FIRST DIVISION

Petitioner Citibank, N.A. (formerly known as the First National City

CITIBANK, N.A. (Formerly G.R. No. 156132
First National City Bank) Bank) is a banking corporation duly authorized and existing under the
and INVESTORS FINANCE Present:
laws of the United States of America and licensed to do commercial
CORPORATION, doing
business under the name PANGANIBAN, C.J. banking activities and perform trust functions in the Philippines.
and style of FNCB Finance, Chairperson,
Petitioners, YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and Petitioner Investors Finance Corporation, which did business
- versus- CHICO-NAZARIO, JJ.
under the name and style of FNCB Finance, was an affiliate company
Promulgated:
MODESTA R. SABENIANO, of petitioner Citibank, specifically handling money market placements
Respondent. October 16, 2006
for its clients. It is now, by virtue of a merger, doing business as part
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- -x of its successor-in-interest, BPI Card Finance Corporation. However,

so as to consistently establish its identity in the Petition at bar, the said

DECISION
petitioner shall still be referred to herein as FNCB Finance. [4]

CHICO-NAZARIO, J.:
Respondent Modesta R. Sabeniano was a client of both

petitioners Citibank and FNCB Finance. Regrettably, the business

Before this Court is a Petition for Review relations among the parties subsequently went awry.
on Certiorari,[1] under Rule 45 of the Revised Rules of Court, of the

Decision[2] of the Court of Appeals in CA-G.R. CV No. 51930, dated On 8 August 1985, respondent filed a Complaint [5] against
26 March 2002, and the Resolution,[3] dated 20 November 2002, of the petitioners, docketed as Civil Case No. 11336, before the Regional
same court which, although modifying its earlier Decision, still denied Trial Court (RTC) of Makati City. Respondent claimed to have
for the most part the Motion for Reconsideration of herein petitioners. substantial deposits and money market placements with the

petitioners, as well as money market placements with the Ayala

Investment and Development Corporation (AIDC), the proceeds of

which were supposedly deposited automatically and directly to

respondents accounts with petitioner Citibank.Respondent alleged

that petitioners refused to return her deposits and the proceeds of her 1979 and 31 October 1979. Petitioners were therefore surprised when

money market placements despite her repeated demands, thus, six years later, in 1985, respondent and her counsel made repeated

compelling respondent to file Civil Case No. 11336 against petitioners requests for the withdrawal of respondents deposits and money

for Accounting, Sum of Money and Damages. Respondent eventually market placements with petitioner Citibank, including her dollar

filed an Amended Complaint[6] on 9 October 1985 to include additional accounts with Citibank-Geneva and her money market placements

claims to deposits and money market placements inadvertently left out with petitioner FNCB Finance. Thus, petitioners prayed for the

from her original Complaint. dismissal of the Complaint and for the award of actual, moral, and

exemplary damages, and attorneys fees.

In their joint Answer[7] and Answer to Amended

Complaint,[8] filed on 12 September 1985 and 6 November 1985, When the parties failed to reach a compromise during the pre-

respectively, petitioners admitted that respondent had deposits and trial hearing,[9] trial proper ensued and the parties proceeded with the

money market placements with them, including dollar accounts in the presentation of their respective evidence. Ten years after the filing of

Citibank branch in Geneva, Switzerland (Citibank- the Complaint on 8 August 1985, a Decision[10] was finally rendered in

Geneva). Petitioners further alleged that the respondent later obtained Civil Case No. 11336 on 24 August 1995 by the fourth Judge [11] who

several loans from petitioner Citibank, for which she executed handled the said case, Judge Manuel D. Victorio, the dispositive

Promissory Notes (PNs), and secured by (a) a Declaration of Pledge portion of which reads

of her dollar accounts in Citibank-Geneva, and (b) Deeds of

WHEREFORE, in view of all the foregoing,
Assignment of her money market placements with petitioner FNCB decision is hereby rendered as follows:
Finance. When respondent failed to pay her loans despite repeated (1) Declaring as illegal, null and void the
setoff effected by the defendant Bank [petitioner
demands by petitioner Citibank, the latter exercised its right to off-set
Citibank] of plaintiffs [respondent Sabeniano] dollar
or compensate respondents outstanding loans with her deposits and deposit with Citibank, Switzerland, in the amount of
US$149,632.99, and ordering the said defendant
money market placements, pursuant to the Declaration of Pledge and [petitioner Citibank] to refund the said amount to the
plaintiff with legal interest at the rate of twelve percent
the Deeds of Assignment executed by respondent in its (12%) per annum, compounded yearly, from 31
October 1979 until fully paid, or its peso equivalent at
favor. Petitioner Citibank supposedly informed respondent Sabeniano the time of payment;
of the foregoing compensation through letters, dated 28 September
 (2) Declaring the plaintiff [respondent
Sabeniano] indebted to the defendant Bank
[petitioner Citibank] in the amount of P1,069,847.40
as of 5 September 1979 and ordering the plaintiff
[respondent Sabeniano] to pay said amount,
however, there shall be no interest and penalty
charges from the time the illegal setoff was effected
on 31 October 1979;
(3) Dismissing all other claims and
counterclaims interposed by the parties against each
other.
Costs against the defendant Bank.
All the parties appealed the foregoing Decision of the RTC to the Court
of Appeals, docketed as CA-G.R. CV No. 51930. Respondent
questioned the findings of the RTC that she was still indebted to
petitioner Citibank, as well as the failure of the RTC to order petitioners
to render an accounting of respondents deposits and money market
placements with them. On the other hand, petitioners argued that
petitioner Citibank validly compensated respondents outstanding
loans with her dollar accounts with Citibank-Geneva, in accordance
with the Declaration of Pledge she executed in its favor. Petitioners
also alleged that the RTC erred in not declaring respondent liable for
damages and interest.
On 26 March 2002, the Court of Appeals rendered its
Decision[12] affirming with modification the RTC Decision in Civil Case
No. 11336, dated 24 August 1995, and ruling entirely in favor of
respondent in this wise
Wherefore, premises considered, the
assailed 24 August 1995 Decision of the court a
quo is hereby AFFIRMED with MODIFICATION, as
follows:
1. Declaring as illegal, null and void the set-
off effected by the defendant-appellant Bank of the
plaintiff-appellants dollar deposit with Citibank,
Switzerland, in the amount of US$149,632.99, and
ordering defendant-appellant Citibank to refund the
said amount to the plaintiff-appellant with legal
interest at the rate of twelve percent (12%) per
annum, compounded yearly, from 31 October 1979
until fully paid, or its peso equivalent at the time of
payment;
2. As defendant-appellant Citibank failed to
establish by competent evidence the alleged
indebtedness of plaintiff-appellant, the set-off
of P1,069,847.40 in the account of Ms. Sabeniano is
hereby declared as without legal and factual basis;
3. As defendants-appellants failed to account
the following plaintiff-appellants money market
placements, savings account and current accounts,
the former is hereby ordered to return the same, in
accordance with the terms and conditions agreed
upon by the contending parties as evidenced by the
certificates of investments, to wit:
(i) Citibank NNPN Serial No.
023356 (Cancels and Supersedes
NNPN No. 22526) issued on 17
March 1977, P318,897.34 with
14.50% interest p.a.;
(ii) Citibank NNPN Serial No.
23357 (Cancels and Supersedes
NNPN No. 22528) issued on 17
March 1977, P203,150.00 with 14.50
interest p.a.;
(iii) FNCB NNPN Serial No.
05757 (Cancels and Supersedes
NNPN No. 04952), issued on 02
June 1977, P500,000.00 with 17%
interest p.a.;
(iv) FNCB NNPN Serial No.
05758 (Cancels and Supersedes
 NNPN No. 04962), issued on 02
June 1977, P500,000.00 with 17% she received a copy of the assailed Court of Appeals Decision on 18
interest per annum;
April 2002 and, thus, had 15 days therefrom or until 3 May 2002 within
(v) The Two Million
which to file her Petition for Review. Since she informed her counsel
(P2,000,000.00) money market
placements of Ms. Sabeniano with of her desire to pursue an appeal of the Court of Appeals Decision
the Ayala Investment & Development
Corporation (AIDC) with legal only on 29 April 2002, her counsel neither had enough time to file a
interest at the rate of twelve percent
(12%) per annum compounded motion for reconsideration of the said Decision with the Court of
yearly, from 30 September 1976 until
fully paid; Appeals, nor a Petition for Certiorari with this Court. Yet, the Motion

4. Ordering defendants-appellants to jointly failed to state the exact extension period respondent was requesting
and severally pay the plaintiff-appellant the sum of
for.
FIVE HUNDRED THOUSAND PESOS
(P500,000.00) by way of moral damages, FIVE
HUNDRED THOUSAND PESOS (P500,000.00) as
exemplary damages, and ONE HUNDRED Since this Court did not act upon respondents Motion for
THOUSAND PESOS (P100,000.00) as attorneys
fees. Extension of Time to file her Petition for Review, then the period for

appeal continued to run and still expired on 3 May

Apparently, the parties to the case, namely, the respondent, on one
2002.[14] Respondent failed to file any Petition for Review within the
hand, and the petitioners, on the other, made separate attempts to
prescribed period for appeal and, hence, this Court issued a
bring the aforementioned Decision of the Court of Appeals, dated 26
Resolution,[15] dated 13 November 2002, in which it pronounced that
March 2002, before this Court for review.
G.R. No. 152985 (Modesta R. Sabeniano
vs. Court of Appeals, et al.). It appearing that
petitioner failed to file the intended petition for review
G.R. No. 152985 on certiorari within the period which expired on May
3, 2002, the Court Resolves to DECLARE THIS
CASE TERMINATED and DIRECT the Division
Respondent no longer sought a reconsideration of the Decision of the Clerk of Court to INFORM the parties that the
judgment sought to be reviewed has become final
Court of Appeals in CA-G.R. CV No. 51930, dated 26 March 2002, and executory.

and instead, filed immediately with this Court on 3 May 2002 a Motion

for Extension of Time to File a Petition for Review, [13] which, after The said Resolution was duly recorded in the Book of Entries of

payment of the docket and other lawful fees, was assigned the docket Judgments on 3 January 2003.

number G.R. No. 152985. In the said Motion, respondent alleged that
G.R. No. 156132 which this Court, for the sake of expediency, discusses jointly,

whenever possible, in the succeeding paragraphs.

Meanwhile, petitioners filed with the Court of Appeals a

Motion for Reconsideration of its Decision in CA-G.R. CV No. 51930, I

dated 26 March 2002. Acting upon the said Motion, the Court of
The Resolution of
Appeals issued the Resolution,[16] dated 20 November 2002, this Court, dated
13 November 2002,
modifying its Decision of 26 March 2002, as follows in G.R. No. 152985,
declaring the
Decision of the
WHEREFORE, premises considered, the
Court of Appeals,
instant Motion for Reconsideration is PARTIALLY
dated 26 March
GRANTED as Sub-paragraph (V) paragraph 3 of the
2002, final and
assailed Decisions dispositive portion is hereby
executory,
ordered DELETED.
pertains to
respondent
The challenged 26 March 2002 Decision of
Sabeniano alone.
the Court is AFFIRMED with MODIFICATION.

Before proceeding to a discussion of the merits of the instant

Assailing the Decision and Resolution of the Court of Appeals
Petition, this Court wishes to address first the argument, persistently
in CA-G.R. CV No. 51930, dated 26 March 2002 and 20 November
advanced by respondent in her pleadings on record, as well as her
2002, respectively, petitioners filed the present Petition, docketed as
numerous personal and unofficial letters to this Court which were no
G.R. No. 156132. The Petition was initially denied[17] by this Court for
longer made part of the record, that the Decision of the Court of
failure of the petitioners to attach thereto a Certification against Forum
Appeals in CA-G.R. CV No. 51930, dated 26 March 2002, had already
Shopping. However, upon petitioners Motion and compliance with the
become final and executory by virtue of the Resolution of this Court in
requirements, this Court resolved[18] to reinstate the Petition.
G.R. No. 152985, dated 13 November 2002.

