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.
GUINGONA VS CITY FISCAL

G.R. No. L-60033 April 4, 1984

TEOFISTO GUINGONA, JR., ANTONIO I.
MARTIN, and TERESITA SANTOS, petitioners,
THE CITY FISCAL OF MANILA, HON. JOSE B.
FLAMINIANO, ASST. CITY FISCAL
FELIZARDO N. LOTA and CLEMENT
DAVID, respondents.

Nature: Petition for prohibition and injunction with a

prayer for the immediate issuance of restraining order
and/or writ of preliminary injunction seeking to
prohibit the public respondent which is the City
Fiscal of Manila from proceeding with the
preliminary investigation, in which they were
charged by private respondent Clement David
Keywords: Bank deposits are loans, mutuum, estafa,
criminal charge, civil case, thrift bank, NSLA
Summary: From March 1979 to March 1981,
Clement David made several investments with the
National Savings and Loan Association (NSLA). On
March 21, 1981, the Bangko Sentral placed the bank
under receivership. Upon David’s request, petitioners
Guingona and Martin issued a joint promissory note,
absorbing the obligations of the bank. On July 17,
1981, they divided the indebtedness. David filed a
complaint for estafa and violation of Central Bank
Circular No. 364 and related regulations regarding
foreign exchange transactions before the Office of the
City Fiscal of Manila. Petitioners filed the herein
petition for prohibition and injunction with a prayer
for immediate issuance of restraining order and/or
writ of preliminary injunction to enjoin the public
respondents to proceed with the
preliminary investigation on the ground that the
petitioners’ obligation is civil in nature.

MAKASIAR, Actg. C.J.

Facts: David invested several deposits with the

Nation Savings and Loan Association [NSLA]. He
said that he was induced into making said
investments by an Australian national who was a
close associate of the petitioners [NSLA officials].
On March 1981, NSLA was placed under
receivership by the Central Bank, so David filed
claims for his and his sister’s investments.

On June 1981, Guingona and Martin, upon David’s

request, assumed the bank’s obligation to David by
executing a joint promissory note. On July 1981,
David received a report that only a portion of his
investments was entered in the NSLA records.

On December 1981, David filed I.S. No. 81-31938 in

the Office of the City Fiscal, which case was
assigned to Asst. City Fiscal Lota for preliminary
investigation. David charged petitioners with estafa
and violation of Central Bank Circular No. 364 and
related regulations on foreign exchange transactions.

Petitioners moved to dismiss the charges against

them for lack of jurisdiction because David's claims
allegedly comprised a purely civil obligation, but the
motion was denied. After the presentation of David's
principal witness, petitioners filed this petition for
prohibition and injunction because:

a. The production of various documents showed

that the transactions between David and NSLA
were simple loans (civil obligations which were
novated when Guingona and Martin assumed
them)

b. David's principal witness testified that the

duplicate originals of the instruments of
indebtedness were all on file with NSLA.

A TRO was issued ordering the respondents to

refrain from proceeding with the preliminary
investigation in I.S. No. 81-31938.
Petitioners’ liability is civil in nature, so respondents
have no jurisdiction over the estafa charge. TRO
CORRECTLY ISSUED.

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

2. Whether there was a violation of Central Bank

Circular No. 364

Held:
1. When David invested his money on time and
savings deposits with NSLA, the contract that was
perfected was a contract of simple loan or
mutuum and not a contract of deposit. Hence, the
relationship between David and NSLA 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 no obligation to return or
deliver the same money that was
deposited. NSLA’s failure 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.

Considering that petitioners’ liability is purely civil in

nature and that there is no clear showing that they
engaged in foreign exchange transactions, public
respondents acted without jurisdiction when they
investigated the charges against the petitioners.
Public respondents should be restrained from further
proceeding with the criminal case for to allow the
case to continue would work great injustice to
petitioners and would render meaningless the proper
administration of justice.

Even granting that NSLA’s failure to pay the time

and savings deposits would constitute a violation of
RPC 315, paragraph 1(b), any incipient criminal
liability was deemed avoided. When NSLA was
placed under receivership, Guingona and Martin
assumed the obligation to David, thereby resulting
in the novation of the original contractual
obligation. The original trust relation between NSLA
and David was converted into an ordinary debtor-
creditor relation between the petitioners and David.
While it is true that novation does not extinguish
criminal liability, it may prevent the rise of criminal
liability as long as it occurs prior to the filing of the
criminal information in court.

