TOPIC Deposit; Art.

2003
CASE NO. G.R. No. 126780. February 17, 2005
CASE NAME YHT Realty v. CA
MEMBER Geoffrey Tungol

DOCTRINE
1.) Bank The New Civil Code 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 servants or employees of the keepers of hotels or inns as well
as by strangers, except as it may proceed from any force majeure
2.) Art. 2003.
a. The hotelkeeper 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 is Void

RECIT-READY DIGEST

McLoughlin, an Australian businessman-philanthropist, used to stay at Sheraton Hotel during his trips to the Philippines
prior to 1984 when he met Tan who made him switch primary hotels to now stay at the Tropicana. McLoughlin made use
of the safety deposit boxes offered by the hotel for the safe keeping of his money, checkbooks and jewelry. on his short
trip to Hongkong, he realized that one envelope of money he had stored was missing 2,000.00USD out of the 5,000.00 he
thought he had placed inside it. The Deposit Box may only be opened through the use of 2 keys, one held by McLoughlin
and the other by the management staff.

On another business trip, he then again utilized the Safety deposit box to store more envelopes of money and even some
jewelry. When he left for Australia, he discovered that the envelope with US$10,000.00 only had US$5,000. He also
noticed that the jewelry which he bought in Hongkong and stored in the safety deposit box upon his return to Tropicana
was likewise missing, except for a diamond bracelet.”

When McLoughlin discovered the loss, he immediately confronted Lainez and Payam who admitted that Tan opened the
safety deposit box with the key assigned to him. McLoughlin went up to his room where Tan was staying and confronted
her. Tan admitted that she had stolen McLoughlin's key and was able to open the safety deposit box with the assistance
of Lopez, Payam and Lainez. Lopez also told McLoughlin that Tan stole the key assigned to McLoughlin while the latter
was asleep.

McLoughlin now raises the case to court but is now faced with a stipulation on the safety deposit agreement stating that
“to release and hold free and blameless TROPICANA APARTMENT HOTEL from any liability arising from any loss in
the contents and/or use of the 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;”

ISSUE: W/N the Hotel may escape Liability from the actions of their staff through a written stipulation stating that “the
hotel would be released from liability arising from any loss in the contents and/or use of the safety deposit box for any
cause whatsoever.” NO

Such stipulation is against public policy and would allow hotels not to be held liable for the negligence or deceit of their
staff or employees. Such stipulation is also against Art 2003 of the civil code. “The New Civil Code 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 servants or employees of the keepers of hotels or inns as well as by strangers, except as it may proceed from any force
majeure.”

The hotel and the Staff will be held liable for the damage caused.

