SAFETY OR FITNESS FIRST: Liability of Fitness Clubs for Loss

By Obiter07

We invariably see this notice and hardly pay attention anymore.  You park your car and the ticket says that that the facility is not liable for any loss or damage to your vehicle. In this case, a client goes to his fitness club and leaves his belongings in a locker for safekeeping. He discovers that items have been stolen.  However, the club membership form, club rules as well as posted notices contain a disclaimer that the club has no liability for such loss.  The Court of Appeals has held that the fitness club can be held liable, notwithstanding this disclaimer. [1]

The complaint arose after a lawyer lost his office uniform, a cellphone, a wallet with cash, among other items, after depositing them at a club locker. The club had argued that it was not liable. In ruling for the plaintiff, the Court relied on Article 2003 of the New Civil Code:

“ARTICLE 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. (n)”

The court held “that a health and wellness center like Fitness First is akin to those engaged in hotel and common carrier businesses which are imbued with public interest.” It further stated that: “Fitness First, being a health club establishment is clearly bound to provide not only a comfortable working-out atmosphere for its members but also a security to their persons and belongings.”  It took into account the club’s “and lackadaisical attitude on the reported loss constitutes negligence and dereliction of its duties and responsibilities as operator of a health and wellness establishment.”[2]

Around 2004, based on a victim’s account, members of Fitness First in Alabang were robbed in broad daylight inside the club when armed men strolled inside the club and held up people one by one. There was no announcement. They just went to people one at a time showed their guns and asked for their victims’ belongings.  Some employees who noticed what was happening simply hid in the fire escape found through the locker room – without warning other people they passed by of what was going on - without even locking the locker room if only to protect everyone inside, including those taking their showers. To make matters worse, after the hold-up, the employees just went back to their stations and resumed operations like nothing happened. Fitness First, indeed.[3]

The Supreme Court was faced with a similar issue in YHT REALTY CORPORATION, et al. vs. COURT OF APPEALS, et al. [G.R. No. 126780.  February 17, 2005.].  It held that the hotel’s requirement for a guest to execute an “"undertaking" contravenes 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. xxx”

As explained by the Court: “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.”

In effect, the Court of Appeals in this case has imposed on fitness clubs the obligations the law imposes on hotel keepers.  Under Articles 1998 to 2001, hotel keepers, now including fitness clubs, have the following responsibilities:

“ARTICLE 1998. The deposit of effects made by travellers 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. (1783)

ARTICLE 1999. The hotel-keeper is liable for the vehicles, animals and articles which have been introduced or placed in the annexes of the hotel. (n)

ARTICLE 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of him. (1784a)

ARTICLE 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. (n)

ARTICLE 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel. (n)

Fitness clubs would be well advised to implement measures to insure the safety and security of the belongings of clients under this ruling.  This decision may still be appealed, however, on the argument that the law does not clearly include fitness clubs as covered by Article 2003.  Legislators may be well advised to amend the law to include such clubs since its clients do have a legitimate interest to be protected from loss, considering the amounts they pay for their membership.  Safety and security should come first before fitness, regardless of the establishment’s notices or name.

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[1] Torres, “Fitness First Club liable for member’s stolen items—Court of Appeals.” INQUIRER.net  

11:37 am | Wednesday, July 11th, 2012.  http://business.inquirer.net/70393/fitness-first-club-liable-for-member%E2%80%99s-stolen-items%E2%80%94court-of-appeals.

[2] Ibid.

[3] Macairan, “Cops identify suspect in fitness center robbery.” PHILSTAR.com 12:00 AM |

June 21, 2004. http://www.philstar.com/Article.aspx?articleId=254772

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THROWING THE BOOK AT THEM: CAB Suspends Local Airlines’ Overbooking, No Refund and No Rebooking Practices

By Siesta-friendly

Sometimes the government does work to promote public interest.  Prime examples are Resolutions Nos. 28 and 29 (BM3-05-11-2012) adopted by the Civil Aeronautics Board (CAB) on May 11, 2012.

Suspension Overbooking Practice

In Resolution No. 28 (BM3-05-11-2012), the CAB suspended “the application of pertinent provisions of Economic Resolution No. 7, as amended (E.R. 7), relating to overbooking” thus “effectively banning the practice of overbooking in the domestic sector.” 

