Triple-V Food Services, Inc. v.
Filipino Merchants Whether or not petitioner should be held liable for
Insurance Company, Inc., G.R. No.160544
Facts:
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. 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. The RTC issued its judgment
in favor of the plaintiff (FMICI) and against the
defendant Triple V (herein petitioner). On appeal,
petitioner contended 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. The Court of Appeals
dismissed petitioner's appeal and affirmed the
appealed decision of the trial court.
Issue:
the loss of De Asis' car.
Held:
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 contract of
deposit, a person receives an object belonging to
another with the obligation of safely keeping it and
returning the same. alaw 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.
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.
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.
United States v. Jose M. Igpuara, G

CA Agro-Industrial Development Corporation vs CA
GR No. 90027. March 3, 1993
Facts:
CA Agro (through its President, Aguirre) and
spouses Pugao entered into an agreement whereby
the former purchased two parcels of land for P350,
525 with a P75, 725 down payment while the
balance was covered by three (3) postdated checks.
Among the terms embodied in a Memorandum of
True and Actual Agreement of Sale of Land were
that titles to the lots shall be transferred to the
petitioner upon full payment of the purchase price
and that the owner’s copies of the certificates of
titles thereto shall be deposited in a safety deposit
box of any bank. The same could be withdrawn only
upon the joint signatures of a representative of the
petitioner upon full payment of the purchase price.
They then rented Safety Deposit box of private
respondent Security Bank and Trust Company
(SBTC). For this purpose, both signed a contract of
lease which contains the following conditions:13.
The bank is not a depositary of the contents of the
safe and it has neither the possession nor control of
the same.14. The bank has no interest whatsoever
in said contents, except herein expressly provided,
and it assumes absolutely no liability in connection
therewith.
control of the safety deposit box was not given to
the joint renters
–
the petitioner and Pugaos.
American Jurisprudence: The prevailing rule is that
the relation between a bank renting out safe-
deposit boxes and its customer with respect to the
contents of the box is that of a bail or bailee, the
bailment being for hire and mutual benefit.
Our provisions on safety deposit boxes are
governed by Section 72 (a) of the General Banking
Act, and this primary function is still found within
the parameters of a contract of deposit like the
receiving in custody of funds, documents and other
valuable objects for safekeeping. The renting out of
the safety deposit boxes is not independent from,
but related to or in conjunction with, this principal
function. Thus, depositary’s liability is governed by
our civil code rules on obligation and contracts, and
thus the SBTC would be liable if, in performing its
obligation, it is found guilty of fraud, negligence,
delay or contravention of the tenor of the
agreement.

After the execution of the contract, two (2) renter’s

key were given to Aguirre, and Pugaos. A key guard
remained with the bank. The safety deposit box has
two key holes and can be opened with the use of
both keys. Petitioner claims that the CTC were
placed inside the said box. Thereafter, a certain
Mrs. Ramos offered to buy from the petitioner the
two (2) lots at a price of P225 per sqm. Mrs. Ramose
demanded the execution of a deed of sale which
necessarily entailed the production of the CTC.
Aguirre and Pugaos then proceeded to the bank to
open the safety deposit box. However, when
opened in the presence of bank’s representative,
the box yielded no certificates. Because of the delay
in reconstitution of title, Mrs. Ramos withdrew her
earlier offer and as a consequence petitioner failed
to realize the expected profit of P280, 500. Hence,
the latter filed a complaint for damages.

RTC: Dismissed the complaint

CA: Affirmed

Issue: Whether or not the contractual relation

between a commercial bank and another party in
the contract of rent of a safety deposit box is one of
bailor and bailee.

Ruling: Yes. The contract in the case at bar is a

special kind of deposit. It cannot be characterized as
an ordinary contract of lease under Article 1643
because the full and absolute possession and

