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334 SUPREME COURT REPORTS ANNOTATED

Investments, Inc. vs. Court of Appeals

*
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.

Remedial Law; Civil Procedure; Judgments; Concept of “ final

judgment,” as distinguished from one which has become “ finaV' (or
“ executoTy"); Interlocutory order, concept of.—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, 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, or 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.

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* FIRST DIVISION.

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VOL. 147, JANUARY 27, 1987 335

Investments, Inc. vs. Court of Appeals

Same; Same; Same; Same; Same; Purpose of the rule.—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.
Same; Same; Same; Same; Same; “ Final judgment” correctly
categorized as a “ final and executory judgment;” Only a final judgment or
order can become final and executory.—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” or, 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. 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.” It bears stressing that only a final judgment
or order, i.e., “a judgment or order that finally disposes of the action of
proceeding” can become final and executory.
Same; Same; Same; Same; Preliminary Injunction; Effectivity of
preliminary injunction ended upon rendition by trial court of its judgment
on the merits regardless of its appealability or actual taking of appeal from
the judgment.—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 petitioner’s theory of the case,
founded on its concept of a “final judgment” is erroneous and cannot be
sustained.

PETITION for certiorari to review the decision of the Court of

Appeals.

The facts are stated in the opinion of the Court.

NARVASA, J.:

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The petitioner seeks the nullification by certiorari of two resolutions

of respondent Court of Appeals in CA G.R. No. Sp.

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336 SUPREME COURT REPORTS ANNOTATED

Investments, Inc. vs. Court of Appeals

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
1
Philippines, Inc. (“TIP"). 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 2writ of injunction and dissolving the temporary restraining
order. Unable to obtain a reconsideration of the order, Investments
brought the3 matter to the Court of Appeals on certiorari and
prohibition.
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

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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.

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VOL. 147, JANUARY 27, 1987 337

Investments, Inc. vs. Court of Appeals

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
4
Case No. 116617." 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 5the subsequent resolutions of September 24
and December 12,1979.
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
6
appeal; and with the Court of Appeals—in CA-G.R. No. 7
SP-08253-
R—a motion to lift the writ of preliminary injunction. 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,

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4 Rollo, pp. 98–100.

5 Rollo, p. 101.
6 Rollo, pp. 226–227.
7 Id., pp. 102–104.

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Investments, Inc. vs. Court of Appeals
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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
9
resolution of August 28,1981.
Investments then presented a motion for extension of time to file
10
a motion for reconsideration, pleading time pressure, which was
11
denied for lack of merit. Hence, the present peti-

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9 Rollo, pp. 142–146.

10 Rollo, pp. 147–148.
11 Rollo, p. 163.

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Investments, Inc. vs. Court of Appeals

tion.
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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
12
one that finally disposes of a case, 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

_______________

12 Sec. l, Rule 39.

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340 SUPREME COURT REPORTS ANNOTATED

Investments, Inc. vs. Court of Appeals

“final” or, to use the established and more distinctive term, “final
and executory.''

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"* * * (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
13
leaves something to be done upon the merits, it is merely interlocutory."
“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 lef t f or future
consideration, except the f act or compliance or non-compliance with the
terms of the judgment or order, such judgment or order is final and
14
appealable."

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

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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 8CRA
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.

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VOL. 147, JANUARY 27, 1987 341

Investments, Inc. vs. Court of Appeals

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
15
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15
of appeal until final judgment is rendered for one party oranother."

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 16court, when all such orders may be contested in a single
appeal.
Now, a “final judgment” in the sense just described becomes final
“upon expiration of the17
period to appeal therefrom if no appeal has
been duly perfected" or, an appeal therefrom having been taken,
the judgment of the appellate tribunal in turn becomes final and the
18
records of the case are returned to the Court of origin. The “final”
judgment is then correctly categorized as a “final and executory
judgment” in respect to which, as the law explicitly provides,
19
“execution shall issue as a matter of right." It bears stressing that
only a final judgment or order, i.e., “a judgment or order that finally
20
disposes of the action of proceeding" 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 ap-

_______________

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. l, Rule 39, supra.
20 Id.

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Ipapo vs. Intermediate Appellate Court

pealability of, or the actual taking of an appeal from, 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.

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     Yap, Metencio-Herrera, Cruz, Feliciano, and Gancayco, JJ.,

Concur.

Notes.—Preliminary mandatory injunction is provided by law by

way of support for speedy adjudication of ejectment cases to have
the disposed parity from further damages. (Ubarra vs. Animas, 134
SCRA 87.)
A petition for review by certiorari of an order of preliminary
mandatory injunction is dismissed after main case is decided on the
merits. (Quesada vs. Court of Appeals, 137 SCRA 590).
Injunction, not to be issued where the basis for doubt as to the
genuiness and validity of the agreement as the sole basis for the
injunction had not been successfully established. (Hernandez vs.
Magat, 137 SCRA 787.)

——o0o——

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