In justifying its move, the CAB stated in the Whereas clauses of Resolution No. 28 that -

“the Board takes cognizance of the prevailing public outrage against delayed and/or cancelled flights, as well as passengers denied boarding, presumably due to overbooking in domestic scheduled flights;” and

“there is thus a need to re-examine the propriety of overbooking as a revenue-management option practiced by airlines in the domestic sector vis-à-vis their obligation under their Certificate of Public Convenience and Necessity to provide services that are efficient and conducive to the convenience of passengers”.

Suspension of Restriction on No Refund and No Rebooking Practice

In Resolution No. 29 (BM3-05-11-2012), the CAB suspended “the non-refundable and non-rebookable conditions of low-cost fares for domestic flights.”

Naturally, Resolution 29 applies “only to low-cost and regular fares for domestic scheduled flights of domestic carriers.” (Section 1)

The period of refundability and rebookability are “subject to the airline’s conditions of carriage, but no more than one (1) year from the date of the original or first intended flight.” (Section 4)

On Rebooking  

“The passenger may rebook his/her flight in case of:

a.          Cancellation by the passenger of the reservation, subject to payment of reasonable rebooking fees that shall be limited to actual administrative costs, and/or the fare difference, if any. Provided, that late check-ins and actual “no-shows” shall be considered as mere cancellation of the reservation by the passenger …

b.         Flight cancellations for security and safety reasons, suspension of a route, or other circumstances beyond the control of the airline.

c.          Flight diversions or flight delays of at least one (1) hour.” (Section 2)

On Refunds

“Subject to the submission of required documents, the passenger may request for a refund of his/her fare in case there is/are:

a.       Cancellations by the airline and route suspensions for reasons other than safety and security, subject to payment of reasonable administrative or other applicable fees.

b.      Flight delays or postponements of more than three (3) hours.

c.       Disallowance of boarding or failure to board for reasons other than non-observance of airline or government policies or laws.  Provided, that on top of the refund, the airline shall pay the passenger denied  - boarding compensation, as provided for under E.R. 7, amended.

d.      Death or serious illness of the passenger before the flight.” (Section 3)

In response to criticism that the CAB’s restrictions may lead to the demise of low cost carriers (LCC), CAB executive director Carmelo Arcilla said -

"The operation of an airline, whether LCC or legacy, is a public utility and as such, an airline is obligated to provide public service and convenience more than its right to generate revenues and its business interests. While we are happy with the success of LCCs in the Philippines, it is instrumental in the growth of aviation and air traffic in the country, we have to draw the line. Low-cost airline doesn't mean that services can be shabby, services can be unreliable and inadequate".[1]

Denying refunds or rebookings to passengers who came on time, paid in full and have done everything to take their flights, is just unfair and tantamount to cheating.  While making flights affordable for every Juan is laudable, making some Juan suffer is not. 

Since the old rules have been merely suspended pending further review of the issues, perhaps overbooking may be allowed to ensure airlines fill as many empty seats as possible (in the event of last-minute passenger cancellations) to allow them to make the most of their costs. But, as practiced in other countries, airlines must be required to ask for volunteers before automatically bumping off a passenger and offer those bumped-off rewards like free upgrades, free flights, free meals, etc. 

It is unimaginable how refunds and rebookings would spell the demise of budget airlines as they offer the best marketing tools to ensure every Juan’s return. 

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[1]  Garcia, C. R. A. (2012, June 5). Stricter cab rules may spell demise of budget airlines. Retrieved from http://www.abs-cbnnews.com/business/06/05/12/stricter-cab-rules-may-spell-demise-budget-airlines

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FILED AND FIRED: No Privacy for Office Computers

By Obiter07

Your public and private life gets to be intertwined in your workplace computer.  As you spend most of your time at the office, the tendency to intermingle personal and work files in your desktop or laptop becomes more difficult to avoid.  You get to download vacation pictures there from your camera, you surf the internet for personal purposes or even compose some communications which are not connected your work.  Be warned though.  The Supreme Court has upheld the dismissal of a government employee using evidence taken from his office computer in Pollo vs. Chairman David, G.R. No. 181881 dated October 18, 2011. This is a case concerning the search of an office computer which led to the dismissal of a government employee for “dishonesty, grave misconduct, conduct prejudicial to the best interest of the service, and violation of Republic Act (R.A.) No. 6713 xxx.” 

The respondent was a specialist and OIC of the Civil Service Commission.  The CSC Chair received an anonymous complaint that he was acting as a lawyer for government employees with pending cases before the CSC. A team was formed and directed to “to back up all the files in the computers found in the Mamamayan Muna (PALD) and Legal divisions.”

