BPI vs.

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

CORTES, J: 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 PPLICtion, Garcia indicated that the amount was to be charged to the dolar savings account of the Zshornacks. There wasa 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 explainaiton 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.

CA Agro Industrial Development Corp., vs Court of Appeals GR# 90027 March 3, 193
DAVIDE, JR., J: Facts: Petitioner and the spouses Ramon and Paula Pugao entered into an agreement whereby the former purchased from the latter two (2) parcels of land. Among the terms and conditions of the agreement were that the 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, and that title shall be deposited 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 Mrs. Margarita Ramos offered to buy from the petitioner the two (2) lots. Mrs. Ramos demanded the execution of a deed of sale which necessarily entailed the production of the certificates of title. In view thereof, Aguirre, accompanied by the Pugaos, then proceeded to the respondent Bank to open the safety deposit box and get the certificates of title. However, when opened in the presence of the Bank's representative, the box yielded no such certificates. Issue: Is the contractual relation between a commercial bank and another party in a contract of rent of a safety deposit box with respect to its contents placed by the latter one of bailor and bailee or one of lessor and lessee? Held: The contract for the rent of the safety deposit box is not an ordinary contract of lease as defined in Article 1643 of the Civil Code. However, We do not fully subscribe to its view that the same is a contract of deposit that is to be strictly governed by the provisions in the 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. In this case, the said key had a duplicate which was made so that both renters could have access to the box.

G.R. No. 102970 May 13, 1993 LUZAN SIA,vs. COURT OF APPEALS and SECURITY BANK and TRUST COMPANY, respondents. 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 1306 of 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 the same. "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.

Section 53. Other Banking Services. - In addition to the operations specifically authorized in this Act, a bank may perform the following services: 53.1. Receive in custody funds, documents and valuable objects; 53.2. Act as financial agent and buy and sell, by order of and for the account of their customers, shares, evidences of indebtedness and all types of securities; 53.3. Make collections and payments for the account of others and perform such other services for their customers as are not incompatible with banking business; 53.4 Upon prior approval of the Monetary Board, act as managing agent, adviser, consultant or administrator of investment management/advisory/consultancy accounts; and 53.5. Rent out safety deposit boxes. The bank shall perform the services permitted under Subsections 53.1, 53.2,53.3 and 53.4 as depositary or as an agent. Accordingly, it shall keep the funds, securities and other effects which it receives duly separate from the bank's own assets and liabilities: The Monetary Board may regulate the operations authorized by this Section in order to ensure that such operations do not endanger the interests of the depositors and other creditors of the bank. In case a bank or quasi-bark notifies the Bangko Sentral or publicly announces a bank holiday, or in any manner suspends the payment of its deposit liabilities continuously for more than thirty (30) days, the Monetary Board may summarily and without need for prior hearing close such banking institution and place it under receivership of the Philippine Deposit Insurance Corporation. (72a)
YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM v. CA and MAURICE McLOUGHLIN 2005 / Tinga

Foreigner rented an SDB and placed valuables there, some of which he lost. He wanted to hold the hotel liable but it cited the Undertaking that the foreigner signed or executed, which said that the hotel shall not be held liable for such losses. Now, the foreigner is contesting these provisions of the Undertaking. He won, since the provisions violated NCC 2003. END!

McLoughlin is an Australian businessman-philanthropist who usually visits PH. His contact here is Brunhilda Tan. Lopez was the hotel manager, while Lainez and Payam had custody of the keys of the safety deposit boxes [SDB].

SDB procedureThe SDB could only be opened using two keysone given to the registered guest, and the other in the possession of hotel management. When the guest wants to open the SDB, only he can personally request the management, and an employee would accompany the guest to assist in opening the SDB with the two keys.