TOPIC: Deposit
G.R. No. 102970 May 13, 1993 LUZAN SIA,
petitioner, vs. COURT OF APPEALS and SECURITY
BANK and TRUST COMPANY, respondents.
DAVIDE, JR., J.:
FACTS: The petitioner instituted an action for
damages arising out of the destruction or loss of the
stamp collection of the plaintiff (petitioner herein)
contained in Safety Deposit Box No. 54 which had
been rented from the private respondent bank
pursuant to a contract denominated as a Lease
Agreement. The said safety deposit box leased by
the plaintiff was at the bottom or at the lowest level
of the safety deposit boxes of the defendant bank at
its aforesaid Binondo Branch. During the floods that
took place in 1985 and 1986, floodwater entered
into the defendant bank's premises, seeped into the
safety deposit box leased by the plaintiff and
caused, according to the plaintiff, damage to his
stamps collection. The defendant bank denied
liability for the damaged stamps collection of the
plaintiff on the basis of the "Rules and Regulations
Governing the Lease of Safe Deposit Boxes"
particularly paragraphs 9 and 13, which reads:
"9. The liability of the Bank by reason of the lease, is
limited to the exercise of the diligence to prevent
the opening of the safe by any person other than
the Renter, his authorized agent or legal
representative;
xxx xxx xxx
"13. The Bank is not a depository of the contents of
the safe and it has neither the possession nor the
control of the same. The Bank has no interest
whatsoever in said contents, except as herein
provided, and it assumes absolutely no liability in
connection therewith." The defendant bank also
contended that its contract with the plaintiff over
safety deposit box No. 54 was one of lease and not
of deposit and, therefore, governed by the lease
agreement which should be the applicable law; that
the destruction of the plaintiff's stamps collection
was due to a calamity beyond obligation on its part
to notify the plaintiff about the floodwaters that
inundated its premises at Binondo branch which
allegedly seeped into the safety deposit box leased
to the plaintiff.
RTC favored private respondent. On appeal, CA
favored the defendant bank and ruled that the
contract entered into by the parties regarding Safe
Deposit Box No. 54 was not a contract of deposit.
ISSUE:
WON the contract over Safety Deposit Box No. 54 is
one of lease and not of deposit.
HELD: It is a special kind of deposit. SBTC's theory
that the "Lease Agreement " covering Safe Deposit
Box No. 54 is just that — a contract of lease — and
not a contract of deposit, and that paragraphs 9 and
13 thereof, which expressly limit the bank's liability
as follows are valid and binding upon the parties is
NOT TENABLE. In accordance with the decision in
the case of CA Agro Industrial Development Corp.
vs. Court of Appeals, this Court explicitly rejected
the contention that a contract for the use of a
safety deposit box is a contract of lease, nor did we
fully subscribe to the view that it is a contract of
deposit to be strictly governed by the Civil Code
provision on deposit; it is a special kind of deposit
wherein Section 72 of the General Banking Act [R.A.
337, as amended] is held applicable in this case
which pertinently provides that in addition to the
operations specifically authorized elsewhere in this
Act, banking institutions other than building and
loan associations may receive in custody funds,
documents, and valuable objects, and rent safety
deposit boxes for the safeguarding of such effects.
Note that the primary function is still found within
the parameters of a contract of deposit, i.e., the
receiving in custody of funds, documents and other
valuable objects for safekeeping. The renting out of
the safety deposit boxes is not independent from,
but related to or in conjunction with this principal
function. Pursuant to Article 1306 of the Civil Code,
the parties to a contract of deposit may establish
such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not
contrary to law, morals, good customs, public order
or public policy. Accordingly, the depositary would
be liable if, in performing its obligation, it is found
guilty of fraud, negligence, delay or contravention
of the tenor of the agreement [Art. 1170, id.]. In the
absence of any stipulation prescribing the degree of
diligence required, that of a good father of a family
is to be observed [Art. 1173, id.]. Hence, any
stipulation exempting the depositary from any
liability arising from the loss of the thing deposited
on account of fraud, negligence or delay would be
void for being contrary to law and public policy.

