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.

FACTS

Petitioner CA Agro-Industrial Development Corp., through its President Sergio Aguirre, purchased two parcels of land from spouses Ramon and Paula Pugao. The agreement required the owner’s copies of the certificates of title (TCT Nos. 284655 and 292434) to be deposited in a bank safety deposit box, withdrawable only upon their joint signatures after full payment. Petitioner and the Pugaos rented Safety Deposit Box No. 1448 from respondent Security Bank and Trust Company. They signed a contract of lease containing conditions that the bank is not a depositary of the contents, has neither possession nor control of them, and assumes absolutely no liability. Two renter’s keys were issued (one to Aguirre, one to the Pugaos), while a guard key remained with the bank; both keys were needed to open the box. Petitioner claimed the certificates of title were placed inside. When petitioner and the Pugaos went to open the box to retrieve the titles for a potential sale, the certificates were missing. The sale fell through, and petitioner allegedly lost an expected profit. Petitioner filed a complaint for damages against the bank. The trial court dismissed the complaint, citing the exculpatory clauses in the contract. The Court of Appeals affirmed, holding the contract was one of lease, not deposit.

ISSUE

Whether the contractual relation between a commercial bank and a renter of a safety deposit box, with respect to the box’s contents, is that of bailor and bailee (deposit) or lessor and lessee (lease).

RULING

The Supreme Court ruled that the contract is a special kind of deposit, not a lease. The bank is a depositary, and the renter is a depositor. The provisions in the contract attempting to absolve the bank from any liability are void as they are contrary to law and public policy. However, the bank’s liability as a depositary is not absolute. Under the circumstances, the bank was not liable for the loss of the certificates of title. The contract required the joint signatures of petitioner and the Pugaos for withdrawal, but the system of two separate renter’s keys meant either party could access the box with the bank’s guard key, without the other’s presence. There was no evidence that the loss was due to the bank’s fraud or negligence. Therefore, the dismissal of the complaint was proper. The award of attorney’s fees to the bank was deleted, as petitioner was not in bad faith for filing the suit. The dispositive portion of the Court of Appeals’ decision was affirmed with the modification deleting the attorney’s fees.