TRIPLE-V FOOD SERVICES INC. vs.

FILIPINO MERCHANTS INSURANCE

COMPANY,
GR. No. 160554,
February 21, 2005

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. De Asis availed of the valet parking
service of petitioner and entrusted her car key to petitioner's valet counter. Afterwards, Madridano, a 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.

ISSUE:

WON petitioner is liable for the loss.

RULING:

Yes, Triple-V Food Services, Inc. is liable.

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.

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

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.
SIA VS. COURT OF APPEALS
G.R. No. 102970
May 13, 1993

Facts:

Plaintiff, Sia, rented a safety deposit box of Security Bank and Trust Co. (Security Bank) 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 in 1985
and 1986, floodwater entered into the defendant banks premises, seeped into the safety deposit box leased
by the plaintiff and caused, according damage to his stamps collection. Security Bank rejected the
plaintiffs claim for compensation for his damaged stamps collection.

Sia, thereafter, instituted an action for damages against the defendant bank. Security Bank contended that
its contract with the Sia over safety deposit box was one of lease and not of deposit and, therefore,
governed by the lease agreement which should be the applicable law; the destruction of the plaintiffs
stamps collection was due to a calamity beyond obligation on its part to notify the plaintiff about the
floodwaters that inundated its premises at Binondo branch which allegedly seeped into the safety deposit
box leased to the plaintiff. The trial court rendered in favor of plaintiff Sia and ordered Sia to pay damages.

Issue:

WON the agreement entered into by the parties is just a contract of lease.

Ruling:

No, it is not a contract of lease. It is a special kind of deposit

In CA Agro-Industrial Development Corp. vs. Court of Appeals(G.R. No. 90027, March 3,1993) , the
Court explicitly rejected the contention that a contract for the use of a safety deposit box is a contract of
lease. Nor did the Court fully subscribe to the view that it is a contract of deposit to be strictly governed by
the Civil Code provision on deposit; it is a special kind of deposit. The prevailing rule in American
jurisprudence is that the relation between a bank renting out safe deposit boxes and its customer with
respect to the contents of the box is that of a bailor and bailee, the bailment being for hire and mutual
benefit.

Moreover, the banks negligence aggravated the injury or damage to the stamp collection. SBTC was
aware of the floods of 1985 and 1986; it also knew that the floodwaters inundated the room where the safe
deposit box was located. In view thereof, it should have lost no time in notifying the petitioner in order that
the box could have been opened to retrieve the stamps, thus saving the same from further deterioration and
loss. In this respect, it failed to exercise the reasonable care and prudence expected of a good father of a
family, thereby becoming a party to the aggravation of the injury or loss.
CA AGRO-INDUSTRIAL DEVT. CORP. VS. CA
GR No. 90027
March 3, 1993

FACTS:

Petitioner and Spouses Pugao entered into agreement for a sale of land. They deposited the certificates of
title in a safety deposit box in SBTC so that it will be given to petitioner upon full payment. The safety
deposit box has a guard key for the bank and 2 keys for petitioner and the Pugaos. Ramos wanted to buy
the land so she wanted to inspect the certificate of title, but upon opening by petitioner and Spouses Pugao,
the certificates of title were not there anymore. Because the reconstitution of title took time, Ramos
withdrew her offer to purchase. So petitioner filed a case against the bank. But it was dismissed by the RTC
and the CA because they said it was covered by their contractual agreement that the bank is not responsible
for the loss and that it is a contract of lease. The position of petitioner is that it is a contract of deposit.

ISSUE:

WON 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?

RULING:

The contractual relation is that of a bailor and bailee.

The Court agrees with petitioner 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 does 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 the 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.

It should be noted 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.
BARON VS. DAVID
GR No L-26948
October 8, 1927

FACTS:

Defendant Pablo David has been engaged in running a rice mill in the municipality of Magalang,
Pampanga. Plaintiffs Silvestra Baron and Guillermo Baron, aunt and uncle of defendant, placed a quantity
of palay in the defendant's mill on June 1, 1920. On January 17, 1921, a fire occurred that destroyed the
mill and its contents. Silvestra Baron and Guillermo Baron 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 defendant
in the year 1920, and that the palay was delivered to defendant at his special request, with a promise of
compensation at the highest price per cavan. These two actions were instituted in the CFI of Pampanga by
the plaintiffs for the purpose of recovering from the defendant, the value of palay alleged to have been sold
by the plaintiffs to the defendant in the year 1920. Both the plaintiffs claim that the palay which was
delivered by them to the defendant was sold to the defendant; while the defendant, on the other hand,
claims that the palay was deposited subject to future withdrawal by the depositors or subject to some future
sale which was never effected. He therefore supposes himself to be relieved from all responsibility by
virtue of the fire of January 17, 1921 which allegedly burned the palay.

ISSUE:

WON there was a deposit

RULING:

No, there was no deposit.

Art. 1978 provides that 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.

