CA Agro-Industrial Development Corp.

vs CA
G.R. No. 90027 March 3, 1993

Doctrine: Contract of rent of a safety deposit box is a special kind of deposit, which is not to
be strictly governed by the provision on deposit.

Facts:
Petitioner, CA Agro-Industrial Development Corp, and spouses Ramon and Pallia Pugao
entered into an agreement whereby the former purchased from the latter two (2) parcels of
land in installment basis. Among the terms and conditions of the agreement were that the
titles to the lots shall be transferred to the petitioner upon full payment of the purchase
price and that the owner's copies of the certificates of titles thereto, 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 Mrs. Margarita
Ramos offered to buy from the petitioner the two (2) parcels of land. Ramos demanded the
execution of a deed of sale, which necessarily entailed the production of the certificates of
title. In view thereof, Aguirre, accompanied by the Pugao’s, then proceeded to the
respondent Bank to open the safety deposit box and get the certificates of title. However,
when opened in the presence of the Bank's representative, the box yielded no such
certificates. Mrs. Ramos withdrew her offer and consequence thereof, petitioner allegedly
failed to realize the profit prompting them to file for complaint against the respondent.

The RTC ruled in favor of the respondent bank. The CA affirmed the assailed decision on the
ground that the contract executed by the petitioner and the bank is a contract of lease, thus
the bank has neither possession nor control over the contents of the safety deposit box.
Hence, this present petition.

Issue: WON the contract entered into by Ca-Agro Industrial Development Corp. and Security
Bank and Trust Company is a contract of rent.

Ruling:
No, the SC held that the contract for the rent of the safety deposit box executed by the
parties is not an ordinary contract of lease as defined in Article 1643 of the Civil Code which
states that, 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. 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.

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