Under the law, the hotel-keeper cannot free himself from responsibility by posting notices to the

effect that he is not liable for the articles brought by the guest. Any stipulation between the hotelkeeper and the guest whereby the responsibility of the former as set forth in Articles 1998 to 2001 is
suppressed or diminished shall be void. (Art. 2003, NCC).
Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely. The
hotel business like the common carriers business is imbued with public interest. Catering to the
public, hotel-keepers are bound 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 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.

Case: The Roman Catholic Bishop of Jaro v. Gregorio

de la Pea (26 PHIL. 144), Nov. 21, 1913
FACTS

PETITIONER-APPELLEE: The Roman Catholic

Bishop of Jaro
RESPONDENT-APPELLANT: Gregorio de la Pea
(administrator of the estate of Father Agustin
de la Pea
PONENTE: Moreland, J.
The Roman Catholic Bishop of Jaro brought
action against the appellant, Gregorio de la
Pea, who was the administrator of the
property of the deceased Fr. Agustin de la Pea
(deceased- 1900), to recover the sum of
P6,641 (Mexican currency) in the Court of First
Instance in Iloilo.
The amount of money in question, was
collected by the deceased priest, as an
authorized representative to collect fees for
the construction of a leper hospital. The
appellee was a trustee of such charitable
bequest. The same amount was deposited,
along with Fr. de la Peas personal funds, in

the Hong Kong and Shanghai Bank of Iloilo.

During the war of the revolution, Fr. de la Pea
was arrested by the military authorities as a
political prisoner. His bank funds were
confiscated as the military authorities thought
that the funds were for revolutionary purposes.
The CFI of Iloilo awarded the plaintiff P6,641
with interest at the legal rate from the
beginning of action, thus this appeal.

ISSUE/S
LAWS

Whether Father de la Pea is liable for the loss

of the bequest money by placing it in his
personal bank account?
Article 1094 (The Civil Code of the Philippines):
A person obliged to give something is also
bound to preserve it with the diligence
pertaining to a good father of a family.
Article 1163 (The New Civil Code of the
Philippines): Every person obliged to give
something is also obliged to take care of it with
the proper diligence of a good father of a
family, unless the law or the stipulation of the
parties requires another standard of care.
(1094a)
Article 1105 (The Civil Code of the Philippines):
No one shall be liable for events which could
not be foreseen, or which having been
foreseen were inevitable,
with the exception of the cases expressly
mentioned in the law or those in which the
obligation so declares
Article 1174 (The New Civil Code of the
Philippines): Except in cases expressly
specified by the law, or when it is otherwise

declared by stipulation, or when the nature of

the obligation requires the assumption of risk,
no person shall be responsible for those events
which could not be foreseen, or which, though
foreseen, were inevitable. (1105a)

HOLDING
S

No. Fr. de la Pea and his trustee (or estate

administrator), Gregorio de la Pea is not liable
for the loss of the bequest money.
Fr. de la Peas liability is determined by
portions in the Civil Code that relate to
obligations (Book 4, Title 1.) and the New Civil
Code (Book 4, Title 1.)
Although Article 1094 of the Civil Code, now,
Article 1163 (The New Civil Code) discusses
that a person obliged to give something is
also bound to preserve it with the diligence
pertaining to a good father of a family, it also
states that no one shall be liable for events
which could not be foreseen, or which having
been
foreseen were inevitable, with the exception of
the cases expressly mentioned in the law or
those in which the obligation so declares
(Article 1105, the Civil Code and Article 1174,
The New Civil Code).
The precise question is not about negligence
as we cannot measure nor say if Fr. de la Pea
was indeed negligent by depositing the
donated funds in his bank. We cannot also do
the same if he just left the funds in his home
or if he deposited the amount in a separate
account as a trustee. No law prohibited him
from depositing the amount as he did and no
law changed his responsibility because of that
act. While one who is under obligation to give
a thing is obliged, when he foresees events
which may be dangerous to his trust, to

exhaust all means and measures to elude or, if

unavoidable, to mitigate the effects of those
events, the Supreme Court held that in
choosing between two means equally legal,
with two possible same repercussions, making
him negligent in selecting either, Fr. de la Pea
was not responsible for the loss of the amount
in question.
The judgment was reversed.
YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM v. CA and MAURICE
McLOUGHLIN
2005 / Tinga

Foreigner rented an SDB and placed valuables there, some of which he lost. He wanted to hold the
hotel liable but it cited the Undertaking that the foreigner signed or executed, which said that the
hotel shall not be held liable for such losses. Now, the foreigner is contesting these provisions of the
Undertaking. He won, since the provisions violated NCC 2003. END!

