G.R. No. L-5733; October 19, 1961
NORTHWEST TRACTOR & EQUIPMENT (PHIL.) CORPORATION, plaintiff-appellant, vs. MORALES SHIPPING COMPANY, INC., defendant-appellant. LUZON BROKERAGE CO., INC., intervenor.

FACTS

Northwest Tractor & Equipment (Phil.) Corporation filed a complaint against Morales Shipping Company, Inc. for breach of contract of carriage. The plaintiff alleged it paid the defendant to transport its machinery and equipment from Guiuan, Samar, to Manila. The bills of lading, however, were erroneously issued in the name of “Northwest Commercial Corporation.” The defendant’s vessels deviated to Cebu, where they were delayed. During the voyage, the LCT 787, which was being towed, capsized and sank, resulting in the loss of the plaintiff’s cargo. Upon the San Vicente M’s arrival in Manila, the defendant refused to deliver the remaining cargo. The plaintiff sought damages for the lost cargo, additional damages for negligence and failure to deliver, and an order for the seizure of the goods on the San Vicente M via a replevin bond.
The defendant, in its answer, asserted there was no privity of contract as the bills of lading named a different corporation. It also contended the plaintiff waived claims for damages, was responsible for improper loading leading to the loss, and that the deviation to Cebu was authorized. The defendant filed counterclaims for alleged damages due to the plaintiff’s attachment of its properties and loss of business goodwill. The trial court ultimately dismissed both the plaintiff’s complaint and the defendant’s counterclaims. Both parties appealed the decision.

RULING

The Supreme Court did not rule on the substantive merits of the case. Instead, it resolved a preliminary issue regarding appellate jurisdiction. Both the plaintiff and the defendant had raised questions of fact on appeal. The Court examined the total monetary claims involved to determine the proper appellate forum. The plaintiff’s reduced claim was P85,000, and the defendant’s reduced counterclaim was P193,000. Citing precedent (Sambrano vs. Rehabilitation Finance Corporation and Rio Y Cia. vs. Vasquez), the Court held that the jurisdictional amount is determined by the separate total claims of the respective parties, not by their combined sum. Since the value of the controversy for each party was below P200,000, the case fell under the appellate jurisdiction of the Court of Appeals pursuant to the Judiciary Act of 1948 (Republic Act No. 296). Consequently, the Supreme Court remanded the case to the Court of Appeals for determination and judgment on the factual and legal issues presented.