G.R. No. 152985 was the docket number assigned by this

The Petition presented fourteen (14) assignments of errors
Court to respondents Motion for Extension of Time to File a Petition
allegedly committed by the Court of Appeals in its Decision, dated 26
for Review. Respondent, though, did not file her supposed
March 2002, involving both questions of fact and questions of law
Petition. Thus, after the lapse of the prescribed period for the filing of

the Petition, this Court issued the Resolution, dated 13 November
2002, declaring the Decision of the Court of Appeals, dated 26 March
2002, final and executory. It should be pointed out, however, that the
Resolution, dated 13 November 2002, referred only to G.R. No.
152985, respondents appeal, which she failed to perfect through the
filing of a Petition for Review within the prescribed period. The
declaration of this Court in the same Resolution would bind
respondent solely, and not petitioners which filed their own separate
appeal before this Court, docketed as G.R. No. 156132, the Petition
at bar. This would mean that respondent, on her part, should be bound
by the findings of fact and law of the Court of Appeals, including the
monetary amounts consequently awarded to her by the appellate
court in its Decision, dated 26 March 2002; and she can no longer
refute or assail any part thereof. [19]
This Court already explained the matter to respondent when
it issued a Resolution[20] in G.R. No. 156132, dated 2 February 2004,
which addressed her Urgent Motion for the Release of the Decision
with the Implementation of the Entry of Judgment in the following
manner
[A]cting on Citibanks and FNCB Finances Motion for
Reconsideration, we resolved to grant the motion,
reinstate the petition and require Sabeniano to file a
comment thereto in our Resolution of June 23,
2003. Sabeniano filed a Comment dated July 17,
2003 to which Citibank and FNCB Finance filed
a Reply dated August 20, 2003.
From the foregoing, it is clear that Sabeniano had
knowledge of, and in fact participated in, the
proceedings in G.R. No. 156132. She cannot feign
ignorance of the proceedings therein and claim that
the Decision of the Court of Appeals has become final
and executory. More precisely, the Decision became
final and executory only with regard to
Sabeniano in view of her failure to file a petition for
review within the extended period granted by the
Court, and not to Citibank and FNCB Finance
whose Petition for Review was duly reinstated and is
now submitted for decision.
Accordingly, the instant Urgent Motion is hereby
DENIED. (Emphasis supplied.)
To sustain the argument of respondent would result in an unjust and
incongruous situation wherein one party may frustrate the efforts of
the opposing party to appeal the case by merely filing with this Court
a Motion for Extension of Time to File a Petition for Review, ahead of
the opposing party, then not actually filing the intended Petition. [21] The
party who fails to file its intended Petition within the reglementary or
extended period should solely bear the consequences of such failure.
Respondent
Sabeniano did not
commit forum
shopping.
Another issue that does not directly involve the merits of the present
Petition, but raised by petitioners, is whether respondent should be
held liable for forum shopping.
Petitioners contend that respondent committed forum shopping on the
basis of the following facts:

While petitioners Motion for Reconsideration of the Decision
in CA-G.R. CV No. 51930, dated 26 March 2002, was still pending
before the Court of Appeals, respondent already filed with this Court
on 3 May 2002 her Motion for Extension of Time to File a Petition for
Review of the same Court of Appeals Decision, docketed as G.R. No.
152985. Thereafter, respondent continued to participate in the
proceedings before the Court of Appeals in CA-G.R. CV No. 51930 by
filing her Comment, dated 17 July 2002, to petitioners Motion for
SEC. 5. Certification against forum
shopping. The plaintiff or principal party shall certify
under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith:
(a) that he has not theretofore commenced any action
or filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to the
best of his knowledge, no such other action or claim
is pending therein; (b) if there is such other pending
action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn
that the same or similar action or claim has been filed
or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.

Reconsideration; and a Rejoinder, dated 23 September 2002, to
petitioners Reply. Thus, petitioners argue that by seeking relief
concurrently from this Court and the Court of Appeals, respondent is
undeniably guilty of forum shopping, if not indirect contempt.
This Court, however, finds no sufficient basis to hold respondent liable
for forum shopping.
Forum shopping has been defined as the filing of two or more suits
involving the same parties for the same cause of action, either
Failure to comply with the foregoing
requirements shall not be curable by mere
amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the
case without prejudice, unless otherwise provided,
upon motion and after hearing. The submission of a
false certification or non-compliance with any of the
undertakings therein shall constitute indirect
contempt of court, without prejudice to the
corresponding administrative and criminal actions. If
the acts of the party or his counsel clearly constitute
willful and deliberate forum shopping, the same shall
be ground for summary dismissal with prejudice and
shall constitute direct contempt, as well as cause for
administrative sanctions.

simultaneously or successively, for the purpose of obtaining a

Although it may seem at first glance that respondent was
favorable judgment.[22] The test for determining forum shopping is
simultaneously seeking recourse from the Court of Appeals and this
whether in the two (or more) cases pending, there is an identity of
Court, a careful and closer scrutiny of the details of the case at bar
parties, rights or causes of action, and relief sought. [23] To guard
would reveal otherwise.
against this deplorable practice, Rule 7, Section 5 of the revised Rules

of Court imposes the following requirement

It should be recalled that respondent did nothing more in G.R.

No. 152985 than to file with this Court a Motion for Extension of Time
within which to file her Petition for Review. For unexplained reasons, involving the same parties, rights or causes of action, and relief

respondent failed to submit to this Court her intended Petition within sought, as that in CA-G.R. CV No. 51930.

the reglementary period. Consequently, this Court was prompted to It should also be noted that the Certification against Forum

issue a Resolution, dated 13 November 2002, declaring G.R. No. Shopping is required to be attached to the initiatory pleading, which,

152985 terminated, and the therein assailed Court of Appeals in G.R. No. 152985, should have been respondents Petition for

Decision final and executory. G.R. No. 152985, therefore, did not Review. It is in that Certification wherein respondent certifies, under

progress and respondents appeal was unperfected. oath, that: (a) she has not commenced any action or filed any claim

involving the same issues in any court, tribunal or quasi-judicial

The Petition for Review would constitute the initiatory pleading agency and, to the best of her knowledge, no such other action or

before this Court, upon the timely filing of which, the case before this claim is pending therein; (b) if there is such other pending action or

Court commences; much in the same way a case is initiated by the claim, that she is presenting a complete statement of the present

filing of a Complaint before the trial court.The Petition for Review status thereof; and (c) if she should thereafter learn that the same or

establishes the identity of parties, rights or causes of action, and relief similar action or claim has been filed or is pending, she shall report

sought from this Court, and without such a Petition, there is technically that fact within five days therefrom to this Court. Without her Petition

no case before this Court. The Motion filed by respondent seeking for Review, respondent had no obligation to execute and submit the

extension of time within which to file her Petition for Review does not foregoing Certification against Forum Shopping. Thus, respondent did

serve the same purpose as the Petition for Review itself. Such a not violate Rule 7, Section 5 of the Revised Rules of Court; neither did

Motion merely presents the important dates and the justification for the she mislead this Court as to the pendency of another similar case.

additional time requested for, but it does not go into the details of the

appealed case. Lastly, the fact alone that the Decision of the Court of Appeals,

dated 26 March 2002, essentially ruled in favor of respondent, does

Without any particular idea as to the assignments of error or not necessarily preclude her from appealing the same. Granted that

the relief respondent intended to seek from this Court, in light of her such a move is ostensibly irrational, nonetheless, it does not amount

failure to file her Petition for Review, there is actually no second case to malice, bad faith or abuse of the court processes in the absence of

further proof. Again, it should be noted that the respondent did not file
her intended Petition for Review. The Petition for Review would have to those of the trial court; (8) when the findings are conclusions without

presented before this Court the grounds for respondents appeal and citation of specific evidence on which they are based; (9) when the

her arguments in support thereof. Without said Petition, any reason facts set forth in the petition as well as in the petitioners main and reply

attributed to the respondent for appealing the 26 March 2002 Decision briefs are not disputed by the respondent; and (10) when the findings

would be grounded on mere speculations, to which this Court cannot of fact are premised on the supposed absence of evidence and

give credence. contradicted by the evidence on record.[24]

II Several of the enumerated exceptions pertain to the Petition

As an exception to at bar.
the general rule,
this Court takes It is indubitable that the Court of Appeals made factual
cognizance of
findings that are contrary to those of the RTC, [25] thus, resulting in its
questions of fact
raised in the substantial modification of the trial courts Decision, and a ruling
Petition at bar.
entirely in favor of the respondent. In addition, petitioners invoked in
It is already a well-settled rule that the jurisdiction of this Court
the instant Petition for Review several exceptions that would justify
in cases brought before it from the Court of Appeals by virtue of Rule
this Courts review of the factual findings of the Court of Appeals, i.e.,
45 of the Revised Rules of Court is limited to reviewing errors of
the Court of Appeals made conflicting findings of fact; findings of fact
law. Findings of fact of the Court of Appeals are conclusive upon this
which went beyond the issues raised on appeal before it; as well as
Court. There are, however, recognized exceptions to the foregoing
findings of fact premised on the supposed absence of evidence and
rule, namely: (1) when the findings are grounded entirely on
contradicted by the evidence on record.
speculation, surmises, or conjectures; (2) when the interference made
On the basis of the foregoing, this Court shall proceed to
is manifestly mistaken, absurd, or impossible; (3) when there is grave
reviewing and re-evaluating the evidence on record in order to settle
abuse of discretion; (4) when the judgment is based on a
questions of fact raised in the Petition at bar.
misapprehension of facts; (5) when the findings of fact are conflicting;

(6) when in making its findings, the Court of Appeals went beyond the The fact that the
trial judge who
issues of the case, or its findings are contrary to the admissions of
rendered the RTC
both the appellant and the appellee; (7) when the findings are contrary Decision in Civil
Case No. 11336, of P1,920,000.00 exclusive of interests and penalty
dated 24 August charges (Exhibits 28, 31, 32, and 33).
1995, was not the
same judge who In fine, this Court hereby finds that the
heard and tried the defendants had established the genuineness and due
case, does not, by execution of the various promissory notes heretofore
itself, render the identified as well as the two deeds of assignments of
said Decision the plaintiffs money market placements with
erroneous. defendant FNCB Finance, on the strength of which
the said money market placements were applied to
partially pay the plaintiffs past due obligation with the
defendant Bank. Thus, the total sum
The Decision in Civil Case No. 11336 was rendered more than 10 of P1,053,995.80 of the plaintiffs past due obligation
was partially offset by the said money market
years from the institution of the said case. In the course of its trial, the
placement leaving a balance of P1,069,847.40 as of
case was presided over by four (4) different RTC judges. [26] It was 5 September 1979 (Exhibit 34).

Judge Victorio, the fourth judge assigned to the case, who wrote the
Disagreeing in the foregoing findings, the Court of Appeals stressed,
RTC Decision, dated 24 August 1995. In his Decision,[27] Judge
in its Decision in CA-G.R. CV No. 51930, dated 26 March 2002, that
Victorio made the following findings
After carefully evaluating the mass of the ponente of the herein assailed Decision is not the Presiding Judge
evidence adduced by the parties, this Court is not
who heard and tried the case.[28] This brings us to the question of
inclined to believe the plaintiffs assertion that the
promissory notes as well as the deeds of whether the fact alone that the RTC Decision was rendered by a judge
assignments of her FNCB Finance money market
placements were simulated. The evidence is other than the judge who actually heard and tried the case is sufficient
overwhelming that the plaintiff received the proceeds
of the loans evidenced by the various promissory justification for the appellate court to disregard or set aside the findings
notes she had signed. What is more, there was not
an iota of proof save the plaintiffs bare testimony that in the Decision of the court a quo?
she had indeed applied for loan with the Development
Bank of the Philippines.
This Court rules in the negative.
More importantly, the two deeds of
assignment were notarized, hence they partake the
nature of a public document. It makes more than
preponderant proof to overturn the effect of a notarial What deserves stressing is that, in this jurisdiction, there exists a
attestation. Copies of the deeds of assignments were
actually filed with the Records Management and disputable presumption that the RTC Decision was rendered by the
Archives Office.
judge in the regular performance of his official duties. While the said
Finally, there were sufficient evidence
wherein the plaintiff had admitted the existence of her presumption is only disputable, it is satisfactory unless contradicted or
loans with the defendant Bank in the total amount overcame by other evidence.[29] Encompassed in this presumption of

regularity is the presumption that the RTC judge, in resolving the case
and drafting his Decision, reviewed, evaluated, and weighed all the
evidence on record.That the said RTC judge is not the same judge
who heard the case and received the evidence is of little consequence
when the records and transcripts of stenographic notes (TSNs) are
complete and available for consideration by the former.
In People v. Gazmen,[30] this Court already elucidated its position on
such an issue
Accused-appellant makes an issue of the fact
that the judge who penned the decision was not the
judge who heard and tried the case and concludes
therefrom that the findings of the former are
erroneous. Accused-appellants argument does not
merit a lengthy discussion. It is well-settled that the
decision of a judge who did not try the case is not by
that reason alone erroneous.
It is true that the judge who ultimately decided
the case had not heard the controversy at all, the trial
having been conducted by then Judge Emilio L. Polig,
who was indefinitely suspended by this
Court. Nonetheless, the transcripts of stenographic
notes taken during the trial were complete and were
presumably examined and studied by Judge Baguilat
before he rendered his decision. It is not unusual for
a judge who did not try a case to decide it on the basis
of the record. The fact that he did not have the
opportunity to observe the demeanor of the witnesses
during the trial but merely relied on the transcript of
their testimonies does not for that reason alone
render the judgment erroneous.
(People vs. Jaymalin, 214 SCRA 685, 692
[1992])
Although it is true that the judge who heard
the witnesses testify is in a better position to observe
the witnesses on the stand and determine by their
demeanor whether they are telling the truth or
mouthing falsehood, it does not necessarily follow
that a judge who was not present during the trial
cannot render a valid decision since he can rely on
the transcript of stenographic notes taken during the
trial as basis of his decision.
Accused-appellants contention that the trial
judge did not have the opportunity to observe the
conduct and demeanor of the witnesses since he was
not the same judge who conducted the hearing is also
untenable. While it is true that the trial judge who
conducted the hearing would be in a better position to
ascertain the truth and falsity of the testimonies of the
witnesses, it does not necessarily follow that a judge
who was not present during the trial cannot render a
valid and just decision since the latter can also rely on
the transcribed stenographic notes taken during the
trial as the basis of his decision.
(People vs. De Paz, 212 SCRA 56, 63
[1992])
At any rate, the test to determine the value of
the testimony of the witness is whether or not such is
in conformity with knowledge and consistent with the
experience of mankind (People vs. Morre, 217 SCRA
219 [1993]). Further, the credibility of witnesses can
also be assessed on the basis of the substance of
their testimony and the surrounding circumstances
(People v. Gonzales, 210 SCRA 44 [1992]). A critical
evaluation of the testimony of the prosecution
witnesses reveals that their testimony accords with
the aforementioned tests, and carries with it the ring
of truth end perforce, must be given full weight and
credit.
Irrefragably, by reason alone that the judge who penned the RTC
Decision was not the same judge who heard the case and received
the evidence therein would not render the findings in the said Decision
erroneous and unreliable. While the conduct and demeanor of

