Duburban Apt

Facts: Pioneer Insurance and Surety Corporation, by right of subrogation, filed a Complaint for Recoveryof Damages against Durban Apartment Corporation. Pioneer Insurance and Surety Corporation is theinsurer of Jeffrey S. See,’s 2001 Suzuki Grand Vitara. Loss occured when See‘s Vitara was carnappedwhile it was in the possession of petitioner Durban Apartment Hotel.Issue: WON there exist a contract of depositHeld: there exist a contract of necessary depositArticle 1962, in relation to Article 1998, of the Civil Code defines a contract of deposit and anecessary deposit made by persons in hotels or inns:Art. 1962. A deposit is constituted from the moment a person receives a thingbelonging 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 isno deposit but some other contract.Art. 1998. The deposit of effects made by travelers in hotels or inns shall also beregarded as necessary. The keepers of hotels or inns shall be responsible for them asdepositaries, provided that notice was given to them, or to their employees, of the effectsbrought by the guests and that, on the part of the latter, they take the precautions whichsaid hotel-keepers or their substitutes advised relative to the care and vigilance of theireffects.Facts shows that the contract of depost was perfectedfrom See’s delivery, when he handed over toJustimbaste the keys to his vehicle, which Justimbaste receive with the obligation of the safely keepingand returning it. Evidence was show that Justimbaste issued a valet parking customer claim stub

CA Agro vs. CA

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 there 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 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.

Sia vs. CA

FACTS: The plaintiff rented on March 22, 1985 the Safety Deposit Box No. 54 of the defendant bank at itsBinondo Branch wherein he placed his collection of stamps. The said safety deposit box leased by the plaintiff was at the bottom or at the lowest level of the safety deposit boxes of the defendant bank .During the floodsthat took place, floodwater entered into the defendant bank's premises, seeped into the safety deposit boxleased by the plaintiff and caused, according to the plaintiff, damage to his stamps collection. The defendantbank rejected the plaintiff's claim for compensation for his damaged stamps collection, so, the plaintiff instituted an action for damages against the defendant bank.

ISSUE: Whether it was a grave error or an abuse of discretion on the part of the respondent court when it ruled that respondent SBTC did not fail to exercise the required diligence in maintaining the safety deposit box

RULING: Note that the primary function is still found within the parameters of a contract of deposit, 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. Accordingly, the depositary would be liable if, in performing its obligation, it is found guilty of fraud, negligence, delay or contravention of the tenor of the agreement. In the absence of any stipulation prescribing the degree of diligence required, that of a good father of a family is to be observed. Hence, any stipulation exempting the depositary from any liability arising from the loss of the thing deposited on account of fraud, negligence or delay would be void for being contrary to law and public policy. Public respondent further postulates that SBTC cannot be held responsible for the destruction or loss of the stamp collection because the flooding was a fortuitous event and there was no showing of SBTC's participation in the aggravation of the loss or injury. Both the law and authority cited are clear enough and require no further elucidation. Unfortunately, however, the public respondent failed to consider that in the instant case, as correctly held by the trial court, SBTC was guilty of negligence. thus comes to the succor of the petitioner. The destruction or loss of the stamp collection which was, in the language of the trial court, the "product of 27 years of patience and diligence" caused the petitioner pecuniary loss; hence, he must be compensated therefor.

Dizon vs. SuntayFACTS:

