(1)

BPI vs. Intermediate Appellate Court GR# L-66826, August 19, 1988

Facts: Rizaldy T. Zshornack and his wife maintained in COMTRUST a dollar savings account and a peso current account. An application for a dollar drat was accomplished by Virgillo Garcia branch manager of COMTRUST payable to a certain Leovigilda Dizon. In the application, Garcia indicated that the amount was to be charged to the dollar savings account of the Zshornacks. There was no indication of the name of the purchaser of the dollar draft. Comtrust issued a check payable to the order of Dizon. When Zshornack noticed the withdrawal from his account, he demanded an explanation from the bank. In its answer, Comtrust claimed that the peso value of the withdrawal was given to Atty. Ernesto Zshornack, brother of Rizaldy. When he encashed with COMTRUST a cashiers check for P8450 issued by the manila banking corporation payable to Ernesto. Issue: Whether the contract between petitioner and respondent bank is a deposit? Held: The document which embodies the contract states that the US$3,000.00 was received by the bank for safekeeping. The subsequent acts of the parties also show that the intent of the parties was really for the bank to safely keep the dollars and to return it to Zshornack at a later time. Thus, Zshornack demanded the return of the money on May 10, 1976, or over five months later. The above arrangement is that contract defined under Article 1962, New Civil Code, which reads: 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 of 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.

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. (3) LUZAN SIA, vs. COURT OF APPEALS and SECURITY BANK and TRUST COMPANY, respondents. G.R. No. 102970 May 13, 1993

(2)

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 down payment 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.

FACTS: The plaintiff rented on March 22, 1985 the Safety Deposit Box No. 54 of the defendant bank at its Binondo Branch wherein he placed his collection of stamps. The said safety deposit box leased by the plaintiff was at the bottom or at the lowest level of the safety deposit boxes of the defendant bank .During the floods that took place, floodwater entered into the defendant bank's premises, seeped into the safety deposit box leased by the plaintiff and caused, according to the plaintiff, damage to his stamps collection. The defendant bank rejected the plaintiff's claim for compensation for his damaged stamps collection, so, the plaintiff instituted an action for damages against the defendant bank. ISSUE: Whether it was a grave error or an abuse of discretion on the part of the respondent court when it ruled that respondent SBTC did not fail to exercise the required diligence in maintaining the safety deposit box RULING: Note that the primary function is still found within the parameters of a contract of deposit, i.e., the receiving in custody of funds, documents and other valuable objects for safekeeping. The renting out of the safety deposit boxes is not independent from, but related to or in conjunction with, this principal function. A contract of deposit may be entered into orally or in writing (Art. 1969, Civil Code] and, pursuant to Article 1306of the Civil Code, the parties thereto may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy. Accordingly, the depositary would be liable if, in performing its obligation, it is found guilty of fraud, negligence, delay or contravention of the tenor of the agreement [Art. 1170, id.]. In the absence of any stipulation prescribing the degree of diligence required, that of a good father of a family is to be observed [Art.1173,id.]. Hence, any stipulation exempting the depositary from any liability arising from the loss of the thing deposited on account of fraud, negligence or delay would be void for being contrary to law and public policy. In the instant case, petitioner maintains that conditions 13 and l4 of the questioned contract of lease of the safety deposit box, which read:"13. The bank is a depositary of the contents of the safe and it has neither the possession nor control of thesame."14. The bank has no interest whatsoever in said contents, except as

herein expressly provided, and it assumes absolutely no liability in connection therewith. "are void as they are contrary to law and public policy. Public respondent further postulates that SBTC cannot be held responsible for the destruction or loss of the stamp collection because the flooding was a fortuitous event and there was no showing of SBTC's participation in the aggravation of the loss or injury. Both the law and authority cited are clear enough and require no further elucidation. Unfortunately, however, the public respondent failed to consider that in the instant case, as correctly held by the trial court, SBTC was guilty of negligence. Thus comes to the succor of the petitioner. The destruction or loss of the stamp collection which was, in the language of the trial court, the "product of 27 years of patience and diligence" caused the petitioner pecuniary loss; hence, he must be compensated therefor. (4) SERRANO vs CENTRAL BANK

