G.R. No. L-16147 April 30, 1964
LUZON COMMODITIES CORPORATION, plaintiff-appellee, vs. AMOR AND SAYO, doing business under the style SUNRISE HILLS VETERANS HOUSING PROJECT, ETC., ET AL., defendants-appellees, GOVERNMENT SERVICE INSURANCE SYSTEM, defendant-appellant.

FACTS

Plaintiff Luzon Commodities Corporation supplied construction materials valued at P10,255.40 to defendants Amor and Sayo for the Sunrise Hills Veterans Housing Project. After the defendants failed to pay despite demands, the plaintiff filed a collection case. The case was initially dismissed for possible amicable settlement but was refiled. Amor and Sayo moved to include the Government Service Insurance System (GSIS) as a party-defendant, alleging the project had been transferred to GSIS, which undertook to finish it and took over existing materials, including those supplied by the plaintiff.
The trial court ordered the amendment of the complaint to include GSIS. In their cross-claim against GSIS, Amor and Sayo sought payment for all construction materials, including the plaintiff’s, that GSIS took over and used. The trial court found that GSIS had indeed taken and used the materials for its own benefit in completing the project.

ISSUE

The core legal issue is whether the trial court correctly applied the principle of quasi-contract or solutio indebiti to hold GSIS directly liable to the plaintiff and to Amor and Sayo for the value of the materials it used.

RULING

The Supreme Court did not rule on the substantive merits of the appeal. Instead, it resolved a jurisdictional issue. The appellant GSIS assigned errors involving mixed questions of law and fact, such as whether the plaintiff exhausted remedies against the primary debtors, the nature of any guaranty, the evaluation of the taken materials, and the solvency of Amor and Sayo. At the time the appeal was perfected, the amount involved (P60,753.90) exceeded P50,000.00, which was then within the Supreme Court’s exclusive appellate jurisdiction.
However, during the pendency of the appeal, Republic Act No. 2613 took effect, increasing the jurisdictional amount to P200,000.00. Since the amount in controversy was below this new threshold, the Supreme Court lost its appellate jurisdiction over the case. Consequently, the Court did not review the trial court’s application of Article 2142 (quasi-contracts) and Article 447 (accession) of the Civil Code. The records were ordered forwarded to the Court of Appeals for proper disposition. The resolution was strictly procedural, leaving the substantive correctness of the lower court’s decision on unjust enrichment for the Court of Appeals to review.