G.R. No. L-2372; August 26, 1949
INTERNATIONAL HARVESTER COMPANY OF THE PHILIPPINES, petitioner-appellee, vs. CRISANTO ARAGON, Judge of Municipal Court of Manila, and YARAS AND COMPANY, FAR EAST, respondents-appellants.

FACTS

Yaras and Company filed a complaint in the Municipal Court of Manila against Manila Terminal Co., Inc. and International Harvester Company of the Philippines (as agent of the vessel S/S Belle of the Sea) for the loss of a carton of goods shipped under a bill of lading. The complaint alleged the loss occurred through negligence either in transit or after discharge at the pier. International Harvester moved to dismiss, claiming the Municipal Court lacked jurisdiction because the action involved admiralty or maritime matters. The Municipal Court denied the motion. International Harvester then filed a petition for prohibition in the Court of First Instance to restrain the Municipal Court from proceeding. The Court of First Instance granted the petition, ruling the Municipal Court had no jurisdiction. Respondents appealed.

ISSUE

Whether the Municipal Court of Manila has jurisdiction over a suit for loss of cargo under a contract of carriage by sea (a bill of lading), or whether such suit falls under admiralty jurisdiction, which is vested exclusively in courts of first instance.

RULING

No, the Municipal Court lacks jurisdiction. The suit involves a maritime contract (a contract of affreightment evidenced by a bill of lading) for loss of cargo, which is within admiralty jurisdiction. Following the American rule adopted in the Philippines, admiralty jurisdiction depends on the subject matter—a maritime service or transaction—not on the place where the contract was made or performed. Therefore, original jurisdiction belongs to the Court of First Instance under the Judiciary Act. Prohibition was the proper remedy to restrain the Municipal Judge from proceeding with a case over which he had no jurisdiction. The judgment of the Court of First Instance was affirmed.

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