G.R. No.

L-39419 April 12, 1982

MAPALAD AISPORNA, petitioner,

vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DE CASTRO, J.:

in CA-G.R. No.
In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated August 14, 1974 1
13243-CR entitled "People of the Philippines, plaintiff-appellee, vs. Mapalad Aisporna, defendant-appellant" of
respondent Court of Appeals affirming the judgment of the City Court of Cabanatuan 2 rendered on August 2,
1971 which found the petitioner guilty for having violated Section 189 of the Insurance Act (Act No. 2427, as
amended) and sentenced her to pay a fine of P500.00 with subsidiary imprisonment in case of insolvency, and to
pay the costs.

Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the Insurance Act on November 21, 1970 in an
information 3 which reads as follows:

That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did then and there, wilfully, unlawfully and feloniously act
as agent in the solicitation or procurement of an application for insurance by soliciting therefor the application of one
Eugenio S. Isidro, for and in behalf of Perla Compania de Seguros, Inc., a duly organized insurance company, registered
under the laws of the Republic of the Philippines, resulting in the issuance of a Broad Personal Accident Policy No. 28PI-
RSA 0001 in the amount not exceeding FIVE THOUSAND PESOS (P5,000.00) dated June 21, 1969, without said
accused having first secured a certificate of authority to act as such agent from the office of the Insurance Commissioner,
Republic of the Philippines.

CONTRARY TO LAW.

The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:

IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969, appellant's husband, Rodolfo
S. Aisporna was duly licensed by Insurance Commission as agent to Perla Compania de Seguros, with license to expire
on 30 June, 1970, Exh. C; on that date, at Cabanatuan City, Personal Accident Policy, Exh. D was issued by Perla thru its
author representative, Rodolfo S. Aisporna, for a period of twelve (12) months with beneficiary as Ana M. Isidro, and for
P5,000.00; apparently, insured died by violence during lifetime of policy, and for reasons not explained in record, present
information was filed by Fiscal, with assistance of private prosecutor, charging wife of Rodolfo with violation of Sec. 189 of
Insurance Law for having, wilfully, unlawfully, and feloniously acted, "as agent in the solicitation for insurance by soliciting
therefore the application of one Eugenio S. Isidro for and in behalf of Perla Compaa de Seguros, ... without said accused
having first secured a certificate of authority to act as such agent from the office of the Insurance Commission, Republic of
the Philippines."

and in the trial, People presented evidence that was hardly disputed, that aforementioned policy was issued with active
participation of appellant wife of Rodolfo, against which appellant in her defense sought to show that being the wife of true
agent, Rodolfo, she naturally helped him in his work, as clerk, and that policy was merely a renewal and was issued
because Isidro had called by telephone to renew, and at that time, her husband, Rodolfo, was absent and so she left a
note on top of her husband's desk to renew ...

Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's decision was affirmed by the respondent
appellate court finding the petitioner guilty of a violation of the first paragraph of Section 189 of the Insurance Act. Hence, this present
recourse was filed on October 22, 1974. 5

6 this Court resolved, without giving due course to this instant petition, to require the
In its resolution of October 28, 1974,
respondent to comment on the aforesaid petition. In the comment 7 filed on December 20, 1974, the respondent,
represented by the Office of the Solicitor General, submitted that petitioner may not be considered as having
violated Section 189 of the Insurance Act. 8 On April 3, 1975, petitioner submitted his Brief 9 while the Solicitor
General, on behalf of the respondent, filed a manifestation 10 in lieu of a Brief on May 3, 1975 reiterating his stand
that the petitioner has not violated Section 189 of the Insurance Act.

In seeking reversal of the judgment of conviction, petitioner assigns the following errors 11 allegedly committed by the appellate
court:

1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF COMPENSATION IS NOT AN
ESSENTIAL ELEMENT OF THE CRIME DEFINED BY THE FIRST PARAGRAPH OF SECTION 189 OF THE
INSURANCE ACT.

2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO EXHIBITS F, F-1, TO F-17,
INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S GUILT BEYOND REASONABLE DOUBT.

3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN PETITIONER.

We find the petition meritorious.

The main issue raised is whether or not a person can be convicted of having violated the first paragraph of Section 189 of the Insurance Act
without reference to the second paragraph of the same section. In other words, it is necessary to determine whether or not the agent
mentioned in the first paragraph of the aforesaid section is governed by the definition of an insurance agent found on its second paragraph.

