GR L 75409; (August, 1987) (Digest)
G.R. Nos. L-75409 & L-75410. August 17, 1987.
CESAR SARMIENTO, petitioner, vs. THE INTERMEDIATE APPELLATE COURT, HON. RICARDO D. DIAZ, PHILIPPINE NATIONAL BANK and NORMA DIAZ SARMIENTO, respondents. (L-75410) and CESAR SARMIENTO, petitioner, vs. THE INTERMEDIATE APPELLATE COURT, HON. REGINA G. ORDOÑEZ-BENITEZ, PHILIPPINE NATIONAL BANK, NORMA SARMIENTO, LORNA SARMIENTO and LERMA SARMIENTO, respondents. (L-75409).
FACTS
In G.R. No. 75409, Norma Sarmiento sued her husband, Cesar, for support. The trial court ordered Cesar to pay monthly support, which was declared immediately executory notwithstanding appeal. Upon Norma’s motion, Judge Ordoñez-Benitez issued an order directing the Philippine National Bank (PNB) not to release any amount due to Cesar from his retirement benefits without court authority. In G.R. No. 75410, Norma filed a separate action for a declaration that Cesar’s retirement benefits from PNB were conjugal, with 50% belonging to her. After Cesar was declared in default, Judge Diaz rendered a judgment ordering PNB to deliver one-half of the retirement benefits to Norma. Cesar filed petitions for certiorari and prohibition with the Intermediate Appellate Court, which were dismissed. Hence, this joint petition.
ISSUE
The core issue is whether the retirement benefits due to Cesar Sarmiento from the PNB can be subject to the freeze orders and execution to satisfy support obligations or be adjudged as conjugal property.
RULING
The Supreme Court granted the petitions. The legal logic centers on the nature of retirement benefits and their exemption from legal processes under specific laws. The Court held that the freeze order issued by Judge Ordoñez-Benitez and the default judgment by Judge Diaz, which effectively attached or partitioned the retirement benefits, are illegal. Retirement benefits, being gratuities for faithful service, are considered the separate property of the retiree-spouse. Crucially, the Court applied Section 26 of the Government Service Insurance System (GSIS) Charter (Republic Act No. 8291, as amended), which explicitly provides that such benefits are exempt from attachment, garnishment, execution, or any other legal process. The directive to PNB not to release the funds and the order to deliver one-half to the wife constitute such prohibited processes. The Court further clarified that while support is a paramount concern, the remedy must be pursued in a manner consistent with the statutory exemption protecting retirement funds. The orders were annulled, and the cases were remanded to the trial courts for further proceedings consistent with this ruling.