner filed an action for mandamus to compel GSIS to pay the deducted amount.
ISSUE
Whether the gratuity received by petitioner under Executive Order No. 392 and Republic Act No. 422 should be refunded to GSIS upon his retirement under Republic Act No. 660 .
RULING
The Supreme Court reversed the lower court’s decision and dismissed the petition. The Court held that under Section 26, paragraph 2, of Republic Act No. 660 , any officer or employee separated due to the reorganization under Republic Act No. 422 may retire under the Act if qualified, provided that any gratuity or retirement benefit already received shall be refunded to the System. This provision clearly indicates that Congress did not intend for individuals separated under Republic Act No. 422 to receive both the gratuity and retirement benefits; instead, the gratuity is offset by the retirement benefits. By applying for retirement under Republic Act No. 660 , petitioner voluntarily accepted the condition of refunding the gratuity. The Court cited its prior ruling in Gabriel vs. GSIS (103 Phil., 651) and reiterated that the refund requirement is mandatory. Petitioner’s reliance on the amendment by Republic Act No. 1123 was unavailing, as it took effect after he received his retirement benefits and had no retroactive application. Thus, GSIS correctly deducted the gratuity from his retirement annuity.