The pertinent provision of Section 189 of the Insurance Act reads as follows:
 No insurance company doing business within the Philippine Islands, nor any agent thereof, shall pay any commission or
other compensation to any person for services in obtaining new insurance, unless such person shall have first procured
from the Insurance Commissioner a certificate of authority to act as an agent of such company as hereinafter provided.
No person shall act as agent, sub-agent, or broker in the solicitation of procurement of applications for insurance, or
receive for services in obtaining new insurance, any commission or other compensation from any insurance company
doing business in the Philippine Islands, or agent thereof, without first procuring a certificate of authority so to act from the
Insurance Commissioner, which must be renewed annually on the first day of January, or within six months thereafter.
Such certificate shall be issued by the Insurance Commissioner only upon the written application of persons desiring such
authority, such application being approved and countersigned by the company such person desires to represent, and shall
be upon a form approved by the Insurance Commissioner, giving such information as he may require. The Insurance
Commissioner shall have the right to refuse to issue or renew and to revoke any such certificate in his discretion. No such
certificate shall be valid, however, in any event after the first day of July of the year following the issuing of such
certificate. Renewal certificates may be issued upon the application of the company.

Any person who for compensation solicits or obtains insurance on behalf of any insurance company, or transmits for a
person other than himself an application for a policy of insurance to or from such company or offers or assumes to act in
the negotiating of such insurance, shall be an insurance agent within the intent of this section, and shall thereby become
liable to all the duties, requirements, liabilities, and penalties to which an agent of such company is subject.

Any person or company violating the provisions of this section shall be fined in the sum of five hundred pesos. On the
conviction of any person acting as agent, sub-agent, or broker, of the commission of any offense connected with the
business of insurance, the Insurance Commissioner shall immediately revoke the certificate of authority issued to him and
no such certificate shall thereafter be issued to such convicted person.

A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a person from acting as agent, sub-agent or
broker in the solicitation or procurement of applications for insurance without first procuring a certificate of authority so to act from the
Insurance Commissioner, while its second paragraph defines who is an insurance agent within the intent of this section and, finally, the third
paragraph thereof prescribes the penalty to be imposed for its violation.

The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph of Section 189 of the aforesaid Act but
under its first paragraph. Thus

... it can no longer be denied that it was appellant's most active endeavors that resulted in issuance of policy to Isidro, she
was there and then acting as agent, and received the pay thereof her defense that she was only acting as helper of her
husband can no longer be sustained, neither her point that she received no compensation for issuance of the policy
because

any person who for compensation solicits or obtains insurance on behalf of any insurance company
or transmits for a person other than himself an application for a policy of insurance to or from such
company or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent
within the intent of this section, and shall thereby become liable to all the duties, requirements,
liabilities, and penalties, to which an agent of such company is subject. paragraph 2, Sec. 189,
Insurance Law,

now it is true that information does not even allege that she had obtained the insurance,

for compensation

which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but what appellant apparently
overlooks is that she is prosecuted not under the 2nd but under the 1st paragraph of Sec. 189 wherein it is provided that,

No person shall act as agent, sub-agent, or broker, in the solicitation or procurement of applications
for insurance, or receive for services in obtaining new insurance any commission or other
compensation from any insurance company doing business in the Philippine Island, or agent thereof,
without first procuring a certificate of authority to act from the insurance commissioner, which must be
renewed annually on the first day of January, or within six months thereafter.

therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4 must be overruled. 12

From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of an
insurance agent under the second paragraph of Section 189 is not applicable to the insurance agent mentioned in
the first paragraph. Parenthetically, the respondent court concludes that under the second paragraph of Section
189, a person is an insurance agent if he solicits and obtains an insurance for compensation, but, in its first
paragraph, there is no necessity that a person solicits an insurance for compensation in order to be called an
insurance agent.

We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of an insurance agent as found in the
second paragraph of Section 189 is intended to define the word "agent" mentioned in the first and second paragraphs of the aforesaid section.
More significantly, in its second paragraph, it is explicitly provided that the definition of an insurance agent is within the intent of Section 189.
Hence

Any person who for compensation ... shall be an insurance agent within the intent of this section, ...

Patently, the definition of an insurance agent under the second paragraph holds true with respect to the agent mentioned in the other two
paragraphs of the said section. The second paragraph of Section 189 is a definition and interpretative clause intended to qualify the term
"agent" mentioned in both the first and third paragraphs of the aforesaid section.

Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and second paragraphs would give
harmony to the aforesaid three paragraphs of Section 189. Legislative intent must be ascertained from a consideration of the statute as a
whole. The particular words, clauses and phrases should not be studied as detached and isolated expressions, but the whole and every part
of the statute must be considered in fixing the meaning of any of its parts and in order to produce harmonious whole. 13 A statute must be
so construed as to harmonize and give effect to all its provisions whenever possible. 14 The meaning of the law, it
must be borne in mind, is not to be extracted from any single part, portion or section or from isolated words and
phrases, clauses or sentences but from a general consideration or view of the act as a whole. 15 Every part of the
statute must be interpreted with reference to the context. This means that every part of the statute must be
considered together with the other parts, and kept subservient to the general intent of the whole enactment, not
separately and independently. 16 More importantly, the doctrine of associated words (Noscitur a Sociis) provides
that where a particular word or phrase in a statement is ambiguous in itself or is equally susceptible of various
meanings, its true meaning may be made clear and specific by considering the company in which it is found or
with which it is associated. 17

Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the
agent mentioned in the first paragraph, to receive a compensation by the agent is an essential element for a
violation of the first paragraph of the aforesaid section. The appellate court has established ultimately that the
petitioner-accused did not receive any compensation for the issuance of the insurance policy of Eugenio Isidro.
Nevertheless, the accused was convicted by the appellate court for, according to the latter, the receipt of
compensation for issuing an insurance policy is not an essential element for a violation of the first paragraph of
Section 189 of the Insurance Act.

We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any person for direct or indirect compensation
to solicit insurance without a certificate of authority to act as an insurance agent, an information, failing to allege that the solicitor was to
receive compensation either directly or indirectly, charges no offense. 18 In the case of Bolen vs. Stake, 19 the provision of
Section 3750, Snyder's Compiled Laws of Oklahoma 1909 is intended to penalize persons only who acted as
insurance solicitors without license, and while acting in such capacity negotiated and concluded insurance
contracts for compensation. It must be noted that the information, in the case at bar, does not allege that the
negotiation of an insurance contracts by the accused with Eugenio Isidro was one for compensation. This
allegation is essential, and having been omitted, a conviction of the accused could not be sustained. It is well-
settled in Our jurisprudence that to warrant conviction, every element of the crime must be alleged and proved. 20

After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that accused did not violate Section 189
of the Insurance Act.

WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime charged, with costs de oficio.

SO ORDERED.

Teehankee (Acting C.J.,) Makasiar, De Castro, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.

Plana, J., took no part.

G.R. No. L-34964 January 31, 1973

CHINA BANKING CORPORATION and TAN KIM LIONG, petitioners-appellants,

vs.
HON. WENCESLAO ORTEGA, as Presiding Judge of the Court of First Instance of Manila, Branch VIII, and VICENTE G.
ACABAN, respondents-appellees.

Sy Santos, Del Rosario and Associates for petitioners-appellants.

Tagalo, Gozar and Associates for respondents-appellees.

MAKALINTAL, J.:

The only issue in this petition for certiorari to review the orders dated March 4, 1972 and March 27, 1972, respectively, of the Court of First
Instance of Manila in its Civil Case No. 75138, is whether or not a banking institution may validly refuse to comply with a court process
garnishing the bank deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405. *

On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against Bautista Logging Co., Inc., B & B Forest Development Corporation
and Marino Bautista for the collection of a sum of money. Upon motion of the plaintiff the trial court declared the defendants in default for failure to
answer within the reglementary period, and authorized the Branch Clerk of Court and/or Deputy Clerk to receive the plaintiff's evidence. On January 20,
1970 judgment by default was rendered against the defendants.

To satisfy the judgment, the plaintiff sought the garnishment of the bank deposit of the defendant B & B Forest Development Corporation with
the China Banking Corporation. Accordingly, a notice of garnishment was issued by the Deputy Sheriff of the trial court and served on said
bank through its cashier, Tan Kim Liong. In reply, the bank' cashier invited the attention of the Deputy Sheriff to the provisions of Republic Act
No. 1405 which, it was alleged, prohibit the disclosure of any information relative to bank deposits. Thereupon the plaintiff filed a motion to cite
Tan Kim Liong for contempt of court.

In an order dated March 4, 1972 the trial court denied the plaintiff's motion. However, Tan Kim Liong was ordered "to inform the Court within
five days from receipt of this order whether or not there is a deposit in the China Banking Corporation of defendant B & B Forest Development
Corporation, and if there is any deposit, to hold the same intact and not allow any withdrawal until further order from this Court." Tan Kim Liong
moved to reconsider but was turned down by order of March 27, 1972. In the same order he was directed "to comply with the order of this
Court dated March 4, 1972 within ten (10) days from the receipt of copy of this order, otherwise his arrest and confinement will be ordered by
the Court." Resisting the two orders, the China Banking Corporation and Tan Kim Liong instituted the instant petition.

