Transcript
CLEMENT L. CUCUECO, petitioner, vs. COURT OF APPEALS,
GOLDEN "L" FILMS INTERNATIONAL, ORLANDO LAPID,
FRANCISCO LAPID, DIOSDADO LAPID, LEA
PRODUCTIONS, INC., and EMILIA S. BLAS, respondents.
G.R. No. 139278 October 25, 2004
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
This is a petition for review on certiorari assailing the Decision
dated March 9, 1998, rendered by the Court of Appeals (CA) in
CA-G.R. CV No. 35911,
1
which reversed the decision of the
Regional Trial Court of Manila (Branch 18) in Civil Case No. 87-
39888, as well as the CA’s Resolution dated July 6, 1999, denying
petitioner’s motion for reconsideration.
Civil Case No. 87-39888 is an action for the declaration of nullity
of contract, torts and damages with preliminary injunction and
attachment filed by petitioner against all the herein respondents.
It was consolidated by the trial court with Civil Case No. 87-
39732, which is an action for specific performance with damages
and preliminary injunction filed by respondents Emilia S. Blas
2
and
Lea Productions, Inc., against Golden "L" Films International, as
these two cases arose from the same set of factual antecedents,
which, as stated by the CA, is as follows:
In his complaint filed with the court a quo, Clement Cucueco
alleged that sometime in 1985, he entered into a joint
venture with Golden "L" Films International (Golden Films)
and its owners, Orlando, Francisco and Diosdado, all
surnamed Lapid, to co-produce a movie entitled "JIMBO"
with the condition that Cucueco’s investment would be
repaid first before that of the Golden Films and that the net
profit would be divided between the parties in proportion to
their respective investments.
Cucueco invested P662,345.00 in the project which was
subsequently increased by P176,539.98 or a total ofP838,884.98.
The proceeds from the showing of "JIMBO" were reinvested in
the production of another film entitled "MARUSO" starring Lito
Lapid.
After the shooting of "MARUSO" and while the film was being
processed preparatory to its commercial exhibition, Golden Films,
without the knowledge and prior consent of Cucueco, sold the
film to Lea Productions, Inc. (LEA), represented by Emilia Blas.
LEA, however, failed to pay in full, so Golden Films withheld
delivery of the film.
Meantime, Cucueco, upon request of Golden Films, paid SQ
Laboratories the processing fee of the film "MARUSO" in the
amount of P82,900.00 to facilitate the recovery of his investment
and share in the joint venture. In turn, SQ Laboratories delivered
to Cucueco the "master" copy and other copies of the film
"MARUSO." Subsequently, Emilia Blas and the Lapids demanded
that Cucueco deliver the film to them but he refused. He
maintains that the sale of "MARUSO" by Golden Films to LEA is
void for lack of consent on his part, he being a co-owner and co-
producer of the film, invoking Section 18 of P.D. 49.
In their separate answers, the defendants denied specifically
Cucueco’s material allegations in the instant complaint, raising
affirmative defenses.
Meanwhile, LEA filed with the RTC of Manila, Branch 26, a
complaint for specific performance and damages with application
for a preliminary injunction (docketed as Civil Case No. 87-39732)
seeking to compel Golden Films and the Lapids to comply with
their obligation under the contract of sale of "MARUSO." In an
amended complaint, LEA and Emilia Blas impleaded Cucueco as
additional defendant.
The two cases (Civil Cases Nos. 87-39888 and 87-39732), being
intimately related, were consolidated before Branch 26 of the RTC
of Manila.
After a joint hearing on the application of Cucueco for preliminary
injunction and attachment in Civil Case No. 87-39888 as well as
the application of LEA for preliminary injunction in Civil Case No.
