INSURANCE COMPANY OF NORTH AMERICA, PLAINTIFF AND APPELLEE, VS. MANILA PORT SERVICE AND/OR MANILA RAILROAD COMPANY, DEFENDANTS AND APPELLANTS.

Defendants-appellants
Manila Port Service and Manila Railroad Company having been sentenced
by the Court of First Instance of Manila (in Civil Case No. 40385), to
pay plaintiff-appellee Insurance Company of North America the sum of
P224.99, with legal interest from the date of the filing of the action
until fully paid, and the costs, have interposed this appeal directly
to us on the sole question of whether the case involves admiralty and,
therefore, comes within the jurisdiction of the trial court.

Plaintiff-appellee,
as the insurer of certain merchandise shipped at San Francisco,
California, U.S.A., for Manila, on board the SS “President Tyler” and
consigned to the order of Philippine Bank of Communications, Manila,
filed the present action originally with the Court of First Instance of
Manila, for payment of the sum of P224.99 representing the value of
damaged, and/or short delivery of cases of evaporated milk which was
unloaded into the custody of defendant-appellant Manila Port Service,
as arrastre-operator in the Port of Manila. The Manila Railroad Company
is included in the mit as the principal of the Manila Port Service.

In
due time, defendants tiled a motion to dismiss on the grounds that (1)
the amount of the damage being only P224.99, the case falls within the
exclusive jurisdiction of the Municipal Court, pursuant to Section 88
of the Judiciary Act of 1948; and (2) the case is an ordinary civil
action and not an action tn admiralty and maritime Jurisdiction and,;
therefore, does not fall within the jurisdiction of the Court of First
Instance. Action on said motion was, however, deferred by the court
until the trial of the case on the merits.

Defendants,
thereupon, filed their answer alleging and reiterating as special
defense that the amount of the demand being only P224.99, and the suit
being an ordinary civil action, not of admiralty jurisdiction, the case
falls within the exclusive original jurisdiction of the Municipal Court
and not cognizable by the Court of First Instance; that the 3 cartoons
of evaporated milk covered by Bad Order Examination Report No. 38363,
were discharged from the carrying vessel in bad order, and any loss or
damage to cargoes on board said vessel is the responsibility of the
carrier and not of the arrastre operator, under the Management Contract
entered into between defendant Manila Port Service and the Bureau of
Customs; and that defendants in no way acted as the ship’s agents for
the receipt and delivery of the goods in the piers.

After trial, the court a quo
held that the case involved admiralty and was within its jurisdiction
to decide and rendered the decision adverted to at the beginning of
this opinion.

Defendants-appellants now contend that the
trial court erred “in holding that this case involves admiralty and
that it is within the jurisdiction of the Court of First Instance.”

We agree with defendants-appellants.^[1] In the case of Macondray & Company, Inc. vs. Delgado Brothers, Inc. (107 Phil., 779), we held:

“The cote at bar does not deal with any, maritime matter or with the administration and application of any maritime law. As custodian of the sixty-eight (68) cartoons of paints it had received from the MS Pleasantville, it
was defendant’s duty, like that of any ordinary depositary, to take
good care of said goods and to turn the same over to the party entitled
to its possession, subject, to such qualification as may have validly
been imposed in the contract between the parties concerned. Such
duty on the part of the defendant would be the same if the final
destination of the goods were Manila, not Iloilo, and the goods had not
been imported from another state. The only issues raised in the
pleadings are (1) whether or not defendant had fully discharged its
obligation to deliver the aforementioned sixty-eight (68) cartoons of
paint; and (2), in the negative case, the amount of indemnity due the
plaintiff therefor. The determination of those questions does not
require the application of any maritime law and cannot affect either
navigation or maritime commerce. The foreign origin of the goods is
under the attending circumstances—immaterial to the law applicable to
this case or the rights of the parties therein, or the procedure for
the settlement of their disputes. Indeed, it is well-settled that—

‘In case of controversy involving both maritime and non-maritime subject matter, where the principal matter involved belongs to the jurisdiction of a court of common law or of equity, admiralty will not
take cognizance of incidental maritime matters connected therewith but
will relegate the whole controversy to the appropriate tribunal.’ (2 C.J.S. 66.).” (Italics supplied.)

