JAVELLANA vs LIM

FACTS:
Defendants executed a document in favor of plaintiff-appellee wherein it states that they have received, as a deposit, without
interest, money from plaintiff-appellee and agreed upon a date when they will return the money. Upon the stipulated due date,
defendants asked for an extension to pay and binding themselves to pay 15% interest per annum on the amount of their
indebtedness, to which the plaintiff-appellee acceded. The defendants were not able to pay the full amount of their indebtedness
notwithstanding the request made by plaintiff-appellee. The lower court ruled in favor of plaintiff-appellee for the recovery of the
amount due.

ISSUE:
Whether the agreement entered into by the parties is one of loan or of deposit?

HELD:
The document executed was a contract of loan. Where money, consisting of coins of legal tender, is deposited with a person and the
latter is authorized by the depositor to use and dispose of the same, the agreement is not a contract of deposit, but a loan. A
subsequent agreement between the parties as to interest on the amount said to have been deposited, because the same could not
be returned at the time fixed therefor, does not constitute a renewal of an agreement of deposit, but it is the best evidence that the
original contract entered into between therein was for a loan under the guise of a deposit.

BARON vs DAVID

FACTS:
- The defendant owns a rice mill, which was well patronized by the rice growers of the vicinity.
- On January 17, 1921, a fire occurred that destroyed the mill and its contents, and it was some time before the mill could be
rebuilt and put in operation again.
- Silvestra Baron (P1) and Guillermo Baron (P2) each filed an action for the recovery of the value of palay from the defendant
(D), alleged that:
 The palay have been sold by both plaintiffs to the D in the year 1920
 Palay was delivered to D at his special request, with a promise of compensation at the highest price per cavan
- D claims that the palay was deposited subject to future withdrawal by the depositors or to some future sale, which was
never effected. D also contended that in order for the plaintiffs to recover, it is necessary that they should be able to
establish that the plaintiffs' palay was delivered in the character of a sale, and that if, on the contrary, the defendant should
prove that the delivery was made in the character of deposit, the defendant should be absolved.

ISSUE:
Whether or not there was deposit

HELD: NO
- Art. 1978. When the depositary has permission to use the thing deposited, the contract loses the concept of a deposit and
becomes a loan or commodatum, except where safekeeping is still the principal purpose of the contract. The permission
shall not be presumed, and its existence must be proved.
- The case does not depend precisely upon this explicit alternative; for even supposing that the palay may have been
delivered in the character of deposit, subject to future sale or withdrawal at plaintiffs' election, nevertheless if it was
understood that the defendant might mill the palay and he has in fact appropriated it to his own use, he is of course bound
to account for its value.
- In this connection we wholly reject the defendant's pretense that the palay delivered by the plaintiffs or any part of it was
actually consumed in the fire of January, 1921. Nor is the liability of the defendant in any wise affected by the circumstance
that, by a custom prevailing among rice millers in this country, persons placing palay with them without special agreement
as to price are at liberty to withdraw it later, proper allowance being made for storage and shrinkage, a thing that is
sometimes done, though rarely.
BANK OF THE PHILIPPINE ISLANDS vs IMMEDIATE APPELLATE COURT

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 cashier’s
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.

ROMAN CATHOLIC BISHOP OF JARO vs DE LA PENA

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 they 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.

CA AGRO-INDUSTRIAL DEVELOPMENT CORPORATION vs COURT OF APPEALS

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 their 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 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.

The bank shall perform the services permitted under subsections (a) (b) and (c) of this section as depositories or as agents.

YHT REALTY CORPORATION vs COURT OF APPEALS

FACTS:
McLoughlin was an Australian businessman-philanthropist who met a certain Bhrunilda Mata – Tan and befriended him. Tan
convinced McLoughlin to transfer from Sheraton Hotel and stay at Tropicana Hotel during trips to the Philippines. Petitioners Lainez,
as manager, Payam and Danilo Lopez, had the custody of the keys for the safety deposit boxes, were all employees at Tropicana.
McLoughlin started staying at said Tropicana Hotel and registered therein from December 1984 to 1987. On October 30, 1987,
McLoughlin arrived from Australia and registered with Tropicana. He rented a safety deposit box which could only be opened
through the use of 2 keys, one of which is given to the registered guest, and the other remaining in the possession of the
management of the hotel. When a registered guest wished to open his safety deposit box, he alone could personally request the
management who then would assign one of its employees to accompany the guest and assist him in opening the safety deposit box
with the two keys.

When McLoughlin went for a trip in Hong Kong and without checking out the hotel, he left some US and Australian dollars in the
safety deposit box. Upon his return, he went back to Australia; there he noticed that some USD5000 and jewelry he bought from
Hong Kong were missing. When he came back to the Philippines, again registered and rented a safety deposit box with Tropicana,
placing therein some USD15000, AUD10000 and some important documents. He requested to open the safety deposit box, but he
found out that USD2000, and AUD4500 were missing. He confronted Lainez and Payam; they told him that Tan was able to open the
safety deposit box. Tan admitted to the said actuation and added that she was assisted by Lainez, Lopez and Payam. Lopez wrote a
PN and requested Tan to sign it, which the latter did. Despite the execution of the PN, 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 deposit box, which held free and blameless Tropicana for any loss in the contents of the safety deposit
box.

ISSUE:
May a hotel 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:
No. Petitioners were directed, jointly and severally, to pay private respondent.