87-39732, the court below issued an order dated June 5, 1987,
the dispositive portion of which reads:
WHEREFORE, after hearing, the Court finds the evidence
sufficient to grant the issuance of a writ of preliminary
injunction to avoid further irreparable injury and to maintain
the status quo during the pendency of the two cases:
Let a writ of preliminary injunction be issued restraining
Lea Productions and Golden "L" Films International,
their representatives, agents and any person or persons
acting for and in their behalf, stead or name or with
their authority, from taking possession of any and/or
prints of the film "MARUSO": sell, distribute and exhibit
the film in any and/or (sic) theaters inside or outside
the Philippines, including video tape viewing; reprinting
the same from any of the prints already existing
including video tape printing; and publishing or
advertising that Lea Productions is the owner of the
film "MARUSO" during the pendency of the two cases
and until further order of the court.
Acting further to the application of plaintiff Clement
Cucueco in his complaint, Civil Case No. 87-39888, for
an order of attachment, the Court finds that the
complaint is supported by plaintiff’s affidavit of merit
that proves that there exists a sufficient cause of action
under Sec. 1, Rule 57 of the Rules of Court; that there
was fraud in the acts of the defendants in incurring the
obligation and there is no other sufficient security for
the claim sought to be enforced by the action.
In view hereof, the restraining order issued against
Clement Cucueco is ORDERED lifted and a writ of
attachment ORDERED issued upon the execution of a
bond in the amount of ONE MILLION FIVE HUNDRED
THOUSAND PESOS (P1,500,000.00) to answer for any
and for all damages the defendants may suffer if the
Court shall adjudge that the applicant was not entitled
thereto. The sheriff is hereby ORDERED to attach all
the existing file prints of "MARUSO" including the
master print and video tapes and the film share of the
showing of the "MARUSO" still in the possession of the
twenty eight (28) theaters listed in the Order of the
Court dated March 20, 1987 to satisfy plaintiff Clement
Cucueco’s demand.
The above order was challenged by LEA and Emilia Blas
in a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 13069.
In a decision promulgated on April 27, 1988, the Court
of Appeals affirmed the assailed order with modification
in the sense that the writ of preliminary attachment
issued in favor of Cucueco was annulled.
LEA and Emilia Blas pursued the cases up to the
Supreme Court in a petition for review on certiorari,
docketed therein as G.R. Nos. 84269-70. The main
issue posed was whether a writ of preliminary
injunction may still be issued after the effectivity of a
temporary restraining order. The Supreme Court
sustained the decision of the Court of Appeals and
denied the petition in a Resolution promulgated on July
12, 1989.
The twin cases were then remanded to the trial court
for further proceedings. It then conducted the pre-trial
but was not concluded.
Subsequently, Cucueco filed a motion for summary
judgment in Civil Case No. 87-39888 alleging that the
order of the lower court dated June 5, 1987 contains
findings of fact and law, affirmed by the Court of
Appeals and the Supreme Court. All the defendants
opposed the motion basically on the grounds that the
June 5, 1987 order is interlocutory and that no factual
finding was affirmed by the Court of Appeals and the
Supreme Court.
Acting upon Cucueco’s motion, the lower court rendered a
decision (summary judgment) the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered for the
plaintiff and against the defendants:
1. Declaring plaintiff co-owner and co-producer of
the film MARUSO, with the right to its possession,
use, distribution, exhibition and profits, as well as
to other rights appertaining to a copyright
proprietor, and the sale of said film between
defendants null and void.
2. Ordering defendants to deliver to the plaintiff all
copies of the movie MARUSO in their respective
possession, together with all trailers and other
components or parts thereof, and declaring the
preliminary injunction previously issued
permanent.
3. Ordering all the defendants to pay jointly and
severally the plaintiff actual damages in the sum
of P1,969,506.64; moral and exemplary damages
in the respective sums of P150,000.00
and P100,000.00 and an additional sum
of P50,000.00 as and for attorney’s fees with
interest thereon at the legal rate from the date of
the filing of this action, plus the costs of suit.
4. Ordering defendants Lea Productions and Emilia
Blas, jointly and severally, to pay, deliver or
turnover to the plaintiff all profits or income they
derived from MARUSO in the total sum
ofP3,446,600.00, with interest thereon from June
5, 1987 until fully paid, and to legal rate (sic).
5. Ordering the separation of this case from Civil
Case No. 87-39732.
SO ORDERED.