When McLoughlin arrived from Australia, he registered with Tropicana and rented an SDB. He allegedly had 3 envelopes (US $10k; US $5k; AUS $10k), 2 envelopes containing letters and credit cards, 2 bank books, and a checkbook in his SDB. Before leaving for a brief trip, he opened his SDB to get some items. He found that one envelope contained only USD $3k. He checked out of Tropicana upon returning to Manila, and he eventually discovered that an envelope was short of $5k. Some jewelry he bought went missing. When he inquired about this, he did not receive a favorable response. He registered again in Tropicana, and placed in the SDB three envelopes (US $15k; AUS $10k; documents). Twelve days later, he noticed that the USD envelope lacked $2k, while the AUSD envelope lacked AUS $4.5k. When he confronted Lainez and Payam, they admitted that it was Tan who opened the SDB, who admitted stealing his key. Lopez wrote a promissory noteI promise to pay Mr. Maurice McLoughlin the amount of AUS$4k and US$2k or its equivalent in Philippine currency on or before May 5, 1988. Lopez requested Tan to sign the promissory note and Lopez also signed as a witness. Despite the execution of promissory note by Tan, McLoughlin insisted that it must be the hotel who must assume responsibility for the loss he suffered. However, Lopez refused to accept the responsibility relying on the conditions for renting the SDB (Undertaking For The Use of Safety Deposit Box): To release and hold free and blameless the hotel from any liability arising from any loss in the contents and/or use of the SDB for any cause whatsoever, including but not limited to the presentation or use thereof by any other person should the key be lost To return the key and execute the release in favor of the hotel upon giving up the use of the SDB McLoughlin consulted his lawyers in Australia, and they said that the stipulations are void for being violative of universal hotel practices and customs. His lawyers prepared a letter, and sent it to President Corazon Aquino. The matter was eventually referred to the Western Police District. Eventually, a complaint for damages was filed against YHT Realty Corporation, Lopez, Lainez, Payam and Tan for the loss of money, but trial proceeded without Lopez and Tan. During the trial, McLoughlin had been in and out of the country to attend to urgent business in Australia, and while staying in the Philippines to attend the hearing, he incurred various expenses; hence, the SC award. -

The RTC rendered judgment in favor of McLoughlin. It found that defendants acted with gross negligence in the performance and exercise of their duties and obligations as innkeepers and were therefore liable to answer for the losses incurred by McLoughlin. It ruled that the aforementioned provisions of the Undertaking are not valid for being contrary to the express mandate of NCC 2003 and against public policy. Thus, there being fraud or wanton conduct on the part of defendants, they should be responsible for all damages which may be attributed to the non-performance of their contractual obligations. CA affirmed RTC, except as to the amount of damages awarded (see last part of digest; SC affirmed CA award)

ISSUE & HOLDING WON the Undertaking for the Use of Safety Deposit Box executed by McLoughlin is null and void. YES

RATIO [I placed the provisions here, as this is the only hotel case.] NCC 1998. The deposit of effects made by the 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)

NCC 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) NCC 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) NCC 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) NCC 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) NCC 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)

NCC 2003 was incorporated as an expression of public policy. The hotel business like the common carriers business is imbued with public interest. The twin duty constitutes the essence of the business: hotelkeepers are bound to provide not only lodging for hotel guests and security to their persons and belongings. The law 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 an early case, it was held that it is not necessary that the guests effects be actually delivered to the innkeepers or their employees, as it is enough that such effects are within the hotel. With greater reason should the liability of the hotelkeeper be enforced when the items are taken without the guests knowledge and consent from an SDB provided by the hotel itself. Paragraphs (2) and (4) of the undertaking manifestly contravene NCC 2003. The undertaking was intended to bar any claim against Tropicana for any loss of the contents of the SDB, WON negligence was incurred by Tropicana or its employees. The NCC is explicit that the responsibility of the hotelkeeper 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. In this case, the thief (Tan) employed no use of arms or an irresistible force to qualify as force majeure, so the hotel is not exempted from liability.

