FIREMAN’S FUND INSURANCE COMPANY, PLAINTIFF-APPELLANT, VS. COMPAÑIA GENERAL DE TABACOS DE FILIPINAS, AND/OR MANILA PORT SERVICE AND/OR MANILA RAILROAD COMPANY, DEFENDANTS-APPELL…

Fireman's Fund Insurance versus Compañia General de Tabacos de Filipinas

The Case

This is a subrogation action brought by Fireman's Fund Insurance Company against three defendants joined in the alternative: the carrier Compañia General de Tabacos de Filipinas, and the arrastre operator Manila Port Service together with its parent, the Manila Railroad Company. The insurer had paid its assured for cargo found short after discharge, and because it could not tell whether the loss occurred at sea or on the pier, it sued both the carrier and the arrastre operator in the alternative. The case matters for two reasons: it is the Supreme Court's clean statement of how alternative causes of action affect a court's jurisdiction over the subject matter, and it shows that a claim for a small amount may still be heard by the Court of First Instance when it is joined with a cause of action that falls exclusively within that court's jurisdiction.

Procedural History

The insurer filed its complaint in the Court of First Instance of Manila, joining the carrier and the arrastre operator as alternative defendants. After trial, the lower court dismissed the complaint against Manila Port Service and Manila Railroad Company for lack of jurisdiction over the subject matter, on the ground that the amount demanded was only 1,898 pesos and 66 centavos, below its jurisdictional limit. It nevertheless sentenced the carrier, Compañia General de Tabacos de Filipinas, to pay 38 pesos and 25 centavos with interest. The plaintiff went straight to the Supreme Court on direct appeal, and the Court reversed.

Facts

On 15 May 1962, International General Electric Company of the United States shipped fifteen cartons on board the ocean vessel Susan Maersk from the port of New York. The shipment was valued at 1,722 dollars and 19 cents, consigned to the order of the First National City Bank of New York, Manila, and insured by Fireman's Fund against loss or damage. Compañia General de Tabacos de Filipinas was the carrier's agent in the Philippines.

The vessel arrived in Manila on 17 June 1962 and unloaded its cargo. Two cartons were allegedly delivered in bad order to the arrastre operator, Manila Port Service. When the goods reached the consignee, one carton valued at 390 dollars and 72 cents was missing, and another was short of contents by 9 dollars and 84 cents.

The consignee filed formal claims with the carrier's agent, with the arrastre operator, and with the insurer. The carrier rejected the claim, saying it had discharged the shipment complete against a clean tally sheet, and referred the consignee to the arrastre operator and the underwriters. The arrastre operator insisted that one case was never landed and refused to pay. The insurer paid the claim at the dollar to peso conversion rate, in the sum of 1,898 pesos and 66 centavos, and then sued as subrogee, uncertain which of the two was liable.

Issues

• Whether or not the Court of First Instance of Manila has jurisdiction over the subject matter of the action against Manila Port Service and Manila Railroad Company, considering that the amount demanded is only 1,898 pesos and 66 centavos, and that these defendants were joined as alternative defendants with a carrier of goods by sea.
• Whether or not the consignee's uncertainty as to which defendant caused the loss justified suing both the carrier and the arrastre operator in the alternative.

Applicable Provisions

Section 13 of Rule 3 of the Rules of Court, on alternative defendants, provides:

Section 13. Alternative defendants. Where it is uncertain in an action against several persons which of them is liable, the plaintiff may join them as defendants in the alternative, and the judgment may be rendered against the one who is found liable.

This provision is the procedural authority for joining the carrier and the arrastre operator in a single complaint when the plaintiff cannot tell which one caused the loss.

Section 5 of Rule 2 of the Rules of Court, on joinder of causes of action, provides:

Section 5. Joinder of causes of action. A party may in one pleading assert, in the alternative or otherwise, as many causes of action as he may have against an opposing party, subject to the following conditions: (a) The party joining the causes of action shall comply with the rules on joinder of parties; (b) The joinder shall not include special civil actions governed by special rules; (c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions, the joinder may be allowed in the Court of First Instance provided one of the causes of action falls within the jurisdiction of said court and the venue lies therein; and (d) Where the claims in all the causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction.

The second paragraph of the same section, as quoted in the decision, fixes where such a joined action must be filed:

the action shall be filed in the inferior court unless any of the causes joined falls within the jurisdiction of the Court of First Instance in which case it shall be filed in the latter court.

This is the decisive language: once any joined cause falls within the Court of First Instance's jurisdiction, that court may hear the whole case, and the small amount of the money claim does not pull it back down to the inferior court.

Ruling

On the first issue, the Court held that the lower court erred in dismissing the action against Manila Port Service and Manila Railroad Company. Section 13 of Rule 3 permits a plaintiff, in case of uncertainty, to sue several defendants in the alternative. Section 5 of Rule 2 permits joinder of causes of action in the alternative when they arise out of the same contract, transaction, or relation between the same parties. And the second paragraph of that section directs that the action be filed in the Court of First Instance whenever any of the joined causes falls within its jurisdiction. The Court noted that the lower court itself admitted that the claim for the short contents of one carton involved an issue in admiralty and was within its jurisdiction; having acquired jurisdiction over that cause, it necessarily acquired jurisdiction over the other cause joined alternatively with it. The Court also invoked the American rule that statutory provisions conferring jurisdiction on inferior courts for demands below certain amounts do not forbid determination of those demands in the superior court where they are connected with larger claims or with a type of demand solely within the superior court's jurisdiction.

On the second issue, the Court held that the consignee's uncertainty was genuine and justified the alternative suit. The lower court had suggested that the consignee could easily have verified the vessel's disclaimer by asking for the cargo receipt signed by the arrastre contractor. The Court answered that this would be true only on the assumption that the receipt was authentic, and since the arrastre operator denied receiving the missing case or that it had been landed, the consignee could not be certain the receipt was genuine or that the arrastre operator would recognize it. The uncertainty therefore remained. Because the Manila Port Service had no opportunity to submit its own evidence on its receipt of the missing case, the Court ordered a rehearing.

Doctrine

First, a plaintiff who is uncertain which of several persons is liable may join them as alternative defendants under Section 13 of Rule 3. Second, causes of action arising from the same contract, transaction, or relation may be joined in the alternative under Section 5 of Rule 2. Third, and most important for the bar, when one of the joined causes of action falls within the jurisdiction of the Court of First Instance, that court has jurisdiction over the entire case, and the fact that the amount sought is below its jurisdictional limit is of no moment, because the cause of action is indivisible and the jurisdictional limitation as to amount must yield to the greater jurisdiction over the subject matter for reasons of expediency and convenience. A maritime cause of action falls exclusively within the Court of First Instance, and it carries the alternatively joined claim with it.

Disposition

The Supreme Court reversed and set aside the decision appealed from, directed the Court of First Instance to overrule the motion to dismiss of Manila Railroad Company and Manila Port Service, and ordered further proceedings in conformity with the decision, with costs against those defendants.

Remember This

Memorize this line: where one of the alternatively joined causes of action falls within the jurisdiction of the Court of First Instance, the small amount of the money claim does not deprive that court of jurisdiction, because the amount limitation yields to jurisdiction over the subject matter. Examiners use this case in civil procedure on joinder of causes of action and alternative defendants, and in transportation law on the shipper's uncertainty between carrier and arrastre operator.