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[ GR No. 42999, Oct 30, 1936 ]



63 Phil. 657

[ G. R. No. 42999, October 30, 1936 ]




These are two appeals taken, the one by the plaintiff company Acme Films,  Inc., and the other  by the  defendant company Theaters Supply Corporation, from the judgment of the  Court of First Instance of Manila, the dispositive part of which reads  as follows:
"Wherefore, denying the defendant's counterclaim, judgment is rendered sentencing said defendant to pay to the plaintiff the sum of P50 corresponding  to the promissory notes for  the months of February and  March, 1934, with interest thereon at 8 per cent per annum plus 10 per cent thereof as attorney's fees, without costs.  So ordered."
In  support of its  appeal, the plaintiff-appellant Acme Films, Inc., assigns the following  alleged errors as committed by  the  court  a  quo in its said judgment, to wit:
  1. In finding that the consideration of the promissory notes sued upon herein was plaintiff's obligation to supply defendant cinematographic films, and in failing to find that such notes have absolutely no bearing, relation or connection with plaintiff's undertaking to supply defendant with such films.

  2. In holding that the cancellation of plaintiff's agreement  to  supply defendant with the said cinematographic films  effected the cancellation of such of said promissory notes  as might fall due after  April, 1934.

  3. In failing to award judgment in  favor of plaintiff and against defendant  in  accordance with the prayer of plaintiff's complaint, and in denying plaintiff's motion for new trial and motion for  reconsideration."
The defendant-appellant Theaters Supply  Corporation, in turn, assigns in support of its appeal the following alleged  errors as committed by the court a quo in its said judgment, to wit:
  1.   The lower court erred in not ordering the plaintiff to pay the defendant the sum of  P550 representing the damages suffered by the defendant  by reason  of plaintiff's arbitrary  breach of  a contract, in manifest disregard of

  2.   The lower court erred in holding that Bosque's testimony in connection with the damages is  vague and general, and that it is well settled that an affirmation of this kind relative to damages suffered, being a mere conclusion, proves nothing.

  3.   The  lower  court erred  in  denying  the defendant-appellant's motion for a new trial."
This case originated in a complaint filed by the plaintiff Acme Films, Inc., against^the defendant Theaters  Supply Corporation, praying: (a) That the defendant company be ordered to pay to it the  sum of P175; (6) that the defendant company pay the sum of P17.50 as attorney's fees, and (c) that it be granted any other just and equitable remedy.

The defendant company, answering the complaint, denies each and every allegation contained  therein and as a cross-complaint prays that the plaintiff company be ordered  to pay it the sum of  P550 by way of  damages for breach  of contract, plus  legal interest thereon from the date  of the filing of the complaint, until fully paid, with costs to said plaintiff.

The following facts, which have not been denied  by the defendant company, were established by the plaintiff company during the trial, to wit:
On December 29, 1933, the defendant-appellant executed and  delivered  to the plaintiff-appellant eight promissory notes for the sum of P25 each, payable on successive dates, with interest at 8 per cent per annum on the unpaid balance of P175, seven of which promissory notes (Exhibits A to  E, inclusive) had been unpaid.  Said promissory notes are  of the same tenor  and contain the same  conditions,  except the date of  maturity, as follows:
"Manila, P. I., Dec. 29,1933

"Note No. 2

"On or before February 28,  1934, for value received, I promise to pay to the order of Acme Films, Inc., at its main office in the  City of Manila, P. I. the sum of pesos twenty-five only (P25) Philippine Cy. with interest at the rate of eight per centum (8%) per annum on the unpaid balance of P175.  This is one of a series of eight (8) promissory notes for an aggregate total of P200 (two hundred pesos)  all executed on this date.  In case of non-payment of  this note of maturity all succeeding notes shall forthwith become  due and payable at the election  of the payee, in which case, we also promise to pay to said Acme Films, Inc. an additional sum equivalent to ten per centum (10%) of the whole amount then remaining  unpaid for and as attorney's fees in addition to costs provided by law.

