Deposit

38. Calibo v. Court of Appeals (replevin, no valid deposit, son could

not pledge the tractor as he was not the absolute owner, deposit
must have the principal purpose of safekeeping and not acting as a
security)
FACTS:

Respondent Abellas son Mike rented for residential purposes the house
of Petitioner Calibo.
Respondent left a tractor in his sons garage for safekeeping
Petitioner Mike had not paid rentals, electric and water bills
Mike reassured Calibo that the tractor would stand as guarantee for its
payment
Respondent wanted to take possession of his tractor but Petitioner said
that the Mike had left the tractor with him as security for the payment
of Mikes obligation to him.
Respondent issued postdated checks but Petitioner will only accept
check if Respondent executes Promissory Note to cover payment for
unpaid electric and water bills.
Petitioner instituted an action for replevin claiming ownership of the
tractor and seeking to recover possession thereof from petitioner.
Likewise, he asserts that the tractor was left with him, in the concept of
an innkeeper, on deposit and that he may validly hold on thereto until
Mike Abella pays his obligations.
TC and CA Mike could not have validly pledged the tractor because he
was not the owner. NO DEPOSIT

ISSUE: WON there was a valid deposit?

HELD: NO
In a contract of deposit, a person receives an object belonging to
another with the obligation of safely keeping it and of returning the
same. Petitioner himself stated that he received the tractor not to
safely keep it but as a form of security for the payment of Mike Abellas
obligations. There is no deposit where the principal purpose for
receiving the object is not safekeeping.
Consequently, petitioner had no right to refuse delivery of the tractor
to its lawful owner. On the other hand, private respondent, as owner,
had every right to seek to repossess the tractor including the
institution of the instant action for replevin.
39. Bishop of Jaro v. Dela Pena (money held in trust was deposit to
the personal account, money was seized during war, father is not
liable as placing the money in the bank did not assume a different
obligation, cannot be held liable for fortuitous event unless contrary
is stipulated)

FACTS : The plaintiff is the trustee of a charitable bequest made for the construction of a
leper hospital and that father Agustin de la Pea was the duly authorized representative of
the plaintiff to receive the legacy. The defendant is the administrator of the estate of Father
De la Pea.
In the year 1898 the books Father De la Pea, 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 Pea 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 Pea 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.
ISSUE : Whether or not Father de la Pea is liable for the loss of the money under his trust?
RULINGS : The court, therefore, finds and declares that the money which is the subject
matter of this action was deposited by Father De la Pea 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
Pea was not responsible for its loss.
Father De la Pea's liability is determined by those portions of the Civil Code which relate to
obligations. (Book 4, Title 1.)
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 Pea 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.

40. CA Agro v. Court of Appeals (security deposit boxes, bank as

depositary accdg. To law therefore provisions exempting it from

liability are void, bank was not aware of agreement of petioner and
that the box was only to be opened ipon the signature of both
parties as such cannot be liable, lessor-lessee relationship, special
deposit) not a lease, no actual disposal, neither is it really a deposit;
an irregular deposit)
Thus, we reach the same conclusion which the Court of Appeals arrived at,
that is, that the petition should be dismissed, but on grounds quite different
from those relied upon by the Court of Appeals. In the instant case, the
respondent Bank's exoneration cannot, contrary to the holding of the Court of
Appeals, be based on or proceed from a characterization of the impugned
contract as a contract of lease, but rather on the fact that no competent proof
was presented to show that respondent Bank was aware of the agreement
between the petitioner and the Pugaos to the effect 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. This in turn flows from this Court's determination that 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.
Since, however, the petitioner cannot be blamed for the filing of the
complaint and no bad faith on its part had been established, the trial court
erred in condemning the petitioner to pay the respondent Bank attorney's
fees. To this extent, the Decision (dispositive portion) of public respondent
Court of Appeals must be modified.
Facts

Petitioner (through its President) purchased 2 parcels of land from spouses

Pugao for P350 K with a downpayment of P75 K.
Per agreement, the land titles will be transferred upon full payment and
will be placed in a safety deposit box (SBDB) of any bank. Moreover, the
same could be withdrawn only upon the joint signatures of a
representative of the Petitioner and the Pugaos upon full payment of the
purchase price.

Thereafter, Petitioner and spouses placed the titles in SDB of Respondent

Security Bank and signed a lease contract which substantially states that
the Bank will not assume liability for the contents of the SDB.