The pertinent provisions of Republic Act No. 1405 relied upon by the petitioners reads:

Sec. 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds
issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as
of absolutely confidential nature and may not be examined, inquired or looked into by any person, government official,
bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a
competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or
invested is the subject matter of the litigation.

Sec 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those
mentioned in Section two hereof any information concerning said deposits.

Sec. 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five years or a
fine of not more than twenty thousand pesos or both, in the discretion of the court.

The petitioners argue that the disclosure of the information required by the court does not fall within any of the four (4) exceptions enumerated
in Section 2, and that if the questioned orders are complied with Tan Kim Liong may be criminally liable under Section 5 and the bank exposed
to a possible damage suit by B & B Forest Development Corporation. Specifically referring to this case, the position of the petitioners is that
the bank deposit of judgment debtor B & B Forest Development Corporation cannot be subject to garnishment to satisfy a final judgment
against it in view of the aforequoted provisions of law.

We do not view the situation in that light. The lower court did not order an examination of or inquiry into the deposit of B & B Forest
Development Corporation, as contemplated in the law. It merely required Tan Kim Liong to inform the court whether or not the defendant B &
B Forest Development Corporation had a deposit in the China Banking Corporation only for purposes of the garnishment issued by it, so that
the bank would hold the same intact and not allow any withdrawal until further order. It will be noted from the discussion of the conference
committee report on Senate Bill No. 351 and House Bill No. 3977, which later became Republic Act 1405, that it was not the intention of the
lawmakers to place bank deposits beyond the reach of execution to satisfy a final judgment. Thus:

Mr. MARCOS. Now, for purposes of the record, I should like the Chairman of the Committee on Ways and Means to
clarify this further. Suppose an individual has a tax case. He is being held liable by the Bureau of Internal Revenue for,
say, P1,000.00 worth of tax liability, and because of this the deposit of this individual is attached by the Bureau of Internal
Revenue.

Mr. RAMOS. The attachment will only apply after the court has pronounced sentence declaring the liability of such person.
But where the primary aim is to determine whether he has a bank deposit in order to bring about a proper assessment by
the Bureau of Internal Revenue, such inquiry is not authorized by this proposed law.

Mr. MARCOS. But under our rules of procedure and under the Civil Code, the attachment or garnishment of money
deposited is allowed. Let us assume, for instance, that there is a preliminary attachment which is for garnishment or for
holding liable all moneys deposited belonging to a certain individual, but such attachment or garnishment will bring out
into the open the value of such deposit. Is that prohibited by this amendment or by this law?

Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited, or rather, the inquiry is made only for the purpose
of satisfying a tax liability already declared for the protection of the right in favor of the government; but when the object is
merely to inquire whether he has a deposit or not for purposes of taxation, then this is fully covered by the law.

Mr. MARCOS. And it protects the depositor, does it not?

 Mr. RAMOS. Yes, it protects the depositor.

Mr. MARCOS. The law prohibits a mere investigation into the existence and the amount of the deposit.

Mr. RAMOS. Into the very nature of such deposit.

Mr. MARCOS. So I come to my original question. Therefore, preliminary garnishment or attachment of the deposit is not
allowed?

Mr. RAMOS. No, without judicial authorization.

Mr. MARCOS. I am glad that is clarified. So that the established rule of procedure as well as the substantive law on the
matter is amended?

Mr. RAMOS. Yes. That is the effect.

Mr. MARCOS. I see. Suppose there has been a decision, definitely establishing the liability of an individual for taxation
purposes and this judgment is sought to be executed ... in the execution of that judgment, does this bill, or this proposed
law, if approved, allow the investigation or scrutiny of the bank deposit in order to execute the judgment?

Mr. RAMOS. To satisfy a judgment which has become executory.

Mr. MARCOS. Yes, but, as I said before, suppose the tax liability is P1,000,000 and the deposit is half a million, will this
bill allow scrutiny into the deposit in order that the judgment may be executed?

Mr. RAMOS. Merely to determine the amount of such money to satisfy that obligation to the Government, but not to
determine whether a deposit has been made in evasion of taxes.

xxx xxx xxx

Mr. MACAPAGAL. But let us suppose that in an ordinary civil action for the recovery of a sum of money the plaintiff
wishes to attach the properties of the defendant to insure the satisfaction of the judgment. Once the judgment is rendered,
does the gentleman mean that the plaintiff cannot attach the bank deposit of the defendant?

