BPI (successor-in-interest of CBTC)

v.
CA, Eastern Plywood and Lim
Facts
Private respondents held at least one and/or joint account with CBTC. A
joint checking and account was opened by Lim and Mariano Velasco in the
amount of Php120,000, which funds deposited came from the and/or joint
account of private respondents. Various amounts were later deposited or
withdrawn from the and account of Lim & Velasco. Velasco died, and at the
time of his death the outstanding balance of the and account was
Php662,522.87. By virtue of an indemnity undertaking executed by Lim, onehalf of this amount was provisionally transferred to one the accounts of
Eastern with CBTC.
Eastern obtained a loan of Php73,000 from CBTC, for which loan Eastern
issued PNs payable on demand at the order of CBTC. Eastern also signed a
hold-out agreement which provided that Eastern and Lim conferred upon
CBTC sufficient power to retain the account balance of the and account
(current account of Lim and Velasco) and to apply same for the purpose of
liquidating the load of Php73,000 in respect of the principal and/or interest.
In the meantime, a case for the settlement of Velascos estate was filed in the
RTC of Pasig. The RTC granted the claim of the estate from the and
account of Lim and Velasco and allowed the heirs to withdraw the amount of
Php331,261.44. When CBTC merged with BPI, the latter filed a complaint
against Lim and Eastern demanding the payment of the loan. Lim and
Eastern filed a counterclaim against BPI for the return of the balance in the
disputed account subject of the holdout agreement; the balance of which
and account was permitted by BPI to be withdrawn by the heirs of Velasco.
Issue
Is BPI still liable to the private respondents on the and account subject of
the holdout agreement after its withdrawal by the heirs of Velasco?
Held
Yes. The award of Php331,264.44 in favor of private respondents shall bear
interest at the rate of 12% per annum from the filing of the counterclaim.
Ratio
The counterclaim of private respondents for the return of the Php331,261.44
was equivalent to a demand that they be allowed to withdraw their deposit
with the bank. Article 1980 of the Civil Code provides that fixed, savings,
current deposits of money in banks and similar institutions shall be governed
by the provisions concerning simple loan. In Serrano v. Central Bank, bank
deposits are in the nature of irregular deposits; they are really loans because
they earn interest. The relationship then between a depositor and a bank is

one of creditor and debtor. The deposit under the questioned and account
was an ordinary bank deposit; hence, it was payable on demand of the
depositor.
The account was proven and established to belong to Eastern even it was
deposited in the names of Lim and Velasco. As the real creditor of the BPI,
Eastern had the right to withdraw it or to demand payment thereof. BPI
cannot be relieved of its duty to pay Eastern simply because it already
allowed the heirs of Velasco to withdraw the whole balance of the account.
The petitioner should have not allowed such withdrawal because it had
admitted in the holdout agreement the questioned ownership of the money
deposited in the account. As early as May 12 1979, CBTC was notified by the
corporate secretary of Eastern that the deposit in the and account of Lim
and Velasco was being claimed by them and that one-half was being claimed
by the heirs of Velasco.
Moreover, the order of the RTC of Pasig merely authorized the heirs of
Velasco to withdraw the account. BPI was not specifically ordered to release
the account to the said heirs; hence, it was under no judicial compulsion to
do so. The authorization given to the heirs of Velasco cannot be construed as
a final determination or adjudication that the account belonged to Velasco.
When the ownership of a particular property is disputed, the determination by
a probate court of whether that property is included in the estate of a
deceased is merely provisional in character and cannot be the subject of
execution. Because the ownership of the deposit remained undetermined,
BPI, as the debtor, had no right to pay to persons other than those in whose
favor the obligation was constituted or whose right or authority to receive
payment is indisputable. The payment of the money deposited with BPI that
will extinguish its obligation to the creditor-depositor is payment to the person
of the creditor or to one authorized by him or by the law to receive it. The
payment of BPI to the heirs of Velasco even if done in good faith did not
extinguish its obligation to the true depositor, Eastern.