The respondent got wind of this via text message from one Director. Petitioner replied that he was leaving the matter to the director and that he will just get a lawyer. 

It was discovered that from the files copied from respondent’s computer that “40 to 42 documents, were draft pleadings or letters in connection with administrative cases in the CSC and other tribunals.” On this basis, the chair issued a show-cause order for respondent to submit his explanation or counter-affidavit. The Chair made a finding that “most of these draft pleadings are for and on behalves of parties, who are facing charges as respondents in administrative cases.  This gives rise to the inference that the one who prepared them was knowingly, deliberately and willfully aiding and advancing interests adverse and inimical to the interest of the CSC as the central personnel agency of the government tasked to discipline misfeasance and malfeasance in the government service.  The number of pleadings so prepared further demonstrates that such person is not merely engaged in an isolated practice but pursues it with seeming regularity.  It would also be the height of naivete or credulity, and certainly against common human experience, to believe that the person concerned had engaged in this customary practice without any consideration, and in fact, one of the retrieved files xxx appears to insinuate the collection of fees.  That these draft pleadings were obtained from the computer assigned to Pollo invariably raises the presumption that he was the one responsible or had a hand in their drafting or preparation since the computer of origin was within his direct control and disposition.”

Respondent filed a comment, denying he was the subject of the anonymous complaint, that he was not a lawyer nor was he engaged in lawyering. Similar to the recently concluded impeachment trial, he charged the CSC of “conducting a “fishing expedition” when they unlawfully copied and printed personal files in his computer, and in subsequently asking him to submit his comment which violated his right against self-incrimination.” He argued that he had protested the taking of his computer, asserting that there were “personal files and those of his sister, relatives, friends and some associates” in it and that he did not authorize the access of the same. Temporary “use and ownership of the computer issued under a Memorandum of Receipt (MR) is ceded to the employee who may exercise all attributes of ownership, including its use for personal purposes.”

The CSC thereafter charged him with “Dishonesty, Grave Misconduct, Conduct Prejudicial to the Best Interest of the Service and Violation of R.A. No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees).”   Respondent assailed the charges as without basis, being based on an illegal search, denied the charges and alleged that he had permitted other persons to use his computer.

After proceedings, he was found guilty and dismissed from the service. Respondent appealed to the Supreme Court raising as a ground, among others, that he should have been allowed to invoke his right to privacy, his right against unreasonable search and seizure and right against self-incrimination alleging that government ownership of the computer does not extend to personal files.

The Court viewed the issues as revolving around respondent’s reasonable expectation of privacy in his office and computer files and if the search made on his computer was “reasonable in its inception and scope.”      In looking at those issues, the Court held that the circumstances to consider are “(1) the employee’s relationship to the item seized; (2) whether the item was in the immediate control of the employee when it was seized; and (3) whether the employee took actions to maintain his privacy in the item.” 

The Court found that respondent did not have “an actual (subjective) expectation of privacy either in his office or government-issued computer which contained his personal files.” He did not allege he had his own separate enclosed office that was not accessible to third parties. He did not allege that he used passwords or that his office was always locked. He even admitted that he normally had visitors in his office and even unknown people were allowed to use his computer.

Even if he had “at least a subjective expectation of privacy in his computer as he claims” this was negated by the CSC’s policy regulating the use of office computers.  An Office Memorandum clearly provided that “Computer Resources are the property of the Civil Service Commission and may be used only for legitimate business purposes.” It goes further to state that –

4.      No expectation of privacy.  Users except the Members of the Commission shall not have an expectation of privacy in anything they create, store, send, or receive on the computer system xxx

5.      Waiver of privacy rights.  Users expressly waive any right to privacy in anything they create, store, send, or receive on the computer through the Internet or any other computer network.  Users understand that the CSC may use human or automated means to monitor the use of its Computer Resources.

6.      Non-exclusivity of Computer Resources.  A computer resource is not a personal property or for the exclusive use of a User to whom a memorandum of receipt (MR) has been issued. It can be shared or operated by other users. However, he is accountable therefor and must insure its care and maintenance.”

xxx

Passwords

12.  Responsibility for passwords.  Users shall be responsible for safeguarding their passwords for access to the computer system.  Individual passwords shall not be printed, stored online, or given to others.  Users shall be responsible for all transactions made using their passwords. No User may access the computer system with another User’s password or account.

13.  Passwords do not imply privacy.  Use of passwords to gain access to the computer system or to encode particular files or messages does not imply that Users have an expectation of privacy in the material they create or receive on the computer system. The Civil Service Commission has global passwords that permit access to all materials stored on its networked computer system regardless of whether those materials have been encoded with a particular User’s password. Only members of the Commission shall authorize the application of the said global passwords.”