We reiterated this ruling in the recent case of Delgado Brothers, Inc. vs. Home Insurance Company, et al. (111 Phil., 452 61 Off. Gaz., [26] 3922), wherein we stated:

“Respondent,
however, submits that the above-quoted ruling is wrong and urge’ a
re-examination of the issue, arguing that petitioner’s arrastre service
id maritime in nature and, therefore, actions against petitioner
arrastre operator properly come under the jurisdiction of the Court of
First Instance of Manila.

“We have carefully considered
respondent’s arguments, but found nothing to justify a departure from
our conclusion in the Macondary case, supra. Section 2 of the
Management Contract entered into between petitioner and the Bureau of
Customs on October 21, 1950 (effective January 1, 1951), reads as
follows:

‘2. During the period while this agreement
remains in force and effect, the CONTRACTOR (herein petitioner Delgado
Brothers, Inc.) shall be, and the sole manager of the Arrastre Service
at the Port of Manila, subject always, however, to the terms,
conditions, restrictions, subjections, supervisions, and provisions in
this agreement contained, with the exclusive right or privilege of receiving,
handling, caring for, and delivering all merchandise, imported and
exported, upon or passing over, the Philippine Government-owned wharves
and piers in the Port of Manila; as also, the recording or checking of all merchandise which may be delivered to the Port of Manila at shipside,
except coal, lumber and firebricks in quantity, case crude oil and
kerosene and gasoline in lots of over ten thousand cases or its
equivalent, and whole cargoes of one commodity when consigned to one
consignee only as hereafter provided and in general to furnish lighting and water services and other incidental services,
in order to undertake such work, and with full power to fix the number
and salaries of, and to appoint and dismiss, all officers, employees
and laborers, temporary and permanent, which may be necessary, and to
do all acts conducive to the interests of the Arrastre Service.”
(Italics supplied.)’

“Under this prevision, petitioner’s
functions as arrastre operator are (1) to receive, handle, care for,
and deliver all merchandise imported and exported, upon or passing over
Government-owned wharves and piers in the Port of Manila, (2) as well
as to record or check all merchandise which may be delivered to said
port at ship-side, and in general, (3) to furnish light and
water services and other incidental services in order to undertake its
arrastre service. Note that there is nothing in those functions which
relate to the trade and business of navigation (1 Am. Jur. 564), nor to
the use or operation of vessels (Id. at 568). Both as to the
nature of the functions and the place of their performance (upon
wharves and piers shipside), petitioner’s services are clearly not
maritime. As we held in the Macondray case, they are no different from those of a depositary or warehouseman. Granting, arguendo, that petitioner’s arrastre service depends on, assists, or furthers maritime transportation (Id.,
at 565), it may be deemed merely incidental to its afore-mentioned
functions as arrastre operator and does not, thereby, make petitioner’s
arrastre service maritime in character.

‘To give admiralty jurisdiction over a contract as maritime, such contract must relate to the trade and business of the sea; it must be essentially and fully maritime in its character;
it must provide for maritime services, maritime transactions, or
maritime casualties.’ (The James T. Furber, 129 Fed. 808, cite din 66
L.R.A. 212; Italics supplied.)’ (See also 2 C.J.S. 66, supra“)

Conformably with said rulings, we hold that the trial court had no jurisdiction to entertain and decide the present case.

With this conclusion, we deem it unnecessary to deal with the other issues raised in the briefs of the parties.

Wherefore, the decision appealed from is hereby reversed and set aside, without costs. So ordered.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Paredes, Dizon, and De Leon, JJ., concur.

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^[1] Successors-in-interest of Delgado Brothers, Inc.