G.R. No.

90027 March 3, 1993

CA AGRO-INDUSTRIAL DEVELOPMENT CORP., petitioner,

vs.
THE HONORABLE COURT OF APPEALS and SECURITY BANK AND TRUST
COMPANY, respondents.

The case is a petition for review on Certiorari with prayer to set aside ruling of
respondent court

FACTS:

Petitioner CA Agro, through its president—Sergio Aguirre, had an agreement

with spouses Pugao, whereby the Petitioner purchased from the Pugaos two parcels of
land for P350,625, paid with P75,725 as downpayment while the balance was covered
by 3 postdated checks.

As part of their agreement, Petitioner and the Pugaos then rented a safety
deposit box from Security Bank. For this purpose, a contract of lease was executed with
conditions leaving the bank of any liability in connection with the contents of the safe.

Thereafter, a certain Margarita Ramos offered to buy from Petitioner the two lots,
which would yield a total profit of P280,500, as per respondent’s computation. Ramos
demanded the execution of a deed of sale which entailed the production of the
certificates of title, thus Aguirre and the Pugaos proceeded to the bank to open the safe
and get the certificates of title, but the safe yielded no such certificates. The delay in the
reconstitution of the titles led to the withdrawal of the offer of Ramos to purchase the
lots, prompting the petitioner to file before the RTC a complaint for damages against
Security Bank. In its Answer, the Bank asserted that the petitioner has no cause of
action by virtue of paragraphs 13 and 14 of the contract of lease.

RTC rendered its decision, dismissing the case, and the Court of Appeals
subsequently affirmed the same. Hence this petition.

ISSUE: WON the contractual relationship between the bank and another party in a
contract of rent of a safety deposit box is one of a bailor and bailee.

RULING:

YES. The petition is partly meritorious, and the Court agrees with the petitioner's
contention that the contract for the rent of the safety deposit box is not an ordinary
contract of lease as defined in the Civil Code.
 Further, while the contract in the case at bar is a special kind of deposit, the
Court, however, does not fully subscribe to the view that the same is a contract of
deposit that is to be strictly governed by the provisions on deposit under the Civil Code.

The Court agrees with the petitioner that under American jurisprudence, 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 safe is that of a bailor and bailee.

In the context of our laws which authorize banking institutions to rent out safety
deposit boxes, it is clear that in this jurisdiction, the prevailing rule in the US has been
adopted. The Court further specifies that in this case, the General Banking Act,
specifically Section 72 thereof is applicable.

WHEREFORE, the Petition for Review is partially GRANTED by deleting the

award for attorney's fees from the decision of CA. As modified, and subject to the
foregoing on a contract of lease of safety deposit boxes, the dispositive portion of the
said Decision is hereby AFFIRMED and the instant Petition for Review is otherwise
DENIED for lack of merit.