G.R. No. L-21839; April 30, 1968
INSURANCE COMPANY OF NORTH AMERICA, plaintiff-appellant, vs. UNITED STATES LINES CO. and THE MANILA PORT SERVICE and/or MANILA RAILROAD COMPANY, defendants-appellees.

FACTS

On October 10, 1960, 12 cases of cinematograph film were shipped from New York to Manila aboard the “SS Pioneer Mart,” operated by defendant United States Lines Co. The shipment, insured by plaintiff Insurance Company of North America, arrived in Manila on November 6, 1960, and was discharged into the custody of defendant Manila Port Service, the arrastre operator and a subsidiary of defendant Manila Railroad Company. Upon delivery, one case was missing and one case was partly short. Within the 15-day period, a provisional claim for loss was filed with Manila Port Service. The consignee filed a claim, and the plaintiff insurance company paid the consignee $1,228.48, thereby becoming subrogated to the consignee’s rights. Plaintiff filed an alternative action in the Court of First Instance of Manila against the carrier (United States Lines Co.) for breach of contract of carriage and against the arrastre operator (Manila Port Service/Manila Railroad Company) for violation of the arrastre contract, alleging the loss occurred either while the vessel had custody or after discharge while the arrastre operator had custody. The trial court found the shipment was fully discharged in good order to the arrastre operator, making it responsible for the loss. However, it dismissed the case against the arrastre operator, holding that since the value of the claim ($1,266.13) was below P5,000, the action against the arrastre operator fell within the exclusive original jurisdiction of the Municipal Court, and the court’s admiralty jurisdiction ceased once it was established the carrier had discharged the cargo in good order.

ISSUE

Whether the Court of First Instance lost jurisdiction over the alternative action against the arrastre operator (Manila Port Service/Manila Railroad Company) after finding the carrier was not liable and the claim amount was below its jurisdictional minimum.

RULING

No. The Court of First Instance retained jurisdiction. The Supreme Court reversed the lower court’s decision, citing its ruling in Rizal Surety and Insurance Co. v. Manila Railroad Co., et al. The plaintiff’s complaint stated alternative causes of action arising from the same transaction (the shipment and delivery of goods), which is permitted under Section 5, Rule 2 of the Rules of Court. Since one of the alternative causes of action (against the carrier for breach of contract of carriage by sea) was an action in admiralty cognizable exclusively by the Court of First Instance, the suit was correctly filed there. The jurisdiction of the Court of First Instance, once acquired at the time of filing, was not lost even after the evidence showed the arrastre operator was solely liable and the claim amount was within the municipal court’s jurisdiction. The subsequent dismissal of the case against the carrier did not divest the Court of First Instance of jurisdiction. The defendants-appellees Manila Port Service and/or Manila Railroad Co. were ordered to pay the plaintiff-appellant the sum of $1,266.13 or its peso equivalent.