LUZON COMMODITIES CORPORATION, PLAINTIFF AND APPELLEE, VS. AMOR AND SAYO, DOING BUSINESS UNDER THE STYLE SUNRISE HILLS VETERANS HOUSING PROJECT, ETC. ET AL., DEFENDANTS AND APPE…

On various dates in 1958, plaintiff Luzon Commodities supplied on
credit defendants-appellees Amor and Sayo, construction materials which
said defendants used in the Sunrise Hills Veterans Housing Project,
having a value of P10,255.40. The receipt of said construction
materials and the value thereof, are admitted by Amor and Sayo. Failing
to pay the amount, even after several demands, plaintiff Luzon
Commodities filed with the Court of First Instance of Manila, Civil
Case No. 37534, for collection, against Amor and Sayo, doing business
under the style Sunrise Hills Veterans Housing Project. The case was,
dismissed without prejudice, upon motion of the parties, for possible
amicable settlement on December 12, 1958. On February 6, 1959, however,
due to the failure to settle Civil Case No. 39230, the one at bar was
presented.

Defendants Amor and Sayo, before answering the
complaint, moved for the inclusion of the Government Service Insurance
System (GSIS, for short), claiming that the project had been
transferred to the GSIS, which undertook to finish the same; that at
the time of the transfer of the project, there were materials in the
premises, some of which were those used and subject of the collection
case, to complete the construction. Over the opposition of the GSIS,
the CFI, on March 21, 1959, entered an Order requiring plaintiff to
amend its complaint. An Amended Complaint was presented on April 1,
1959, this time making GSIS a party defendant and praying for judgment
for P10,255.40, the value of the materials plus legal interest from the
filing of the complaint, the further sum of P3,000.00 by way of
attorney’s fees, and other reliefs and remedies, against any of the
defendants therein.

The defendants presented Answers containing Cross-Claim against each
other, aside from the usual admissions and denials and defenses. Sayo
and Amor, in their cross-claim prayed that their co-defendant GSIS be
ordered to pay to them P60,753.90, representing the value of
construction materials which said GSIS took over and used in finishing
the housing project, some of which belonged to plaintiff Luzon
Commodities valued at P10,255.40.

At the trial, Sayo and Amor proved that there were construction
materials in the premises of the project at the time of the transfer
and which were inventoried in a memorandum by representatives of the
appellant GSIS. They did not deny their liability to plaintiff. The
GSIS did not present evidence in support of its cross-claim against
Sayo and Amor, and relied mainly on its pleadings.

On June 22, 1959, the trial court rendered judgment, the pertinent portions of which recite—

“Considering that the materials in question were taken by defendant
Government Service Insurance System for its own benefit, such act
‘gives rise to the juridical relation of quasi-contract to the end that
no one shall be unjustly enriched or benefited at the expense of
another.’ (Art. 2142, Civil Code of the Philippines.) As the defendant
Government Service Insurance System used the said materials of its
co-defendants, Amor & Sayo, in the construction or work on its
parcels of land within the Sunrise Hills Veterans Housing Project, it
should pay the value of said materials to defendant Amor and Sayo (Art.
447, Civil Code of the Philippines). Nevertheless, inasmuch as the
ownership of the parcels of land in the housing project, as well as the
improvements and constructions thereon, has been transferred to
defendant Government Service Insurance System, under the compromise
agreement (Exh. B), said defendant has also assumed the obligation of
paying for the unpaid materials furnished by the suppliers thereof.

In view of all the foregoing, judgment is hereby rendered:—

1. Ordering defendant Government Service Insurance System to pay unto
   plaintiff Luzon Commodities Corporation the sum of P10,255.40,
   representing the value of the materials and supplies claimed by said
   plaintiff, with interest thereon at the legal rate from April 3, 1959,
   the date of filing of amended complaint, until the same is fully paid,
   plus the sum of P200.00 as attorney’s fees, and the costs of suit.

2. Ordering defendant Government Service Insurance System to pay unto
   cross-claimants and defendants Amor and Sayo, or Marcelino N. Sayo and
   Antonio C. Amor, the sum of P50,498.50, representing the balance of the
   cross-claim deducting plaintiff’s demand, for unused materials and
   supplies, per inventory (Exh. 1-Amor & Sayo), which were taken and
   used by said cross-defendant Government Service Insurance System.

3. Dismissing the cross-claim of defendant Government Service Insurance System for lack of evidence in support thereof.”

The motion of the GSIS to reconsider the above judgment, on various
grounds, which was opposed by defendants Amor and Sayo, was on August
1, 1959, denied for lack of merits. Several proceedings had taken place
before the Court a quo, but We consider them not necessary to delve into.

In the appeal brought directly to this Court, the GSIS assigned four
(4) errors’ supposedly committed by the lower court to wit:

1. In condemning the GSIS to pay the claim of plaintiff when by its own
   findings the plaintiff did not exhaust all the legal remedies against
   the debtors, Amor and Sayo, who are solvent, the plaintiff is not
   asserting preference of credit;

2. In ordering payment of plaintiff’s claim out of the value of materials
   taken by the GSIS in the housing project when the sale of materials to
   Amor and Sayo and the taking over by the GSIS of the project are
   separate and did not arise out of the same transaction, the trial court
   also erred in ordering the payment of the value of materials to Amor
   and Sayo the same being contrary to the evidence, has no basis in law
   and not in keeping with the agreements of the parties;

3. In granting discretionary execution to Amor and Sayo as said defendants
   are not entitled to the payment as shown in assignment of error No. 2.

4. In condemning the GSIS to pay interests, expenses and fees when it has
   nothing to do with the claim of plaintiff nor in the delay of payment
   of its claims.

Obviously, the above errors
supposedly committed, present mixed questions of law and of facts,
since it cannot be disputed that in order to resolve some of them,
specially Nos. 1 and 2, the appellate Court will be called upon to
examine the evidence and concomitant agreements. The GSIS denies that
it guaranteed the payment of materials. Amor and Sayo claim that the
certificate of guaranty is the best proof. Upon the other hand, the
GSIS contends that the alleged guaranty did not refer to anyone in
particular, much less to the plaintiff Luzon Commodities Corporation.
Another factual issue is whether the goods, subject matter of the claim
of Luzon Commodities Corp. were used in the construction of the housing
project. Then again, on the issue, whether or not the alleged guarantor
is liable, there must be a finding that Amor & Sayo were insolvent
or not. The parties have a divergence of opinion regarding the matter.
There being no valuation of the materials alleged to have been made in
the memorandum-inventory, the price or cost fixed by the trial court,
was not only unsupported by evidence, but it was allegedly arbitrary.
Lastly, the issue of credibility of the evidence, is likewise being
presented.

Moreover, the amount involved in the appeal is only P60,753.90, reason
for which although there are mixed questions of law and of facts, the
appeal was brought directly to this Court because at that time the
amount of our appellate jurisdiction was over P50,000.00. But with the
passage of Rep. Act No. 2613, increasing the jurisdictional amount to
P200,000.00, this Court does not have any authority to entertain this
appeal now.

Let the records of the case be forwarded to the Court of Appeals for proper disposition.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon, and Makalintal, JJ., concur.