S. V. S. PICTURES, INC., AND RAMON S. SEVILLA, PETITIONERS, VS. THE COURT OF APPEALS, RAMCAR, INC., AND JOSE NEPOMUCENO, RESPONDENTS.

It appears that on April 22, 1947, a contract was entered into
between Jose Nepomuceno and S. V. S. Pictures, Inc., whereby for a
consideration of P23,000.00, the former undertook to furnish to the
latter “a complete service of equipment and personnel” for the filming
of a picture entitled “Dalawang Anino” and to release to the said
corporation six prints of said picture for exhibition in the different
theaters. The stipulated consideration of P23,000.00 was to be paid in
installments, P5,000.00 on the date of the contract, P1,000.00 weekly
for ten weeks and the balance from the first receipts from the showing
of the picture. In fulfillment of the contract, the picture mentioned
was filmed. Three prints thereof were delivered to S. V. S. Pictures.
The latter, in turn, made partial payments to Nepomuceno as stipulated
in the contract. On November 10, 1947, after the picture had been
exhibited in Manila and in the provinces, an accounting was had between
the parties. As it was found that there was still due Nepomuceno the
sum of P6,000.00, the S. V. S. Pictures, represented by Ramon S.
Sevilla and its president and general manager Arsenio J. Santos,
executed six promissory notes for Pl,000.00 each payable without
interest to Nepomuceno. The first of the notes was to mature on
December 10, 1947 and the others successively on the 10th of the
following months.

The aforesaid notes having been subsequently assigned to RAMCAR,
Inc., the latter, upon the notes being dishonored, brought the present
action on July 19, 1948 in the Court of First Instance of Manila
against S. V. S. Pictures and Ramon S. Sevilla for the total amount of
the notes with legal interest from the filing of the complaint.

The defendants, in their separate answers, set up the defense that
the notes were void for want of consideration; that their assignment to
plaintiff RAMCAR was not valid because it was without consideration and
without notice to the makers; and that Nepomuceno had no right to make
such assignment. Defendant Sevilla further disclaimed liability on the
contract alleging that the same was signed by him as Treasurer and
Director of S. V. S. Pictures and not in his personal capacity.
Together with the answers, defendants each filed a third party
complaint against Nepomuceno alleging that the latter had breached his
contract by not releasing to the S. V. S. Pictures the remaining three
other prints of the film and praying that for such breach Nepomuceno be
condemned to pay damages in the sum of P10,000.00. In their amended
third-party complaint, defendants further alleged that the negative of
the film “Dalawang Anino” was delivered to Nepomuceno which the latter
failed and refused to return, and accordingly prayed that Nepomuceno be
ordered to return said negative.

After hearing, the trial court rendered judgment condemning the
defendants to pay the plaintiff RAMCAR, jointly and severally, the sum
of P6,000.00 with legal interest from the filing of the action and
dismissing the third party complaint against Jose Nepomuceno as well as
the counterclaim filed by defendant S. V. S. Pictures.

The above decision having been affirmed by the Court of Appeals, the
defendants brought the case to this Court through appeal by certiorari,
contending that the Court of Appeals erred (1) “in not permitting
petitioners to introduce evidence in support of their right to recover
the film negative as well as to ask for damages for the delay of the
return thereof;” and (2) “in not making complete finding of fact and
law in its decision.”

After going over the record, we find that, contrary to petitioners’
first assignment of error which appears to be directed against the
trial court they were in fact allowed to introduce evidence in support
of their alleged right to recover the film negative. Their witnesses
testified on the matter and portions of such testimony are even quoted
in their own brief. What is more, petitioners themselves admit that
“they introduced evidence to show ownership of this film negative and
to show proof of the delivery thereof to the respondents.” What
petitioners, in reality, are questioning, as gleaned from their
arguments, is the denial by the trial court of their motion for the
admission of their second amended answer and to present additional
evidence on the execution of the promissory notes and on damages they
suffered, as well as the denial of their other motion for the admission
of additional documentary evidence for attachment to the record. The
motions, however, sought the introduction of evidence which would
establish damages allegedly suffered by the petitioners as a result of
Nepomuceno’s alleged breach of contract and had nothing to do with
their claim for the return of the film negative. Thus, petitioners in
their petition for review state that their purpose in filing those
motions was to prove some allegations in their answers. The pleadings,
on the other hand, show that their claim to the film negative is
alleged only in their third-party complaints. At any rate, the motions
were filed after the case was submitted for decision so that their
grant or denial was purely discretionary upon the court. In the
circumstances of the case, we hold that the Court of, Appeals correctly
sustained the action of the trial court denying the said motions.

