Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-21723 November 26, 1970

BARREDO, J.:
A special civil action for prohibition seeking to declare Resolution No. 1497 of the Board of
Trustees of the respondent Government Service Insurance System of August 9, 1963 to the
effect that petitioner "Mr. (Hilarion) Beronilla be considered compulsorily retired from the
service (as Auditor of the Philippine National Bank) effective January 14, 1963" as null and
void for having been issued, in the words of the petition, "in excess of the powers granted to
it by law, a wanton abuse of discretion, violation of contracts, removal or forced retirement
without due process of law and to declare all acts heretofore taken in implementation
thereof also void, and to prohibit said respondent and its representatives from carrying out
or implementing the aforesaid resolution." Acting on petitioner's prayer for preliminary
injunction, on August 26, 1963, this Court issued the writ prayed for upon petitioner's filing
an injunction bond in the amount of P1,000.00.
At the time of the filing of the present petition on August 23, 1963, petitioner was acting as
and performing the duties of Auditor of the Philippine National Bank. Before that, he had
occupied many other positions in the government and had been a member of the GSIS
during all times required by law.
In his application for employment, his applications for life and retirement insurance as well
as his application to be allowed to take civil service examinations, ten times from 1917 to
1925, petitioner uniformly indicated that his date of birth is January 14, 1898. He also
indicated the same date of birth in his Member's Service Record which he submitted to the
GSIS on October 29, 1954 pursuant to the provisions of Section 13-A, Republic Act No. 660.
On September 29, 1959, he requested the Commissioner of Civil Service, thru the Auditor
General, that his date of birth indicated in the records be changed to January 14, 1900.
According to the petition, it was only in 1955, before the demise of his mother that petitioner
discovered that his true date of birth is January 14, 1900; that his mother told him that in
1916, his uncle, Alvaro Beronilla, purchased a cedula for him showing in the same that he
was already 18 years old for the reason that his uncle wanted to take advantage of his being
able to vote for him in La Paz, Abra in 1919, when he would be already twenty-one years of
age and the uncle a candidate for vice-president of the municipality; that since then he had

been looking for people who could attest to his true date of birth and it was only in
September, 1959 that he came upon two old persons of their town, Felix Alberne and
Ricardo Lalin who could do so; that the former had been a member of the provincial board
and the latter is a retired justice of the peace; and that his letter to the Civil Service
Commissioner was supported by the affidavits of these two persons. This letter was
endorsed by the Commission to the GSIS for action "without the intervention of the Civil
Service Commission."
In the GSIS, petitioner's letter-request was referred to the Legal Counsel who, on October 22,
1959, denied the same since "all official records point to January 14, 1898 as the birthday of
Mr. Hilarion Beronilla." Upon learning of this denial, petitioner submitted additional evidence
to support his request. This evidence consisted of photostat copies of the yearbooks of the
Philippine Institute of Accountants in 1954 and 1958 wherein his date of birth is shown as
January 14, 1900. This additional evidence notwithstanding, on March 21, 1960 the Legal
Counsel reiterated his former denial. Whereupon, on May 21, 1960 petitioner appealed to
the General Manager of the System who at that time was Mr. Rodolfo Andal. Upon favorable
recommendation of the 2nd Assistant General Manager, Mr. F. G. Araa in a memorandum
dated May 30, 1960, on June 2, 1960, Mr. Andal placed "OK." at the foot thereof over his
initials, thus indicating approval of the requested change.
Based on this action of the General Manager, notes of the adjustment of the date of birth of
petitioner to January 14, 1900 were sent to the Auditor General and the Commissioner of
Civil Service and the proceeds of petitioner's policy was re-computed. The Legal Counsel
whose title and rank had been meanwhile changed to Assistant General Manager for Legal
Affairs later communicated the aforesaid decision of the General manager to the Philippine
National Bank on November 2, 1962 and the Deputy Auditor General on November 12, 1962,
by letter and indorsement, respectively. As emphasized by petitioner, in the letter to the
Philippine National Bank, it is stated that "his date of birth has been adjusted by this office,
after careful study and deliberation." On the other hand, in the 2nd indorsement to the
Deputy Auditor General, it was made clear that relative to petitioner's life insurance policy
No. N-2065 which had matured on November 30, 1957, corresponding adjustment or
recomputation of the maturity value had been effected on the basis of his changed date of
birth. In the meantime, upon application of petitioner, on October 1, 1960, he was issued a
new life policy No. 335778 indicating his date of birth as January 14, 1900. Regarding his
above-mentioned policy No. N-2065, on July 7, 1960, demand was made upon petitioner to
pay the System additionally the sum of P131.09, due to the adjustment of his date of birth,
which demand, petitioner promptly complied with.
