G.R. No. L-27808 June 29, 1972
DOMESTIC INSURANCE COMPANY OF THE PHILIPPINES, plaintiff-appellee, vs. MAERSK LINE, ET AL., defendants, MANILA PORT SERVICE and/or MANILA RAILROAD COMPANY, INC., defendants-appellants.

FACTS

The plaintiff, Domestic Insurance Company, sued for recovery of a sum paid to its insured, Security Auto Supply, due to the loss of cargo. The shipment of seven cases of truck engine parts arrived in Manila aboard the SS Marit Maersk and was discharged into the custody of the arrastre operator, Manila Port Service. While two cases were delivered intact, five cases were delivered empty. The plaintiff, as subrogee, filed a complaint in the Court of First Instance of Manila, naming the carrier (Maersk Line) and the arrastre operator (Manila Port Service/Manila Railroad Company) as alternative defendants.
The arrastre operators appealed the trial court’s decision holding them jointly and severally liable. They raised four errors, contesting the CFI’s jurisdiction over them, the sufficiency of the provisional claim filed, the application of the P500 limited liability clause per their Management Contract, and the award of attorney’s fees.

ISSUE

The primary issues were: (1) whether the Court of First Instance had jurisdiction over the suit against the arrastre operator, given that the claim, if standing alone, would fall under city court jurisdiction; (2) whether the provisional claim filed complied with contractual requirements; (3) whether the arrastre operator’s liability was limited to P500 per package; and (4) whether attorney’s fees were properly awarded.

RULING

The Supreme Court affirmed the CFI’s jurisdiction. Following precedent, where causes of action are pleaded in the alternative against different defendants and one cause (here, against the carrier for breach of contract of carriage by sea) is within the exclusive original jurisdiction of the CFI (being an admiralty matter), the suit is correctly filed in the CFI even if the alternative cause against the arrastre operator alone would be within inferior court jurisdiction.
On the provisional claim, the Court found it sufficient. The claim, which listed the bill of lading number, marks, number of packages, and contents, substantially complied with the Management Contract’s requirements by informing the arrastre operator of the nature of the loss to facilitate investigation, even without specifying the exact value.
Regarding liability, the Court applied the limitation clause in the Management Contract, which caps liability at P500 per package unless a higher value is specified and corresponding arrastre charges are paid. Since the value was not specified and charges were paid based on weight/measurement, liability was limited. The total recoverable amount was recalculated to P2,256.19, based on the aggregate invoice value for some packages and the P500 limit for others, modifying the lower court’s award.
Finally, the award of attorney’s fees was upheld as just and equitable, given the arrastre operator’s systematic rejection of such claims, necessitating litigation.