Subsequently, 2 renter's keys were given to the renters one to the

Petitioner and the other to the Pugaos. A guard key remained in the
possession of the Respondent Bank. The SDB can only be opened using
these 2 keys simultaneously.

Afterwards, a certain Mrs. Ramos offered to buy from the Petitioner the 2
lots that would yield a profit of P285K.

Mrs. Ramos demanded the execution of a deed of sale which necessarily

entailed the production of the certificates of title. Thus, Petitioner with the
spouses went to Respondent Bank to retrieve the titles.

However, when opened in the presence of the Bank's representative, the

SDB yielded no such certificates.

Because of the delay in the reconstitution of the title, Mrs. Ramos

withdrew her earlier offer to purchase the lots; as a consequence, the
Petitioner allegedly failed to realize the expected profit of P285K.

Hence, Petitioner filed a complaint for damages against Respondent Bank.

Lower courts ruled in favour of Respondent Bank. Thus, this petition.

Issues:
1. Whether or not the disputed contract is an ordinary contract of lease?
2. Whether or not the provisions of the cited contract are valid?
3. Whether or not Respondent Bank is liable for damages?
Ruling:
1. No. SC ruled that it is a special kind of deposit because:
the full and absolute possession and control of the SDB 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 and vice versa.

In this case, the said key had a duplicate which was made so that both
renters could have access to the box.

Moreover, the renting out of the SDBs is not independent from, but
related to or in conjunction with, the principal function of a contract of
deposit the receiving in custody of funds, documents and other
valuable objects for safekeeping.
2. NO. SC opined that it is void.

Generally, the Civil Code provides that the depositary (Respondent

Bank) 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, the diligence 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 (which is present in the disputed contract)

Said provisions are inconsistent with the Respondent Bank's

responsibility as a depositary under Section 72(a) of the General
Banking Act.

3. NO. SC ruled that:

no competent proof was presented to show that Respondent Bank was

aware of the private agreement between the Petitioner and the Pugaos
that the Land titles were withdrawable from the SDB 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.

41. Javellana v. Lim (loan not a deposit, depositary cannot use or

consume a thing deposited otherwise it loses its character as a
deposit, extension provided for 15% interest
FACTS: Defendants executed a document in favor of plaintiff-appellee wherein it
states that they have received, as a deposit, without interest, money from plaintiffappellee and agreed upon a date when they will return the money. Upon the
stipulated due date, defendants asked for an extension to pay and binding
themselves to pay 15% interest per annum on the amount of their indebtedness, to
which the plaintiff-appellee acceded. The defendants were not able to pay the full
amount of their indebtedness notwithstanding the request made by plaintiff-appellee.
The lower court ruled in favor of plaintiff-appellee for the recovery of the amount due.
ISSUE: Whether the agreement entered into by the parties is one of loan or of
deposit?
HELD: The document executed was a contract of loan. Where money, consisting of
coins of legal tender, is deposited with a person and the latter is authorized by the
depositor to use and dispose of the same, the agreement is not a contract of deposit,
but a loan. A subsequent agreement between the parties as to interest on the
amount said to have been deposited, because the same could not be returned at the
time fixed therefor, does not constitute a renewal of an agreement of deposit, but it is
the best evidence that the original contract entered into between therein was for a
loan under the guise of a deposit.