The defendant-appellant paid the promissory note upon maturity thereof in January, 1934; but did not do so  with respect to the amount of the promissory note which matured on  February 8, 1934, nor the corresponding  interest thereon, the payment of each of the remaining promissory notes having ipso facto matured, as per agreement.

In support of its cross-complaint the defendant-appellant attempted to prove that it entered into "Booking Contracts" with the plaintiff-appellant  (Exhibits 1  to 5, inclusive); that  the  plaintiff  company failed to supply the following films: on April 4, 1934, the films "Night Rider", All Talking Comedy, -Novelty & Cartoon and Pathe News; on April 5, 1934, the films "Monster Walks", "Whispering Shadow", AH Talking Novelty and Pathe News;  on April 11, 1934, the films "Skyway", All Talking Comedy, Novelty &  Cartoon and  Pathe News; on April 12, 1934, the films "Crashing  Broadway",  "Whispering Shadow"  and  Novelty  & News; on April 18, 1934, the films "Mounted Fury", All Talking Comedy, Cartoon & Novelty and Path4 News; on April 19, 1934,  the films "The  Phantom", "Whispering Shadow", All  Talking Comedy and Cartoon & Pathe News; on April 25, 1934, the films "Son of Oklahoma", All Talking Comedy,  All Talking Novelty and Cartoon & Pathe News; on March 27,  1934, the films "Phantom Broadcast", "Whispering Shadow 1" and Pathe News; on March 28, 1934, the films "Phantom Broadcast", "Whispering Shadow 1" and Path6 News;  on the same date, March 28, 1934, the films "Blind Adventure",  All  Talking  Comedy,  Cartoon  and Pathe News;  and on March  29; 1934,  the  films "Lucky Devils", "Whispering Shadow" and Pathe News; that among the films to be shown which the plaintiff failed to supply, there were serials; that such  serials had to be advertised in advance, said advertisements consisting not only in the printing of programs but also in the exhibition  of posters which paraded around the poblacion where the films were to be  shown,  and in the employment of bands of music to go  through the different streets of the poblacion  announcing the showing of said films ; that by reason of the plaintiff's failure to supply the films which it was bound to supply under the Booking Contracts  (Exhibits 1 to 5), the defendant company was forced to take  films from the Universal  Pictures Corporation,  paying therefor five  per cent more than what it paid to the plaintiff company under the contracts  in question;  that  on" March 26,  1935,  the plaintiff company wrote a letter (Exhibit 6) to the defendant company notifying the latter that all subsequent booking contracts were cancelled; that the defendant on said date wrote a letter  (Exhibit 7) stating that while it was willing to discontinue negotiating with the appellant,  it should be understood that the cancellation became effective on April 1, 1934, and that any serial already  commenced  must con- tinue to be shown  until the end;  that  notwithstanding this letter the plaintiff company failed to supply the films stated  in the cross-complaint thereby causing damages to the defendant in the sum of P400 to P550.

The first question to be decided in the appeal  of the plaintiff company,  Acme  Films, Inc., which is raised  in  the first assignment of alleged error, is whether or not the court a quo erred in arriving at the conclusion that  the cause or consideration of the promissory notes which are the subject matter of  the complaint was the plaintiff company's obligation  to supply the defendant  with  cinematographic films.

A simple reading of the promissory notes  in question shows  that they were issued for value received, and that upon maturity of each note the grantor would pay eight per cent per annum on the unpaid balance of P175.  If under the promissory notes in  question the defendant company bound  itself to partially pay an amount already received  plus interest at eight per cent on the unpaid balance, the obligation to supply cinematographic films could not  have been the cause  or consideration of the execution  thereof, but a pre-existent debt.  Furthermore, as the booking contract became effective only on  February 24, 1934, which supply began on said date and  on March 3  and 20, 1934, respectively, there could be no unpaid balance of P175, because the supply of films in question was based on a commission  on  the  proceeds of their exhibition  on the dates above-stated, which  commission  was undoubtedly  payable after each exhibition.

