YHT Realty Corporation vs. CA
When McLounghlin came back to the Philippines in April 1988 he asked
Petitioner: YHT REALTY CORPORTION, ERLINDA LAINEZ, AND ANICIA
PAYAM
Respondent: COURT OF APPEALS, MAURICE McLOUHLIN
TINGA, J
Group 3
Facts:
1. Private respondent McLoughlin, an Australian businessman-
philanthropist, used to stay at Sheraton Hotel during his trips to the
Philippines prior to 1984 when he met Tan.
2. Tan befriended McLoughlin and convinced him him to transfer from
Sheraton Hotel to Tropicana where Lainez, Payam and Danilo Lopez were
employed.
a. Lopez- manager of the hotel
b. Lainez and Payam had custody of the keys for the safety deposit
boxes of Tropicana
3. Tan took care of LcLoughlin’s booking at the Tropicana where he started
staying during his trips to the Philippines from December 1984 to
September 1987.
4. October 1987 McLoughlin arrived from Australia and registered with
Tropicana. He rented a safety deposit box as he did every time he
registered with Tropicana. McLoughlin was aware of the procedure
observed by Tropicana relative to his safety deposit box, could only be
opened with two keys, one with the registered guest, one with the
management of the hotel.
5. McLoughlin allegedly placed USD15,000 in two envelopes $5k and $10k;
AUS$10,000; two envelopes containing letters and credit cards; two
bankbooks; and a checkbook.
6. 12 December 1987 McLoughlin, before leaving for a brief trip to Hong
Kong, opened his safety deposit box and took the envelop containing
USD$5,000 and the AUS$10,000, his passports and his credit cards; and
left the other items in the box.
7. Upon reaching Hong Kong he opened the envelope and discovered that
only USD$3,000 were enclosed therein. He assumed it was bad
accounting.
8. After returning to Manila in December 1987, he discovered the envelop
with Ten Thousand dollars was missing Five thousand dollars. He also
noticed that the jewelry he brought from Hong Kong was missing except
for a diamond bracelet.
9.
Lainez if some money and/or jewelry which he had lost were found and
returned to her or to the management. Lainez told him that no one in the
hotel found such things and none were turned over to the management.
10. He again registered at the Tropicana and rented a safety deposit box and
placed an envelope containing USD$15,000 and another one containing
AUS$10,000 and other envelopes containing his travel papers and
documents.
11. April 16, 1988, McLoughlin requested Lainez and Payam to open his
safety deposit box. He noticed that in the evelope containing USD$15,000,
USD$2,000 was missing and in the envelope containing the Australian
dollars, AUS$4,500 was missing.
12. He immediately confronted Lainez and Payam who admitted that Tan
opened the safety deposit box with the key assigned to him. McLoughlin
confronted Tan. Who admitted that she had stolen McLoughlen’s key and
was able to open the box with the assistance of Lopez, Payam, and Lainez.
Lopez told McLoughlin that Tan stole the keys while the latter was asleep.
13. McLoughlin requested the management for an investigation of the
incident. Lopez got in touch with Tan and arranged for a meeting with the
police and McLoughlin.
14. When the police did not arrive, Lopez and Tan went to the room of
McLoughlin at Tropicana and Lopez wrote a promissory note dated 21
April 1988 to pay McLoughlin the AUS$4,000 and US$2,000 or its
equivalent in the Philippine currency on or befor May 5, 1988. Signed by
Tan, with Lopez as a witness.
15. McLoughlin insisted that it must be the hotel who must assumed
responsibility for the loss he suffered but Lopez refused to accept the
responsibility relying on the conditions for renting the safety deposit box
which stated:
“2. To release and hold free and blameless Tropicana Apartment
Hotel from any liability arising from any loss in the contents
and/or use of said deposit box for any cause whatsoever,
including but not limited to the presentation or use thereof by
any other person should the key be lost;
4. To return the key and execute the release in favor of
Tropicana Apartment Hotel upon iving up the use of the box.”
16. May 17, 1988 McLoughlin went back to Australia and he consulted his
lawyers as to the validity of the stipulations. They opined the stipulations
were void for being violative of the universal hotel practices and customs.