Plaintiff is the owner of a three-carat diamond. ring valued at P5,500.00. On June 13, 1962, the plaintiff and Clarita R. Sison entered into a transaction wherein the plaintiff’s ring was delivered to Clarita R. Sison for sale on commission. Upon receiving the ring, Clarita R. Sison executed and delivered to the plaintiff the receipt. After the lapse of a considerable time without Clarita R. Sison having returned to the plaintiff the latter’s ring, the plaintiff made demands on Clarita R. Sison for the return of her ring but the latter could not comply with the demands because, without the knowledge of the plaintiff, on June 15, 1962 or three days after the ring above-mentioned was received by Clarita R. Sison from the plaintiff, said ring was pledged by Melia Sison, niece of the husband of Clarita R. Sison, evidently in connivance with the latter, with the defendant’s pawnshop for P2,600.00. Since the plaintiff insistently demanded from Clarita R. Sison the return of her ring, the latter finally delivered to the former the pawnshop ticket, which is the receipt of the pledge with the defendant’s pawnshop of the plaintiff’s ring. When the plaintiff found out that Clarita R. Sison pledged, she took steps to file a case of estafa against the latter with the fiscal’s office. Subsequently thereafter, the plaintiff, wrote a letter to the defendant asking for the delivery to the plaintiff of her ring pledged with defendant’s pawnshop.Since the defendant refused to return the ring, the plaintiff filed the present action with the CFI for the recovery of said ring. The plaintiff asked for the provisional remedy writ of replevin by the delivery of the ring to her, upon her filing the requisite bond, pending the final determination of the action. The lower court issued the writ of replevin prayed for by plaintiff and the latter was able to take possession of the ring during the pendency of the action upon her filing the requisite bond. The lower cOUl1 rendered judgment declaring that Suntay had the right to the possession of the ring in question. Petitioner Dizon, as defendant, sought to have the judgment reversed by the CA, which ruled in favor of Suntay.ISSUE:Whether or not Suntay had the right to the possession of the ring.HELD:Yes.The controlling provision is Article 559 of the Civil Code. It reads thus: The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. If the possessor of a movable lost of which the owner has been unlawfully deprived, has/acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefore. The only exception the law allows is when there is acquisition in good faith of the possessor at a public sale, in which case the owner cannot obtain its return without reimbursing the price.

EDCA vs. SantosFACTS:EDCA Publishing sold 406 books to a certain Professor Jose Cruz who ordered these by telephone, which was agreed to be payable on delivery. The books were subsequently delivered to him with the corresponding invoice, and he paid with a personal check. Cruz then sold the 120 of the books to Leonor Santos who asked for verification, and was then showed the invoice for the books. EDCA became suspicious when Cruz ordered another set of books even before his check cleared. Upon investigation, EDCA found that he wasn’t the person he claimed to be (Dean in DLSU). EDCA had the police capture Cruz, as well as seize the books from Santos. Santos demanded the return of the books. RTC granted the writ of preliminary attachment. Subsequent dishonor of a check, which did not render the contract of sale void does not amount to unlawful deprivation of property

ISSUE:Whether or not the owner was unlawfully deprived of the property?

HELD: No.

Santos was a good faith buyer after taking steps to verify the identity of the seller. When she was showed the invoice, she reasonably believed that he was a legitimate seller. With regard to unlawful deprivation, EDCA was not unlawfully deprived of the property by mere failure of consideration. There was already a perfected contract of sale. Proof was even substantiated when EDCA gave the invoice as proof of payment upon delivery of the books. This did not amount to unlawful taking, because by the delivery of EDCA to Cruz, ownership of the books already transferred to him.

Makati Shangri la vs. harperThe hotel business is imbued with public interest. Hotelkeepers are bound to provide not only lodging for their guests but also security to their persons and belongings to their guest. The twin duty constitutes the essence of the business (Arts 2000-2001 New Civil Code).

Hotel owner is liable for civil damages to surviving heirs of hotel guest whom strangers murder inside his hotel room.

FACTS:Christian Harper was a Norweigian who came to Manila on a business trip. He stayed at Makati Shangri-la Hotel, but he was murdered in his hotel room.

It was found that the muderer, a caucasian male, was able to trespass into the hotel room of the victim and was then able to murder and rob the victim. The heirs of the victim blame the hotel's gross negligence in providing the most basic security system of its guests.

The RTC held in favor of the heirs and ordered Shangri-la to pay damages. CA affirmed.

ISSUE: WON Shangri-la Hotel is liable for damages.

HELD:Yes. Shangri-la is liable due to its own negligence.

The testimony revealed that the management practice of the hotel prior to the death of the victim was to deploy only one security or roving guard for every three or four floors of the hotel, which is inadequate because the hotel is L-shaped that rendered hallways not visible end to end. That there was a recommendation to increase security to one guard per floor but this was not followed. This ommission is critical. The hotel business is imbued with public interest. Hotelkeepers are bound to provide not only lodging for their guests but also security to their persons and belongings to their guest. The twin duty constitutes the essence of the business.