YHT REALTY CORP vs. CA G.R. No. 126780, February
17, 2005
Fact:
Private Respondent was an Australian businessman-
philanthropist who stayed in a Suites owned by the
Petitioner. The Private Respondent rented a safety
deposit box with the said Suite. In Renting the box,
he was asked to sign a waiver “Undertaking For The
Use of Safety Deposit Box” which exonerating the
Hotel, its Management and Employees from liability
in case of loss of the item in the box. The
companion of the respondent Tan, while the latter
was sleeping with the assistance of the staff of the
Hotel, was allowed to open the depositary box of
Respondent. When the respondent opened the box,
he Notice in a number of occasion that the Money
he placed in the box was either missing or lacking.
When he confronted the Management of the hotel,
the latter advised that it was his companion Tan
who opened the box.
The respondent went to the RTC and filed a
complaint against the Petitioner. In the RTC, the
Petitioner contented that the waiver signed by the
Respondent exonerate them from liabilities. the RTC
found the Management of the Hotel negligent for
allowing a third person to open the box which the
Respondent rented from them. The RTC found the
Hotel and its staff liable for the actual and Moral
damages that the Respondent lost.
Petitioner went to CA to contest the decision.
However, the CA agreed with the decision of the
RTC and dismissed the petition. Hence, the
Petitioner elevated the issue to the SC.
Issue:
1. Whether the Petitioner Committed Gross
Negligence for the stolen property of the Private
Respondent?
2. Whether the “Undertaking For The Use of Safety
Deposit Box” executed by the Private Respondent
to exonerate the hotel prom liability is null and
void?
Held:
1. The evidence reveals that two keys are required
to open the safety deposit boxes of Tropicana. One
key is assigned to the guest while the other remains
in the possession of the management. If the guest
desires to open his safety deposit box, he must
request the management for the other key to open
the same. In other words, the guest alone cannot
open the safety deposit box without the assistance
of the management or its employees. With more
reason that access to the safety deposit box should
be denied if the one requesting for the opening of
the safety deposit box is a stranger. Thus, in case of
loss of any item deposited in the safety deposit box,
it is inevitable to conclude that the management
had at least a hand in the consummation of the
taking, unless the reason for the loss is force
majeure. Under Article 1170 of the New Civil Code,
those who, in the performance of their obligations,
are guilty of negligence, are liable for damages. As
to who shall bear the burden of paying damages,
Article 2180, paragraph (4) of the same Code
provides that the owners and managers of an
establishment or enterprise are likewise responsible
for damages caused by their employees in the
service of the branches in which the latter are
employed or on the occasion of their functions.
Also, this Court has ruled that if an employee is
found negligent, it is presumed that the employer
was negligent in selecting and/or supervising him
for it is hard for the victim to prove the negligence
of such employer. Thus, given the fact that the loss
of McLoughlin’s money was consummated through
the negligence of Tropicana’s employees in allowing
Tan to open the safety deposit box without the
guest’s consent, both the assisting employees and
YHT Realty Corporation itself, as owner and
operator of Tropicana, should be held solidarily
liable pursuant to Article 2193.
2. Yes, Art. 2003. The hotel-keeper cannot free
himself from responsibility by posting notices to the
effect that he is not liable for the articles brought by
the guest. Any stipulation between the hotel-keeper
and the guest whereby the responsibility of the
former as set forth in Articles 1998 to 2001 is
suppressed or diminished shall be void.Article 2003
was incorporated in the New Civil Code as an
expression of public policy precisely to apply to
situations such as that presented in this case. The
hotel business like the common carrier’s business is
imbued with public interest. Catering to the public,
hotelkeepers 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.Paragraphs (2) and (4) of the
“undertaking” manifestly contravene Article 2003 of
the New Civil Code for they allow Tropicana to be
released from liability arising from any loss in the
contents and/or use of the safety deposit box for
any cause whatsoever. Evidently, the undertaking
was intended to bar any claim against Tropicana for
any loss of the contents of the safety deposit box
whether or not negligence was incurred by
Tropicana or its employees. The New Civil Code is
explicit that the responsibility of the hotel-keeper
shall extend to loss of, or injury to, the personal
property of the guests even if caused by servants or
employees of the keepers of hotels or inns as well
as by strangers, except as it may proceed from any
force majeure. It is the loss through force majeure
that may spare the hotel-keeper from liability. In
the case at bar, there is no showing that the act of
the thief or robber was done with the use of arms
or through an irresistible force to qualify the same
as force majeure.
DURBAN APARTMENTS CORPORATION v. PIONEER
INSURANCE, GR No. 179419, 2011-01-12
Article 1962, in relation to Article 1998, of the Civil
Code defines a contract of deposit and a necessary
deposit made by persons in hotels or inns:
Art. 1962. A deposit is constituted from the moment
a person receives a thing belonging to another, with
the obligation of safely keeping it and returning the
same. If the safekeeping of the thing delivered is
not the principal purpose of the contract, there is
no... deposit but some other contract.

Facts: Art. 1998. The deposit of effects made by

Durban Apartments Corporation solely liable to
respondent Pioneer Insurance and Surety
Corporation for the loss of Jeffrey See's (See's)
vehicle.
on April 30, 2002, See arrived and checked in at the
City Garden Hotel in Makati corner Kalayaan
Avenues, Makati City before midnight, and its
parking attendant, defendant x x x Justimbaste got
the key to said Vitara from
See to park it[. O]n May 1, 2002, at about 1:00
o'clock in the morning, See was awakened in his
room by [a] telephone call from the Hotel Chief
Security Officer who informed him that his Vitara
was carnapped while it was parked unattended at
the parking area of Equitable
PCI Bank along Makati Avenue between the hours
of 12:00 [a.m.] and 1:00 [a.m.];
Art. 1998. The deposit of effects made by travelers
in hotels or inns shall also be regarded as necessary.
The keepers of hotels or inns shall be responsible
for them as depositaries, provided that notice was
given to them, or to their employees, of the effects
brought by the... guests and that, on the part of the
latter, they take the precautions which said hotel-
keepers or their substitutes advised relative to the
care and vigilance of their effects.
Plainly, from the facts found by the lower courts,
the insured See deposited his vehicle for
safekeeping with petitioner, through the latter's
employee, Justimbaste. In turn, Justimbaste issued
a claim stub to See. Thus, the contract of deposit
was perfected from See's delivery,... when he
handed over to Justimbaste the keys to his vehicle,
which Justimbaste received with the obligation of
safely keeping and returning it. Ultimately,
petitioner is liable for the loss of See's vehicle.

