rule 86-90 cases special proceedings

7/25/2019 Rule 86-90 cases special proceedings

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Rule 86

G.R. No. 146989 February 7, 2007

MELENCIO GABRIEL, represented by surviving spouse, FLORDELIZA V. GABRIEL, Petitioner,vs.NELSON BILON, ANGEL BRAZIL AND ERNESTO PAGAYGAY,Respondents.

D E C I S I O N

AZCUNA,J.:

This is a petition for review on certiorari1assailing the Decision and Resolution of the Court of Appeals, respectivelydated August 4, 2000 and February 7, 2001, in CA-G.R. SP No. 52001 entitled "Nelson Bilon, et al. v. National LaborRelations Commission, et al."

The challenged decision reversed and set aside the decision2of the National Labor Relations Commission (NLRC)dismissing respondents complaint for illegal dismissal and illegal deductions, and reinstating the decision of the LaborArbiter finding petitioner guilty of illegal dismissal but not of illegal deductions subject to the modification thatrespondents be immediately reinstated to their former positions without loss of seniority rights and privileges insteadof being paid separation pay.

Petitioner, represented by his surviving spouse, Flordeliza V. Gabriel, was the owner-operator of a public transportbusiness, "Gabriel Jeepney," with a fleet of 54 jeepneys plying the Baclaran-Divisoria-Tondo route. Petitioner had apool of drivers, which included respondents, operating under a "boundary system" of P400 per day.

The facts3are as follows:

On November 15, 1995, respondents filed their separate complaints for illegal dismissal, illegal deductions, andseparation pay against petitioner with the National Labor Relations Commission (NLRC). These were consolidated anddocketed as NLRC-NCR Case No. 00-11-07420-95.4

On December 15, 1995, the complaint was amended, impleading as party respondent the Bacoor Transport ServiceCooperative, Inc., as both parties are members of the cooperative.

Respondents alleged the following:

1) That they were regular drivers of Gabriel Jeepney, driving their respective units bearing Plate Nos. PHW553, NXU 155, and NWW 557, under a boundary system of P400 per day, plying Baclaran to Divisoria viaTondo, and vice versa, since December 1990, November 1984 and November 1991, respectively, up to April30, 1995,5driving five days a week, with average daily earnings of P400;

2) That they were required/forced to pay additional P55.00 per day for the following: a) P20.00 policeprotection; b) P20.00 washing; c) P10.00 deposit; and [d)] P5.00 garage fees;

3) That there is no law providing the operator to require the drivers to pay police protection, deposit, washing,and garage fees.

4) That on April 30, 1995, petitioner told them not to drive anymore, and when they went to the garage toreport for work the next day, they were not given a unit to drive; and

5) That the boundary drivers of passenger jeepneys are considered regular employees of the jeepneyoperators. Being such, they are entitled to security of tenure. Petitioner, however, dismissed them withoutfactual and legal basis, and without due process.

On his part, petitioner contended that:

1) He does not remember if the respondents were ever under his employ as drivers of his passenger jeepneys.Certain, however, is the fact that neither the respondents nor other drivers who worked for him were everdismissed by him. As a matter of fact, some of his former drivers just stopped reporting for work, eitherbecause they found some other employment or drove for other operators, and like the respondents, the next

time he heard from them was when they started fabricating unfounded complaints against him;

2) He made sure that none of the jeepneys would stay idle even for a day so he could collect his earnings;hence, it had been his practice to establish a pool of drivers. Had respondents manifested their desire to drivehis units, it would have been immaterial whether they were his former drivers or not. As long as they obtainedthe necessary licenses and references, they would have been accommodated and placed on schedule;

3) While he was penalized or made to pay a certain amount in connection with similar complaints by otherdrivers in a previous case before this, it was not because his culpability was established, but due totechnicalities involving oversight and negligence on his part by not participating in any stage of theinvestigation thereof; and
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4) Respondents claim that certain amounts, as enumerated in the complaint, were deducted from their daysearnings is preposterous. Indeed, there were times when deductions were made from the days earnings ofsome drivers, but such were installment payments for the amount previously advanced to them. Most drivers,when they got involved in accidents or violations of traffic regulations, managed to settle them, and in theprocess they had to spend some money, but most of the time they did not have the needed amount so theysecured cash advances from him, with the understanding that the same should be paid back by installmentsthrough deductions from their daily earnings or boundary.

On the other hand, Bacoor Transport Service Cooperative, Inc. (BTSCI) declared that it should not be made a party tothe case because: 1) [I]t has nothing to do with the employment of its member-drivers. The matter is between the

member-operator and their respective member-drivers. The member-drivers tenure of employment, compensation,work conditions, and other aspects of employment are matters of arrangement between them and the member-operators concerned, and the BTSCI has nothing to do with it, as can be inferred from the Management Agreementbetween BTSCI and the member-operators; and 2) [T]he amount allegedly deducted from respondents and thepurpose for which they were applied were matters that the cooperative was not aware of, and much less imposed onthem.

On September 17, 1996, respondents filed a motion to re-raffle the case for the reason that the Labor Arbiter (Hon.Roberto I. Santos) failed "to render his decision within thirty (30) calendar days, without extension, after thesubmission of the case for decision."

On September 18, 1996, said Labor Arbiter inhibited himself from further handling the case due to "personal reasons."

On November 8, 1996, Labor Arbiter Ricardo C. Nora, to whom the case was re-raffled, ordered the parties to file theirrespective memoranda within ten days, after which the case was deemed submitted for resolution.

On March 17, 1997, the Labor Arbiter (Hon. Ricardo C. Nora) handed down his decision, the dispositive portion ofwhich is worded as follows:

WHEREFORE, premises considered, judgment is hereby rendered declaring the illegality of [respondents] dismissaland ordering [petitioner] Melencio Gabriel to pay the [respondents] the total amount of ONE MILLION THIRTY FOURTHOUSAND PESOS [P1,034,000,] representing [respondents] backwages and separation pay as follows:

1. Nelson Bilon

Backwages P 284,800

Separation Pay 26,400 P 321,200

2. Angel Brazil

Backwages P 294,800

Separation Pay 96,800 391,600

3. Ernesto Pagaygay

Backwages P 294,800

Separation Pay 26,400 321,200

P 1,034,000

[Petitioner] Melencio Gabriel is likewise ordered to pay attorneys fees equivalent to five percent (5%) of the judgmentaward or the amount of P51,700 within ten (10) days from receipt of this Decision.

All other issues are dismissed for lack of merit.

SO ORDERED.6

Incidentally, on April 4, 1997, petitioner passed away. On April 18, 1997, a copy of the above decision was deliveredpersonally to petitioners house. According to respondents, petitioners surviving spouse, Flordeliza Gabriel, and theirdaughter, after reading the contents of the decision and after they had spoken to their counsel, refused to receive thesame. Nevertheless, Bailiff Alfredo V. Estonactoc left a copy of the decision with petitioners wife and her daughter butthey both refused to sign and acknowledge receipt of the decision.7

The labor arbiters decision was subsequently served by registered mail at petitioners residence and the same wasreceived on May 28, 1997.