Mr. RAMOS. That was the question raised by the gentleman from Pangasinan to which I replied that outside the very
purpose of this law it could be reached by attachment.

Mr. MACAPAGAL. Therefore, in such ordinary civil cases it can be attached?

Mr. RAMOS. That is so.

(Vol. II, Congressional Record, House of Representatives, No. 12, pp. 3839-3840, July 27, 1955).

It is sufficiently clear from the foregoing discussion of the conference committee report of the two houses of Congress that the prohibition
against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished to insure satisfaction of a
judgment. Indeed there is no real inquiry in such a case, and if the existence of the deposit is disclosed the disclosure is purely incidental to
the execution process. It is hard to conceive that it was ever within the intention of Congress to enable debtors to evade payment of their just
debts, even if ordered by the Court, through the expedient of converting their assets into cash and depositing the same in a bank.

WHEREFORE, the orders of the lower court dated March 4 and 27, 1972, respectively, are hereby affirmed, with costs against the petitioners-
appellants.

Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

Concepcion, C.J. and Teehankee, J., took no part.

Footnotes

* An Act Probihiting Disclosure of or Inquiry into, Deposits with any Banking Institution and Providing Penalty Therefor.
G.R. No. L-37867 February 22, 1982

BOARD OF ADMINISTRATORS, PHILIPPINES VETERANS ADMINISTRATION, petitioner,

vs.
HON. JOSE G. BAUTISTA, in his capacity as Presiding Judge of the CFI Manila, Branch III, and CALIXTO V. GASILAO, respondents.

GUERRERO, J.:

This is a petition to review on certiorari the decision of respondent Court of First Instance of Manila, Branch III, rendered on October 25, 1973
in Civil Case No. 90450 for mandamus filed by Calixto V. Gasilao against the Board of Administrators of the Philippine Veterans
Administration.

The facts as found by the Court a quo to have been established by the pleadings find by the parties are stated in the decision under review
from which We quote the following:

Calixto V. Gasilao, pauper litigant and petitioner in the above-entitled case, was a veteran in good standing during World
War II. On October 19, 1955, he filed a claim for disability pension under Section 9, Republic Act No. 65. The claim was
disapproved by the Philippine Veterans Board (now Board of Administrators, Philippine Veterans Administration).

Meanwhile, Republic Act 65 was amended by Republic Act 1362 on June 22, 1955 by including as part of the benefit of
P50.00, P10.00 a month for each of the unmarried minor children below 18 of the veteran Republic Act No. 1362 was
implemented by the respondents only on July 1, 1955.

On June 18, 1957, Section 9 of Republic Act No. 65 was further amended by Republic Act 1920 increasing the life
pension of the veteran to P100.00 a month and maintaining the P10.00 a month each for the unmarried minor children
below 18.

Fortunately, on August 8, 1968, the claim of the petitioner which was disapproved in December, 1955 was reconsidered
and his claim was finally approved at the rate of P100.00 a month, life pension, and the additional Pl0.00 for each of his
ten unmarried minor children below 18. In view of the approval of the claim of petitioner, he requested respondents that
his claim be made retroactive as of the date when his original application was flied or disapproved in 1955. Respondents
did not act on his request.

On June 22, 1969, Section 9 of Republic Act No. 65 was amended by Republic Act No. 5753 which increased the life
pension of the veteran to P200.00 a month and granted besides P30.00 a month for the wife and P30.00 a month each for
his unmarried minor children below 18. In view of the new law, respondents increased the monthly pension of petitioner to
P125.00 effective January 15, 1971 due to insufficient funds to cover full implementation. His wife was given a monthly
pension of P7.50 until January 1, 1972 when Republic Act 5753 was fully implemented.

Petitioner now claims that he was deprived of his right to the pension from October 19, 1955 to June 21, 1957 at the rate
of P50.00 per month plus P10.00 a month each for his six (6) unmarried minor children below 18. lie also alleges that from
June 22, 1957 to August 7, 1968 he is entitled to the difference of P100.00 per month plus P10.00 a month each for his
seven (7) unmarried nor children below 18. Again, petitioner asserts the difference of P100.00 per month, plus P30.00 a
month for his wife and the difference of P20.00 a month each for his four (4) unmarried minor children below 18 from June
22, 1969 up to January 14, 1971 and finally, the difference of P75.00 per month plus P30.00 a month for his wife and the
difference of P20.00 a month for his three (3) unmarried minor children below 18 from January 15, 1971 to December 31,
1971. 1

According to the records, the parties, through their respective counsels, filed on September 24, 1973 the following stipulation of facts in the
lower Court:

STIPULATION OF FACTS

COME NOW the parties thru their respective counsel, and unto this Honorable Court, respectfully state that they agree on
the following facts which may be considered as proved without the need of the introduction of any evidence thereon, to
wit:

1. Petitioner was a veteran in good standing during the last World War that took active participation in the liberation drive
against the enemy, and due to his military service, he was rendered disabled.

