CA Agro-Industrial Development Corporation vs CA GR No. 90027.

March 3, 1993
Facts:
CA Agro (through its President, Aguirre) and spouses Pugao entered into
an agreement whereby the former purchased two parcels of land for P350, 525 with a
P75, 725 down payment while the balance was covered by three (3) postdated checks.
Among the terms embodied in a Memorandum of True and Actual Agreement of Sale of
Land were that titles to the lots shall be transferred to the petitioner upon full
payment of the purchase price and that the owner’s copies of the certificates of titles
thereto shall be deposited in a safety deposit box of any bank. The same could be
withdrawn only upon the joint signatures of a representative of the petitioner upon full
payment of the purchase price. They then rented Safety Deposit box of private
respondent Security Bank and Trust Company (SBTC). For this purpose, both signed
a contract of lease which contains the following conditions:
13. The bank is not a depositary of the contents of the safe and it has
neither the possession nor control of the same.
14. The bank has no interest whatsoever in said contents, except
herein expressly provided, and it assumes absolutely no liability in connection
therewith.
After the execution of the contract, two (2) renter’s key were given to Aguirre, and
Pugaos. A key guard remained with the bank. The safety deposit box has two key holes
and can be opened with the use of both keys. Petitioner claims that the CTC were
placed inside the said box.
Thereafter, a certain Mrs. Ramos offered to buy from the petitioner the two (2) lots at a
price of P225 per sqm. Mrs. Ramose demanded the execution of a deed of sale which
necessarily entailed the production of the CTC. Aguirre and Pugaos then proceeded to
the bank to open the safety deposit box. However, when opened in the presence of
bank’s representative, the box yielded no certificates. Because of the delay in
reconstitution of title, Mrs. Ramos withdrew her earlier offer and as a consequence
petitioner failed to realize the expected profit of P280 , 500. Hence, the latter filed a
complaint for damages.
RTC: Dismissed the complaint
CA: Affirmed

Issue:
Whether or not the contractual relation between a commercial bank and
another party in the contract of rent of a safety deposit box is one of bailor and bailee.

Ruling:
Yes.
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 Pugaos.
American Jurisprudence:
The prevailing rule is that the relation between a bank renting out safe-deposit
boxes and its customer with respect to the contents of the box is that of a bail or bailee,
the bailment being for hire and mutual benefit.Our provisions on safety deposit
boxes are governed by Section 72 (a) of the General Banking Act, and this
primary function is still found within the parameters of a contract of deposit like
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. Thus, depositary’s liability is
governed by our civil code rules on obligation and contracts, and thus the SBTC would
be liable if, in performing its obligation, it is found guilty of fraud, negligence, delay or
contravention of the tenor of the agreement.

[G.R. No. 160544. February 21, 2005] TRIPLE-V vs. FILIPINO

MERCHANTS

DEPOSITS

FACTS:

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.

petitioner argued that the complaint failed to aver facts to support the allegations
of recklessness and negligence committed in the safekeeping and custody of the
subject vehicle, claiming that it and its employees wasted no time in ascertaining
the loss of the car and in informing De Asis of the discovery of the loss.

Petitioner further argued that in accepting the complimentary valet parking

service, De Asis received a parking ticket whereunder it is so provided that
"[Management and staff will not be responsible for any loss of or damage
incurred on the vehicle nor of valuables contained therein", a provision
which, to petitioner's mind, is an explicit waiver of any right to claim indemnity for
the loss of the car; and that De Asis knowingly assumed the risk of loss when she
allowed petitioner to park her vehicle, adding that its valet parking service did not
include extending a contract of insurance or warranty for the loss of the vehicle.

During trial, petitioner challenged FMICI's subrogation to Crispa's right to file a

claim for the loss of the car, arguing that theft is not a risk insured against under
FMICI's Insurance Policy No. PC-5975 for the subject vehicle.

petitioner appealed to the Court of Appeals reiterating its argument that it was not
a depositary of the subject car and that it exercised due diligence and prudence in
the safe keeping of the vehicle, in handling the car-napping incident and in the
supervision of its employees. It further argued that there was no valid subrogation
of rights between Crispa and respondent FMICI.

ISSUE:

Whether it is a deposit?

RULING:

When De Asis entrusted the car in question to petitioners valet attendant while
eating at petitioner's Kamayan Restaurant, the former expected the car's safe
return at the end of her meal. Thus, petitioner was constituted as a depositary of the
same car. Petitioner cannot evade liability by arguing that neither a contract of
deposit nor that of insurance, guaranty or surety for the loss of the car was
constituted when De Asis availed of its free valet parking service.