On May 16, 1997, counsel for petitioner filed an entry of appearance with motion to dismiss the case for the reasonthat petitioner passed away last April 4, 1997.
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On June 5, 1997, petitioner appealed the labor arbiters decision to the National Labor Relations Commission, FirstDivision, contending that the labor arbiter erred:

1. In holding that [petitioner] Gabriel dismissed the complainants, Arb. Nora committed a serious error in thefindings of fact which, if not corrected, would cause grave or irreparable damage or injury to [petitioner]Gabriel;

2. In holding that strained relations already exist between the parties, justifying an award of separation payin lieu of reinstatement, Arb. Nora not only committed a serious error in the findings of fact, but he alsoabused his discretion;

3. In computing the amount of backwages allegedly due [respondents] from 30 April 1995 to 15 March 1997,Arb. Nora abused his discretion, considering that the case had been submitted for decision as early as 1 March1996 and that the same should have been decided as early as 31 March 1996;

4. In using P400.00 and 22 days as factors in computing the amount of backwages allegedly due[respondents], Arb. Nora abused his discretion and committed a serious error in the findings of fact,considering that there was no factual or evidentiary basis therefor;

5. In using 33.5 months as factor in the computation of the amount of backwages allegedly due[respondents], Arb. Nora committed a serious error in the findings of fact[,] because even if it is assumed thatbackwages are due from 30 April 1995 to 15 March 1997, the period between the two dates is only 22months, and not 33 months as stated in the appealed decision; and

6. In not dismissing the case[,] despite notice of the death of [petitioner] Gabriel before final judgment, Arb.Nora abused his discretion and committed a serious error of law.8

On July 3, 1997, respondents filed a motion to dismiss petitioners appeal on the ground that the "surety bond isdefective" and the appeal was "filed out of time," which move was opposed by petitioner.

Subsequently, on April 28, 1998, the NLRC promulgated its first decision, the dispositive portion of which reads:

WHEREFORE, premises considered, the appealed decision is hereby reversed and set aside. The above-entitled case ishereby dismissed for lack of employer-employee relationship.

SO ORDERED.9

Respondents filed a motion for reconsideration. They claimed that the decision did not discuss the issue of thetimeliness of the appeal. The lack of employer-employee relationship was mentioned in the dispositive portion, whichissue was not raised before the labor arbiter or discussed in the body of the questioned decision. In view of the issuesraised by respondents in their motion, the NLRC rendered its second decision on October 29, 1998. The pertinentportions are hereby quoted thus:

In the case at bar, [petitioner] Melencio Gabriel was not represented by counsel during the pendency of the case. Adecision was rendered by the Labor Arbiter a quo on March 17, 1997 while Mr. Gabriel passed away on April 4, 1997without having received a copy thereof during his lifetime. The decision was only served on April 18, 1997 when hewas no longer around to receive the same. His surviving spouse and daughter cannot automatically substitutethemselves as party respondents. Thus, when the bailiff tendered a copy of the decision to them, they were not in aposition to receive them. The requirement of leaving a copy at the partys residence is not applicable in the instant

case because this presupposes that the party is still living and is just not available to receive the decision.

The preceding considered, the decision of the labor arbiter has not become final because there was no proper serviceof copy thereof to [petitioner] .

Undoubtedly, this case is for recovery of money which does not survive, and considering that the decision has notbecome final, the case should have been dismissed and the appeal no longer entertained.

WHEREFORE, in view of the foregoing, the Decision of April 28, 1998 is set aside and vacated. Furthermore, theinstant case is dismissed and complainants are directed to pursue their claim against the proceedings for thesettlement of the estate of the deceased Melencio Gabriel.

SO ORDERED.10

Aggrieved by the decision of the NLRC, respondents elevated the case to the Court of Appeals (CA) by way of apetition for certiorari. On August 4, 2000, the CA reversed the decisions of the NLRC:

Article 223 of the Labor Code categorically mandates that "an appeal by the employer may be perfected only upon theposting of a cash bond or surety bond x x x." It is beyond peradventure then that the non-compliance with the aboveconditio sine qua non, plus the fact that the appeal was filed beyond the reglementary period, should have beenenough reasons to dismiss the appeal.
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In any event, even conceding ex gratia that such procedural infirmity [were] inexistent, this petition would still betenable based on substantive aspects.

The public respondents decision, dated April 28, 1998, is egregiously wrong insofar as it was anchored on theabsence of an employer-employee relationship. Well-settled is the rule that the boundary system used in jeepney and(taxi) operations presupposes an employer-employee relationship (National Labor Union v. Dinglasan, 98 Phil. 649) .

The NLRC ostensibly tried to redeem itself by vacating the decision April 28, 1998. By so doing, however, it did notactually resolve the matter definitively. It merely relieved itself of such burden by suggesting that the petitioners"pursue their claim against the proceedings for the settlement of the estate of the deceased Melencio Gabriel."

In the instant case, the decision (dated March 17, 1997) of the Labor Arbiter became final and executory on accountof the failure of the private respondent to perfect his appeal on time.

Thus, we disagree with the ratiocination of the NLRC that the death of the private respondent on April 4, 1997 ipsofactonegates recovery of the money claim against the successors-in- interest . Rather, this situation comes withinthe aegis of Section 3, Rule III of the NLRC Manual on Execution of Judgment, which provides:

SECTION 3. Execution in Case of Death of Party.Where a party dies after the finality of the decision/entry ofjudgment of order, execution thereon may issue or one already issued may be enforced in the following cases:

a) x x x ;

b) In case of death of the losing party, against his successor-in-interest, executor or administrator;

c) In case of death of the losing party after execution is actually levied upon any of his property, the samemay be sold for the satisfaction thereof, and the sheriff making the sale shall account to his successor-in-interest, executor or administrator for any surplus in his hands.

Notwithstanding the foregoing disquisition though, We are not entirely in accord with the labor arbiters decisionawarding separation pay in favor of the petitioners. In this regard, it [is] worth mentioning that in Kiamco v. NLRC,11

citing Globe-Mackay Cable and Radio Corp. v. NLRC,12the Supreme Court qualified the application of the"strained relations" principle when it held --

"If in the wisdom of the Court, there may be a ground or grounds for the non-application of the above-cited provision

(Art. 279, Labor Code) this should be by way of exception, such as when the reinstatement may be inadmissible dueto ensuing strained relations between the employer and employee.

In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust andconfidence of his employer, and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may begenerated as to adversely affect the efficiency and productivity of the employee concerned x x x Obviously, theprinciple of strained relations cannot be applied indiscriminately. Otherwise, reinstatement can never be possiblesimply because some hostility is invariably engendered between the parties as a result of litigation. That is humannature.

Besides, no strained relations should arise from a valid legal act of asserting ones righ t; otherwise[,] an employeewho shall assert his right could be easily separated from the service by merely paying his separation pay on thepretext that his relationship with his employer had already become strained."

