Calibo vs CA 1. Pablo Abella owns a tractor, which he left with his son Mike for safekeeping 2.

Mike then kept in the garage of the house he was leasing from Dionisio Calibo 3. Dionisio learned that Mike had stopped paying rentals and had never paid the electric and water bills which he was bound to shoulder 4. Upon confrontation, Mike informed Dionisio that he would only be staying til the end of December and that he would be settling his account, offering the tractor as security 5. Mike even asked Calibo to find a buyer for the tractor 6. Lease ended and Mike vacated the premises; new tenant 7. Dionisio visited Mike few times in Cebu to try to settle with Mike re: outstanding accounts, but to no avail out of town most of the time and that the prospective buyer of the tractor did not come back anymore 8. When confronted again, Mike reassured Calibo that tractor would stand as guarantee for its payment 9. When Pablo Abella came to claim and take possession of the tractor, Dionisio refused to give it up alleging that Mike left it with him as security for the payment of Mikes obligation 10. Pablo offered to write a 2,000 check but Dionisio would only accept if Pablo will write a promissory note to cover the amount of the electric and water bills 11. Failed to agree so Pablo went back to Cebu 12. Pablo later instituted an action for replevin, claiming ownership of the tractor and seeking to recover possession thereof 13. RTC: granted, CA: affirmed 14. Ratio: Mike could not have validly pledged the subject tractor to Dionisio since he was NOT THE OWNER thereof, NOR WAS HE AUTHORIZED by its owner to PLEDGE the tractor. Or that IF NOT A PLEDGE, THEN A DEPOSIT was created (the primary purpose of which is safekeeping only and NOT TO SECURE PAYMENT OF DEBT) 15. Appeal to SC 16. Dionisio: valid pledge; tractor left to him in concept of innkeeper, on deposit, and he may hold onto it til Mike pay; principal-agent relationship, failure to repudiate = estoppel ISSUE: WON tractor valid security HELD: DENIED, LACK OF MERIT 1. Pledge: creditor is given the right to retain his debtors property til debt is paid a. Pledge is constituted to secure the fulfilment of a principal obligation b. Pledger absolute owner of thing pledged c. Person constituting the pledge has the free disposal of property or that he is legally authorized for the purpose

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Hence, cannot validly bind the property in favour of creditor, and the pledgee or mortgagee in such case acquires no right whatsoever in the property pledged or mortgaged Mike Abella not absolute owner: no valid pledge As to agency relationship: for an agency relationship to be deemed implied, the principal must know (1869) that another person is acting on his behalf without authority- Mike was acting without Pablos knowledge, not just without authority; and principal will only be solidarily liable if he allowed his agent to act with full powers- again, lack of knowledge No valid deposit: person receives an object belonging to another with the obligation of safely keeping it and of returning the same- THERE IS NO DEPOSIT WHERE THE PRINCIPAL PURPOSE FOR RECEIVING THE OBJECT IS NOT SAFEKEEPING Hence, Dionisio had no right to refuse delivery of the tractor to its lawful owner because he had every right to seek to repossess property

Roman Catholic Bishop of Jaro vs de la Pena 1. Father de la Pena was trustee of RCBJ for 6,641 collected by him for charitable purposes 2. He deposited 19,000 in his bank account with HSB 3. He was subsequently arrested as political prisoner 4. Funds in the bank were confiscated because it was allegedly used for revolutionary purposes because he was an insurgent 5. Money was taken from the bank by military authorities, confiscated and turned over to Government 6. Careful examination of case yields that the 6,641 trust fund money was included in the 19,000 confiscated 7. No law re: trust so Civil Code governs

Held: 1. A person obliged to give something is also bound to preserve it with the diligence pertaining to a good father of a family (1094) 2. No one shall be liable for events which could not be foreseen, or which having foreseen were inevitable xxx 3. By placing money in bank and mixing it with personal funds, de la Pena did not 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 4. No liability will attach: money forcibly taken, even if he placed the trust fund in the his personal account 5. WON mas okay if iniwan nya sa bahay na lang: not material

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There was no law prohibiting him from depositing it as he did and there was no law which changed his responsibility by reason of the deposit Money forcibly taken from bank by armed forces during war and insurrection: no liability