witnesses may sway a trial court judge in deciding a case, it is not, Respondent alleged that she had several deposits and money

and should not be, his only consideration. Even more vital for the trial market placements with petitioners. These deposits and money

court judges decision are the contents and substance of the witnesses market placements, as determined by the Court of Appeals in its

testimonies, as borne out by the TSNs, as well as the object and Decision, dated 26 March 2002, and as modified by its Resolution,

documentary evidence submitted and made part of the records of the dated 20 November 2002, are as follows

case.
Deposit/Placement Amount
Dollar deposit with Citibank-Geneva $ 149,632.99
This Court
Money market placement with Citibank,
proceeds to
evidenced by Promissory Note (PN) No.
making its own
23356 (which cancels and supersedes PN
findings of fact.
No. 22526), earning 14.5% interest per P 318,897.34
annum (p.a.)
Money market placement with Citibank,
Since the Decision of the Court of Appeals in CA-G.R. CV No. evidenced by PN No. 23357 (which
cancels and supersedes PN No. 22528), P 203,150.00
51930, dated 26 March 2002, has become final and executory as to earning 14.5% interest p.a.
Money market placement with FNCB
the respondent, due to her failure to interpose an appeal therefrom Finance, evidenced by PN No. 5757
(which cancels and supersedes PN No. P 500,000.00
within the reglementary period, she is already bound by the factual
4952), earning 17% interest p.a.
findings in the said Decision. Likewise, respondents failure to file, Money market placement with FNCB
Finance, evidenced by PN No. 5758
within the reglementary period, a Motion for Reconsideration or an (which cancels and supersedes PN No. P 500,000.00
2962), earning 17% interest p.a.
appeal of the Resolution of the Court of Appeals in the same case,
This Court is tasked to determine whether petitioners are indeed liable
dated 20 November 2002, which modified its earlier Decision by
to return the foregoing amounts, together with the appropriate
deleting paragraph 3(v) of its dispositive portion, ordering petitioners
interests and penalties, to respondent. It shall trace respondents
to return to respondent the proceeds of her money market placement
transactions with petitioners, from her money market placements with
with AIDC, shall already bar her from questioning such modification
petitioner Citibank and petitioner FNCB Finance, to her savings and
before this Court. Thus, what is for review before this Court is the
current accounts with petitioner Citibank, and to her dollar accounts
Decision of the Court of Appeals, dated 26 March 2002, as modified
with Citibank-Geneva.
by the Resolution of the same court, dated 20 November 2002.
 Petitioner Citibank alleged that it had already paid to

Money market placements with petitioner Citibank respondent the principal amounts and proceeds of PNs No. 23356 and

23357, upon their maturity. Petitioner Citibank further averred that

The history of respondents money market placements with respondent used the P500,000.00 from the payment of PNs No.

petitioner Citibank began on 6 December 1976, when she made a 23356 and 23357, plus P600,000.00 sourced from her other funds, to

placement of P500,000.00 as principal amount, which was supposed open two time deposit (TD) accounts with petitioner Citibank, namely,

to earn an interest of 16% p.a. and for which PN No. 20773 was TD Accounts No. 17783 and 17784.

issued. Respondent did not yet claim the proceeds of her placement

and, instead, rolled-over or re-invested the principal and proceeds Petitioner Citibank did not deny the existence nor questioned

several times in the succeeding years for which new PNs were issued the authenticity of PNs No. 23356 and 23357 it issued in favor of

by petitioner Citibank to replace the ones which matured. Petitioner respondent for her money market placements. In fact, it admitted the

Citibank accounted for respondents original placement and the genuineness and due execution of the said PNs, but qualified that they

subsequent roll-overs thereof, as follows were no longer outstanding.[31] In Hibberd v. Rohde and

McMillian,[32] this Court delineated the consequences of such an

Maturity
Date PN Cance Date Amount Intere admission
(mm/dd/yy No. ls PN (mm/dd/yy (P) st
No. yy) (p.a.) By the admission of the genuineness and due
yy)
execution of an instrument, as provided in this
12/06/1976 2077 None 01/13/1977 500,000. 16% section, is meant that the party whose signature it
3 00 bears admits that he signed it or that it was signed by
01/14/1977 2168 20773 02/08/1977 508,444. 15% another for him with his authority; that at the time it
6 44 was signed it was in words and figures exactly as set
02/09/1977 2252 21686 03/16/1977 313,952. 15- out in the pleading of the party relying upon it; that the
6 59 3/4% document was delivered; and that any formal
2252 21686 03/16/1977 200,000. 15- requisites required by law, such as a seal, an
8 00 3/4% acknowledgment, or revenue stamp, which it lacks,
03/17/1977 2335 22526 04/20/1977 318,897. 14- are waived by him. Hence, such defenses as that the
6 34 1/2% signature is a forgery (Puritan Mfg. Co. vs. Toti &
2335 22528 04/20/1977 203,150. 14- Gradi, 14 N. M., 425; Cox vs. Northwestern Stage
7 00 1/2% Co., 1 Idaho, 376; Woollen vs. Whitacre, 73 Ind., 198;
Smith vs. Ehnert, 47 Wis., 479; Faelnar vs. Escao, 11
Phil. Rep., 92); or that it was unauthorized, as in the
case of an agent signing for his principal, or one
signing in behalf of a partnership (Country
 Bank vs. Greenberg, 127 Cal., 26;
Henshaw vs. Root, 60 Inc., 220; Naftzker vs. Lantz, Citibank to show that it had been discharged. [33] It has already been
137 Mich., 441) or of a corporation
(Merchant vs. International Banking Corporation, 6 established by this Court that
Phil Rep., 314; Wanita vs. Rollins, 75 Miss., 253;
Barnes vs. Spencer & Barnes Co., 162 Mich., 509);
As a general rule, one who pleads payment
or that, in the case of the latter, that the corporation
has the burden of proving it. Even where the plaintiff
was authorized under its charter to sign the
must allege non-payment, the general rule is that the
instrument (Merchant vs. International Banking
burden rests on the defendant to prove payment,
Corporation, supra); or that the party charged signed
rather than on the plaintiff to prove non-payment. The
the instrument in some other capacity than that
debtor has the burden of showing with legal certainty
alleged in the pleading setting it out
that the obligation has been discharged by payment.
(Payne vs. National Bank, 16 Kan., 147); or that it
was never delivered (Hunt vs. Weir, 29 Ill., 83;
When the existence of a debt is fully
Elbring vs. Mullen, 4 Idaho, 199; Thorp vs. Keokuk
established by the evidence contained in the record,
Coal Co., 48 N.Y., 253; Fire Association of
the burden of proving that it has been extinguished by
Philadelphia vs. Ruby, 60 Neb., 216) are cut off by
payment devolves upon the debtor who offers such
the admission of its genuineness and due execution.
defense to the claim of the creditor. Where the debtor
introduces some evidence of payment, the burden of
The effect of the admission is such that in the
going forward with the evidence as distinct from the
case of a promissory note a prima facie case is made
general burden of proof shifts to the creditor, who is
for the plaintiff which dispenses with the necessity of
then under the duty of producing some evidence of
evidence on his part and entitles him to a judgment
non-payment.[34]
on the pleadings unless a special defense of new
matter, such as payment, is interposed by the
defendant (Papa vs. Martinez, 12 Phil. Rep., 613;
Chinese Chamber of Commerce vs. Pua To Ching, Reviewing the evidence on record, this Court finds that
14 Phil. Rep., 222; Banco Espaol-Filipino vs. McKay
& Zoeller, 27 Phil. Rep., 183). x x x petitioner Citibank failed to satisfactorily prove that PNs No. 23356

and 23357 had already been paid, and that the amount so paid was

Since the genuineness and due execution of PNs No. 23356 and actually used to open one of respondents TD accounts with petitioner

23357 are uncontested, respondent was able to establish prima Citibank.

facie that petitioner Citibank is liable to her for the amounts stated

therein. The assertion of petitioner Citibank of payment of the said Petitioner Citibank presented the testimonies of two witnesses

PNs is an affirmative allegation of a new matter, the burden of proof to support its contention of payment: (1) That of Mr. Herminio

as to such resting on petitioner Citibank. Respondent having proved Pujeda,[35] the officer-in-charge of loans and placements at the time

the existence of the obligation, the burden of proof was upon petitioner when the questioned transactions took place; and (2) that of Mr.
Francisco Tan,[36] the former Assistant Vice-President of Citibank, who
directly dealt with respondent with regard to her deposits and loans.
[37]
The relevant portion of Mr. Pujedas testimony as to PNs
No. 23356 and 23357 (referred to therein as Exhibits No. 47 and 48,
respectively) is reproduced below
Atty. Mabasa:
Okey [sic]. Now Mr. Witness, you were asked to
testify in this case and this case is [sic]
consist [sic] of several documents involving
transactions between the plaintiff and the
defendant. Now, were you able to make your
own memorandum regarding all these
transactions?
A Yes, based on my recollection of these facts, I did
come up of [sic] the outline of the
chronological sequence of events.
Court:
Are you trying to say that you have personal
knowledge or participation to these
transactions?
A Yes, your Honor, I was the officer-in charge of the
unit that was processing these
transactions. Some of the documents bear
my signature.
Court:
And this resume or summary that you have prepared
is based on purely your recollection or
documents?
A Based on documents, your Honor.
Court:
Are these documents still available now?
A Yes, your honor.
Court:
Better present the documents.
Atty. Mabasa:
Yes, your Honor, that is why your Honor.
Atty. Mabasa:
Q Now, basing on the notes that you prepared, Mr.
Witness, and according to you basing also on
your personal recollection about all the
transactions involved between Modesta
Sabeniano and defendant City Bank [sic] in
this case. Now, would you tell us what
happened to the money market placements
of Modesta Sabeniano that you have earlier
identified in Exhs. 47 and 48?
A The transactions which I said earlier were
terminated and booked to time deposits.
Q And you are saying time deposits with what bank?
A With First National Citibank.
Q Is it the same bank as Citibank, N.A.?
A Yes, sir.
Q And how much was the amount booked as time
deposit with defendant Citibank?
A In the amount of P500,000.00.
Q And outside this P500,000.00 which you said was
booked out of the proceeds of Exhs. 47 and
48, were there other time deposits opened by
Mrs. Modesta Sabeniano at that time.
 A Yes, she also opened another time deposit
for P600,000.00. Mr. Tan : Split into two time deposits.

Q So all in all Mr. Witness, sometime in April of 1978 Atty. Mabasa : Exhibits E and F?
Mrs. Modesta Sabeneano [sic] had time
deposit placements with Citibank in the
amount of P500,000.00 which is the
proceeds of Exh. 47 and 48 and Before anything else, it should be noted that when Mr.
another P600,000.00, is it not?
Pujedas testimony before the RTC was made on 12 March 1990 and
A Yes, sir.
Mr. Tans deposition in Hong Kong was conducted on 3 September
Q And would you know where did the other P600,000 1990, more than a decade had passed from the time the transactions
placed by Mrs. Sabeneano [sic] in a time
deposit with Citibank, N.A. came [sic] from? they were testifying on took place. This Court had previously

A She funded it directly. recognized the frailty and unreliability of human memory with regards

Q What are you saying Mr. Witness is that to figures after the lapse of five years.[38] Taking into consideration the
the P600,000 is a [sic] fresh money coming
from Mrs. Modesta Sabeneano [sic]? substantial length of time between the transactions and the witnesses

testimonies, as well as the undeniable fact that bank officers deal with
A That is right.
multiple clients and process numerous transactions during their

tenure, this Court is reluctant to give much weight to the testimonies

In his deposition in Hong Kong, Mr. Tan recounted what
of Mr. Pujeda and Mr. Tan regarding the payment of PNs No. 23356
happened to PNs No. 23356 and 23357 (referred to therein as Exhibits
and 23357 and the use by respondent of the proceeds thereof for
E and F, respectively), as follows
opening TD accounts. This Court finds it implausible that they should
Atty. Mabasa : Now from the Exhibits that you have remember, after all these years, this particular transaction with
identified Mr. Tan from Exhibits A
to F, which are Exhibits of the respondent involving her PNs No. 23356 and 23357 and TD
plaintiff. Now, do I understand
from you that the original amount accounts. Both witnesses did not give any reason as to why, from
is Five Hundred Thousand and
thereafter renewed in the among all the clients they had dealt with and all the transactions they
succeeding exhibits?
had processed as officers of petitioner Citibank, they specially
Mr. Tan : Yes, Sir. remembered respondent and her PNs No. 23356 and 23357. Their
Atty. Mabasa : Alright, after these Exhibits E and F testimonies likewise lacked details on the circumstances surrounding
matured, what happened
thereafter? the payment of the two PNs and the opening of the time deposit
accounts by respondent, such as the date of payment of the two PNs, When Mr. Pujeda testified before the RTC on 6 February

mode of payment, and the manner and context by which respondent 1990,[39] petitioners counsel attempted to present in evidence a

relayed her instructions to the officers of petitioner Citibank to use the document that would supposedly support the claim of petitioner

proceeds of her two PNs in opening the TD accounts. Citibank that the proceeds of PNs No. 23356 and 23357 were used by

respondent to open one of her two TD accounts in the amount

Moreover, while there are documentary evidences to support of P500,000.00. Respondents counsel objected to the presentation of

and trace respondents money market placements with petitioner the document since it was a mere xerox" copy, and was blurred and

Citibank, from the original PN No. 20773, rolled-over several times to, hardly readable. Petitioners counsel then asked for a continuance of

finally, PNs No. 23356 and 23357, there is an evident absence of any the hearing so that they can have time to produce a better document,

documentary evidence on the payment of these last two PNs and the which was granted by the court. However, during the next hearing and

use of the proceeds thereof by respondent for opening TD continuance of Mr. Pujedas testimony on 12 March 1990, petitioners

accounts. The paper trail seems to have ended with the copies of PNs counsel no longer referred to the said document.

