CA-Agro Industrial Devt Corp vs CA 219 SCRA 426

Facts:
On July 3, 1979, petitioner (through its President- Sergio Aguirre) and the Spouses
Ramon and Paula Pugao entered into an agreement whereby the former purchase two
parcel of lands from the latter. It was paid of downpayment while the balance was
covered by there postdated checks. Among the terms and conditions embodied in the
agreement were the titles shall be transferred to the petitioner upon full payment of the
price and the owner's copies of the certificate of titles shall be deposited in a safety
deposit box of any bank. Petitioner and the Pugaos then rented Safety Deposit box of
private respondent Security Bank and Trust Company.

Thereafter, a certain Margarita Ramos offered to buy from the petitioner. Mrs Ramos
demand the execution of a deed of sale which necessarily entailed the production of the
certificate of titles. In view thereof, Aguirre, accompanied by the Pugaos, then proceed to
the respondent Bank to open the safety deposit box and get the certificate of titles.
However, when opened in the presence of the Bank's representative, the box yielded no
such certificate. Because of the delay in the reconstitution of the title, Mrs Ramos
withdrew her earlier offer to purchase.

Hence this petition.

Issue:
Whether or not the contract of rent between a commercial bank and another party for the
use of safety deposit box can be considered alike to a lessor-lessee relationship.

Ruling:
The petitioner is correct in making the contention that the contract for the rent of the
deposit box is not a ordinary contract of lease as defined in Article 1643 of the Civil
Code. However, the Court do not really subscribe to its view that the same is a contract
of deposit that is to be strictly governed by the provisions in Civil Code on Deposit; the
contract in the case at bar is a special kind of deposit. It cannot be characterized as an
ordinary contract of lease under Article 1643 because the full and absolute possession
and control of the safety deposit box was not given to the joint renters- the petitioner and
the Pugaos. The guard key of the box remained with the respondent bank; without this
key, neither of the renters could open the box. On the other hand, the respondent bank
could not likewise open the box without the renter's key. The Court further assailed that
the petitioner is correct in applying American Jurisprudence. Herein, the prevailing view
is that the relation between the a bank renting out safe deposits boxes and its customer
with respect to the contents of the box is that of a bail or/ and bailee, the bailment being
for hire and mutual benefits. That prevailing rule has been adopted in Section 72 of the
General Banking Act.

Section 72. In addition to the operations specifically authorized elsewhere in this Act,
banking institutions other that building and loan associations may perform the following
services:
(a) Receive in custody funds, document and valuable objects and rents safety deposits
taxes for the safeguard of such effects.
xxx xxx xxx
The bank shall perform the services permitted under subsections (a) (b) and (c) of this
section as depositories or as agents.

SERRANO vs CENTRAL BANK, 96 SCRA 96

Petition for mandamus and prohibition, with preliminary injunction, that seeks the
establishment of joint and solidary liability to the amount of Three Hundred Fifty
Thousand Pesos, with interest, against respondent Central Bank of the Philippines and
Overseas Bank of Manila and its stockholders, on the alleged failure of the Overseas
Bank of Manila to return the time deposits made by petitioner and assigned to him, on
the ground that respondent Central Bank failed in its duty to exercise strict supervision
over respondent Overseas Bank of Manila to protect depositors and the general public.

Facts: Serrano had P350K worth of time deposits in Overseas Bank of Manila. He made
a series of encashment but was not successful. He filed a case against Overseas Bank &
he also included the Central Bank so that the latter may also be jointly and severally
liable. Serrano argued that the CB failed to supervise the acts of Overseas Bank and
protect the interests of its depositors by virtue of constructive trust.

Issue: W/N the Central Bank is liable?

Ruling: No. There is no breach of trust from a banks failure to return the subject matter
of the deposit. Bank deposits are in the nature of irregular deposits. All kinds of bank
deposits are to be treated as loans and are to be covered by the law on loans Art.1980. In
reality the depositor is the creditor while the bank is the debtor. Failure of the respondent
bank to honor the time deposit is failure to pay its obligation as a debtor.

WHEREFORE, the petition is dismissed for lack of merit, with costs against petitioner.