Aboitiz, administrator of the estate of Juan Ibanez de Aldecoa

v.
Oquiena & Co. and Oquiena & Co. Ltd.
Facts
Juan de Aldecoa maintained mercantile relations with Oquiena. When
Aldecoa died, Anastacio de Aldecoa was appointed administrator of the
formers estate. At that time Anastacio was also the Cebu manager of
Oquiena. Anastacio committed suicide, thus Aboitiz was appointed as
administrator of Juans estate in place of Anastacio.
For the first cause of action, plaintiff sought to recover from defendants the
sum of Php9,011.58 with interest at the rate 8% per annum beginning on
Feb. 13, 1913; and for the second cause of action, the sum of Php5,000 with
legal interest from Feb. 5, 1915, the time the complaint was filed.
At the death of Juan, Anastacio collected from the New York Life Insurance
the sum of Php9,011.58 which Anastacio deposited with, and was receipted
by, Oquiena & Co. .
After the death of Juan I. de Aldecoa, his business employees in Surigao
continued said commercial relations with the Oquiena & Co. in Cebu,
whereby there resulted a balance, in favor of Jose I. de Aldecoa, of
P2,312.79, and not P5,000 as is alleged in the complaint.
The court rendered a judgment against defendant Oquiena & Co. in favor of
the petitioner, and absolved defendant Oquiena & Co. Ltd.
Both defendants appealed the decision of the trial court.
Issue
Did the trial court err when it
- overruled the demurrer interposed to the amended complaint?
- pronounced judgment against Oquiena & Co., a company already
dissolved, and absolved Oquiena & Co. Ltd., the successor and assignee of
the former?
Held
No/Yes.
Ratio
The demurrer was based on the ground that the facts alleged in the
complaint did not constitute a cause of action in regard to the payment of the
sum of Php9,011.58. It is said that, if this was in the hands of the defendants
as a deposit, the plaintiff cannot withdraw it without a judicial order, inasmuch

as in the receipt no fixed time was given. The document was in fact
embodying a deposit, according to its terms, without a fixed time. But exactly
for being such, the sum deposited may be withdrawn at any time.
According to its by-laws, Oquiena & Co. ought to have bee dissolved ob
July 30, 1912. However, in accordance with the said by-laws this date was
extended to July 1, 1913. On April 14, 1914, the creditors and shareholders
of the Oquiena & Co. began to organize a company called Oquiena & Co.
Ltd. and was transferred with all the assets and business of Oquiena & Co.
In the articles of co-partnership, it was made to appear that Oquiena & Co.
Ltd. had assumed all the obligations of Oquiena & Co.; and that it appeared
at its own request as defendant in this case and appealed in order to assume
all the obligations of Oquiena & Co. In fact and in law, Oquiena & Co. had
not existed since the organization of Oquiena & Co. Ltd. and there was no
reason why the former should be declared liable instead of Oquiena & Co.
Ltd. to which had passed all said obligations and rights and by which all were
assumed in good faith.

YHT Realty, Lainez, Payam

v.
CA and McLoughlin
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.

For the main issue:

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 socalled "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 guests 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
_________________________________________________________
(for the benefit of all - Supplemental reasoning of the Court)

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

We are also not impressed by petitioners' argument that the finding of gross negligence by the
lower court as affirmed by the appellate court is not supported by evidence. The evidence
reveals that two keys are required to open the safety deposit boxes of Tropicana. One key is
assigned to the guest while the other remains in the possession of the management. If the guest
desires to open his safety deposit box, he must request the management for the other key to
open the same. In other words, the guest alone cannot open the safety deposit box without the
assistance of the management or its employees. With more reason that access to the safety
deposit box should be denied if the one requesting for the opening of the safety deposit box is a
stranger. Thus, 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.

