Ligot vs. Mathay

Retirement gratuity is a form of compensation or emolument subject to the constitutional prohibition against increasing the compensation of members of Congress during their term of office; a retiring legislator whose term expired on the date a salary increase became constitutionally operative may not have his retirement benefits computed on the basis of that increased salary, as doing so would circumvent the constitutional ban by granting indirectly what could not be granted directly.

Petitioner Benjamin T. Ligot served as a member of the House of Representatives for three consecutive four-year terms, from December 30, 1957 to December 30, 1969. During his second term, Republic Act No. 4134 was enacted on June 20, 1964, increasing the salaries of members of Congress from P7,200.00 to P32,000.00 per annum, but expressly providing that the increases "shall take effect in accordance with the provisions of the Constitution." Section 14, Article VI of the 1935 Constitution mandates that "[n]o increase in said compensation shall take effect until after the expiration of the full term of all the members of the Senate and of the House of Representatives approving such increase." In Philconsa vs. Mathay, the Court unanimously held that the increased compensation under Republic Act No. 4134 would become operative only on December 30, 1969, upon the expiration of the full terms of all members of Congress who approved the increase. Retirement benefits for government officials with at least twenty years of service were governed by Commonwealth Act No. 186, Section 12(c), as amended by Republic Act No. 4968, which provided that for elected officials, the gratuity was computed on "the rates of pay as provided by law."

Petitioner Benjamin T. Ligot served as a member of the House of Representatives of the Congress of the Philippines for three consecutive four-year terms, covering a twelve-year span from December 30, 1957 to December 30, 1969. During his second term in office (1961–1965), Republic Act No. 4134, "fixing the salaries of constitutional officials and certain other officials of the national government," was enacted into law on June 20, 1964, and under Section 7 thereof took effect on July 1, 1964. The Act increased the salaries of members of Congress from P7,200.00 to P32,000.00 per annum, but expressly provided that the increases "shall take effect in accordance with the provisions of the Constitution."

Petitioner was re-elected to a third term from December 30, 1965 to December 30, 1969, but was held not entitled to the salary increase during that term by virtue of the Court's unanimous decision in Philconsa vs. Mathay, which ruled that the increased compensation under Republic Act No. 4134 was not operative until December 30, 1969, when the full term of all members of the Senate and House that approved it would have expired, pursuant to Section 14, Article VI of the 1935 Constitution. Petitioner lost his bid for a consecutive fourth term in the 1969 elections.

Upon the expiration of his term on December 30, 1969, petitioner filed a claim for retirement under Commonwealth Act No. 186, Section 12(c), as amended by Republic Act No. 4968, which provided for retirement gratuity of any official or employee, appointive or elective, with a total of at least twenty years of service, the last three years of which are continuous — in the case of elected officials, computed on "the rates of pay as provided by law." On May 8, 1970, the House of Representatives issued a treasury warrant in the sum of P122,429.86 in petitioner's favor as his retirement gratuity, using the increased salary of P32,000.00 per annum which he never received during his incumbency and which could become operative only on December 30, 1969 under the Court's ruling in Philconsa vs. Mathay.

Respondent Velasco, as Congress Auditor, did not sign the warrant, pending resolution by the Auditor General of a similar claim filed by former Representative Melanio T. Singson, whose term likewise expired on December 30, 1969. On July 22, 1970, respondent Velasco formally requested petitioner to return the warrant and its supporting papers for recomputation, enclosing a copy of the Auditor General's adverse decision on ex-Congressman Singson's claim. Petitioner's request for reconsideration was denied on January 20, 1972, by the Auditor General through respondent Auditor, who also furnished petitioner with a copy of the Office of the President's dismissal of Singson's appeal from the Auditor General's adverse decision. Petitioner then filed the present petition for review.

