[G.R. No. 160544. February 21, 2005] 3. The amount of P50,000.

00 as exemplary damages;
TRIPLE-V vs. FILIPINO MERCHANTS
THIRD DIVISION
4. Plus, cost of suit.
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated FEB 21 2005.
Defendant Triple V is not therefore precluded from taking appropriate action against defendant Armando
Madridano.
G.R. No. 160544 (Triple-V Food Services, Inc. vs. Filipino Merchants Insurance Company, Inc.)

Assailed in this petition for review on certiorari is the decision[1]cralaw dated October 21, 2003 of the Court of
Appeals in CA-G.R. CV No. 71223, affirming an earlier decision of the Regional Trial Court at Makati City, Branch
148, in its Civil Case No. 98-838, an action for damages thereat filed by respondent Filipino Merchants Insurance,
Company, Inc., against the herein petitioner, Triple-V Food Services, Inc.
On March 2, 1997, at around 2:15 o'clock in the afternoon, a certain Mary Jo-Anne De Asis (De Asis) dined at
petitioner's Kamayan Restaurant at 15 West Avenue, Quezon City. De Asis was using a Mitsubishi Galant Super
Saloon Model 1995 with plate number UBU 955, assigned to her by her employer Crispa Textile Inc. (Crispa). On
said date, De Asis availed of the valet parking service of petitioner and entrusted her car key to petitioner's valet
counter. A corresponding parking ticket was issued as receipt for the car. The car was then parked by petitioner's
valet attendant, a certain Madridano, at the designated parking area. Few minutes later, Madridano noticed that
the car was not in its parking slot and its key no longer in the box where valet attendants usually keep the keys of
cars entrusted to them. The car was never recovered. Thereafter, Crispa filed a claim against its insurer, herein
respondent Filipino Merchants Insurance Company, Inc. (FMICI). Having indemnified Crispa in the amount of
P669.500 for the loss of the subject vehicle, FMICI, as subrogee to Crispa's rights, filed with the RTC at Makati City
an action for damages against petitioner Triple-V Food Services, Inc., thereat docketed as Civil Case No. 98-838
which was raffled to Branch 148.
In its answer, petitioner argued that the complaint failed to aver facts to support the allegations of recklessness
and negligence committed in the safekeeping and custody of the subject vehicle, claiming that it and its employees
wasted no time in ascertaining the loss of the car and in informing De Asis of the discovery of the loss. Petitioner
further argued that in accepting the complimentary valet parking service, De Asis received a parking ticket
whereunder it is so provided that "[Management and staff will not be responsible for any loss of or damage
incurred on the vehicle nor of valuables contained therein", a provision which, to petitioner's mind, is an explicit
waiver of any right to claim indemnity for the loss of the car; and that De Asis knowingly assumed the risk of loss
when she allowed petitioner to park her vehicle, adding that its valet parking service did not include extending a
contract of insurance or warranty for the loss of the vehicle.
During trial, petitioner challenged FMICI's subrogation to Crispa's right to file a claim for the loss of the car, arguing
that theft is not a risk insured against under FMICI's Insurance Policy No. PC-5975 for the subject vehicle.
SO ORDERED.
Obviously displeased, petitioner appealed to the Court of Appeals reiterating its argument that it was not a
depositary of the subject car and that it exercised due diligence and prudence in the safe keeping of the vehicle,
in handling the car-napping incident and in the supervision of its employees. It further argued that there was no
valid subrogation of rights between Crispa and respondent FMICI.
In a decision dated October 21, 2003,[2]cralaw the Court of Appeals dismissed petitioner's appeal and affirmed the
appealed decision of the trial court, thus:
WHEREFORE, based on the foregoing premises, the instant appeal is hereby DISMISSED. Accordingly, the assailed
June 22, 2001 Decision of the RTC of Makati City - Branch 148 in Civil Case No. 98-838 is AFFIRMED.
SO ORDERED.
In so dismissing the appeal and affirming the appealed decision, the appellate court agreed with the findings and
conclusions of the trial court that: (a) petitioner was a depositary of the subject vehicle; (b) petitioner was
negligent in its duties as a depositary thereof and as an employer of the valet attendant; and (c) there was a valid
subrogation of rights between Crispa and respondent FMICI.
Hence, petitioner's present recourse.
We agree with the two (2) courts below.
When De Asis entrusted the car in question to petitioners valet attendant while eating at petitioner's Kamayan
Restaurant, the former expected the car's safe return at the end of her meal. Thus, petitioner was constituted as
a depositary of the same car. Petitioner cannot evade liability by arguing that neither a contract of deposit nor
that of insurance, guaranty or surety for the loss of the car was constituted when De Asis availed of its free valet
parking service.

