PEOPLE’S CAR VS COMMANDO SECURITY G.R. L-36840 MAY 22, 1973

FACTS:

People’s Car entered into a contract with Commando Security to safeguard and protect the business premises of the plaintiff from theft, pilferage, robbery, vandalism, and all other unlawful acts of any person/s prejudicial to the interest of the plaintiff.

On April 5, 1970, around 1:00am, defendant’s security guard on duty at plaintiff’s premises, without any authority, consent, approval, or orders of the plaintiff and/or defendant brought out the compound of the plaintiff a car belonging to its customer and drove said car to a place or places unknown, abandoning his post and while driving the car lost control of it causing it to fall into a ditch.

As a result, the car of plaintiff’s customer, which had been left with plaintiff for servicing and maintenance, suffered extensive damage besides the car rental value for a car that plaintiff had to rent and make available to its customer, Joseph Luy, to enable him to pursue his business and occupation.

Plaintiff instituted a claim against defendant for the actual damages it incurred due to the unlawful act of defendant’s personnel citing paragraph 5 of the contract wherein defendant accepts sole responsibility for the acts done during their watch hours.

Defendant claimed that they may be liable but its liability is limited under paragraph 4 of the contract which provides that its liability shall not exceed P1,000 per guard post for loss or damage through the negligence of its guards during the watch hours provided that it is reported within 24 hours of the incident.

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ISSUE: Whether or not the defendant is obliged to indemnify the plaintiff for the entire costs as result of the incident

HELD: Yes. 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.

Plaintiff in law could not tell its customer 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.