DE LOS SANTOS vs TAN KHEY O.G.No.

26695-R, July 30, 1962

Facts: Tan Khey was the owner of International Hotel located in Iloilo city. Romeo de
los Santos lodged in Tan Kheys hotel. After arrival, he left the hotel, depositing his
revolver and his bag with the person in charge in the hotel. When he returned to the
hotel, he took his revolver and his bag from the person in charge in the hotel and
proceeded to his room. He locked the door before sleeping. When he woke up, he
discovered that the door in his room was opened and his bag and pants, wherein he
placed his revolver , was missing. He reported the matter to the Assistant Manager
of the hotel, who in turn informed Tan Khey. A secret service agent was sent to
investigate and it was found that the wall of the room occupied by De los Santos was
only seven feet high with an open space above through which one could enter from
outside. De los Santos told the detective that he lost his revolver. Tan Khey
disclaimed liability because De los Santos did not deposit his properties with the
manager despite a notice to that effect was posted in the hotel. Tan Khey contended
that to be liable under Article 1998 of the Civil Code, the following conditions must
concur:
1. Deposit of effects by travellers in hotel or inn
2. Notice given to hotel keepers or employees of the effects brought by guests 3.
Guest or travellers take the precautions which said hotel keepers or their substitutes
advised relative to the care and vigilance of their effects.

Issue: Whether the hotel owner should be held liable for the loss of the effects of the
guest?

Rulng: The Court ruled that the hotel owner should be liable for the loss of the
revolver, pants and bag of the guest. Deposit While the law speaks of deposit of
effects by travellers in hotels or inns, personal receipt by the innkeeper for safe
keeping of effects is not necessaily meant thereby. The reason therefor is the fact
that it is the nature of business of an innkeeper to provide not only lodging for
travellers but also to security to their persons and effects. The secuity mentioned is
not confined to the effects actually delivered to the innkeeper but also to all effects
placed within the premises of the hotel. This is because innkeepers by the neture of
their business, have supervision and controlof their inns and the premises threof. It
is not necessary that the effect was actually delivered but it is enough that they are
within the inn. If a guest and goods are within the inn, that is sufficient to charge him.
The owner of a hotel may exonerate himself from liability by showing that the guest
has taken exclusive control of his own goods, but this must be exclusive custody and
control of a guest, and must not be held under the supervision and care of the
innkeeper,ey are kept in a room assigned to a guest or the other proper depository in
the house. In this case, the guest deposited his effects in the hotel because they are
in his room and within the premises of the hotel, and therefore, within the
supervision and control of the hotel owner.

Notice The Court ruled that there was no doubt that the person in charge had
knowledge of his revolver, the bag, and pants of the guest, De los Santos. The
requirement of notice being evidently for the purpose of closing the door to
fraudulent claims for non-existent articles, the lack thereof was fatal to De los
Santos claim for reparation for the loss of his eyeglass, ring, and cash. Precautions
While an innkeeper cannot free himself from responsibility by posting notices, there
can be no doubt of the innkeepers right to make such regulations in the
management of his inn as will more effectually secure the property of his guest and
operate as protection to himself, and that it is incumbent upon the guest, if he means
to hold the inkeeper ho his responsibility, to comply with any regulation that is just
and reasonable, when he is requested to do so. However, in this case, the notice
requiring actual deposit of the effects with the manager was an unreasonable
regulation. It was unreasonable to require the guest to deposit his bag ,pants and
revolver to the manager. De los Santos had exercised the necessary diligence with
respect to the care and vigilance of his effects.

YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM, petitioners

VS.

THE COURT OF APPEALS and MAURICE McLOUGHLIN, respondents.G.R. No.