2. The Philippine Veterans Administration, formerly the Philippine Veterans Board, (now Philippine Veterans Affairs Office)
is an agency of the Government charged with the administration of different laws giving various benefits in favor of
veterans and their orphans/or widows and parents; that it has the power to adopt rules and regulations to implement said
laws and to pass upon the merits and qualifications of persons applying for rights and privileges extended by this Act
pursuant to such rules and regulations as it may adopt to insure the speedy and honest fulfillment of its aims and
purposes.

3. On July 23, 1955, petitioner filed a claim (Claim No. Dis-12336) for disability pension under Section 9 of RA 65, with the
Philippine Veterans Board (later succeeded by the Philippine Veterans Administration, now Philippine Veterans Affairs
Office), alleging that he was suffering from PTB, which he incurred in line of duty.

4. Due to petitioner's failure to complete his supporting papers and submit evidence to establish his service connected
illness, his claim was disapproved by the Board of the defunct Philippine Veterans Board on December 18, 1955.

5. On August 8, 1968, petitioner was able to complete his supporting papers and, after due investigation and processing,
the Board of Administrators found out that his disability was 100% thus he was awarded the full benefits of section 9 of RA
65, and was therefore given a pension of P100.00 a month and with an additional P 10.00 a month for each of his
unmarried minor children pursuant to RA 1920, amending section 9 of RA 65.

6. RA 5753 was approved on June 22, 1969, providing for an increase in the basic pension to P200.00 a month and the
additional pension, to P30.00 a month for the wife and each of the unmarried minor children. Petitioner's monthly pension
was, however, increased only on January 15, 1971, and by 25% of the increases provided by law, due to the fact that it
 was only on said date that funds were released for the purpose, and the amount so released was only sufficient to pay
only 25% of the increase.

7. On January 15, 1972, more funds were released to implement fully RA 5753 and snow payment in full of the benefits
thereunder from said date.

WHEREFORE, it is respectfully prayed that a decision be rendered in accordance with the foregoing stipulation of facts. It
is likewise prayed that the parties be granted a period of (15) days within which to file their memoranda. 2

Upon consideration of the foregoing and the Memoranda filed by the parties, the lower Court rendered judgment
against therein respondent Board of Administrators, the dispositive portion of which reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered for petitioner and the respondents are ordered to
make petitioner's pension effective as of December 18, 1955 at the rate of P50.00 per month; and the rate increased to
P100.00 per month plus P10.00 per month each for his ten unmarried minor children below 18 years of age from June 22,
1957 up to August 7..1968; to pay the difference of P100.00 per month plus P30.00 per month and P20.00 per month
each for his ten unmarried children below 18 years of age from June 22, 1969 up to January 15, 1971, the difference of
P75.00 per month plus P22.50 per month for his wife and P20.00 per month each for his unmarried nor children then
below 18 years of age from January 16, 1971 up to December 31, 1971.

SO ORDERED.

Manila, October 25, 1973. 3

In its Petition before this Court, the Board of Administrators of the Philippine Veterans Administration, through the
Office of the Solicitor General, challenges the abovementioned decision of the Court a quo on the following
grounds:

1. The lower Court erred in ordering the petitioners to retroact the effectivity of their award to respondent Calixto V.
Gasilao of full benefits under section 9 of RA 65 to December 18, 1955, the date when his application was disapproved
due to dis failure to complete his supporting papers and submit evidence to establish his service connected illness, and
not August 8, 1968, the date when he was able to complete his papers and allow processing and approval of his
application.

2. The lower Court erred in ordering payment of claims which had prescribed.

3. The lower Court erred in allowing payment of claims under a law for which no funds had been released. 4

The question raised under the first assigned error is: When should private respondent Gasilao's pension benefits start

The lower Court, quoting excerpts from Our decision in Begosa vs. Chairman Philippine Veterans Administration, 5ruled
that Gasilao's
pension benefits should retroact to the date of the disapproval of his claim on December 18, 1955, and not
commence from the approval thereon on August 8, 1968 as contended by the Board of Administrators.