McLoughlin is an Australian businessman-philanthropist who usually visits PH. His contact

here is Brunhilda Tan.
Lopez was the hotel manager, while Lainez and Payam had custody of the keys of the safety
deposit boxes [SDB].
SDB procedureThe SDB could only be opened using two keysone given to the registered
guest, and the other in the possession of hotel management. When the guest wants to open
the SDB, only he can personally request the management, and an employee would accompany
the guest to assist in opening the SDB with the two keys.

When McLoughlin arrived from Australia, he registered with Tropicana and rented an SDB. He
allegedly had 3 envelopes (US $10k; US $5k; AUS $10k), 2 envelopes containing letters and credit
cards, 2 bank books, and a checkbook in his SDB. Before leaving for a brief trip, he opened his SDB to
get some items. He found that one envelope contained only USD $3k. He checked out of Tropicana
upon returning to Manila, and he eventually discovered that an envelope was short of $5k. Some
jewelry he bought went missing. When he inquired about this, he did not receive a favorable
response.
He registered again in Tropicana, and placed in the SDB three envelopes (US $15k; AUS $10k;
documents). Twelve days later, he noticed that the USD envelope lacked $2k, while the AUSD
envelope lacked AUS $4.5k. When he confronted Lainez and Payam, they admitted that it was Tan
who opened the SDB, who admitted stealing his key.
Lopez wrote a promissory noteI promise to pay Mr. Maurice McLoughlin the amount of
AUS$4k and US$2k or its equivalent in Philippine currency on or before May 5, 1988. Lopez requested
Tan to sign the promissory note and Lopez also signed as a witness. Despite the execution of

promissory note by Tan, McLoughlin insisted that it must be the hotel who must assume
responsibility for the loss he suffered. However, Lopez refused to accept the responsibility
relying on the conditions for renting the SDB (Undertaking For The Use of Safety Deposit
Box):
-

To release and hold free and blameless the hotel from any liability arising from any loss in
the contents and/or use of the SDB for any cause whatsoever, including but not limited to
the presentation or use thereof by any other person should the key be lost
To return the key and execute the release in favor of the hotel upon giving up the use of
the SDB
McLoughlin consulted his lawyers in Australia, and they said that the stipulations are
void for being violative of universal hotel practices and customs. His lawyers prepared a letter,
and sent it to President Corazon Aquino. The matter was eventually referred to the Western Police
District. Eventually, a complaint for damages was filed against YHT Realty Corporation, Lopez,
Lainez, Payam and Tan for the loss of money, but trial proceeded without Lopez and Tan. During the
trial, McLoughlin had been in and out of the country to attend to urgent business in Australia, and
while staying in the Philippines to attend the hearing, he incurred various expenses; hence, the SC
award.

The RTC rendered judgment in favor of McLoughlin. It found that defendants acted with gross
negligence in the performance and exercise of their duties and obligations as innkeepers and were
therefore liable to answer for the losses incurred by McLoughlin. It ruled that the aforementioned
provisions of the Undertaking are not valid for being contrary to the express mandate of
NCC 2003 and against public policy. Thus, there being fraud or wanton conduct on the part of
defendants, they should be responsible for all damages which may be attributed to the nonperformance of their contractual obligations. CA affirmed RTC, except as to the amount of damages
awarded (see last part of digest; SC affirmed CA award)

ISSUE & HOLDING

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

RATIO [I placed the provisions here, as this is the only hotel case.]
NCC 1998. The deposit of effects made by the travellers 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 latter, they take the precautions
which said hotel-keepers or their substitutes advised relative to the care and vigilance of their effects. (1783)
NCC 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or placed in
the annexes of the hotel. (n)
NCC 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the
personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as
strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on
the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him.