RATIO:
Article 2003 provides that 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 reasonability of the
former as set for the in articles 1998 to 2001 is suppressed or diminished shall be void. The hotel business like the common carrier's
business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide not only lodging for hotel guests
and security to their persons and belongings. The twin duty constitutes the essence of the business. The law in turn does not allow
such duty to the public to be negated or diluted by any contrary stipulation in so-called "undertakings" that ordinarily appear in
prepared forms imposed by hotel keepers on guests for their signature.

In an early case, to hold hotel-keepers or innkeepers 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 are taken without the guest’s knowledge and consent from a
safety deposit box provided by the hotel itself. The undertaking manifestly contravened Article 2003 of the Civil Code it allowed
Tropicana to be released from liability arising from any loss in the contents of the safety deposit box for any cause whatsoever.
Evidently, the undertaking was intended to bar any claim against Tropicana for any loss of the contents of the safety deposit box
whether or not negligence was incurred by Tropicana or its employees. The New Civil Code is explicit that the responsibility of the
hotel-keeper shall extend to loss of, or injury to, the personal property of the guests even if caused by servants or employees of the
keepers of hotels or inns as well as by strangers, except as it may proceed from any force majeure. 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 act of the thief or robber was
done with the use of arms or through an irresistible force to qualify the same as force majeure.

TRIPLE-V FOOD SERVICES vs FILIPINO MERCHANTS INSURANCE

FACTS:
Mary Jo-Anne De Asis dined at petitioner's Kamayan Restaurant. De Asis was using a Mitsubishi Galant Super Saloon Model 1995
issued by her employer Crispa Textile Inc. On said date, De Asis availed of the valet parking service of petitioner and entrusted her
car key to petitioner's valet counter. Afterwards, a certain Madridano, valet attendant, 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. Having
indemnified Crispa 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. Petitioner claimed that the complaint failed to adduce facts to support
the allegations of recklessness and negligence committed in the safekeeping and custody of the subject vehicle. Besides, when De
Asis availed the free parking stab which contained a waiver of petitioner’s liability in case of loss, she had thereby waived her rights.

ISSUE:
Whether or not petitioner Triple-V Food Services, Inc. is liable for the loss.

HELD:
The Supreme Court ruled in the affirmative. In a contract of deposit, a person receives an object belonging to another with the
obligation of safely keeping it and returning the same. 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. 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.

DURBAN APARTMENTS CORPORATION vs PIONEER INSURANCE AND SURETY CORPORATION

FACTS:
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
occurred when See‘s Vitara was car napped while it was in the possession of petitioner Durban Apartment Hotel.

ISSUE:
Whether or not there was existent contract of deposit

HELD:
There exists 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 deposit was perfected from See’s 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.

NAPOCOR vs DE VEYRA

FACTS:
On March 31, 1959, the Court of First Instance of Manila rendered a decision ordering the City of Baguio to pay the National Power
Corporation various sums of money totaling P240,000.00 representing the unpaid electric charges, and rentals for the lease of two
generators, etc. The aforesaid decision having become final, the court of Manila granted on June 4, 1959, the National Power
Corporation's motion for execution. A writ was issued, addressed to the Sheriff of Baguio City to levy execution on the property of
above respondent Baguio City to satisfy the judgment. Such Sheriff, in compliance with the writ, garnished on June 8, 1959, the
amount of P239,589.80 out of the cash deposits of Baguio City in the possession of the Baguio Branch of the Philippine National
Bank.

Whereupon on June 12, 1959, Baguio City filed against herein petitioner National Power Corporation, the Philippine National Bank
and the said Sheriff, in the Court of First Instance of Baguio City, a complaint (Civil Case No. 866) praying that all the acts of said
defendants relative to the garnishment of the cash deposits with the defendant Philippine National Bank, be declared illegal, that
said defendants be permanently restrained from performing acts in furtherance of the said garnishment, and that they be ordered
to pay damages.

On the same date, June 12, 1959, above respondent court of Baguio City issued a preliminary mandatory injunction ordering above
petitioner corporation, the Philippine National Bank, the Sheriff and others acting in their behalf to restore and maintain the status
quo of respondent corporation's bank deposits.

ISSUE:
Whether or not property which has been levied upon in a garnishment proceedings by one court, may be subject to the jurisdiction
of another court (where the property is found) in an independent suit impugning the legality of said garnishment — the property
garnished allegedly being exempt from execution.

HELD:
The garnishment of property to satisfy a writ of execution "operates as an attachment and fastens upon the property a lien by which
the property is brought under the jurisdiction of the court issuing the writ." It is brought into custodia legis, under the sole control of
such court. Property is in the custody of the court when it has been seized by an officer either under a writ of attachment on mesne
process or under a writ of execution. A court which has control of such property, exercises exclusive jurisdiction over same. No
court, except one having a supervisory control or superior jurisdiction in the premises, has a right to interfere with and change that
possession.

The property involved in Civil Case No. 866, is property in custodia legis of the Court of First Instance of Manila, it having been
garnished to satisfy a writ of execution duly issued by the said court. Respondent Baguio court should not have interfered with the
Manila court's jurisdiction by issuing the writ of preliminary injunction and assuming cognizance of the complaint presented before
it.

The reason advanced by the respondent court of Baguio City that it should grant relief when "there is apparently an illegal service of
the writ" (the property garnished being allegedly exempt from execution) may not be upheld, there being a better procedure to
follow, i.e., a resort to the Manila court, wherein the remedy may be obtained, it being the court under whose authority the illegal
levy had been made. Needless to say, an effective ordering of legal relationships in civil society is possible only when each court is
granted exclusive jurisdiction over the property brought to it. To allow coordinate courts to interfere with each other's judgments or
decrees by injunctions, would obviously lead to confusion and might seriously hinder the proper administration of justice