Petitioners likewise anchor their defense on NCC 2002, to which SC says NO WAY! The justification would render nugatory the public interest sought to be protected. What if the negligence of the employer or its employees facilitated the consummation of a crime committed by the registered guests relatives or visitor? Should the la w exculpate the hotel from liability since the loss was due to the act of the visitor of the registered guest of the hotel? Hence, this provision presupposes that the hotelkeeper is not guilty of concurrent negligence or has not contributed in any degree to the occurrence of the loss. A depositary is not responsible for the loss of goods by theft, unless his actionable negligence contributes to the loss. Tropicana was guilty of concurrent negligence. To rule otherwise would result in undermining the safety of the SDBs in hotels, for the management will be given imprimatur to allow any person, under the pretense of being a family member or a visitor of the guest, to have access without fear of any liability that will attach in case such person turns out to be a complete stranger.

Torts part of the case Given the established SDB procedure, is inevitable to conclude that the management had at least a hand in the consummation of the taking. The employees even admitted that they assisted Tan on three (!) separate occasions in opening McLoughlins SDB. The management failed to notify McLoughlin of the incident and waited for him to discover the taking before it disclosed the matter to him. Therefore, Tropicana should be held responsible for the damage suffered by McLoughlin by reason of the negligence of its employees.

FAIL DEFENSE OF HOTEL: We thought Ms. Tan was your wife, Mr. McLoughlin! To which SC says: Mere close companionship and intimacy are not enough to warrant such conclusion considering that what is involved in the instant case is the very safety of McLoughlins deposit. (haha) If only petitioners exercised due diligence, they should have confronted him as to his relationship with Tan considering that the latter had been observed opening McLoughlins SDB a number of times at the early hours of the morning.

NCC 1170 ~ Those who, in the performance of their obligations, are guilty of negligence, are liable for damages. NCC 2180 (4) provides that the owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. If an employee is found negligent, it is presumed that the employer was negligent in selecting and/or supervising him. Thus, given the fact that the loss of McLoughlins money was consummated through the negligence of Tropicanas employees in allowing Tan to open the SDB without the guests consent, both the assisting employees and YHT Realty Corporation itself, as owner and operator of Tropicana, should be held solidarily liable pursuant to NCC 2194.

Durban Apartments Corporation v Pioneer Insurance and Surety Corporation Facts:

Nature of the Case: Petition for review of the Decision of CA which affirmed the decision of the RTCholding petitioner Durban Apartments Corp solely liable to respondent Pioneer Insurance and Surety Corp for the loss of Jeffrey Sees vehicle. Facts:

July 22, 2003, Pioneer Insurance and Surety Corp, by right of subrogation, filed with the RTC of Makati a Complaint for Recovery of Damages against Durban Apartments Corp ( or City Garden Hotel) and defendant before the RTC, Vicente Justimbaste. Respondent averred that it is the insurer for loss and damage of Jeffrey S. Sees 2001 Suzuki Grand Vitarain the amount of P1,175,000.00. On April 30, 2002, See arrived and checked in at the City Garden Hotel before midnight, and its parking attendant, Justimbaste got the key to said Vitara from See to park 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 parked unattended at the parking area of Equitable PCI Bank See went to see the Security Officer, thereafter reported the incident to the Operations Division of the Makati City Police Anti-Carnapping Unit, and a flash alarm was issued. The police investigated Hotel Security Officer, Ernesto T. Horlador, Jr. and Justimbaste. See gave his SinumpaangSalaysay to the police investigator, and filed a Complaint Sheet with the PNP Traffic Management Group in Camp Crame. it paid the 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 was discovered during the investigation that this was the second time that a similar incident of carnapping happened 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 employees particularly defendant Justimbaste. Both failed and refused to pay its valid, just, and lawful claim despite written demands.

Pioneer Insurance and Surety Corporation, by right of subrogation, filed a Complaint for Recovery of Damages against Durban Apartment Corporation. Pioneer Insurance and Surety Corporation is the insurer of Jeffrey S. See,s 2001 Suzuki Grand Vitara. Loss occured when Sees Vitara was carnapped while it was in the possession of petitioner Durban Apartment Hotel. 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 keeping and returning it. Evidence was show that Justimbaste issued a valet parking customer claim stub.