Anent the award of backwages, the Labor Arbiter erred in computing the same from the date the petitioners wereillegally dismissed (i.e. April 30, 1995) up to March 15, 1997, that is two (2) days prior to the rendition of his decision(i.e. March 17, 1997).

WHEREFORE, premises considered, the petition is GRANTED, hereby REVERSING and SETTING ASIDE the assaileddecisions of the National Labor Relations Commission, dated April 28, 1998 ans October 29, 1998. Consequently, thedecision of the Labor Arbiter, dated March 17, 1997, is hereby REINSTATED, subject to the MODIFICATION that theprivate respondent is ORDERED to immediately REINSTATE petitioners Nelson Bilon, Angel Brazil and ErnestoPagaygay to their former position without loss of seniority rights and privileges, with full backwages from the date oftheir dismissal until their actual reinstatement. Costs against private respondent.

SO ORDERED.13

Petitioner filed a motion for reconsideration but the same was denied by the CA in a resolution dated February 7,2001.

Hence, this petition raising the following issues:14

I

THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONERS APPEAL TO THE NATIONAL LABOR RELATIONSCOMMISSION WAS FILED OUT OF TIME.
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II

THE COURT OF APPEALS ERRED IN HOLDING THAT THE ALLEGED DEFECTS IN PETITIONERS APPEAL BOND WERE OFSUCH GRAVITY AS TO PREVENT THE APPEAL FROM BEING PERFECTED.

III

THE COURT OF APPEALS ERRED IN GRANTING RESPONDENTS PETITION FOR CERTIORARI DESPITE THE FACT THATTHE SAME ASSAILED A DECISION WHICH HAD BEEN VACATED IN FAVOR OF A NEW ONE WHICH, IN TURN, HAS

SOLID LEGAL BASIS.

IV

THE COURT OF APPEALS ERRED IN APPLYING SECTION 3, RULE III, OF THE MANUAL ON EXECUTION OF JUDGMENTOF THE NATIONAL LABOR RELATIONS COMMISSION WHICH, BY ITS OWN EXPRESS TERMS, IS NOT APPLICABLE.

A resolution of the case requires a brief discussion of two issues which touch upon the procedural and substantialaspects of the case thus: a) whether petitioners appeal was filed out of time; and b) whether the claim survives.

As regards the first issue, the Court considers the service of copy of the decision of the labor arbiter to have beenvalidly made on May 28, 1997 when it was received through registered mail. As correctly pointed out by petitionerswife, service of a copy of the decision could not have been validly effected on April 18, 1997 because petitioner

passed away on April 4, 1997.

Section 4, Rule III of the New Rules of Procedure of the NLRC provides:

SEC. 4. Service of Notices and Resolutions.(a) Notices or summons and copies of orders, resolutions ordecisions shall be served on the parties to the case personally by the bailiff or authorized public officer within three(3) days from receipt thereof or by registered mail; Provided, That where a party is represented by counsel orauthorized representative, service shall be made on such counsel or authorized representative; Provided further, Thatin cases of decision and final awards, copies thereof shall be served on both parties and their counsel .

For the purpose of computing the period of appeal, the same shall be counted from receipt of such decisions, awardsor orders by the counsel of record.

(b) The bailiff or officer personally serving the notice, order, resolution or decision shall submit his return within two(2) days from date of service thereof, stating legibly in his return, his name, the names of the persons served and thedate of receipt which return shall be immediately attached and shall form part of the records of the case. If no servicewas effected, the serving officer shall state the reason therefore in the return.

Section 6, Rule 13 of the Rules of Court which is suppletory to the NLRC Rules of Procedure states that: "[s]ervice ofthe papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his office withhis clerk or with a person having charge thereof. If no person is found in his office, or his office is not known, or hehas no office, then by leaving the copy, between the hours of eight in the morning and six in the evening, at thepartys or counsels residence, if known, with a person of sufficient age and discretion then residing therein."

The foregoing provisions contemplate a situation wherein the party to the action is alive upon the delivery of a copy ofthe tribunals decision. In the present case, however, petitioner died before a copy of the labor arbiters decisi on was

served upon him. Hence, the above provisions do not apply. As aptly stated by the NLRC:

In the case at bar, respondent Melencio Gabriel was not represented by counsel during the pendency of the case. Adecision was rendered by the Labor Arbiter a quoon March 17, 1997 while Mr. Gabriel passed away on April 4, 1997,without having received a copy thereof during his lifetime. The decision was only served on April 18, 1997 when hewas no longer around to receive the same. His surviving spouse and daughter cannot automatically substitutethemselves as party respondents. Thus, when the bailiff tendered a copy of the decision to them, they were not in aposition to receive them. The requirement of leaving a copy at the partys residence is not applicable in the instantcase because this presupposes that the party is still living and is not just available to receive the decision.

The preceding considered, the decision of the Labor Arbiter has not become final because there was no proper serviceof copy thereof to party respondent.15

Thus, the appeal filed on behalf of petitioner on June 5, 1997 after receipt of a copy of the decision viaregistered mailon May 28, 1997 was within the ten-day reglementary period prescribed under Section 223 of the Labor Code.

On the question whether petitioners surety bond was defective, Section 6, Rule VI of the New Rules of Procedure ofthe NLRC provides:

SEC. 6.Bond.In case the decision of a Labor Arbiter involves monetary award, an appeal by the employer shallbe perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accreditedby the Commission or the Supreme Court in an amount equivalent to the monetary award, exclusive of moral andexemplary damages and attorneys fees.
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The employer as well as counsel shall submit a joint declaration under oath attesting that the surety bond posted isgenuine and that it shall be in effect until final disposition of the case.

The Commission may, in meritorious cases and upon Motion of the Appellant, reduce the amount of the bond. (Asamended on Nov. 5, 1993).

The Court believes that petitioner was able to comply substantially with the requirements of the above Rule. Ascorrectly pointed out by the NLRC:

While we agree with complainants-appellees that the posting of the surety bond is jurisdictional, We do not believethat the "defects" imputed to the surety bond posted for and in behalf of respondent-appellant Gabriel are of suchcharacter as to affect the jurisdiction of this Commission to entertain the instant appeal.

It matters not that, by the terms of the bond posted, the "Liability of the surety herein shall expire on June 5, 1998and this bond shall be automatically cancelled ten (10) days after the expiration." After all, the bond is accompaniedby the joint declaration under oath of respondent-appellants surviving spouse and counsel attesting that the suretybond is genuine and shall be in effect until the final disposition of the case.

Anent complainants-appellees contention that the surety bond posted is defective for being in the name of BTSCIwhich did not appeal and for having been entered into by Mrs. Gabriel without BTSCIs authority, the same has beenrendered moot and academic by the certification issued by Gil CJ. San Juan, Vice-President of the bonding company tothe effect that "Eastern Assurance and Surety Corporation Bond No. 2749 was posted for and on behalf appellantMelencio Gabriel and/or his heirs" and that "(T)he name "Bacoor Transport Service Cooperative, Inc." was indicated in

said bond due merely in (sic) advertence."

