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INTLHARVESTERCOvs ARAGON

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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: International Harvester Company of the Philippines is the S/S Belle of the Sea took on board at Los Angeles, California, U. S. A., goods for shipment to Manila, and covered by Bill of Lading No. 105; WhenS/S Belle of the Seaarrived in Manila, the cargoes were duscharged at the Government piers under the supervision and custody of Manila Terminal Co., Inc. Out of the goods covered by Bill of Lading No. 105, one carton of assorted samples with a stipulated value of P200 was not delivered to Yaras and Company which was lost through the negligence either of the Manila Terminal Co., Inc., or of the International Harvester Company of the Philippines. The complaint prayed for judgment either against the defendant Manila Terminal Co., Inc., or the International Harvester Company of the Philippines, agent of the vessel Belle of the Sea for the amount of P200, with legal interest from the date of the filing of the complaint. *Before the trial in the Municipal Court of Manila could be proceeded with, the International Harvester of the Philippines filed a motion to dismiss, on the ground that the Municipal Court of Manila had no jurisdiction to try case because the action involves admiralty or maritime jurisdiction, which motion was overruled by the municipal court. *The Court of First Instance of Manila rendered judgment favor of the International Harveter Company of the Philippines, ordering the judge of the municipal court to desist from taking cognizance of civil case against the International Harvester Company of the Philippines. ISSUE(s): WON the municipal court can take cognizance of civil case for recovery of the undelivered goods against the International Harvester Company of the Philippines. RULING: Wherefore, the judge of the municipal court is ordered to desist from taking cognizance of civil case against the International Harvester Company of the Philippines. REASON(s): In view of our conclusion that the cause of action of Yaras and Company against International Harvester Company of the Philippines involves admiralty over which the courts of first instance have original jurisdiction and to which the jurisdiction of the justice of the peace courts (including municipal courts) does not extend the respondent judge was properly restrained from further proceeding with civil case No. IV-262. The liability of the International Harvester Company of the Philippines is predicated on the contract of carriage by sea between the International Harvester Company of the Philippines and Yaras and Company as evidenced by Bill of Lading No. 105, independently of the liability of the Manila Terminal Co., Inc, as operator of an arrastre service. Admiralty has jurisdiction over all maritime contracts, in whatever form, wherever they were executed or are to be performed, but not over non-maritime contracts. Whether or not a contract is maritime does not depend upon the English rule which conceded jurisdiction only to contracts made upon and the to be performed upon navigable water, making the locality the test. It depends on the subjectmatter of the contract, making the true criterion a maritime service or a maritime transaction. Specifically, admiralty has jurisdiction of a proceeding in rem or in personam for the breach of a contract of affreightment, whether evidenced by a bill of lading or a charter party. And typical of a controversy over contracts of affreightment is a suit of one party against the other for loss of or damage to the cargo.

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