Vitara was lost due to the negligence of [petitioner]

Durban Apartments and [defendant] Justimbaste
because it was discovered during the investigation
that this was the second time that a similar incident
of carnapping happened in the valet parking service
of [petitioner] Durban

Apartments and no necessary precautions were

taken to prevent its repetition;... upon arrival at the
City Garden Hotel, See gave notice to the doorman
and parking attendant of the said hotel, x x x
Justimbaste, about his Vitara when he entrusted its
ignition key to the latter. x x x Justimbaste issued a
valet... parking customer claim stub to See, parked
the Vitara at the Equitable PCI Bank parking area,
and placed the ignition key inside a safety key box
while See proceeded to the hotel lobby to check in.
The Equitable PCI Bank parking area became an
annex of City Garden Hotel when the...
management of the said bank allowed the parking
of the vehicles of hotel guests thereat in the
evening after banking hours.

Issues:

Ultimately, whether petitioner is liable to

respondent for the loss of See's vehicle.

Ruling:

SULPICIO LINES v. NAPOLEON SESANTE, GR No.
172682, 2016-07-27
Facts:
On September 18, 1998, at around 12:55 p.m., the
M/V Princess of the Orient, a passenger vessel
owned and operated by the petitioner, sank near
Fortune Island in Batangas. Of the 388 recorded
passengers, 150 were lost.[3] Napoleon Sesante,
then a member of the Philippine National Police
(PNP) and a lawyer, was one of the passengers who
survived the sinking. He sued the petitioner for
breach of contract and damages.[4]
Sesante alleged in his complaint that the M/V
Princess of the Orient left the Port of Manila while
Metro Manila was experiencing stormy weather;
that at around 11:00 p.m., he had noticed the vessel
listing starboard, so he had gone to the uppermost
deck where he witnessed the strong winds and big
waves pounding the vessel; that at the same time,
he had seen how the passengers had been
panicking, crying for help and frantically scrambling
for life jackets in the absence of the vessel's officers
and crew; that sensing danger, he had called a
certain Vency Ceballos through his cellphone to
request him to inform the proper authorities of the
situation; that thereafter, big waves had rocked the
vessel, tossing him to the floor where he was
pinned by a long steel bar; that he had freed himself
only after another wave had hit the vessel;[5] that
he had managed to stay afloat after the vessel had
sunk, and had been carried by the waves to the
coastline of Cavite and Batangas until he had been
rescued; that he had suffered tremendous hunger,
thirst, pain, fear, shock, serious anxiety and mental
anguish; that he had sustained injuries,[6] and had
lost money, jewelry, important documents, police
uniforms and the .45 caliber pistol issued to him by
the PNP; and that because it had committed bad
faith in allowing the vessel to sail despite the storm
signal, the petitioner should pay him actual and
moral damages
In its defense, the petitioner insisted on the
seaworthiness of the M/V Princess of the Orient
due to its having been cleared to sail from the Port
of Manila by the proper authorities; that the sinking
had been due to force majeure; that it had not been
negligent; and that its officers and crew had also not
been negligent because they had made
preparations to abandon the vessel because they
had launched life rafts and had provided the
passengers assistance in that regard.
On October 12, 2001, the RTC rendered its
judgment in favor of the respondent,... The
petitioner sought reconsideration, but the RTC only
partly granted its motion by reducing the temperate
damages from P500,000.00 to P300,000.00
Dissatisfied, the petitioner appealed.[12] It was
pending the appeal in the CA when Sesante passed
away. He was substituted by his heirs.
On June 27, 2005, the CA promulgated its assailed
decision. It lowered the temperate damages to
P120,000.00, which approximated the cost of
Sesante's lost personal belongings; and held that
despite the seaworthiness of the vessel, the
petitioner remained civilly liable because its officers
and crew had been negligent in performing their
duties
Issues:
(1) Is the complaint for breach of contract and
damages a personal action that does not survive the
death of the plaintiff?; (2) Is the petitioner liable for
damages under Article 1759 of the Civil Code?; and
(3) Is there sufficient basis for awarding moral and
temperate damages?
Ruling:
The appeal lacks merit.
An action for breach of contract of carriage survives
the death of the plaintiff
Section 16, Rule 3 of the Rules of Court lays down
the proper procedure in the event of the death of a
litigant, viz.:Section 16. Death of party; duty of
counsel. - Whenever a party to a pending action
dies, and the claim is not thereby extinguished, it
shall be the duty of his counsel to inform the court
within thirty (30) days after such death of the fact
thereof, and to give the name and address of his
legal representative or representatives. Failure of
counsel to comply with his duty shall be a ground
for disciplinary action.The heirs of the deceased
may be allowed to be substituted for the deceased,
without requiring the appointment of an executor
or administrator and the court may appoint a
guardian ad litem for the minor heirs.
A contract of carriage generates a relation attended
with public duty, neglect or malfeasance of the
carrier's employees and gives ground for an action
for damages.[19] Sesante's claim against the
petitioner involved his personal injury caused by the
breach of the contract of carriage. Pursuant to the
aforecited rules, the complaint survived his death,
and could be continued by his heirs following the
rule on substitution.
The petitioner is liable for breach of contract of
carriage