In a decision dated June 22, 2001, the trial court rendered judgment for respondent FMICI, thus:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff (FMICI) and against the
defendant Triple V (herein petitioner) and the latter is hereby ordered to pay plaintiff the following:
In a contract of deposit, a person receives an object belonging to another with the obligation of safely keeping it
and returning the same.[3]cralaw A deposit may be constituted even without any consideration. It is not necessary
that the depositary receives a fee before it becomes obligated to keep the item entrusted for safekeeping and to
return it later to the depositor.

1. The amount of P669,500.00, representing actual damages plus compounded (sic); Specious is petitioner's insistence that the valet parking claim stub it issued to De Asis contains a clear exclusion
of its liability and operates as an explicit waiver by the customer of any right to claim indemnity for any loss of or
2. The amount of P30,000.00 as acceptance fee plus the amount equal to 25% of the total amount due as damage to the vehicle.
attorney's fees;
The parking claim stub embodying the terms and conditions of the parking, including that of relieving petitioner
from any loss or damage to the car, is essentially a contract of adhesion, drafted and prepared as it is by the
petitioner alone with no participation whatsoever on the part of the customers, like De Asis, who merely adheres
to the printed stipulations therein appearing. While contracts of adhesion are not void in themselves, yet this
Court will not hesitate to rule out blind adherence thereto if they prove to be one-sided under the attendant facts
and circumstances.[4]cralaw

Hence, and as aptly pointed out by the Court of Appeals, petitioner must not be allowed to use its parking claim
stub's exclusionary stipulation as a shield from any responsibility for any loss or damage to vehicles or to the
valuables contained therein. Here, it is evident that De Asis deposited the car in question with the petitioner as
part of the latter's enticement for customers by providing them a safe parking space within the vicinity of its
restaurant. In a very real sense, a safe parking space is an added attraction to petitioner's restaurant business
because customers are thereby somehow assured that their vehicle are safely kept, rather than parking them
elsewhere at their own risk. Having entrusted the subject car to petitioner's valet attendant, customer De Asis,
like all of petitioner's customers, fully expects the security of her car while at petitioner's premises/designated
parking areas and its safe return at the end of her visit at petitioner's restaurant.

Petitioner's argument that there was no valid subrogation of rights between Crispa and FMICI because theft was
not a risk insured against under FMICI's Insurance Policy No. PC-5975 holds no water.

Insurance Policy No. PC-5975 which respondent FMICI issued to Crispa contains, among others things, the
following item: "Insured's Estimate of Value of Scheduled Vehicle- P800.000".[5]cralaw On the basis of such item,
the trial court concluded that the coverage includes a full comprehensive insurance of the vehicle in case of
damage or loss. Besides, Crispa paid a premium of P10,304 to cover theft. This is clearly shown in the breakdown
of premiums in the same policy.[6]cralaw Thus, having indemnified CRISPA for the stolen car, FMICI, as correctly
ruled by the trial court and the Court of Appeals, was properly subrogated to Crispa's rights against petitioner,
pursuant to Article 2207 of the New Civil Code[7].

Anent the trial court's findings of negligence on the part of the petitioner, which findings were affirmed by the
appellate court, we have consistently ruled that findings of facts of trial courts, more so when affirmed, as here,
by the Court of Appeals, are conclusive on this Court unless the trial court itself ignored, overlooked or
misconstrued facts and circumstances which, if considered, warrant a reversal of the outcome of the
case.[8]cralaw This is not so in the case at bar. For, we have ourselves reviewed the records and find no justification
to deviate from the trial court's findings.

WHEREFORE, petition is hereby DENIED DUE COURSE.