It would seem that under the first assignment of error petitioners
are also claiming for damages based on the alleged delay of the return
of the film negative. In this connection, it is to be noted that in the
trial court, as well as in the Court of Appeals, petitioners as third
party plaintiffs asked for damages only on the ground that Nepomuceno
breached their contract by failing to release three additional prints.
Such being the case, petitioners cannot now for the first time on
appeal claim for damages based on the alleged delay of the return of
the film negative.

Under the second assignment of error, petitioners allege that the
Court of Appeals did not make a complete finding of fact and law. They
claim that as that court did not resolve the question of the return of
the film negative which was properly raised before it, its decision is
void. We find, however, that the appealed decision holding the
petitioners liable on the promissory notes is based on sufficient
findings of fact. Thus, the Court of Appeals found that—

‘* * * from the terms of the contract between the
parties for the filming or the picture ‘Dalawang Anino’, dated April
22, 1947, can be clearly gleamed that what Nepomuceno undertook to
provide was the equipment and facilities of the studio the technical
personnel etc., but not the raw materials (films) to be used for the
making of the picture, which were to be furnished and supplied by
defendant corporation, and the uncontradicted testimony of Nepomuceno
plainly points out the reason why three prints only of the picture were
actually released and delivered to defendant corporation, such reason
being the failure of the latter to provide and supply the raw materials
needed for the making of the three additional prints. Anyway, the
promissory notes in question were executed on November 10, 1947, after
a formal accounting and liquidation of the transaction was made, which
showed an unpaid balance of P6,000.00, and the execution of said
promissory notes for the satisfaction of said P6,000.00 not only shows
the consideration for the drawing of the notes but also a recognition
of the indebtedness on the part of the makers thereof, which was over
and above or despite the alleged violations of contract by Nepomuceno.”

What is more, petitioners in this appeal no longer question their
liability on the promissory notes. The pretense, therefore, that the
decision sought to be reviewed does not comply with the rule that a
judgment must state the facts on which it is based cannot be sustained.

It is true that the Court of Appeals in its decision did not
expressly rule on petitioners claim in their third party complaints for
the return of the film negative. This failure, however, in our opinion,
is not a reversible error, particularly since petitioners had already
called the attention of the appellate court in that regard in their
motion for reconsideration. If that court denied their motion, it was
apparently because it deemed it unjustified or without merit.

It cannot be ascertained, however, from the decision appealed from
just why petitioners’ claim for the return of the film negative was
denied. Neither does said decision—or that of the trial court—state
facts essential to the determination of that claim. On the other hand,
it is of record that the question regarding the return of the negative
was one of the issues squarely raised in the proceedings below and, for
that matter, the parties had already presented their evidence.
Petitioners alleged that the negative, worth at least P25,000.00,
belonged to S. V. S. Pictures and that it had been delivered to
respondent Nepomuceno. The latter, on the other hand, averred that
petitioners did not present sufficient evidence to establish his
liability to return the negative film as it had not been shown that he
was in possession thereof. Counsel for the respondent RAMCAR, Inc.,
after hearing of the case before this Court, has also made allegations,
factual in nature, regarding the negative film, which tend to defeat
petitioners’ claim for its return. Needless to say, resolution of these
conflicting claims necessarily involve an examination of the probative
value of the evidence presented (or still to be presented, if
necessary) by the parties. The transcript containing the testimony of
the witnesses, however, is not before us, the instant case being an
appeal by certiorari wherein only questions of law may be raised. In
the circumstances, we think the interest of justice would be better
served if the case were remanded to the Court of Appeals for further
proceedings insofar as petitioners’ claim for the return of the film
negative is concerned.

Wherefore, the decision appealed from holding petitioners liable on
the promissory notes is affirmed, but the case is hereby ordered
remanded to the Court of Appeals for further proceedings insofar as the
controversy on the film negative is concerned. Without pronouncement as
to costs.

Paras, C. J., Bengzon, Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia, and Barrera, JJ., concur.