G. R. No. L-60036 - Investments, Inc. vs. Court of Appeals

Manila

G. R. No. L-60036 January 27, 1987

INVESTMENTS, INC.,petitioner,
vs.
COURT OF APPEALS, TOBACCO INDUSTRIES OF THE PHILIPPINES, INC., and THE SHERIFF OF THE CITY OF MANILA,respondents.

NARVASA,J.:

The petitioner seeks the nullification bycertiorariof two resolutions of respondent Court of Appeals in CA G.R. No. Sp.08253-R: one dated December 9, 1981, denying its motioninter aliato declare void the auction sale held on August 24,1981 at the instance of respondent Tobacco Industries of the Philippines, Inc.; and another dated January 13, 1982 denying its motion for extension of time to file a motion for reconsideration. The petitioner also seeks to compel respondent Court bymandamusto enforce an earlier resolution in the same case dated December 12, 1979, for the return to it of the chattels sold at public auction.

The instant petition originated from Civil Case No. 116617, instituted by Investments, Inc. (hereinafter referred to simply as "Investment's) on July 7, 1978 in the Court of First Instance of Manila against the private respondent, Tobacco Industries of the Philippines, Inc., ("TIP").1The action was for the annulment of a chattel mortgage executed by Investments in TIP's favor covering five cigarette-making machines, which were about to be sold on foreclosure by the latter.ℒαwρhi৷Initially a temporary restraining order was issued by the Court ex-parte enjoining the Sheriff from proceeding with the auction sale of the machines. But not long afterwards, the Trial Court promulgated an order denying Investments' application for a writ of injunction and dissolving the temporary restraining order.2Unable to obtain a reconsideration of the order, Investments brought the matter to the Court of Appeals oncertiorariand prohibition.3

That Court, on December 21, 1978, directed issuance of a writ of preliminary irijunction against the threatened auction sale upon Investments' posting a bond in the amount of P75,000.00. Subsequently, however, by resolution dated May 15, 1979, the Court dismissed Investment's petition and lifted the injunction. Investments filed a motion for reconsideration, at the hearing of which it argued for the reinstatement of the preliminary injunction since "the hearing on the merits of the main case below is about to be terminated." The Appellate Court then suggested that the injunction bond be increased to P650,000.00 to cover the principal obligation. The suggestion having been accepted by both parties, Investments accordingly filed a bond in the increased amount. The Court approved the bond on September 24, 1979 and issued a restraining order which in effect reinstated the injunction earlier granted.

On December 12, 1979 the Court of Appeals promulgated a Resolution declaring that without prejudice to the early conclusion of the case in the Trial Court, it deemed the proceedings before it terminated because it had already "stopped the sale ... of the machines ... until final judgment shall have been rendered in Civil Case No, 116617."4In due course, the Clerk of Court caused entry of judgment in CA-G.R. No. SP-08253-R, but what was inadvertently entered was the dispositive portion of the previous resolution of May 15, 1979 dismissing the petition for certiorari, and no reference whatever was made to the subsequent resolutions of September 24 and December 12, 1979.5

Trial in Civil Case No. 116617 having continued in the meantime, judgment therein was rendered on December 19, 1980, dismissing Investment's complaint for lack of merit, and awarding moral and exemplary damages to TIP. Investments appealed that decision to the Court of Appeals.

TIP filed with the Trial Court a motion for execution pending appeal;6and with the Court of Appeals — in CA-G.R. No. SP-08253-R — a motion to lift the writ of preliminary injunction.7Investments opposed both motions on the ground that the injunction issued by the Appellate Court against the holding of the auction sale was meant to subsist until "final in Civil Case No. 116617," and since the decision rendered in said case was not yet final and executory, said injunction was still in force. What the Court of Appeals did, however was to declare, by Resolution dated June 9, 1981, that it was no longer entertaining the pending incidents on the ground that the case before it (CA-G.R. No. SP-08253) had long been terminated. In so declaring the Court evidently relied only on the dispositive portion of its resolution of May 15, 1979 erroneously entered by the Clerk of Court (dismissing Investment's petition for certiorari and prohibition) and failed to take account of the injunction it had issued thereafter (upon the filing of a bond in the increased amount of P650,000.00). TIP then caused the mortgaged chattels to be sold by the Sheriff at a public auction on August 24, 1981, at which sale it was the successful bidder.