It should be stated that the palay in question was placed by the plaintiffs in the defendants mill with the
understanding that the defendant was at liberty to convert it into rice and dispose of it at his pleasure. The
mill was actively running during the entire season, and as palay was daily coming in from many customers
and as rice was being constantly shipped by the defendant to Manila, or other rice markets, it was
impossible to keep the plaintiffs palay segregated. In fact the defendant admits that the plaintiffs palay
was mixed with that of others.In view of the nature of the defendants activities and the way in which the
palay was handled in the defendants mill, it is quite certain that all of the plaintiffs palay, which was put
in before June 1, 1920, had been milled and disposed of long prior to the fire of January 17, 1921.
Considering the fact that the defendant had thus milled and doubtless sold the plaintiffs palay prior to
the date of the fire, it results that he is bound to account for its value, and his liability was not extinguished
by the occurrence of the fire. 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.
DURBAN APARTMENTS V. PIONEER INSURANCE
GR No. 179419
January 12, 2011

FACTS:

On April 30, 2002, Jeffrey See arrived and checked in at the City Garden Hotel in Makati corner Kalayaan
Avenues, Makati City before midnight, and its parking attendant, defendant Justimbaste got the key to said
Vitara from See to park it. On May 1, 2002, at about 1:00 o'clock in the morning, See was awakened in his
room by a telephone call from the Hotel Chief Security Officer who informed him that his Vitara was
carnapped while it was parked unattended at the parking area of Equitable PCI Bank along Makati Avenue
between the hours of 12:00a.m and 1:00a.m; See went to see the Hotel Chief Security Officer, thereafter
reported the incident to the Operations Division of the Makati City Police Anti-Carnapping Unit, and a
flash alarm was issued.

On July 22, 2003, the respondent, Pioneer Insurance and Surety Corporation, by right of subrogation, filed
a Complaint for Recovery of Damages against petitioner doing business under the name and style of City
Garden Hotel, and Vicente Justimbaste averring that it is the insurer for the loss and damage of Sees car.

Upon service of Summons, Durban Apartments and Justimbaste filed their Answer with Compulsory
Counterclaim alleging that See did not check in at its hotel, on the contrary, he was a guest of a certain
Ching Montero. Justimbaste did not get the ignition key of See's Vitara, on the contrary, it was See who
requested a parking attendant to park the Vitara at any available parking space, and it was parked at the
Equitable Bank parking area, which was within See's view, while he and Montero were waiting in front of
the hotel.

ISSUE:

WHETHER OR NOT THE PETIONER HOTEL IS LIABLE

RULING:

Yes, petitioner is liable

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

Plainly, the insured See deposited his vehicle for safekeeping with petitioner, through the latter's employee,
Justimbaste. In turn, Justimbaste issued a claim stub to See. Thus, the contract of deposit was perfected
from See's delivery, when he handed over to Justimbaste the keys to his vehicle, which Justimbaste
received with the obligation of safely keeping and returning it. Ultimately, petitioner is liable for the loss of
See's vehicle.
YHT REALTY CORP. V CA
GR No. 126780
February 17, 2005

FACTS:

On 30 Oct 1987 Maurice Peache McLoughlin arrived in the Philippines stayed with Tropicana Hotel. He
rented a safety deposit box. The box required two keys, the guest had one and one from the
management. He placed US $10,000 in one envelope and US$5,000 in another , AU$10,000 in another
envelope and other envelopes with his passport and credit cards. On 12 Dec 1987, he took from the box the
envelope with US$5,000 and the one with AU$10,000 to go to Hong Kong for a short visit, because he was
not checking out. When he arrived in HK, the envelope with US$5,000 only contained US$3,000, but
because he had no idea if the safety deposit box has been tampered, he thought it was just bad accounting.

After returning to Manila, he checked out of the Tropicana on 18 Dec 1987 and left for Australia. When he
arrived he discovered that the envelope with US$10,000 was short of US$5,000. He also noticed that the
jewelry he bought in Hong Kong which he stored in the safety deposit box upon his return to Tropicana
was likewise missing, except for a diamond bracelet.

It was found that a certain Tan, a guest of the hotel took the money with the assistance of some employees.
McLoughlin wants hotel to be liable together with Tan and the employees. Hotel argues it is not liable
because he signed an Undertaking for the Use of Safety Deposit Box" which disclaims any liability of the
hotel for things put inside the box.

ISSUE:

(1) WON the undertaking is valid

(2) WON the hotel is liable

RULING:

(1) No, the undertaking is not valid.

Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to apply to
situations such as that presented in this case. 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.

Paragraphs (2) and (4) of the undertaking manifestly contravene Article 2003, CC for they allow
Tropicana to be released from liability arising from any loss in the contents and/or use 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.

(2) Yes, the hotel is liable.

The petitioners anchor their defense on Article 2002 which exempts the hotel- keeper from liability if the
loss is due to the acts of his guest, his family, or visitors. 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, 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.