The petitioner submits that an action for damages
based on breach of contract of carriage under
Article 1759 of the Civil Code should be read in
conjunction with Article 2201 of the same code;
that although Article 1759 only provides for a
presumption of negligence, it does not envision
automatic liability; and that it was not guilty of bad
faith considering that the sinking of M/V Princess of
the Orient had been due to a fortuitous event, an
exempting circumstance under Article 1174 of the
Civil Code.
Article 1759 of the Civil Code does not establish a
presumption of negligence because it explicitly
makes the common carrier liable in the event of
death or injury to passengers due to the negligence
or fault of the common carrier's employees. It
reads:Article 1759. Common carriers are liable for
the death or injuries to passengers through the
negligence or willful acts of the former's employees,
although such employees may have acted beyond
the scope of their authority or in violation of the
orders of the common carriers.This liability of the
common carriers does not cease upon proof that
they exercised all the diligence of a good father of a
family in the selection and supervision of their
employees.The liability of common carriers under
Article 1759 is demanded by the duty of
extraordinary diligence required of common carriers
in safely carrying their passengers.[
On the other hand, Article 1756 of the Civil Code
lays down the presumption of negligence against
the common carrier in the event of death or injury
of its passenger, viz.:Article 1756. In case of death
of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted
negligently, unless they prove that they observed
extraordinary diligence as prescribed in Articles
1733 and 1755.
Clearly, the trial court is not required to make an
express finding of the common carrier's fault or
negligence.[21] Even the mere proof of injury
relieves the passengers from establishing the fault
or negligence of the carrier or its employees.[22]
The presumption of negligence applies so long as
there is evidence showing that: (a) a contract exists
between the passenger and the common carrier;
and (b) the injury or death took place during the
existence of such contract.[23] In such event, the
burden shifts to the common carrier to prove its
observance of extraordinary diligence, and that an
unforeseen event or force majeure had caused the
injury.
Sesante sustained injuries due to the buffeting by
the waves and consequent sinking of M/V Princess
of the Orient where he was a passenger. To
exculpate itself from liability, the common carrier
vouched for the seaworthiness of M/V Princess of
the Orient, and referred to the BMI report to the
effect that the severe weather condition - a force
majeure - had brought about the sinking of the
vessel.
A common carrier may be relieved of any liability
arising from a fortuitous event pursuant to Article
1174[25] of the Civil Code. But while it may free a
common carrier from liability, the provision still
requires exclusion of human agency from the cause
of injury or loss.[26] Else stated, for a common
carrier to be absolved from liability in case of force
majeure, it is not enough that the accident was
caused by a fortuitous event. The common carrier
must still prove that it did not contribute to the
occurrence of the incident due to its own or its
employees' negligence.
The petitioner has attributed the sinking of the
vessel to the storm notwithstanding its position on
the seaworthiness of M/V Princess of the Orient.
Yet, the findings of the BMI directly contradicted
the petitioner's attribution,... The Captain's
erroneous maneuvers of the M/V Princess of the
Orient minutes before she sunk [sic] had caused the
accident. It should be noted that during the first
two hours when the ship left North Harbor, she was
navigating smoothly towards Limbones Point.
During the same period, the ship was only subjected
to the normal weather stress prevailing at the time.
She was then inside Manila Bar. The waves were
observed to be relatively small to endanger the
safety of the ship. It was only when the MV Princess
of the Orient had cleared Limbones Pt. while
navigating towards the direction of the Fortune
Island when this agonizing misfortune struck the
ship.
Initially, a list of three degrees was observed. The
listing of the ship to her portside had continuously
increased. It was at this point that the captain had
misjudged the situation. While the ship
continuously listed to her portside and was battered
by big waves, strong southwesterly winds, prudent
judgement [sic] would dictate that the Captain
should have considerably reduced the ship's speed.
He could have immediately ordered the Chief
Engineer to slacken down the speed. Meanwhile,
the winds and waves continuously hit the ship on
her starboard side. The waves were at least seven
to eight meters in height and the wind velocity was
a[t] 25 knots. The MV Princess of the Orient being a
close-type ship (seven decks, wide and high
superstructure) was vulnerable and exposed to the
howling winds and ravaging seas. Because of the
excessive movement, the solid and liquid cargo
below the decks must have shifted its weight to
port, which could have contributed to the tilted
position of the ship.
Even assuming the seaworthiness of the MA/
Princess of the Orient, the petitioner could not
escape liability considering that, as borne out by the
aforequoted findings of the BMI, the immediate and
proximate cause of the sinking of the vessel had
been the gross negligence of its captain in
maneuvering the vessel