In a contract of deposit, a person receives an object belonging to another with the

obligation of safely keeping it and returning the same. [3]cralaw A deposit may be
constituted even without any consideration. It is not necessary that the depositary
receives a fee before it becomes obligated to keep the item entrusted for
safekeeping and to return it later to the depositor.

Specious is petitioner's insistence that the valet parking claim stub it issued to De
Asis contains a clear exclusion of its liability and operates as an explicit waiver by
the customer of any right to claim indemnity for any loss of or damage to the
vehicle.

The parking claim stub embodying the terms and conditions of the parking,
including that of relieving petitioner from any loss or damage to the car, is
essentially a contract of adhesion, drafted and prepared as it is by the petitioner
alone with no participation whatsoever on the part of the customers, like De Asis,
who merely adheres to the printed stipulations therein appearing. While 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.[4]cralaw

Hence, and as aptly pointed out by the Court of Appeals, petitioner must not be
allowed to use its parking claim stub's exclusionary stipulation as a shield from any
responsibility for any loss or damage to vehicles or to the valuables contained
therein. Here, it is evident that De Asis deposited the car in question with the
petitioner as part of the latter's enticement for customers by providing them a safe
parking space within the vicinity of its restaurant. In a very real sense, a safe
parking space is an added attraction to petitioner's restaurant business because
customers are thereby somehow assured that their vehicle are safely kept, rather
than parking them elsewhere at their own risk. Having entrusted the subject car to
petitioner's valet attendant, customer De Asis, like all of petitioner's customers,
fully expects the security of her car while at petitioner's premises/designated
parking areas and its safe return at the end of her visit at petitioner's restaurant.
Petitioner's argument that there was no valid subrogation of rights between Crispa
and FMICI because theft was not a risk insured against under FMICI's Insurance
Policy No. PC-5975 holds no water.

Insurance Policy No. PC-5975 which respondent FMICI issued to Crispa contains,
among others things, the following item: "Insured's Estimate of Value of Scheduled
Vehicle- P800.000".[5]cralaw On the basis of such item, the trial court concluded
that the coverage includes a full comprehensive insurance of the vehicle in case of
damage or loss. Besides, Crispa paid a premium of P10,304 to cover theft. This is
clearly shown in the breakdown of premiums in the same policy. [6]cralaw Thus,
having indemnified CRISPA for the stolen car, FMICI, as correctly ruled by the trial
court and the Court of Appeals, was properly subrogated to Crispa's rights against
petitioner, pursuant to Article 2207 of the New Civil Code[7].

Anent the trial court's findings of negligence on the part of the petitioner, which
findings were affirmed by the appellate court, we have consistently ruled that
findings of facts of trial courts, more so when affirmed, as here, by the Court of
Appeals, are conclusive on this Court unless the trial court itself ignored, overlooked
or misconstrued facts and circumstances which, if considered, warrant a reversal of
the outcome of the case.[8]cralaw This is not so in the case at bar. For, we have
ourselves reviewed the records and find no justification to deviate from the trial
court's findings.

WHEREFORE, petition is hereby DENIED DUE COURSE.

SO ORDERED.

BANK OF THE PHILIPPINE ISLANDS, petitioner,

vs.
THE INTERMEDIATE APPELLATE COURT and ZSHORNACK respondents.

As for the second cause of action, The complaint filed with the trial court alleged that on
December 8, 1975, Zshornack entrusted to COMTRUST, thru Garcia, US
$3,000.00 cash (popularly known as greenbacks) for safekeeping, and that the agreement
was embodied in a document, a copy of which was attached to and made part of the
complaint.

the bank comes to this Court praying that it be totally absolved from any liability to Zshornack.

In its answer, COMTRUST averred that the US$3,000 was credited to Zshornack's peso
current account at prevailing conversion rates.

It must be emphasized that COMTRUST did not deny specifically under oath the authenticity
and due execution of the above instrument.

During trial, it was established that on December 8, 1975 Zshornack indeed delivered to the
bank US $3,000 for safekeeping. When he requested the return of the money on May 10, 1976,
COMTRUST explained that the sum was disposed of in this manner: US$2,000.00 was sold
on December 29, 1975 and the peso proceeds amounting to P14,920.00 were deposited to
Zshornack's current account per deposit slip accomplished by Garcia; the remaining
US$1,000.00 was sold on February 3, 1976 and the peso proceeds amounting to P8,350.00
were deposited to his current account per deposit slip also accomplished by Garcia.
Aside from asserting that the US$3,000.00 was properly credited to Zshornack's current
account at prevailing conversion rates, BPI now posits another ground to defeat private
respondent's claim. It now argues that the contract embodied in the document is the contract
of depositum (as defined in Article 1962, New Civil Code), which banks do not enter into. The
bank alleges that Garcia exceeded his powers when he entered into the transaction. Hence, it
is claimed, the bank cannot be liable under the contract, and the obligation is purely personal
to Garcia.

