1. REFERENCE
1.1. DOCKET/REGISTRY NUMBER
- GR No. L-36840
1.2. REPORTED/PREFERRED CITATION
- People’s Car, Inc. v. Commando Security, GR L-36840, 51 SCRA 40 (May 22, 1973)
1.3. FULL-TEXT SOURCE ONLINE
2. MNEMONIC
2.1. LAW SCHOOL SUBJECT
- OBLICON
2.2. KEYWORDS
- Guard Service Contract; Acts and Omission; Stipulation
2.3. FACT MNEMONIC
- Security guard drives and crashes customer’s car case
2.4. DOCTRINE MNEMONIC
- Security agency liable to plaintiff for full damages as a result of security guard’s negligence.
2.5. VERBATIM DOCTRINE
- Security agency liable to plaintiff for full damages as a result of security guard’s negligence.
- Defendant is therefore undoubtedly liable to indemnify plaintiff for the entire damages thus incurred, since under paragraph 5 of their contract it "assumed the responsibility for the proper performance by the guards employed of their duties and (contracted to) be solely responsible for the acts done during their watch hours" and "specifically released (plaintiff) from any and all liabilities… to the third parties arising from the acts or omissions done by the guards during their tour of duty."
2.6. SHORT-HAND DIGEST
- In a case wherein a security guard crashes the car of the customer of the plaintiff’s business where he is designated, two stipulations of the Guard Service Contract were in dispute: paragraph 4, which in this case makes the defendant, the security agency, liable for only a thousand pesos; and paragraph 5, which makes the defendant liable for the total damages incurred by the plaintiff. The Supreme Court upheld the stipulation in paragraph 5 which provided that defendant is responsible for the proper performance of its security guards and that plaintiff is released from liabilities from third parties arising from the acts and omissions done by the guards during their tour of duty. The judgment of CFI Davao reversed.
3. PROFILE
3.1. DATE OF PROMULGATION
- May 22, 1973
3.2. DECIDING COURT
- Supreme Court
3.3. DIVISION
- Second Division
3.4. PONENTE
- Teehankee
3.5. CONCURRENCE AND ATTENDANCE
3.5.1. CONCURRING
- Makalintal
- Zaldivar
- Castro
- Fernando
- Barredo
- Makasiar
- Antonio
- Esguerra
3.5.2. DISSENTING
- N/A
3.5.3. ABSENT/OTHERS
- N/A
3.6. SEPARATE OPINIONS
- N/A
3.7. PARTIES
3.7.1. PLAINTIFF-APPELLANT
- People’s Car Inc
3.7.2. DEFENDANT-APPELLEE
- Commando Security Service Agency
3.8. COUNSEL
- N/A
3.9. NATURE OF ACTION
- Appeal from a decision of CFI Davao
3.10. LAWS AND PROVISIONS CITED
- New Civil Code
- Article 1159
3.11. CASES CITED
- None
4. CONTENTS
4.1. SUBSTANTIAL FACTS
- Plaintiff and defendant were bound by a "Guard Service Contract"
- Defendant-appellee as a duly licensed security service agency undertook in payments made by plaintiff "to safeguard and protect the business premises of (plaintiff) from theft, pilferage, robbery, vandalism, and all other unlawful acts of any person or persons prejudicial to the interest of (plaintiff)".
- April 5, 1970 at around 1:00 AM, the defendant’s security guard drove out a car of a plaintiff’s customer, Joseph Luy, outside the compound. Losing control, the security guard caused the car to fall into a ditch along JP Laurel St., Davao City.
- As a result, plaintiff incurred the total sum of P 8489.10 in damages
- P 7,079.10 for damages of repair and maintenance of the vehicle
- P 1,410.00 for fees of a car rental the plaintiff have to provide for the customer while the damaged car was being repaired for 47 days.
4.2. PROCEDURAL HISTORY
- CFI Davao
- Plaintiff brought the case to the court claiming that the defendant is liable for the damages incurred as a result of the incident. He relied on Par. 5 of the contract:
- Par. 5 – The part of the Second Part assumes the responsibility for the proper performance by the guards employed, of their duties and (shall) be solely responsible for the acts done during their watch hours, ~the party of the First Part being specifically released from any and all liabilities of the former’s employee or to the third parties arising from the acts of omissions done by the guards during their tour of duty.