SO ORDERED.
G.R. No. 179382 January 14, 2013
SPOUSES BENJAMIN C. MAMARIL AND SONIA P. MAMARIL, Petitioners,
vs.
THE BOY SCOUT OF THE PHILIPPINES, AIB SECURITY AGENCY, INC., CESARIO PEÑA,* AND VICENTE
GADDI, Respondents.
DECISION
PERLAS-BERNABE, J.:
This is a Petition for Review on Certiorari assailing the May 31, 2007 Decision1 and August 16, 2007 Resolution2 of
the Court of Appeals (CA) in CA-G.R. CV No. 75978. The dispositive portion of the said Decision reads:
WHEREFORE, the Decision dated November 28, 2001 and the Order dated June 11, 2002 rendered by the Regional
Trial Court of Manila, Branch 39 is hereby MODIFIED to the effect that only defendants AIB Security Agency, Inc.,
Cesario Peña and Vicente Gaddi are held jointly and severally liable to pay plaintiffs-appellees Spouses Benjamin
C. Mamaril and Sonia P. Mamaril the amount of Two Hundred Thousand Pesos (₱200,000.00) representing the
cost of the lost vehicle, and to pay the cost of suit. The other monetary awards are DELETED for lack of merit
and/or basis.
Defendant-Appellant Boy Scout of the Philippines is absolved from any liability.
SO ORDERED.3
The Antecedent Facts
Spouses Benjamin C. Mamaril and Sonia P. Mamaril (Sps. Mamaril) are jeepney operators since 1971. They would
park their six (6) passenger jeepneys every night at the Boy Scout of the Philippines' (BSP) compound located at
181 Concepcion Street, Malate, Manila for a fee of ₱300.00 per month for each unit. On May 26, 1995 at 8 o'clock
in the evening, all these vehicles were parked inside the BSP compound. The following morning, however, one of
the vehicles with Plate No. DCG 392 was missing and was never recovered.4 According to the security guards
Cesario Peña (Peña) and Vicente Gaddi (Gaddi) of AIB Security Agency, Inc. (AIB) with whom BSP had
contracted5 for its security and protection, a male person who looked familiar to them took the subject vehicle
out of the compound.
On November 20, 1996, Sps. Mamaril filed a complaint6 for damages before the Regional Trial Court (RTC) of
Manila, Branch 39, against BSP, AIB, Peña and Gaddi. In support thereof, Sps. Mamaril averred that the loss of the
subject vehicle was due to the gross negligence of the above-named security guards on-duty who allowed the
subject vehicle to be driven out by a stranger despite their agreement that only authorized drivers duly endorsed
by the owners could do so. Peña and Gaddi even admitted their negligence during the ensuing investigation.
Notwithstanding, BSP and AIB did not heed Sps. Mamaril's demands for a conference to settle the matter. They
therefore prayed that Peña and Gaddi, together with AIB and BSP, be held liable for: (a) the value of the subject
vehicle and its accessories in the aggregate amount of ₱300,000.00; (b) ₱275.00 representing daily loss of
income/boundary reckoned from the day the vehicle was lost; (c) exemplary damages; (d) moral damages; (e)
attorney's fees; and (f) cost of suit.
In its Answer,7 BSP denied any liability contending that not only did Sps. Mamaril directly deal with AIB with respect
to the manner by which the parked vehicles would be handled, but the parking ticket8 itself expressly stated that
the "Management shall not be responsible for loss of vehicle or any of its accessories or article left therein." It also
claimed that Sps. Mamaril erroneously relied on the Guard Service Contract. Apart from not being parties thereto,
its provisions cover only the protection of BSP's properties, its officers, and employees.
In addition to the foregoing defenses, AIB alleged that it has observed due diligence in the selection, training and
supervision of its security guards while Peña and Gaddi claimed that the person who drove out the lost vehicle
from the BSP compound represented himself as the owners' authorized driver and had with him a key to the
subject vehicle. Thus, they contended that Sps. Mamaril have no cause of action against them.
The RTC Ruling
After due proceedings, the RTC rendered a Decision9 dated November 28, 2001 in favor of Sps. Mamaril. The
dispositive portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered ordering the defendants Boy Scout of the Philippines and AIB Security
Agency, with security guards Cesario Pena and Vicente Gaddi: -
1. To pay the plaintiffs jointly and severally the cost of the vehicle which is ₱250,000.00 plus accessories
of ₱50,000.00;
2. To pay jointly and severally to the plaintiffs the daily loss of the income/boundary of the said jeepney
to be reckoned fromits loss up to the final adjudication of the case, which is ₱275.00 a day;
3. To pay jointly and severally to the plaintiffs moral damages in the amount of ₱50,000.00;
4. To pay jointly and severally to the plaintiffs exemplary damages in the amount of ₱50,000.00;
5. To pay jointly and severally the attorney's fees of ₱50,000.00 and appearances in court the amount
of ₱1,500.00 per appearance; and
6. To pay cost.
SO ORDERED.10
The RTC found that the act of Peña and Gaddi in allowing the entry of an unidentified person and letting him drive
out the subject vehicle in violation of their internal agreement with Sps. Mamaril constituted gross negligence,
rendering AIB and its security guards liable for the former's loss. BSP was also adjudged liable because the Guard
Service Contract it entered into with AIB offered protection to all properties inside the BSP premises, which
necessarily included Sps. Mamaril's vehicles. Moreover, the said contract stipulated AIB's obligation to indemnify
BSP for all losses or damages that may be caused by any act or negligence of its security guards. Accordingly, the
BSP, AIB, and security guards Peña and Gaddi were held jointly and severally liable for the loss suffered by Sps.
Mamaril.
On June 11, 2002, the RTC modified its decision reducing the cost of the stolen vehicle from ₱250,000.00 to
₱200,000.00.11
Only BSP appealed the foregoing disquisition before the CA.
The CA Ruling
In its assailed Decision,12 the CA affirmed the finding of negligence on the part of security guards Peña and Gaddi. In this case, it is undisputed that the proximate cause of the loss of Sps. Mamaril's vehicle was the negligent act of
However, it absolved BSP from any liability, holding that the Guard Service Contract is purely between BSP and security guards Peña and Gaddi in allowing an unidentified person to drive out the subject vehicle. Proximate
AIB and that there was nothing therein that would indicate any obligation and/or liability on the part of BSP in cause has been defined as that cause, which, in natural and continuous sequence, unbroken by any efficient
favor of third persons, such as Sps. Mamaril. Nor was there evidence sufficient to establish that BSP was negligent. intervening cause, produces the injury or loss, and without which the result would not have occurred.15