Petitioner maintains the stand that the facts of the Begosa case are not similar to those of the case at bar to warrant an application of the
ruling therein on the retroactivity of a pension award to the date of prior disapproval of the claim. In the Begosa case, the Supreme Court
speaking thru then Associate Justice, now Chief Justice Fernando, affirmed the decision of the lower Court, and ruled in part as follows:

From the facts just set out, it will be noted that plaintiff filed his said claim for disability pension as far back as March 4,
1955; that it was erroneously disapproved on June 21, 1955, because his dishonorable discharge from the Army was not
a good or proper ground for the said disapproval and that on reconsideration asked for by him on November 1, 1957,
which he continued to follow up, the Board of Administrators, Philippine Veterans Administration, composed of herein
defendants, which took over the duties of the Philippine Veterans Board, finally approved his claim on September 2, 1964,
at the rate of P30.00 a month. 6

Had it not been for the said error, it appears that there was no good ground to deny the said claim, so that the latter was
valid and meritorious even as of the date of its filing on March 4, 1955, hence to make the same effective only as of the
date of its approval on September 2, 1964 according to defendant's stand would be greatly unfair and prejudicial to
plaintiff. 7

In other words, the favorable award which claimant Begosa finally obtained on September 2, 1964 was made to retroact to the date of prior
disapproval of the claim on June 2, 1955 for the reason that such disapproval was erroneously made.

In the instant case, on the other hand, the herein claim of respondent Gasilao was denied on December 18, 1955 because of his "failure to
complete his supporting papers and submit evidence to establish his service-connected illness" (Stipulation of Facts, Par. 4, ante).
Nonetheless, the Stipulation of Facts admitted in par. 1 that "Petitioner was a veteran in good standing during the last World War that took
active participation in the liberation drive against the enemy, and due to his military service, he was rendered disabled." From this admission in
par. 1, it can reasonably be deduced that the action on the claim of Gasilao was merely suspended by the Philippine Veterans Administration
pending the completion of the required supporting papers and evidence to establish his service-connected illness. Hence, Our ruling in
the Begosa case making retroactive the award in favor of the veteran still holds.

Republic Act No. 65 otherwise known as the Veterans' Bill of Rights, as amended, does not explicitly provide for the effectivity of pension
awards. However, petitioner seeks to remedy this legislative deficiency by citing Section 15 of the law which in part reads as follows:

Sec. 15. Any person who desires to take advantage of the rights and privileges provided for in this Act should file his
application with the Board ...

Petitioner contends that since the foregoing section impliedly requires that the application filed should first be approved by the Board of
Administrators before the claimant could receive his pension, therefore, an award of pension benefits should commence form the date of he
approval of the application.
This stand of the petitioner does not appear to be in consonance with the spirit and intent of the law, considering that Republic Act 65 is a
veteran pension law which must be accorded a liberal construction and interpretation in order to favor those entitled to the rights, privileges
and benefits granted thereunder, among which are the right to resume old positions in the government, educational benefits, the privilege to
take promotional examinations, a life pension for the incapacitated, pensions for widow and children, hospitalization and medical care benefits.

As it is generally known, the purpose of Congress in granting veteran pensions is to compensate, as far as may be, a class of men who
suffered in the service for the hardships they endured and the dangers they encountered, 8 and more particularly, those who have
become incapacitated for work owing to sickness, disease or injuries sustained while in line of duty. 9 A veteran
pension law is, therefore, a governmental expression of gratitude to and recognition of those who rendered
service for the country, especially during times of war or revolution, by extending to them regular monetary aid.
For this reason, it is the general rule that a liberal construction is given to pension statutes in favor of those
entitled to pension. Courts tend to favor the pensioner, but such constructional preference is to be considered with
other guides to interpretation, and a construction of pension laws must depend on its own particular language. 10

Significantly, the original text of RA 65 provided that:

Sec. 6. It also shall be the duty of the Board (then the Philippine Veterans Board) to pass upon the merits and
qualifications of persons applying for the rights and/or privileges extended by this Act, pursuant to such rules as it may
adopt to insure the speedy and honest fulfillment of its aims and purposes. (Emphasis supplied.)

The foregoing provision clearly makes it incumbent upon the implementing Board to carry out the provisions of the statute in the most
expeditious way possible and without unnecessary delay. In the Begosa case, it took nine years (from June 2, 1955 to September 2, 1964)
before the claimant finally obtained his pension grant, whereas in the instant case, it took about twelve years (from December, 1955 to August
8, 1968) for respondent Gasilao to receive his pension claim. To Our mind, it would be more in consonance with the spirit and intentment of
the law that the benefits therein granted be received and enjoyed at the earliest possible time by according retroactive effect to the grant of the
pension award as We have done in the Begosa case.

