The Supreme Court ruled that a trial court’s decision ordering an accounting in a civil aspect of a case is an interlocutory order, not a final judgment. This means that the order does not completely dispose of the case but leaves further action to be taken by the court, specifically to determine the extent of civil liability based on the accounting submitted. As an interlocutory order, it is not immediately appealable until a final determination of liability is made.

Accounting or Accountability? Unpacking Finality in Civil Judgments

In a case involving allegations of estafa, Genoveva Tomacruz-Lactao sought to hold Jannah Ann Espejo civilly liable for losses incurred in foreign currency trading. While Espejo was acquitted of the criminal charges, the trial court ordered her to render an accounting of the transactions she handled on behalf of Lactao. The central legal question revolved around whether this order for accounting constituted a final, immediately executable judgment, or an interlocutory order requiring further proceedings to determine the actual amount of liability.

The Court of Appeals (CA) sided with Espejo, declaring that the trial court’s order was not final and executory because the exact amount of Espejo’s liability had yet to be determined. The Supreme Court (SC) affirmed the CA’s decision, emphasizing the distinction between final and interlocutory orders. A **final order** disposes of the subject matter entirely, leaving nothing more for the court to do except execute the judgment. An **interlocutory order**, however, does not fully resolve the case; it leaves substantial proceedings yet to be conducted.

Building on this principle, the Supreme Court highlighted that the test for distinguishing between these types of orders lies in whether the court still needs to address the merits of the case. Quoting *Metropolitan Bank & Trust Company v. Court of Appeals*, the Court reiterated, “Does it leave something 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.”

In this instance, the trial court’s August 27, 1997 decision ordered Espejo to provide an accounting, and jointly and severally pay sums which they may fail to account for. This directive necessitated further evaluation to ascertain whether Espejo was indeed liable, and if so, the precise amount she owed Lactao. The Supreme Court drew a parallel with *Hydro Resources Contractors Corp. v. Court of Appeals*, where an order establishing liability for realty taxes was deemed interlocutory because the specific amount remained to be determined.

The Court noted that the December 8, 1997 Order of the trial court declared that Espejo and her co-accused are liable for P1,015,000.00 in light of their alleged “failure” to render an accounting. The High Court clarified that such order, was not yet final and executory as it was still subject to appeal, as correctly held by the CA. Rule 39, Section 1 of the Rules of Court provides:

SECTION 1. Execution upon judgments or final orders. – Execution shall issue a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.

The Court emphasized that only final orders can become final and executory, unalterable through appeal. Interlocutory orders, conversely, never attain such finality because they resolve incidental matters without concluding the case. In this case, the directive to render an accounting was a necessary step before a final determination of civil liability could be made.

FAQs

What was the key issue in this case?	The central issue was whether the trial court’s order for Jannah Ann Espejo to render an accounting was a final, immediately executable judgment or an interlocutory order subject to further proceedings.
What is the difference between a final and an interlocutory order?	A final order disposes of the entire case, leaving nothing more for the court to do except execute the judgment, while an interlocutory order does not fully resolve the case and leaves substantial proceedings yet to be conducted.
What was the court’s reasoning in determining the order was interlocutory?	The court reasoned that the order to render an accounting required further proceedings to determine if Espejo was indeed liable and, if so, the precise amount she owed, thus it was interlocutory.
Why couldn’t the writ of execution be issued immediately?	Because the order to render an accounting was interlocutory, it was not yet a final determination of liability, and therefore, a writ of execution could not be issued until the court made a final decision on the amount owed.
What happens after an interlocutory order is issued?	After an interlocutory order, the court must still conduct further proceedings, such as evaluating the accounting and determining the final amount of civil liability, before a final judgment can be made.
What is the significance of *Hydro Resources Contractors Corp. v. Court of Appeals* in this case?	It established a precedent where an order establishing liability, but requiring further proceedings to determine the specific amount, was deemed interlocutory, which helped support the decision in this case.
Can an interlocutory order be appealed?	An interlocutory order cannot be appealed directly until a final judgment is rendered, as it does not fully resolve the case.
What was the outcome of the case?	The Supreme Court affirmed the Court of Appeals’ decision, ruling that the trial court’s order to render an accounting was an interlocutory order, not a final judgment, and therefore not immediately executable.

Ultimately, the Supreme Court’s decision underscores the importance of distinguishing between final and interlocutory orders. This distinction dictates when a judgment becomes enforceable and when parties can exercise their right to appeal. By clarifying that an order for accounting is interlocutory, the Court ensured that Espejo had the opportunity to challenge the final determination of her civil liability after the accounting process.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: GENOVEVA TOMACRUZ-LACTAO v. JANNAH ANN ESPEJO, G.R. No. 144410, July 21, 2004