The Court also notes that Metro Manila was

experiencing Storm Signal No. 1 during the time of
the sinking.[31] The BMI observed that a vessel like
the M/V Princess of the Orient, which had a volume
of 13.734 gross tons, should have been capable of
withstanding a Storm Signal No. 1 considering that
the responding fishing boats of less than 500 gross
tons had been able to weather through the same
waves and winds to go to the succor of the sinking
vessel and had actually rescued several of the
latter's distressed passengers

We agree with the petitioner that moral damages

may be recovered in an action upon breach of
contract of carriage only when: (a) death of a
passenger results, or (b) it is proved that the carrier
was guilty of fraud and bad faith, even if death does
not result.[33] However, moral damages may be
awarded if the contractual breach is found to be
wanton and deliberately injurious, or if the one
responsible acted fraudulently or with malice or bad
faith.

Principles:

In order to be considered a fortuitous event,

however, (1) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor
to comply with his obligation, must be independent
of human will; (2) it must be impossible to foresee
the event which constitute the caso fortuito, or if it
can be foreseen it must be impossible to avoid; (3)
the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in
any manner; and (4) the obligor must be free from
any participation in the aggravation of the injury
resulting to the creditor.

[T]he principle embodied in the act of God doctrine

strictly requires that the act must be occasioned
solely by the violence of nature. Human
intervention is to be excluded from creating or
entering into the cause of the mischief. When the
effect is found to be in part the result of the
participation of man, whether due to his active
intervention or neglect or failure to act, the whole
occurrence is then humanized and removed from
the rules applicable to the acts of God.[

