Case Summary (G.R. No. 126780)
Parties
Petitioners: YHT Realty Corporation, Erlinda Lainez, Anicia Payam
Respondents: Maurice McLoughlin and the Court of Appeals (in its capacity as appellee in the petition for certiorari)
Key Dates
• December 1984–September 1987: McLoughlin’s initial stays at Tropicana
• October 30, 1987: McLoughlin rents a safety deposit box
• December 12, 1987: First withdrawal; discovers shortage later in Hong Kong
• April 4–16, 1988: Second box rental; discovers further shortages on April 16
• December 3, 1990: Complaint for damages filed before the Regional Trial Court (RTC)
• December 16, 1991: RTC renders judgment in favor of McLoughlin
• October 19, 1995: Court of Appeals affirms RTC but modifies damages
• February 17, 2005: Supreme Court issues its decision
Applicable Law
• 1987 Philippine Constitution – confers appellate jurisdiction on the Supreme Court under Article VIII, Section 5(2) to resolve questions of law raised by a petition for certiorari (Rule 45).
• New Civil Code of the Philippines:
– Article 1170 (liability for negligence)
– Articles 1998–2001 (innkeeper’s responsibility for guests’ effects)
– Article 2003 (prohibition of waiver of innkeeper’s liability)
– Article 2180(4) (employer’s liability for employees)
– Article 2193 (solidary liability for quasi-delicts)
Factual Background
McLoughlin, having transferred from Sheraton to Tropicana at the recommendation of Tan, routinely rented a safety deposit box secured by two keys: one with the guest, one with Tropicana management. On December 12, 1987, and again on April 16, 1988, he discovered significant shortages of U.S. and Australian dollars and jewelry from his box. Upon inquiry, Lainez and Payam admitted they had assisted Tan in opening the box with the master key on multiple occasions. Tan later confessed to stealing McLoughlin’s key and, with Lopez’s assistance, using it to open his box. Lopez drafted a promissory note on Tan’s behalf for partial reimbursement, but the hotel management declined liability, invoking a pre-printed “Undertaking for the Use of Safety Deposit Box” signed by McLoughlin, which purported to release Tropicana from any loss.
Procedural History
McLoughlin pursued administrative remedies through the Office of the President, Department of Justice, and police authorities without success. He then filed a complaint for damages in December 1990 against YHT Realty Corporation, Lopez, Lainez, Payam, and Tan. Tan and Lopez were never served; trial proceeded against YHT, Lainez, and Payam only. The RTC found petitioners jointly and solidarily liable for actual, moral, exemplary, and litigation damages. The Court of Appeals affirmed liability but reduced the amounts awarded under several heads. YHT, Lainez, and Payam then filed a Rule 45 petition before the Supreme Court, raising four principal issues concerning factual findings, negligence, the validity of the waiver, and the quantum of damages.
Issues Presented
- Whether the uncorroborated testimony of McLoughlin sufficed to prove the prior existence and subsequent loss of the deposited money and jewelry.
- Whether petitioners were grossly negligent as innkeepers.
- Whether the “Undertaking for the Use of Safety Deposit Box” is void under Article 2003 of the Civil Code.
- Whether the damages awarded were proper in form and amount.
Supreme Court Decision
Credibility and Proof of Loss
– The Supreme Court deferred to the RTC’s firsthand appraisal of McLoughlin’s testimony, noting that courts give great weight to trial judges’ evaluations of witness credibility. The finding of factual loss was, therefore, beyond the scope of Rule 45 review.Gross Negligence of Innkeeper
– Tropicana required two keys to open a box; management employees alone could supply the second key. By admitting that Lainez and Payam repeatedly assisted Tan (a non-guest) in accessing McLoughlin’s box while he slept, petitioners were at minimum grossly negligent. Under Articles 1170 and 2180(4), YHT Realty Corporation, as employer, is vicariously liable for its employees’ negligence. Solidary liability under Article 2193 applied.Invalidity of the Waiver
– Article 2003 of the Civil Code ex
Case Syllabus (G.R. No. 126780)
Facts
- Maurice McLoughlin, an Australian businessman, was a frequent guest of Sheraton Hotel until late 1984, when Brunhilda Mata-Tan introduced him to Tropicana Copacabana Apartment Hotel, owned by YHT Realty Corporation.
- From December 1984 to September 1987, McLoughlin stayed at Tropicana under the assistance of Tan (booking), with Erlinda Lainez and Anicia Payam holding the management’s master keys to its safety deposit boxes; Danilo Lopez served as hotel manager.
- On October 30, 1987, McLoughlin rented a safety deposit box at Tropicana and placed US$15,000 (in two envelopes), AUS$10,000 (in one envelope), travel documents, credit cards, bankbooks, and a checkbook inside.
- On December 12, 1987, before a brief trip to Hong Kong, he removed two envelopes (US$5,000 and AUS$10,000) along with passports and cards; upon counting in Hong Kong, he found US$2,000 missing from the US$5,000 envelope.
- After returning to Manila and finally checking out on December 18, 1987, McLoughlin flew back to Australia, later discovering US$5,000 missing from the remaining US$10,000 envelope and most of his newly purchased jewelry missing from the deposit box.
- On April 4, 1988, upon re-registration, McLoughlin discovered further shortages (US$2,000 and AUS$4,500) in the contents of his safety deposit box; Lainez and Payam admitted that Tan had stolen McLoughlin’s key and, with their assistance and that of Lopez, opened the box.
- A promissory note was executed by Tan on April 21, 1988, but the hotel management refused to assume liability, citing an “Undertaking For the Use Of Safety Deposit Box” containing waivers of liability.
- McLoughlin pursued administrative and criminal remedies (letters to the President, DOJ, police investigations) but the criminal case was dismissed for failure to prosecute; he then filed a civil complaint for damages on December 3, 1990, later amending it to include earlier losses.
Procedural History
- Regional Trial Court (Branch 13, Manila) Decision (December 16, 1991): found YHT Realty Corporation, Tan, Lainez, and Payam jointly and solidarily liable; awarded US$11,400, AUS$4,500 (with peso equivalents), actual and consequential damages, moral, exemplary damages,