Noteworthy is the fact that Payam and Lainez, who were employees of Tropicana, had custody
of the master key of the management when the loss took place. In fact, they even admitted that
they assisted Tan on three separate occasions in opening McLoughlin's safety deposit box. This
only proves that Tropicana had prior knowledge that a person aside from the registered guest
had access to the safety deposit box. Yet 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.
The management should have guarded against the occurrence of this incident considering that
Payam admitted in open court that she assisted Tan three times in opening the safety deposit
box of McLoughlin at around 6:30 A.M. to 7:30 A.M. while the latter was still asleep. In light of
the circumstances surrounding this case, it is undeniable that without the acquiescence of the
employees of Tropicana to the opening of the safety deposit box, the loss of McLoughlin's
money could and should have been avoided.

Tropicana was guilty of concurrent negligence in allowing Tan, who was not the registered guest,
to open the safety deposit box of McLoughlin, even assuming that the latter was also guilty of
negligence in allowing another person to use his key. To rule otherwise would result in
undermining the safety of the safety deposit boxes 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 to the safety deposit box without fear of any liability that will attach
thereafter in case such person turns out to be a complete stranger. This will allow the hotel to
evade responsibility for any liability incurred by its employees in conspiracy with the guest's
relatives and visitors.
Petitioners contend that McLoughlin's case was mounted on the theory of contract, but the trial
court and the appellate court upheld the grant of the claims of the latter on the basis of
tort.There is nothing anomalous in how the lower courts decided the controversy for this Court
has pronounced a jurisprudential rule that tort liability can exist even if there are already
contractual relations. The act that breaks the contract may also be tort.

The management contends, however, that McLoughlin, by his act, made its employees believe
that Tan was his spouse for she was always with him most of the time. The evidence on record,
however, is bereft of any showing that McLoughlin introduced Tan to the management as his
wife. Such an inference from the act of McLoughlin will not exculpate the petitioners from liability
in the absence of any showing that he made the management believe that Tan was his wife or
was duly authorized to have access to the safety deposit box. 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 McLoughlin's deposit. If only petitioners exercised due
diligence in taking care of McLoughlin's safety deposit box, they should have confronted him as
to his relationship with Tan considering that the latter had been observed opening McLoughlin's
safety deposit box a number of times at the early hours of the morning. Tan's acts should have
prompted the management to investigate her relationship with McLoughlin. Then, petitioners
would have exercised due diligence required of them. Failure to do so warrants the conclusion
that the management had been remiss in complying with the obligations imposed upon hotelkeepers under the law.
Under Article 1170 of the New Civil Code, those who, in the performance of their obligations, are
guilty of negligence, are liable for damages. As to who shall bear the burden of paying damages,
Article 2180, paragraph (4) of the same Code 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. Also, this Court has ruled that if an employee is found negligent, it is presumed that
the employer was negligent in selecting and/or supervising him for it is hard for the victim to
prove the negligence of such employer.Thus, given the fact that the loss of McLoughlin's money
was consummated through the negligence of Tropicana's employees in allowing Tan to open the
safety deposit box without the guest's consent, both the assisting employees and YHT Realty
Corporation itself, as owner and operator of Tropicana, should be held solidarily liable pursuant
to Article 2193.
Petitioners likewise anchor their defense on Article 2002 43 which exempts the hotel-keeper from
liability if the loss is due to the acts of his guest, his family, or visitors. Even a cursory reading of
the provision would lead us to reject petitioners' contention. The justification they raise would
render nugatory the public interest sought to be protected by the provision. What if the
negligence of the employer or its employees facilitated the consummation of a crime committed
by the registered guest's relatives or visitor? Should the law 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 hotel-keeper 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.
In the case at bar, the responsibility of securing the safety deposit box was shared not only by
the guest himself but also by the management since two keys are necessary to open the safety
deposit box. Without the assistance of hotel employees, the loss would not have occurred. Thus,

Estrada, et.al.
v.