On the other hand, if the pension awards are made effective only upon approval of the corresponding application which would be dependent
on the discretion of the Board of Administrators which as noted above had been abused through inaction extending to nine years, even to
twelve years, the noble and humanitarian purposes for which the law had enacted could easily be thwarted or defeated.

On the issue of prescription, petitioner cites Article 1144 of the Civil Code which provides:

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law; and

(3) Upon a judgment.

Petitioner now contends that since the action was filed in the lower Court on April 13, 1973 seeking the payment of alleged claims which have
accrued more than ten (10) years prior to said date, the same should have been disallowed as to the prescribed claims.

The obligation of the government to pay pension was created by law (Sec. 9, R.A. 65). Hence, the ten-year prescriptive period should be
counted from the date of passage of the law which is September 25, 1946, the reason being that it is only from said date that private
respondent could have filed his application. Taking September 25, 1946 as the point of reference, the actual filing of Gasilao's application on
July 23, 1955 was clearly made within and effectively interrupted the prescriptive period. It is not the date of the commencement of the action
in the lower Court which should be reckoned with, for it was not on said date that Gasilao first sought to claim his pension benefits, but on July
23, 1955 when he filed his application with the defunct Philippine Veterans Board. As We had the occasion to state in the case of Vda. de
Nator vs. C.I.R., 11 "the basis of prescription is the unwarranted failure to bring the matter to the attention of those who
are by law authorized to take cognizance thereof."

The Stipulation of Facts do not show and neither do the records indicate when Gasilao attempted to reinstate his claim after the same was
disapproved on December 18, 1955. What is evident is that he did take steps to reinstate his claim because on August 8, 1968, herein
petitioner finally approved his application. We find it more logical to presume that upon being properly notified of the disapproval of his
application and the reasons therefor, Gasilao, being the interested party that he was proceeded to work for the completion of the requirements
of the Board, as in fact he was successful in meeting such requirements. There is nothing in the record to show intentional abandonment of
the claim to as to make the prescriptive period continue to run again.

The third ground relied upon in support of this Petition involves the issue as to whether or not the payment of increased pension provided in
the amendatory Act, R.A. 5753, could be ordered, even where there was no actual release of funds for the purpose, although the law itself
expressly provided for an appropriation. In the case ofBoard of Adminitrators, Philippine Veterans Administration vs. Hon. Agcoili, et
al., 12 penned by Chief Justice Fred Ruiz Castro, the same issue was treated in this wise:

... The inability of the petitioner to pay Abrera the differential of P60.00 in monthly pension is attributed by it, in its own
words, "to the failure of Congress to appropriate the necessary funds to cover all claims for benefits, pensions and
allowances." And the petitioner states that it has "no alternative but to suspend (full implementation of said laws until such
time, as sufficient funds have been appropriated by Congress" to cover the total amount of all approved claims.

We find the explanation of the petitioner satisfactory, but we nevertheless hold that as a matter of law Abrera is entitled to
a monthly pension of P120.00 from January 1, 1972 when Republic Act 5753 was implemented up to the present, if his
physical disability rating has continued and continues to be 60%. Payment to him of what is due him from January 1, 1972
must however remain subject to the availability of Government funds duly set aside for the purpose and subject further
periodic re-rating of his physical disability.

But even if we have thus defined the precise terms, nature and scope of the entitlement of the respondent Abrera, for the
guidance of petitioner, we nevertheless refrain from ordering the petitioner to pay the amount of P120.00 per month from
January 1, 1972 that is due to the respondent by virtue of the mandate of section 9 of Republic Act 65, as amended by
Republic Act 5753, because the Government has thus far not provided the necessary funds to pay all valid claims duly
approved under the authority of said statute. 13 (Emphasis supplied.)

ACCORDINGLY, the judgment of the Court a quo is hereby modified to read as follows:
WHEREFORE, premises considered, the Board of Administrators of the Philippine Veterans Administration (now the
Philippine Veterans Affairs Office) is hereby ordered to make Gasilao's pension effective December 18, 1955 at the rate of
P50-00 per month plus P10.00 per month for each of his then unmarried minor children below 18, and the former amount
increased to P100.00 from June 22, 1957 to August 7, 1968.

The differentials in pension to which said Gasilao, his wife and his unmarried minor children below 18 are entitled for the
period from June 22, 1969 to January 14, 1972 by virtue of Republic Act No. 5753 are hereby declared subject to the
availability of Government funds appropriated for the purpose.

SO ORDERED.