No. 23356 and 23357.Although both Mr. Pujeda and Mr. Tan said that As respondent had established a prima facie case that

they based their testimonies, not just on their memories but also on petitioner Citibank is obligated to her for the amounts stated in PNs

the documents on file, the supposed documents on which they based No. 23356 and 23357, and as petitioner Citibank failed to present

those portions of their testimony on the payment of PNs No. 23356 sufficient proof of payment of the said PNs and the use by the

and 23357 and the opening of the TD accounts from the proceeds respondent of the proceeds thereof to open her TD accounts, this

thereof, were never presented before the courts nor made part of Court finds that PNs No. 23356 and 23357 are still outstanding and

the records of the case. Respondents money market placements petitioner Citibank is still liable to respondent for the amounts

were of substantial amounts consisting of the principal amount stated therein.

of P500,000.00, plus the interest it should have earned during the

years of placement and it is difficult for this Court to believe that The significance of this Courts declaration that PNs No. 23356 and

petitioner Citibank would not have had documented the payment 23357 are still outstanding becomes apparent in the light of petitioners

thereof. next contentions that respondent used the proceeds of PNs No. 23356

and 23357, together with additional money, to open TD Accounts No.

17783 and 17784 with petitioner Citibank; and, subsequently, Citifinance (which, according to Mr. Pujeda,[43] was one with and the

respondent pre-terminated these TD accounts and transferred the same as petitioner FNCB Finance), with the additional notation that

proceeds thereof, amounting to P1,100,000.00, to petitioner FNCB A/C MODESTA R. SABENIANO. Typewritten on MC No. 199253 is

Finance for money market placements. While respondents money the phrase Ref. Proceeds of TD 17783, and on MC No. 199251 is a

market placements with petitioner FNCB Finance may be traced back similar phrase, Ref. Proceeds of TD 17784. These phrases

with definiteness to TD Accounts No. 17783 and 17784, there is only purportedly established that the MCs were paid from the proceeds of

flimsy and unsubstantiated connection between the said TD accounts respondents pre-terminated TD accounts with petitioner

and the supposed proceeds paid from PNs No. 23356 and Citibank. Upon receipt of the MCs, petitioner FNCB Finance deposited

23357. With PNs No. 23356 and 23357 still unpaid, then they the same to its account with Feati Bank and Trust Co., as evidenced

represent an obligation of petitioner Citibank separate and distinct by the rubber stamp mark of the latter found at the back of both

from the obligation of petitioner FNCB Finance arising from MCs. In exchange, petitioner FNCB Finance booked the amounts

respondents money market placements with the latter. received as money market placements, and accordingly issued PNs

No. 4952 and 4962, for the amounts of P500,000.00

Money market placements with petitioner FNCB Finance and P600,000.00, respectively, payable to respondents savings

account with petitioner Citibank, S/A No. 25-13703-4, upon their

According to petitioners, respondents TD Accounts No. 17783 and maturity on 1 June 1977. Once again, respondent rolled-over several

17784, in the total amount of P1,100,000.00, were supposed to times the principal amounts of her money market placements with

mature on 15 March 1978. However, respondent, through a letter petitioner FNCB Finance, as follows

dated 28 April 1977,[40] pre-terminated the said TD accounts and

Maturity
transferred all the proceeds thereof to petitioner FNCB Finance for Date PN Cancel Date Amount Intere
(mm/dd/yyy No. s PN (mm/dd/yyy (P) st
money market placement. Pursuant to her instructions, TD Accounts No. y) (p.a.)
y)
No. 17783 and 17784 were pre-terminated and petitioner Citibank 04/29/1977 495 None 06/01/1977 500,000. 17%
2 00
(then still named First National City Bank) issued Managers Checks 496 None 06/01/1977 600,000. 17%
2 00
(MC) No. 199253[41] and 199251[42] for the amounts of P500,000.00
06/02/1977 575 4952 08/31/1977 500,000. 17%
and P600,00.00, respectively. Both MCs were payable to 7 00
 575 4962 08/31/1977 500,000. 17%
8 00 Petitioner FNCB Finance presented four checks as proof of payment
08/31/1977 816 5757 08/25/1978 500,000. 14%
7 00 of the principal amounts and interests of PNs No. 8167 and 8169 upon
816 5752 08/25/1978 500,000. 14% their maturity. All the checks were payable to respondents savings
9 00
account with petitioner Citibank, with the following details

As presented by the petitioner FNCB Finance, respondent rolled-over Date of Amount

Issuance Check (P) Notation
only the principal amounts of her money market placements as she
(mm/dd/yyyy) No.
chose to receive the interest income therefrom. Petitioner FNCB 09/01/1978 76962 12,833.34 Interest payment on
PN#08167
Finance also pointed out that when PN No. 4962, with principal 09/01/1978 76961 12,833.34 Interest payment on
PN#08169
amount of P600,000.00, matured on 1 June 1977, respondent 09/05/1978 77035 500,000.00 Full payment of
principal on
received a partial payment of the principal which, together with the PN#08167 which is
interest, amounted to P102,633.33;[44] thus, only the amount hereby cancelled
09/05/ 1978 77034 500,000.00 Full payment of
of P500,000.00 from PN No. 4962 was rolled-over to PN No. 5758. principal on
PN#08169 which is
hereby cancelled

Based on the foregoing records, the principal amounts of PNs No.

5757 and 5758, upon their maturity, were rolled over to PNs No. 8167
and 8169, respectively. PN No. 8167[45] expressly canceled and
superseded PN No. 5757, while PN No. 8169[46]also explicitly
canceled and superseded PN No. 5758. Thus, it is patently erroneous
for the Court of Appeals to still award to respondent the principal
amounts and interests covered by PNs No. 5757 and 5758 when these
were already canceled and superseded. It is now incumbent upon this
Court to determine what subsequently happened to PNs No. 8167 and
8169.
Then again, Checks No. 77035 and 77034 were later returned to
petitioner FNCB Finance together with a memo,[47] dated 6 September
1978, from Mr. Tan of petitioner Citibank, to a Mr. Bobby Mendoza of
petitioner FNCB Finance. According to the memo, the two checks, in
the total amount of P1,000,000.00, were to be returned to respondents
account with instructions to book the said amount in money market
placements for one more year. Pursuant to the said memo, Checks
No. 77035 and 77034 were invested by petitioner FNCB Finance, on
behalf of respondent, in money market placements for which it issued

PNs No. 20138 and 20139. The PNs each covered P500,000.00, to

earn 11% interest per annum, and to mature on 3 September 1979.

 of P3,812,712.32, had there been no withdrawals or debits from the

On 3 September 1979, petitioner FNCB Finance issued Check No. said accounts from the time the said deposits were made.

100168, pay to the order of Citibank N.A. A/C Modesta Sabeniano, in

the amount of P1,022,916.66, as full payment of the principal amounts Although the RTC and the Court of Appeals did not make any definitive

and interests of both PNs No. 20138 and 20139 and, resultantly, findings as to the status of respondents savings and current accounts

canceling the said PNs.[48] Respondent actually admitted the issuance with petitioner Citibank, the Decisions of both the trial and appellate

and existence of Check No. 100168, but with the qualification that the courts effectively recognized only the P31,079.14 coming from

proceeds thereof were turned over to petitioner respondents savings account which was used to off-set her alleged

Citibank.[49] Respondent did not clarify the circumstances attending outstanding loans with petitioner Citibank. [50]

the supposed turn over, but on the basis of the allegations of petitioner

Citibank itself, the proceeds of PNs No. 20138 and 20139, amounting Since both the RTC and the Court of Appeals had consistently

to P1,022,916.66, was used by it to liquidate respondents outstanding recognized only the P31,079.14 of respondents savings account with

loans.Therefore, the determination of whether or not respondent is still petitioner Citibank, and that respondent failed to move for

entitled to the return of the proceeds of PNs No. 20138 and 20139 reconsideration or to appeal this particular finding of fact by the trial

shall be dependent on the resolution of the issues raised as to the and appellate courts, it is already binding upon this Court. Respondent

existence of the loans and the authority of petitioner Citibank to use is already precluded from claiming any greater amount in her savings

the proceeds of the said PNs, together with respondents other and current accounts with petitioner Citibank. Thus, this Court shall

deposits and money market placements, to pay for the same. limit itself to determining whether or not respondent is entitled to the

return of the amount of P31,079.14 should the off-set thereof by

Savings and current accounts with petitioner Citibank petitioner Citibank against her supposed loans be found invalid.

Respondent presented and submitted before the RTC deposit

slips and bank statements to prove deposits made to several of her Dollar accounts with Citibank-Geneva

accounts with petitioner Citibank, particularly, Accounts No.

00484202, 59091, and 472-751, which would have amounted to a total

 US$ 156942.70 Total funds available
Respondent made an effort of preparing and presenting before the
- US$ 149632.99 Transfer to Citibank Manila on
RTC her own computations of her money market placements and 26.10.1979
dollar accounts with Citibank-Geneva, purportedly amounting to a total (counter value of Pesos 1102944.78)

of United States (US) $343,220.98, as of 23 June 1985. [51] In her US$ 7309.71 Balance in current accounts

Memorandum filed with the RTC, she claimed a much bigger amount - US$ 6998.84 Transfer to Citibank Zuerich ac no.
121359 on March
of deposits and money market placements with Citibank-Geneva, 13, 1980
totaling US$1,336,638.65.[52] However, respondent herself also US$ 310.87 various charges including closing
charges
submitted as part of her formal offer of evidence the computation of
According to the foregoing computation, by 25 October 1979,
her money market placements and dollar accounts with Citibank-
respondent had a total of US$156,942.70, from which,
Geneva as determined by the latter.[53] Citibank-Geneva accounted for
US$149,632.99 was transferred by Citibank-Geneva to petitioner
respondents money market placements and dollar accounts as follows
Citibank in Manila, and was used by the latter to off-set respondents
MODESTA SABENIANO &/OR outstanding loans. The balance of respondents accounts with
==================
Citibank-Geneva, after the remittance to petitioner Citibank in Manila,
US$ 30000.-- Principal Fid. Placement
+ 339.06 Interest at 3,875% p.a. from 12.07. amounted to US$7,309.71, which was subsequently expended by a
US$ 25.10.79
- US$ 95.-- Commission (minimum) transfer to another account with Citibank-Zuerich, in the amount of

US$ 30244.06 Total proceeds on 25.10.1979 US$6,998.84, and by payment of various bank charges, including

closing charges, in the amount of US$310.87. Rightly so, both the

US$ 114000.-- Principal Fid. Placement RTC and the Court of Appeals gave more credence to the computation
+ 1358.50 Interest at 4,125% p.a. from 12.07.
US$ 25.10.79 of Citibank-Geneva as to the status of respondents accounts with the
- US$ 41.17 Commission
said bank, rather than the one prepared by respondent herself, which
US$ 115317.33 Total proceeds on 25.10.1979
was evidently self-serving. Once again, this Court shall limit itself to

determining whether or not respondent is entitled to the return of the

US$ 145561.39 Total proceeds of both placements on
25.10.1979 amount of US$149,632.99 should the off-set thereof by petitioner
+ 11381.31 total of both current accounts
US$ Citibank against her alleged outstanding loans be found
invalid. Respondent cannot claim any greater amount since she did

not perfect an appeal of the Decision of the Court of Appeals, dated According to petitioner Citibank, respondent incurred her loans under

26 March 2002, which found that she is entitled only to the return of the circumstances narrated below.

the said amount, as far as her accounts with Citibank-Geneva is As early as 9 February 1978, respondent obtained her first

concerned. loan from petitioner Citibank in the principal amount of P200,000.00,

for which she executed PN No. 31504.[54] Petitioner Citibank extended

III to her several other loans in the succeeding months. Some of these

loans were paid, while others were rolled-over or renewed. Significant

Petitioner Citibank
was able to to the Petition at bar are the loans which respondent obtained from
establish by
preponderance of July 1978 to January 1979, appropriately covered by PNs (first
evidence the
set).[55] The aggregate principal amount of these loans
existence of
respondents was P1,920,000.00, which could be broken down as follows
loans.

