UNIVERSAL FOOD CORPORATION, PETITIONER, VS. THE COURT OF APPEALS, MAGDALO V. FRANCISCO, SR., AND VICTORIANO V. FRANCISCO, RESPONDENTS.

The petitioner Universal Food Corporation moves to reconsider our
decision dated May 13, 1970;
its motion is based on four grounds which we shall discuss in seriatim.

1.  The petitioner contends
that (a) under the terms of the Bill of Assignment, exh.
A, the respondent Magdalo V. Francisco ceded and
transferred to the petitioner not only the right to the use of the formula for Mafran sauce but also the formula itself, because this,
allegedly, was the intention of the parties; (b) that on the basis of the entire
evidence on record and as found by the trial court, the petitioner did not
dismiss the respondent Francisco because he was, and still is, a member of the
board of directors, a stockholder, and an officer of the peti­tioner
corporation, and that as such, had actual knowledge of the resumption of
production by the petitioner, but that despite such knowledge, he refused to report
back for work notwithstanding the petitioner’s call for him to do so; (c) that
the private respondents are not entitled to rescind the Bill of Assignment; and
(d) that the evidence on record shows that the respondent Francisco was the one
not ready, willing and able to comply with his obligations under the Bill of
Assignment, in the sense that he not only irregularly reported for work but
also failed to assign, transfer and convey to the petitioner the formula for
Mafran sauce, in violation of the said deed of conveyance.

There is no need to further belabor the foregoing mat­ters raised
by the petitioner since they have been amply discussed and then resolved on
pages 7-13, 13-15, and 15-17 of our decision.

2.  The petitioner next
points to certain provisions in the Bill of Assignment, which, it asserts, are
not sufficient by them­selves to prove that the respondent Francisco ceded to
the petitioner merely the use of the formula for Mafran
sauce and not the formula itself.  It
specifically cites the paragraphs (a) dealing with the payment of a
“royalty of two (2%) per centum of the annual profit” earned by
petitioner to the respondent Francisco; (b) stating the appointment of the said
respondent as chief chemist of the petitioner as “permanent in
character,” with absolute control and supervision over laboratory
personnel in the preparation of the Mafran sauce; and
(c) making the property rights to the said trademark and formula automatically
reversible to the res­pondent Francisco should dissolution of the petitioner
corpora­tion take place.  Standing by
themselves, the foregoing provisions of the Bill of Assignment are perhaps not sufficient
to prove that what was ceded by the respondent Francisco to the petitioner was
merely the use of the formula for Mafran sauce and
not the for­mula itself.  We have,
however, made it clear in our decision that it is the cumulative effect of (a)
the foregoing circumstances, (b) the admission made by the petitioner of
paragraph 3 of the respondents’ complaint, (c) the factual milieu of the case,
and (d) the application of the first sentence of art. 13 78 of the New Civil
Code, which led this Court to conclude that what was actual­ly ceded and
transferred was only the use of the Mafran sauce
formula.  The fact that the trademark
“Mafran” was duly regis­tered in the name
of the petitioner pursuant to the Bill of Assign­ment, standing by itself
alone, to borrow the petitioner’s language, is not sufficient proof that the
respondent Francisco was sup­posedly obligated to transfer and cede to the
petitioner the for­mula for Mafran sauce and not
merely its use.  For the said res­pondent
allowed the petitioner to register the trademark for pur­poses merely of the
“marketing of said project.” (see
pars. 3 respectively of the complaint and answer, cited on page 12 of our
decision.)

3.  The petitioner the
advances the view that the findings of fact made by the trial court which led
it to rule against the rescission of the Bill of Assignment, should be
respected and upheld by this Court, because to disregard them would constitute
an unjustified departure from the well-settled rule in this juris­diction that
appellate courts should not interfere with the findings of fact of the trial
court or with its appreciation of the weight and credibility of the testimony
of the witnesses.  Stated elsewise, the petitioner, in essence and more precisely,
wants this Court to overturn the rule that the findings of fact arrived at by
the Court of Appeals are not subject to review by the Supreme Court (Uy vs. J.M. Tuason & Co.,
Inc., 31 SCRA 121 [1970]; Ro­que vs. Buan, 21 SCRA 642 [1967]). 
It is true that the foregoing rule admits of certain defined
exceptions:  “the findings of fact
made by the Court of Appeals may be set aside: 
1) when the con­clusion is a finding grounded entirely on speculation,
surmises or conjectures; 2) when the inference made is manifestly mis­taken,
absurd or impossible; 3) where there is a grave abuse of discretion; 4) when
the judgment is based on a misapprehension of facts; and 5) when the Court of
Appeals, in making its find­ings, went beyond the issues of the case and the
same are contrary to the admissions of both appellant and appellee”
(Roque vs. Buan, supra,
and cases cited).  The petitioner,
however, has not demonstrated the applicability of any of the foregoing exceptions
to the case at bar.

4.  Finally, the petitioner
maintains that, assuming that the respondent Francisco is entitled to his back
salary, since he has formed another corporation styled “La Mer Industries, Inc.” the principal purpose of which
is to engage in the manufacture and sale of products similar to if not the same
as the Mafran sauce being produced by the petitioner,
and, during the period of the pendency of this case, practised his other profession as chiropractor, the total
amount of his earnings from these sources, computed from the date of dismissal
to the date of reinstatement, and should he decide not to return to work,
computed from the date of dismissal to the date of finality of our judgment,
should be deducted from the back salary accruing to him.  We find this argument tenable.

In his pleading filed on January
29, 1971, the respondent Francisco manifested that he would no
longer file a rejoinder to the petitioner’s reply and supplementary reply dated
December 14, 1970 and December 22, 1970, respectively, and
that he was submitting to final resolution by this Court the pleadings already
submitted.  In effect, the respondent
Francisco does not deny the petitioner’s aforestated
contention.

ACCORDINGLY, we hereby modify our decision of May 13, 1970
only to the extent that the total earnings of the respon­dent Magdalo V. Francisco, Sr. from whatever source during the
period from the date of his dismissal up to the date of finality of our
decision, shall be deducted from the total back salary that shall have accrued
to the said respondent.  The trial court
shall receive pertinent evidence on the earnings adverted to, then make the
necessary determination, and forthwith issue the proper writ of execution to
enforce the final judgment in this case.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Barredo, Villamor, and Makasiar, JJ., concur.

Concepcion, C.J., and Teehankee, J., took no part.