SSS v.

Davac - SSS Benefits

17 SCRA 863

Facts:

> Davac was an SSS member, and designated Candelaria Davac, his alleged wife, as his beneficiary.

> When he died, both his first wife, Lourdes and his second wife, Candelaria filed claims for the death benefits.

> Due to the conflicting claims, the SSS filed a petition praying that both of them be required to interplead and litigate
the conflicting claims.

> The death benefits were awarded to Candelaria Davac.

Issue:

Who is entitled to the SSS benefits?

Held:

Candelaria.

Under the SSS Act, the beneficiary as recorded by the employees employer is the one entitled to the death benefits,
hence they should go to Candelaria. Lourdes contends that the designation made in the person of Candelaria who is
party in a bigamous marriage is null and void for being against Art. 739 of the CC. SC held that the disqualification
mentioned in Art. 739 is NOT applicable to Candelaria, because she was not guilty of concubinage , there bieing NO
proof that she had actual knowledge of the previous marriage of her husband.

SSS v Davac G.R. No. L-21642 July 30, 1966

J. Barrera

Facts:
The late Petronilo Davac, a former employee of Lianga Bay, became a member of the SSS. He designated
Candelaria Davac as his beneficiary and indicated his relationship to her as that of "wife". He died then each
of the respondents (Candelaria Davac and Lourdes Tuplano) filed their claims for death benefit with the SSS.
The deceased contracted two marriages, the first, with claimant Lourdes Tuplano and the second with
Candelaria Davac. The processing was withheld. The SSS filed this petition praying that the two parties be
required to litigate their claims.
The SSS issued the resolution naming Davac as the valid beneficiary. Not satisfied with the resolution,
Lourdes Tuplano brought the appeal.

Issue: Whether or not the Social Security Commission acted correctly in declaring respondent Candelaria
Davac as the person entitled to receive the death benefits in question.

Held: Yes. SSS resolution affirmed.

Ratio:
Section 13, Republic Act No. 1161, provides:
1. SEC. 13. Upon the covered employee's death or total and permanent disability under such conditions as the
Commission may define, his beneficiaries, shall be entitled to the following benefit
The beneficiary "as recorded" by the employee's employer is the one entitled to the death benefits.
The appellant contends that the designation made in the person of the second and bigamous wife is null and
void, because (1) it contravenes the provisions of the Civil Code, and (2) it deprives the lawful wife of her
share in the conjugal property as well as of her own and her child's legitime in the inheritance.
As to the first point, appellant argues that a beneficiary under the Social Security System partakes of the nature
of a beneficiary in life insurance policy and, therefore, the same qualifications and disqualifications should be
applied. Article 739 and 2012 of the civil code prohibits persons whoi cannot receive donations from being
beneficiaries of a policy.
The provisions mentioned in Article 739 are not applicable to Candelaria Davac because she was not guilty
of concubinage, there being no proof that she had knowledge of the previous marriage of her husband
Petronilo.
Regarding the second point raised by appellant, the benefits accruing from membership in the Social Security
System do not form part of the properties of the conjugal partnership of the covered member. They are
disbursed from a public special fund created by Congress in pursuance to the declared policy of the Republic
"to develop, establish gradually and perfect a social security system which ... shall provide protection against
the hazards of disability, sickness, old age and death."
The sources of this special fund are from salary contributions.
Under other provisions, if there is a named beneficiary and the designation is not invalid, it is not the heirs of
the employee who are entitled to receive the benefits (unless they are the designated beneficiaries themselves).
It is only when there is no designated beneficiaries or when the designation is void, that the laws of succession
are applicable. The Social Security Act is not a law of succession.

