Safekeeping as the principal purpose of contracts of deposit

The depositary cannot make use of the thing deposited except only in the two instances mentioned in Article 1977 of the New Civil Code of the Philippines. It must be noted that the depositary's primary obligation is to keep the thing bailed and, later, return it to the depositor upon demand.

If the obligation of safekeeping is not the principal obligation in the contract but merely an accessory obligation, it (the contract) would not be a contract of deposit but some other contract. According to De Leon and De Leon (2010), in such a case, deposit is not constituted but some other contract like lease, commodatum, or agency. They cite Article 1868 which defines agency as a contract, alluding to the fact that, if a person holds property for and in behalf of another person (principal), he acts as an agent and not as a bailee (depositary).

"By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter."

De Leon and De Leon (2010) concludes that the delivery of money to a person so that he may make payment or invest the money for the account of the giver, or of documents or records to a lawyer hired to represent a party to a suit, cannot be regarded as constituting a deposit, but only as an agency. In this example given by the authords, the principal end of the contract is representation of one by another and not the custody and preservation of the thing delivered.

CASE #1: In a contract of deposit, a person receives an object belonging to another with the obligation of safely keeping it and of returning the same. Petitioner himself states that he received the tractor not to safely keep it but as a form of security for the payment of Mike Abella's obligations. There is no deposit where the principal purpose for receiving the object is not safekeeping.

As indicated in Article 1869, for an agency relationship to be deemed as implied, the principal must know that another person is acting on his behalf without authority. Here, appellee categorically stated that the only purpose for his leaving the subject tractor in the care and custody of Mike Abella was for safekeeping, and definitely not for him to pledge or alienate the same. If it were true that Mike pledged appeellee's tractor to appellant, then Mike was acting not only without appellee's authority but without the latter's knowledge as well. Article 1911, on the other hand, mandates that the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. Again, in view of appellee's lack of knowledge of Mike's pledging the tractor without any authority from him, it stands to reason that the former could not have allowed the latter to pledge the tractor as if he had full powers to do so. (G.R. No. 120528. January 29, 2001)

CASE #2: [The] records also reveal that upon arrival at the City Garden Hotel, See gave notice to the doorman and parking attendant of the said hotel, x x x Justimbaste, about his Vitara when he entrusted its ignition key to the latter. x x x Justimbaste issued a valet parking customer claim stub to See, parked the Vitara at the Equitable PCI Bank parking area, and placed the ignition key inside a safety key box while See proceeded to the hotel lobby to check in. The Equitable PCI Bank parking area became an annex of City Garden Hotel when the management of the said bank allowed the parking of the vehicles of hotel guests thereat in the evening after banking hours.

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, with 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.1avvphi1 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 latter’s employee, Justimbaste. In turn, Justimbaste issued a claim stub to See. Thus, the contract of deposit was perfected from See’s 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 See’s vehicle. (G.R. No. 179419. January 12, 2011)

The discussion above is based on an outline by De Leon and De Leon, Jr. (2010). Their books are available in fine bookstores nationwide. SOURCE: De Leon and De Leon, Jr. (2010). Comments and Cases on CREDIT TRANSACTIONS. 11th edition. ISBN 978-971-23-5535-6. Rex Books Store.