It further ruled that the agreement between Sps. Mamaril and BSP was substantially a contract of lease whereby Moreover, Peña and Gaddi failed to refute Sps. Mamaril's contention16 that they readily admitted being at fault
the former paid parking fees to the latter for the lease of parking slots. As such, the lessor, BSP, was not an insurer during the investigation that ensued.
nor bound to take care and/or protect the lessees' vehicles.
On the other hand, the records are bereft of any finding of negligence on the part of BSP. Hence, no reversible
On the matter of damages, the CA deleted the award of ₱50,000.00 representing the value of the accessories error was committed by the CA in absolving it from any liability for the loss of the subject vehicle based on fault
inside the lost vehicle and the ₱275.00 a day for loss of income in the absence of proof to support them. It also or negligence.
deleted the award of moral and exemplary damages and attorney's fees for lack of factual and legal bases.
Neither will the vicarious liability of an employer under Article 218017 of the Civil Code apply in this case. It is
Sps. Mamaril's motion for reconsideration thereof was denied in the August 16, 2007 Resolution.13 uncontested that Peña and Gaddi were assigned as security guards by AIB to BSP pursuant to the Guard Service
Contract. Clearly, therefore, no employer-employee relationship existed between BSP and the security guards
assigned in its premises. Consequently, the latter's negligence cannot be imputed against BSP but should be
Issues Before the Court
attributed to AIB, the true employer of Peña and Gaddi.18
Hence, the instant petition based on the following assignment of errors, to wit:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ABSOLVING RESPONDENT BOY SCOUT OF In the case of Soliman, Jr. v. Tuazon,19 the Court enunciated thus:
THE PHILIPPINES FROM ANY LIABILITY.
II.
It is settled that where the security agency, as here, recruits, hires and assigns the work of its watchmen or security
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS MISTAKE WHEN IT RULED THAT THE
guards, the agency is the employer of such guards and watchmen. Liability for illegal or harmful acts committed
GUARD SERVICE CONTRACT IS PURELY BETWEEN BOY SCOUT OF THE
by the security guards attaches to the employer agency, and not to the clients or customers of such agency. As a
PHILIPPINES AND AIB SECURITY AGENCY, INC., AND IN HOLDING THAT THERE IS ABSOLUTELY NOTHING
general rule, a client or customer of a security agency has no hand in selecting who among the pool of security
IN THE SAID CONTRACT THAT WOULD INDICATE ANY OBLIGATION AND/OR LIABILITY ON THE PART OF
guards or watchmen employed by the agency shall be assigned to it; the duty to observe the diligence of a good
THE PARTIES THEREIN IN FAVOR OF THIRD PERSONS, SUCH AS PETITIONERS HEREIN.
father of a family in the selection of the guards cannot, in the ordinary course of events, be demanded from the
III.
client whose premises or property are protected by the security guards. The fact that a client company may give
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN THE INTERPRETATION OF LAW
instructions or directions to the security guards assigned to it, does not, by itself, render the client responsible as
WHEN IT CONSIDERED THE AGREEMENT BETWEEN BOY SCOUT OF THE PHILIPPINES AND PETITIONERS
an employer of the security guards concerned and liable for their wrongful acts or omissions. Those instructions
A CONTRACT OF LEASE, WHEREBY THE BOY SCOUT IS NOT DUTY BOUND TO PROTECT OR TAKE CARE
or directions are ordinarily no more than requests commonly envisaged in the contract for services entered into
OF PETITIONERS' VEHICLES.
with the security agency.20
IV.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT PETITIONERS ARE NOT
ENTITLED TO DAMAGES AND ATTORNEY'S FEES.14 Nor can it be said that a principal-agent relationship existed between BSP and the security guards Peña and Gaddi
as to make the former liable for the latter's complained act. Article 1868 of the Civil Code states that "by the
contract of agency, a person binds himself to render some service or to do something in representation or on
In fine, Sps. Mamaril maintain that: (1) BSP should be held liable for the loss of their vehicle based on the Guard
behalf of another, with the consent or authority of the latter." The basis for agency therefore is
Service Contract and the parking ticket it issued; and (2) the CA erred in deleting the RTC awards of damages and
representation,21 which element is absent in the instant case. Records show that BSP merely hired the services of
attorney's fees.
AIB, which, in turn, assigned security guards, solely for the protection of its properties and premises. Nowhere can
it be inferred in the Guard Service Contract that AIB was appointed as an agent of BSP. Instead, what the parties
The Court's Ruling intended was a pure principal-client relationship whereby for a consideration, AIB rendered its security services
to BSP.
The petition lacks merit.
Notwithstanding, however, Sps. Mamaril insist that BSP should be held liable for their loss on the basis of the
Guard Service Contract that the latter entered into with AIB and their parking agreement with BSP.
Article 20 of the Civil Code provides that every person, who, contrary to law, willfully or negligently causes damage
to another, shall indemnify the latter for the same. Similarly, Article 2176 of the Civil Code states:
Such contention cannot be sustained.
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the Article 1311 of the Civil Code states:
parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights cause on the use of the thing leased; but the lessee shall have a direct action against the intruder." Here, BSP was
and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of not remiss in its obligation to provide Sps. Mamaril a suitable parking space for their jeepneys as it even hired
law. The heir is not liable beyond the value of the property he received from the decedent. security guards to secure the premises; hence, it should not be held liable for the loss suffered by Sps. Mamaril.