At any rate, the Supreme Court has time and again ruled that while Article 223 of the Labor Code, as amendedrequiring a cash or surety bond in the amount equivalent to the monetary award in the judgment appealed from forthe appeal to be perfected, may be considered a jurisdictional requirement, nevertheless, adhering to the principlethat substantial justice is better served by allowing the appeal on the merits threshed out by this HonorableCommission, the foregoing requirement of the law should be given a liberal interpretation (Pantranco North Express,Inc. v. Sison, 149 SCRA 238; C.W. Tan Mfg. v. NLRC, 170 SCRA 240; YBL v. NLRC, 190 SCRA 160; Rada v. NLRC, 205SCRA 69; Star Angel Handicraft v. NLRC, 236 SCRA 580).16

On the other hand, with regard to the substantive aspect of the case, the Court agrees with the CA that an employer-employee relationship existed between petitioner and respondents. In Martinez v. National Labor RelationsCommission,17citing National Labor Union v. Dinglasan,18the Court ruled that:

[T]he relationship between jeepney owners/operators and jeepney drivers under the boundary system is that ofemployer-employee and not of lessor-lessee because in the lease of chattels the lessor loses complete control overthe chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for thedamages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercises supervisionand control over the latter. The fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" [that] they pay to the owner/operator is not sufficient to withdraw the relationship between themfrom that of employer and employee. Thus, private respondents were employees because they had been engagedto perform activities which were usually necessary or desirable in the usual business or trade of the employer .19

The same principle was reiterated in the case of Paguio Transport Corporation v. NLRC.20

The Court also agrees with the labor arbiter and the CA that respondents were illegally dismissed by petitioner.

Respondents were not accorded due process.21

Moreover, petitioner failed to show that the cause for termination fallsunder any of the grounds enumerated in Article 282

(then Article 283)22of the Labor Code.23Consequently, respondents are entitled to reinstatement without loss ofseniority rights and other privileges and to their full backwages computed from the date of dismissal up to the time oftheir actual reinstatement in accordance with Article 279 of the Labor Code.

Reinstatement is obtainable in this case because it has not been shown that there is an ensuing "strained relations"between petitioner and respondents. This is pursuant to the principle laid down in Globe-Mackay Cable and RadioCorporation v. NLRC24as quoted earlier in the CA decision.

With regard to respondents monetary claim, the same shall be governed by Section 20 (then Section 21), Rule 3 ofthe Rules of Court which provides:1awphi1.net

SEC. 20.Action on contractual money claims. When the action is for recovery of money arising from contract,express or implied, and the defendant dies before entry of final judgment in the court in which the action was pendingat the time of such death, it shall not be dismissed but shall instead be allowed to continue until entry of final

judgment. A favorable judgment obtained by the plaintiff therein shall be enforced in the manner provided in theseRules for prosecuting claims against the estate of a deceased person. (21a)

In relation to this, Section 5, Rule 86 of the Rules of Court states:

SEC. 5. Claims which must be filed under the notice. If not filed, barred ; exceptions. All claims for money againstthe decedent arising from contract, express or implied, whether the same be due, not due, or contingent, ... and

judgment for money against the decedent, must be filed within the time limited in the notice; otherwise they are
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barred forever, except that they may be set forth as counterclaims in any action that the executor or administratormay bring against the claimants.

Thus, in accordance with the above Rules, the money claims of respondents must be filed against the estate ofpetitioner Melencio Gabriel.25

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated August 4, 2000 andFebruary 7, 2001, respectively, in CA-G.R. SP No. 52001 are AFFIRMED but with the MODIFICATION that the moneyclaims of respondents should be filed against the estate of Melencio Gabriel, within such reasonable time from thefinality of this Decision as the estate court may fix.

No costs.

SO ORDERED.

G.R. No. 149926 February 23, 2005

UNION BANK OF THE PHILIPPINES,petitioner,vs.EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ ARIOLA,respondents.

D E C I S I O N

CALLEJO, SR.,J.:

Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court which seeks the reversal ofthe Decision1of the Court of Appeals dated May 30, 2001 in CA-G.R. CV No. 48831 affirming the dismissal2of thepetitioners complaint in Civil Case No. 18909 by the Regional Trial Court (RTC) of Makati City, Branch 63.

The antecedent facts are as follows:

On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim M. Santibaez entered into a loanagreement3in the amount of P128,000.00. The amount was intended for the payment of the purchase price of one (1)unit Ford 6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son, Edmund, executed apromissory note in favor of the FCCC, the principal sum payable in five equal annual amortizations of P43,745.96 due

on May 31, 1981 and every May 31st thereafter up to May 31, 1985.

On December 13, 1980, the FCCC and Efraim entered into another loan agreement,4this time in the amount ofP123,156.00. It was intended to pay the balance of the purchase price of another unit of Ford 6600 Agricultural All-Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor Model AR 60K. Again, Efraim and hisson, Edmund, executed a promissory note for the said amount in favor of the FCCC. Aside from such promissory note,they also signed a Continuing Guaranty Agreement5for the loan dated December 13, 1980.

Sometime in February 1981, Efraim died, leaving a holographic will.6Subsequently in March 1981, testateproceedings commenced before the RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On April9, 1981, Edmund, as one of the heirs, was appointed as the special administrator of the estate of the decedent.7During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister Florence SantibaezAriola, executed a Joint Agreement8dated July 22, 1981, wherein they agreed to divide between themselves and take

possession of the three (3) tractors; that is, two (2) tractors for Edmund and one (1) tractor for Florence. Each ofthem was to assume the indebtedness of their late father to FCCC, corresponding to the tractor respectively taken bythem.

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities9was executed by and between FCCC andUnion Savings and Mortgage Bank, wherein the FCCC as the assignor, among others, assigned all its assets andliabilities to Union Savings and Mortgage Bank.

Demand letters10for the settlement of his account were sent by petitioner Union Bank of the Philippines (UBP) toEdmund, but the latter failed to heed the same and refused to pay. Thus, on February 5, 1988, the petitioner filed aComplaint11for sum of money against the heirs of Efraim Santibaez, Edmund and Florence, before the RTC of MakatiCity, Branch 150, docketed as Civil Case No. 18909. Summonses were issued against both, but the one intended forEdmund was not served since he was in the United States and there was no information on his address or the date ofhis return to the Philippines.12Accordingly, the complaint was narrowed down to respondent Florence S. Ariola.

On December 7, 1988, respondent Florence S. Ariola filed her Answer13and alleged that the loan documents did notbind her since she was not a party thereto. Considering that the joint agreement signed by her and her brotherEdmund was not approved by the probate court, it was null and void; hence, she was not liable to the petitioner underthe joint agreement.