Therefore, the hotel has a greater degree of care and responsibility for its guests , otherwise the hotelkeepers would just stand idly by while strangers have unrestricted access to all hotel rooms on the pretense of being visitors of the guests which is absurd.

Producers Bank of the Philippines vs CA (2003)Doctrine:Facts:•Vives (will be the creditor in this case) was asked by his friend Sanchez to help thelatter’s friend, Doronilla (will be the debtor in this case) in incorporating Doronilla’sbusiness “Strela”. This “help” basically involved Vives depositing a certain amount of money in Strela’s bank account for purposes of

incorporation (rationale: Doronilla had toshow that he had sufficient funds for incorporation). This amount shall later be returnedto Vives.•Relying on the assurances and representations of Sanchez and Doronilla, Vives issued acheck of P200,00 in favor of Strela and deposited the same into Strela’s newly-openedbank account (the passbook was given to the wife of Vives and the passbook had aninstruction that no withdrawals/deposits will be allowed unless the passbook ispresented).•Later on, Vives learned that Strela was no longer holding office in the address previouslygiven to him. He later found out that the funds had already been withdrawn leaving onlya balance of P90,000. The Vives spouses tried to withdraw the amount, but it wasunable to since the balance had to answer for certain postdated checks issued byDoronilla.•Doronilla made various tenders of check in favor of Vives in order to pay his debt. All of which were dishonored.•Hence, Vives filed an action for recovery of sum against Doronilla, Sanchez, Dumagpiand Producer’s Bank.• TC & CA: ruled in favor of Vives.Issue/s:(1)WON the transaction is a commodatum or a mutuum. COMMODATUM.(2) WON the fact that there is an additional P 12,000 (allegedly representing interest) inthe amount to be returned to Vives converts the transaction from commodatum tomutuum. NO.(3)WON Producer’s Bank is solidarily liable to Vives, considering that it was not privy tothe transaction between Vives and Doronilla. YES.Held/Ratio:(1)The transaction is a commodatum.•CC 1933 (the provision distinguishing between the two kinds of loans) seem to implythat if the subject of the contract is a consummable thing, such as money, the contractwould be a mutuum. However, there are instances when a commodatum may have forits object a consummable thing. Such can be found in CC 1936 which states that“consummable goods may be the subject of commodatum if the purpose of the contractis not the consumption of the object, as when it is merely for exhibition”. In this case,the intention of the parties was merely for exhibition. Vives agreed to deposit his moneyin Strela’s account specifically for purpose of making it appear that Streal had sufficientcapitalization for incorporation, with the promise that the amount should be returnedwithing 30 days.(2)CC 1935 states that “the bailee in commodatum acquires the use of the thing loaned butnot its fruits”. In this case, the additional P 12,000 corresponds to the fruits of thelending of the P 200,000.(3)Atienza, the Branch Manager of Producer’s Bank, allowed the withdrawals on theaccount of Strela despite the rule written in the passbook that neither a deposit, nor awithdrawal will be permitted except upon the production of the passbook (recall in thiscase that the passbook was in the possession of the wife of Vives all along). Hence, thisonly proves to show that Atienza allowed the withdrawals because he was party toDoronilla’s scheme of defrauding Vives. By virtue of CC 2180, PNB, as employer, is heldprimarily and solidarily liable for damages caused by their employees acting within thescope of

their assigned tasks. Atienza’s acts, in helpong Doronilla, a customer of thebank, were obviously done in

furtherance of the business of the bank, even though inthe process, Atienza violated some rules

