G.R. No. L-26718 October 31, 1969
ELITE SHIRT FACTORY, INC., petitioner-appellant, vs. THE HON. W. L. CORNEJO and/or THE CITY COURT OF MANILA, COMPAÑIA MARITIMA and THE PHILIPPINE STEAM NAVIGATION CO., INC., respondents-appellees.

FACTS

Petitioner-appellant Elite Shirt Factory, Inc. delivered several cartons of merchandise to respondent Compañia Maritima for shipment to designated consignees on November 29, 1963. While the cargo was stored in Compañia Maritima’s bodega at Pulupandan, Negros Occidental, and before delivery to the consignees, a fire broke out, allegedly causing damages of P2,124.00 to the appellant. On June 13, 1964, appellant filed a complaint for reimbursement of this amount against Compañia Maritima in the City Court of Manila. Compañia Maritima moved to dismiss on the ground that the city court lacked jurisdiction, as the case was in the nature of maritime and admiralty, falling under the exclusive jurisdiction of courts of first instance. The motion was denied. Compañia Maritima then filed an answer impleading Philippine Steam Navigation Co., Inc. as a third-party defendant, alleging the fire started from the section occupied by the third-party defendant due to its negligence. After Philippine Steam Navigation Co., Inc. failed to appear at a hearing, an ex parte judgment was rendered against it, and a judgment by consent was rendered against Compañia Maritima. Upon a petition by Philippine Steam Navigation Co., Inc. to set aside the judgment due to excusable neglect, respondent Judge W. L. Cornejo set aside his decision and denied appellant’s subsequent motion for execution. Appellant then filed a petition for certiorari with the Court of First Instance of Manila, which dismissed the petition, holding that the respondent Judge lacked jurisdiction because the matter fell within the exclusive admiralty and maritime jurisdiction of the court of first instance under the Judiciary Act.

ISSUE

Does the exclusive jurisdiction conferred on a court of first instance over admiralty and maritime cases include a suit where a shipper files a claim against a carrier, the goods having been landed and stored in the carrier’s bodega but subsequently burned, with no delivery having been made to the consignee?

RULING

Yes. The Supreme Court affirmed the decision of the lower court, holding that the matter falls within the exclusive admiralty and maritime jurisdiction of the court of first instance. The Court ruled that admiralty jurisdiction extends over all maritime contracts, whether executed or still to be performed, as long as the subject matter is a maritime service or transaction. The proceeding in this case was in effect for a breach of a contract of shipment. The obligation of the carrier, Compañia Maritima, under the contract of affreightment did not cease upon the discharge of the goods at the port of destination; it remained under a duty to deliver the goods to the consignees. Until such compliance, the contract was not at an end, and it remained the basis for any liability. Therefore, the suit was within the admiralty jurisdiction of the court of first instance, and the city court had no jurisdiction. The argument that the carrier’s liability after discharge was merely that of a depositary was not accepted, as the goods were stored in the carrier’s own warehouse pending delivery under the maritime contract.