G.R. No. L-387, October 25, 1946
BALBINA MENDOZA, petitioner, vs. PACIANO DIZON, in his capacity as Auditor General, respondent.

FACTS

Juan M. Cuevas, the legitimate son of petitioner Balbina Mendoza, died on November 3, 1945, while actively serving as the Provincial Auditor of Ilocos Sur. He had been in active service since the outbreak of war on December 8, 1941. Cuevas was married to Florencia Cocadiz in 1932, but their marriage was definitively dissolved by a final decree of divorce issued by the Court of First Instance of Batangas on March 21, 1944. There were no children from the marriage. It is undisputed that Balbina Mendoza is the deceased’s nearest relative and rightful heir, to the exclusion of his siblings and nephews.
On December 7, 1945, the President of the Commonwealth of the Philippines issued Administrative Order No. 27, which provided for the payment of gratuities to government officials and employees who were in active service on December 8, 1941, under certain conditions. Prior to this, on December 4, 1945, Balbina Mendoza filed a petition with the Auditor General, presenting documents to establish her relationship to the deceased and listing his assets, including money held by the Government, the Philippine National Bank, and the Postal Savings Bank. She requested to be designated as the next of kin to receive any amount due to her deceased son. Florencia Cocadiz, the divorced wife, did not file any claim or appear officially before the Auditor General.
Initially, the Deputy Auditor General sought an opinion from the Department of Justice on whether the divorced wife had any right to the gratuity, considering it might be equivalent to salary for January and February 1942. The Department of Justice declined to issue an opinion, noting the inquiry was hypothetical as there was no conflict of claims since only Balbina Mendoza had filed a petition.
Subsequently, on March 12, 1946, the Deputy Auditor General resolved Balbina Mendoza’s petition, ruling that the gratuity under Administrative Order No. 27 corresponded to the deceased’s salary for January and February 1942, a period during which his marriage was still subsistent. Therefore, it should be deemed part of the conjugal estate. Only one-half could be paid to the surviving mother as the next of kin, with the other half payable to the divorced wife. Balbina Mendoza appealed this ruling.

ISSUE

Whether the gratuity payable to the deceased Juan M. Cuevas under Administrative Order No. 27 belongs to his intestate estate or should be considered part of the conjugal assets of the deceased and his divorced wife.

RULING

The Supreme Court ruled in favor of the petitioner, Balbina Mendoza. The gratuity granted under Administrative Order No. 27 belongs to the intestate estate of the deceased Juan M. Cuevas and is payable in its entirety to his rightful heir.
The Court held that the gratuities in question are governed by Administrative Order No. 27, which has the force and effect of law. The Order uses the specific term “gratuity,” which in law and jurisprudence is distinct from salary, wages, or other emoluments. A gratuity signifies a gift, reward, or bounty given gratuitously. The Court emphasized that when the law’s phraseology is unambiguous, judicial interpretation must be literal. The Order’s provision that “The gratuities herein authorized shall be equivalent to two months’ basic salary at the rates actually received on December 8, 1941” was solely for the purpose of computing the amount. It does not mean the gratuity corresponds to or represents salary for any specific two-month period, such as January and February 1942. The right to the gratuity only became demandable and payable upon the promulgation of the Order on December 7, 1945, long after the divorce decree became final on March 21, 1944.
Therefore, the Deputy Auditor General’s ruling that the gratuity was conjugal property was without legal basis. The total amount of the gratuity belongs to the deceased’s estate, and Balbina Mendoza, as the designated next of kin, is entitled to receive it, without prejudice to any other valid claims against the estate under the laws on decedent’s property. The appealed ruling was modified accordingly. No costs were awarded.