On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati City, Branch 63.14Consequently, trialon the merits ensued and a decision was subsequently rendered by the court dismissing the complaint for lack ofmerit. The decretal portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack of merit.15
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The trial court found that the claim of the petitioner should have been filed with the probate court before which thetestate estate of the late Efraim Santibaez was pending, as the sum of money being claimed was an obligationincurred by the said decedent. The trial court also found that the Joint Agreement apparently executed by his heirs,Edmund and Florence, on July 22, 1981, was, in effect, a partition of the estate of the decedent. However, the saidagreement was void, considering that it had not been approved by the probate court, and that there can be no validpartition until after the will has been probated. The trial court further declared that petitioner failed to prove that itwas the now defunct Union Savings and Mortgage Bank to which the FCCC had assigned its assets and liabilities. Thecourt also agreed to the contention of respondent Florence S. Ariola that the list of assets and liabilities of the FCCCassigned to Union Savings and Mortgage Bank did not clearly refer to the decedents account. Ruling that the jointagreement executed by the heirs was null and void, the trial court held that the petitioners cause of action against

respondent Florence S. Ariola must necessarily fail.

The petitioner appealed from the RTC decision and elevated its case to the Court of Appeals (CA), assigning thefollowing as errors of the trial court:

1. THE COURTA QUOERRED IN FINDING THAT THE JOINT AGREEMENT (EXHIBIT A) SHOULD BE APPROVEDBY THE PROBATE COURT.

2. THE COURTA QUOERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRSUNTIL AFTER THE WILL HAS BEEN PROBATED.

3. THE COURTA QUOERRED IN NOT FINDING THAT THE DEFENDANT HAD WAIVED HER RIGHT TO HAVE THECLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.16

The petitioner asserted before the CA that the obligation of the deceased had passed to his legitimate children andheirs, in this case, Edmund and Florence; the unconditional signing of the joint agreement marked as Exhibit "A"estopped respondent Florence S. Ariola, and that she cannot deny her liability under the said document; as theagreement had been signed by both heirs in their personal capacity, it was no longer necessary to present the samebefore the probate court for approval; the property partitioned in the agreement was not one of those enumerated inthe holographic will made by the deceased; and the active participation of the heirs, particularly respondent FlorenceS. Ariola, in the present ordinary civil action was tantamount to a waiver to re-litigate the claim in the estateproceedings.

On the other hand, respondent Florence S. Ariola maintained that the money claim of the petitioner should have beenpresented before the probate court.17

The appellate court found that the appeal was not meritorious and held that the petitioner should have filed its claimwith the probate court as provided under Sections 1 and 5, Rule 86 of the Rules of Court. It further held that thepartition made in the agreement was null and void, since no valid partition may be had until after the will has beenprobated. According to the CA, page 2, paragraph (e) of the holographic will covered the subject properties (tractors)in generic terms when the deceased referred to them as "all other properties." Moreover, the active participation ofrespondent Florence S. Ariola in the case did not amount to a waiver. Thus, the CA affirmed the RTC decision, viz.:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Makati City, Branch 63, ishereby AFFIRMED in toto.

SO ORDERED.18

In the present recourse, the petitioner ascribes the following errors to the CA:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE JOINT AGREEMENT SHOULD BE APPROVED BYTHE PROBATE COURT.

II.

THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO VALID PARTITION AMONG THE HEIRS OF THELATE EFRAIM SANTIBAEZ UNTIL AFTER THE WILL HAS BEEN PROBATED.

III.

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE RESPONDENT HAD WAIVED HER RIGHT TO HAVE THECLAIM RE-LITIGATED IN THE ESTATE PROCEEDING.

IV.

RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE WITH THE PRINCIPAL DEBTOR THE LATEEFRAIM SANTIBAEZ ON THE STRENGTH OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN FAVOR OFPETITIONER-APPELLANT UNION BANK.

V.
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THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF P128,000.00 AND DECEMBER 13, 1980 IN THEAMOUNT OF P123,000.00 CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS BOUND THEMSELVESJOINTLY AND SEVERALLY LIABLE WITH THE LATE DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF PETITIONER UNIONBANK.19

The petitioner claims that the obligations of the deceased were transmitted to the heirs as provided in Article 774 ofthe Civil Code; there was thus no need for the probate court to approve the joint agreement where the heirspartitioned the tractors owned by the deceased and assumed the obligations related thereto. Since respondentFlorence S. Ariola signed the joint agreement without any condition, she is now estopped from asserting any positioncontrary thereto. The petitioner also points out that the holographic will of the deceased did not include nor mention

any of the tractors subject of the complaint, and, as such was beyond the ambit of the said will. The activeparticipation and resistance of respondent Florence S. Ariola in the ordinary civil action against the petitioners claimamounts to a waiver of the right to have the claim presented in the probate proceedings, and to allow any one of theheirs who executed the joint agreement to escape liability to pay the value of the tractors under consideration wouldbe equivalent to allowing the said heirs to enrich themselves to the damage and prejudice of the petitioner.

The petitioner, likewise, avers that the decisions of both the trial and appellate courts failed to consider the fact thatrespondent Florence S. Ariola and her brother Edmund executed loan documents, all establishing the vinculum jurisorthe legal bond between the late Efraim Santibaez and his heirs to be in the nature of a solidary obligation.Furthermore, the Promissory Notes dated May 31, 1980 and December 13, 1980 executed by the late EfraimSantibaez, together with his heirs, Edmund and respondent Florence, made the obligation solidary as far as the saidheirs are concerned. The petitioner also proffers that, considering the express provisions of the continuing guarantyagreement and the promissory notes executed by the named respondents, the latter must be held liable jointly andseverally liable thereon. Thus, there was no need for the petitioner to file its money claim before the probate court.Finally, the petitioner stresses that both surviving heirs are being sued in their respective personal capacities, not asheirs of the deceased.

In her comment to the petition, respondent Florence S. Ariola maintains that the petitioner is trying to recover a sumof money from the deceased Efraim Santibaez; thus the claim should have been filed with the probate court. Shepoints out that at the time of the execution of the joint agreement there was already an existing probate proceedingsof which the petitioner knew about. However, to avoid a claim in the probate court which might delay payment of theobligation, the petitioner opted to require them to execute the said agreement.1a\^/phi1.net

According to the respondent, the trial court and the CA did not err in declaring that the agreement was null and void.She asserts that even if the agreement was voluntarily executed by her and her brother Edmund, it should still havebeen subjected to the approval of the court as it may prejudice the estate, the heirs or third parties. Furthermore, shehad not waived any rights, as she even stated in her answer in the court a quothat the claim should be filed with the

probate court. Thus, the petitioner could not invoke or claim that she is in estoppel.

Respondent Florence S. Ariola further asserts that she had not signed any continuing guaranty agreement, nor wasthere any document presented as evidence to show that she had caused herself to be bound by the obligation of herlate father.

The petition is bereft of merit.