                        [Emphasis supplied.]

The CSC had put its employees on notice that “they have no expectation of privacy in anything they create, store, send or receive on the office computers, and that the CSC may monitor the use of the computer resources using both automated or human means.”  This meant “on-the-spot inspections may be done to ensure that the computer resources were used only for such legitimate business purposes.” 

On the reasonableness of the search conducted, this was in “connection with investigation of work-related misconduct prompted by an anonymous letter-complaint xxx.” The Court held that a “search by a government employer of an employee’s office is justified at inception when there are reasonable grounds for suspecting that it will turn up evidence that the employee is guilty of work-related misconduct.”

The Court cited the CSC’s ruling that the search was “undertaken in connection with an investigation involving a work-related misconduct xxx.”  xxx  That it was the computers that were subjected to the search was justified since these furnished the easiest means for an employee to encode and store documents.  Indeed, the computers would be a likely starting point in ferreting out incriminating evidence. Concomitantly, the ephemeral nature of computer files, that is, they could easily be destroyed at a click of a button, necessitated drastic and immediate action.”

Hence, respondent cannot claim a violation of the right to privacy since “certain legitimate intrusions into the privacy of employees in the government workplace xxx.” The “search of petitioner’s computer was justified there being reasonable ground for suspecting that the files stored therein would yield incriminating evidence relevant to the investigation being conducted by CSC as government employer of such misconduct subject of the anonymous complaint.  This situation clearly falls under the exception to the warrantless requirement in administrative searches xxx.” The Court found the evidence to be admissible and upheld the CSC’s findings dismissing him from the service.

The case is to be distinguished from the case of Anonymous Letter-Complaint against Atty. Miguel Morales, Clerk of Court, Metropolitan Trial Court of Manila where a branch clerk was accused of attending to personal cases.  The Court denied the use of evidence “obtained from his personal computer against him for it violated his constitutional right against unreasonable searches and seizures.”  [Emphasis supplied.]

Employers are hence forewarned to have clear policies in place, should they wish to limit the use of computers to official purposes only.  Employees are now put on notice that certain files can get them fired.

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FEE… HIGH… NOW… NONE: No more filing fees at the DOJ

By Obiter07

Some good news.  There is no longer any fee to be paid for filing cases before the Department of Justice (“DOJ”).   Under Department Circular No.  25 which was issued this year, the DOJ ordered “[a]ll assessment clerks and collection officers under the National Prosecution Service [to] forthwth CEASE AND DESIST from assessing and collecting legal fees” from individuals filing criminal complaints.”[1]

Apparently, there were four (4) previous DOJ orders which set and increased the amount of docket fees for criminal cases. This was used to fund the special allowances of prosecutors under Republic Act No. 9279.  “[I]ndividuals filing cases in the DOJ had to pay as much as P5,000 in legal fees xxx.” [2]  As cited in the first Whereas clause of D.C. No. 25, “Republic Act (R.A.) No. 9279 and its Implementing Rules and Regulations (IRR) allowed members of the National Prosecution Service in the Department of Justice to receive additional compensation in the form of special allowances sourced from any increase in fees and new fees actually collected bv the National Prosecution Service after May 16, 2004, the effectivity of R.A. No. 9279.” 

It seems strange to be a victim two times over, first of a crime and then having to pay more for the prosecutors duty bound to prosecute such criminal cases.

In 2010, of R.A. No. 10071 (Strengthening and Rationalizing the National Prosecution Service) provided that:

 "the special allowances granted to the members of the National Prosecution Service under Republic Act No. 9279 shall continue to be given to them subject to the provisions hereof: Provided, however, that the amount not supported by the funding source specified in Section 3 thereof to complete the equivalent of hundred percent (100%) of the basic salary shall be paid through appropriations included in the budget of the DOJ: Provided, further, That when the amount being supported by the said funding source shall have been also included in the General Appropriations, the fees authorized under said Section 3 shall no longer be collected."   (Section 20)

Section 3 of R.A. 9279 provides:

“The amount necessary to implement the additional compensation in the form of special allowances … shall be sourced from the collections of the National Prosecution Service and the Office of the Chief State Counsel of the Office of the Secretary of Justice from any increase in fees or new fees that they are hereby authorized to assess for various services rendered ... These collections shall be deposited as a Special Trust Fund which shall be administered by the Secretary of Justice for the benefit of the members of the National Prosecution Service, the Office of the Chief State Counsel and the undersecretaries concerned, and shall be made available for payment of benefits herein provided.