42. Gavieres v. Tavera (not a deposit but a loan, action to collect has
already prescribed, All personal actions, such as those which arise from a
contract of loan, cease to have legal effect after twenty years according to
the former law and after fifteen years according to the Civil Code now in
force)
The present appeal has been interposed in the declarative action of greater
import filed in the Court of First Instance of Tondo, commenced on January 10,
1900, by Don Manuel Garcia Gavieres as plaintiff and successor in interest of
the deceased Doa Ignacia de Gorricho against Don Trinidad H. Pardo de
Tavera as universal heir of the deceased Don Felix Pardo de Tavera for the
collection of a balance of 1,423 pesos 75 cents, remaining due on an original
obligation of 3,000 pesos which, as the plaintiff alleges, was the amount of a
deposit delivered by Doa Ignacia Gorricho, deceased, to Don Felix Pardo de
Tavera, deceased, on the 31st day of October, 1859. The agreement between
the parties appears in the following writing:
Received of Seorita Ignacia de Gorricho the
sum of 3,000 pesos, gold (3,000 pesos), as a
deposit payable on two months' notice in
advance, with interest at 6 per cent per
annum with an hypothecation of the goods
now owned by me or which may be owned
hereafter, as security of the payment.
In witness whereof I sign in Binondo, January
31, 1859.
FELIX PARDO DE TAVERA.
The defendant answering complaint of plaintiff alleges among other things as
a defense, that the document upon which the complaint is based was not a
contract of deposit as alleged in the complaint, but a contract of loan, and
setting forth furthermore the payment of the original obligation as well as the
prescription of the action. The defendant contends that the document upon
which the action is based is not evidence of a deposit, as the plaintiff
maintains, but of a contract of loan, and that the prescription applicable to
loans has extinguished the right of action. Although in the document in
question a deposit is spoken of, nevertheless from an examination of the
entire document it clearly appears that the contract was a loan and that such
was the intention of the parties. It is unnecessary to recur to the canons of
interpretation to arrive at this conclusion. The obligation of the depositary to
pay interest at the rate of 6 per cent to the depositor suffices to cause the
obligation to be considered as a loan and makes it likewise evident that it was
the intention of the parties that the depositary should have the right to make
use of the amount deposited, since it was stimulated that the amount could
be collected after notice of two months in advance. Such being the case, the
contract lost the character of a deposit and acquired that of a loan. (Art.
1768, Civil Code.)

All personal actions, such as those which arise from a contract of loan, cease
to have legal effect after twenty years according to the former law and after
fifteen years according to the Civil Code now in force. The date of the
document is January 31, 1859. The proof of payment in support of the
defense we consider likewise sufficient to establish such defense. The
document dated January 8, 1869, executed by Don Felix Garcia Gavieres,
husband and legal representative of Doa Ignacia Gorricho, acknowledges
the receipt of 1,224 pesos from Don Manuel Darvin, representative of the
deceased Don Felix Pardo de Tavera. This sum is declared in said document to
be the balance due upon the debt of 2,000 pesos. This was slightly more or
less the amount which remained as due upon the original obligation after
deducting the payment which are admitted to have been made. In the
absence of evidence disclosing that there were other claims in favor of
Gavieres it is reasonably to be supposed that this payment was made to
satisfy the balance due upon the original obligation.
The original contract between the parties was celebrated nearly a half
century ago; the contracting parties have ceased to exist long since; it may
be that there exists or may have existed documents proving a total payment
between the parties and that this document has some time ago suffered the
common fate of perishable things. He who by laches in the exercise of his
rights has caused a failure of proof has no right to complain if the court does
not apply the strict rules of evidence which are applicable in ordinary cases,
and admits to a certain extent the presumption to which the conduct of the
interest party himself naturally gives rise.
It is our opinion that the judgment of the Court of First Instance should be
affirmed, and it is so ordered, with costs of appeal taxed against the
appellant.
Arellano, C.J., Torres, Willard, and Mapa, JJ., concur.
43. Baron v. David (rice mill burned down, palay, no deposit, when a
thing is used or consumed it loses the character of a deposit, palay
was used even before the fire)
FACTS:
-

The defendant owns a rice mill, which was well patronized by the rice
growers of the vicinity.
On January 17, 1921, a fire occurred that destroyed the mill and its
contents, and it was some time before the mill could be rebuilt and put
in operation again.
Silvestra Baron (P1) and Guillermo Baron (P2) each filed an action for
the recovery of the value of palay from the defendant (D), alleged that:
o The palay have been sold by both plaintiffs to the D in the year
1920
o Palay was delivered to D at his special request, with a promise of
compensation at the highest price per cavan

D claims that the palay was deposited subject to future withdrawal by

the depositors or to some future sale, which was never effected. D also
contended that in order for the plaintiffs to recover, it is necessary that
they should be able to establish that the plaintiffs' palay was delivered
in the character of a sale, and that if, on the contrary, the defendant
should prove that the delivery was made in the character of deposit,
the defendant should be absolved.
ISSUE: WoN there was deposit
-

SC: NO
-

Art. 1978. 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.
The case does not depend precisely upon this explicit alternative; for
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.
In this connection we wholly reject the defendant's pretense that the
palay delivered by the plaintiffs or any part of it was actually consumed
in the fire of January, 1921. Nor is the liability of the defendant in any
wise affected by the circumstance that, by a custom prevailing among
rice millers in this country, persons placing palay with them without
special agreement as to price are at liberty to withdraw it later, proper
allowance being made for storage and shrinkage, a thing that is
sometimes done, though rarely.