CA Agro-Industrial Corp vs CA 1. CA bought 2 parcels of land for 350,625 from the Pugao spouses; 75,725 served as downpayment while the balance was covered by 3 post-dated checks 2. Memorandum of True and Actual Agreement of Sale of Land: Titles to the lots shall be transferred to CA upon full payment and the owners copies of the certificate of title and TCTs shall be DEPOSITED IN A SAFETY DEPOSIT BOX OF SECURITY BANK AND TRUST COMPANY 3. Only could be withdrawn upon JOINT SIGNATURES OF A REPRESENTATIVE OF THE CA AND THE PUGAOS UPON FULL PAYMENT OF THE PURCHASE PRICE 4. 2 renters keys were given: one to Aguirre (CA) and the other to the Pugaos, guard key with the bank (box had 2 keyholes: 1 for guard key, sabay open) 5. Margarita Ramos offered to buy from CA the two lots at price of 225,000 per sqm (profit of 100) or a total of 280,500 6. Ramos demanded execution: give me certificates of title 7. Aguirre, accompanied by the Pugaos, then proceeded to the respondent Bank on 4 October 1979 to open the safety deposit box and get the certificate- BUT BOX WAS EMPTY! 8. Ramos withdrew her offer to purchase because of the delay of the reconstitution of title 9. CA filed for damages against the Bank for failing to realize the 280,500 profit 10. Bank: no cause of actiona. The bank is not a depositary of the contents of the safe and it has neither the possession nor control of the same. b. The bank has no interest whatsoever in said contents, except herein expressly provided, and it assumes absolutely no liability in connection therewith. 11. RTC: Dismissed complaint, stipulation re: non-liability binding 12. Appeal: affirmed RTC decision- it was a contract of lease, while the bank retained no right to open said box because it neither had the possession nor control over its contents a. Article 1643: In the lease of things, one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite. However, no lease for more than ninety-nine years shall be valid. b. "[c]learly, the defendant-appellee is not under any duty to maintain the contents of the box. The stipulation absolving the defendant-appellee from liability is in accordance with the nature of the contract of lease and cannot be regarded as contrary to law, public order and public policy."

BUT respondent Bank may still be made ANSWERABLE IN CASE UNAUTHORIZED PERSONS ENTER INTO THE VAULT AREA OR WHEN THE RENTED BOX IS FORCED OPEN. Thus, as expressly provided for in stipulation number 8 of the contract in question: i. The Bank shall use due diligence that no unauthorized person shall be admitted to any rented safe and beyond this, the Bank will not be responsible for the contents of any safe rented from it. 13. Petitioner maintains that regardless of nomenclature, the contract for the rent of the safety deposit box is actually a contract of deposit governed by Title XII, Book IV of the Civil Code of the Philippines. Accordingly, it is claimed that the respondent Bank is liable for the loss of the certificates of title pursuant to Article 1972 of the said Code which provides: Art. 1972. The depositary is obliged to keep the thing safely and to return it, when required, to the depositor, or to his heirs and successors, or to the person who may have been designated in the contract. His responsibility, with regard to the safekeeping and the loss of the thing, shall be governed by the provisions of Title I of this Book. If the deposit is gratuitous, this fact shall be taken into account in determining the degree of care that the depositary must observe. 14. that where a safe-deposit company leases a safe-deposit box or safe and the lessee takes possession of the box or safe and places therein his securities or other valuables, the relation of bailee and bail or is created between the parties to the transaction as to such securities or other valuables; the fact that the safe-deposit company does not know, and that it is not expected that it shall know, the character or description of the property which is deposited in such safe-deposit box or safe does not change that relation. Possession with the company since, the company is, by the nature of the contract, given absolute control of access to the property, and the depositor cannot gain access thereto without the consent and active participation of the company. . . . 15. Petitioner further argues that conditions 13 and 14 of the questioned contract are contrary to law and public policy and should be declared null and void. Issue: WON Bank is liable Held: 1. petition should be dismissed, but on grounds quite different from those relied upon by the Court of Appeals

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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 BUT ITS NOT A CONTRACT OF DEPOSIT: because its a special kind of deposit , not strictly governed by the provisions of the CC on deposit CANNOT BE CHARACTERIZED AS AN ORDINARY CONTRACT OF LEASE: the full and absolute possession and control of the safety deposit box was not given to the joint renters the petitioner and the Pugaos- in essence, neither Pugaos and CA can open the box without the guard key and bank cant open without eithers keys the prevailing rule 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 bail or and bailee, the bailment being for hire and mutual benefit. Section 72 of the General Banking Act 23 pertinently provides: Sec. 72. In addition to the operations specifically authorized elsewhere in this Act, banking institutions other than building and loan associations may perform the following services: (a) Receive in custody funds, documents, and valuable objects, and rent safety deposit boxes for the safeguarding of such effects. The banks shall perform the services permitted under subsections (a), (b) and (c) of this section as depositories or as agents. . 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. And that depositary's responsibility for the safekeeping of the objects deposited in the case at bar is governed by Title I, Book IV of the Civil Code: liable if, in performing its obligation, it is found guilty of fraud, negligence, delay of contravention of the tenor of the agreement Absent any stipulation re: degree of care: diligence of a good father Any stipulation exempting depositary arising from loss of the thing deposited: VOID not correct to assert that the Bank has neither the possession nor control of the contents of the box since in fact, the safety deposit box itself is located in its premises and is under its absolute control; moreover, the respondent Bank keeps the guard key to the said box no competent proof was shown that the Bank was aware of the agreement between CA and Pugaos that the certificates of title were withdrawable from the safety deposit box only upon both parties' joint signatures, and that no evidence was submitted to reveal that the loss of the certificates of title was due to the fraud or negligence of the respondent Bank the contract involved was one of deposit. Since both the petitioner and the Pugaos agreed that each should have one (1) renter's key, it was obvious that either of them could ask the Bank for access to the safety deposit box and, with

the use of such key and the Bank's own guard key, could open the said box, without the other renter being present. 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.

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Javellana vs Lim 1. defendants received from Javellana 600.86 as deposit without interest, to be returned to him, jointly and severally 2. obligation became due and defendants asked for extension of time for payment, binding themselves to pay 15% interest to which Javellana agreed to 3. debtors paid 1,000 interest but

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