Court of Agrarian Relations and Galvan

(Full case maiksi lang)
These cases are now before this Court on the petition flied by the petitioners
under date of June 10, 1961, asking that the manager of the Moncada
Bonded Warehouse and respondent Faustino F. Galvan be declared in
contempt of court and punished accordingly.
It appears that, upon motion, this Court, on January 6, 1961, issued a
resolution of the following tenor:
In cases L-17481 and L-17537 to 17559 (Liberata Antonio Estrada,
et al. vs. Court of Agrarian Relations and Faustino Galvan),
considering the motion, and opposition thereto, that the owner or
manager of the Moncada Bonded Warehouse be ordered to release
and give to petitioners-appellants the remaining deposits 10% of
the net produce of the first crop minus P300.00 and 15% of the net
produce of the second crop minus P200.00, the COURT RESOLVED
to grant the motion without prejudice to subsequent accounting.
That on April 12, 1961, this Court, passing upon motion filed by the
petitioners in which they alleged that the manager of the Moncada Bonded
Warehouse had refused to comply with the above resolution unless "the
original of the receipts of palay deposits be presented and surrendered to
him," issued another resolution which provides:
In cases L-17537 to 17559 (Liberata Antonio Estrada, et al. vs. Court
of Agrarian Relations, et al.), considering the petitioner's motion
dated March 18, 1961, and the respondents' opposition thereto, THE
COURT RESOLVED to order respondent Faustino Galvan to
surrender the original of the receipts of the palay deposits to the
manager or owner of the Moncada Bonded Warehouse, Moncada
Tarlac.
That the manager of the Moncada Bonded Warehouse and respondent
Faustino F. Galvan were duly served with notice of the above resolutions,
and that notwithstanding such service of notice and in spite of repeated
demands, the manager of the Moncada Bonded Warehouse and respondent
Faustino F. Galvan refused and still refuse to comply with the above orders of
this Court, the former, for the reason that petitioners could not surrender to
him the original of the warehouse receipts issued for the palay in question,
and the latter, because, as he alleged in his answer to the motion for
contempt, he could not locate any more said receipts "as they were
scattered, misplaced, destroyed or lost when the contents of the Office of

said respondent-appellee, Faustino F. Galvan, in the Galvan-Cabrera

Building in Ylaya Street, Manila, were being desperately evacuated therefrom
during the fire which burned the Divisoria market and said Galvan-Cabrera
Building in Ylaya Street, Manila, in the latter part of May, 1961."
The excuses respectively offered by the manager of the Moncada Bonded
Warehouse and respondent Faustino F. Galvan are not without some merits.
The former unquestionably had the right to protect the interest of the bonded
warehouse of which he was manager, as the warehouse receipts issued for
the palay in question might have been for the value in favor of innocent third
parties; and the latter, or Faustino F. Galvan, might have in fact lost said
warehouse receipts in the manner above stated, for his allegation to the
effect in his answer to petitioners' motion for contempt until now has not been
contradicted.
Such incidents, however, do not constitute a valid excuse to evade
compliance with the order of this Court that the palay in question be delivered
to the petitioners, and, considering that the petitioners, according to the
manifestation filed by their counsel under date of August 3, 1961, are in dire
need of said palay for their subsistence, our order must be carried out in the
meantime that this cases have not been finally decided in order to ameliorate
the precarious situation in which said petitioners find themselves.
WHEREFORE, it is hereby ordered that the manager or the owner of the
Moncada Bonded Warehouse in Moncada, Tarlac, and respondent Faustino
F. Galvan release and deliver to the petitioners the portion still remaining to
be delivered to them or their shares in the palay involved in these cases, i.e.,
(a) 10% of the net produce of the first crops minus P300.00; and
(b) 15% of the net produce of the second crops minus P200.00;
which was ordered deposited in said warehouse by the trial court, upon the
issuance by said petitioners, or their duly authorized representative, of the
corresponding receipts, without the necessity of producing and surrendering
the original of the warehouse receipts issued therefore. It is so ordered.