If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he It bears to reiterate that the subject loss was caused by the negligence of the security guards in allowing a stranger
communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person to drive out plaintiffs-appellants' vehicle despite the latter's instructions that only their authorized drivers may do
is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person. so. Moreover, the agreement with respect to the ingress and egress of Sps. Mamaril's vehicles were coordinated
only with AIB and its security guards,29 without the knowledge and consent of BSP. Accordingly, the mishandling
of the parked vehicles that resulted in herein complained loss should be recovered only from the tort feasors
Thus, in order that a third person benefited by the second paragraph of Article 1311, referred to as a stipulation
(Peña and Gaddi) and their employer, AIB; and not against the lessor, BSP.30
pour autrui, may demand its fulfillment, the following requisites must concur: (1) There is a stipulation in favor of
a third person; (2) The stipulation is a part, not the whole, of the contract; (3) The contracting parties clearly and
deliberately conferred a favor to the third person - the favor is not merely incidental; (4) The favor is unconditional Anent Sps. Mamaril's claim that the exculpatory clause: "Management shall not be responsible for loss of vehicle
and uncompensated; (5) The third person communicated his or her acceptance of the favor before its revocation; or any of its accessories or article left therein"31 contained in the BSP issued parking ticket was void for being a
and (6) The contracting parties do not represent, or are not authorized, by the third party.22 However, none of the contract of adhesion and against public policy, suffice it to state that contracts of adhesion are not void per se. It
foregoing elements obtains in this case. is binding as any other ordinary contract and a party who enters into it is free to reject the stipulations in its
entirety. If the terms thereof are accepted without objection, as in this case, where plaintiffs-appellants have been
leasing BSP's parking space for more or less 20 years,32 then the contract serves as the law between
It is undisputed that Sps. Mamaril are not parties to the Guard Service Contract.1âwphi1 Neither did the subject
them.33 Besides, the parking fee of ₱300.00 per month or ₱10.00 a day for each unit is too minimal an amount to
agreement contain any stipulation pour autrui. And even if there was, Sps. Mamaril did not convey any acceptance
even create an inference that BSP undertook to be an insurer of the safety of plaintiffs-appellants' vehicles.
thereof. Thus, under the principle of relativity of contracts, they cannot validly claim any rights or favor under the
said agreement.23 As correctly found by the CA:
On the matter of damages, the Court noted that while Sonia P. Mamaril testified that the subject vehicle had
accessories worth around !J50,000.00, she failed to present any receipt to substantiate her claim. 34 Neither did
First, the Guard Service Contract between defendant-appellant BSP and defendant AIB Security Agency is purely
she submit any record or journal that would have established the purported ₱275.0035 daily earnings of their
between the parties therein. It may be observed that although the whereas clause of the said agreement provides
jeepney. It is axiomatic that actual damages must be proved with reasonable degree of certainty and a party is
that defendant-appellant desires security and protection for its compound and all properties therein, as well as
entitled only to such compensation for the pecuniary loss that was duly proven. Thus, absent any competent proof
for its officers and employees, while inside the premises, the same should be correlated with paragraph 3(a)
of the amount of damages sustained, the CA properly deleted the said awards.36
thereof which provides that the security agency shall indemnify defendant-appellant for all losses and damages
suffered by it attributable to any act or negligence of the former's guards.
Similarly, the awards of moral and exemplary damages and attorney's fees were properly disallowed by the CA for
lack of factual and legal bases. While the RTC granted these awards in the dispositive portion of its November 28,
Otherwise stated, defendant-appellant sought the services of defendant AIB Security Agency for the purpose of
2001 decision, it failed to provide sufficient justification therefor.37
the security and protection of its properties, as well as that of its officers and employees, so much so that in case
of loss of [sic] damage suffered by it as a result of any act or negligence of the guards, the security agency would
then be held responsible therefor. There is absolutely nothing in the said contract that would indicate any WHEREFORE premises considered, the instant petition is DENIED. The May 31, 2007 Decision and August 16, 2007
obligation and/or liability on the part of the parties therein in favor of third persons such as herein plaintiffs- Resolution of the Court of Appeals in CA-G.R. CV No. 75978 are AFFIRMFED.
appellees.24
SO ORDERED
Moreover, the Court concurs with the finding of the CA that the contract between the parties herein was one of
lease25 as defined under Article 164326 of the Civil Code. It has been held that the act of parking a vehicle in a
garage, upon payment of a fixed amount, is a lease.27 Even in a majority of American cases, it has been ruled that
where a customer simply pays a fee, parks his car in any available space in the lot, locks the car and takes the key
with him, the possession and control of the car, necessary elements in bailment, do not pass to the parking lot
operator, hence, the contractual relationship between the parties is one of lease.28