The Court is posed to resolve the following issues: a) whether or not the partition in the Agreement executed by theheirs is valid; b) whether or not the heirs assumption of the indebtedness of the deceased is valid; and c) whetherthe petitioner can hold the heirs liable on the obligation of the deceased.1awphi1.nt

At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the properties of the

deceased, to determine whether they should or should not be included in the inventory or list of properties to beadministered.20The said court is primarily concerned with the administration, liquidation and distribution of theestate.21

In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has beenprobated:

In testate succession, there can be no valid partition among the heirs until after the will has been probated. The lawenjoins the probate of a will and the public requires it, because unless a will is probated and notice thereof given tothe whole world, the right of a person to dispose of his property by will may be rendered nugatory. The authenticationof a will decides no other question than such as touch upon the capacity of the testator and the compliance with thoserequirements or solemnities which the law prescribes for the validity of a will .22

This, of course, presupposes that the properties to be partitioned are the same properties embraced in the will .23Inthe present case, the deceased, Efraim Santibaez, left a holographic will24which contained, inter alia, the provisionwhich reads as follows:

(e) All other properties, real or personal, which I own and may be discovered later after my demise, shall bedistributed in the proportion indicated in the immediately preceding paragraph in favor of Edmund and Florence, mychildren.

We agree with the appellate court that the above-quoted is an all-encompassing provision embracing all the propertiesleft by the decedent which might have escaped his mind at that time he was making his will, and other properties hemay acquire thereafter. Included therein are the three (3) subject tractors. This being so, any partition involving thesaid tractors among the heirs is not valid. The joint agreement25executed by Edmund and Florence, partitioning the
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tractors among themselves, is invalid, specially so since at the time of its execution, there was already a pendingproceeding for the probate of their late fathersholographic will covering the said tractors.

It must be stressed that the probate proceeding had already acquired jurisdiction over all the properties of thedeceased, including the three (3) tractors. To dispose of them in any way without the probate courts approval istantamount to divesting it with jurisdiction which the Court cannot allow.26Every act intended to put an end toindivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be asale, an exchange, a compromise, or any other transaction.27Thus, in executing any joint agreement which appearsto be in the nature of an extra-judicial partition, as in the case at bar, court approval is imperative, and the heirscannot just divest the court of its jurisdiction over that part of the estate. Moreover, it is within the jurisdiction of the

probate court to determine the identity of the heirs of the decedent.28In the instant case, there is no showing that thesignatories in the joint agreement were the only heirs of the decedent. When it was executed, the probate of the willwas still pending before the court and the latter had yet to determine who the heirs of the decedent were. Thus, forEdmund and respondent Florence S. Ariola to adjudicate unto themselves the three (3) tractors was a premature act,and prejudicial to the other possible heirs and creditors who may have a valid claim against the estate of thedeceased.

The question that now comes to fore is whether the heirs assumption of the indebtedness of the decedent is binding.We rule in the negative. Perusing the joint agreement, it provides that the heirs as parties thereto "have agreed todivide between themselves and take possession and use the above-described chattel and each of them to assume theindebtedness corresponding to the chattel taken as herein after stated which is in favor of First Countryside CreditCorp."29The assumption of liability was conditioned upon the happening of an event, that is, that each heir shall takepossession and use of their respective share under the agreement. It was made dependent on the validity of thepartition, and that they were to assume the indebtedness corresponding to the chattel that they were each to receive.The partition being invalid as earlier discussed, the heirs in effect did not receive any such tractor. It follows then thatthe assumption of liability cannot be given any force and effect.

The Court notes that the loan was contracted by the decedent.l^vvphi1.netThe petitioner, purportedly a creditor ofthe late Efraim Santibaez, should have thus filed its money claim with the probate court in accordance with Section5, Rule 86 of the Revised Rules of Court, which provides:

Section 5. Claims which must be filed under the notice. If not filed barred; exceptions. All claims for money againstthe decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claimsfor funeral expenses for the last sickness of the decedent, and judgment for money against the decedent, must befiled within the time limited in the notice; otherwise they are barred forever, except that they may be set forth ascounterclaims in any action that the executor or administrator may bring against the claimants. Where an executor oradministrator commences an action, or prosecutes an action already commenced by the deceased in his lifetime, the

debtor may set forth by answer the claims he has against the decedent, instead of presenting them independently tothe court as herein provided, and mutual claims may be set off against each other in such action; and if final

judgment is rendered in favor of the defendant, the amount so determined shall be considered the true balanceagainst the estate, as though the claim had been presented directly before the court in the administrationproceedings. Claims not yet due, or contingent, may be approved at their present value.

The filing of a money claim against the decedents estate in the probate court is mandatory.30As we held in thevintage case of Py Eng Chong v. Herrera:31

This requirement is for the purpose of protecting the estate of the deceased by informing the executor oradministrator of the claims against it, thus enabling him to examine each claim and to determine whether it is aproper one which should be allowed. The plain and obvious design of the rule is the speedy settlement of the affairs ofthe deceased and the early delivery of the property to the distributees, legatees, or heirs. `The law strictly requires

the prompt presentation and disposition of the claims against the decedent's estate in order to settle the affairs of theestate as soon as possible, pay off its debts and distribute the residue.32

Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola accountable for anyliability incurred by her late father. The documentary evidence presented, particularly the promissory notes and thecontinuing guaranty agreement, were executed and signed only by the late Efraim Santibaez and his son Edmund. Asthe petitioner failed to file its money claim with the probate court, at most, it may only go after Edmund as co-makerof the decedent under the said promissory notes and continuing guaranty, of course, subject to any defenses Edmundmay have as against the petitioner. As the court had not acquired jurisdiction over the person of Edmund, we find itunnecessary to delve into the matter further.

We agree with the finding of the trial court that the petitioner had not sufficiently shown that it is the successor-in-interest of the Union Savings and Mortgage Bank to which the FCCC assigned its assets and liabilities.33The petitionerin its complaint alleged that "by virtue of the Deed of Assignment dated August 20, 1981 executed by and betweenFirst Countryside Credit Corporation and Union Bank of the Philippines"34However, the documentary evidence35clearly reflects that the parties in the deed of assignment with assumption of liabilities were the FCCC, and the UnionSavings and Mortgage Bank, with the conformity of Bancom Philippine Holdings, Inc. Nowhere can the petitionersparticipation therein as a party be found. Furthermore, no documentary or testimonial evidence was presented duringtrial to show that Union Savings and Mortgage Bank is now, in fact, petitioner Union Bank of the Philippines. As thetrial court declared in its decision:

[T]he court also finds merit to the contention of defendant that plaintiff failed to prove or did not present evidenceto prove that Union Savings and Mortgage Bank is now the Union Bank of the Philippines. Judicial notice does notapply here. "The power to take judicial notice is to [be] exercised by the courts with caution; care must be taken thatthe requisite notoriety exists; and every reasonable doubt upon the subject should be promptly resolved in thenegative." (Republic vs. Court of Appeals, 107 SCRA 504).36
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This being the case, the petitioners personality to file the complaint is wanting. Consequently, it failed to establish itscause of action. Thus, the trial court did not err in dismissing the complaint, and the CA in affirming the same.

IN LIGHT OF ALL THE FOREGOING,the petition is hereby DENIED. The assailed Court of Appeals Decision isAFFIRMED. No costs.

SO ORDERED.

G.R. No. 159130 August 22, 2008

ATTY. GEORGE S. BRIONES,petitioner,vs.LILIA J. HENSON-CRUZ, RUBY J. HENSON, and ANTONIO J. HENSON respondents.