Delos Santos Vs. Tan Khey

Facts: Tan Khey was the owner of International Hotel located in Iloilo city. Romeo de los
Santos lodged in Tna Kheys hotel. After arrival, he left the hotel, depositing his revolver
and his bag with the person in charge in the hotel. When he returned to the hotel, he took
his revolver and his bag from the person in charge in the hotel and proceeded to his
room. He locked the door before sleeping. When he woke up, he discovered that the door
in his room was opened and his bag and pants, wherein he placed his revolver , was
missing. He reported the matter to the Assistant Manager of the hotel, who in turn
informed Tan Khey. A secret service agent was sent to investigate and it was found that
the wall of the room occupied by De los Santos was only seven feet high with an open
space above through which one could enter from outside. De los Santos told the detective
that he lost his revolver. Tan Khey disclaimed liability because De los Santos did not
deposit his properties with the manager despite a notice to that effect was posted in the
hotel. Tan Khey contended that to be liable under Article 1998 of the Civil Code, the
following conditions must concur:

1. Deposit of effects by travellers in hotel or inn

2. Notice given to hotel keepers or employees of the effects brought by guests

3. Guest or travellers take the precautions which said hotel keepers or their substitutes
advised relative to the care and vigilance of their effects.

Issue: Whether the hotel owner should be held liable for the loss of the effects of the
guest?

Rulng: The Court ruled that the hotel owner should be liable for the loss of the revolver,
pants and bag of the guest.

Deposit

While the law speaks of deposit of effects by travellers in hotels or inns, personal
receipt by the innkeeper for safe keeping of effects is not necessaily meant thereby. The
reason therefor is the fact that it is the nature of business of an innkeeper to provide not
only lodging for travelers but also to security to their persons and effects. The security
mentioned is not confined to the effects actually delivered to the innkeeper but also to all
effects placed within the premises of the hotel. This is because innkeepers by the nature
of their business, have supervision and control of their inns and the premises thereof. It is
not necessary that the effect was actually delivered but it is enough that they are within
the inn. If a guest and goods are within the inn, that is sufficient to charge him. The
owner of a hotel may exonerate himself from liability by showing that the guest has
taken exclusive control of his own goods, but this must be exclusive custody and control
of a guest, and must not be held under the supervision and care of the innkeeper, they are
kept in a room assigned to a guest or the other proper depository in the house.

In this case, the guest deposited his effects in the hotel because they are in his room and
within the premises of the hotel, and therefore, within the supervision and control of the
hotel owner.

Notice: The Court ruled that there was no doubt that the person in charge had knowledge
of his revolver, the bag, and pants of the guest, De los Santos. The requirement of notice
being evidently for the purpose of closing the door to fraudulent claims for non-existent
articles, the lack thereof was fatal to De los Santos claim for reparation for the loss of his
eyeglass, ring, and cash.

Precautions: While an innkeeper cannot free himself from responsibility by posting

notices, there can be no doubt of the innkeepers right to make such regulations in the
management of his inn as will more effectually secure the property of his guest and
operate as protection to himself, and that it is incumbent upon the guest, if he means to
hold the inkeeper ho his responsibility, to comply with any regulation that is just and
reasonable, when he is requested to do so. However, in this case, the notice requiring
actual deposit of the effects with the manager was an unreasonable regulation. It was
unreasonable to require the guest to deposit his bag, pants and revolver to the manager.
De los Santos had exercised the necessary diligence with respect to the care and
vigilance of his effects.
YHT Realty Corporation et al vs. CA
G.R. No. 126780 February 17, 20052
nd
Division J. Tinga

FACTS:Respondent McLoughlin would always stay at Tropicana Hotel every time he is

here in the Philippines and would rent a safety deposit box. The safety deposit box could
only be opened through the use of 2 keys, one of which is given to the registered guest, and the other
remaining inthe possession of the management of the hotel.McLoughlin allegedly placed the following
in his safety deposit box 2 envelopes containingUS Dollars, one envelope containing
Australian Dollars, Letters, credit cards, bankbooks and acheckbook.On 12 December 1987,
before leaving for a brief trip, McLoughlin took some items from thesafety box which includes the ff:
envelope containing Five Thousand US Dollars (US$5,000.00), theother envelope containing Ten
Thousand Australian Dollars (AUS$10,000.00), his passports and hiscredit cards. The other items
were left in the deposit box. Upon arrival, he found out that a fewdollars were missing and
the jewelry he bought was likewise missing.Eventually, he confronted Lainez and Paiyam who
admitted that Tan opened the safetydeposit box with the key assigned to him. McLoughlin went up
to his room where Tan was stayingand confronted her. Tan admitted that she had stolen
McLouglins key and was able to open thesafety deposit box with the assistance of
Lopez, Paiyam and Lainez. Lopez also told McLoughlinthat Tan stole the key assigned to
McLouglin while the latter was asleep.McLoughlin insisted that it must be the hotel who must assume
responsibility for the loss he suffered. Lopez refused to accept responsibility relying on the
conditions for renting the safety deposit box entitled Undertaking For the Use of Safety Deposit
Box

ISSUE: WON the "Undertaking for the Use of Safety Deposit Box" admittedly executed
by privaterespondent is null and void.