Facts:
In the first week of November 1999, Christian
Harper came to Manila on a business trip as the
Business Development Manager for Asia of ALSTOM
Power Norway AS, an engineering firm with
worldwide operations. He checked in at the Shangri-
La Hotel
He... was due to check out on November 6, 1999. In
the early morning of that date, however, he was
murdered inside his hotel room by... unidentified
malefactors.
the crime was discovered
A routine verification call from the American
Express Card Company to cardholder Harper's
residence in Oslo, Norway... led to the discovery.
It appears that... a Caucasian male... entered the
Alexis Jewelry Store... expressed interest in
purchasing a Cartier lady's watch valued... at
P320,000.00 with the use of two Mastercard credit
cards and an American Express credit card issued in
the name of Harper. But the customer's difficulty in
answering the queries phoned in by a credit card
representative sufficiently aroused the suspicion of
saleslady... who asked for the customer's passport
upon suggestion of the credit card representative to
put the credit cards on hold. Probably sensing
trouble for himself, the customer hurriedly left the
store, and left the three credit cards and the
passport behind.
meanwhile, Harper's family in Norway... called him
at his hotel room to inform him about the attempt
to use his American Express card. Not getting any
response from the room, his family requested... the
Duty Manager of the Shangri-La Hotel, to check... on
Harper's room... went to Room... and were shocked
to discover Harper's lifeless body on the bed.
On August 30, 2002, respondents commenced this
suit in the RTC to recover various damages from
petitioner... alleging:
The murderer succeeded to... trespass into... hotel's
private rooms area and into the room of the said
deceased on account of the hotel's gross negligence
in providing the most basic security system of its
guests, the lack of which owing to the acts or
omissions of its employees was the... immediate
cause of the tragic death of said deceased.
Defendant has prided itself to be among the top
hotel chains in the East claiming to provide
excellent service, comfort and security for its guests
for which reason ABB Alstom executives and their
guests have invariably chosen this hotel to stay
RTC rendered judgmen... finding the defendant
hotel... liable for the death of Christian Harper
PhP 43,901,055.00 as and by way of actual and
compensatory damages;
PhP 739,075.00 representing the expenses of
transporting the remains of Harper to Oslo, Norway;
PhP 250,000.00 attorney's fees;
CA affirmed the judgment of the RTC with
modification... defendant... s ordered to pay
plaintiffs-appellees the amounts of P52,078,702.50,
as actual and... compensatory damages;
P25,000.00, as temperate damages; P250,000.00, as
attorney's fees; and to pay the costs of the suit.
Petitioner argues that respondents failed to prove
its negligence; that Harper's own negligence in
allowing the killers into his hotel room was the
proximate cause of his own death; and that hotels
were not insurers of the safety of their guests.
Issues:
WHETHER OR NOT THE APPELLEES WERE ABLE TO
PROVE WITH COMPETENT EVIDENCE THE
AFFIRMATIVE ALLEGATIONS IN THE COMPLAINT
THAT THERE WAS NEGLIGENCE ON THE PART OF
THE APPELLANT AND ITS SAID NEGLIGENCE WAS
THE PROXIMATE CAUSE OF THE DEATH OF MR.
CHRISTIAN HARPER.
WHETHER OR NOT THE PROXIMATE CAUSE OF THE
DEATH OF MR. CHRISTIAN HARPER WAS HIS OWN
NEGLIGENCE.
Ruling:
Petitioner was liable due to its own negligence
Article 2176 of the Civil Code,... states that
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 was no preexisting contractual
relation between the parties, is called quasi-delict
and is governed by the... provisions of this chapter.
negligence is want of care required by the
circumstances. It is a relative or comparative, not an
absolute, term and its application depends upon the
situation of the parties and the degree of care and
vigilance which the circumstances reasonably
require
In... determining whether or not there is negligence
on the part of the parties in a given situation,
jurisprudence has laid down the following test: Did
defendant, in doing the alleged negligent act, use
that reasonable care and caution which an
ordinarily prudent person would have... used in the
same situation? If not, the person is guilty of
negligence.
The test, as applied to the extant case, is whether or
not defendant-appellant, under the attendant...
circumstances, used that reasonable care and
caution which an ordinary reasonable person would
have used in the same situation.
security
Col. Rodrigo De Guzman who was then the Chief
Security Officer of defendant hotel for the year
He is... a retired police officer and had vast
experience in security jobs. He was likewise a
member of the elite Presidential Security Group.
He testified that upon taking over the job as the
chief of the security force of the hotel, he made an
assessment of the security situation... was not
satisfied with the security set-up and told the hotel
management of his desire to improve it.
On cross-examination, Col. De Guzman testified that
the security of the hotel was adequate at the time
the crime occurred because the hotel was not fully
booked.
his recommendation of one guard per floor is the
"ideal" set-up when the... hotel is fully-booked.
Col. De Guzman also testified that the reason why
the hotel management disapproved his
recommendation was that the... hotel was not
doing well
It was a business judgment call on the part of the
defendant.
Article 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 pre-existing contractual
relation between the parties, is called... quasi-delict.
Liability on the part of the defendant is based upon
the fact that he was in a better situation than the
injured person to foresee and prevent the
happening of the injurious occurrence.
There is no dispute that even prior to the untimely
demise of Mr. Harper, defendant was duly
forewarned of the security lapses in the hotel. Col.
De Guzman was particularly concerned with the
security of the private areas where the guest rooms
are. He wanted not just one roving... guard in every
three or four floors. He insisted there must be at
least one in each floor considering the length and
the shape of the corridors. The trained eyes of a
