DURBAN APARTMENTS CORPORATIONVS.PIONEER INSURANCE AND SURETY CORPORATIONG.R. NO. 179419JANUARY 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. 03-857, 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 GardenHotel, 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 ofP1,175,000.00. 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 atelephone 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 theP1,163,250.00 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.