HELD: YES 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 carriers business is imbued with public interest.
Catering to the public, hotel keepers 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.I n a n e a r l y c a s e ( D e L o s S a n t o s v. Ta n
K h e y ) , C A r u l e d t h a t t o h o l d h o t e l k e e p e r s o r inn keeper liable for the effects of
their guests, it is not necessary that they be actually delivered to the innkeepers or their employees. It is
enough that such effects are within the hotel or inn. With greater reason should the liability of the
hotelkeeper be enforced when the missing items aretaken without the guests knowledge and
consent from a safety deposit box provided by the hotelitself, as in this case.Paragraphs (2) and (4) of the
undertaking manifestly contravene Article 2003, CC for theyallow Tropicana to be released from
liability arising from any loss in the contents and/or use of thesafety deposit box for any cause
whatsoever. Evidently, the undertaking was intended to bar anyclaim 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
theresponsibility of the hotel-keeper shall extend to loss of, or injury to, the personal property of
theguests even if caused by servants or employees of the keepers of hotels or
inns as well as bystrangers, except as it may proceed from any force majeure. It is the loss through
force majeure that may spare the hotel-keeper from liability. In the case at bar, there is no showing that
the actof the thief or robber was done with the use of arms or through an irresistible force to qualify the
same as force majeure.

Durban Apartments Corporation v Pioneer Insurance and Surety Corporation

Nature of the Case: Petition for review of the Decision of CA which affirmed the decision of theRTC
holding petitioner Durban Apartments Corp solely liable to respondent Pioneer Insuranceand Surety
Corp for the loss of Jeffrey Sees vehicle.
Facts:
July 22, 2003, Pioneer Insurance and Surety Corp, by right of subrogation, filed withthe
RTC of Makati a Complaint for Recovery of Damages against Durban ApartmentsCorp
( or City Garden Hotel) and defendant before the RTC, Vicente Justimbaste.Respondent
averred that it is the insurer for loss and damag
e of Jeffrey S. Sees 2001
Suzuki Grand Vitara in the amount of P1,175,000.00.On April 30, 2002, See arrived and
checked in at the City Garden Hotel beforemidnight, and its parking attendant,
Justimbaste got the key to said Vitara from See topark it.On May 1, 2002, at about
1:00 am, See received a phone call where the Hotel Chief Security Officer informed him
that his Vitara was carnapped while it was parkedunattended at the parking area
of Equitable PCI Bank See went to see the Security Officer, thereafter reported the
incident to the OperationsDivision of the Makati City Police Anti-Carnapping Unit, and
a flash alarm wasissued. The police investigated Hotel Security Officer, Ernesto T.
Horlador, Jr. andJustimbaste. See gave his Sinumpaang Salaysay to the police
investigator, and filed aComplaint Sheet with the PNP Traffic Management Group in
Camp Crame. it paidthe 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
wasdiscovered during the investigation that this was the second time that a similar incident of
carnappinghappened in the valet parking service and no necessary precautions were taken to prevent its
repetition.Durban Apartments was wanting in due diligence in the selection and supervision of its
employeesparticularly defendant Justimbaste. Both failed and refused to pay its valid, just,
and lawful claimdespite written demands.

Issue: WON there exist a contract of deposit

Held: there exist a contract of necessary deposit. 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.
Facts shows that the contract of depost was perfected from Sees delivery, when he handed
over to Justimbaste the keys to his vehicle, which Justimbaste receive with the obligation
of the safely keepingand returning it. Evidence was show that Justimbaste issued a valet parking
customer claim stub.