2. Petitioner Guingona merely accommodated the

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

In conclusion, considering that the liability of the

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

Ruling: WHEREFORE, THE PETITION IS

HEREBY GRANTED; THE TEMPORARY
RESTRAINING ORDER PREVIOUSLY ISSUED
IS MADE PERMANENT.

Note:

GENERAL RULE: Criminal prosecution may not be

blocked by court prohibition or injunction.

EXCEPTIONS
1. For the orderly administration of justice
2. To prevent the use of the strong arm of the law in
an oppressive and vindictive manner
3. To avoid multiplicity of actions
4. To afford adequate protection to constitutional
rights
5. In proper cases, because the statute relied upon is
unconstitutional or was held invalid
Integrated Realty Corp vs PNB
GR No. 60705, 28 June 1989
174 SCRA 295

FACTS
Raul Santos made a time deposit with OBM
in the amount of P500H and he was issued a
certificate of time deposits. On another date, Santos
again made a time deposit with OBM in the amount
of P200H, he was again issued a CTD. IRC, thru its
president Raul Santos, applied for a loan and/or credit
line (P700H) with PNB. To secure such, Santos
executed a Deed of Assignment of the 2 time deposits.
After due dates of the time deposit certificates, OBM
did not pay PNB. PNB then demanded payment from
IRC and Santos, but they replied that the loan was
deemed paid with the irrevocable assignment of the
time deposit certificates.

PB then filed with RTC to collect from IRC

and Santos with interest. The trial court ruled in favor
of PNB ordering IRC and Santos to pay PNB the
total amount of P700H plus interest of 9% PA, 2%
additional interest and 1& PA penalty interest. On
appeal, the CA ordered OBM to pay IRC and Santos
whatever amts they will to PNB with interest.
 IRC and Santos now claim that OBM should
reimburse them for whatever amts they may be
adjudged to pay PNB by way of compensation for
damages incurred.

ISSUE
Whether or not the claim of IRC and Santos
will prosper.

HELD
The Court held in the affirmative. The 2 time
deposits matured on 11 January 1968 and 6 February
1968, respectively. However, OBM was not allowed
and suspended to operate only on 31 July 1968 and
resolved on 2 August 1968. There was a yet no
obstacle to the faithful compliance by OBM of its
liabilities. For having incurred in delay in the
performance of its obligation, OBM should be held
for damages. OBM contends that it had agreed to pay
interest only up to the dates of maturity of the CTD
and that Santos is not entitled to interest after
maturity dates had expired.

While it is true that under Article 1956 of the

CC, no interest shall be due unless it has been
expressly stipulated in writing, this applies only to
interest for the use of money. It does not comprehend
interest paid as damages. OBM is being required to
pay such interest, not as interest income stipulated in
the CTD, but as damages fro failure and delay in the
payment of its obligations which thereby compelled
IRC and Santos to resort to the courts.

The applicable rule is that LI, in the nature of

damages for non-compliance with an obligation to
puy sum of money, is recoverable from the date
judicially or extra-judicially demand is made
THE ROMAN CATHOLIC BISHOP OF JARO,
plaintiff-appellee,
vs.
GREGORIO DE LA PEÑA

This is an appeal by the defendant from a judgment

of the Court of First Instance of Iloilo, awarding to
the plaintiff the sum of P6,641, with interest at the
legal rate from the beginning of the action.
It is established in this case that 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.
That branch of the law known in England and
America as the law of trusts had no exact counterpart
in the Roman law and has none under the Spanish law.
In this jurisdiction, therefore, Father De la Peña's
liability is determined by those portions of the Civil
Code which relate to obligations.
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.
We do not enter into a discussion for the purpose of
determining whether he acted
more or less negligently by depositing the money in
the bank than he would if he
had left it in his home; or whether he was more or
less negligent by depositing the
money in his personal account than he would have
been if he had deposited it in a
separate account as trustee. We regard such
discussion as substantially fruitless,
inasmuch as the precise question is not one of
negligence. There was no law
prohibiting him from depositing it as he did and there
was no law which changed his
responsibility be reason of the deposit. While it may
be true that one who is under
obligation to do or give a thing is in duty bound,
when he sees events approaching
the results of which will be dangerous to his trust, to
take all reasonable means and
measures to escape or, if unavoidable, to temper the
effects of those events, we do
not feel constrained to hold that, in choosing between
two means equally legal, he is
culpably negligent in selecting one whereas he would
not have been if he had
selected the other.
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.
Triple V Food Services, Inc. v. Filipino Merchants
Insurance

G.R. No. 160544, February 21, 2005

Doctrine: 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.