D E C I S I O N

BRION,J.:

We review in this petition1the Decision of the Court of Appeals (Fifteenth Division) dated February 11, 20032in CA-G.R. SP No. 71844.

THE ANTECEDENTS

Respondent Ruby J. Henson filed on February 23, 1999 a petition for the allowance of the will of her late mother, LuzJ. Henson, with the Regional Trial Court (RTC) of Manila, docketed as Special Proceedings No. 99-92870.

Lilia Henson-Cruz, one of the deceased's daughters and also a respondent in this petition, opposed Ruby's petition.She alleged that Ruby understated the value of their late mother's estate and acted with "unconscionable bad faith" inthe management thereof. Lilia prayed that her mother's holographic will be disallowed and that she be appointed asthe Intestate Administratrix.

Lilia subsequently moved for the appointment of an Interim Special Administrator of the estate of her late mother,praying that the Prudential Bank & Trust Company-Ermita Branch be appointed as Interim Special Administrator. Thetrial court granted the motion but designated Jose V. Ferro (Senior Vice-President and Trust Officer, Trust BankingGroup of the Philippines National Bank) as the Special Administrator. Ferro, however, declined the appointment.

The trial court then designated petitioner Atty. George S. Briones as Special Administrator of the estate. Atty. Brionesaccepted the appointment, took his oath of office, and started the administration of the estate. The significanthighlights of his administration are listed below:

1. On November 22, 1999, the trial court directed the heirs of Luz J. Henson to turn over the possession of allthe properties of the deceased to the Special Administrator.

2. On February 16, 2000, Atty. Briones moved that the trial court approve Special Administrator's fees ofP75,000.00 per month. These fees were in additionto the commission referred to in Section 7, Rule 85 of theRevised Rules of Court. The trial court granted the motion but reduced the fees to P60,000.00 per month,retroactive to the date Atty. Briones assumed office.

3. Atty. Briones filed a Special Administrator's Report No. 1 dated September 8, 2000 which contained aninventory of the properties in his custody and a statement of the income received and the disbursementsmade for the estate. The trial court issued an Order dated March 5, 2001 approving the report.

4. On September 17, 2001, the heirs of Luz J. Henson submitted a project of partition of the estate for thetrial court's approval.

5. On January 8, 2002, Atty. Briones submitted the Special Administrator's Final Report for the approval of thecourt. He prayed that he be paid a commission of P97,850,191.26 representing eight percent (8%) of thevalue of the estate under his administration.

6. The respondents opposed the approval of the final report and prayed that they be granted an opportunityto examine the documents, vouchers, and receipts mentioned in the statement of income and disbursements.

They likewise asked the trial court to deny the Atty. Briones' claim for commission and that he be ordered torefund the sum of P134,126.33 to the estate.

7. On February 21, 2002, the respondents filed an audit request with the trial court. Atty. Briones filed hiscomment suggesting that the audit be done by an independent auditor at the expense of the estate.

8. In an Order dated March 12, 2002, the trial court granted the request for audit and appointed theaccounting firm Alba, Romeo & Co. to conduct the audit.

9. The respondents moved for the reconsideration of Order dated March 12, 2002, alleging that in view of thepartition of the estate there was no more need for a special administrator. They also clarified that they werenot asking for an external audit; they merely wanted to be allowed to examine the receipts, vouchers, bank
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statements, and other documents in support of the Special Administrator's Final Report and to examine theSpecial Administrator under oath.

10. The trial court handed down an Order dated April 13, 2002, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, the court hereby:

1. Reiterates its designation of the accounting firm of Messrs. Alba, Romeo & Co. toimmediately conduct an audit of the administration by Atty. George S. Briones of the

estate of the late Luz J. Henson, the expenses of which shall be charged against theestate.

2. Suspends the approval of the report of the special administrator except thepayment of his commission, which is hereby fixed at 1.8% of the value of the estate.

3. Directs the special administrator to deliver the residue to the heirs in proportion to theirshares. From the shares of Lilia J. Henson-Cruz, there shall be deducted the advances made toher.

IT IS SO ORDERED.

On April 29, 2002, respondents filed with the Court of Appeals (CA) a Petition for Certiorari, Prohibition, and

Mandamuswhich was raffled to the CA's Ninth Division and docketed as CA-G.R. SP No. 70349. The petitionassailed the Order dated March 12, 2002 which appointed accounting firm Alba, Romeo & Co. as auditors and theOrder dated April 3, 2002 which reiterated the appointment.

Prior the filing of the petition for certiorariin CA G.R. SP No. 70349, the heirs of Luz Henzon filed on April 9, 2002 aNotice of Appeal with the RTC assailing the Order dated April 3, 2003 insofar as it directed the payment of Atty.Briones' commission. They subsequently filed their record on appeal.

The trial court, however, denied the appeal and disapproved the record on appeal on May 23, 2002 on the ground offorum shopping. Respondents' motion for reconsideration was likewise denied.

On July 26, 2002, the respondents filed a Petition for Mandamuswith the appellate court, docketed as CA-G.R. SPNo. 71844. They claimed that the trial court unlawfully refused to comply with its ministerial duty to approve their

seasonably-perfected appeal. They refuted the trial court's finding of forum shopping by declaring that the issues intheir appeal and in their petition for certiorari(CA-G.R. SP No. 70349) are not identical, although both stemmed fromthe same Order of April 3, 2002. The appeal involved the payment of the special administrator's commission, whilethe petition for certiorariassailed the appointment of an accounting firm to conduct an external audit.

On the other hand, the petitioner insisted that the respondents committed forum shopping when they assailed theOrder of April 3, 2002 twice, i.e., through a special civil action for certiorariand by ordinary appeal. Forum shoppingtook place because of the identity of the reliefs prayed for in the two cases. The petitioner likewise posited that thetrial court's error, if any, in dismissing the appeal on the ground of forum shopping is an error of judgment, not of

jurisdiction, and hence is not correctible by certiorari.

On February 11, 2003, the Court of Appeals decided the respondents' petition for Mandamus(CA-G.R. SP No. 71844)as follows:

WHEREFORE, the petition is GRANTED and respondent Judge is directed to give due course to theappeal of petitioners from the Order dated April 3, 2002 insofar as it directed the payment ofcommission to private respondent.[Emphasis supplied.]

SO ORDERED.

The Court of Appeals held that the trial court had neither the power nor the authority to deny the appeal on theground of forum shopping. It pointed out that under Section 13, Rule 41 of the 1997 Rules of Civil Procedure, asamended, the authority of the trial court to dismiss an appeal, either motu proprioor on motion, may be exercisedonly if the appeal was taken out of time or if the appellate court docket and other fees were not paid within thereglementary period.

Atty. Briones moved for the reconsideration of this decision. The appellate court denied his motion in its Resolutiondated July 17, 2003. Thereupon, he seasonably filed the present Petition for Review on Certiorari on September 4,2003 on the ground that the CA refused to resolve the issue of forum shopping in its Decision of February 11, 2003and its resolution of July 17, 2003 in CA-G.R. SP No. 71844 (Petition for Mandamusto give due course to the appeal).