ISSUE: Whether public respondents acted without jurisdiction when they investigated the charges (estafa and violation of CB Circular No. 364 and related regulations regarding foreign exchange transactions) subject matter of I.S. No. 81-31938. RULING: Public respondents have no jurisdiction over the charge of estafa. 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. Thus, Article 1980 of the New Civil Code provides that: Article 1980. Fixed, savings, and current deposits of-money in banks and similar institutions shall be governed by the provisions concerning simple loan. 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 the amount 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. In order that a person can be convicted under the above-quoted provision, it must be proven that he has the obligation to deliver or return the some money, goods or personal property that he received Petitioners had no such obligation to return the same money, i.e., the bills or coins, which they received from private respondents. This is so because as clearly as stated in criminal complaints, the related civil complaints and the supporting sworn statements, the sums of money that petitioners received were loans. The nature of simple loan is defined in Articles 1933 and 1953 of the Civil Code. "Art. 1933. - By the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time-and return it, in which case the contract is called a commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality shall he paid in which case the contract is simply called a loan or mutuum. "Commodatum is essentially gratuitous. "Simple loan may be gratuitous or with a stipulation to pay interest. "In commodatum the bailor retains the ownership of the thing loaned while in simpleloan, ownership passes to the borrower. "Art. 1953. - A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality." It can be readily noted from the above-quoted provisions that in simple loan (mutuum), as contrasted to commodatum the borrower acquires ownership of the money, goods or personal property borrowed Being the owner, the borrower can dispose of the thing borrowed (Article 248, Civil Code) and his act will not be considered misappropriation thereof' (Yam vs. Malik, 94 SCRA 30, 34 [1979];Emphasis supplied). 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 Article315 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

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. (5) TEOFISTO GUINGONA, JR., vs. THE CITY FISCAL OF MANILA G.R. No. L-60033 April 4, 1984

FACTS: This is a petition for prohibition and injunction with a prayer for the immediate issuance of restraining order and/or writ of preliminary injunction filed by petitioners, the instant petition seeks to prohibit public respondents from proceeding with the preliminary investigation, in which petitioners were charged by private respondent Clement David, with estafa and violation of Central Bank Circular No.364 and related regulations regarding foreign exchange transactions principally, on the ground of lack of jurisdiction in that the allegations of the charged, as well as the testimony of private respondent's principal witness and the evidence through said witness, showed that petitioners' obligation is civil in nature. Private respondent David filed a complaint with the Office of the City Fiscal of Manila charging petitioners with estafa and violation of Central Bank Circular No. 364 and related Central Bank regulations on foreign exchange transactions. Private respondent David, together with his sister, Denise Kuhne, invested with the Nation Savings and Loan Association the sum of P1,145,546.20 on time deposits covered by Bankers Acceptances and Certificates of Time Deposits and the sum of P13,531.94on savings account deposits covered by passbook nos. 6-632 and 29-742, or a total of P1,159,078.14 (pp. 15-16, roc.). It appears further that private respondent David, together with his sister, made investments in the aforesaid bank in the amount of US$75,000.00. When the bank was placed under receivership, petitioners Guingona and Martin, upon the request of private respondent David, assumed the obligation of the bank to private respondent David by executing on June 17, 1981 a joint promissory note in favor of private respondent acknowledging an indebtedness of Pl,336,614.02 and US$75,000.00. This promissory note was based on the statement of account as of June 30, 1981 prepared by the private respondent. The amount of indebtedness assumed appears to be bigger than the original claim because of the added interest and the inclusion of other deposits of private respondent's sister in the amount of P116,613.20. Petitioners Guingona and Martin agreed to divide the said indebtedness, and petitioner Guingona executed another promissory note antedated to June 17, 1981 whereby he personally acknowledged an indebtedness of P668,307.01 (1/2 of P1,336,614.02) and US$37,500.00 (1/2 of US$75,000.00) in favor of private respondent. The promissory notes were executed as a result of deposits made by Clement David and Denise Kuhne with the Nation Savings and Loan Association.