126780

FACTS

Respondent McLoughlin would always stay at Tropicana Hotel every time he is here
in thePhilippines and would rent a safety deposit box. The safety deposit box could
only be openedthrough the use of 2 keys, one of which is given to the registered
guest, and the other remaining inthe possession of the management of the
hotel.McLoughlin allegedly placed the following in his safety deposit box 2
envelopes containingUS Dollars, one envelope containing Australian Dollars,
Letters, credit cards, bankbooks and acheckbook.On 12 December 1987, before
leaving for a brief trip, McLoughlin took some items from thesafety box which
includes the ff: envelope containing Five Thousand US Dollars (US$5,000.00),
theother envelope containing Ten Thousand Australian Dollars (AUS$10,000.00), his
passports and hiscredit cards. The other items were left in the deposit box. Upon
arrival, he found out that a fewdollars were missing and the jewelry he bought was
likewise missing.Eventually, he confronted Lainez and Paiyam who admitted that Tan
opened the safetydeposit box with the key assigned to him. McLoughlin went up to
his room where Tan was stayingand confronted her. Tan admitted that she had
stolen McLouglins key and was able to open thesafety deposit box with the
assistance of Lopez, Paiyam and Lainez. Lopez also told McLoughlinthat Tan stole
the key assigned to McLouglin while the latter was asleep.McLoughlin insisted that it
must be the hotel who must assume responsibility for the loss hesuffered. Lopez
refused to accept responsibility relying on the conditions for renting the safetydeposit
box entitled Undertaking For the Use of Safety Deposit Box

ISSUE

WON the Undertaking for the Use of Safety Deposit Box admittedly executed by
privaterespondent is null and void.

HELD

YES Article 2003 was incorporated in the New Civil Code as an expression of public
policyprecisely to apply to situations such as that presented in this case. The hotel
business like thecommon carriers business is imbued with public interest. Catering
to the public, hotelkeepers arebound to provide not only lodging for hotel guests and
security to their persons and belongings. The twin duty constitutes the essence of
the business. The law in turn does not allow such duty tothe public to be negated or
diluted by any contrary stipulation in so-called undertakings thatordinarily appear in
prepared forms imposed by hotel keepers on guests for their signature.In an early
case (De Los Santos v. Tan Khey), CA ruled that to hold hotelkeepers orinnkeeper
liable for the effects of their guests, it is not necessary that they be actually delivered
tothe innkeepers or their employees. It is enough that such effects are within the
hotel or inn. Withgreater reason should the liability of the hotelkeeper be enforced
when the missing items aretaken without the guests knowledge and consent from a
safety deposit box provided by the hotelitself, as in this case.Paragraphs (2) and (4)
of the undertaking manifestly contravene Article 2003, CC for theyallow Tropicana
to be released from liability arising from any loss in the contents and/or use of
thesafety deposit box for any cause whatsoever. Evidently, the undertaking was
intended to bar anyclaim against Tropicana for any loss of the contents of the safety
deposit box whether or notnegligence was incurred by Tropicana or its employees.
The New Civil Code is explicit that theresponsibility of the hotel-keeper shall extend
to loss of, or injury to, the personal property of theguests even if caused by servants
or employees of the keepers of hotels or inns as well as bystrangers, except as it
may proceed from any force majeure.

URBAN APARTMENTS CORPORATION vs PIONEER INSURANCE AND SURETY

CORPORATION

Facts: Pioneer insurance and surety corporation, by right of subrogation, filed a

complaint for recovery of damages against durban apartment corporation. Pioneer
insurance and surety corporaton is the insurer of jefrrey s. Sees 2001 suzuki grand
vitara. Loss occurred when sees vitara was car napped while it was in the
possession of petioner durban apartment hotel.

Issue: Whether or not there was existent contract of deposit

Held: Yes. There exists a contract of necessary deposit. Aticle 1962, in relaon to
article 1998, of the civil code denes a contract of deposit and a necessary deposit
made by persons in hotels or inns: Art. 1962. A deposit is constituted from the
moment a person receives a thing belonging to another, with the obligation of safely
keeping it and returning the same. If the safekeeping of the thing delivered is not the
principal purpose of the contract, there is no deposit but some other contract. Art.
1998. The deposit of eects made by travelers in hotels or inns shall also be
regarded as necessary. The keepers of hotels or inns shall be responsible for them
as depositaries, provided that notice was given to them, or to their employees, of the
effects brought by the guests and that, on the part of the later, they take the
precautions which said hotel-keepers or their substitutes advised relative to the care
and vigilance of their eects. Facts shows that the contract of deposit was perfected
from sees delivery, when he handed over to Justimbaste the keys to his vehicle,
which Justimbaste receive with the obligation of the safely keeping and returning it.
Evidence was show that jusmbaste issued a valet parking customer claim stub.