Almost three years after Mr. Andal approved the change of petitioner's date of birth, more
specifically, on May 6, 1963, Mr. Ismael Mathay, then Auditor of the Central Bank detailed to
the Philippine National Bank, wrote the Board of Trustees of the GSIS about the service of
petitioner and stated that "in the course of the audit of the transactions of the Philippine
National Bank, it was found that Mr. Hilarion Beronilla has been continuously paid since
January 15, 1963, his salary allowances and other fringe benefits as Auditor of said Bank
notwithstanding the fact that Mr. Beronilla has attained his sixty-fifth (65th) birthday last
January 14, 1963, the date of his automatic and compulsory retirement from the government
service as fixed under Republic Act No. 3096 approved June 16, 1961." Acting on this letter,
the Board referred the same to Assistant General Manager and Actuary, Dr. Manuel Hizon,
then in charge of the Claims Department. The latter submitted a memorandum on August 6,
1963 stating the facts and evidence in the GSIS records concerning the determination of the
date of birth of petitioner, including the actions aforementioned taken thereon by Mr. Andal
and the Legal Counsel. On August 9, 1963, the Board adopted the disputed resolution
without even notifying petitioner of Mr. Mathay's letter and without giving him any
opportunity to be heard regarding the same.
Upon these facts, it is the theory of petitioner that the approval by General Manager Andal of
his request for the change of the date of his birth in the official records of the GSIS from
January 14, 1898 to January 14, 1900, after the same had been previously denied by the
Legal Counsel, could not be legally altered or modified by the Board of Trustees, not only

because the power to decide such matter finally is legally lodged in the General Manager
and not in the Legal Counsel, nor in the Board, but also because even if the Board were
assumed to have authority to review the acts of the General Manager, it was either guilty of
laches or estopped from revising the same; and, furthermore, in approving the resolution in
dispute, the Board of Trustees had denied due process to petitioner and impaired the
obligations of the contract between petitioner and the GSIS regarding his retirement. In
other words, the main issue before Us in this case is one of power and does not call for Our
determination of whether petitioner's real date of birth is January 14, 1898 or January 14,
1900. Accordingly, all We have to decide is whether or not the GSIS Board of Trustees acted
within its powers when it reversed the approval by General Manager Andal of petitioner's
request for the change of his date of birth, taking all circumstances into account including
petitioner's allegations of res adjudicata, laches, estoppel, denial of due process and
unconstitutional impairment of contractual obligations. After carefully going over the facts
on record and considering all pertinent legal principles and statutory provisions, particularly
Commonwealth Act 186, the Charter of the GSIS, as amended, together with the relevant
resolutions of the Board of Trustees, We have decided to uphold the superior authority of the
Board over the General Manager and to dismiss this petition.
We do not deem it necessary to pass upon petitioner's initial proposition, pressed vigorously,
to be sure, to the effect that as between the previous denial by the Legal Counsel and the
subsequent approval by General Manager Andal of his request for the change of his date of
birth in the records, the latter, which was precisely the action on his appeal from the Legal
Counsel's denial, should prevail. Even granting it to be true that, pursuant to what is
generally the practice and the rule, applications for retirement annuities in the GSIS are
subject to final approval by the General Manager after its being approved by one of the
Assistant General Managers and/or one or two Department Managers, 1 it is clear to Us that
under the GSIS charter, the General Manager's approval is not beyond review and
reprobation by the Board of Trustees. It must be borne in mind that under Section 16 of said
charter, the System "shall be managed by the Board of Trustees ... " and Section 17 adds
that the Board "shall have the following powers and authority: (a) to adopt by-laws, rules and
regulations for the administration of the System and the transaction of its business." On the
other hand, the extent of the functions and powers of the General Manager are defined in
Section 18 as follows:
SEC. 18. Personnel. The Board shall have the power to appoint a general
manager, who shall be a person of recognized experience and capacity in the
subject of life and social insurance, and who shall be the chief executive
officer of the System, one or more assistant general managers, one or more
managers, a medical director, and an actuary, and fix their compensation. The
general manager shall, subject to the approval of the Board, appoint
additional personnel whenever and wherever they may be necessary to the
effective execution of the provisions of this Act, fix their compensation,
remove, suspend, or otherwise discipline them, for cause. He shall have the
power to prescribe their duties, grant leave, prescribe certain qualifications to
the end that only competent persons may be employed, and appoint
committees: Provided, however, That said additional personnel shall be
subject to existing Civil Service laws, rules and regulations.