Date of Date of Date o

PN No. Issuance Maturity Principal (mm/d
(mm/dd/yyyy) (mm/dd/yyyy) Amount
Petitioners version of events
32935 07/20/1978 09/18/1978 P 400,000.00 07/2
33751 10/13/1978 12/12/1978 100,000.00
33798 10/19/1978 11/03/1978 100,000.00 10/1
In sum, the following amounts were used by petitioner Citibank to 34025 11/15/1978 01/15/1979 150,000.00 11/1
34079 11/21/1978 01/19/1979 250,000.00 11/2
liquidate respondents purported outstanding loans
34192 12/04/1978 01/18/1979 100,000.00 12/0
34402 12/26/1978 02/23/1979 300,000.00 12/2
Description Amount 34534 01/09/1979 03/09/1979 150,000.00 01/0
Principal and interests of PNs No. 20138 34609 01/17/1979 03/19/1979 150,000.00 01/1
and 20139 34740 01/30/1979 03/30/1979 220,000.00 01/3
(money market placements with P 1,022,916.66
petitioner FNCB Finance) Total P1,920,000.00
Savings account with petitioner Citibank 31,079.14
Dollar remittance from Citibank-
Geneva (peso equivalent When respondent was unable to pay the first set of PNs upon their
Of US$149,632.99) 1,102,944.78
maturity, these were rolled-over or renewed several times,
Total P 2,156,940.58
necessitating the execution by respondent of new PNs in favor of extended to her by petitioner Citibank, in the aggregate principal

petitioner Citibank. As of 5 April 1979, respondent had the following amount of P500,000.00. On 9 March 1978, respondent executed in

outstanding PNs (second set),[56] the principal amount of which favor of petitioner Citibank another Deed of Assignment, [58] this time,

remained at P1,920,000.00 of PN No. 8167, also issued by petitioner FNCB Finance, to secure

payment of the credit and banking facilities extended to her by

Date of Date of
PN No. Issuance Maturity Principal petitioner Citibank, in the aggregate amount of P500,000.00. When
(mm/dd/yyyy) (mm/dd/yyyy) Amount
PNs No. 8167 and 8169, representing respondents money market
34510 01/01/1979 03/02/1979 P 400,000.00
34509 01/02/1979 03/02/1979 100,000.00 placements with petitioner FNCB Finance, matured and were rolled-
34534 01/09/1979 03/09/1979 150,000.00
34612 01/19/1979 03/16/1979 150,000.00 over to PNs No. 20138 and 20139, respondent executed new Deeds
34741 01/26/1979 03/12/1979 100,000.00
of Assignment,[59] in favor of petitioner Citibank, on 25 August
35689 02/23/1979 05/29/1979 300,000.00
35694 03/19/1979 05/29/1979 150,000.00 1978. According to the more recent Deeds, respondent assigned PNs
35695 03/19/1979 05/29/1979 100,000.00
356946 03/20/1979 05/29/1979 250,000.00 No. 20138 and 20139, representing her rolled-over money market
35697 03/30/1979 05/29/1979 220,000.00
placements with petitioner FNCB Finance, to petitioner Citibank as
Total P 1,920,000.00 security for the banking and credit facilities it extended to her, in the

aggregate principal amount of P500,000.00 per Deed.

All the PNs stated that the purpose of the loans covered thereby is To In addition to the Deeds of Assignment of her money market
liquidate existing obligation, except for PN No. 34534, which stated for placements with petitioner FNCB Finance, respondent also executed
its purpose personal investment. a Declaration of Pledge,[60] in which she supposedly pledged [a]ll

present and future fiduciary placements held in my personal and/or

Respondent secured her foregoing loans with petitioner
Citibank by executing Deeds of Assignment of her money market
placements with petitioner FNCB Finance. On 2 March 1978,
respondent executed in favor of petitioner Citibank a Deed of
[57]
Assignment of PN No. 8169, which was issued by petitioner FNCB
Finance, to secure payment of the credit and banking facilities
joint name with Citibank, Switzerland, to secure all claims the
petitioner Citibank may have or, in the future, acquire against
respondent. The petitioners copy of the Declaration of Pledge is
undated, while that of the respondent, a copy certified by a Citibank-
Geneva officer, bore the date 24 September 1979.[61]

When respondent failed to pay the second set of PNs upon their
maturity, an exchange of letters ensued between respondent and/or
her representatives, on one hand, and the representatives of
petitioners, on the other.
The first letter[62] was dated 5 April 1979, addressed to respondent and
signed by Mr. Tan, as the manager of petitioner Citibank, which stated,
in part, that
Despite our repeated requests and follow-up, we
regret you have not granted us with any response or
payment.
We, therefore, have no alternative but to call your loan
of P1,920,000.00 plus interests and other charges
due and demandable. If you still fail to settle this
obligation by 4/27/79, we shall have no other
alternative but to refer your account to our lawyers for
legal action to protect the interest of the bank.
Respondent sent a reply letter[63] dated 26 April 1979, printed on paper
bearing the letterhead of respondents company, MC Adore
International Palace, the body of which reads
This is in reply to your letter dated April 5, 1979
inviting my attention to my loan which has become
due. Pursuant to our representation with you over the
telephone through Mr. F. A. Tan, you allow us to pay
the interests due for the meantime.
Please accept our Comtrust Check in the amount
of P62,683.33.
Please bear with us for a little while, at most ninety
days. As you know, we have a pending loan with the
Development Bank of the Philippines in the amount
of P11-M. This loan has already been recommended
for approval and would be submitted to the Board of
Governors. In fact, to further facilitate the early
release of this loan, we have presented and furnished
Gov. J. Tengco a xerox copy of your letter.
You will be doing our corporation a very viable
service, should you grant us our request for a little
more time.
A week later or on 3 May 1979, a certain C. N. Pugeda,
designated as Executive Secretary, sent a letter [64] to petitioner
Citibank, on behalf of respondent. The letter was again printed on
paper bearing the letterhead of MC Adore International Palace. The
pertinent paragraphs of the said letter are reproduced below
Per instructions of Mrs. Modesta R. Sabeniano, we
would like to request for a re-computation of the
interest and penalty charges on her loan in the
aggregate amount of P1,920,000.00 with maturity
date of all promissory notes at June 30, 1979. As she
has personally discussed with you yesterday, this
date will more or less assure you of early settlement.
In this regard, please entrust to bearer, our Comtrust
check for P62,683.33 to be replaced by another
check with amount resulting from the new
computation. Also, to facilitate the processing of the
same, may we request for another set of promissory
notes for the signature of Mrs. Sabeniano and to
cancel the previous ones she has signed and
forwarded to you.
This was followed by a telegram,[65] dated 5 June 1979, and received
by petitioner Citibank the following day. The telegram was sent by a
Dewey G. Soriano, Legal Counsel. The telegram acknowledged
receipt of the telegram sent by petitioner Citibank regarding the re-
 This letter serves as an authority to debit
past due obligation of McAdore International Palace. However, it whatever the outstanding balance from my
captioned accounts and credit the amount to
reported that respondent, the President and Chairman of MC Adore my loan outstanding account with you.
International Palace, was presently abroad negotiating for a big

loan. Thus, he was requesting for an extension of the due date of the
Unlike respondents earlier letters, both letters, dated 21 June 1979,
obligation until respondents arrival on or before 31 July 1979.
are printed on plain paper, without the letterhead of her company, MC

Adore International Palace.

[66]
The next letter, dated 21 June 1979, was signed by

respondent herself and addressed to Mr. Bobby Mendoza, a Manager

By 5 September 1979, respondents outstanding and past due
of petitioner FNCB Finance. Respondent wrote therein
obligations to petitioner Citibank totaled P2,123,843.20, representing
Re: PN No. 20138 the principal amounts plus interests. Relying on respondents Deeds
for P500,000.00 &
PN No. 20139 of Assignment, petitioner Citibank applied the proceeds of
for P500,000.00
totalling P1 Million, respondents money market placements with petitioner FNCB Finance,
both PNs will mature
on 9/3/1979. as well as her deposit account with petitioner Citibank, to partly

This is to authorize you to release the liquidate respondents outstanding loan balance, [68] as follows
accrued quarterly interests payment from my
captioned placements and forward directly to
Respondents outstanding obligation (principal P 2,123,843.20
Citibank, Manila Attention: Mr. F. A. Tan, Manager, to
and interest)
apply to my interest payable on my outstanding loan
Less: Proceeds from respondents money
with Citibank.
market placements
with petitioner FNCB Finance (1,022,916.66)
Please note that the captioned two
(principal and interest)
placements are continuously pledged/hypothecated
Deposits in respondents bank
to Citibank, Manila to support my personal
accounts with petitioner
outstanding loan. Therefore, please do not release
Citibank (31,079.14)
the captioned placements upon maturity until you
have received the instruction from Citibank, Manila.
Balance of respondents obligation P 1,069,847.40
[67]
On even date, respondent sent another letter to Mr. Tan of

petitioner Citibank, stating that

Mr. Tan of petitioner Citibank subsequently sent a letter, [69] dated 28
Re: S/A No. 25-225928
September 1979, notifying respondent of the status of her loans and
and C/A No. 484-946
the foregoing compensation which petitioner Citibank effected. In the
letter, Mr. Tan informed respondent that she still had a remaining past- 1979, informing her that petitioner Citibank had effected an off-set

due obligation in the amount of P1,069,847.40, as of 5 September using her account with Citibank-Geneva, in the amount of

1979, and should respondent fail to pay the amount by 15 October US$149,632.99, against her outstanding, overdue, demandable and

1979, then petitioner Citibank shall proceed to off-set the unpaid unpaid obligation to petitioner Citibank. Atty. Agcaoili claimed therein

amount with respondents other collateral, particularly, a money market that the compensation or off-set was made pursuant to and in

placement in Citibank-Hongkong. accordance with the provisions of Articles 1278 through 1290 of the

Civil Code. He further declared that respondents obligation to

On 5 October 1979, respondent wrote Mr. Tan of petitioner Citibank, petitioner Citibank was now fully paid and liquidated.

on paper bearing the letterhead of MC Adore International Palace, as

regards the P1,920,000.00 loan account supposedly of MC Adore Unfortunately, on 7 October 1987, a fire gutted the 7 th floor of

Finance & Investment, Inc., and requested for a statement of account petitioner Citibanks building at Paseo de Roxas St., Makati, Metro

covering the principal and interest of the loan as of 31 October Manila. Petitioners submitted a Certification[70] to this effect, dated 17

1979. She stated therein that the loan obligation shall be paid within January 1991, issued by the Chief of the Arson Investigation Section,

60 days from receipt of the statement of account. Fire District III, Makati Fire Station, Metropolitan Police Force. The

7th floor of petitioner Citibanks building housed its Control Division,

Almost three weeks later, or on 25 October 1979, a certain Atty. which was in charge of keeping the necessary documents for cases in

Moises Tolentino dropped by the office of petitioner Citibank, with a which it was involved. After compiling the documentary evidence for

letter, dated 9 October 1979, and printed on paper with the letterhead the present case, Atty. Renato J. Fernandez, internal legal counsel of

of MC Adore International Palace, which authorized the bearer thereof petitioner Citibank, forwarded them to the Control Division. The

to represent the respondent in settling the overdue account, this time, original copies of the MCs, which supposedly represent the proceeds

purportedly, of MC Adore International Palace Hotel. The letter was of the first set of PNs, as well as that of other documentary evidence

signed by respondent as the President and Chairman of the Board. related to the case, were among those burned in the said fire. [71]

Eventually, Atty. Antonio Agcaoili of Agcaoili & Associates, as counsel Respondents version of events

of petitioner Citibank, sent a letter to respondent, dated 31 October

Respondent disputed petitioners narration of the circumstances money market placement with petitioner FNCB Finance. In turn, she

surrounding her loans with petitioner Citibank and the alleged used the very same money market placement with petitioner FNCB

authority she gave for the off-set or compensation of her money Finance as security for her P150,000.00 loan from petitioner

market placements and deposit accounts with petitioners against her Citibank. When she failed to pay the loan when it became due,

loan obligation. petitioner Citibank allegedly forfeited her money market placement

with petitioner FNCB Finance and, thus, the loan was already paid. [75]

Respondent denied outright executing the first set of PNs, except for

one (PN No. 34534 in particular). Although she admitted that she Respondent likewise questioned the MCs presented by petitioners,

obtained several loans from petitioner Citibank, these only amounted except for one (MC No. 228270 in particular), as proof that she

to P1,150,000.00, and she had already paid them. She secured from received the proceeds of the loans covered by the first set of PNs. As

petitioner Citibank two loans of P500,000.00 each. She executed in recounted in the preceding paragraph, respondent admitted to

favor of petitioner Citibank the corresponding PNs for the loans and obtaining a loan of P150,000.00, covered by PN No. 34534, and

the Deeds of Assignment of her money market placements with receiving MC No. 228270 representing the proceeds thereof, but

petitioner FNCB Finance as security.[72] To prove payment of these claimed that she already paid the same. She denied ever receiving

loans, respondent presented two provisional receipts of petitioner MCs No. 220701 (for the loan of P400,000.00, covered by PN No.