44. U.S. v. Igpuara (deposit not a loan or a negotiable instrument,

estafa because deposit was used by depository without depositors
consent, Failure to claim at once or delay for sometime in demanding
restitution of the things deposited, which was immediately due, does not
imply such permission to use the thing deposited as would convert the
deposit into a loan.)
Facts: The defendant Jose igpuara was entrusted with the amount of P2,498
by Montilla and Veraguth. Without the consent of Montilla and Veraguth
however, Igpuara used the said amount for his own ends. Thus, igpuara was
charged and convicted with estafa, for having swindled Juana Montilla and
Eugenio Veraguth out of P2,498 which he had taken as deposit from the
former to be at the his disposal. Igpuara was sentenced to pay Juana Montilla
P2,498 . The instrument for the deposit reads:
We hold at the disposal of Eugenio Veraguth the sum of two thousand four
hundred and ninety-eight pesos (P2,498), the balance from Juana Montilla's
sugar. Iloilo, June 26, 1911, Jose Igpuara, for Ramirez and Co

Igpuara contended that the amount was not deposit for there was no
certificate of deposit, there was no transfer or delivery of the P2,498 and
what transpired was a loan. If assuming that it was deposit, this is negotiable.
Issues: Whether or not it is necessary that there be transfer or delivery in
order to constitute a deposit.
Held: No.
A deposit is constituted from the time a person receives a thing
belonging to another with the obligation of keeping and returning it.
(Art. 1758, Civil Code.)
His contention is without merit because firstly, the defendant drew up a
document declaring that they remained in his possession. With the
understanding that he would, for it has no other purpose.
The certificate of deposit in question is not negotiable because only
instruments payable to order are negotiable. Hence, this instrument not
being to order but to bearer, it is not negotiable.
As for the argument that the depositary may use or dispose oft he things
deposited, the depositor's consent is required thus, the rights and obligations
of the depositary and of the depositor shall cease and the rules and
provisions applicable to commercial loans, commission, or contract which
took the place of the deposit shall be observed. Igpuara however has shown
no authorization whatsoever or the consent of the depositary for using or
disposing of the P2,498.
That there was not demand on the same or the next day after the certificate
was signed, does not operate against the depositor, or signify anything
except the intention not to press it. Failure to claim at once or delay for
sometime in demanding restitution of the things deposited, which was
immediately due, does not imply such permission to use the thing deposited
as would convert the deposit into a loan.
Judgment appealed from is affirmed
45. Palacio v. Sudario (pasturing of cattle, loss of the thing
deposited -> burden falls on the depositary, that loss without his
fault or fortuitous event was nor proven by depositary)
FACTS: The plaintiff made an arrangement for the pasturing of eighty-one
head of cattle, in return for which she has to give one-half of the calves that
might be born and was to pay the defendant one-half peso for each calf
branded. On demand for the whole, forty-eight head of cattle were afterwards
returned to her and this action is brought to recover the remaining thirtythree.

Defendant in reply to the demand for the cattle, in which he seeks to excuse
himself for the loss of the missing animals.
As a second defense it is claimed that the thirty-three cows either died of
disease or were drowned in a flood. The defendant's witnesses swore that of
the cows that perished, six died from overfeeding, and they failed to make
clear the happening of any flood sufficient to destroy the others.
HELD: If we consider the contract as one of deposit, then under article 1183
of the Civil Code, the burden of explanation of the loss rested upon the
depositary and under article 1769 the fault is presumed to be his. The
defendant has not succeeded in showing that the loss occurred either without
fault on his part or by reason of caso fortuito.
If, however, the contract be not one strictly of deposit but one according to a
local custom for the pasturing of cattle, the obligations of the parties remain
the same.
46. Gullas v. PNB (bank and client, debtor-creditor, although bank
hasright to set off baalnce and debt but bank acted prematurely,
Gullas as mere indorser, prior to the mailing of the notice of dishonor and
without waiting for any action by Gullas, the bank made use of the money
standing in his account to make good for the treasury warrant. At this point
recall that Gullas was merely an indorser. Notice should have been given to
him in order that he might protect his interest. He should be awarded with
nominal damages because of the premature action of the Bank.)
Facts:

Atty. Gullas has a current account with PNB.

