DURBAN APARTMENTS CORPORATION, doing business under the name and style of

City Garden Hotel

Vs.
PIONEER INSURANCE AND SURETY CORPORATION

Facts:
On April 30, 2002, See arrived and checked in at the City Garden Hotel in Makati corner
Kalayaan Avenues, Makati City before midnight with his 2001 Suzuki Grand Vitara with Plate
No. XBH-510 under Policy No. MC-CV-HO-01-0003846-00-D in the amount of P1,175,000.00.
The parking attendant, Justimbaste, got the key to said Vitara from See to park it. On May 1,
2002 at about 1:00Am, 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 itt was park unattended
at the parking area of Equitable PCI Bank along Makati Avenue.
He reported the incident to the Operations Division of the Makati City Police Anti-
Carnapping Unit, and a flash alarm was issued. They investigated Hotel Security Officer, Ernesto
T. Horlador, Jr., and Justimbaste. See gave his Sinumpang Salaysay and filed a complaint with
PNP Traffic Managemenet Group. PNP TMG issued a Certificate of Non-recovery on July 2002.
See was paid by Pioneer Insurance his money claim P 1,163,250.00 and mortgagee ABN AMRO
Savings Bank as indemnity for the loss of Vitara.  
Pioneer Insurance sent demand letters to Durban Apartments and Justimbaste but did not
pay notwithstanding their receipt of demand letters. On July 22, 2003,  Pioneer Insurance and
Surety Corporation (insurer by loss) by right of subrogation, filed  a Complaint for Recovery of
Damages against Durban Apartments Corporation, doing business under the name and style of
City Garden Hotel, and Vicente Justimbaste. RTC ordered Durban Apartments and Justimbaste
to pay the P 1,163,250.00 with legal interest from July 22, 2003 until the obligation is fully paid
and attorneys fees and litigation expenses amounting to p 120,000.00.
On appeal, CA affirmed the decision of RTC which states that Durban Apartments is
solely liable to Pioneer Insurance and Surety Corporation for the loss of Jeffrey Sees Suzuki
Grand Vitara. Hence, this petition.

Issue: Whether or not the petitioner is liable for the lossof See’s vehicle.

Held: The petition is denied but with modification that the award to attorneys fees is reduced to
P 60,000.00.

Ratio: The Vitara was lost due to the negligence of Durban Apartments and Justimbaste because
it was discovered during the investigation that this was the second time that a similar incident of
carnapping happened in the valet parking service and no necessary precautions were taken to
prevent its repetition; Durban Apartments was wanting in due diligence in the selection and
supervision of its employees particularly Justimbaste.
Contract of necessary deposit existed between the insured See and petitioner. 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, witsh 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, from the facts found by the lower courts, the insured See deposited his vehicle
for safekeeping with petitioner, through the latters employee, Justimbaste. In turn, Justimbaste
issued a claim stub to See. Thus, the contract of deposit was perfected from Sees 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 Sees
vehicle.

TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and TERESITA SANTOS

vs.
THE CITY FISCAL OF MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY FISCAL
FELIZARDO N. LOTA and CLEMENT DAVID

This is a petition for prohibition and injunction with a prayer for the immediate issuance
of restraining order and/or writ of preliminary injunction filed by petitioners on March 26,
1982.

