YHT Realty Corp v CA

G.R. No. 126780

February 17, 2005

FACTS
On 30 Oct 1987, McLoughlin arrived from Australia and registered with Tropicana. He
rented a safety deposit box as his usual practice. The box required two keys, the guest had one
and one from the management. He placed US $10,000 in one envelope and US$5,000 in another,
AU$10,000 in another envelope and other envelopes with his passport and credit cards. On 12
Dec 1987, he took from the box the envelope with US$5,000 and the one with AU$10,000 to go
to Hong Kong for a short visit, because he was not checking out. When he arrived in HK, the
envelope with US$5,000 only contained US$3,000, but because he had no idea if the safety
deposit box has been tampered, he thought it was just bad accounting.
After returning to Manila, he checked out of the Tropicana on 18 Dec 1987 and left for
Australia. When he arrived he discovered that the envelope with US$10,000 was short of
US$5,000. He also noticed that the jewelry he bought in Hong Kong which he stored in the safety
deposit box upon his return to Tropicana was likewise missing, except for a diamond bracelet.
He went back to the Philippines on 4 Apr 1988 and asked Lainez (who had custody of the
management key) if some money was missing or returned to her, to which the latter answered
there was not. He again registered at the Tropicana and rented a safety deposit box. He placed
an envelope containing US$15,000, another of AU$10,000. On 16 Apr, he opened his safety
deposit box and noticed that US$2,000 and AU$4,500 was missing from the envelopes.
He immediately confronted Lainez and Payam who admitted that Tan opened the safety
deposit box with the key assigned to McLoughlin. McLoughlin went up to his room where Tan was
staying and confronted her. Tan admitted that she had stolen McLoughlin’s key and was able to
open the safety deposit box with the assistance of Lopez, Payam and Lainez. Lopez also told
McLoughlin that Tan stole the key assigned to McLoughlin while the latter was asleep.
McLoughlin requested the management for an investigation of the incident. Lopez got in
touch with Tan and arranged for a meeting with the police and McLoughlin. When the police did
not arrive, Lopez and Tan went to the room of McLoughlin at Tropicana and thereat, Lopez wrote
on a piece of paper a promissory note.
He made Lopez and Tan sign a promissory note for him for the loss. However, Lopez
refused liability on behalf of the hotel, reasoning that McLoughlin signed an "Undertaking for the
Use of Safety Deposit Box" which disclaims any liability of the hotel for things put inside
the box.

ISSUE: Whether or not a hotel may evade liability for the loss of items left with it for safekeeping
by its guests, by having these guests execute written waivers holding the establishment or its
employees free from blame for such loss in light of Article 2003 of the Civil Code which voids such
waivers.
RULING
NO. Article 2003 was incorporated in the New Civil Code as an expression of public policy
precisely. The hotel business like the common carrier’s business is imbued with public interest.
Catering to the public, hotel-keepers 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