The DOJ found that “100% of the basic salary of prosecutors under R.A. No. 6758 otherwise known as the Salary Standardization Law, as amended, has already been reached xxx.”  Hence, “Section 20 of R.A. No. 10071 mandates that the fees authorized to be collected under R.A. No. 9279 shall no longer be collected.”

If crime does not pay, neither should the victim, at least as far as filing fees before the DOJ. For now.

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[1] Department of Justice, (2012). Issuances (Department Circular No. 025). Retrieved from website: http://www.doj.gov.ph/?page=20.

[2] http://newsinfo.inquirer.net/185359/doj-makes-filing-cases-cheaper.

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The Witness and the Witless (Presenting A Hostile Witness)

By Obiter07

Some people may remember a previous impeachment where a person on the stand was addressed as “Madame Wetness” by one of the prosecution lawyers.  But the substance of the testimony by one the witnesses at the current impeachment trial is certainly not wet but rather hot and controversial.  The Ombudsman just testified that millions of dollars are allegedly held by the Chief Justice in various bank accounts. But the Ombudsman was in fact not called by those prosecuting the Chief Justice but by the latter’s defense team. Why the defense called on the Ombudsman, who presumably had evidence of the CJ’s millions of dollars, is still a mystery.  Even as she was declared as the defense team’s hostile witness. 

Exactly what is meant when she was declared as a “hostile” witness?

In the normal course of a trial, both sides are expected to call witnesses to establish their case. However, there is a peculiar situation where either the prosecution or the defense may need to call a witness who may not be sympathetic to their respective cases.  Calling a witness hostile is not automatic but has to be declared by the court -

“A witness may be considered as unwilling or hostile only if so declared by the court upon adequate showing of his adverse interest, unjustified reluctance to testify, or his having misled the party into calling him to the witness stand (Section 12, Rule 132).”  

A party calls witnesses to discharge his burden of proof as it is “the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law (Section 1, Rule 131).  Hence, the defense, in calling the Ombudsman to the witness stand, must have felt that her testimony would aid their case especially since a declaration that she is a hostile witness gives them a lot of leeway in eliciting testimony.

Leading questions allowed

For example, the defense can ask leading questions of such a witness.  A leading question is something “which suggests to the witness the answer which the examining party desires.”  To illustrate:

Leading question: When was the $1,000,000.00 deposited into the Chief Justice’s account?

This is a sample leading question because it already assumes the Chief Justice has a dollar account - when such an issue is still in contention.

Alternative and non-leading questions:  In whose name is the account where the $1,000,000.00 was deposited? When was it deposited?

A leading question is not allowed, except “of an unwilling or hostile witness (Section 10, Rule 132).”   This dispenses with the tiresome task of meeting objections on questions which are framed in a leading manner.  Leading questions are actually easier to formulate.  Otherwise, questions have to be formulated in sequence and have to call only for certain specific information so as not to be objectionable.

Impeaching a hostile witness

More importantly, a hostile witness can be impeached by the party calling him to testify. 

Impeachment of adverse party's witness. — A witness may be impeached by the party against whom he was called, by contradictory evidence, by evidence that his general reputation for truth, honestly, or integrity is bad, or by evidence that he has made at other times statements inconsistent with his present, testimony, but not by evidence of particular wrongful acts, except that it may be shown by the examination of the witness, or the record of the judgment, that he has been convicted of an offense. (Sec. 11, 132)

It seems ironic that the Chief Justice’s defense team may seek to impeach a witness in an impeachment case against their client.  Then again, they were the ones who asked her to testify in the first place.  The last laugh may yet be theirs as the CJ is set to testify and refute all the apparently damaging evidence and testimonies next week.

In any case, impeachment, in this context, of a hostile witness refers to being “impeached by the party presenting him in all respects as if he had been called by the adverse party, except by evidence of his bad character. He may also be impeached and cross-examined by the adverse party, but such cross-examination must only be on the subject matter of his examination-in-chief. (Section 12).”   In effect, the witness’ “credibility” is put at issue.   This is not allowed as a general rule except in certain instances which includes a hostile witness (Section 12).

So far, it seems to have been a witless strategy to have called a witness who was able to testify on matters damaging to the defense.  It may turn out that a witness hostile to the accused may be friendly to the cause of justice but not to that of a sitting Chief Justice.

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