CF Sharp vs. Northwest AirlinesFacts: On May 9, 1974, CF Sharp was authorized to sell tickets of Northwest Airlines-Japan by entering an International Passenger Sales Agency Agreement, however, CFSharp failed to remit the proceeds of the ticket sales. This prompted Northwest Airlinesto file a collection suit against the CF Sharp before the Tokyo Distirct Court. Judgmentwas rendered in its favor, ordering CF Sharp to pay Northwest Airlines includingdamages for the delay. Unable to execute the decision in Japan, the respondent filed acase to enforce said judgment with the RTC. Thereafter, the RTC issued a writ of execution for foreign court’s decision. The petitioner filed for certiorari, assertingit has already made partial payments. The CA lowered the amount to be paid andincluded in its decision that the amount may be paid in local currency at rate prevailingat time of payment. partly affirmed by the Supreme Court. CF Sharp was then ordered to pay Northwest sothat the RTC issued a writ of execution of decision ruling that Sharp is to pay Northwestthe sum of 83,158,195 yen at the exchange rate prevailing on the date of the foreign judgment plus 6% per annum until fully paid, 6% damages and 6% interest. An appeal,the Court of Appeals reduced the interest and it ruled that the basis of the conversion of Petitioner’s liability in its peso equivalent should be the prevailing rate at the time of payment and not the rate on the date of the foreign judgment.

Issue: Whether or not the basis for the payment of the amount due is the value of the currency at the time of the establishment of the obligation.

Ruling: NO, the rule that the value of currency at the time of the establishment of the obligation shall be the basis of payment finds application only when there is an official pronouncement or declaration of the existence of an extraordinary inflation or deflation. Hence, petitioners contention that Article 1250 of the Civil Code shall apply in this case is untenable. Under RA 529, stipulations on the satisfaction of obligations in foreign currencyare void. Payments of monetary obligations, subject to certain exceptions, shall be discharged in the currency which is the legal tender of the Philippines. But since the lawdoesn't provide for the rate of exchange for the payment of foreign currencyobligations incurred after its enactment, jurisprudence held that the exchange rateshould be the prevailing rate at time of payment. This law has been amended, in payments for obligations to be made in currency other than Philippine currency but then again, it failed to state what the exchange rate that should be used. This being the case the jurisprudence regarding the use of the exchange rate at time of payment shall be used

Baylon v CAFacts:Pacionara Baylon introduced Rosita Luanzon to Leonila Tomacruz which is the co-manager of her husband in PLDT.Baylon invited Leonila to lend Rosita money for her business as contractor and in return pay the amount and a monthlyinterest rate of 5%.Persuaded by Baylon’s assurances that the business was stable and the high interest rate Leonila lent Rosita P 150,000.Rosita on the other hand

issued and signed a promissory note acknowledging the receipt of P 150,000 payable on August22, 1987. Baylon signed the promissory note as “guarantor”.Later on, Rosita failed to pay the said amount forcing Leonila to file a case for collection of sum of money against Rositaand Baylon. However summons were never served to Rosita.Baylon denied having guaranteed the payment of the promissory note and claims that the money given to Rosita was nota loan but an investment and that assuming that the loan was guaranteed Leonila has not exhausted the property of Rosita nor resorted to all legal remedies against Rosita as required by law.Trial court ruled in favor of Leonila making Baylon liable for the said amount. This decision was affirmed by the C.A.Issue:WON Baylon should be held liable for the amount of the promissory note.Ruling:No.Rationale:Petitioner is invoking the benefit of execution pursuant to article 2058 of the Civil Code, which provides that —The guarantor cannot be compelled to pay the creditor unless the latter has exhausted all the property of the debtor, and has resorted to all the legal remedies against the debtor.It is axiomatic that the liability of the guarantor is only subsidiary. All the properties of the principal debtor must first be exhausted before his own is levied upon. Thus, the creditor may hold the guarantor liable only after judgment has been obtained against the principal debtor and the latter is unable to pay, "for obviously the 'exhaustion of the principal's property' — the benefit of which the guarantor claims — cannot even begin to take place before judgment has been obtained." Garcia vs CASuretyIn 1980, Dynetics Inc, through its president, acquired a P25M export loan from Security Bank. In 1982, a credit accommodation (SWAP loan) was opened by Security Bank in favor of Dynetics allowing it to acquire an additional $700k loan. This loan was secured by an Indemnity Agreement signed by Garcia acting as a surety. This loan was not availed of by Dynetics however.In 1993, the SWAP loan was renewed but it was reduced to $500k. This time, Dynetics availed of it. Garcia still acted as surety but there was no Indemnity Agreement involved. Later, Dynetics, without Garcia’s knowledge, executed several Chattel Mortgages in favor of Security Bank.Dynetics defaulted from paying. Security Bank foreclosed the mortgages. The proceeds were applied to the SWAP loan leaving a balance of P3.5M. The Export loan has a balance of P464M.Security Bank is now demanding Garcia, as surety, to pay for the deficiency in both loans.ISSUE: Whether or not Garcia is liable for both loans.HELD: No. The Indemnity Agreement specifically secured the $700k SWAP loan which was not availed of. The Continuing Suretyship, on the other hand, specifically secured the reduced $500k SWAP loan. The Indemnity Agreement is not involved in the reduced SWAP loan. There was no reason for SBTC to require the execution of the Continuing Suretyship if its intention were to have the earlier Indemnity Agreement secure the SWAP loan in both the original and in the reduced amounts.Garcia is not liable for the deficiency on the SWAP loan because Dynetics executed chattel mortgages in view of the export loan in favor of Security Bank. And this was w/o Garcia’s knowledge. This does not technically release Garcia as surety but since it is a chattel mortgage which has nothing to do with Garcia (it does not bind him), then the deficiency will have to be shouldered by Dynetics.

