GR 102970; (May, 1993) (Digest)
G.R. No. 102970 May 13, 1993
LUZAN SIA, petitioner, vs. COURT OF APPEALS and SECURITY BANK and TRUST COMPANY, respondents.
FACTS
Petitioner Luzan Sia rented Safety Deposit Box No. 54 from respondent Security Bank and Trust Company (SBTC) at its Binondo Branch on March 22, 1985, where he placed his stamp collection. The box was located at the lowest level of the bank’s safety deposit boxes. During floods in 1985 and 1986, floodwater entered the bank’s premises and seeped into the safety deposit box, damaging the stamp collection. SBTC rejected Sia’s claim for compensation, relying on paragraphs 9 and 13 of the “Rules and Regulations Governing the Lease of Safe Deposit Boxes” (the Lease Agreement), which limited the bank’s liability to exercising diligence to prevent unauthorized opening and stated the bank was not a depository of the contents. Sia filed an action for damages. The Regional Trial Court ruled in favor of Sia, awarding actual damages, moral damages, and attorney’s fees. The Court of Appeals reversed the decision, dismissing the complaint, holding that the contract was a lease and not a contract of deposit, the limiting stipulations were valid, the damage was due to a fortuitous event (the floods), and there was no evidence SBTC failed to exercise the required diligence.
ISSUE
The primary issue is whether SBTC can be held liable for the damage to the stamp collection contained in the rented safety deposit box, notwithstanding the exculpatory clauses in the Lease Agreement and the occurrence of floods.
RULING
The Supreme Court GRANTED the petition, SET ASIDE the Decision and Resolution of the Court of Appeals, and REINSTATED the Decision of the Regional Trial Court, except as to the award of moral damages which was set aside.
The Court ruled that the contract for the use of a safety deposit box is a special kind of deposit, not a simple contract of lease. The bank is a depositary required to exercise the diligence of a good father of a family in keeping the objects deposited. The stipulations in paragraphs 9 and 13 of the Lease Agreement, which seek to exempt the bank from any liability except for unauthorized opening, are void for being contrary to law and public policy as they effectively negate the bank’s liability as a depositary.
The Court found that while the initial entry of floodwater may be considered a fortuitous event, SBTC failed to exercise the required diligence after it knew of the inundation. The bank, being aware of the floods and the location of the box, failed to notify Sia promptly to retrieve the stamps and prevent further damage. This failure constituted negligence and made SBTC a party to the aggravation of the loss, removing the defense of fortuitous event under Article 1174 of the Civil Code. SBTC was thus liable for damages under Article 1170.
However, the award of moral damages was deleted as there was no proof of fraud or bad faith on the part of SBTC, which is required for an award of moral damages arising from a breach of contract.