Thus his lawyers prepared a letter dated 30 May 1988 which was signed
 by McLoughlin and sent to President Corazon Aquino. OP referred the
letter to DOJ who forwarded it to Western Police District.
17. McLoughlin came back to the Philippines and registered again as a hotel
guest of Tropicana. He went to Malacanang to follow up on his letter but
was instructed to go to the DOJ who directed him to the WPD. But
McLoughlin went back to Australia as he has an urgent business matter to
attend to.
18. August 25, 1989 WPD conducted an investigation which resulted in the
preparation of an affidavit which was forwarded to the Manila City
Fiscal’s office. This became the basis for prelim investigation but
McLoughlin left for Australia again without receiving notice of the
hearing on November 24, 1989 thus the case was dismissed for failure to
prosecute. He requested reinstatement of the criminal charge for theft and
wrote demand letters to pay the damage then left for Australia again.
19. October 22, 1990 he registered at the Echelon Towers at Malate, Manila.
Meetings were held with his lawyers resulting in the filing of a complaint
for damages on December 3, 1990 against YHT Realty Corporation,
Lopez, Lainez, Payam, and Tan for the loss. Then he left again for
Australia. Tan and Lopez were not served summons and trial proceeded
with only Lainez, Payam and YHT Realty corporation as defendants.
20. RTC rendered judgment in favor of McLoughlin. CA affirmed except as to
amount.
21. YHT Realty Corporation, Lainez and Payam went to this Court in this
appeal by certiorari.
Issues:
(1) WN the appellate court’s conclusion on the alleged prior existence and
subsequent loss of the subject money and jewelry is supported by
evidence on record
(2) WN the finding of gross negligence on the part of the petitioners in the
performance of their duties as innkeepers is supported by the
evidence on record
(3) WN the “Undertaking For The Use of Safety Deposit Box (Safety
Deposit Box agreement) is null and void
(4) WN the damages awarded to private respondent as well as the
amounts thereof, are proper under the circumstances
Ruling: Petition is devoid of merit
Ratio:
1st Issue: YES. We adhere to the findgins of the trial court as affirmed by the
appellate court that the fact of loss was established by credible testimony.
1. Trial court had the occasion to observe the demeanor of McLoughlin
while testifying which reflected the veracity of the facts testified to by
him.
2. We give full credence to the appreciation of testimonial evidence by the
trial court especially if what is at issue is the credibility of the witness.
2nd Issue: YES. We are not impressed by petitioner’s argument that the finding of
gross negligence by the lower court as affirmed by the appellate court is not
supported by evidence.
1. Evidence reveals that two keys are required to open the safety deposit
boxes of Tropicana; one for the guest, one remains in the possession of the
management. Thus, in case of loss of any item deposited in the safety
deposit box, it is inevitable to conclude that the management had at least a
hand in the consummation of the taking, unless the reason for the loss is
force majeure.
2. Payam and Lainez had custody of the master key of the management when
the loss took place. In fact, they even admitted that they assisted Tan on
three separate occasions in opening McLoughlin’s safety deposit box. This
only proves that Tropicana had prior knowledge that a person aside from
the registered guest had access to the safety deposit box. Yet the
management failed to notify McLoughlin of the incident and waited for
him to discover the taking before it disclosed the matter to him. Therefore
Tropicana should be held responsible for the damage suffered by
McLoughlin by reason of the negligence of its employees.
3. The management should have guarded against the occurrence of this
incident considering that Payam admitted in open court that she assisted
Tan three times in opening the safety deposit box of McLoughlin at
around 6:30 AM to 7:30 AM while the latter was asleep. In light of the
circumstances surrounding the case it is undeniable that without the
acquiescence of the employees of Tropicana to the opening of the safety
deposit box, the loss of McLoughlin’s money could and should have neen
avoided. Management contends that McLoughlin made the employees
believe that Tan was his spouse for she was always with him. Records
never supported this.
4. Art 1170 of the NCC states that those who in the performance of their
obligations are guilty of negligence are liable for the damages. As to who
shall bear the burden, Art 2180 (4) provides owners and managers of an
establishment.
