CA AGRO-INDUSTRIAL DEVELOPMENT CORP.

v.
THE HONORABLE COURT OFAPPEALS and SECURITY BANK AND TRUST
COMPANY G.R. No. 90027, March 3, 1993, THIRD DIVISION (DAVIDE, JR.,
J.
)FACTS:
CA Agro-Industrial Development Corp. (CA Agro) purchased two (2) parcels of l a n d f r o m
the spouses Ramon and Paula Pugao (Pugaos). CA Agro
p a i d a downpayment and issued three (3) post-dated checks covering the balance of theprice.
It was contracted that the titles to the lots shall be transferred to CA Agro u p o n
full payment of the purchase price and that the owner's copies
o f t h e certificates of titles thereto shall be deposited in a safety deposit box of any bank. The
same could be withdrawn only upon the joint signatures of a representative of CA Agro and the
Pugaos upon full payment of the purchase price.Forthwith, CA Agro and the Pugaos
rented Safety Deposit Box of SecurityBank and Trust Company (Bank). For this
purpose, they both signed a contract of lease containing the following conditions:
13. The bank is not a depositary of the contents of the safe and it has neitherthe possession nor
control of the same.1 4 . T h e b a n k h a s n o i n t e r e s t w h a t s o e v e r i n s a i d c o n t e n t s ,
except hereinexpressly provided, and it assumes absolutely no liability
i n c o n n e c t i o n therewith.
After the execution of the contract, two (2) renter's keys were given to the renters
one to CA Agro and the other to the Pugaos. A guard key remained in thepossession of the
Bank. The safety deposit box has two (2) keyholes, one for the guard key and the other
for the renter's key, and can be opened only with the useof both keys. Thereafter, a certain Mrs.
Margarita Ramos (Ramos) offered to buy from CAAgro the two (2) lots at a price that
will yield a profit for the latter. Accordingly,Ramos demanded the execution of a
deed of sale which necessarily entailed the production of the certificates of title. In view
thereof, CA Agro, accompanied by thePugaos, then proceeded to the bank to open the
safety deposit box and get the c e r t i f i c a t e s o f t i t l e . H o w e v e r , w h e n
o p e n e d i n t h e p r e s e n c e o f t h e B a n k ' s representative, the box
yielded no such certificates. As a result, Ramos withdrew her offer to buy the lots.As a
consequence, CA Agro failed to realize the expected profit, thus, it fileda c o m p l a i n t f o r
damages against the Bank. The Bank in its answer with
a counterclaim invoked paragraphs 13 and 14 of the contract of lease for its defense.In due
course, the trial court rendered a decision against CA Agro on the ground that the
provisions of the contract of lease are binding on the parties, andthat under said paragraphs, the
Bank has no liability for the loss of the certificatesof title.