Teofisto Guingona, Jr., Antonio Martin, and Teresita Santos

vs. The City Fiscal of Manila, Hon. Jose Flaminiano, Asst.
City Fiscal Felizardo Lota and
Facts:

From March 1979 to March 1981, Clement David made several investments with the National Savings
and Loan Association. On March 21, 1981, the bank was placed under receivership by the Bangko
Sentral. Upon Davids request, petitioners Guingona and Martin issued a joint promissory note,
absorbing the obligations of the bank. On July 17, 1981, they divided the indebtedness. David filed a
complaint for estafa and violation of Central Bank Circular No. 364 and related regulations regarding
foreign exchange transactions before the Office of the City Fiscal of Manila. Petitioners filed the
herein petition for prohibition and injunction with a prayer for immediate issuance of restraining
order and/or writ of preliminary injunction to enjoin the public respondents to proceed with the
preliminary investigation on the ground that the petitioners obligation is civil in nature.

Issue:

(1) Whether the contract between NSLA and David is a contract of depositor a contract of loan, which
answer determines whether the City Fiscal has the jurisdiction to file a case for estafa

(2) Whether there was a violation of Central Bank Circular No. 364

Held:

(1) When private respondent David invested his money on nine. and savings deposits with the
aforesaid bank, the contract that was perfected was a contract of simple loan or mutuum and not a
contract of deposit. Hence, the relationship between the private respondent and the Nation Savings
and Loan Association is that of creditor and debtor; consequently, the ownership of the amount
deposited was transmitted to the Bank upon the perfection of the contract and it can make use of the
amount deposited for its banking operations, such as to pay interests on deposits and to pay
withdrawals. While the Bank has the obligation to return theamount deposited, it has, however, no
obligation to return or deliver the same money that was deposited. And, the failure of the Bank to
return the amount deposited will not constitute estafa through misappropriation punishable under
Article 315, par. l(b) of the Revised Penal Code, but it will only give rise to civil liability over which the
public respondents have no jurisdiction.

But even granting that the failure of the bank to pay the time and savings deposits of private
respondent David would constitute a violation of paragraph 1(b) of Article 315 of the Revised Penal
Code, nevertheless any incipient criminal liability was deemed avoided, because when the aforesaid
bank was placed under receivership by the Central Bank, petitioners Guingona and Martin assumed
the obligation of the bank to private respondent David, thereby resulting in the novation of the
original contractual obligation arising from deposit into a contract of loan and converting the original
trust relation between the bank and private respondent David into an ordinary debtor-creditor
relation between the petitioners and private respondent. Consequently, the failure of the bank or
petitioners Guingona and Martin to pay the deposits of private respondent would not constitute a
breach of trust but would merely be a failure to pay the obligation as a debtor. Moreover, while it is
true that novation does not extinguish criminal liability, it may however, prevent the rise of criminal
liability as long as it occurs prior to the filing of the criminal information in court. In the case at bar,
there is no dispute that petitioners Guingona and Martin executed a promissory note on June 17,
1981 assuming the obligation of the bank to private respondent David; while the criminal complaint
for estafa was filed on December 23, 1981 with the Office of the City Fiscal. Hence, it is clear that
novation occurred long before the filing of the criminal complaint with the Office of the City Fiscal.
Consequently, as aforestated, any incipient criminal liability would be avoided but there will still be a
civil liability on the part of petitioners Guingona and Martin to pay the assumed obligation.

(2) Petitioner Guingona merely accommodated the request of the Nation Savings and loan
Association in order to clear the bank draft through his dollar account because the bank did not have
a dollar account. Immediately after the bank draft was cleared, petitioner Guingona authorized
Nation Savings and Loan Association to withdraw the same in order to be utilized by the bank for its
operations. It is safe to assume that the U.S. dollars were converted first into Philippine pesos before
they were accepted and deposited in Nation Savings and Loan Association, because the bank is
presumed to have followed the ordinary course of the business which is to accept deposits in
Philippine currency only, and that the transaction was regular and fair, in the absence of a clear and
convincing evidence to the contrary.

In conclusion, considering that the liability of the petitioners is purely civil in nature
and that there is no clear showing that they engaged in foreign exchange transactions,
We hold that the public respondents acted without jurisdiction when they investigated
the charges against the petitioners. Consequently, public respondents should be
restrained from further proceeding with the criminal case for to allow the case to
continue, even if the petitioners could have appealed to the Ministry of Justice, would
work great injustice to petitioners and would render meaningless the proper
administration of justice.