(1784a)
NCC 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with
the use of arms or through an irresistible force. (n)
NCC 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his family,
servants or visitors, or if the loss arises from the character of the things brought into the hotel. (n)
NCC 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is 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 set forth in articles 1998 to 2001 is suppressed or diminished shall be void. (n)
NCC 2003 was incorporated as an expression of public policy. The hotel business like the
common carriers business is imbued with public interest. The twin duty constitutes the essence
of the business: hotelkeepers are bound to provide not only lodging for hotel guests and security
to their persons and belongings. The law 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.
In an early case, it was held that it is not necessary that the guests effects be actually
delivered to the innkeepers or their employees, as it is enough that such effects are within the
hotel. With greater reason should the liability of the hotelkeeper be enforced when the items are taken
without the guests knowledge and consent from an SDB provided by the hotel itself.
Paragraphs (2) and (4) of the undertaking manifestly contravene NCC 2003. The
undertaking was intended to bar any claim against Tropicana for any loss of the contents of the SDB,
WON negligence was incurred by Tropicana or its employees. The NCC is explicit that the responsibility
of the hotelkeeper shall extend to loss of, or injury to, the personal property of the guests even if
caused by servants or employees of the keepers of hotels or inns as well as by strangers, except as it
may proceed from any force majeure. In this case, the thief (Tan) employed no use of arms or an
irresistible force to qualify as force majeure, so the hotel is not exempted from liability.

Petitioners likewise anchor their defense on NCC 2002, to which SC says NO WAY!
The justification would render nugatory the public interest sought to be protected. What if the
negligence of the employer or its employees facilitated the consummation of a crime committed by
the registered guests relatives or visitor? Should the law exculpate the hotel from liability since the
loss was due to the act of the visitor of the registered guest of the hotel? Hence, this provision
presupposes that the hotelkeeper 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.
Tropicana was guilty of concurrent negligence. To rule otherwise would result in
undermining the safety of the SDBs 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
without fear of any liability that will attach in case such person turns out to be a complete stranger.

Torts part of the case

Given the established SDB procedure, is inevitable to conclude that the management had at least a
hand in the consummation of the taking. The employees even admitted that they assisted Tan on
three (!) separate occasions in opening McLoughlins SDB. 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.

FAIL DEFENSE OF HOTEL: We thought Ms. Tan was your wife, Mr. McLoughlin!
To which SC says: Mere close companionship and intimacy are not enough to warrant such
conclusion considering that what is involved in the instant case is the very safety of McLoughlins
deposit. (haha) If only petitioners exercised due diligence, they should have confronted him as to his
relationship with Tan considering that the latter had been observed opening McLoughlins SDB a
number of times at the early hours of the morning.

NCC 1170 ~ Those who, in the performance of their obligations, are guilty of
negligence, are liable for damages.
NCC 2180 (4) provides that the owners and managers of an establishment or
enterprise are likewise responsible for damages caused by their employees in the service of
the branches in which the latter are employed or on the occasion of their functions.
If an employee is found negligent, it is presumed that the employer was negligent in
selecting and/or supervising him. Thus, given the fact that the loss of McLoughlins money
was consummated through the negligence of Tropicanas employees in allowing Tan to open
the SDB without the guests consent, both the assisting employees and YHT Realty Corporation
itself, as owner and operator of Tropicana, should be held solidarily liable pursuant to NCC
2194.

Awards
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

US$2,000.00 and AUS$4,500.00 or their peso equivalent at the time of payment

Peso value for the air fares from Sydney to Manila and back for eleven 11 trips
One-half of P336,207.05 or P168,103.52 representing payment to Tropicana
One-half of P152,683.57 or P76,341.785 representing payment to Echelon Tower
One-half of P179,863.20 or P89,931.60 for the taxi or transportation expense
One-half of P7,801.94 or P3,900.97 representing Meralco power expenses
One-half of P356,400.00 or P178,200.00 representing expenses for food and maintenance
P50,000.00 for moral damages
P10,000.00 as exemplary damages
P200,000 representing attorneys fees