In the instant case, the owners parked their six (6) passenger jeepneys inside the BSP compound for a monthly fee G.R. No. 177056 September 18, 2009
of ₱300.00 for each unit and took the keys home with them. Hence, a lessor-lessee relationship indubitably existed THE OFFICE OF THE SOLICITOR GENERAL, Petitioner,
between them and BSP. On this score, Article 1654 of the Civil Code provides that "the lessor (BSP) is obliged: (1) vs.
to deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended; AYALA LAND INCORPORATED, ROBINSON’S LAND CORPORATION, SHANGRI-LA PLAZA CORPORATION and SM
(2) to make on the same during the lease all the necessary repairs in order to keep it suitable for the use to which PRIME HOLDINGS, INC., Respondents.
it has been devoted, unless there is a stipulation to the contrary; and (3) to maintain the lessee in the peaceful Facts:
and adequate enjoyment of the lease for the entire duration of the contract." In relation thereto, Article 1664 of This is a Petition for Review on Certiorari, under Rule 45 of the Revised Rules of Court, filed by petitioner seeking
the same Code states that "the lessor is not obliged to answer for a mere act of trespass which a third person may the reversal and setting aside of the decision of CA which affirmed the decision of RTC, which denied the Motion
for Reconsideration of OSG. The RTC adjudged that respondents Ayala Land Incorporated (Ayala Land), Robinsons
Land Corporation (Robinsons), Shangri-la Plaza Corporation (Shangri-la), and SM Prime Holdings, Inc. (SM Prime)
could not be obliged to provide free parking spaces in their malls to their patrons and the general public.
The Senate Committee on Trade and Commerce found that the collection of parking fees by shopping malls is
contrary to National Building Code and figuratively speaking, the Code has “expropriated” the land for parking.
Also, Committee stated that the collection of parking fees would be against Article II of RA 9734 (Consumer Act of
the Philippines) as to the State’s policy of protecting the interest of consumers. Moreover, Section 201 of the
National Building Code gives the responsibility for the administration and enforcement of the provisions of the
Code, including the imposition of penalties for administrative violations thereof to the Secretary of Public Works.
This is not being strictly followed as the LGUs are tasked to discharge the regulatory powers of DPWH instead of
DPWH instead.
As such, Senate Committee recommended that: 1) Office of Solicitor General should institute the action to enjoin
the collction of parking fees and enforce the sanctions for violation of National Building Code; 2) DTI pursuant to
RA 7394 should enforce the provisions of Code relative to parking; and 3) Congress should amend and update the
National Building Code to prohibit the collection of parking fees and its waiver of liability.
Respondent SM Prime assailed the recommendation of the Committee and filed a Petition for Declaratory Relief
under Rule 63 of the Revised Rules of Court against DPWH and local building officials, contending that: 1) Rule XIX
of Implementing Rules and Regulations of National Building Code is unconstitutional and void; 2) respondent has
the legal right to lease parking spaces; and 3) National Building Code IRR is ineffective as it was not published for
3 consecutive weeks in newspaper of general circulation as mandated by Section 211 of PD 1096.
OSG then filed a Petition for Declaratory Relief and Injunction (with Prayer for Temporary Restraining Order and
Writ of Preliminary Injunction) to the RTC against respondents, prohibiting them from collecting parking fees and
contending that their practice of charging parking fees is violative of National Building Code.
The RTC held that: 1) OSG has the capacity to institute the proceeding it being a controversy of public welfare; 2)
a petition for declaratory relief is proper since all the requisites are present; 3) the Building Code with its IRR does
not necessarily impose that parking spaces shall be free of charge and providing parking spaces for free can be
considered as unlawful taking of property right without just compensation; and 4) there was no sufficient evidence
to justify any award for damages. They deemed that the respondents are not obligated to provide parking spaces
free of charge.
OSG appealed the decision to CA, saying that RTC erred in holding that the National Building Code did not intend
the parking spaces to be free of charge. On the otherhand, respondent SM filed a separate appeal to the CA,
contending that: 1) RTC erred in failing to declare Rule XIX of IRR as unconstitutional; 2) RTC erred in failing to
declare IRR ineffective for not having been published as required by law; 3) RTC erred in dismissing the OSG’s
petition for failure to exhaust administrative remedies; and 4) RTC erred in failing to declare that OSG has no legal
standing as it is not a real party-in-interest.
CA denied the appeals of both petitioners and respondents on the following grounds: 1) OSG did not fail to exhaust
administrative remedies and that an administrative review is not a condition precedent to judicial relief where the
question in dispute is purely a legal one and nothing of an administrative nature is to be or can be done; 2) the
validity of National Building Code IRR cannot be proceeded as it was not discussed in RTC and the controversy
could be settled on other grounds without touching the issue of validity since the courts should refrain from
passing upon the constitutionality of a law; and 3) Section 803 of National Building Code and Rule XIX of IRR are
clear that they are only intended to control the occupancy of areas and structures, and in the absence of provision
of law, respondents could not be obliged to provide parking spaces free of charge.
As such, OSG presented itself to SC for the instant Petition for Review.