Teofisto Guingona, Jr., Antonio Martin, and Teresita

Santos vs. The City Fiscal of Manila, Hon. Jose
Flaminiano, Asst. City Fiscal Felizardo Lota and

Facts:

From March 1979 to March 1981, Clement David made several investments with the
National Savings and Loan Association. On March 21, 1981, the bank was placed under
receivership by the Bangko Sentral. Upon Davids request, petitioners Guingona and
Martin issued a joint promissory note, absorbing the obligations of the bank. On July 17,
1981, they divided the indebtedness. David filed a complaint for estafa and violation of
Central Bank Circular No. 364 and related regulations regarding foreign exchange
transactions before the Office of the City Fiscal of Manila. Petitioners filed the herein
petition for prohibition and injunction with a prayer for immediate issuance of restraining
order and/or writ of preliminary injunction to enjoin the public respondents to proceed
with the preliminary investigation on the ground that the petitioners obligation is civil in
nature.

Issue:

(1) Whether the contract between NSLA and David is a contract of depositor a contract
of loan, which answer determines whether the City Fiscal has the jurisdiction to file a
case for estafa

(2) Whether there was a violation of Central Bank Circular No. 364

Held:

(1) When private respondent David invested his money on nine. and savings deposits
with the aforesaid bank, the contract that was perfected was a contract of simple loan
or mutuum and not a contract of deposit. Hence, the relationship between the private
respondent and the Nation Savings and Loan Association is that of creditor and debtor;
consequently, the ownership of the amount deposited was transmitted to the Bank upon
the perfection of the contract and it can make use of the amount deposited for its banking
operations, such as to pay interests on deposits and to pay withdrawals. While the Bank
has the obligation to return theamount deposited, it has, however, no obligation to return
or deliver the same money that was deposited. And, the failure of the Bank to return the
amount deposited will not constitute estafa through misappropriation punishable under
Article 315, par. l(b) of the Revised Penal Code, but it will only give rise to civil liability
over which the public respondents have no jurisdiction.

But even granting that the failure of the bank to pay the time and savings deposits of
private respondent David would constitute a violation of paragraph 1(b) of Article 315 of
the Revised Penal Code, nevertheless any incipient criminal liability was deemed
avoided, because when the aforesaid bank was placed under receivership by the Central
Bank, petitioners Guingona and Martin assumed the obligation of the bank to private
respondent David, thereby resulting in the novation of the original contractual obligation
arising from deposit into a contract of loan and converting the original trust relation
between the bank and private respondent David into an ordinary debtor-creditor relation
between the petitioners and private respondent. Consequently, the failure of the bank or
petitioners Guingona and Martin to pay the deposits of private respondent would not
constitute a breach of trust but would merely be a failure to pay the obligation as a
debtor. Moreover, while it is true that novation does not extinguish criminal liability, it
may however, prevent the rise of criminal liability as long as it occurs prior to the filing
of the criminal information in court. In the case at bar, there is no dispute that petitioners
Guingona and Martin executed a promissory note on June 17, 1981 assuming the
obligation of the bank to private respondent David; while the criminal complaint for
estafa was filed on December 23, 1981 with the Office of the City Fiscal. Hence, it is
clear that novation occurred long before the filing of the criminal complaint with the
Office of the City Fiscal. Consequently, as aforestated, any incipient criminal liability
would be avoided but there will still be a civil liability on the part of petitioners
Guingona and Martin to pay the assumed obligation.

(2) Petitioner Guingona merely accommodated the request of the Nation Savings and
loan Association in order to clear the bank draft through his dollar account because the
bank did not have a dollar account. Immediately after the bank draft was cleared,
petitioner Guingona authorized Nation Savings and Loan Association to withdraw the
same in order to be utilized by the bank for its operations. It is safe to assume that the
U.S. dollars were converted first into Philippine pesos before they were accepted and
deposited in Nation Savings and Loan Association, because the bank is presumed to have
followed the ordinary course of the business which is to accept deposits in Philippine
currency only, and that the transaction was regular and fair, in the absence of a clear and
convincing evidence to the contrary.

In conclusion, considering that the liability of the petitioners is purely civil in nature and
that there is no clear showing that they engaged in foreign exchange transactions, We
hold that the public respondents acted without jurisdiction when they investigated the
charges against the petitioners. Consequently, public respondents should be restrained
from further proceeding with the criminal case for to allow the case to continue, even if
the petitioners could have appealed to the Ministry of Justice, would work great injustice
to petitioners and would render meaningless the proper administration of justice.