In the interim, on August 5, 2003, the Court of Appeals (Ninth Division) handed down its Decision3in CA-G.R. SP No.70439(Petition for Certiorari, Prohibition, and Mandamus on the appointment of the auditing firm), whose falloreads:

WHEREFORE, premises considered, the petition is GRANTED. The assailed Orders dated March 12, 2002 andApril 3, 2002 are REVERSED and SET ASIDE. Public respondent Judge Artemio S. Tipon is herebyCOMMANDED to allow petitioner-heirs: 1) to examine all the receipts, bank statements, bank passbook,
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treasury bills, and other documents in support of the Special Administrator's Final Report, as well as theStatement of the Income and Disbusement Made from the Estate; and 2) to cross-examine private respondentBriones, before finally approving the Special Administrator's Final Report. [Emphasis supplied.]

SO ORDERED.

THE PARTIES' POSITIONS

The petitioner faults the appellate court for refusing to resolve the forum shopping issue in its Decision of February

11, 2003 and the Resolution of July 17, 2003, thereby deciding the case in a way not in accord with law or withapplicable decisions of this Court. On the matter of forum shopping, the appellate court simply stated in its decisionthat "In view of the fact that respondent Judge had no power to disallow the appeal on the ground of forum shopping,we deem it unnecessary to discuss whether or not petitioners committed forum shopping." Neither did the appellatecourt pass upon the issue of forum shopping in its ruling on the petitioner's motion for reconsideration, stating thatforum shopping should be resolved either in the respondent's appeal or in their petition for certiorari, prohibition, andmandamus(CA-G.R. SP No. 70349).

As basis, the petitioner cites Section 3 of this Court's Circular No. 28-91 which provides that "(a) Any violation of thisCircular shall be a cause for the summary dismissal of the multiple petition or complaint; and (b) Any willful anddeliberate forum shopping by any party and his lawyer with the filing of multiple petitions and complaints to ensurefavorable action shall constitute direct contempt of court."

To prove that forum shopping transpired, the petitioner cites the respondents' petition for certiorari, prohibition, andmandamus(CA-G.R. SP No. 70349) that prayed for the annulment of the assailed Order of April 3, 2002 in itsentirety. To the petitioner, the attack on the entire Order meant that even the payment of the special administrator'scommission - which was the subject of a separate appeal - was covered by the petition. The petitioner further allegedthat "to conceal the attempt at forum shopping, respondents deliberately failed to mention the existence of theirordinary appeal of the same Order of April 3, 2002 in the certification against forum shopping attached to theirpetition for certiorari, prohibition, and mandamusin CA-G.R. SP No. 70349."

The petitioner cites in support of his position the cases of Silahis International, Inc. v. National Labor RelationsCommission,4Tantoy Sr. v. Court of Appeals,5and First Philippine International Bank v. Court of Appeals.6Silahis wascited for the proposition that only one recourse - the appeal - should have been filed because the issues were inter-related. Tantoy, Sr. spoke of related causes or the same or substantially the same reliefs in considering whether thereis forum shopping. On the other hand, First Philippine International Bankwas cited to emphasize that the key to afinding of forum shopping is the objective of the relief; though differently worded, there is violation of the rule against

forum shopping if the objective in all the actions filed involves the same relief - in this case, the setting aside of theOrder of April 3, 2002. The petitioner noted that the respondents had succeeded in obtaining this relief in theirpetition for certiorari, prohibition, and mandamus(CA-G.R. SP No. 70349) and the ruling in this petition alreadyconstituted res judicataon the validity of the Order of April 3, 2002.

The respondents, for their part, claim that "the mere failure to specify in the decision the contentions of the appellantand the reason for refusing to believe them is not sufficient to hold the same contrary to the provisions of the law andthe Constitution."7In support of the twin recourses they took, they citeArgel v. Court of Appeals8where this Courtrejected the ground for objection similar to present petitioner's because "the special civil action for certiorariand theappeal did not involve the same issue." The respondents saw as ineffective the argument that the petition forcertiorariprayed for the annulment of the entire Order of April 3, 2002 since the petition and the appeal were veryspecific on the portions of the Order that were being assailed. They pointed, too, to the decision in CA-G.R. SP No.70349 which only passed upon the issues specified in the petition for certiorari, leaving untouched the issue that theychose to raise via an appeal. As their last point, the respondents claimed they saw no need to mention the pendency

of the appeal in their non-forum shopping certification because the appeal dealt with an issue altogether different fromthe issues raised in the petition for certiorari, citing for this purpose the specific wordings of Section 5, Rule 7 of theRevised Rules of Court.

THE ISSUE

The sole issue presented to us for resolution is: Did the Court of Appeals (Fifteenth Division) err in notdismissing the respondents' petition for mandamus(CA-G.R. SP No. 71844) on the ground of forumshopping?

THE COURT'S RULING

We find the petition devoid of merit as the discussions below will show.

The Order of April 3, 2002

An examination of the RTC Order of April 3, 2002 shows that it resolved three matters, namely: (1) the designation ofthe accounting firm of Alba, Romeo & Co. to conduct an audit of the administration of Atty. George S. Briones of theestate of Luz J. Henson, at the expense of the estate; (2) the payment of the petitioner's commission as the estate'sSpecial Administrator; and (3) the directive to the petitioner to deliver the residue of the estate to the heirs in theirproportional shares. Of these, only the first twoare relevant to the present petition as the third is the ultimatedirective that will close the settlement of estate proceedings.

The first part of the Order (the auditor's appointment) was the subject of the petition for certiorari, prohibition, andmandamusthat the respondents filed before the appellate court (CA-G.R. SP No. 70349). Whether this part is
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interlocutory or one that fully settles the case on the merits can be answered by the test that this Court laid down inMirada v. Court of Appeals: "The test to ascertain whether or not an order is interlocutory or final is - Does it leavesomething to be done in the trial court with respect to the merits of the case? If it does, it is interlocutory;if it does not it is final."9

The terms of the trial court's order with respect to the appointment or "designation" of the accounting firm is clear:"to immediately conduct an audit of the administration by Atty. George S. Briones of the estate of the late Luz J.Henson, the expenses of which shall be charged against the estate."

To audit, is "to examine and verify (as the books of account of a company or a treasurer's accounts)." An audit is the"formal or official examination and verification of books of account (as for reporting on the financial condition of abusiness at a given date or on the results of its operations for a given period)."10Black's Law Dictionary defines it nodifferently: "a systematic inspection of accounting records involving analyses, tests and confirmations; a formal orofficial examination and authentication of accounts, with witnesses, vouchers, etc."11

Given that the subject matter of the audit is Atty. Briones' Final Report in the administration of the estate of thedecedent, its preparatory character is obvious; it is a prelude to the court's final settlement and distribution of theproperties of the decedent to the heirs. In the context of what the court's order accomplishes, the court's designationof an auditor does not have the effect of ruling on the pending estate proceeding on its merits (i.e., in terms of finallydetermining the extent of the net estate of the deceased and distributing it to the heirs)

rule 86-90 cases special proceedings

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