3
Respondents filed an ordinary appeal from the trial court’s
decision with the CA, to which petitioner filed a Motion to Dismiss
Appeal on the ground that respondents should have filed a
petition for review on certiorari with this Court, instead of an
ordinary appeal to the CA, as the case involves pure questions of
law.
4
Per its Resolution dated October 7, 1992, the CA resolved
that it will consider the issues raised therein in the decision it will
render on the main case.
5
On March 9, 1998, the Court of Appeals rendered the herein
assailed decision, with the following dispositive portion:
WHEREFORE, the appealed decision (summary judgment) is
hereby REVERSED and SET ASIDE. Let the records of both
cases be remanded to the court of origin for further
proceedings with dispatch.
SO ORDERED.
6
His motion for reconsideration having been denied, petitioner filed
the instant petition for review on certiorari, alleging the following
questions of law:
(1) Whether or not the mode of appeal resorted to by
private respondents from the Decision (Summary Judgment)
of the trial court to the respondent COURT is proper; and
(2) Whether or not the trial court correctly rendered the
Decision (Summary Judgment) appealed from and in
applying the Doctrine of the "Law of the Case" doctrine (sic)
in the process.
7
Notably, while the CA stated in its Resolution dated October 7,
1992 that it would resolve petitioner’s Motion to Dismiss Appeal in
its decision on the appeal, it apparently failed to consider the
same, as the appellate court’s decision does not show any
discussion thereon. Thus, petitioner insists that the mode of
appeal taken by respondents from the trial court’s decision is
erroneous. According to him, the issues raised in the appeal were
purely questions of law as the summary judgment rendered by
the trial court was rendered merely based on the pleadings and
documents on record, and without any trial or reception of
evidence.
8
Petitioner also argues that inasmuch as respondents
failed to contradict the evidence he presented, they having
focused on the issue of the propriety of the summary judgment
and the application of the "law of the case," the "correctness or
incorrectness of the conclusions drawn by the trial court from the
undisputed evidence of petitioner also raises a question of
law."
9
Such being the case, respondents should have filed a
petition for review on certiorari with this Court and not an
ordinary appeal to the CA.
The Court finds that the issues raised by respondents in their
appeal clearly involve questions of law.
There is no question that when an appeal raises only pure
questions of law, it is this Court that has the sole jurisdiction to
entertain the same.
10
On the other hand, appeals involving both
questions of law and fact fall within the exclusive appellate
jurisdiction of the CA.
11
The distinction between questions of law and questions of fact
has long been settled. There is a "question of law" when the
doubt or difference arises as to what the law is on certain state of
facts, and which does not call for an examination of the probative
value of the evidence presented by the parties-litigants. On the
other hand, there is a "question of fact" when the doubt or
controversy arises as to the truth or falsity of the alleged facts.
Simply put, when there is no dispute as to fact, the question of
whether or not the conclusion drawn therefrom is correct, is a
question of law.
12
Simple as it may seem, determining the true nature and extent of
the distinction is sometimes complicated. In a case involving a
"question of law," the resolution of the issue must rest solely on
what the law provides on the given set of circumstances. Once it
is clear that the issue invites a review of the evidence presented,
the question posed is one of fact. If the query requires a
reevaluation of the credibility of witnesses, or the existence or
relevance of surrounding circumstances and their relation to each
other, the issue in that query is factual.
13
In their brief filed before the CA, respondents as appellants raised
the following assignment of errors: (1) the lower court erred in
rendering the summary judgment in Civil Case No. 87-39888; and
(2) the lower court grossly misapplied the doctrine of the law of
the case.
14
In support thereof, respondents argue that the
summary judgment rendered by the trial court in Civil Case No.
87-39888 was erroneous, as there were material facts alleged in
petitioner’s complaint that they denied and disputed, and which
can only be solved after trial on the merits, i.e., cost of
production; the parties’ contributions to the production of
"Jimbo"; whether or not the film made any earnings or losses;
whether or not petitioner is a co-producer of the film "Maruso";
etc.
15
Respondents also argued that the "law of the case" should
not have been applied by the trial court in resolving Civil Case No.