xxx xxx xxx
It is thus obvious that by express statutory authority, the Board of Trustees directly manages
the System and the General Manager is only the chief executive officer of the Board. In the
exercise of its power to adopt rules and regulations for the administration of the System and
the transaction of its business, the Board may lodge in the General Manager the authority to
act on any matter the Board may deem proper, but in no wise can such conferment of
authority be considered as a full and complete delegation resulting in the diminution, much
less exhaustion, of the Board's own statutorily-based prerogative and responsibility to
manage the affairs of the System and, accordingly, to decide with finality any matter
affecting its transactions or business. In other words, even if the Board may entrust to the

General Manager the power to give final approval to applications for retirement annuities,
the finality of such approval cannot be understood to divest the Board, in appropriate cases
and upon its attention being called to a flaw, mistake or irregularity in the General
Manager's action, of the authority to exercise its power of supervision and control which
flows naturally from the ultimate and final responsibility for the proper management of the
System imposed upon it by the charter. Incidentally, it may be added that the force of this
principle is even more true insofar as the GSIS is concerned, for the fiduciary character of
the management of the System is rendered more strict by the fact that the funds under its
administration are partly contributed by the thousands upon thousands of employees and
workers in all the branches and instrumentalities of the government. It is indeed well to
remember at all times that the System and, particularly, its funds do not belong to the
government, much less to any administration which may happen to be temporarily on the
saddle, and that the interests of the mass of its members can only be duly safeguarded if
the administrators of the System act with utmost fidelity and care. Not for nothing is its
controlling and managing board called the Board of Trustees. It results, therefore, that the
first contention of petitioner cannot be sustained and We hold that any authority conferred
upon the General Manager by the Board of Trustees notwithstanding, the said Board may in
appropriate cases and in the exercise of its own sound discretion review the actions and
decisions of the General Manager. The mere fact that the resolution granting the authority
expressly gives the character of finality to the General Manager's acts does not constitute
such a representation to third persons dealing with the System that such finality is definite
even vis-a-vis the Board as to create any estoppel, for the simple reason that it is not legally
possible for the Board to divest itself of an authority which the charter of the System places
under its direct responsibility. From another point of view, since the law clearly vests the
management in the Board and makes the General Manager only its chief executive officer,
all parties dealing with the System must be deemed to be on guard regarding the ultimate
authority of the Board to modify or reverse any action of the General Manager and they
cannot complain should the Board exercise its powers in the premises.
Petitioner posits, however, that even assuming that the Board may have the power to
reverse or modify any action of the General Manager in the exercise of his authority,
because of the failure of the Board to act from June 2, 1960, when General Manager Andal
acted favorably on his request to August 9, 1963, when the Board approved the herein
impugned Resolution No. 1497, or for more than three years, during which time
corresponding adjustments were made in his GSIS records, payment and life insurance
policies and due notices were served by the GSIS itself on all parties concerned on the basis
of his changed date of birth, respondent should be considered as guilty of laches or held in
estoppel to change or alter the action of Mr. Andal. While petitioner's posture is not entirely
without logic, it falls short of the requirements for the successful invocation of the pleas of
laches and estoppel. We have carefully considered the lengthy and rather impressive
discussion by petitioner of these points in his petition, memorandum and reply to
respondent's memorandum as well as the equally detailed and authority-supported contrary
arguments in the answer and memorandum of the respondent, and We have arrived at the
conclusion that petitioner's position cannot be sustained.
It may be stated at the outset that petitioner's twin points of laches and estoppel actually
boil down in this particular case to nothing more than estoppel by silence. With this
clarification, it is meet to recall that "mere innocent silence will not work estoppel. There
must also be some element of turpitude or negligence connected with the silence by which
another is misled to his injury" (Civil Code of the Philippines by Tolentino, Vol. IV, p. 600) and
that "the doctrine of estoppel having its origin in equity and therefore being based on moral
and natural justice, its applicability to any particular case depends, to a very large extent,
upon the special circumstances of the case." (Mirasol v. Municipality of Tabaco, 43 Phil. 610,
614.) Important also it is not to overlook that as regards the actuations of government
officials, the general rule is that their mistakes and omissions do not create estoppel.
(Republic vs. Philippine Long Distance Telephone Co., L-18841, January 27, 1969, citing
Pineda vs. Court of First Instance of Tayabas, 52 Phil. 803, 807; and Benguet Consolidated
Mining Co. vs. Pineda, 98 Phil. 711, 724. See also: Republic vs. Philippine Rabbit Bus Lines,
Inc., L-26862, March 30, 1970, and the cases therein cited.)

