GR L 9075; (January, 1960) (Digest)
G.R. No. L-9075; January 29, 1960
S. V. S. PICTURES, INC., and RAMON S. SEVILLA, petitioners, vs. THE COURT OF APPEALS, RAMCAR, INC., and JOSE NEPOMUCENO, respondents.
FACTS
On April 22, 1947, Jose Nepomuceno contracted with S.V.S. Pictures, Inc. to provide equipment and personnel for filming the picture “Dalawang Anino” and to deliver six prints for exhibition, for a total consideration of P23,000.00 payable in installments. After the picture was filmed and exhibited, an accounting on November 10, 1947, revealed a remaining balance of P6,000.00 owed by S.V.S. Pictures to Nepomuceno. To settle this, S.V.S. Pictures, represented by its President and General Manager Arsenio J. Santos and its Treasurer and Director Ramon S. Sevilla, executed six promissory notes for P1,000.00 each in favor of Nepomuceno. Nepomuceno later assigned these notes to RAMCAR, Inc. Upon the notes being dishonored, RAMCAR filed an action in the Court of First Instance of Manila against S.V.S. Pictures and Ramon S. Sevilla to collect the P6,000.00 plus interest. The defendants, in their answers, claimed the notes were void for lack of consideration, challenged the validity of the assignment, and Sevilla denied personal liability. They also filed a third-party complaint against Nepomuceno, alleging he breached the contract by failing to deliver the remaining three prints and praying for P10,000.00 in damages. In an amended third-party complaint, they further alleged that the film negative of “Dalawang Anino” was delivered to Nepomuceno, who refused to return it, and prayed for its return. The trial court rendered judgment in favor of RAMCAR, ordering the defendants to pay the P6,000.00, and dismissed the third-party complaint and counterclaim. The Court of Appeals affirmed this decision.
ISSUE
1. Whether the Court of Appeals erred in not permitting the petitioners to introduce evidence to support their claim for the return of the film negative and for damages due to its delayed return.
2. Whether the Court of Appeals erred by not making complete findings of fact and law in its decision, specifically regarding the claim for the return of the film negative.
RULING
1. On the first issue: The Supreme Court found no error. The petitioners were, in fact, allowed to introduce evidence regarding the film negative in the trial court, as portions of such testimony were quoted in their own brief. Their real grievance pertained to the trial court’s denial of their motions to file a second amended answer and to present additional evidence on the execution of the notes and on damages from the alleged breach of contract. These motions were filed after the case was submitted for decision, and their denial was within the trial court’s discretion, which the Court of Appeals correctly sustained. Furthermore, the claim for damages based on the alleged delay in returning the negative was not raised in the trial court or the Court of Appeals (where damages were sought only for the failure to release three prints) and could not be raised for the first time on appeal.
2. On the second issue: The Supreme Court held that the Court of Appeals’ decision contained sufficient findings of fact to support the petitioners’ liability on the promissory notes. The appellate court found that the contract required Nepomuceno to provide equipment and personnel, not raw film materials; that the failure to deliver three additional prints was due to S.V.S. Pictures’ failure to supply the needed raw materials; and that the execution of the promissory notes after an accounting constituted both consideration for the notes and a recognition of the indebtedness, superseding any prior alleged breaches. However, the Supreme Court agreed that the Court of Appeals failed to expressly rule on or state essential facts regarding the petitioners’ separate claim in their third-party complaint for the return of the film negative, an issue squarely raised and for which evidence had been presented. Since the resolution of this conflicting claim required an examination of the evidence, and the transcript was not before the Supreme Court, the interest of justice would be better served by remanding the case for further proceedings on this specific issue.
DISPOSITIVE PORTION:
The decision of the Court of Appeals holding the petitioners liable on the promissory notes is AFFIRMED. The case is REMANDED to the Court of Appeals for further proceedings solely on the controversy regarding the return of the film negative of “Dalawang Anino.” No costs.