Investments forthwith filed with respondent Court of Appeals a motion for contempt and for annulment of the sale. The Court's response was to issue on August 28, 1981 a temporary restraining order stopping TIP from taking possession of the machines, and commanding their return to Investments if already in TIP's possession.8Subsequently, however, by Resolution dated December 9, 1981, the Court denied Investment's plea for nullification of the sale and for an adjudication of TIP's liability for contempt. In that resolution of December 9, 1981, the Appellate Court sustained TIP's position that the restraining order enjoining the sale of the mortgaged chattels had lapsed upon the rendition of final judgment in Civil Case No. 116617, irrespective of the appeal taken therefrom. The Court also declared valid the auction sale of August 24, 1981, and dissolved the restraining order embodied in the Resolution of August 28, 1981 said resolution having been "intended as a temporary measure pending determination of the status of the main case below." Finally, the respordent Court dismissed the contempt charges, finding TIP's offer to put up a counterbond in lieu of returning the machines to be substantial compliance with said resolution of August 28, 1981.9

Investments then presented a motion for extension of time to file a motion for reconsideration, pleading time pressure,10which was denied for lack of merit.11Hence, the present petition.

As is at once apparent, the crux of the controversy is the effective life of the preliminary injunction of the Appellate Court as regards the auction sale of Investments' cigarette-making machines, dated December 21, 1978 which, after having been lifted, was reinstated upon the filing by Investments of the increased injunction bond of P650,000.00 on September 24, 1979. The parties do not dispute the fact that the injunction was to subsist "until final judgment shall have been rendered in Civil Case No. 116617." The point about which they differ is the meaning to be accorded to the term, "final judgment" in the context of Civil Case No. 116617. Investments theorizes that the judgment rendered by the Trial Court in said Civil Case No. 116617 on December 19, 1980 was not a "final judgment" because it was an appealable judgment and had, in fact, been appealed seasonably. TIP, for its part, asserts that that judgment was in truth a "final judgment" as the term is used in procedural law, even if appealable and hence, upon its rendition, the preliminary injunction of the Appellate Court expired, its life having precisely been fixed to endure until such judgment shall have been rendered.

The concept of "final" judgment, as distinguished from one which has "become final" (or "executory" as of right [final and executory]), is definite and settled. A "final" judgment or order is one that finally disposes of a case,12leaving nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at the trial, declares categorir-ally what the rights and obligations of the parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, ofres adjudicataor prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties' next move (which among others, may consist of the filing of a motion for new trial or reconsideration, or the taking of an appeal) and ultimately, of course, to cause the execution of the judgment once it becomes "final" or, to use the established and more distinctive term, "final and executory."

Conversely, an order that does not finally dispose of the case, and does not end the Court's task of adjudicating the parties' contentions and determining their rights and liabilities as regards each other, but obviously indicates that other things remain to be done by the Court, is "interlocutory," e.g., an order denying a motion to dismiss under Rule 16 of the Rules, or granting a motion for extension of time to file a pleading, or authorizing amendment thereof, or granting or denying applications for postponement, or production or inspection of documents or things, etc. Unlike a "final" judgment or order, which is appealable, as above pointed out, an "interlocutory" order may not be questioned on appeal except only as part of an appeal that may eventually be taken from the final judgment rendered in the case.

The rule is founded on considerations of orderly procedure, to forestall useless appeals and avoid undue inconvenience to the appealing party by having to assail orders as they are promulgated by the court, when all such orders may be contested in a single appeal.16

Now, a "final judgment" in the sense just described becomes final "upon expiration of the peirod to appeal therefrom if no appeal has been duly perfected"17or, an appeal therefrom having been taken, the judgment of the appellate tribunal in turn becomes final and the records of the case are returned to the Court of origin.18The "final" judgment is then correctly categorized as a "final and executory judgment" in respect to which, as the law explicitly provides, "execution shall issue as a matter of right."19It bears stressing that only a final judgment or order, i.e., "a judgment or order that finally disposes of the action of proceeding"20can become final and executory.

There is no showing that the parties and their counsel intended to give the term "final judgment" a special signification, a meaning other than that accorded to it by law and established usage. Their agreement must therefore be construed to mean exactly what it says, that upon rendition by the Trial Court. on December 9, 1981 of its judgment on the merits, i. e., its " final judgment," the life and effectivity of the preliminary injunction came to an end, regardless of the appealability of, or the actual taking of an appeal froia said judgment. The petitioner's theory of the case, founded on its concept of a "final judgment" is erroneous and cannot be sustained.

WHEREFORE,the petition is dismissed, with costs against petitioner.

SO ORDERED.

Yap, Melencio-Herrera, Cruz, Feliciano, and Gancayco, JJ., Concur.

Footnotes