Gateway Electronics vs. AsianbankFACTS: Petitioner Gateway Electronics Corporation is a domestic corporation that used to be engaged in the semi-conductor business. During the period material, petitioner Geronimo delos Reyes was its

president and one Andrew delos Reyes its executive vice-president. On July 23, 1996, Geronimo and Andrew executed separate but almost identical deeds of suretyship for Gateway in favor of respondent Asianbank for Domestic Bills Purchased Line and the Omnibus Credit Line.Later developments saw Asianbank extending to Gateway several export packing loans .This loan package was later consolidated with A Dollar Promissory Note. Gateway initially made payments on its loan obligations, but eventually defaulted. Upon Gateway’s request, Asianbank extended the maturity dates of the loan several times. These extensions bore the conformity of three of Gateway’s officers, among them Andrew. Gateway issued two Philippine Commercial International Bank checks as payment for its arrears and but both checks were dishonored for insufficiency of funds. Asianbank’s demands for payment made upon Gateway and its sureties went unheeded. As of November 23, 1999, Gateway’s obligation to Asianbank, inclusive of principal, interest, and penalties, totaled USD 2,235,452.17.Thus Asianbank filed with the RTC in Makati City a complaint for a sum of money against Gateway, Geronimo, and Andrew. In its answer to the amended complaint, Gateway traced the cause of its financial difficulties, described the steps it had taken to address its mounting problem, and faulted Asianbank for trying to undermine its efforts toward recovery. Andrew also filed an answer alleging, among other things, that the deed of suretyship he executed covering the Domestic Bills Purchased Line and the Omnibus Credit Line did NOT include the Dollar Promissory Note, the payment of which was extended several times without his consent. Geronimo, on the other hand, alleged that the subject deed of suretyship, assuming the authenticity of his signature on it, was signed without his wife’s consent and should, thus, be considered as a mere continuing offer. Like Andrew, Geronimo argued that he ought to be relieved of his liability under the surety agreement inasmuch as he too never consented to the repeated loan maturity date extensions given by Asianbank to Gateway. After due hearing, the RTC rendered judgment holding Gateway, Geronimo and Andrew jointly and severally liable to pay Asianbank.  ISSUE: is Geronimo discharged from liability because of the insolvency of Gateway, the principalHELD: petition deniedNOAsianbank argues that the stay of the collection suit against Gateway is without bearing on the liability of Geronimo as a surety. Pursuing the point, Asianbank avers that Geronimo may not invoke the insolvency of Gateway as a defense to evade liability. Geronimo counters with the argument that his liability as a surety cannot be separated from Gateway’s liability. As surety, he continues, he is entitled to avail himself of all the defenses pertaining to Gateway, including its insolvency, suggesting that if Gateway is eventually released from what it owes Asianbank, he, too, should also be so relieved. Geronimo’s above contention is untenable. Suretyship is covered by Article 2047 of the Civil Code, which states: By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case the latter should fail to do so. If a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall be observed. In such case the contract is called a suretyship.