Moreover, in computing the period of alleged silence or inaction of the Board, what is
relevant is not the actual or, what petitioner calls, imputable knowledge of said Board of the
favorable action of Mr. Andal. Even if such knowledge had come earlier than May 6, 1963,
the date of Mr. Mathay's letter, what is decisive is that it was only thru Mr. Mathay's letter
that the Board got notice of the error in Mr. Andal's action. Precisely because it was not
incumbent upon the Board, as petitioner himself alleges, to spontaneously or in the ordinary
course review the action of the General Manager, any knowledge thereof by the Board,
whether actual or imputable, could not, in logic and conscience, have placed the Board on
notice of any error or irregularity therein. Consequently, the immediate steps taken by the
Board to have the facts alleged in Mr. Mathay's letter verified are inconsistent with the
charge of unreasonable delay, much more of laches.
The compulsory retirement of government officials and employees upon their reaching the
age of 65 years is founded on public policy which aims by it to maintain efficiency in the
government service and at the same time give to the retiring public servants the
opportunity to enjoy during the remainder of their lives the recompense, inadequate
perhaps for their long service and devotion to. the government, in the form of a
comparatively easier life, freed from the rigors of civil service discipline and the exacting
demands that the nature of their work and their relations with their superiors as well as the
public would impose upon them. Needless to say, therefore, the officials charged with the
duty of implementing this policy cannot be too careful in insuring and safeguarding the
correctness and integrity of the records they prepare and keep. In this case, all that the
Board has done is to set aside what it found to be an erroneous decision of the General
Manager in approving the change of date of petitioner's birth, because from the evidence
before it, the Board was convinced that the originally recorded date of birth should not be
disturbed. We cannot see where the charged inequity of such action of the Board could lie.
Above all, it is a must consideration whenever principles of equity are invoked that for such
invocation to succeed, it must appear that if the plea is not heeded the party making the
plea will suffer, in truth and in fact, inequity and injury, whether pecuniary or moral or, at
least, in a juridical sense. Such is not the case with petitioner. Examining the circumstances
of this case, We see nothing inequitous to petitioner in the questioned resolution of the
Board of Trustees. For decades back, repeatedly and uniformly, petitioner made it appear in
all material government and public records and in all his representations to respondent
System that his date of birth is January 14, 1898. His rather belated request for a change of
said date to January 14, 1900 which would unquestionably favor his interests, pecuniarily or
otherwise, and correspondingly adversely affect those of the System and, of course, its
members, was duly investigated and found not to be sufficiently grounded to merit favorable
action by the Legal Counsel in whom is lodged the authority to evaluate such request. True
this negative action was reversed by the General Manager, albeit by virtue of a procedure
not strictly in accordance with the established one as outlined in footnote 1 of this opinion,
but on the other hand, the favorable action of the General Manager was in turn reversed by
the Board of Trustees, the final legal authority in the System, upon its being informed of the
error thereof. It is to be noted that, after all, it was always the petitioner who made
representations to the respondent System as to his date of birth, and not the other way
around. All that the System did was to take his representations for what they were worth. He
was not believed by the Legal Counsel, but the General Manager did; on the other hand, the
authority higher than the General Manager found the action of the General Manager
erroneous. Under these circumstances, how could the System be in estoppel where the
conflicting representations are of the petitioner rather than of the System?
Anent petitioner's contention that he was denied due process when the Board of Trustees
acted on the letter of Mr. Mathay, without notifying him thereof or hearing him thereon,
suffice it to say that since there is no showing that under the procedure established in the
GSIS, such notice and hearing are required, considering that the System operates as a
business corporation and generally notice and hearing are not indispensable for due process
in corporations, and in any event, inasmuch as what was considered by the Board was
nothing more than petitioner's own conflicting representations, and if petitioner really

believed he should have been heard, he could have filed a motion for reconsideration or
reopening, it cannot be said that indeed he had not had due opportunity to present his side.
Finally, as regards petitioner's argument that the Board's resolution in question constitutes
an impairment of the obligations of his contract of insurance, it is obvious that the
constitutional injunction that is evidently the basis of such argument refers to the legislature
and not to resolutions even of government corporations. Besides, petitioner's life insurance
policy, apart from not having any real relevance in this case, what is involved being his
retirement, contains specific provisions contemplating the correction of any error or mistake
in the date of birth of the insured. On the other hand, the retirement of government
employees is imposed by law and is not the result of any contractual stipulation.
WHEREFORE, the petition in this case is dismissed, with costs against petitioner, and the writ
of preliminary injunction issued herein is hereby dissolved.