G.R. No. L-36840 - People's Car, Inc. vs. Commando Security Service Agency

The Court of First Instance of Davao rendered judgment limiting plaintiff-appellant People’s Car, Inc.’s recovery to ₱1,000 instead of the claimed ₱8,489.10.
A special division of the Court of Appeals, by a 4–1 vote on April 14, 1973, certified the case to the Supreme Court as presenting “pure questions of law” based on a stipulation of facts.
The plaintiff’s notice of appeal was expressly directed to the Supreme Court, but due to a clerical error, the record was first forwarded to the Court of Appeals.

Under the “Guard Service Contract,” defendant-appellee Commando Security Service Agency agreed to safeguard plaintiff’s business premises; paragraph 4 limited liability for negligent losses to ₱1,000 per guard post after investigation, report within 24 hours, and proof of negligence; paragraph 5 assumed sole responsibility for all acts of its guards during watch hours and released plaintiff from third-party liabilities.
Parties stipulated that the sole issue was the proper interpretation of paragraphs 4 and 5 as to the extent of defendant’s liability for the guard’s wrongful act.

On April 5, 1970 at about 1:00 A.M., defendant’s guard, without authority or knowledge of either party, drove a customer’s car out of plaintiff’s compound, abandoned his post, lost control on a city street, and crashed into a ditch. A qualified theft blotter was made.
The car suffered ₱7,079.10 in repair damages and plaintiff incurred ₱1,410.00 in rental‐car expenses to serve its customer for 47 days, totaling ₱8,489.10.
Plaintiff discharged its liability to the customer and sought full indemnification from defendant; defendant insisted its liability was capped at ₱1,000 under paragraph 4.

Whether paragraph 4’s ₱1,000 liability limit applies to the guard’s wrongful removal and damage of a third-party’s car.
Whether paragraph 5’s assumption of full responsibility for guards’ acts during watch hours governs and renders defendant liable for the entire ₱8,489.10.