Issues:
1. Whether the CA erred in affirming the ruling of RTC that respondents are not obliged to provide free parking
spaces to their customers or the public.
2. Whether the petition of OSG for prohibiting the collection of parking fees is a valid exercise of the police power
of State.
Held:
1. No. The CA was correct in affirming the ruling of RTC, and the respondents are not obliged to provide free
parking spaces. SC found no merit in the OSG’s petition:
Sec 803 of National Building Code.
Percentage of Site Occupancy states that maximum site occupancy shall be governed by the use, type of
construction, and height of the building and the use, area, nature, and location of the site; and subject to the
provisions of the local zoning requirements and in accordance with the rules and regulations promulgated by the
Secretary.
RULE XIX – PARKING AND LOADING SPACE REQUIREMENTS
Pursuant to Section 803 of the National Building Code (PD 1096) providing for maximum site occupancy, the
following provisions on parking and loading space requirements shall be observed:
1. The parking space ratings listed below are minimum off-street requirements for specific uses/occupancies for
buildings/structures:
1.1 The size of an average automobile parking slot shall be computed as 2.4 meters by 5.00 meters for
perpendicular or diagonal parking, 2.00 meters by 6.00 meters for parallel parking. A truck or bus parking/loading
slot shall be computed at a minimum of 3.60 meters by 12.00 meters. The parking slot shall be drawn to scale and
the total number of which shall be indicated on the plans and specified whether or not parking accommodations,
are attendant-managed. (See Section 2 for computation of parking requirements).
x x x x
1.7 Neighborhood shopping center – 1 slot/100 sq. m. of shopping floor area
SECTION 102. Declaration of Policy
It is hereby declared to be the policy of the State to safeguard life, health, property, and public welfare, consistent
with the principles of sound environmental management and control; and to this end, make it the purpose of this
Code to provide for all buildings and structures, a framework of minimum standards and requirements to regulate
and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance.
The requirement of free-of-charge parking, the OSG argues, greatly contributes to the aim of safeguarding “life,
health, property, and public welfare, consistent with the principles of sound environmental management and
control.” Adequate parking spaces would contribute greatly to alleviating traffic congestion when complemented
by quick and easy access thereto because of free-charge parking. Moreover, the power to regulate and control
the use, occupancy, and maintenance of buildings and structures carries with it the power to impose fees and,
conversely, to control — partially or, as in this case, absolutely — the imposition of such fees.
The explicit directive of the above is that respondents, as operators/lessors of neighborhood shopping centers,
should provide parking and loading spaces with the minimum ratio of one slot per 100 square meters of shopping
floor area. There is nothing therein pertaining to the collection (or non-collection) of parking fees by respondents.
In fact, the term “parking fees” cannot even be found at all in the entire National Building Code and its IRR. One
rule of statutory construction is that if a statute is clear and unequivocal, it must be given its literal meaning and
applied without any attempt at interpretation. Since Section 803 of the National Building Code and Rule XIX of its
IRR do not mention parking fees, then simply, said provisions do not regulate the collection of the same
The OSG cannot rely on Section 102 of the National Building Code to expand the coverage of Section 803 of the
same Code and Rule XIX of the IRR, so as to include the regulation of parking fees. The OSG limits its citation to
the first part of Section 102 of the National Building Code declaring the policy of the State “to safeguard life,
health, property, and public welfare, consistent with the principles of sound environmental management and
control”; but totally ignores the second part of said provision, which reads, “and to this end, make it the purpose
of this Code to provide for all buildings and structures, a framework of minimum standards and requirements to
regulate and control their location, site, design, quality of materials, construction, use, occupancy, and
maintenance.” While the first part of Section 102 of the National Building Code lays down the State policy, it is the
second part thereof that explains how said policy shall be carried out in the Code. Section 102 of the National
Building Code is not an all-encompassing grant of regulatory power to the DPWH Secretary and local building
officials in the name of life, health, property, and public welfare. On the contrary, it limits the regulatory power of
said officials to ensuring that the minimum standards and requirements for all buildings and structures, as set
forth in the National Building Code, are complied with.
Consequently, the OSG cannot claim that in addition to fixing the minimum requirements for parking spaces for
buildings, Rule XIX of the IRR also mandates that such parking spaces be provided by building owners free of
charge. If Rule XIX is not covered by the enabling law, then it cannot be added to or included in the implementing
rules. The rule-making power of administrative agencies must be confined to details for regulating the mode or
proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand
the statutory requirements or to embrace matters not covered by the statute. Administrative regulations must
always be in harmony with the provisions of the law because any resulting discrepancy between the two will
always be resolved in favor of the basic law.