• Basis of Retirement Gratuity Computation: Petitioner contended that his retirement gratuity should be computed on the basis of the increased salary of P32,000.00 per annum for members of Congress under Republic Act No. 4134, because at the time of his retirement on December 30, 1969, the increased salary "as provided by law" was already P32,000.00 per annum and already operative.
• No Constitutional Violation: Petitioner maintained that the increased salary would not compensate him for services rendered during the constitutionally prohibited period, but would simply serve as the basis for computing his retirement gratuity for services rendered across his entire government career, including positions in other branches of government.

• Constitutional Prohibition: Respondent, through the Solicitor General, countered that allowing petitioner a retirement gratuity computed on the basis of P32,000.00 per annum would be a subtle way of increasing his compensation during his term of office and of achieving indirectly what he could not obtain directly, in violation of Article VI, Section 14 of the 1935 Constitution.
• Rate of Pay as Provided by Law: Respondent argued that P7,200.00 per annum was petitioner's authorized compensation during his term of office and therefore the rate of pay prescribed by law for him upon retirement, while P32,000.00 per annum was the allowable compensation of incoming members of Congress during their term and hence the rate of pay prescribed by law for them on their retirement.

• Retirement Gratuity Basis: Whether a retiring member of Congress whose term expired on December 30, 1969 — the same date the salary increase under Republic Act No. 4134 became constitutionally operative — is entitled to have his retirement gratuity computed on the basis of the increased salary of P32,000.00 per annum rather than the P7,200.00 per annum he actually received during his incumbency.
• Nature of Retirement Gratuity: Whether retirement gratuity constitutes a form of compensation or emolument subject to the constitutional prohibition against increasing the compensation of members of Congress during their term of office.

• Retirement Gratuity Basis: No. The retirement gratuity must be computed on the basis of P7,200.00 per annum, the salary petitioner actually received and was constitutionally permitted to receive during his term of office, not the P32,000.00 per annum increase which was operative only for incoming members of Congress.
• Nature of Retirement Gratuity: Yes. Retirement gratuity is a form of compensation or emolument within the purview of the constitutional provision limiting legislators' compensation and "other emoluments" to their salary as provided by law, as held in Philconsa vs. Jimenez.

• Retirement Gratuity Basis: The salary increase to P32,000.00 per annum under Republic Act No. 4134 could be operative only from December 30, 1969 for incoming members of Congress, by virtue of the constitutional mandate in Article VI, Section 14 of the 1935 Constitution. The "rate of pay as provided by law" for members of Congress retiring on December 30, 1969 must necessarily be P7,200.00 per annum — the compensation they received "as provided by law" and the Constitution during their term of office. The increased salary of P32,000.00 was the rate prescribed by Republic Act No. 4134 for the successor in office, not for the retiring legislator. To compute retirement gratuity on the prohibited higher rate would effectively give the retiree the benefits of increased compensation to which he was not entitled during his term, thereby violating the constitutional prohibition. As the Auditor General observed, the retiree could not legally receive such rate as salary while still in the service, and it defies logic to allow him to enjoy it thereafter by virtue of retirement.

• Nature of Retirement Gratuity: The Court relied on its prior ruling in Philconsa vs. Jimenez, which struck down Republic Act No. 3836 as null and void insofar as it referred to the retirement of members of Congress, holding that retirement benefit is a form or another species of emolument because it is a part of compensation for services of one possessing any office. That decision established that retirement benefits immediately available without awaiting the expiration of the full term of all members approving the increase clearly run counter to the prohibition in Article VI, Section 14 of the Constitution. Applying this principle, computing petitioner's retirement gratuity on the basis of P32,000.00 per annum would constitute an increase in emoluments prohibited by the Constitution, as it would be a subtle way of increasing his compensation during his term of office and achieving indirectly what could not be obtained directly.