 5. Thus both assisting employees and YHT Realty Corporation should be
solidarily liable.
3rd Issue: YES. Both the trial court and the appellate court found the same to be
null and void. We find no reason to reverse their common conclusion.
1. Art 2003: The hotel keeper cannot free himself from responsibility by
posting notices to the effect that he his not liable for the articles brought
by the guest. Any stipulation between the hotel-keeper and the guest
whereby the responsibility of the former as act forth in Articles 1998 to
2001 is suppressed or diminished shall be void.
2. Art 2003 was incorporated in the New Civil Code as an expression of
public policy precisely to apply to situations such as that presented in this
case. The hotel business is imbued with public interest. Catering to the
public, hotelkeepers are bound to provide not only lodging for hotel guests
and security to their persons and belongings. The twin duty constitutes the
essense of the business. The law in turn does not allow such duty to the
public to be negated or diluted by any contrary stipulation in so-called
“undertakings” that ordinarily appear in prepared forms imposed by hotel
keepers on guests for their signature.
3. In an early case, the CA ruled that to hold hotelkeepers or innkeepers
liable for the effects of their guests, it is not necessary that they be actually
delievered to the innkeepers of their employees. It is enough that such
effects are within the hotel or inn. With greater reason should the liability
of the hotelkeeper be enforced when the missing items are taken without
the guest’s knowledge and consent from a safety deposit box provided by
the hotel itself, as in this case.
4. Paragraphs (2) and (4) of the undertaking manifestly contravene Article
2003, NCC for they allow Tropicana to be released from liability arising
from any loss in the contents and/or use of the safety deposit box for any
cause whatsoever. Evidently, the undertaking was intended to bar any
claim against Tropicana for any loss of the contents of the safety box
whether or not negligence was incurred by Tropicana or its employees.
The NCC is explicit that the responsibility of the hotel-keeper shall extend
to loss of, or injury to, the personal property of the guests even if caused
by serants or employees of the keepers of hotels or inns as well as by
strangers, except as it may proceed from any force majeure. It is this loss
that may spare the hotel-keeper from liability.
5. In the case at bar, there is no showing that the act of the thief or robber
was done with the use of arms or through an irressistable force to quality
the same as force majeure.
6. Petitioners likewise anchor their defense on Article 2002 which exempts
the hotel-keeper from liability if the loss is due to the acts of his guest, his
family, or visitors.
a. Even a cursory reading of the provision would lead us to reject.
The justification they raise would render nugatory the public
interest sought to be protected by the provision.
b. This provision presupposes that the hotel-keeper is not guilty of
concurrent negligence or has not contributed in any degree to the
occurrence of the loss. A depositary is not responsible for the
loss of goods by theft, unless his actionable negligence
contributes to the loss.
7. In the case at bar, the responsibility of securing the safety deposit box was
shared not only by the guest himself but also by the management since
two keys are necessary to open the box. Without the assistance of the hotel
employees, the loss would not have occurred. Thus Tropicana was guilty
of concurrent negligence in allowing Tan, who was not the registered
guest, to open the safety deposit box of McLoughlin, even assuming that
the latter was also guilty of negligence in allowing another person to use
his key.
8. To rule otherwise would result in undermining the aety of the boxes in
hotels for the management will be given imprimatur to allow any person,
under the pretense of being a family member or a visitor of the guest to
have access to the boxes without fear of liability. This will allow the hotel
to evade responsibility for any liability incurred by its employees in
conspiracy with the guest’s relatives and visitors.
9. Petitioners contend that McLoughlin’s case was mounted on the theory of
contract, but the trial court and the appellate court uphelt the grant of the
claims of the latter on the basis of tort. There is nothing anomalous in how
the lower courts decided the controversy for this Court has pronounced a
jurisprudential rule that tort liability can exist even if there are already
contractual relations. The act that breaks the contract may also be a tort.
4th Issue: We see no reason to modify the amounts awarded.
1. It is within the province of the lower courts to ettle factual issues such as
the proper amount of damages and such finding is binding upon this Court
especially if sufficiently proven by evidence and not unconscionable or
excessive.
Wherefore foregoing premises considered the CA is affirmed.