G.R. No. L-22688 April 27, 1967
UNITED INSURANCE COMPANY, INC., plaintiff-appellee, vs. ROYAL INTEROCEAN LINES, ET AL., defendants. MANILA PORT SERVICE and/or MANILA RAILROAD COMPANY, defendants-appellants.

FACTS

The plaintiff, United Insurance Company, Inc., insured a shipment of 3,768 cases of corned beef consigned to Visayan Commercial of Manila. The cargo was loaded on the S/S “Straat Van Diemen,” owned and operated by defendant Royal Interocean Lines. The vessel arrived at the port of Manila on October 4, 1961, and the cargo was discharged into the custody of the defendant arrastre operator, Manila Port Service, which subsequently delivered it to the consignee. Upon delivery, the cargo was found short of 66 cases. The plaintiff, as insurer, paid the consignee for the loss and was subrogated to the consignee’s rights. The plaintiff then filed a complaint in the Court of First Instance of Manila against Royal Interocean Lines, Manila Port Service, and Manila Railroad Company as alternative defendants. The defendant carrier denied liability, claiming complete discharge to the arrastre operator, and interposed a counterclaim for attorney’s fees. The defendant arrastre operator disclaimed receipt of the missing cases and, as a special defense, averred that the claim was time-barred for not being filed within fifteen days from discharge as required by the Management Contract. The lower court found that the entire cargo was delivered to Manila Port Service, which failed to deliver 66 cases, and held the arrastre operator and its mother company liable for the value of the missing cases. On appeal, the arrastre operator and Manila Railroad Company, for the first time, disputed the trial court’s jurisdiction over the subject matter concerning them, arguing that the cause of action against them, involving a sum below the jurisdictional minimum, was improperly joined with the admiralty case against the carrier.

ISSUE

The primary issue is whether the Court of First Instance had jurisdiction over the case, specifically concerning the claim against the arrastre operator, given that the amount involved (P3,371.43) was below its jurisdictional minimum, and this claim was joined with an admiralty claim against the carrier.

RULING

The Supreme Court affirmed the decision of the lower court, holding that the Court of First Instance correctly exercised jurisdiction. The plaintiff, uncertain whether the loss occurred while the cargo was in the custody of the carrier or the arrastre operator, properly joined both as alternative defendants under Section 13 of Rule 3 of the Rules of Court. The joinder of causes of action was sanctioned by Section 5, Rule 2, which allows a party to state in one pleading as many causes of action in the alternative if they arise out of the same transaction or relation. Under paragraph 2 of Section 5, Rule 2, 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 cause of action against the carrier for breach of contract of carriage was an admiralty matter cognizable by the Court of First Instance. Therefore, even though the other cause of action against the arrastre operator involved an amount within the jurisdiction of an inferior court, the case was correctly filed in the Court of First Instance. This ruling was consistent with prior jurisprudence, including Switzerland General Insurance Co., Ltd. vs. Java Pacific and Hoegh Lines. The Court also rejected the contention that the claim was time-barred, finding that a provisional claim was filed with the arrastre operator on October 8, 1961, within three days of discharge, which constituted sufficient compliance with the 15-day requirement under the Management Contract.