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SECOND DIVISION

[G.R. No. L-36840. May 22, 1973.]

PEOPLE'S CAR, INC., plaintiff-appellant, vs. COMMANDO SECURITY SERVICE AGENCY, defendant-
appellee.

Facts :

Commando Security Service Agency provides security services for People’s Car, Inc.

Their Contract Stipulation provides for the following:

'Par. 4. — Party of the Second Part (defendant) through the negligence of its guards, after an
investigation has been conducted by the Party of the First Part (plaintiff) wherein the Party of
the Second Part has been duly represented, shall assume full responsibilities for any loss or
damages that may occur to any property of the Party of the First Part for which it is accountable,
during the watch hours of the Party of the Second Part, provided the same is reported to the
Party of the Second Part within twenty-four (24) hours of the occurrence, except where such
loss or damage is due to force majeure, provided however that after the proper investigation to
be made thereof that the guard on post is found negligent and that the amount of the loss shall
not exceed ONE THOUSAND (P1,000.00) PESOS per guard post.'

'Par. 5— The party of the Second Part assumes the responsibility for the proper performance by
the guards employed, of their duties and (shall) be solely responsible for the acts done during
their watch hours, the Party of the First Part being specifically released from any and all
liabilities to the former's employee or to the third parties arising from the acts or omissions
done by the guards during their tour of duty.'"

The issue arose on an incident that happened April 15, 1970 when one of the security guard on duty at
plaintiff's premises, "without any authority, consent, approval, knowledge or orders of the plaintiff
and/or defendant brought out of the compound of the plaintiff a car belonging to its customer, and
drove said car for a place or places unknown, abandoning his post as such security guard on duty inside
the plaintiff's compound, and while so driving said car in one of the City streets lost control of said car,
causing the same to fall into a ditch along J.P. Laurel St., Davao City

It took plaintiff to repair the damaged car for the sum of P8,489.10.

Plaintiff claimed that defendant should be liable for the entire amount under paragraph 5 of their
contract where under defendant assumed "sole responsibility for the acts done during their watch
hours" by its guards, whereas defendant contended, without questioning the amount of the actual
damages incurred by plaintiff, that its liability "shall not exceed one thousand (P1,000.00) pesos per
guard post" under paragraph 4 of their contract.
The trial court favored COMMANDO SECURITY SERVICE AGENCY. Thus, this appeal.

ISSUE: The extent of the liability of the defendant to the plaintiff by reason of the acts of the employees
of the defendant?

RULING:

Trial Court misread the contractual provisions of the parties. Paragraph 4, which limits the liability of the
service agency to PHP 1,000, only pertains “if there is any loss or damage through the negligence of its
guards during watch hours.” This is inapplicable to the facts at hand because the security guard was not
negligent – he acted unlawfully and wrongfully when he drove the car out of the premises without the
consent of PEOPLE’S CAR, INC. or COMMANDO SECURITY SERVICE AGENCY. So paragraph 5 will really
apply because COMMANDO SECURITY SERVICE AGENCY assumes the responsibility of proper
performance by their guards and shall be SOLELY responsible for all the acts done during watch hours. It
specifically releases PEOPLE’S CAR, INC from any liabilities to 3rd parties arising from the ACTS or
omissions DONE BY THE GUARDS DURING THEIR DUTIES since COMMANDO SECURITY SERVICE AGENCY
presumes that their security guards are doing their job in good faith, they have contracted to be liable if
they did not do a proper performance of the job. Accdg., to Art 1159, “Obligations has the force of the
law between contracting parties should it be complied in good faith.”

PEOPLE’S CAR, INC has the obligation to repair the damaged car of the client to honor their contract to
the client and they cannot tell that under their contract, the security guard was liable, because the client
does not have a contract with COMMANDO SECURITY SERVICE AGENCY, so PEOPLE’S CAR, INC paid for it
first, to be reimbursed by COMMANDO SECURITY SERVICE AGENCY.

Thus, COMMANDO SECURITY SERVICE AGENCY is liable for the actual damages of P8,489.10.