DURBAN APARTMENTS CORPORATION

VS.
PIONEER INSURANCE AND SURETY CORPORATION
G.R. NO. 179419
JANUARY 12, 2011

For review is the Decision of the Court of Appeals, which affirmed the decision
of the Regional Trial Court (RTC), Branch 66, Makati City, in Civil Case No. 03857, holding petitioner Durban Apartments Corporation solely liable to
respondent Pioneer Insurance and Surety Corporation for the loss of Jeffrey
Sees vehicle.

FACTS:
On July 22, 2003, Pioneer Insurance and Surety Corporation, by right of
subrogation, filed a Complaint for Recovery of Damages against Durban
Apartments Corporation, doing business under the name and style of City
Garden Hotel, and Vicente Justimbaste. Respondent averred that it is the
insurer for loss and damage of Jeffrey S. Sees 2001 Suzuki Grand Vitara with
Plate No. XBH-510 under Policy No. MC-CV-HO-01-0003846-00-D in the
amount of P1,175,000.00.
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 Justimbaste got the key to said Vitara from See to park
it. On May 1, 2002, at about 1:00 oclock 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. See went to see the Hotel Chief Security
Officer, thereafter reported the incident to the Operations Division of the
Makati City Police Anti-Carnapping Unit, and a flash alarm was issued.
The Makati City Police Anti-Carnapping Unit investigated Hotel Security
Officer, Ernesto T. Horlador, Jr. and defendant Justimbaste. The Vitara has not
yet been recovered since July 23, 2002 as evidenced by a Certification of
Non- Recovery issued by the PNP TMG. Pioneer Insurance and Surety Co. paid
the P1,163,250.00 money claim of See and mortgagee ABN AMRO Savings
Bank, Inc. as indemnity for the loss of the Vitara. The Vitara was lost due to
the negligence of Durban Apartments and 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
Durban Apartments and no necessary precautions were taken to prevent its

repetition. Durban Apartments was wanting in due diligence in the selection

and supervision of its employees particularly defendant Justimbaste.
Defendant Justimbaste and Durban Apartments failed and refused to pay its
valid, just, and lawful claim despite written demands.

Thereafter, on January 27, 2006, the RTC rendered a decision, disposing, as

follows:
WHEREFORE, judgment is hereby rendered ordering petitioner
Durban Apartments Corporation to pay respondent Pioneer Insurance and
Surety Corporation the sum of P1,163,250.00 with legal interest thereon from
July 22, 2003 until the obligation is fully paid and attorneys fees and
litigation expenses amounting to P120,000.00.

On appeal, the appellate court affirmed the decision of the trial court:
WHEREFORE, premises considered, the Decision dated January 27,
2006 of the RTC, Branch 66, Makati City in Civil Case No. 03-857 is hereby
AFFIRMED insofar as it holds petitioner Durban Apartments Corporation
solely liable to [respondent] Pioneer Insurance and Surety Corporation for the
loss of Jeffrey Sees Suzuki Grand Vitara.
Hence, this recourse by petitioner.

ISSUE:
Whether petitioner is liable to respondent for the loss of Sees vehicle.

RULING:
In this case, respondent substantiated the allegations in its complaint, a
contract of necessary deposit existed between the insured See and
petitioner. On this score, we find no error in the following disquisition of the
appellate court:
The records also reveal that upon arrival at the City Garden Hotel, See gave
notice to the doorman and parking attendant of the said hotel, Justimbaste,

about his Vitara when he entrusted its ignition key to the latter. 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.
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.
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 latters employee,
Justimbaste. In turn, Justimbaste issued a claim stub to See. Thus, the
contract of deposit was perfected from Sees 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 Sees vehicle.