respondent would not constitute a breach of trust but would merely be a failure to pay the obligation as a debtor. (6) Triple-V Food Services, Inc. v. Filipino Merchants Insurance Company, Inc. GR No. 160544, February 21, 2005

the car insurance claims of Crispa Textile, Inc., owner of the vehicle and De Asis employer. The trial court ruled in FMICIs favor, which ruling was affirmed by the Court of Appeals. (7) YHT REALTY CORP. vs. CA G.R. No. 126780 | 17 February 2005

Food chain owner Triple-V Food Services, Inc. was recently found liable for the loss of a car entrusted to the valet parking service of one of its restaurants.

On March 2, 1997, at around 2:15 o'clock in the afternoon, a certain Mary Jo-Anne De Asis (De Asis) dined at petitioner's Kamayan Restaurant at 15 West Avenue, Quezon City. De Asis was using a Mitsubishi Galant Super Saloon Model 1995 with plate number UBU 955, assigned to her by her employer Crispa Textile Inc. (Crispa). On said date, De Asis availed of the valet parking service of petitioner and entrusted her car key to petitioner's valet counter. A corresponding parking ticket was issued as receipt for the car. The car was then parked by petitioner's valet attendant, a certain Madridano, at the designated parking area. Few minutes later, Madridano noticed that the car was not in its parking slot and its key no longer in the box where valet attendants usually keep the keys of cars entrusted to them. The car was never recovered. Thereafter, Crispa filed a claim against its insurer, herein respondent Filipino Merchants Insurance Company, Inc. (FMICI). Having indemnified Crispa in the amount of P669.500 for the loss of the subject vehicle, FMICI, as subrogee to Crispa's rights, filed with the RTC at Makati City an action for damages against petitioner Triple-V Food Services, Inc., thereat docketed as Civil Case No. 98-838 which was raffled to Branch 148. In a seven-page resolution, the Supreme Courts Third Division denied due course to Triple-Vs petition and held it responsible for the loss of a Mitsubishi Galant car deposited by one Mary JoAnne De Asis with the valet parking service of Kamayan restaurant on West Avenue, Quezon City. The Court said Triple-V cannot evade liability by claiming that availing of its free valet parking service did not give rise to a contract of deposit or insurance for the safety of the car. When De Asis entrusted the car to the restaurants valet attendant, she expected the cars safe return at the end of her meal. Thus, petitioner was constituted as a depositary of the same car, the Court said. The Court brushed aside Triple-Vs claim that under the terms of the valet parking claim stub, the restaurant was relieved from responsibility for any loss or damage to the vehicle and that by availing of the service, De Asis had waived her right to claim indemnity. The Court pointed out that the parking claim stub was a contract of adhesion prepared by the company with no participation from customers, who merely adhered to the stipulations. Triple-V could not be allowed to use this stipulation as a shield from liability, it said. The Court added, [w]hile contracts of adhesion are not void in themselves, yet this Court will not hesitate to rule out blind adherence thereto if they prove to be one-sided under the attendant facts and circumstances. The Court also said that the free valet service was part of the restaurants enticement for customers since it assured them that their vehicles would be safely kept within the restaurants vicinity, rather than parked elsewhere at their own risk. Having then entrusted the car to TripleVs valet attendant, De Asis, like all of the restaurants customers, fully expected the security of her car while in the designated parking area and its safe return at the end of her visit, the Court stressed. The controversy stemmed from a case for damages filed with the Makati Regional Trial Court by the Filipino Merchants Insurance Company, Inc. against Triple-V. FMICI filed the suit after it paid

