INVESTMENTS, INC., PETITIONER, VS. COURT OF APPEALS, TOBACCO INDUSTRIES OF THE PHILIPPINES, INC., AND THE SHERIFF OF THE CITY OF MANILA, RESPONDENTS.

The petitioner seeks the nullification by
certiorari of two resolutions of respondent Court of Appeals
in CA G.R. No. Sp. 08253-R:  one dated December 9, 1981, denying
its motion inter alia to 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 by
mandamus to 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
“Investments”) on July 7,
1978 in the Court of First Instance of Manila against the private
respondent, Tobacco Industries of the Philippines, Inc. (“TIP”).^[1] The 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.  Initially 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.^[2] Unable to obtain a
reconsideration of the order, Investments brought the matter to the Court of
Appeals on certiorari and prohibition.^[3]

That Court, on December
21, 1978, directed issuance of a writ of preliminary injunction
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.”^[4] In 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
Investments’ 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;^[6] and with the Court of Appeals
— in CA-G.R. No. SP-08253-R — a motion to lift the writ of
preliminary injunction.^[7] Investments
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
judgment 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.^[8] Subsequently, 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 respondent
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,^[10] which was denied for lack of merit.^[11] Hence, 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,^[12] leaving 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 categorically 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, of res adjudicata
or 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.”

“* * * (A)n order or judgment is deemed final when it finally
disposes of the pending action so that nothing more can be done with it in the
trial court.  In other words, a final order is that which gives an end to the litigation…  When the
order or judgment does not dispose of the case completely but leaves something
to be done upon the merits, it is merely interlocutory.”^[13]

“A final order or judgment finally disposes of, adjudicates, or
determines the rights, or some right or right of the parties, either on the
entire controversy or on some definite and separate branch thereof, and
concludes them until it is reversed or set aside…  Where no issue
is left for future consideration, except the fact of compliance or
non-compliance with the terms of the judgment or order, such judgment or order
is final and appealable.”^[14]

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

“** Only final judgments or orders shall be subject to
appeal.  No interlocutory order shall stay the progress of an
action, nor shall it be subject of appeal until final judgment is rendered for
one party or another.”^[15]

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 period to appeal therefrom if
no appeal has been duly perfected”^[17]
or, an appeal therefrom having been taken, the
judgment of the appeallate tribunal in
turn becomes final and the records of the case are returned to the court
of origin.^[18] The “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”.^[19] It bears
stressing that only a final judgment or order, i.e., “a judgment or
order that finally disposes of the action of proceeding”^[20] can 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 from, said judgment.  The petititioner’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, (Chairman), Melencio-Herrera, Cruz, Feliciano, and Gancayco, JJ., concur.“

---

^[1] Entitled “Investments, Inc. vs.
Tobacco Industries of the Phils.,
Inc.” The Sheriff of Manila was subsequently impleaded as defendant by an amended complaint.

^[2] Rollo, pp. 54-56

^[3] Entitled “Investments, Inc.
vs. Hon. Alfredo Florendo, Tobacco Industries of the Phils. and the Sheriff of
Manila.” CA-G.R. No. SP-08253-R

^[4] Rollo, pp. 98-100

^[5] Rollo, p. 101

^[6] Rollo, pp. 226-227

^[7] Id., pp. 102-104

^[8] Sec. 11, Rule 51, Rules of
Court.

^[9] Rollo, pp. 142-146 .

^[10] Rollo, pp. 147-148.

^[11] Rollo, p. 163.

^[12] Sec. 1, Rule 39.

^[13] PLDT Employees’ Union v. PLDT
Co. Free Tel. Workers’ Union, 97 Phil. 424, citing Moran, Comments on
the Rules, 1952 ed., Vol. 1, pp. 894-895, Nico v. Blanco, 81 Phil. 213 and
Jodges v. Villanueva, 90 Phil. 255, Mejia v.
Alimorong, 4 Phil. 572; Rios v. Ros 79 Phil. 243;
Kapisanan ng mga Manggagawa sa MRR Co. v. Yard Crew Union, et al., 109 Phil.
1150; Antonio v. Samonte, 1 SCRA 1072; Acting Director, National
Bureau of Investigation vs. Hon. Caluag, et al., 2 SCRA 541; Bairan v. Tan Siu Lay, et al. 18 SCRA
1239; Dela Cruz v. Hon. Paras and San Miguel,
69 SCRA 556.

^[14]Antonio v. Samonte,
supra, quoting 4 C.J.S. 257-258, 268; Dela Cruz v. Hon. Paras and San Miguel,
supra; Valdez v.
Hon. Bagaso, et al., 82 SCRA 22.

^[15] Sec. 2, Rule 41.

^[16] See PLDT Employees’
Union v. PLDT Co. Free Tel. Workers’
Union, supra, 97 Phil. 424, 427.

^[17] Sec. 1, Rule 39, Rules of
Court.

^[18] Sec. 11, Rule 51, Rules of
Court.

^[19] Sec. 1, Rule 39,
supra.

^[20]Id.