The treasury of the US issued a warrant in the amount of $361 payable to the
order of Bacos. Gullas and Lopez signed as indorsers of this warrant. Thereupon it
was cashed by PNB.
The warrant was subsequently dishonored by the Insular treasurer.
At that time, Gullas had a balance of P500 in PNB. From this balance, he also
issued some checks which eventually could not be paid when it was sequestered
by the Bank.
When it learned of the dishonor, PNB sent notice to Gullas stating that it applied
the outstanding balances from his current account as payment of the dishonored
warrant. Such notice could not be delivered to him since he was out of town.
Without any action from Gullas, PNB applied the dishonored warrant against his
account.
Because of this, Gullas was unable to pay for the checks he issued before the
application.
Gullas filed a complaint against PNB.

Issue:
Whether or not PNB has a right to apply a deposit to the debt of a depositor to the
bank?

Held:
Yes, PNB has a right to apply the payment against the account of the depositor.
The relation between a depositor and a bank is that if creditor and debtor. The
general rule is that a bank has a right to set off of the deposit in its hands for the
payment of any indebtedness to it on the part of the depositor.
However, prior to the mailing of the notice of dishonor and without waiting for any
action by Gullas, the bank made use of the money standing in his account to make
good for the treasury warrant. At this point recall that Gullas was merely an indorser.
Notice should have been given to him in order that he might protect his interest. He
should be awarded with nominal damages because of the premature action of the
Bank.

47. Serrano v. Central Bank (time deposit, not really a deposit but a
loan, an irregular deposit, failure to honor time deposit: not a breach
of trust but a failure to pay the obligation)
Furthermore, both parties overlooked one fundamental principle in the nature
of bank deposits when the petitioner claimed that there should be created a
constructive trust in his favor when the respondent Overseas Bank of Manila
increased its collaterals in favor of respondent Central Bank for the former's
overdrafts and emergency loans, since these collaterals were acquired by the
use of depositors' money.
Bank deposits are in the nature of irregular deposits. They are really loans
because they earn interest. All kinds of bank deposits, whether fixed, savings,
or current are to be treated as loans and are to be covered by the law on
loans. 14 Current and savings deposit are loans to a bank because it can use
the same. The petitioner here in making time deposits that earn interests
with respondent Overseas Bank of Manila was in reality a creditor of the
respondent Bank and not a depositor. The respondent Bank was in turn a
debtor of petitioner. Failure of he respondent Bank to honor the time deposit
is failure to pay s obligation as a debtor and not a breach of trust arising from
depositary's failure to return the subject matter of the deposit
Facts: Serrano had P350K worth of time deposits in Overseas Bank of Manila. He
made a series of encashment but was not successful. He filed a case against
Overseas Bank & he also included the Central Bank so that the latter may also be
jointly and severally liable. Serrano argued that the CB failed to supervise the acts of
Overseas Bank and protect the interests of its depositors by virtue of constructive
trust.
Issue: W/N the Central Bank is liable?
Ruling: No. There is no breach of trust from a banks failure to return the subject
matter of the deposit. Bank deposits are in the nature of irregular deposits. All kinds
of bank deposits are to be treated as loans and are to be covered by the law on loans
Art.1980. In reality the depositor is the creditor while the bank is the debtor. Failure of
the respondent bank to honor the time deposit is failure to pay its obligation as a
debtor.