Citibank No. 19471,[73] dated 11 August 1978, and No. 33935) and No. 226467 (for the loan of P250,000.00, covered by PN

12723,[74] dated 10 November 1978 both signed by Mr. Tan, and No. 34079), and pointed out that the checks did not bear her

acknowledging receipt from respondent of several checks in the total indorsements. She did not deny receiving all other checks but she

amount of P500,744.00 and P500,000.00, respectively, for liquidation interposed that she received these checks, not as proceeds of loans,

of loan. but as payment of the principal amounts and/or interests from her

money market placements with petitioner Citibank. She also raised

She borrowed another P150,000.00 from petitioner Citibank doubts as to the notation on each of the checks that reads RE:

for personal investment, and for which she executed PN No. 34534, Proceeds of PN#[corresponding PN No.], saying that such notation

on 9 January 1979. Thus, she admitted to receiving the proceeds of did not appear on the MCs when she originally received them and that

this loan via MC No. 228270. She invested the loan amount in another the notation appears to have been written by a typewriter different from
that used in writing all other information on the checks (i.e., date, After going through the testimonial and documentary evidence

payee, and amount).[76] She even testified that MCs were not presented by both sides to this case, it is this Courts assessment that

supposed to bear notations indicating the purpose for which they were respondent did indeed have outstanding loans with petitioner Citibank

issued. at the time it effected the off-set or compensation on 25 July 1979

As to the second set of PNs, respondent acknowledged having signed (using respondents savings deposit with petitioner Citibank), 5

them all. However, she asserted that she only executed these PNs as September 1979 (using the proceeds of respondents money market

part of the simulated loans she and Mr. Tan of petitioner Citibank placements with petitioner FNCB Finance) and 26 October 1979

concocted. Respondent explained that she had a pending loan (using respondents dollar accounts remitted from Citibank-

application for a big amount with the Development Bank of the Geneva). The totality of petitioners evidence as to the existence of the

Philippines (DBP), and when Mr. Tan found out about this, he said loans preponderates over respondents. Preponderant evidence

suggested that they could make it appear that the respondent had means that, as a whole, the evidence adduced by one side outweighs

outstanding loans with petitioner Citibank and the latter was already that of the adverse party.[78]

demanding payment thereof; this might persuade DBP to approve

respondents loan application. Mr. Tan made the respondent sign the Respondents outstanding obligation for P1,920,000.00 had been

second set of PNs, so that he may have something to show the DBP sufficiently documented by petitioner Citibank.

investigator who might inquire with petitioner Citibank as to

respondents loans with the latter. On her own copies of the said PNs, The second set of PNs is a mere renewal of the prior loans originally

respondent wrote by hand the notation, This isa (sic) simulated non- covered by the first set of PNs, except for PN No. 34534. The first set

negotiable note, signed copy given to Mr. Tan., (sic) per agreement to of PNs is supported, in turn, by the existence of the MCs that represent

be shown to DBP representative. itwill (sic) be returned to me if the proceeds thereof received by the respondent.

the P11=M (sic) loan for MC Adore Palace Hotel is approved by

DBP.[77] It bears to emphasize that the proceeds of the loans were paid to

respondent in MCs, with the respondent specifically named as

Findings of this Court as to the existence of the loans
payee. MCs checks are drawn by the banks manager upon the bank

itself and regarded to be as good as the money it

represents.[79] Moreover, the MCs were crossed checks, with the used in commercial transactions for it also serves as a receipt or

words Payees Account Only. evidence for the drawee bank of the cancellation of the said check due

to payment,[82] then, the possession by petitioner Citibank of the said

In general, a crossed check cannot be presented to the drawee bank MCs, duly stamped Paid gives rise to the presumption that the said

for payment in cash. Instead, the check can only be deposited with the MCs were already paid out to the intended payee, who was in this

payees bank which, in turn, must present it for payment against the case, the respondent.

drawee bank in the course of normal banking hours. The crossed

check cannot be presented for payment, but it can only be deposited This Court finds applicable herein the presumptions that private

and the drawee bank may only pay to another bank in the payees or transactions have been fair and regular, [83] and that the ordinary

indorsers account.[80] The effect of crossing a check was described by course of business has been followed.[84] There is no question that the

this Court in Philippine Commercial International Bank v. Court of loan transaction between petitioner Citibank and the respondent is a

Appeals[81] private transaction. The transactions revolving around the crossed

[T]he crossing of a check with the phrase Payees MCs from their issuance by petitioner Citibank to respondent as
Account Only is a warning that the check should be
deposited in the account of the payee. Thus, it is the payment of the proceeds of her loans; to its deposit in respondents
duty of the collecting bank PCI Bank to ascertain that
accounts with several different banks; to the clearing of the MCs by an
the check be deposited in payees account only. It is
bound to scrutinize the check and to know its independent clearing house; and finally, to the payment of the MCs by
depositors before it can make the clearing
indorsement all prior indorsements and/or lack of petitioner Citibank as the drawee bank of the said checks are all
indorsement guaranteed.
private transactions which shall be presumed to have been fair and

regular to all the parties concerned. In addition, the banks involved in

The crossed MCs presented by petitioner Bank were indeed deposited
the foregoing transactions are also presumed to have followed the
in several different bank accounts and cleared by the Clearing Office
ordinary course of business in the acceptance of the crossed MCs for
of the Central Bank of the Philippines, as evidenced by the stamp
deposit in respondents accounts, submitting them for clearing, and
marks and notations on the said checks. The crossed MCs are already
their eventual payment and cancellation.
in the possession of petitioner Citibank, the drawee bank, which was
The afore-stated presumptions are disputable, meaning, they are
ultimately responsible for the payment of the amount stated in the
satisfactory if uncontradicted, but may be contradicted and overcome
checks. Given that a check is more than just an instrument of credit
by other evidence.[85] Respondent, however, was unable to present Respondent denied ever receiving MCs No. 220701 and

sufficient and credible evidence to dispute these presumptions. 226467. However, considering that the said checks were crossed for

payees account only, and that they were actually deposited, cleared,

It should be recalled that out of the nine MCs presented by petitioner and paid, then the presumption would be that the said checks were

Citibank, respondent admitted to receiving one as proceeds of a loan properly deposited to the account of respondent, who was clearly

(MC No. 228270), denied receiving two (MCs No. 220701 and named the payee in the checks. Respondents bare allegations that

226467), and admitted to receiving all the rest, but not as proceeds of she did not receive the two checks fail to convince this Court, for to

her loans, but as return on the principal amounts and interests from sustain her, would be for this Court to conclude that an irregularity had

her money market placements. occurred somewhere from the time of the issuance of the said checks,

to their deposit, clearance, and payment, and which would have

Respondent admitted receiving MC No. 228270 representing the involved not only petitioner Citibank, but also BPI, which accepted the

proceeds of her loan covered by PN No. 34534. Although the principal checks for deposit, and the Central Bank of the Philippines, which

amount of the loan is P150,000.00, respondent only cleared the checks. It falls upon the respondent to overcome or

received P146,312.50, because the interest and handling fee on the dispute the presumption that the crossed checks were issued,

loan transaction were already deducted therefrom. [86] Stamps and accepted for deposit, cleared, and paid for by the banks involved

notations at the back of MC No. 228270 reveal that it was deposited following the ordinary course of their business.

at the Bank of the Philippine Islands (BPI), Cubao Branch, in Account

No. 0123-0572-28.[87] The check also bore the signature of The mere fact that MCs No. 220701 and 226467 do not bear

respondent at the back.[88] And, although respondent would later admit respondents signature at the back does not negate deposit thereof in

that she did sign PN No. 34534 and received MC No. 228270 as her account. The liability for the lack of indorsement on the MCs no

proceeds of the loan extended to her by petitioner Citibank, she longer fall on petitioner Citibank, but on the bank who received the

contradicted herself when, in an earlier testimony, she claimed that same for deposit, in this case, BPI Cubao Branch. Once again, it must

PN No. 34534 was among the PNs she executed as simulated loans be noted that the MCs were crossed, for payees account only, and the

with petitioner Citibank.[89] payee named in both checks was none other than respondent. The

crossing of the MCs was already a warning to BPI to receive said

checks for deposit only in respondents account. It was up to BPI to and 228400 (which respondent admitted to receiving as proceeds

verify whether it was receiving the crossed MCs in accordance with from her money market placements) were deposited. Likewise, MC

the instructions on the face thereof. If, indeed, the MCs were No. 226467 was deposited in Account No. 0121-002-43 of BPI Cubao

deposited in accounts other than respondents, then the respondent Branch, to which MCs No. 226285 and 226439 (which respondent

would have a cause of action against BPI. [90] admitted to receiving as proceeds from her money market

placements) were deposited. It is an apparent contradiction for

BPI further stamped its guarantee on the back of the checks to the respondent to claim having received the proceeds of checks deposited

effect that, All prior endorsement and/or Lack of endorsement in an account, and then deny receiving the proceeds of another check

guaranteed. Thus, BPI became the indorser of the MCs, and assumed deposited in the very same account.

all the warranties of an indorser, [91] specifically, that the checks were

genuine and in all respects what they purported to be; that it had a Another inconsistency in respondents denial of receipt of MC No.

good title to the checks; that all prior parties had capacity to contract; 226467 and her deposit of the same in her account, is her presentation

and that the checks were, at the time of their indorsement, valid and of Exhibit HHH, a provisional receipt which was supposed to prove

subsisting.[92] So even if the MCs deposited by BPI's client, whether it that respondent turned over P500,000.00 to Mr. Tan of petitioner

be by respondent herself or some other person, lacked the necessary Citibank, that the said amount was split into three money market

indorsement, BPI, as the collecting bank, is bound by its warranties as placements, and that MC No. 226467 represented the return on her

an indorser and cannot set up the defense of lack of indorsement as investment from one of these placements. [94] Because of her Exhibit

against petitioner Citibank, the drawee bank. [93] HHH, respondent effectively admitted receipt of MC No. 226467,

although for reasons other than as proceeds of a loan.

Furthermore, respondents bare and unsubstantiated denial of receipt

of the MCs in question and their deposit in her account is rendered Neither can this Court give credence to respondents contention that

suspect when MC No. 220701 was actually deposited in Account No. the notations on the MCs, stating that they were the proceeds of

0123-0572-28 of BPI Cubao Branch, the very same account in which particular PNs, were not there when she received the checks and that

MC No. 228270 (which respondent admitted to receiving as proceeds the notations appeared to be written by a typewriter different from that

of her loan from petitioner Citibank), and MCs No. 228203, 228357, used to write the other information on the checks. Once more,
respondents allegations were uncorroborated by any other Respondent presented several more pieces of evidence to

evidence. Her and her counsels observation that the notations on the substantiate her claim that she received MCs No. 226285, 226439,

MCs appear to be written by a typewriter different from that used to 226467, 226057, 228357, and 228400, not as proceeds of her loans

write the other information on the checks hardly convinces this Court from petitioner Citibank, but as the return of the principal amounts and

considering that it constitutes a mere opinion on the appearance of the payment of interests from her money market placements with

notation by a witness who does not possess the necessary expertise petitioners. Part of respondents exhibits were personal

on the matter. In addition, the notations on the MCs were written using checks[95] drawn by respondent on her account with Feati Bank &

both capital and small letters, while the other information on the Trust Co., which she allegedly invested in separate money market

checks were written using capital letters only, such difference could placements with both petitioners, the returns from which were paid to

easily confuse an untrained eye and lead to a hasty conclusion that her via MCs No. 226285 and 228400. Yet, to this Court, the personal

they were written by different typewriters. checks only managed to establish respondents issuance thereof, but

there was nothing on the face of the checks that would reveal the

Respondents testimony, that based on her experience transacting purpose for which they were issued and that they were actually

with banks, the MCs were not supposed to include notations on the invested in money market placements as respondent claimed.

purpose for which the checks were issued, also deserves scant

consideration. While respondent may have extensive experience Respondent further submitted handwritten notes that

dealing with banks, it still does not qualify her as a competent witness purportedly computed and presented the returns on her money market

on banking procedures and practices. Her testimony on this matter is placements, corresponding to the amount stated in the MCs she

even belied by the fact that the other MCs issued by petitioner Citibank received from petitioner Citibank. Exhibit HHH-1[96] was a handwritten

(when it was still named First National City Bank) and by petitioner note, which respondent attributed to Mr. Tan of petitioner Citibank,

FNCB Finance, the existence and validity of which were not disputed showing the breakdown of her BPI Check for P500,000.00 into three

by respondent, also bear similar notations that state the reason for different money market placements with petitioner Citibank. This

which they were issued. Court, however, noticed several factors which render the note highly

suspect. One, it was written on the reversed side of Provisional

Receipt No. 12724 of petitioner Citibank which bore the initials of Mr.
Tan acknowledging receipt of respondents BPI Check No. 120989 identify whether the initials as appearing on the note were actually Mr.

for P500,000.00; but the initials on the handwritten note appeared to Mendozas.

be that of Mr. Bobby Mendoza of petitioner FNCB Finance. [97] Second,

according to Provisional Receipt No. 12724, BPI Check No. 120989 Also, going by the information on the front page of the note,

for P500,000.00 was supposed to be invested in three money market this Court observes that payment of respondents alleged money

placements with petitioner Citibank for the period of 60 days. Since all market placements with petitioner FNCB Finance were made using

these money market placements were made through one check Citytrust Checks; the MCs in question, including MC No. 228057, were

deposited on the same day, 10 November 1978, it made no sense that issued by petitioner Citibank. Although Citytrust (formerly Feati Bank

the handwritten note at the back of Provisional Receipt No. 12724 & Trust Co.), petitioner FNCB Finance, and petitioner Citibank may be

provided for different dates of maturity for each of the money market affiliates of one another, they each remained separate and distinct

placements (i.e., 16 November 1978, 17 January 1979, and 21 corporations, each having its own financial system and records. Thus,

November 1978), and such dates did not correspond to the 60 day this Court cannot simply assume that one corporation, such as

placement period stated on the face of the provisional receipt. And petitioner Citibank or Citytrust, can issue a check to discharge an

third, the principal amounts of the money market placements as stated obligation of petitioner FNCB Finance. It should be recalled that when

in the handwritten note P145,000.00, P145,000.00 and P242,000.00 petitioner FNCB Finance paid for respondents money market

totaled P532,000.00, and was obviously in excess of the P500,000.00 placements, covered by its PNs No. 8167 and 8169, as well as PNs

acknowledged on the face of Provisional Receipt No. 12724. No. 20138 and 20139, petitioner FNCB Finance issued its own

checks.