2. No. The petition of OSG to prohibit collection of parking fees is not a valid exercise of the police power of State.
It is not sufficient for the OSG to claim that “the power to regulate and control the use, occupancy, and
maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control,
partially or, as in this case, absolutely, the imposition of such fees.” Firstly, the fees within the power of regulatory
agencies to impose are regulatory fees. It has been settled law in this jurisdiction that this broad and all-
compassing governmental competence to restrict rights of liberty and property carries with it the undeniable
power to collect a regulatory fee. It looks to the enactment of specific measures that govern the relations not only
as between individuals but also as between private parties and the political society. True, if the regulatory agencies
have the power to impose regulatory fees, then conversely, they also have the power to remove the same. Even
so, it is worthy to note that the present case does not involve the imposition by the DPWH Secretary and local
building officials of regulatory fees upon respondents; but the collection by respondents of parking fees from
persons who use the mall parking facilities. Secondly, assuming arguendo that the DPWH Secretary and local
building officials do have regulatory powers over the collection of parking fees for the use of privately owned
parking facilities, they cannot allow or prohibit such collection arbitrarily or whimsically. Whether allowing or
prohibiting the collection of such parking fees, the action of the DPWH Secretary and local building officials must
pass the test of classic reasonableness and propriety of the measures or means in the promotion of the ends
sought to be accomplished.
purpose of protecting peace and order and of promoting the general welfare; for instance, the confiscation of an
illegally possessed article, such as opium and firearms.
When there is a taking or confiscation of private property for public use, the State is no longer exercising police
power, but another of its inherent powers, namely, eminent domain. Eminent domain enables the State to forcibly
acquire private lands intended for public use upon payment of just compensation to the owner.
Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession
of, the expropriated property; but no cogent reason appears why the said power may not be availed of only to
impose a burden upon the owner of condemned property, without loss of title and possession. It is a settled rule
that neither acquisition of title nor total destruction of value is essential to taking. It is usually in cases where title
remains with the private owner that inquiry should be made to determine whether the impairment of a property
is merely regulated or amounts to a compensable taking. A regulation that deprives any person of the profitable
use of his property constitutes a taking and entitles him to compensation, unless the invasion of rights is so slight
as to permit the regulation to be justified under the police power. Similarly, a police regulation that unreasonably
restricts the right to use business property for business purposes amounts to a taking of private property, and the
owner may recover therefor.
Although in the present case, title to and/or possession of the parking facilities remain/s with respondents, the
prohibition against their collection of parking fees from the public, for the use of said facilities, is already
tantamount to a taking or confiscation of their properties. The State is not only requiring that respondents devote
a portion of the latter’s properties for use as parking spaces, but is also mandating that they give the public access
to said parking spaces for free. Such is already an excessive intrusion into the property rights of respondents. Not
only are they being deprived of the right to use a portion of their properties as they wish, they are further
prohibited from profiting from its use or even just recovering therefrom the expenses for the maintenance and
operation of the required parking facilities.
In conclusion, the total prohibition against the collection by respondents of parking fees from persons who use
the mall parking facilities has no basis in the National Building Code or its IRR. The State also cannot impose the
same prohibition by generally invoking police power, since said prohibition amounts to a taking of respondents’
property without payment of just compensation.
WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED. The Decision dated 25 January 2007
and Resolution dated 14 March 2007 of the Court of Appeals in CA-G.R. CV No. 76298, affirming in toto the Joint
Decision dated 29 May 2002 of the Regional Trial Court of Makati City, Branch 138, in Civil Cases No. 00-1208 and
No. 00-1210 are hereby AFFIRMED. No cost

Without using the term outright, the OSG is actually invoking police power to justify the regulation by the State,
through the DPWH Secretary and local building officials, of privately owned parking facilities, including the
collection by the owners/operators of such facilities of parking fees from the public for the use thereof. The Court
finds, however, that in totally prohibiting respondents from collecting parking fees, the State would be acting
beyond the bounds of police power.

Police power is the power of promoting the public welfare by restraining and regulating the use of liberty and
property. It is usually exerted in order to merely regulate the use and enjoyment of the property of the owner.
The power to regulate, however, does not include the power to prohibit. A fortiori, the power to regulate does
not include the power to confiscate. Police power does not involve the taking or confiscation of property, with the
exception of a few cases where there is a necessity to confiscate private property in order to destroy it for the