48. Aboitiz v. Orquinena (death, 1st administrator committed suicide,

insurance claim was deposited in the company, company refused to
give deposit without judicial demand, court ruled that there is no
need for judicial demand to claim a deposit)
Juan I. de Aldecoa, a resident of the municipality of Surigao, Province of
Surigao, had there a going business and maintained mercantile relations with
Oquiena & Co. in Cebu. On July 30, 1913, Juan I. de Aldecoa died, and in
September of the same year Anastacio I. de Aldecoa was appointed
administrator of his estate. At that time Anastacio I. de Aldecoa was also the
manager in Cebu of Oquiena & Co. On February 4, 1914, Anastacio I. de
Aldecoa died, having committed suicide, and in April of the same year Ramon
Aboitiz was appointed in his place as administrator of the estate of I. de
Aldecoa.
For the first cause of action the Plaintiff seeks to recover from the Defendants
the sum of P9,011.58, with interest at the rate of 8 percent per annum
beginning on February 22, 1913; and for the second cause of action, the sum
of P5,000, with legal interest beginning on February 5, 1915, the time that
the complaint was filed.
At the death of Juan I. de Aldecoa, Anastacio I. de Aldecoa, at that time his
administrator, collected from the New York Life Insurance Co. the sum of
P9,011.58 the amount of Juan I. de Aldecoas life insurance. On November 22,
1913, Anastacio I. de Aldecoa deposited said sum with Oquiena & Co. at 8
percent interest beginning on that date. Oquiena & Co. gave the following
receipt for this sum:
For P9,011.58.We have received from the estate of the deceased, D. Juan I.
de Aldecoa, the sum of nine thousand eleven pesos with 58/100 (P9,011.58)
as a deposit and with interest at 8 percent per annum, which sum comes
from the New York Life Insurance Co. as the settlement of the life insurance of
the said Sr. Aldecoa. Said interest will begin to run from the 22nd of last
November, the date we received the sum in Manila.
CEBU, January 21, 1914.
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 judgment against the Defendant Oquiena & Co. in favor
of the Plaintiff, for the sum of P9,011.58 with interest at 8 per cent per annum
from the 22nd of November, 1913; for the sum of P2,312.79 with interest at 6
percent per annum from the 5th of February, 1915; the court reserved to
Oquiena & Co. the right to demand from the administrator of the estate of
the deceased, Juan I. de Aldecoa, the sum of P946.58 as pensions paid by the
said Defendant company to the family of the deceased in Spain, and absolved
the other Defendant, Oquiena & Co. (Ltd.)

Both of the Defendants appealed from this decision.

The first error assigned by the Appellants as committed by the trial court is
that the latter overruled the demurrer interposed to the amended complaint.
This demurrer was based on the ground that the facts alleged in the
complaint do not constitute a cause of action in regard to the payment of the
sum of P9,011.58. It is said that, if this is 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 is given. The document is in fact clearly a deposit,
according to its terms, without a fixed time. But exactly for being such, the
sum deposited may be withdrawn at any time (Articles 1766 of the Civil Code
and 306 of the Code of Commerce)
The second error assigned was that the trial court did not take into
consideration the motion praying for the inclusion, as true and necessary
parties, in addition to Oquiena & Co. Ltd.), (the assignee of Oquiena & Co.),
the sureties of Anastacio Ibanez de Aldecoa, the administrator, of the Plaintiff
herein. According to the records, the trial court determined this motion by
directing the inclusion of Oquiena & Co. (Ltd.) but not that of the sureties. As
the Defendant did not except to this resolution therefore we cannot review
same at this instance.
The third error assigned is that the trial court did not dismiss the complaint
regarding the second cause of action, namely the claim for P5,000 as the
consequence of the continuance of the transactions with Oquiena & Co.
after the death of Juan I. de Aldecoa. The trial court reduced this claim to
P2,3129. It is alleged there is no evidence sustaining this claim. It appears
that in deciding this sum as due to the Plaintiff, the trial court, aided by an
expert accountant and consented to by counsel for both parties, took into
consideration the account books of Oquiena & Co. We do not find any reason
to alter the conclusion reached upon an examination of said books by the trial
court.
The fourth error assigned is that the trial court did not accept the expenses
consequent to the business established in the Province of Surigao and
appertaining to the estate of Juan Ibanez de Aldecoa. In rejecting these
expenses the court found same were not business expenses but personal
debts of Francisco Manzarraga to Oquiena & Co. for which the estate of Juan
I. de Aldecoa ought not to be responsible. We believe this conclusion is
correct.
The last error assigned is that the trial court pronounced judgment against
Oquiena & Co., a company already dissolved, and absolved Oquiena & Co.
(Ltd.), the successor and assignee of the former.
According to its by-laws, Oquiena & Co. ought to have been dissolved on 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 Oquinena & Co. began to organize a company called Oquiena & Co.

(Ltd.), as a successor to the former. On August 5, 1914, Oquiena & Co. (Ltd.)
was duly organized and on July 29, 1914, the formal transfer of all the assets
and business of Oquiena & Co. to Oquiena & Co. (Ltd.) was effected. In the
articles of copartnership of the new company, Oquiena & Co. (Ltd.), as well
as in the transference to the same of all the assets and business of the
Oquiena & Co., it was made to appear that Oquiena & Co. (Ltd.) has
assumed all the obligations of Oquiena & Co. Oquiena & Co. ( Ltd. )
appeared at its own request as Defendant in this case and appealed in order
to assume the obligations of Oquiena & Co. In fact and in law Oquiena &
Co. has not existed since the organization of Oquiena & Co. (Ltd.), and we
find no reason why the former should be declared liable in this decision
instead of Oquiena & Co. (Ltd.) to whom has passed all said obligations and
rights and by whom voluntarily and in good faith all are assumed.