Exhibits III and III-1, the front and bank pages of a handwritten

note of Mr. Bobby Mendoza of petitioner FNCB Finance, [98] also did As a last point on this matter, if respondent truly had money

not deserve much evidentiary weight, and this Court cannot rely on market placements with petitioners, then these would have been

the truth and accuracy of the computations presented therein. Mr. evidenced by PNs issued by either petitioner Citibank or petitioner

Mendoza was not presented as a witness during the trial before the FNCB Finance, acknowledging the principal amounts of the

RTC, so that the document was not properly authenticated nor its investments, and stating the applicable interest rates, as well as the

contents sufficiently explained. No one was able to competently dates of their of issuance and maturity. After respondent had so
meticulously reconstructed her other money market placements with
petitioners and consolidated the documentary evidence thereon, she
came surprisingly short of offering similar details and substantiation
for these particular money market placements.
Since this Court is satisfied that respondent indeed received the
proceeds of the first set of PNs, then it proceeds to analyze her
evidence of payment thereof.
In support of respondents assertion that she had already paid
whatever loans she may have had with petitioner Citibank, she
presented as evidence Provisional Receipts No. 19471, dated 11
August 1978, and No. 12723, dated 10 November 1978, both of
petitioner Citibank and signed by Mr. Tan, for the amounts
of P500,744.00 and P500,000.00, respectively. While these
provisional receipts did state that Mr. Tan, on behalf of petitioner
Citibank, received respondents checks as payment for her loans, they
failed to specifically identify which loans were actually paid. Petitioner
Citibank was able to present evidence that respondent had executed
several PNs in the years 1978 and 1979 to cover the loans she
secured from the said bank. Petitioner Citibank did admit that
respondent was able to pay for some of these PNs, and what it
identified as the first and second sets of PNs were only those which
remained unpaid. It thus became incumbent upon respondent to prove
that the checks received by Mr. Tan were actually applied to the PNs
in either the first or second set; a fact that, unfortunately, cannot be
determined from the provisional receipts submitted by respondent
since they only generally stated that the checks received by Mr. Tan
were payment for respondents loans.
Mr. Tan, in his deposition, further explained that provisional
receipts were issued when payment to the bank was made using
checks, since the checks would still be subject to clearing. The
purpose for the provisional receipts was merely to acknowledge the
delivery of the checks to the possession of the bank, but not yet of
payment.[99] This bank practice finds legitimacy in the pronouncement
of this Court that a check, whether an MC or an ordinary check, is not
legal tender and, therefore, cannot constitute valid tender of
payment. In Philippine Airlines, Inc. v. Court of Appeals, [100] this Court
elucidated that:
Since a negotiable instrument is only a
substitute for money and not money, the delivery of
such an instrument does not, by itself, operate as
payment (Sec. 189, Act 2031 on Negs. Insts.; Art.
1249, Civil Code; Bryan Landon Co. v. American
Bank, 7 Phil. 255; Tan Sunco, v. Santos, 9 Phil. 44;
21 R.C.L. 60, 61). A check, whether a manager's
check or ordinary check, is not legal tender, and an
offer of a check in payment of a debt is not a valid
tender of payment and may be refused receipt by the
obligee or creditor. Mere delivery of checks does not
discharge the obligation under a judgment. The
obligation is not extinguished and remains suspended
until the payment by commercial document is actually
realized (Art. 1249, Civil Code, par. 3).
In the case at bar, the issuance of an official receipt by petitioner was included in the second set without need for its renewal, and it still

Citibank would have been dependent on whether the checks delivered being the original PN for that particular loan, its stated purpose was

by respondent were actually cleared and paid for by the drawee banks. for personal investment.[104] Respondent essentially admitted

executing the second set of PNs, but they were only meant to cover

As for PN No. 34534, respondent asserted payment thereof at two simulated loans. Mr. Tan supposedly convinced her that her pending

separate instances by two different means. In her formal offer of loan application with DBP would have a greater chance of being

exhibits, respondent submitted a deposit slip of petitioner Citibank, approved if they made it appear that respondent urgently needed the

dated 11 August 1978, evidencing the deposit of BPI Check No. 5785 money because petitioner Citibank was already demanding payment

for P150,000.00.[101] In her Formal Offer of Documentary Exhibits, for her simulated loans.

dated 7 July 1989, respondent stated that the purpose for the

presentation of the said deposit slip was to prove that she already paid Respondents defense of simulated loans to escape liability for the

her loan covered by PN No. 34534.[102] In her testimony before the second set of PNs is truly a novel one. It is regrettable, however, that

RTC three years later, on 28 November 1991, she changed her she was unable to substantiate the same. Yet again, respondents

story. This time she narrated that the loan covered by PN No. 34534 version of events is totally based on her own uncorroborated

was secured by her money market placement with petitioner FNCB testimony. The notations on the second set of PNs, that they were

Finance, and when she failed to pay the said PN when it became due, non-negotiable simulated notes, were admittedly made by respondent

the security was applied to the loan, therefore, the loan was herself and were, thus, self-serving. Equally self-serving was

considered paid.[103] Given the foregoing, respondents assertion of respondents letter, written on 7 October 1985, or more than six years

payment of PN No. 34534 is extremely dubious. after the execution of the second set of PNs, in which she demanded

return of the simulated or fictitious PNs, together with the letters

According to petitioner Citibank, the PNs in the second set, relating thereto, which Mr. Tan purportedly asked her to

except for PN No. 34534, were mere renewals of the unpaid PNs in execute. Respondent further failed to present any proof of her alleged

the first set, which was why the PNs stated that they were for the loan application with the DBP, and of any circumstance or

purpose of liquidating existing obligations. PN No. 34534, however, correspondence wherein the simulated or fictitious PNs were indeed

which was part of the first set, was still valid and subsisting and so it used for their supposed purpose.
 The account officer, in the Marketing Department, deals directly with

In contrast, petitioner Citibank, as supported by the testimonies of its the clients who wish to borrow money from petitioner Citibank. The

officers and available documentation, consistently treated the said Marketing Department will forward a loan booking checklist, together

PNs as regular loans accepted, approved, and paid in the ordinary with the borrowing clients PNs and other supporting documents, to the

course of its business. loan pre-processor, who will check whether the details in the loan

booking checklist are the same as those in the PNs. The documents

The PNs executed by the respondent in favor of petitioner Citibank to are then sent to Signature Control for verification of the clients

cover her loans were duly-filled out and signed, including the signature in the PNs, after which, they are returned to the loan pre-

disclosure statement found at the back of the said PNs, in adherence processor, to be forwarded finally to the loan processor. The loan

to the Central Bank requirement to disclose the full finance charges to processor shall book the loan in the General Ledger, indicating therein

a loan granted to borrowers. the client name, loan amount, interest rate, maturity date, and the

corresponding PN number. Since she booked respondents loans

Mr. Tan, then an account officer with the Marketing personally, Ms. Dondoyano testified that she saw the original PNs. In

Department of petitioner Citibank, testified that he dealt directly with 1986, Atty. Fernandez of petitioner Citibank requested her to prepare

respondent; he facilitated the loans; and the PNs, at least in the an accounting of respondents loans, which she did, and which was

second set, were signed by respondent in his presence. [105] presented as Exhibit 120 for the petitioners. The figures from the said

exhibit were culled from the bookings in the General Ledger, a fact

Mr. Pujeda, the officer who was previously in charge of loans which respondents counsel was even willing to stipulate.[107]

and placements, confirmed that the signatures on the PNs were

verified against respondents specimen signature with the bank. [106] Ms. Teresita Glorioso was an Investigation and Reconcilement Clerk

at the Control Department of petitioner Citibank. She was presented

Ms. Cristina Dondoyano, who worked at petitioner Citibank as by petitioner Citibank to expound on the microfilming procedure at the

a loan processor, was responsible for booking respondents bank, since most of the copies of the PNs were retrieved from

loans. Booking the loans means recording it in the General microfilm. Microfilming of the documents are actually done by people

Ledger. She explained the procedure for booking loans, as follows: at the Operations Department. At the end of the day or during the day,
the original copies of all bank documents, not just those pertaining to training of the officers of the bank. She testified on the standard loan

loans, are microfilmed. She refuted the possibility that insertions could application process at petitioner Citibank. According to Ms. Rubio, the

be made in the microfilm because the microfilm is inserted in a account officer or marketing person submits a proposal to grant a loan

cassette; the cassette is placed in the microfilm machine for use; at to an individual or corporation. Petitioner Citibank has a worldwide

the end of the day, the cassette is taken out of the microfilm machine policy that requires a credit committee, composed of a minimum of

and put in a safe vault; and the cassette is returned to the machine three people, which would approve the loan and amount

only the following day for use, until the spool is full. This is the thereof. There can be no instance when only one officer has the power

microfilming procedure followed everyday. When the microfilm spool to approve the loan application. When the loan is approved, the

is already full, the microfilm is developed, then sent to the Control account officer in charge will obtain the corresponding PNs from the

Department, which double checks the contents of the microfilms client. The PNs are sent to the signature verifier who would validate

against the entries in the General Ledger. The Control Department the signatures therein against those appearing in the signature cards

also conducts a random comparison of the contents of the microfilms previously submitted by the client to the bank. The Operations Unit will

with the original documents; a random review of the contents is done check and review the documents, including the PNs, if it is a clean

on every role of microfilm.[108] loan, and securities and deposits, if it is collateralized. The loan is then

recorded in the General Ledger. The Loans and Placements

Ms. Renee Rubio worked for petitioner Citibank for 20 years. She rose Department will not book the loans without the PNs. When the PNs

from the ranks, initially working as a secretary in the Personnel Group; are liquidated, whether they are paid or rolled-over, they are returned

then as a secretary to the Personnel Group Head; a Service Assistant to the client.[109] Ms. Rubio further explained that she was familiar with

with the Marketing Group, in 1972 to 1974, dealing directly with respondents accounts since, while she was still the Head of the Loan

corporate and individual clients who, among other things, secured and Placements Unit, she was asked by Mr. Tan to prepare a list of

loans from petitioner Citibank; the Head of the Collection Group of the respondents outstanding obligations.[110] She thus calculated

Foreign Department in 1974 to 1976; the Head of the Money Transfer respondents outstanding loans, which was sent as an attachment to

Unit in 1976 to 1978; the Head of the Loans and Placements Unit up Mr. Tans letter to respondent, dated 28 September 1979, and

to the early 1980s; and, thereafter, she established operations training presented before the RTC as Exhibits 34-B and 34-C.[111]

for petitioner Citibank in the Asia-Pacific Region responsible for the

Lastly, the exchange of letters between petitioner Citibank and
respondent, as well as the letters sent by other people working for
respondent, had consistently recognized that respondent owed
petitioner Citibank money.
In consideration of the foregoing discussion, this Court finds
that the preponderance of evidence supports the existence of the
respondents loans, in the principal sum of P1,920,000.00, as of 5
September 1979. While it is well-settled that the term preponderance
of evidence should not be wholly dependent on the number of
witnesses, there are certain instances when the number of witnesses
become the determining factor
The preponderance of evidence may be
determined, under certain conditions, by the number
of witnesses testifying to a particular fact or state of
facts. For instance, one or two witnesses may testify
to a given state of facts, and six or seven witnesses
of equal candor, fairness, intelligence, and
truthfulness, and equally well corroborated by all the
remaining evidence, who have no greater interest in
the result of the suit, testify against such state of facts.
Then the preponderance of evidence is determined
by the number of witnesses. (Wilcox vs. Hines, 100
Tenn. 524, 66 Am. St. Rep., 761.) [112]
Best evidence rule
This Court disagrees in the pronouncement made by the
Court of Appeals summarily dismissing the documentary evidence
submitted by petitioners based on its broad and indiscriminate
application of the best evidence rule.
In general, the best evidence rule requires that the highest
available degree of proof must be produced. Accordingly, for
documentary evidence, the contents of a document are best proved
by the production of the document itself, [113] to the exclusion of any
secondary or substitutionary evidence.[114]
The best evidence rule has been made part of the revised
Rules of Court, Rule 130, Section 3, which reads
SEC. 3. Original document must be
produced; exceptions. When the subject of inquiry is
the contents of a document, no evidence shall be
admissible other than the original document itself,
except in the following cases:
(a) When the original has been lost or
destroyed, or cannot be produced in court, without
bad faith on the part of the offeror;
(b) When the original is in the custody or
under the control of the party against whom the
evidence is offered, and the latter fails to produce it
after reasonable notice;
(c) When the original consists of numerous
accounts or other documents which cannot be
examined in court without great loss of time and the
fact sought to be established from them is only the
general result of the whole; and
(d) When the original is a public record in the
custody of a public officer or is recorded in a public
office.

As the afore-quoted provision states, the best evidence rule applies
only when the subject of the inquiry is the contents of the
document. The scope of the rule is more extensively explained thus
documents in which ordinarily no real dispute
arised. This measure is a sensible and progressive
one and deserves universal adoption (post, sec.
1233). Its essential feature is that a copy may be
used unconditionally, if the opponent has been given
an opportunity to inspect it. (Emphasis supplied.)

