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Subsection (b) of Section 11 of Com. Act 186, as amended by Rep. Act 660, provides
as follows:
(b) Survivors benefit. Upon death before he becomes
eligible for retirement, his beneficiaries as recorded in the
application for retirement annuity filed with the System shall
be paid his own premiums with interest of three per centum
per annum, compounded monthly. If on his death he is
eligible for retirement, then the automatic retirement annuity
or the annuity chosen by him previously shall be paid
accordingly.
The above-quoted provisions of subsection (b) of Section 11 of Commonwealth Act
186, as amended by Rep. Act 660, clearly indicate that there is need for the employee
to file an application for retirement insurance benefits when he becomes a member of
the GSIS, and he should state in his application the beneficiary of his retirement
insurance. Hence, the beneficiary named in the life insurance does not automatically
become the beneficiary in the retirement insurance unless the same beneficiary in the
life insurance is so designated in the application for retirement insurance.
Section 24 of Commonwealth Act 186, as amended by Rep. Act 660, provides for a life
insurance fund and for a retirement insurance fund. There was no such provision in
Com. Act 186 before it was amended by Rep. Act 660. Thus, subsections (a) and (b) of
Section 24 of Commonwealth Act 186, as amended by Rep. Act 660, partly read as
follows:
(a) Life insurance fund. This shall consist of all premiums
for life insurance benefit and/or earnings and savings
therefrom. It shall meet death claims as they may arise or
such equities as any member may be entitled to, under the
conditions of his policy, and shall maintain the required
reserves to the end of guaranteeing the fulfillment of the life
insurance contracts issued by the System ...
(b) Retirement insurance fund. This shall consist of all
contributions for retirement insurance benefit and of earnings
and savings therefrom. It shall meet annuity payments and
establish the required reserves to the end of guaranteeing the
fulfillment of the contracts issued by the System. ...
Thus, We see that the GSIS offers two separate and distinct systems of benefits to its
members one is the life insurance and the other is the retirement insurance. These
two distinct systems of benefits are paid out from two distinct and separate funds that
are maintained by the GSIS.
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 a 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.4 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 to 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.
It is Our view, therefore, that the respondent GSIS had correctly acted when it ruled
that the proceeds of the retirement insurance of the late Jose Consuegra should be
divided equally between his first living wife Rosario Diaz, on the one hand, and his
second wife Basilia Berdin and 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 as cited in the stipulation of facts and in the
decision appealed from.5 In the recent case of Gomez vs. Lipana, L-23214, June 30,
1970, 6 this 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 appellant Basilia Berdin and
appellee 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
lust 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."
WHEREFORE, the decision appealed from is affirmed, with costs against petitionersappellants. It is so ordered.