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.

ISSUE:

Can Zshornack demanded the return of the money on May 10, 1976, or over five months
later?

Ruling:

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.

Note that the object of the contract between Zshornack and COMTRUST was foreign
exchange. Hence, the transaction was covered by Central Bank Circular No. 20, Restrictions
on Gold and Foreign Exchange Transactions, promulgated on December 9, 1949, which was
in force at the time the parties entered into the transaction involved in this case. The circular
provides:

xxx xxx xxx

2. Transactions in the assets described below and all dealings in them of whatever nature,
including, where applicable their exportation and importation, shall NOT be effected, except
with respect to deposit accounts included in sub-paragraphs (b) and (c) of this paragraph,
when such deposit accounts are owned by and in the name of, banks.

(a) Any and all assets, provided they are held through, in, or with banks or banking institutions
located in the Philippines, including money, checks, drafts, bullions bank drafts, deposit
accounts (demand, time and savings), all debts, indebtedness or obligations, financial brokers
and investment houses, notes, debentures, stocks, bonds, coupons, bank acceptances,
mortgages, pledges, liens or other rights in the nature of security, expressed in foreign
currencies, or if payable abroad, irrespective of the currency in which they are expressed, and
belonging to any person, firm, partnership, association, branch office, agency, company or
other unincorporated body or corporation residing or located within the Philippines;

(b) Any and all assets of the kinds included and/or described in subparagraph (a) above,
whether or not held through, in, or with banks or banking institutions, and existent within the
Philippines, which belong to any person, firm, partnership, association, branch office, agency,
company or other unincorporated body or corporation not residing or located within the
Philippines;

(c) Any and all assets existent within the Philippines including money, checks, drafts, bullions,
bank drafts, all debts, indebtedness or obligations, financial securities commonly dealt in by
bankers, brokers and investment houses, notes, debentures, stock, bonds, coupons, bank
acceptances, mortgages, pledges, liens or other rights in the nature of security expressed in
foreign currencies, or if payable abroad, irrespective of the currency in which they are
expressed, and belonging to any person, firm, partnership, association, branch office, agency,
company or other unincorporated body or corporation residing or located within the
Philippines.

xxx xxx xxx

4. (a) All receipts of foreign exchange shall be sold daily to the Central Bank by those
authorized to deal in foreign exchange. All receipts of foreign exchange by any person, firm,
partnership, association, branch office, agency, company or other unincorporated body or
corporation shall be sold to the authorized agents of the Central Bank by the recipients within
one business day following the receipt of such foreign exchange. Any person, firm, partnership,
association, branch office, agency, company or other unincorporated body or corporation,
residing or located within the Philippines, who acquires on and after the date of this Circular
foreign exchange shall not, unless licensed by the Central Bank, dispose of such foreign
exchange in whole or in part, nor receive less than its full value, nor delay taking ownership
thereof except as such delay is customary; Provided, further, That within one day upon taking
ownership, or receiving payment, of foreign exchange the aforementioned persons and
entities shall sell such foreign exchange to designated agents of the Central Bank.

xxx xxx xxx

8. Strict observance of the provisions of this Circular is enjoined; and any person, firm or
corporation, foreign or domestic, who being bound to the observance thereof, or of such other
rules, regulations or directives as may hereafter be issued in implementation of this Circular,
shall fail or refuse to comply with, or abide by, or shall violate the same, shall be subject to the
penal sanctions provided in the Central Bank Act.

xxx xxx xxx

Paragraph 4 (a) above was modified by Section 6 of Central Bank Circular No. 281,
Regulations on Foreign Exchange, promulgated on November 26, 1969 by limiting its
coverage to Philippine residents only. Section 6 provides:

SEC. 6. All receipts of foreign exchange by any resident person, firm, company or corporation
shall be sold to authorized agents of the Central Bank by the recipients within one business
day following the receipt of such foreign exchange. Any resident person, firm, company or
corporation residing or located within the Philippines, who acquires foreign exchange shall not,
unless authorized by the Central Bank, dispose of such foreign exchange in whole or in part,
nor receive less than its full value, nor delay taking ownership thereof except as such delay is
customary; Provided, That, within one business day upon taking ownership or receiving
payment of foreign exchange the aforementioned persons and entities shall sell such foreign
exchange to the authorized agents of the Central Bank.