87-39888 as no final conclusions of fact were drawn by the CA in
CA-G.R. SP Nos. 13069 and 13911, and the Supreme Court in
G.R. Nos. 84269 and 84270, as these cases merely involved an
interlocutory order.
16
At first blush, it may appear that the issues raised by respondents
indeed involve questions of fact justifying their resort to ordinary
appeal. A closer scrutiny, however, shows that the appeal actually
involves purely questions of law. The test of whether a question
is one of law or of fact is not the appellation given to such
question by the party raising the same; rather, it is whether the
appellate court can determine the issue raised without reviewing
or evaluating the evidence, in which case, it is a question of law;
otherwise, it is a question of fact.
17
Respondents’ appeal calls for a determination of whether the
pleadings filed by the parties indeed tendered a genuine issue as
to the material facts. In order to resolve this issue, the appellate
court need only to look into the pleadings, depositions,
admissions, and affidavits submitted by the respective parties
without going into the truth or falsity of such documents. It must
be noted that under Section 1, Rule 35, of the Rules of Court, a
trial court may grant a summary judgment if, on motion of either
party, there appears from the pleadings, depositions, admissions,
and affidavits that no important issues of fact are involved,
except the amount of damages. Trial courts have limited authority
to render summary judgments and may do so only when there is
clearly no genuine issue as to any material fact. In other words,
in a motion for summary judgment, the crucial question is: are
the issues raised in the pleadings genuine, sham or fictitious, as
shown by affidavits, depositions or admissions accompanying the
motion?
18
Any review by the appellate court of the propriety of the
summary judgment rendered by the trial court based on these
pleadings would not involve an evaluation of the probative value
of any evidence, but would only limit itself to the inquiry of
whether the law was properly applied given the facts and these
supporting documents. Therefore, what would inevitably arise
from such a review are pure questions of law, and not questions
of fact, which are not proper in an ordinary appeal under Rule 41,
but should be raised by way of a petition for review
on certiorariunder Rule 45.
Likewise, the issue of whether the rulings of the CA in CA-G.R. SP
Nos. 13069 and 13911, and the Supreme Court in G.R. Nos.
84269 and 84270, may be applied as "law of the case" involves a
question of law.
"Law of the case" has been defined as the opinion delivered on a
former appeal. It is a term applied to an established rule that
when an appellate court passes on a question and remands the
case to the lower court for further proceedings, the question
there settled becomes the law of the case upon subsequent
appeal.
19
It means that whatever is once irrevocably established
as the controlling legal rule or decision between the same parties
in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which
such decision was predicated continue to be the facts of the case
before the court. As a general rule, a decision on a prior appeal of
the same case is held to be the law of the case whether that
question is right or wrong, the remedy of the party deeming
himself aggrieved being to seek a rehearing.
20
Again, a court need not go into the probative value and/or
evaluation of the evidence on hand to determine whether the
doctrine of the "law of the case" is applicable in a given case or
not. In fact, a mere perusal of the pleadings, orders, and other
documents would suffice for a court to determine the applicability
of such doctrine. The appellate court need even not delve into the
truth or falsity of the evidence presented by the parties during
the hearing on the application for a writ of preliminary injunction,
or the findings of the trial court in said hearing, rather, the
appellate court merely had to determine whether such evidence
and findings are conclusive to be considered as "law of the case"
on the controversy at hand. Perforce, such inquiry is a question of
law.
It is undeniable that the appellate court did not make any finding
of fact. Neither did it evaluate the parties’ respective evidence,
nor pass upon the truth or falsity of the parties’ allegations. What
the appellate court did was simply apply the law as to the facts
borne out by the allegations in the pleadings, and whatever
conclusions the appellate court arrived at evidently involved
questions of law.
Hence, the issues raised being pure questions of law, the
appellate court should have dismissed respondents’ appeal
outright pursuant to Supreme Court Circular 2-90, which was the
law prevailing at the time the appeal was taken,
21
viz.:
4. Erroneous Appeals. -- An appeal taken to either the
Supreme Court or the Court of Appeals by the wrong or
inappropriate mode shall be dismissed.