security officer wa... looking at that deadly scenario
resulting from that wide security breach as that...
which befell Christian Harper.
While defendant's theory may be true, it is more
likely, under the circumstances obtaining that the
malefactor/s gained entry into his room by simply
knocking at Harper's door and the latter opening it
probably thinking it was hotel personnel, without an
inkling that criminal/s... could be in the premises.
Clearly, defendant's inaction constitutes negligence
or want of the reasonable care demanded of it in
that particular situation.
there were prior incidents that occurred in the hotel
which should have forewarned the hotel
management of the security lapses of the hotel.
These "minor" incidents may be of little significance
to the hotel, yet relative to the instant case, it
speaks volume. This should have served as a caveat
that the hotel security has lapses.
Makati Shangri-La Hotel, to stress, is a five-star
hotel. The "reasonable care" that it must exercise
for the safety and comfort of its guests should be
commensurate with the grade and quality of the
accommodation it offers. If there is such a thing as
"five-star hotel... security", the guests at Makati
Shangri-La surely deserves just that!
When one registers (as) a guest of a hotel, he makes
the establishment the guardian of his life and his
personal belongings during his stay. It is a standard
procedure of the management of the hotel to
screen visitors who call on their guests at their
rooms. The murder of Harper... could have been
avoided had the security guards of the Shangri-La
Hotel in Makati dutifully observed this standard
procedure.
Court concurs entirely with the findings and
conclusions of the CA,... The hotel business is
imbued with public interest. Catering to the public,
hotelkeepers are bound to provide not only lodging
for their guests but also security to the persons and
belongings of their guests. The twin duty constitutes
the essence of the business.[43] Applying by
analogy Article 2000,[44] Article 2001[45] and
Article 2002[46] of the Civil Code (all of which
concerned the hotelkeepers' degree of care and
responsibility as to the personal... effects of their
guests), we hold that there is much greater reason
to apply the same if not greater degree of care and
responsibility when the lives and personal safety of
their guests are involved. Otherwise, the
hotelkeepers would simply stand idly by as
strangers have... unrestricted access to all the hotel
rooms on the pretense of being visitors of the
guests, without being held liable should anything
untoward· befall the unwary guests. That would be
absurd, something that no good law would ever
envision
Decision
WHEREFORE, the Court AFFIRMS the judgment of
the Court of Appeals; and ORDERS petitioner to pay
the costs of suit.
THE METROPOLITAN BANK AND TRUST COMPANY,
Petitioner, vs
ANA GRACE ROSALES AND YO YUK TO,
Respondents.
G.R. No. 183204 January 13, 2014
PONENTE: Del Castillo
FACTS:
Petitioner Metrobank is a domestic
banking corporation duly organized and existing
under the laws of the Philippines. Respondent
Rosales is the owner of a travel agency while Yo Yuk
To is her mother.
In 2000, respondents opened a Joint Peso
Account10 with petitioner’s Pritil-Tondo Branch.
In May 2002, respondent Rosales
accompanied her client Liu Chiu Fang, a Taiwanese
National applying for a retiree’s visa from the
Philippine Leisure and Retirement Authority (PLRA),
to petitioner’s branch in Escolta to open a savings
account. Since Liu Chiu Fang could speak only in
Mandarin, respondent Rosales acted as an
interpreter for her.
On March 3, 2003, respondents opened
with petitioner’s Pritil-Tondo Branch a Joint Dollar
Account with an initial deposit of US$14,000.00.
On July 31, 2003, petitioner issued a “Hold
Out” order against respondents’ accounts.
On September 3, 2003, petitioner, through
its Special Audit Department Head Antonio Ivan
Aguirre, filed before the Office of the Prosecutor of
Manila a criminal case for Estafa through False
Pretenses, Misrepresentation, Deceit, and Use of
Falsified Documents.
Respondent Rosales, however, denied
taking part in the fraudulent and unauthorized
withdrawal from the dollar account of Liu Chiu
Fang.
On December 15, 2003, the Office of the
City Prosecutor of Manila issued a Resolution
dismissing the criminal case for lack of probable
cause. On September 10, 2004, respondents filed
before the RTC of Manila a complaint for Breach of
Obligation and Contract with Damages.
ISSUE:
Whether Metrobank breached its contract
with respondents.
HELD:
YES. The Court held that Metrobank’s
reliance on the “Hold Out” clause in the Application
and Agreement for Deposit Account is misplaced.
Bank deposits, which are in the nature of a
simple loan or mutuum, must be paid upon demand
by the depositor.
The “Hold Out” clause applies only if there
is a valid and existing obligation arising from any of
the sources of obligation enumerated in Article
1157 of the Civil Code, to wit: law, contracts, quasi-
contracts, delict, and quasi-delict. In this case,
petitioner failed to show that respondents have an
obligation to it under any law, contract, quasi-
contract, delict, or quasi-delict. And although a
criminal case was filed by petitioner against
respondent Rosales, this is not enough reason for
petitioner to issue a “Hold Out” order as the case is
still pending and no final judgment of conviction has
been rendered against respondent Rosales.
In fact, it is significant to note that at the
time petitioner issued the “Hold Out” order, the
criminal complaint had not yet been filed. Thus,
considering that respondent Rosales is not liable
under any of the five sources of obligation, there
was no legal basis for petitioner to issue the “Hold
Out” order. Accordingly, we agree with the findings
of the RTC and the CA that the “Hold Out” clause
does not apply in the instant case.
In view of the foregoing, the Court found
that petitioner is guilty of breach of contract when it
unjustifiably refused to release respondents’
deposit despite demand. Having breached its
contract with respondents, petitioner is liable for
damages.
FALLO:

WHEREFORE, the Petition is hereby

DENIED. The assailed April 2, 2008 Decision and the
May 30, 2008 Resolution of the Court of Appeals in
CA-G.R. CV No. 89086 are hereby AFFIRMED.