G.R. No. L-21623; April 30, 1966
RIZAL SURETY AND INSURANCE COMPANY, plaintiff-appellant, vs. MANILA RAILROAD COMPANY, ET AL., defendants-appellees.

FACTS

On March 16, 1962, Cargill, Inc. shipped 6,000 sacks of soybean meals from New Orleans to Manila, consigned to Superior Feed Mills, Inc., and insured with Rizal Surety & Insurance Company. Upon arrival, the shipment was placed under the custody of the Manila Port Service, a subsidiary of the Manila Railroad Company. Upon delivery to the consignee, 106 sacks were found shortweighed by 7,526 lbs. The insurance company paid the consignee P1,158.93 for the loss. After the vessel’s agent (Delgado Shipping Agencies, Inc.) and the arrastre operator (Manila Railroad Company and Manila Port Service) refused its claim for reimbursement, the insurance company filed an action on March 13, 1963, in the Court of First Instance of Manila. It sued the shipping agent and the arrastre operator as alternative defendants, seeking to recover the value of the short-delivered cargo. The arrastre operator defendants filed a motion to dismiss based on lack of jurisdiction, arguing that the action against them was based on an arrastre contract and the amount involved (less than P2,000) fell within the exclusive jurisdiction of the municipal court. The lower court granted the motion, dismissing the case for lack of jurisdiction.

ISSUE

Whether the Court of First Instance has jurisdiction over the case where the plaintiff sues alternative defendants—one for a cause of action falling within the court’s exclusive jurisdiction (admiralty/maritime against the shipping agent) and the other for a cause of action falling within the inferior court’s jurisdiction (arrastre contract against the arrastre operator, based on the amount involved)—when both causes of action arise from the same transaction.

RULING

Yes, the Court of First Instance has jurisdiction. The Supreme Court set aside the order of dismissal and remanded the case to the lower court for further proceedings. The Court ruled that under Section 5, Rule 2 of the Rules of Court, a party may state in one pleading, in the alternative, as many causes of action as he may have against an opposing party if they arise from the same transaction. The rule further provides that if any of the joined causes of action falls within the jurisdiction of the Court of First Instance, the action shall be filed in that court. Here, the causes of action against both alternative defendants arose from the same transaction—the recovery for the lost shipment—and it was uncertain whether the loss occurred during the voyage (a maritime matter within the exclusive jurisdiction of the Court of First Instance) or while in the custody of the arrastre operator. Since the action against the shipping agent involved a contract of carriage by sea (an admiralty case), it fell within the exclusive original jurisdiction of the Court of First Instance, regardless of the amount claimed. The jurisdictional limit as to amount for the claim against the arrastre operator must yield to the greater jurisdiction of the Court of First Instance over the subject matter (admiralty) for reasons of expediency and convenience, as the cause of action is indivisible. The Court cited the precedent of International Harvester Company of the Philippines vs. Aragon and supported its ruling with the principle that statutory provisions conferring jurisdiction on inferior courts for small demands do not forbid the determination of such demands in a superior court when they are connected with a type of demand solely within the superior court’s jurisdiction.