Facts: MAURICE McLaughlin is an Australian national who comes to the Philippines for business. During his trips he stays in Tropicana, a hotel recommended to him by Brunhilda Tan. McLaughlin deposited cash and jewelry to the safety deposit box of the Hotel. The safety deposit box cannot be opened unless the key of the guest and that of the management are present. Lainez and Payam are employees of Tropicana who is charged with the custody of the keys. Thereafter, McLaughlin found out that some of the money and jewelry he deposited were missing. Lainez and Payam admitted that they assisted Tan to open his deposit box. Tan admitted that she stole McLaughlins keys. Tan executed a promissory note to cover the amount of the stolen money and jewelry. McLaughlin wanted to make the management liable. Issue: Whether or not a hotel may evade liability for the loss of items left with it for safekeeping by its guests, by having these guests execute written waivers holding the establishment or its employees free from blame for such loss in light of Article 2003 of the Civil Code which voids such waivers. Held: The issue of whether the Undertaking For The Use of Safety Deposit Box executed by McLoughlin is tainted with nullity presents a legal question appropriate for resolution in this petition. Notably, both the trial court and the appellate court found the same to be null and void. We find no reason to reverse their common conclusion. Article 2003 is controlling, thus: Art. 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 hotelkeeper and the guest whereby the responsibility of the former as set forth in Articles 1998 to 2001[37] is suppressed or diminished shall be void. 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, 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. GUARANTY (1) SPOUSES VICKY TAN TOH and LUIS TOH vs SOLID BANK CORPORATION, ET.AL.[GR No. 154183. AUGUST 7, 2003.]

FACTS: Herein petitioners, spouses Luis and Vicky were then chairman and vice-president, respectively of First Business Paper Corporation (FBPC). Private respondents spouses Kenneth and Ma. Victoria Ng Li were President and manager of the same corporation. Respondent Solidbank Corporation agreed to extend an omnibus line credit facility wothP10million in favor of respondent FBPC. One of the terms and conditions of the agreement which was embodied in a letter advise of the bank was that herein petitioners together with respondent spouses Kenneth and Ma. Victoria Ng Li would sign the Continuing Guarantee, a public document prepared solely by the respondent bank. The terms of the instrument defined the contract arising therefrom as a surety agreement and provided for the solidary liability of the signatories thereto for and in consideration of "loans or advances" and "credit in any other manner to, or at the requestor for