Facts:

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 Gallant Super Saloon
Model 1995, assigned to 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.

Petitioner Triple V argued 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.

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.

The trial court rendered judgement in favor of FMICI.

On appeal to the CA, the CA dismissed petitioner’s
appeal and affirmed the decision of the trial court.
The appellate court agreed with the findings and
conclusions of the trial court that:

(a) petitioner was a depositary of the subject vehicle;

(b) petitioner was negligent in its duties as a
depositary thereof and as an employer of the valet
attendant.

Issue:

Was petitioner Triple V a depositary of the vehicle of

De Asis?

Ruling:

Yes. Triple V was a depositary of the vehicle of De

Asis.

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.

In this case, 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.
YHT Realty Corp. v. Court of Appeals

G.R. No. 126780, February 17, 2005

Tinga, J.

Doctrine: In case of loss of any item deposited in the

safety deposit box, it is inevitable

to conclude that the management had at least a hand

in the consummation of the

taking, unless the reason for the loss is force majeure.

Facts:

McLoughlin, was an Australian businessman-

philanthropist who stayed in Tropicana

Suites owned by petitioner. McLoughlin rented a

safety deposit box, as he usually did

when he stayed at Tropicana, and in renting the box,

he was asked to sign a waiver

“Undertaking For the Use of Safety Deposit Box”,

which exonerated the hotel, its
management and employees from liability in case of
loss of the item in the box. The safety deposit box
could only be opened through the use of two keys,
one of which is given to the registered guest, and the
other in the possession of the management of the
hotel. He allegedly placed the following in his safety
deposit box: one envelope containing USD10,000
and another envelope containing USD5,000;
AUS10,000 in another envelope; two other envelopes
containing letters and credit cards; two bankbooks;
and a checkbook, arranged side by side inside the
safety deposit box.

On December 12, 1987, before leaving for a brief trip

to HongKong, McLoughlin opened his safety deposit
box with his key and took the envelope containing
USD5,000, the envelope with AUS10,000, his
passports and his credit cards. He left the other items
in the box as he did not check out of his room. When
he arrived in Hongkong, he opened the envelope that
had USD5,000 and discovered upon counting that
only USD3,000 were there. After returning to Manila,
he checked out of Tropicana and left for Australia.
When he arrived in Australia, he discovered that the
envelope with USD10,000 was short of USD5,000.
He also noticed that the jewelry he bought in
Hongkong and stored in the safety deposit box was
also missing, except for a diamond bracelet. When he
came back to the Philippines, he immediately
confronted Lainez and Payam (employees of
Tropicana) who admitted that Tan, a woman who
befriended McLoughlin, opened the safety deposit
box with the key.

McLoughlin confronted Tan and the latter admitted

that she had stolen his key and was able to open the
safety deposit box with the assistance of Lopez,
Payam, and Lainez. Lopez issued a promissory note
to pay McLoughlin AUS4,000 and USD2,000 and
requested Tan to sign the same. 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 of the waiver signed by McLoughlin
for renting the safety deposit box.

Issue:

Is the “Undertaking For The Use of Safety Deposit

Box”, exonerating the hotel from liability, null and
void?

Ruling:

Yes. Art. 2003 of the New Civil Code 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 responsibility of the former as set forth
in Arts. 1998-2001 is suppressed or diminished shall
be void.

Catering to the public, hotel-keepers are bound to

provide not only lodging for hotel guests and security
to their persons and belongings. The twin duty
constitutes the essence of the business. The law in
turn does not allow such duty to the public to be
negated or diluted by any contrary stipulation in so-
called “undertakings” that ordinarily appear in
prepared forms imposed by hotel keepers on guests
for their signature. 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. 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. Thus, the hotel should be held liable
for the undertaking signed by McLoughlin is null and
void.