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YHT REALTY CORPORATION v. CA

FACTS:

The case involves a petition for review of a decision involving YHT Realty Corporation, Brunhilda Mata-Tan, Erlinda Lainez, and Anicia Payam. Maurice McLoughlin, an Australian businessman-philanthropist, stayed at Tropicana Copacabana Apartment Hotel owned by YHT Realty Corporation upon the persuasion of Tan. McLoughlin deposited his money and other items in a safety deposit box at Tropicana. Later, he discovered that a portion of his money was missing. McLoughlin confronted Lainez and Payam, who admitted that Tan opened the safety deposit box using McLoughlin's key, which Tan stole while McLoughlin was asleep. McLoughlin filed an action for damages against YHT Realty Corporation, Tan, Lainez, and Payam. The RTC found them liable, and the Court of Appeals affirmed the decision. The primary legal issue is whether a hotel can evade liability for the loss of items left with it for safekeeping by having the guests sign waivers releasing the hotel from any blame for such loss.

The trial court found that Tan stole McLoughlin's key while he was asleep at Tropicana Hotel. McLoughlin reported the incident to the hotel management, and a meeting with the police was arranged but did not push through. Instead, Lopez and Tan went to McLoughlin's room where a promissory note was signed by Tan, promising to pay McLoughlin a certain amount. Despite this, McLoughlin insisted that the hotel should be responsible for the loss, but Lopez refused, citing the conditions for renting the safety deposit box. McLoughlin sought legal advice in Australia, and his lawyers opined that the stipulations in the hotel's conditions were void. McLoughlin corresponded with various authorities in the Philippines to seek assistance but failed to receive any. McLoughlin returned to the Philippines and filed a complaint for damages against certain defendants, alleging the loss of his money in the safety deposit box. The trial court found McLoughlin's testimony credible and established that the defendants acted with gross negligence in their duties as innkeepers. The trial court also ruled that certain paragraphs of the "Undertaking For The Use Of Safety Deposit Box" were invalid.

ISSUES:

  1. Whether the conclusion on the existence and loss of the money and jewelry is supported by the evidence

  2. Whether the finding of gross negligence on the part of the petitioners is supported by the evidence

  3. Whether the "Undertaking for the Use of Safety Deposit Box" is null and void

  4. Whether the damages awarded to the respondent, as well as the amounts thereof, are proper

  5. Whether Tropicana Hotel is liable for the loss of McLoughlin's money

  6. Whether the "Undertaking For The Use of Safety Deposit Box" executed by McLoughlin is valid

  7. Whether the hotel is liable for the loss of the contents of a safety deposit box taken without the guest's knowledge and consent.

  8. Whether the hotel can be exempted from liability based on the acts of the guest, guest's family, or visitors.

  9. Whether the case should be decided based on contract or tort.

  10. Whether the awards of damages and attorney's fees are proper.

  11. Whether the amounts awarded for various expenses are supported by evidence.

RULING:

  1. The Supreme Court held that the evidence on record supports the conclusion on the existence and loss of the money and jewelry as testified by the respondent. The Court also affirmed the finding of gross negligence on the part of the petitioners, as supported by the evidence. The Court found that the "Undertaking for the Use of Safety Deposit Box" is null and void. Finally, the Court concluded that the damages awarded to the respondent, as well as the amounts, are proper under the circumstances.

  2. Tropicana Hotel is liable for the loss of McLoughlin's money. The management had knowledge that a person other than the registered guest had access to the safety deposit box and even assisted in opening it on three separate occasions. The hotel had a duty to guard against such incidents and failed to exercise due diligence. Under Article 1170 of the New Civil Code, those guilty of negligence in the performance of their obligations are liable for damages. The owners and managers of the hotel are responsible for damages caused by their employees. Therefore, both the assisting employees and the hotel itself should be held solidarily liable.

  3. The "Undertaking For The Use of Safety Deposit Box" executed by McLoughlin is null and void. Article 2003 of the New Civil Code provides that any stipulation diminishing the hotel-keeper's responsibility for the guest's belongings shall be void. The purpose of this provision is to uphold the duty of hotelkeepers to provide lodging and security to their guests and ensure public interest. Any contrary stipulations in prepared forms imposed by hotel keepers on guests for their signature are not valid.

  4. The hotel is liable for the loss of the contents of a safety deposit box taken without the guest's knowledge and consent.

  5. The hotel cannot be exempted from liability based on the acts of the guest, guest's family, or visitors.

  6. The case can be decided based on tort even if there are already contractual relations.

  7. The awards of P10,000.00 as exemplary damages and P200,000.00 representing attorney's fees are sustained.

  8. The petitioners are directed, jointly and severally, to pay the respondent the amounts listed in the decision, which are supported by evidence.

PRINCIPLES:

  • The Supreme Court, in a Rule 45 petition, only resolves questions of law and does not address peripheral factual questions.

  • Findings of fact by the trial court, especially those pertaining to the credibility of witnesses, are accorded great respect on appeal.

  • Gross negligence can be established by evidence and warrants liability for damages.

  • Contracts or provisions that are contrary to law and public policy are null and void.

  • Hotelkeepers have a duty to provide security to their guests and their belongings.

  • Stipulations in prepared forms imposed by hotel keepers on guests that diminish the hotel-keeper's responsibility are void.

  • Hotel owners and managers are solidarily liable for damages caused by their employees.

  • The responsibility of the hotel-keeper extends to the loss of personal property of guests even if caused by servants, employees, or strangers, except when it is due to force majeure.

  • The hotel-keeper is not exempted from liability if the loss is due to the acts of the guest, guest's family, or visitors, unless the hotel-keeper is not guilty of concurrent negligence or has not contributed in any degree to the occurrence of the loss.

  • Tort liability can exist even if there are already contractual relations.

  • The amount of damages awarded by lower courts, based on factual issues and evidence, is binding upon higher courts unless unconscionable or excessive. Moral damages are awarded to alleviate the moral suffering of the injured party, not to enrich them at the expense of the defendant.

Exemplary damages may be awarded in cases where the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

Attorney's fees may be awarded when the court deems it just and equitable.

Damages and expenses must be supported by evidence to be awarded.