G.R. No. L-21642 July 30, 1966

SOCIAL SECURITY SYSTEM, petitioner-appellee,
vs.
CANDELARIA D. DAVAC, ET AL., respondents;
LOURDES Tuplano, respondent-appellant.
J. Ma. Francisco and N. G. Bravo for respondent-appellant.
Office of the Solicitor General Arturo A. Alafriz, Solicitor Camilo D. Quiason and E. T. Duran for petitioner-appellee.
BARRERA, J.:
This is an appeal from the resolution of the Social Security Commission declaring respondent Candelaria Davac as the
person entitled to receive the death benefits payable for the death of Petronilo Davac.
The facts of the case as found by the Social Security Commission, briefly are: The late Petronilo Davac, a former
employee of Lianga Bay Logging Co., Inc. became a member of the Social Security System (SSS for short) on September
1, 1957. As such member, he was assigned SS I.D. No. 08-007137. In SSS form E-1 (Member's Record) which he
accomplished and filed with the SSS on November 21, 1957, he designated respondent Candelaria Davac as his
beneficiary and indicated his relationship to her as that of "wife". He died on April 5, 1959 and, thereupon, each of the
respondents (Candelaria Davac and Lourdes Tuplano) filed their claims for death benefit with the SSS. It appears from
their respective claims and the documents submitted in support thereof, that the deceased contracted two marriages,
the first, with claimant Lourdes Tuplano on August 29, 1946, who bore him a child, Romeo Davac, and the second,
with Candelaria Davac on January 18, 1949, with whom he had a minor daughter Elizabeth Davac. Due to their
conflicting claims, the processing thereof was held in abeyance, whereupon the SSS filed this petition praying that
respondents be required to interpose and litigate between themselves their conflicting claims over the death benefits
in question.1wph1.t
On February 25, 1963, the Social Security Commission issued the resolution referred to above, Not satisfied with the
said resolution, respondent Lourdes Tuplano brought to us the present appeal.
The only question to be determined herein is whether or not the Social Security Commission acted correctly in
declaring respondent Candelaria Davac as the person entitled to receive the death benefits in question.
Section 13, Republic Act No. 1161, as amended by Republic Act No. 1792, in force at the time Petronilo Davac's death
on April 5, 1959, provides:
1. SEC. 13. Upon the covered employee's death or total and permanent disability under such conditions as the
Commission may define, before becoming eligible for retirement and if either such death or disability is not
compensable under the Workmen's Compensation Act, he or, in case of his death, his beneficiaries, as recorded by his
employer shall be entitled to the following benefit: ... . (emphasis supplied.)
Under this provision, the beneficiary "as recorded" by the employee's employer is the one entitled to the death
benefits. In the case of Tecson vs. Social Security System, (L-15798, December 28, 1961), this Court, construing said
Section 13, said:
It may be true that the purpose of the coverage under the Social Security System is protection of the employee as well
as of his family, but this purpose or intention of the law cannot be enforced to the extent of contradicting the very
provisions of said law as contained in Section 13, thereof, ... . When the provision of a law are clear and explicit, the
courts can do nothing but apply its clear and explicit provisions (Velasco vs. Lopez, 1 Phil, 270; Caminetti vs. U.S., 242
U.S. 470, 61 L. ed. 442).
But appellant contends that the designation herein made in the person of the second and, therefore, bigamous wife
is null and void, because (1) it contravenes the provisions of the Civil Code, and (2) it deprives the lawful wife of her
share in the conjugal property as well as of her own and her child's legitime in the inheritance.
As to the first point, appellant argues that a beneficiary under the Social Security System partakes of the nature of a
beneficiary in life insurance policy and, therefore, the same qualifications and disqualifications should be applied.
Article 2012 of the New Civil Code provides:
ART. 2012. Any person who is forbidden from receiving any donation under Article 739 cannot be named beneficiary
of a life insurance policy by the person who cannot make any donation to him according to said article.
And Article 739 of the same Code prescribes:
ART. 739. The following donations shall be void:
(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;
xxx xxx xxx
Without deciding whether the naming of a beneficiary of the benefits accruing from membership in the Social Security
System is a donation, or that it creates a situation analogous to the relation of an insured and the beneficiary under a
life insurance policy, it is enough, for the purpose of the instant case, to state that the disqualification mentioned in
Article 739 is not applicable to herein appellee Candelaria Davac because she was not guilty of concubinage, there
being no proof that she had knowledge of the previous marriage of her husband Petronilo.1
Regarding the second point raised by appellant, the benefits accruing from membership in the Social Security System
do not form part of the properties of the conjugal partnership of the covered member. They are disbursed from a
public special fund created by Congress in pursuance to the declared policy of the Republic "to develop, establish
gradually and perfect a social security system which ... shall provide protection against the hazards of disability,
sickness, old age and death."2
The sources of this special fund are the covered employee's contribution (equal to 2- per cent of the employee's
monthly compensation);3 the employer's contribution (equivalent to 3- per cent of the monthly compensation of the
covered employee);4 and the Government contribution which consists in yearly appropriation of public funds to assure
the maintenance of an adequate working balance of the funds of the System.5 Additionally, Section 21 of the Social
Security Act, as amended by Republic Act 1792, provides:
SEC. 21. Government Guarantee. The benefits prescribed in this Act shall not be diminished and to guarantee said
benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the
System.
From the foregoing provisions, it appears that the benefit receivable under the Act is in the nature of a special privilege
or an arrangement secured by the law, pursuant to the policy of the State to provide social security to the workingmen.
The amounts that may thus be received cannot be considered as property earned by the member during his lifetime.
His contribution to the fund, it may be noted, constitutes only an insignificant portion thereof. Then, the benefits are
specifically declared not transferable,6 and exempted from tax legal processes, and lien.7 Furthermore, in the
settlement of claims thereunder the procedure to be observed is governed not by the general provisions of law, but
by rules and regulations promulgated by the Commission. Thus, if the money is payable to the estate of a deceased
member, it is the Commission, not the probate or regular court that determines the person or persons to whom it is
payable.8 that the benefits under the Social Security Act are not intended by the lawmaking body to form part of the
estate of the covered members may be gathered from the subsequent amendment made to Section 15 thereof, as
follows:
SEC. 15. Non-transferability of benefit. The system shall pay the benefits provided for in this Act to such persons as
may be entitled thereto in accordance with the provisions of this Act. Such benefits are not transferable, and no power
of attorney or other document executed by those entitled thereto in favor of any agent, attorney, or any other
individual for the collection thereof in their behalf shall be recognized except when they are physically and legally
unable to collect personally such benefits: Provided, however, That in the case of death benefits, if no beneficiary has
been designated or the designation there of is void, said benefits shall be paid to the legal heirs in accordance with
the laws of succession. (Rep. Act 2658, amending Rep. Act 1161.)
In short, if there is a named beneficiary and the designation is not invalid (as it is not so in this case), it is not the heirs
of the employee who are entitled to receive the benefits (unless they are the designated beneficiaries themselves). It
is only when there is no designated beneficiaries or when the designation is void, that the laws of succession are
applicable. And we have already held that the Social Security Act is not a law of succession.9
Wherefore, in view of the foregoing considerations, the resolution of the Social Security Commission appealed from is
hereby affirmed, with costs against the appellant.
So ordered.