G.R. No. 137898 - China Road and Bridge Corp. vs. Court of Appeals

China Road and Bridge Corporation (CRBC) is a foreign corporation duly licensed by the Securities and Exchange Commission to do business in the Philippines, and it was awarded the contract to construct the EDSA Shaw Boulevard Overpass in Mandaluyong.
Hi-Quality Builders and Traders, Inc. (HI-QUALITY), a domestic corporation, subcontracted by CRBC, executed various documents and undertakings in connection with the project.
Jade Progressive Savings and Mortgage Bank (JADEBANK) is the private respondent involved in multiple financial transactions with HI-QUALITY, including providing loans secured by promissory notes and assigned receivables.

On 17 October 1996, Helen Ambrosio, President of HI-QUALITY, executed a Continuing Suretyship in favor of JADEBANK, binding herself to guarantee the obligations of HI-QUALITY.
On 10 January 1997, HI-QUALITY executed a Deed of Assignment, assigning to JADEBANK all monthly accomplishment billings or receivables from CRBC arising from the construction project.
Subsequent to the Deed of Assignment, JADEBANK released several loans to HI-QUALITY, with each release supported by corresponding promissory notes, and secured by checks drawn either by CRBC or by HI-QUALITY on different banks.

Multiple loans were advanced by JADEBANK to HI-QUALITY (e.g., for amounts of P500,000.00, P250,000.00, P400,000.00, P350,000.00, and another P250,000.00), secured by promissory notes with twenty-five percent (25%) interest per annum and five percent (5%) penalty per month for default.
Several checks, including those drawn on United Coconut Planters Bank (UCPB), Allied Banking Corporation (ALLIEDBANK), and Security Bank Corporation (SECURITYBANK), were issued corresponding to the loan releases.
The checks were dishonored for reasons such as “Stop Payment” orders and account closures, prompting JADEBANK to file a case for collection against HI-QUALITY, Helen Ambrosio, and CRBC, alleging fraudulent acts.

On 9 June 1997, following repeated demands for payment, JADEBANK filed a complaint for collection, which included allegations of fraud and breach of the Deed of Assignment by CRBC.
A writ of preliminary attachment was issued on 17 June 1997, and subsequent proceedings included a Notice of Garnishment against CRBC’s bank accounts.
CRBC eventually filed a Motion for Discharge of Attachment, which was later acted upon when CRBC posted a counter-bond to discharge the attachment.

On 28 July 1997, CRBC filed a Motion to Dismiss the amended complaint on the ground that there was no cause of action against it. CRBC argued that:

The Deed of Assignment was subject to the terms of the Sub-Contracting Agreement between CRBC and HI-QUALITY.
There was no obligation on CRBC’s part to pay HI-QUALITY as the checks issued were intended solely for HI-QUALITY’s use and did not indicate any notice or consent to JADEBANK.

The trial court granted the motion to dismiss with respect to CRBC, ruling that any cause of action rested solely with HI-QUALITY.
JADEBANK then filed a Motion for Reconsideration, which was denied by the trial court.

JADEBANK appealed the trial court’s decision to the Court of Appeals under Rule 41, raising issues concerning the sufficiency of a cause of action against CRBC.
On 12 August 1997, CRBC filed a Motion to Dismiss the appeal with the contention that the appeal involved only questions of law (not of fact) and that the proper mode of review should be by petition for review on certiorari under Rule 45.
The Court of Appeals (Special Seventh Division) denied CRBC’s Motion to Dismiss, ruling that the appeal involved mixed questions of law and fact.
CRBC subsequently petitioned for certiorari under Rule 65 to nullify the Court of Appeals’ resolutions dated 29 October 1998 and 5 February 1999.

Whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying CRBC's Motion to Dismiss the appeal.
Whether the appeal raised by JADEBANK involved purely questions of law or if it involved mixed questions of law and fact.
Whether, in a motion to dismiss based on failure to state a cause of action, there exists any question of fact that would preclude the review from being purely a question of law.
Whether the proper mode of appeal should be petition for review on certiorari under Rule 45 when only questions of law are involved, rather than an ordinary appeal under Rule 41.