As earlier stated, the document and the subsequent acts of the parties show that they intended
the bank to safekeep the foreign exchange, and return it later to Zshornack, who alleged in his
complaint that he is a Philippine resident. The parties did not intended to sell the US dollars to
the Central Bank within one business day from receipt. Otherwise, the contract
of depositum would never have been entered into at all.

Since the mere safekeeping of the greenbacks, without selling them to the Central Bank within
one business day from receipt, is a transaction which is not authorized by CB Circular No. 20,
it must be considered as one which falls under the general class of prohibited transactions.
Hence, pursuant to Article 5 of the Civil Code, it is void, having been executed against the
provisions of a mandatory/prohibitory law. More importantly, it affords neither of the parties a
cause of action against the other. "When the nullity proceeds from the illegality of the cause or
object of the contract, and the act constitutes a criminal offense, both parties being in pari
delicto, they shall have no cause of action against each other. . ." [Art. 1411, New Civil Code.]
The only remedy is one on behalf of the State to prosecute the parties for violating the law.

We thus rule that Zshornack cannot recover under the second cause of action.

3. Lastly, we find the P8,000.00 awarded by the courts a quo as damages in the concept of
litigation expenses and attorney's fees to be reasonable. The award is sustained.

WHEREFORE, the decision appealed from is hereby MODIFIED. Petitioner is ordered to

restore to the dollar savings account of private respondent the amount of US$1,000.00 as of
October 27, 1975 to earn interest at the rate fixed by the bank for dollar savings deposits.
Petitioner is further ordered to pay private respondent the amount of P8,000.00 as damages.
The other causes of action of private respondent are ordered dismissed.

THE ROMAN CATHOLIC BISHOP OF JARO vs. GREGORIO DE LA PEÑA

FACTS : The plaintiff is the trustee of a charitable bequest made for the construction of a leper
hospital and that father Agustin de la Peña was the duly authorized representative of the
plaintiff to receive the legacy. The defendant is the administrator of the estate of Father De la
Peña.

In the year 1898 the books Father De la Peña, as trustee, showed that he had on hand as
such trustee the sum of P6,641, collected by him for the charitable purposes aforesaid. In the
same year he deposited in his personal account P19,000 in the Hongkong and Shanghai Bank
at Iloilo. Shortly thereafter and during the war of the revolution, Father De la Peña was
arrested by the military authorities as a political prisoner, and while thus detained made an
order on said bank in favor of the United States Army officer under whose charge he then was
for the sum thus deposited in said bank. The arrest of Father De la Peña and the confiscation
of the funds in the bank were the result of the claim of the military authorities that he was an
insurgent and that the funds thus deposited had been collected by him for revolutionary
purposes. The money was taken from the bank by the military authorities by virtue of such
order, was confiscated and turned over to the Government.

While there is considerable dispute in the case over the question whether the P6,641 of trust
funds was included in the P19,000 deposited as aforesaid, nevertheless, a careful examination
of the case leads us to the conclusion that said trust funds were a part of the funds deposited
and which were removed and confiscated by the military authorities of the United States.

ISSUE : Whether or not Father de la Peña is liable for the loss of the money under his trust?

RULINGS : The court, therefore, finds and declares that the money which is the subject matter
of this action was deposited by Father De la Peña in the Hongkong and Shanghai Banking
Corporation of Iloilo; that said money was forcibly taken from the bank by the armed forces of
the United States during the war of the insurrection; and that said Father De la Peña was not
responsible for its loss.
Father De la Peña's liability is determined by those portions of the Civil Code which relate to
obligations. (Book 4, Title 1.)

Although the Civil Code states that "a person obliged to give something is also bound to
preserve it with the diligence pertaining to a good father of a family" (art. 1094), it also provides,
following the principle of the Roman law, major casus est, cui humana infirmitas resistere non
potest, that "no one shall be liable for events which could not be foreseen, or which having
been foreseen were inevitable, with the exception of the cases expressly mentioned in the law
or those in which the obligation so declares." (Art. 1105.)

By placing the money in the bank and mixing it with his personal funds De la Peña did not
thereby assume an obligation different from that under which he would have lain if such
deposit had not been made, nor did he thereby make himself liable to repay the money at all
hazards. If the had been forcibly taken from his pocket or from his house by the military forces
of one of the combatants during a state of war, it is clear that under the provisions of the Civil
Code he would have been exempt from responsibility. The fact that he placed the trust fund in
the bank in his personal account does not add to his responsibility. Such deposit did not make
him a debtor who must respond at all hazards.