YHT REALTY CORPORATION, ERLINDA LAINEZ AND ANICIA PAYAM,

PETITIONERS, VS. THE COURT OF APPEALS AND MAURICE MCLOUGHLIN,

RESPONDENTS.
G.R. NO. 126780
February 17, 2005
TINGA, J.

I. FACTS: Maurice McLoughlin, an Australian businessman-philanthropist, was

convinced by Tan to stay at Tropicana Copacabana Apartment Hotel, owned and
operated by YHT Realty Corporation where Lainez and Payam are employed, whenever
he stays in the Philippines. McLoughlin rented a safety deposit box where he put his
money and personal effects every time he registered in the said hotel. Two keys should
be used to unlock the safety deposit box, one of which was handed to the registered
guest and the other remained in the hotel management's possession. There is an
executed written waiver holding the establishment or its employees free from blame for
the loss of items left in the safety deposit box. McLoughlin noticed that there are short of
money in the envelopes he stored in the safety deposit box and some jewelry was
missing as well. When McLoughlin discovered the loss, he confronted Lainez and
Payam who admitted that Tan opened the safety deposit box with the key assigned to
him.
II. ISSUE/S: Whether or not YHT Realty Corporation, Erlinda Lainez and Anicia Payam
are liable for the loss of the money and personal effects of Maurice McLoughlin.
III. RULING: The trial court 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. Moreover, the trial
court ruled that the “Undertaking For The Use Of Safety Deposit Box” which implies that
Tropicana Copacabana Apartment Hotel should be released from liability arising from
any loss in the contents and/or use of the safety deposit box for  any cause whatsoever
is not valid for being contrary to the express mandate of Article 2003 of the New Civil
Code and against public policy. Notably, both the trial court and the appellate court
found the same to be null and void.