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FACTS
• 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.
• Tan convinced McLoughlin to transfer from Sheraton Hotel to Tropicana where Lainez, Payam and Danilo Lopez
were employed. Lopez served as manager of the hotel while Lainez and Payam had custody of the keys for the
safety deposit boxes of Tropicana. Tan took care of McLoughlin's booking at the Tropicana where he started
staying during his trips to the Philippines from December 1984 to September 1987.
• On 30 October 1987, McLoughlin arrived from Australia and registered with Tropicana. He rented a safety deposit
box as it was his practice to rent a safety deposit box every time, he registered at Tropicana
• The procedure is that deposit box could only be opened using two keys, one of which is given to the registered
guest, and the other remaining in the possession of the management of the hotel.
• He would allegedly put in the deposit box, 15,000.00US$ in two envelopes. 5 K in one, 10K in another. He would
also put 10,000.00 AU$ in another envelope, along with credit cards, 2 bank books and a check book
• On 12 December 1987, before leaving for a brief trip to Hongkong, McLoughlin opened his safety deposit box
with his key and with the key of the management to take the envelope with 5K US$, only to find out in Hongkong
that the envelope only had 3,000.00 US$ in it. McLoughlin blamed himself thinking that it was just poor
accounting on his part.
• “After returning to Manila, he checked out of Tropicana on 18 December 1987 and left for Australia. When he
arrived in Australia, he discovered that the envelope with US$10,000.00 only had US$5,000. He also noticed that
the jewelry which he bought in Hongkong and stored in the safety deposit box upon his return to Tropicana was
likewise missing, except for a diamond bracelet.”
• “McLoughlin came back to the Philippines on 4 April 1988, he asked Lainez if some money and/or jewelry which
he had lost were found and returned to her or to the management. However, Lainez told him that no one in the
hotel found such things and none were turned over to the management. He again registered at Tropicana and
rented a safety deposit box.”
• McLoughlin again placed therein 1 envelope containing US$15,000.00, another envelope containing Ten
AUS$10,000.00 and other envelopes containing his traveling papers/documents.
• On 16 April 1988, McLoughlin requested Lainez and Payam to open his safety deposit box. He noticed that in
the envelope containing US$15,000.00, US$2,000.00 were missing and, in the envelope, previously containing
AUS$10,000.00, Australian Dollars AUS$4,500.00 was missing.
• “When McLoughlin discovered the loss, he immediately confronted Lainez and Payam who admitted that Tan
opened the safety deposit box with the key assigned to him. McLoughlin went up to his room where Tan was
staying and confronted her. Tan admitted that she had stolen McLoughlin's key and was able to open the safety
deposit box with the assistance of Lopez, Payam and Lainez. Lopez also told McLoughlin that Tan stole the key
assigned to McLoughlin while the latter was asleep.”
• “Upon his return on 22 October 1990, he registered at the Echelon Towers at Malate, Manila. Meetings were held
between McLoughlin and his lawyer which resulted to the filing of a complaint for damages on 3 December 1990
against YHT Realty Corporation, Lopez, Lainez, Payam and Tan (defendants) for the loss of McLoughlin's money
which was discovered on 16 April 1988”
• There was a provision when renting out a deposit box stating that the Hotel avoids all liability to any loss that
may occur when using their deposit boxes. The defendants YHT realty now rely on this to avoid paying liability.
o Paragraph (2) and (4)
o “to release and hold free and blameless TROPICANA APARTMENT HOTEL from any liability arising
from any loss in the contents and/or use of the 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;”

ISSUE/S and HELD

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1.) W/N a Hotel may escape liability from the loss of items within their safety deposit boxes through a written
waiver. NO
2.) W/N YHT Realty Corporation, Lopez, Lainez, Payam and Tan are absolved from damages. NO

RATIO

1.) On the Issue on W/N a Hotel may escape liability from the loss of items within their safety deposit boxes through a
written waiver. NO
a. “The New Civil Code 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 servants or employees of the keepers of hotels or inns as
well as by strangers, except as it may proceed from any force majeure.”
b. A reading on Art. 2003 (see doctrines for full text) would reveal the intention to make sure businesses will not
contravene public policy by making terms that would unjustly remove their liability through a waiver
c. This situation was exactly what happened at the case at bar, as the paragraphs (2) and (4) of the "undertaking"
(The agreement to be signed for the use of the deposit box) manifestly contravene Article 2003 of the New
Civil Code 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.
d. As such stipulation is void, the Hotel may not escape liability with through this stipulation.

2.) On the issue W/N YHT Realty Corporation, Lopez, Lainez, Payam and Tan are absolved from damages. NO
a. 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 safety deposit box.
b. Without the assistance of 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 if the latter was also guilty of negligence in allowing another person to use his key.
c. To rule otherwise would result in undermining the safety of the safety deposit 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 safety deposit box without fear of any liability that will attach
thereafter in case such person turns out to be a complete stranger.

DISPOSTIVE PORTION

WHEREFORE, foregoing premises considered, the Decision of the Court of Appeals dated 19 October 1995 is hereby
AFFIRMED. Petitioners are directed, jointly and severally, to pay private respondent the following amounts:

(1) US$2,000.00 and AUS$4,500.00 or their peso equivalent at the time of payment;
(2) P308,880.80, representing the peso value for the air fares from Sydney to Manila and back for a total of eleven (11)
trips;
(3) One-half of P336,207.05 or P168,103.52 representing payment to Tropicana Copacabana Apartment Hotel;
(4) One-half of P152,683.57 or P76,341.785 representing payment to Echelon Tower;
(5) One-half of P179,863.20 or P89,931.60 for the taxi or transportation expense from McLoughlin's residence to
Sydney Airport and from MIA to the hotel here in Manila, for the eleven (11) trips;
(6) One-half of P7,801.94 or P3,900.97 representing Meralco power expenses;
(7) One-half of P356,400.00 or P178,200.00 representing expenses for food and maintenance;
(8) P50,000.00 for moral damages;
(9) P10,000.00 as exemplary damages; and
(10) P200,000 representing attorney's fees.