Title YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM vs.

THE COURT OF
APPEALS and MAURICE McLOUGHLIN
Ponente Tinga, J.
Doctrine Deposits under Art. 2002 -2003, NCC.
Facts  Private Respondent McLoughlin is an Australian businessman-philanthropist. He used to stay
at Sheraton Hotel prior to 1984 where he met Brunhilda Tan.
 Tan convinced respondent to transfer from Sheraton Hotel to Tropicana where Petitioners
were employed—Lopez was the manager and Lainez and Payam had custody of the keys for
the safety deposit boxes of Tropicana.
 Thereafter, McLoughlin stayed at Tropicana during his trips from 1984 to 1987.
 In 1987, Respondent upon arrival and registration with Tropicana, rented a safety deposit
box which could only be opened through the use of two keys, one of which is given to the
guest and the other remaining with the management of the hotel.
 To open such box, only the guest could personally request the management who could then
assign an employee to accompany the guest and open the box with to keys.
 McLoughlin placed two envelops—one containing $5,000 and other $10,000. Another
envelope containing AUS$10,000, his credit cards, 2 bankbooks and a checkbook.
 At the end of his trip, the money in the safety boxes were short of$2k and $5k and some
jewelry from HK were also missing. He ignored it as he thought that it was just a result of
bad accounting.
 When he returned to the PH in 1988, he placed his money on a deposit box by Tropicana
however, upon checking it later on, some of the money deposited were missing.
 He confronted petitioners and they admitted that Tan opened the safety deposit with the key
assigned to him. Tan admitted she stole the key and was able to open the safety deposit
with the assistance of petitioners.
 Tan issued a promissory note in favor of McLoughlin with Lopez as witness, but Respondent
insisted that it must be the hotel ho must assume the responsibility for the loss he suffered.
However, Lopez refused to accept responsibility relying on the conditions under the written
waivers.
 Respondent sent a letter to the President of the Philippines who endorsed the letter to the
DOJ ho forwarded it to Western Police District.
 He filed a complaint for damages against petitioners herein. Tan is not part of the petitioners
because she was not served summons.
Contentions Petitioner Respondent

Lower Courts Ruled in favor of McLoughlin.

1. Trial court found that respondents allegations as to the fact of loss and as to the amount of
money he lost were sufficiently shown. TC found him to be credible and worthy of belief as it
was established that his money, kept in Tropicana’s safety box, was taken by Tan without
McLoughlin’s consent.
2. Petitioners acted with gross negligence in the performance and exercise of their duties and
obligations as innkeepers and ere therefore liable to answer for the lossess incurred by
McLoughlin.
3. The Undertaking are not valid for being contrary to the express mandate of Article 2003 of
the NCC and against public policy—they should be responsible for all damages which may be
attributed to the non-performance of their contractual obligations.
Appellate Court Affirmed RTC ruling.
Issue Whether a hotel may evade liability for the loss of items left with it for safekeeping by its guests by
executing written waivers holding the establishment free from blame for such loss in light of Article
2003 of the Civil Code.
SC Ruling The petition is untenable.

Article 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 like the common carrier's
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 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.
Paragraphs (2) and (4) of the "undertaking" 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.

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. It is the
loss through force majeure that may spare the hotel-keeper from liability. 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
irresistible force to qualify the same as force majeure.

Article 2002 on the other hand, which exempts hotel inn-keepers liability if the loss is due to the acts
of the guest, his family or visitors, cannot apply in the case at bar where the responsibility of
securing the safety box as SHARED not only by the guest but also by the management since to keys
are necessary to open the deposit box.

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.