From the foregoing considerations, we affirm the former judgment in all its
parts except regarding the sentencing Oquiena & Co. and the absolving of
Oquiena & Co. (Ltd.). We hereby absolve the first and sentence the second
to pay to the Plaintiff the sum mentioned in the judgment appealed from. No
special finding is made as to the costs. SO ORDERED.
49. Delos Santos v. Tan Khey (revolver, personal receipt of items that
were lost is not necessary, sufficient that they were within the
premises, business of the inn is both lodging and security)
Facts:
Tan Khey was the owner of International Hotel located in Iloilo city. Romeo de los
Santos lodged in Tna Kheys hotel. After arrival, he left the hotel, depositing his
revolver and his bag with the person in charge in the hotel. When he returned to the
hotel, he took his revolver and his bag from the person in charge in the hotel and
proceeded to his room. He locked the door before sleeping.
When he woke up, he discovered that the door in his room was opened and his
bag and pants, wherein he placed his revolver , was missing. He reported the matter
to the Assistant Manager of the hotel, who in turn informed Tan Khey.
A secret service agent was sent to investigate and it was found that the wall of
the room occupied by De los Santos was only seven feet high with an open space
above through which one could enter from outside. De los Santos told the detective
that he lost his revolver.
Tan Khey disclaimed liability because De los Santos did not deposit his properties
with the manager despite a notice to that effect was posted in the hotel.
Tan Khey contended that to be liable under Article 1998 of the Civil Code, the
following conditions must concur:
1. Deposit of effects by travellers in hotel or inn
2. Notice given to hotel keepers or employees of the effects brought by
guests

3. Guest or travellers take the precautions which said hotel keepers or their
substitutes advised relative to the care and vigilance of their effects.
Issue: Whether the hotel owner should be held liable for the loss of the effects of the
guest?
Rulng:
The Court ruled that the hotel owner should be liable for the loss of the revolver,
pants and bag of the guest.
Deposit
While the law speaks of deposit of effects by travellers in hotels or inns,
personal receipt by the innkeeper for safe keeping of effects is not necessaily meant
thereby. The reason therefor is the fact that it is the nature of business of an
innkeeper to provide not only lodging for travellers but also to security to their
persons and effects. The secuity mentioned is not confined to the effects actually
delivered to the innkeeper but also to all effects placed within the premises of the
hotel. This is because innkeepers by the neture of their business, have supervision
and controlof their inns and the premises threof.
It is not necessary that the effect was actually delivered but it is enough that
they are within the inn. If a guest and goods are within the inn, that is sufficient to
charge him.
The owner of a hotel may exonerate himself from liability by showing that the
guest has taken exclusive control of his own goods, but this must be exclusive
custody and control of a guest, and must not be held under the supervision and care
of the innkeeper,ey are kept in a room assigned to a guest or the other proper
depository in the house.
In this case, the guest deposited his effects in the hotel because they are in his
room and within the premises of the hotel, and therefore, within the supervision and
control of the hotel owner.
Notice
The Court ruled that there was no doubt that the person in charge had
knowledge of his revolver, the bag, and pants of the guest, De los Santos.
The requirement of notice being evidently for the purpose of closing the door to
fraudulent claims for non-existent articles, the lack thereof was fatal to De los Santos
claim for reparation for the loss of his eyeglass, ring, and cash.
Precautions
While an innkeeper cannot free himself from responsibility by posting notices,
there can be no doubt of the innkeepers right to make such regulations in the
management of his inn as will more effectually secure the property of his guest and
operate as protection to himself, and that it is incumbent upon the guest, if he means
to hold the inkeeper ho his responsibility, to comply with any regulation that is just
and reasonable, when he is requested to do so.

However, in this case, the notice requiring actual deposit of the effects with the
manager was an unreasonable regulation. It was unreasonable to require the guest
to deposit his bag ,pants and revolver to the manager. De los Santos had exercised
the necessary diligence with respect to the care and vigilance of his effects.