…
c) Raising issues purely of law in the Court of Appeals,
or appeal by wrong mode. -- If an appeal under Rule
41 is taken from the regional trial court to the Court of
Appeals and therein the appellant raises only questions
of law, the appeal shall be dismissed, issues purely of
law not being reviewable by said Court. …
Nevertheless, in order to serve the ends of substantial
justice and fair play, the Court deems it apt to suspend the
enforcement of statutory and mandatory rules on appeal in
the present case. After all, rules of procedure should be
viewed as mere tools designed to aid the courts in the
speedy, just and inexpensive determination of the cases
before them. Liberal construction of the rules and the
pleadings is the controlling principle to effect substantial
justice. Litigations should, as much as possible, be decided
on their merits and not on mere technicalities.
22
Thus, in Ginete vs. Court of Appeals,
23
the Court ruled that:
In the case at bar, the lawyer’s negligence without any
participatory negligence on the part of petitioners is a
sufficient reason to set aside the resolutions of the Court of
Appeals. Aside from matters of life, liberty, honor or
property which would warrant the suspension of the rules of
the most mandatory character and an examination and
review by the appellate court of the lower court's findings of
fact, the other elements that should be considered are the
following: (1) the existence of special or compelling
circumstances, (2) the merits of the case, (3) a cause not
entirely attributable to the fault or negligence of the party
favored by the suspension of the rules, (4) a lack of any
showing that the review sought is merely frivolous and
dilatory, (5) the other party will not be unjustly prejudiced
thereby.
On the whole, the principal considerations in giving due
course to an appeal by suspending the enforcement of
statutory and mandatory rules are substantial justice and
equity considerations. But the above-cited elements should
likewise be considered for the appeal to be reinstated and
given due course.
In the present case, the trial court disregarded and
misappreciated the allegations in the parties’ respective
pleadings, and misapplied the rules on summary judgment. A
perusal of the records of this case shows that the parties’
respective pleadings show that there are genuine issues of fact
that necessitate formal trial. Petitioner’s complaint alleges certain
facts in support of his claim for the nullity of the contract between
Golden "L" Films International and Lea Production, Inc., regarding
the sale of the film "Maruso." On the other hand, respondents
raise substantial factual matters denying petitioner’s entitlement
to the relief prayed for. These denials in fact tendered genuine
material issues necessitating a full-blown trial on the merits and
presentation of evidence.
As was found by the appellate court:
Here, the answer of appellants LEA and Emilia Blas raises
the following defenses: (1) Appellee Cucueco is not a co-
owner or co-producer of the film "MARUSO;" (2) They
bought "MARUSO" in good faith from Golden Films, its
absolute owner; (3) Appellee does not appear to have any
interest in the said motion picture either as stockholder or
investor; and (4) Appellee, not being a party in the contract
of sale, has no personality to impugn its validity.
Meanwhile, the answer of appellants Golden Films and the
Lapids poses the following defenses: (1) The contract
between them and appellee Cucueco in the production of
"JIMBO" is a "Joint Agreement" wherein under business
practices and tradition, all losses and proceeds are shared
equally between the parties; (2) All proceeds from the
showing of "JIMBO" were actually received by Appellee,
through his mother; (3) "MARUSO" was solely produced by
the appellants Golden Films and the Lapids and should
actually belong to appellants LEA and Emilia Blas upon full
payment of the purchase price; and (4) Appellants did not
authorize Appellee to pay SQ Laboratories the processing
fee, etc.
There is no question that these recitals in appellants’
answers raise genuine issues which can only be threshed out
in a formal hearing to determine their veracity.
24
Thus, despite the fact that the CA should not have reviewed this
case when it was before it on ordinary appeal, the Court finds it
imperative to consider the CA’s decision as a valid and binding
judgment on the case.
WHEREFORE, the petition for certiorari is DENIED. The Court
of Appeals’ Decision dated March 9, 1998, together with the
Resolution dated July 6, 1999, is AFFIRMED. Let the records of
this case be remanded to the Regional Trial Court of Manila
(Branch 18) for further proceedings.
SO ORDERED.
Puno, Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.