• Retirement gratuity as emolument — Retirement benefit is a form or another species of emolument, being a part of compensation for services rendered by one holding office. As such, it falls within the purview of constitutional provisions limiting the compensation and "other emoluments" of members of Congress to their salary as provided by law. The Court applied this doctrine to hold that computing a retiring legislator's gratuity on a salary rate he was constitutionally prohibited from receiving during his term would circumvent the constitutional ban.
• Prohibition against indirect increase of legislative compensation — The constitutional mandate that no increase in the compensation of members of Congress shall take effect until after the expiration of the full term of all members approving such increase prohibits not only direct salary increases during the prohibited period but also indirect increases through retirement gratuity computed on a prohibited higher rate. A scheme that would lead to the same prohibited result by enabling administrative authorities to do indirectly what cannot be done directly contravenes the Constitution.

• "To grant petitioner's contention that the retirement gratuity of members of Congress; such as himself whose terms expired on December 30, 1969 should be computed on the basis of an increased salary of P32,000.00 per annum under Republic Act 4134 which could only by operative with incoming members of Congress whose terms of office would commence on December 30, 1969, by virtue of the Constitutional mandate that such salary increases could take effect only upon the expiration of the full term of all members of Congress that approved on June 20, 1964 such increased salary, (since petitioner and other outgoing members of Congress were constitutionally prohibited from receiving such salary increase during their term of office) would be a subtle way of going around the constitutional prohibition and increasing in effect their compensation during their term of office and of doing indirectly what could not be done directly." — This passage states the ratio decidendi of the case, articulating the core principle that retirement gratuity computed on a constitutionally prohibited salary rate constitutes an indirect circumvention of the constitutional ban on increasing legislative compensation during the legislator's term.

• "it is evident that retirement benefit is a form or another species of emolument, because it is a part of compensation for services of one possessing any office" — This quotation, drawn from the Court's prior ruling in Philconsa vs. Jimenez and reproduced in the decision, provides the canonical formulation of the doctrine that retirement benefits are emoluments subject to constitutional limitations on legislative compensation.

• Philconsa vs. Mathay, 18 SCRA 300 (1966) — Controlling precedent followed. The Court's unanimous decision held that the increased compensation under Republic Act No. 4134 was not operative until December 30, 1969, when the full terms of all members of Congress who approved the increase would have expired, pursuant to Article VI, Section 14 of the 1935 Constitution. This ruling established the operative date of the salary increase and determined that outgoing members whose terms expired on that date never received the higher salary during their incumbency.
• Philconsa vs. Jimenez, 15 SCRA 479 (1965) — Controlling precedent followed. The Court struck down Republic Act No. 3836 as void insofar as it provided for retirement of members of Congress, holding that retirement benefit is a form of emolument and part of compensation, and that retirement benefits immediately available without awaiting expiration of the full term of all members approving the increase violated Article VI, Section 14 of the Constitution. This case supplied the doctrinal foundation for treating retirement gratuity as subject to the constitutional prohibition.

• Section 14, Article VI, 1935 Constitution — Provides that "[n]o increase in said compensation shall take effect until after the expiration of the full term of all the members of the Senate and of the House of Representatives approving such increase." This provision was the constitutional basis for holding that the salary increase under Republic Act No. 4134 could not operate for members of Congress who approved it during their term, and that computing retirement gratuity on the prohibited higher rate would violate this mandate.
• Section 12(c), Commonwealth Act No. 186, as amended by Republic Act No. 4968 — The retirement law providing gratuity to any official or employee with at least twenty years of service, the last three years continuous, computed for elected officials on "the rates of pay as provided by law." The Court interpreted "rates of pay as provided by law" to mean the salary the retiring legislator was constitutionally authorized to receive during his term — P7,200.00 per annum — not the increased rate of P32,000.00 which was prescribed by law only for his successor.
• Section 1 and Section 7, Republic Act No. 4134 — Fixed the salaries of constitutional officials and certain other officials, increasing the compensation of members of Congress from P7,200.00 to P32,000.00 per annum, with the express proviso that the increases "shall take effect in accordance with the provisions of the Constitution." The Court relied on this statutory acknowledgment of the constitutional limitation to reinforce that the increased rate was never available to petitioner during his incumbency.

Makalintal, C.J., Castro, Esguerra, and Muñoz Palma, JJ., concurred. Makasiar, J., was on leave.