We therefore hold that the first  assignment of alleged error is  well founded.

The second Question to be decided is that raised by the plaintiff-appellant in  its  second assignment  of  alleged error, consisting in whether or not the court a quo erred in holding that the cancellation of said  plaintiff-appellant's agreement  to  supply the  defendant-appellant  with  the cinematographic films in question produced ipso facto the cancellation of the promissory notes the payment of which would mature after the month  of  April, 1934.

If,  as  already stated, the obligation contracted by the plaintiff-appellant to supply the defendant-appellant with cinematographic films was not and could not be the cause or consideration of the issuance  of  said promissory notes, it is logical  to conclude that the cancellation of the  booking contract  could not result in the  cancellation  of the promissory notes the maturity of which would take place after said cancellation, there being no relation of cause and effect between  both contracts.

With  respect to the  defendant-appellant's appeal,  the first question to be  decided  is that raised in its first assignment of alleged error, consisting in whether or not the court a  quo erred in not ordering the plaintiff to pay to the defendant the sum of P550 as damages suffered by the latter for the arbitrary breach of contract by the plaintiff.

It is not denied that the plaintiff  company failed to supply the defendant with the cinematographic films which were the subject matter of the  contracts entered  into on March 20,  1934 (Exhibits  1  and 2), and two films under the contract of March 24,  1934 (Exhibit 3), one  of said films being a serial entitled  "Whispering Shadow".   Guillermo Garcia Bosque  testified that  because  the plaintiff company had failed to supply said films, the defendant had to resort to the Universal Pictures Corporation and ask for films to replace those  which said plaintiff had failed to supply under the contract, having had to pay therefor five per cent more  than for those films  contracted  with said plaintiff Acme Films, Inc.,  and that the total cost thereof, including the printing of programs, posters paraded through the streets with bands of music to announce the showing of the films which the plaintiff company failed to  supply, amount to from P400 to P550.   The  plaintiff company did not submit evidence to  rebut the testimony of said witness and the fact that the estimate of the expenses is approximate does not make said  estimate inadmissible.  It was incumbent upon the  plaintiff company to submit evidence in rebuttal, or at least ascertain the  amount of the different items in  cross-examination.  There being no evidence to the contrary, it is logical to  admit that the  defendant company spent at least the sum  of P400.

Inasmuch as  the plaintiff company had failed to comply with a part of its booking contract,  and as the  defendant company had suffered damages as a  result thereof, the former is liable to indemnify the damages caused to the latter,  in accordance with the provisions of article 1101 of the Civil Code.

In view of the foregoing considerations, we are of the opinion and so hold:  (1)  That the defendant company is bound  to pay to the plaintiff company the  sum of P175 representing  the  total  amount of the seven matured and unpaid promissory notes, plus interest at eight per cent per annum on said sum of P175 from February 28, 1934, until fully paid, and an additional sum equivalent to ten per cent of said sum of P175 as attorney's fees; and (2)  that the plaintiff company,  in turn,  is bound to  pay to  the defendant company the sum of P400, as damages suffered by the latter  for breach  by  the former of its booking contract, plus interest thereon at six per cent per annum from July 29, 1934, the date of the filing of the cross-complaint, until fully paid.

Wherefore, the  appealed  judgment is reversed and the defendant company Theaters Supply Corporation is ordered to pay the sum of P175 to  the plaintiff company, plus the corresponding interest thereon at eight per cent per annum from February 28, 1934, until fully paid, and a sum equivalent to ten per cent of  said sum of P175  as attorney's fees; and the plaintiff company Acme Films, Inc., in turn, is ordered to pay  the sum  of P400 to the defendant company  Theaters Supply Corporation, plus  legal   interest thereon  at  six  per cent per annum  from the  date of the filing of the cross-complaint, until  fully paid, without special  pronouncement as to costs.  So ordered.

Avanceña, C. J.,  Abad Santos, Imperial, Diaz, and Laurel, JJ.,  concur.