the account" of FBPC. On January 16, 1993, respondent FBPC started to avail of the credit facility and procure letters of credit. On November 17, 1993, FBPC opened 13 letters of credit and obtained loans totaling P15,227,510.00. As the letters of credit were secured, FBPC, through its officers Kenneth Ng Li, Ma. Victoria Ng Li and Redentor Padilla as signatories executed a series of trust receipts over the goods allegedly purchased from the proceeds of the loans. On January 13, 1994 respondent Bank received information that respondent-spouses Kenneth Ng Li and Ma. Victoria Ng Li had fraudulently departed from their conjugal home. On January 14, 1994 the Bank served a demand letter upon FBPC and petitioner Luis Toh invoking the acceleration clause in the trust receipts of FBPC and claimed payment for P10,539,758.68 as unpaid overdue accounts on the letters of credit plus interests and penalties within twentyfour (24) hours from receipt thereof. The Bank also invoked the Continuing Guaranty executed by petitioner-spouses Luis Toh and Vicky Tan Toh who were the only parties known to be within national jurisdiction to answer as sureties for the credit facility of FBPC. After trial on the merits, the court a quo rendered a decision finding respondent FBPC liable to Solidbank but absolving petitioner spouses of any liability holding that petitioners were not bound by the surety contract since the letters of credit it was supposed to secure were opened long after petitioners had ceased to be part of FBPC. On appeal, the Court of Appeals modified the above decision and held that by signing the Continuing Guarantee, petitioner spouses became solidarily liable with FBPC to pay respondent bank ratiocinating that the surety agreement did not indicate that petitioners signed the same intheir capacity as officers of the FBPC only. Finally, the Court of Appeals rejected petitioners' argument that there were "material alterations" in the provisions of the "letter-advise," i.e., that only domestic letters of credit were opened when the credit facility was for importation of papers and other materials, and that marginal deposits were not paid, contrary to the requirements stated in the "letter-advise." The simple response of the appellate court to this challenge was, first, the "letter-advise" itself authorized the issuance of domestic letters of credit, and second, the several waivers extended by petitioners in the Continuing Guaranty, which included changing the time and manner of payment of the indebtedness, justified the action of respondent Bank not to charge marginal deposits. ISSUES: Are petitioners liable to Solidbank pursuant to Continuing Guarantee? HELD: YES. This Court holds that the Continuing Guaranty is a valid and binding contract of petitionerspouses as it is a public document that enjoys the presumption of authenticity and due execution. Although petitioners as appellees may raise issues that have not been assigned as errors by respondent Bank as party-appellant, i.e., unenforceability of the surety contract, we are bound by the consistent finding of the courts a quo that petitioner-spouses Luis Toh and Vicky Tan Toh" voluntarily affixed their signature[s]" on the surety agreement and were thus "at some given point in time willing to be liable under those forms." In the absence of clear, convincing and more than preponderant evidence to the contrary, our ruling cannot be otherwise. Similarly, there is no basis for petitioners to limit their responsibility thereon so long as they were corporate officers and stockholders of FBPC. Nothing in the Continuing Guaranty restricts their contractual undertaking to such condition or eventuality. In fact the obligations assumed by them therein subsist "upon the undersigned, the heirs, executors, administrators, successors and assigns of the undersigned, and shall inure to the benefit of, and be enforceable by you, your successors, transferees and assigns," and that their commitment "shall remain in full force and effect until written notice shall have been received by [the Bank] that it has been revoked by the undersigned." Verily, if petitioners intended not to be charged as sureties after their withdrawal from FBPC, they could have simply terminated the agreement by serving the required notice of revocation upon the Bank as expressly allowed therein.

(2) Special Steel Products vs. Lutgardo Villareal & Frederick So G.R. No.143304. July 8, 2004 Facts: Special Steel Products, Inc., is a domestic corporation engaged in the principal business of importation, sale, and marketing of BOHLER steel products. Respondents worked for petitioner as assistant manager and salesman. Villareal obtained a car loan from Bank of Commerce with petitioner as surety wherein they are jointly and severally agreed to pay the bank in installment basis. In January 1997, Villareal resigned and joined Hi-Grade Industrial and Technical Products as Executive vice-president. Respondent So was sponsored by petitioner to attend a training course in Kapfenberg, Austria conducted by BOHLER. It rewarded Sos outstanding sales performance. When So returned, the petitioner asked respondent So to sign a memorandum to work for the company for three years. After 2 years and 4 months, So resigned from the company. Petitioner ordered respondents an accounting of the various Christmas giveaways they received. In return, respondents also demanded payment of their separation benefits, commissions, monetary benefits but petitioner refused and withheld the 13th month pay and other benefits. Issue: Whether or not the employer can withhold its employees wages and benefits as lien to protect its interest as surety in the car loan and for expenses in the training abroad. Ruling: The employer cannot withhold respondents 13th month pay and other monetary benefits. Article 116 of the Labor Code, as amended, provides: Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages (and benefits) of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the workers consent. The above provision is clear and needs no further elucidation. Indeed, petitioner has no legal authority to withhold respondents 13th month pay and other benefits. What an employee has worked for, his employer must pay. Thus, an employer cannot simply refuse to pay the wages or benefits of its employee because he has either defaulted in paying a loan guaranteed by his employer; or violated their memorandum of agreement; or failed to render an accounting of his employers property.