Facts:
From March 20, 1979 to March, 1981, David invested with the Nation Savings and Loan
Association, (NSLA) the sum of P1,145,546.20 on nine deposits, P13,531.94 on savings account
deposits (jointly with his sister, Denise Kuhne), US$10,000.00 on time deposit, US$15,000.00
under a receipt and guarantee of payment and US$50,000.00 under a receipt dated June 8, 1980
(au jointly with Denise Kuhne). He was induced into making the investments by Robert Marshall
an Australian national who was allegedly a close associate of petitioner Guingona Jr., then
NSLA President, petitioner Martin, then NSLA Executive Vice-President of NSLA and
petitioner Santos, then NSLA General Manager.
 March 21, 1981 NSLA was placed under receivership by the Central Bank, so that David
filed claims for his investments and those of his sister. on July 22, 1981 David received a report
from the Central Bank that only P305,821.92 of those investments were entered in the records of
NSLA. Therefore, the respondents in I.S. No. 81-31938 misappropriated the balance of the
investments, at the same time violating Central Bank Circular No. 364 and related Central Bank
regulations on foreign exchange transactions. After demand, petitioner Guingona Jr. paid only
P200,000.00, thereby reducing the amounts misappropriated to P959,078.14 and US$75,000.00.
Guingona and Martin, upon the request of private respondent David, assumed the obligation of
the bank to private respondent David by executing on June 17, 1981 a joint promissory note in
favor of private respondent acknowledging an indebtedness of Pl,336,614.02 and US$75,000.00.
This promissory note was based on the statement of account as of June 30, 1981 prepared by the
private respondent.
 In I.S. No. 81-31938, David charged petitioners (together with one Robert Marshall and
the following directors of the Nation Savings and Loan Association, Inc., namely Homero
Gonzales, Juan Merino, Flavio Macasaet, Victor Gomez, Jr., Perfecto Manalac, Jaime V. Paz,
Paulino B. Dionisio, and one John Doe) with estafa and violation of Central Bank Circular No.
364 and related Central Bank regulations on foreign exchange transactions.
At the inception of the preliminary investigation before respondent Lota, petitioners
moved to dismiss the charges against them for lack of jurisdiction because David's claims
allegedly comprised a purely civil obligation which was itself novated. Fiscal Lota denied the
motion to dismiss.
But, after the presentation of David's principal witness, petitioners filed the instant
petition because: (a) the production of the Promisory Notes, Banker's Acceptance, Certificates of
Time Deposits and Savings Account allegedly showed that the transactions between David and
NSLA were simple loans, i.e., civil obligations on the part of NSLA which were novated when
Guingona, Jr. and Martin assumed them; and (b) David's principal witness allegedly testified that
the duplicate originals of the aforesaid instruments of indebtedness were all on file with NSLA,
contrary to David's claim that some of his investments were not record.

Issue: 1. Whether or not the transaction is a contract of deposit.

2. Whether or not there is a violation of Central Bank CircularNo. 364.

Held: The petition is granted. The temporary restraining order is made permanent.

Ratio: Article 1980. Fixed, savings, and current deposits of-money in banks and similar
institutions shall be governed by the provisions concerning simple loan.

1. In the case of Central Bank of the Philippines vs. Morfe “fixed, savings, and current
deposits of money in banks and similar institutions are hat true deposits. are considered
simple loans and, as such, are not preferred credits.” in the case of Serrano vs. Central
Bank of the Philippines “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.
Current and saving deposits, are loans to a bank because it can use the same.”

The relationship between the private respondent and the Nation Savings and Loan
Association is that of creditor and debtor; consequently, the ownership of the amount deposited
was transmitted to the Bank upon the perfection of the contract and it can make use of the
amount deposited for its banking operations, such as to pay interests on deposits and to pay
withdrawals. While the Bank has the obligation to return the amount deposited, it has, however,
no obligation to return or deliver the same money that was deposited. And, the failure of the
Bank to return the amount deposited will not constitute estafa through misappropriation
punishable under Article 315, par. l(b) of the Revised Penal Code, but it will only give rise to
civil liability over which the public respondents have no- jurisdiction.
The failure of the bank to pay the time and savings deposit of private respondent would
constitue violation of par. 1(b) of Article 315 of the Revised Penal Code. Any incipient criminal
liability was deemed avoided because of novation. Novation because Guingona and Martin
assumed the obligation of the abnk to private respondent thus, converting the original trust
relation between bank and David into an ordinary debtor-creditor relation between Guingona and
Martin and David.
Moreover, while it is true that novation does not extinguish criminal liability, it may
however, prevent the rise of criminal liability as long as it occurs prior to the filing of the
criminal information in court. There is no dispute that Guingona and Martin executed promissory
note on June 1981 assuming the obligation of the bank to David. While the criminal complaint
for estafa was filed on December 23, 1981 with the Office of the City Fiscal. Hence, it is clear
that novation occurred long before the filing of the criminal complaint with the Office of the City
Fiscal. Consequently, as aforestated, any incipient criminal liability would be avoided but there
will still be a civil liability on the part of petitioners Guingona and Martin to pay the assumed
obligation.

2. Petitioner Guingona merely accommodated the request of the bank NSLA in order to
clear the bank draft through his dollar account because the bank did not have a dollar
account. Immediately after the bank draft was cleared, Guingona authorized NSLA to
withdraw the same in order to be utilized by the bank for its operations. It is safe to
assume that the US dollars were converted first into Philippine pesos before they were
accepted and deposited in NSLA, because the bank is presumed to have followed the
ordinary course of the business which is to accept deposits in Philippine currency only,
and that the transaction was regular and fair, in the absence of a clear and convincing
evidence to the contrary.

We hold that the public respondents acted without jurisdiction when they investigated the
charges against the petitioners. Consequently, public respondents should be restrained from
further proceeding with the criminal case for to allow the case to continue, even if the petitioners
could have appealed to the Ministry of Justice, would work great injustice to petitioners and
would render meaningless the proper administration of justice.