- Defendant claimed that it is only liable based on Par. 4 of the same contract:
- Par. 4. Party of the Second Part (defendant) through the negligence of its guards, after an investigation has been conducted by the Party of the First Part (plaintiff) wherein the Part of the Second Part has been duly represented, shall assume full responsibilities for any loss or damages that may occur to any property of the Party of the First Part of which it is accountable, during the watch hours of the Part of the Second Part, provided the same is reported to the Part of the Second Part within twenty-four (24) hours of the occurrence, except where such loss or damage is due to force majeure, provided however that after the proper investigation is to be made thereof that the guard on post is found negligent and that the amount of the loss shall not exceed ONE THOUSAND (P 1,000.00) PESOS per guard post.
- Plaintiff brought the case to the court claiming that the defendant is liable for the damages incurred as a result of the incident. He relied on Par. 5 of the contract:
- The Court rendered a judgment upholding Paragraph 4 of the Guard Service Contract, wherein the plaintiff can only recover P 1,000.00.
- Court of Appeals, Special Division
- Certified the appeal of plaintiff-appellant on a four-two-one vote as per its resolution of April 14, 1973.
- "since the case was submitted to the court a quo for decision on the strength of the stipulation of facts, only questions of law can be involved in the present appeal."
- Certified the appeal of plaintiff-appellant on a four-two-one vote as per its resolution of April 14, 1973.
- Supreme Court
- Accepted the certification upon finding that plaintiff’s notice of appeal was expressly to this Court "on pure questions of law"
- Davao CFI approved the same on July 3, 1971 instead of having required the filing of a petition for review of the judgment sought to be appealed from directly with this Court, in accordance with the provisions of Republic Act 5440.
4.3. ISSUES
- Whether defendant is liable to the plaintiff on the basis of Paragraph 4 of the Guard Service Contract?
- Whether plaintiff should have notified the customer of defendant’s liability under Paragraph 5 of the Guard Service Contract and thus filed the appropriate action recommended by the trial court?
4.4. RATIO/S
- Whether defendant is liable to the plaintiff on the basis of Paragraph 4 of the Guard Service Contract?
- No.
- Paragraph 4 of the contract, which limits defendant’s liability for the amount of loss or damage to any property of plaintiff to "P 1,000.00 per guard post," is by its own terms applicable only for loss or damage "through the negligence of its guards… during the watch hours" provided that the same is duly reported by plaintiff within 24 hours of the occurrence and the guard’s negligence is verified after proper investigation with the attendance of both contracting parties. Said paragraph is manifestly inapplicable to the stipulated facts of record, which involve neither property of plaintiff that has been lost or damaged at its premises nor mere negligence of defendant’s security guard on duty.
- Defendant is therefore undoubtedly liable to indemnify plaintiff for the entire damages thus incurred, since under paragraph 5 of their contract it "assumed the responsibility for the proper performance by the guards employed of their duties and (contracted to) be solely responsible for the acts done during their watch hours" and "specifically released (plaintiff) from any and all liabilities… to the third parties arising from the acts or omissions done by the guards during their tour of duty." As plaintiff had duly discharged its liability to the third party, its customer, Joseph Luy, for the undisputed damages of P 8,489.10 caused said customer, due to the wanton and unlawful act of defendant’s guard, defendant in turn was clearly liable under the terms of paragraph 5 of their contract to indemnify plaintiff in the same amount.
- No.
- Whether plaintiff should have notified the customer of defendant’s liability under Paragraph 5 of the Guard Service Contract and thus filed the appropriate action recommended by the trial court?
- No.
- Plaintiff was in law liable to its customer for the damages caused the customer’s car, which had been entrusted into its custody. Plaintiff therefore was in law justified in making good such damages and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages, which had been caused directly by the unlawful and wrongful acts of defendant’s security guard in breach of their contract. As ordained in Article 1159 of the Civil Code, "obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith."
- Plaintiff in law could not tell its customer, as per the trial court’s view, that "under the Guard Service Contract it was not liable for the damage but the defendant – since the customer could not hold defendant to account for the damages as he had no privity of contract with defendant. Such an approach of telling the adverse party to go to court, notwithstanding his plainly valid claim, aside from its ethical deficiency among others, could hardly create any goodwill for plaintiff’s business, in the same way that defendant’s baseless attempt to fully discharging its contractual liability to plaintiff cannot be expected to have brought it more business. Worse, the administration of justice is prejudiced, since the court dockets are unduly burdened with unnecessary litigation.
4.5. DISPOSITIVE PORTION
- Judgment of CFI Davao reversed.
- "Accordingly, the judgment appealed from is hereby reversed and judgment is hereby rendered sentencing defendant-appellee to pay plaintiff-appellant the sum of P8489.10 as and by way of reimbursement of the stipulated actual damages and expenses, as well as the costs of suit in both instances."
4.6. SEPARATE OPINION
- N/A