But even with respect to documentary

evidence, the best evidence rule applies only when
This Court did not violate the best evidence rule when it
the content of such document is the subject of the
inquiry. Where the issue is only as to whether such considered and weighed in evidence the photocopies and microfilm
document was actually executed, or exists, or on the
circumstances relevant to or surrounding its copies of the PNs, MCs, and letters submitted by the petitioners to
execution, the best evidence rule does not apply and
testimonial evidence is admissible (5 Moran, op. cit., establish the existence of respondents loans. The terms or contents
pp. 76-66; 4 Martin, op. cit., p. 78). Any other
substitutionary evidence is likewise admissible of these documents were never the point of contention in the Petition
without need for accounting for the original.
at bar. It was respondents position that the PNs in the first set (with
Thus, when a document is presented to
the exception of PN No. 34534) never existed, while the PNs in the
prove its existence or condition it is offered not as
documentary, but as real, evidence. Parol evidence second set (again, excluding PN No. 34534) were merely executed to
of the fact of execution of the documents is allowed
(Hernaez, et al. vs. McGrath, etc., et al., 91 Phil cover simulated loan transactions. As for the MCs representing the
565). x x x [115]
proceeds of the loans, the respondent either denied receipt of certain

MCs or admitted receipt of the other MCs but for another

In Estrada v. Desierto,[116] this Court had occasion to rule that
purpose.Respondent further admitted the letters she wrote personally
It is true that the Court relied not upon the
original but only copy of the Angara Diary as or through her representatives to Mr. Tan of petitioner Citibank
published in the Philippine Daily Inquirer on February
4-6, 2001. In doing so, the Court, did not, however, acknowledging the loans, except that she claimed that these letters
violate the best evidence rule. Wigmore, in his book
were just meant to keep up the ruse of the simulated loans. Thus,
on evidence, states that:
respondent questioned the documents as to their existence or
Production of the original may be dispensed
with, in the trial courts discretion, whenever in the execution, or when the former is admitted, as to the purpose for which
case in hand the opponent does not bona fide dispute
the contents of the document and no other useful the documents were executed, matters which are, undoubtedly,
purpose will be served by requiring production.24
external to the documents, and which had nothing to do with the
xxxx
contents thereof.
In several Canadian provinces, the principle
of unavailability has been abandoned, for certain
 Alternatively, even if it is granted that the best evidence rule the case, sometime in years 1986-1987. The original MCs were

should apply to the evidence presented by petitioners regarding the subsequently turned over to the Control and Investigation Division of

existence of respondents loans, it should be borne in mind that the petitioner Citibank.[118]

rule admits of the following exceptions under Rule 130, Section 5 of

the revised Rules of Court It was only petitioner FNCB Finance who claimed that they

lost the original copies of the PNs when it moved to a new

SEC. 5. When the original document is
unavailable. When the original document has been office. Citibank did not make a similar contention; instead, it explained
lost or destroyed, or cannot be produced in court, the
offeror, upon proof of its execution or existence and that the original copies of the PNs were returned to the borrower upon
the cause of its unavailability without bad faith on his
liquidation of the loan, either through payment or roll-over. Petitioner
part, may prove its contents by a copy, or by a recital
of its contents in some authentic document, or by the Citibank proffered the excuse that they were still looking for the
testimony of witnesses in the order stated.
documents in their storage or warehouse to explain the delay and

difficulty in the retrieval thereof, but not their absence or loss. The
The execution or existence of the original copies of the
original documents in this case, such as the MCs and letters, were
documents was established through the testimonies of witnesses,
destroyed and, thus, unavailable for presentation before the RTC only
such as Mr. Tan, before whom most of the documents were personally
on 7 October 1987, when a fire broke out on the 7 th floor of the office
executed by respondent. The original PNs also went through the
building of petitioner Citibank. There is no showing that the fire was
whole loan booking system of petitioner Citibank from the account
intentionally set. The fire destroyed relevant documents, not just of the
officer in its Marketing Department, to the pre-processor, to the
present case, but also of other cases, since the 7 th floor housed the
signature verifier, back to the pre-processor, then to the processor for
Control and Investigation Division, in charge of keeping the necessary
booking.[117] The original PNs were seen by Ms. Dondoyano, the
documents for cases in which petitioner Citibank was involved.
processor, who recorded them in the General Ledger. Mr. Pujeda

personally saw the original MCs, proving respondents receipt of the

The foregoing would have been sufficient to allow the
proceeds of her loans from petitioner Citibank, when he helped Attys.
presentation of photocopies or microfilm copies of the PNs, MCs, and
Cleofe and Fernandez, the banks legal counsels, to reconstruct the
letters by the petitioners as secondary evidence to establish the
records of respondents loans. The original MCs were presented to

Atty. Cleofe who used the same during the preliminary investigation of
existence of respondents loans, as an exception to the best evidence Division in CA-G.R. CV No. 15934 (or the Dy case), when there is an

rule. absolute lack of legal basis for doing such.

The impact of the Decision of the Court of Appeals in the Dy case

Although petitioner Citibank and its officer, Mr. Tan, were also involved

In its assailed Decision, the Court of Appeals made the following in the Dy case, that is about the only connection between the Dy case

pronouncement and the one at bar. Not only did the Dy case tackle transactions

between parties other than the parties presently before this Court, but
Besides, We find the declaration and
the transactions are absolutely independent and unrelated to those in
conclusions of this Court in CA-G.R. CV No.
15934 entitled Sps. Dr. Ricardo L. Dy and Rosalind the instant Petition.
O. Dy vs. City Bank, N.A., et al, promulgated on 15
January 1990, as disturbing taking into
consideration the similarities of the fraud,
machinations, and deceits employed by the In the Dy case, Severino Chua Caedo managed to obtain loans from
defendant-appellant Citibank and its Account
Manager Francisco Tan. herein petitioner Citibank amounting to P7,000,000.00, secured to the

Worthy of note is the fact that Our extent of P5,000,000.00 by a Third Party Real Estate Mortgage of the
declarations and conclusions against Citibank and
properties of Caedos aunt, Rosalind Dy. It turned out that Rosalind Dy
the person of Francisco Tan in CA-G.R. CV No.
15934 were affirmed in toto by the Highest Magistrate and her husband were unaware of the said loans and the mortgage of
in a Minute Resolution dated 22 August 1990
entitled Citibank, N.A., vs. Court of Appeals, G.R. their properties. The transactions were carried out exclusively
93350.
between Caedo and Mr. Tan of petitioner Citibank. The RTC found Mr.
As the factual milieu of the present appeal
created reasonable doubts as to whether the nine (9) Tan guilty of fraud for his participation in the questionable
Promissory Notes were indeed executed with
considerations, the doubts, coupled by the findings transactions, essentially because he allowed Caedo to take out the
and conclusions of this Court in CA-G.R. CV No. signature cards, when these should have been signed by the Dy
15934 and the Supreme Court in G.R. No. 93350.
should be construed against herein defendants- spouses personally before him. Although the Dy spouses signatures
appellants Citibank and FNCB Finance.
in the PNs and Third Party Real Estate Mortgage were forged, they

were approved by the signature verifier since the signature cards

What this Court truly finds disturbing is the significance given by the
against which they were compared to were also forged. Neither the
Court of Appeals in its assailed Decision to the Decision[119] of its Third
RTC nor the Court of Appeals, however, categorically declared Mr.
Tan personally responsible for the forgeries, which, in the narration of
the facts, were more likely committed by Caedo.
In the Petition at bar, respondent dealt with Mr. Tan directly, there was
no third party involved who could have perpetrated any fraud or
forgery in her loan transactions. Although respondent attempted to
raise suspicion as to the authenticity of her signatures on certain
documents, these were nothing more than naked allegations with no
corroborating evidence; worse, even her own allegations were replete
with inconsistencies. She could not even establish in what manner or
under what circumstances the fraud or forgery was committed, or how
Mr. Tan could have been directly responsible for the same.
While the Court of Appeals can take judicial notice of the Decision of
its Third Division in the Dy case, it should not have given the said case
much weight when it rendered the assailed Decision, since the former
does not constitute a precedent. The Court of Appeals, in the
challenged Decision, did not apply any legal argument or principle
established in the Dy case but, rather, adopted the findings therein of
wrongdoing or misconduct on the part of herein petitioner Citibank and
Mr. Tan. Any finding of wrongdoing or misconduct as against herein
petitioners should be made based on the factual background and
pieces of evidence submitted in this case, not those in another case.
It is apparent that the Court of Appeals took judicial notice of the Dy
case not as a legal precedent for the present case, but rather as
evidence of similar acts committed by petitioner Citibank and Mr.
Tan. A basic rule of evidence, however, states that, Evidence that one
did or did not do a certain thing at one time is not admissible to prove
that he did or did not do the same or similar thing at another time; but
it may be received to prove a specific intent or knowledge, identity,
plan, system, scheme, habit, custom or usage, and the like. [120] The
rationale for the rule is explained thus
The rule is founded upon reason, public
policy, justice and judicial convenience. The fact that
a person has committed the same or similar acts at
some prior time affords, as a general rule, no logical
guaranty that he committed the act in question. This
is so because, subjectively, a mans mind and even
his modes of life may change; and, objectively, the
conditions under which he may find himself at a given
time may likewise change and thus induce him to act
in a different way. Besides, if evidence of similar acts
are to be invariably admitted, they will give rise to a
multiplicity of collateral issues and will subject the
defendant to surprise as well as confuse the court and
prolong the trial.[121]
The factual backgrounds of the two cases are so different and
unrelated that the Dy case cannot be used to prove specific intent,
knowledge, identity, plan, system, scheme, habit, custom or usage on
the part of petitioner Citibank or its officer, Mr. Tan, to defraud
respondent in the present case.
 (4) That they be liquidated and
IV demandable;
(5) That over neither of them there be any
The liquidation of retention or controversy, commenced by third
respondents persons and communicated in due time to the debtor.
outstanding loans
were valid in so far
as petitioner
Citibank used There is little controversy when it comes to the right of
respondents
savings account petitioner Citibank to compensate respondents outstanding loans with
with the bank and
her money market her deposit account. As already found by this Court, petitioner
placements with
Citibank was the creditor of respondent for her outstanding loans. At
petitioner FNCB
Finance; but illegal the same time, respondent was the creditor of petitioner Citibank, as
and void in so far
as petitioner far as her deposit account was concerned, since bank deposits,
Citibank used
respondents dollar whether fixed, savings, or current, should be considered as simple
accounts with
Citibank-Geneva. loan or mutuum by the depositor to the banking institution. [122] Both

debts consist in sums of money. By June 1979, all of respondents PNs

Savings Account with petitioner Citibank in the second set had matured and became demandable, while

respondents savings account was demandable anytime. Neither was

Compensation is a recognized mode of extinguishing
there any retention or controversy over the PNs and the deposit
obligations. Relevant provisions of the Civil Code provides account commenced by a third person and communicated in due time

to the debtor concerned. Compensation takes place by operation of

Art. 1278. Compensation shall take place
when two persons, in their own right, are creditors and law,[123] therefore, even in the absence of an expressed authority from
debtors of each other.
respondent, petitioner Citibank had the right to effect, on 25 June
Art. 1279. In order that compensation may be
proper, it is necessary; 1979, the partial compensation or off-set of respondents outstanding
(1) That each one of the obligors be bound
principally, and that he be at the same time a principal loans with her deposit account, amounting to P31,079.14.
creditor of the other;
(2) That both debts consist in a sum of
money, or if the things due are consumable, they be Money market placements with FNCB Finance
of the same kind, and also of the same quality if the
latter has been stated;
(3) That the two debts be due;
 Things though are not as simple and as straightforward as The Court of Appeals did not consider these Deeds of

regards to the money market placements and bank account used by Assignment because of petitioners failure to produce the original

petitioner Citibank to complete the compensation or off-set of copies thereof in violation of the best evidence rule. This Court again

respondents outstanding loans, which came from persons other than finds itself in disagreement in the application of the best evidence rule

petitioner Citibank. by the appellate court.

Respondents money market placements were with petitioner To recall, the best evidence rule, in so far as documentary

FNCB Finance, and after several roll-overs, they were ultimately evidence is concerned, requires the presentation of the original copy

covered by PNs No. 20138 and 20139, which, by 3 September 1979, of the document only when the context thereof is the subject of inquiry

the date the check for the proceeds of the said PNs were issued, in the case. Respondent does not question the contents of the Deeds

amounted to P1,022,916.66, inclusive of the principal amounts and of Assignment. While she admitted the existence and execution of the

interests. As to these money market placements, respondent was the Deeds of Assignment, dated 2 March 1978 and 9 March 1978,

creditor and petitioner FNCB Finance the debtor; while, as to the covering PNs No. 8169 and 8167 issued by petitioner FNCB Finance,

outstanding loans, petitioner Citibank was the creditor and respondent she claimed, as defense, that the loans for which the said Deeds were

the debtor. Consequently, legal compensation, under Article 1278 of executed as security, were already paid. She denied ever executing

the Civil Code, would not apply since the first requirement for a valid both Deeds of Assignment, dated 25 August 1978, covering PNs No.

compensation, that each one of the obligors be bound principally, and 20138 and 20139. These are again issues collateral to the contents of

that he be at the same time a principal creditor of the other, was not the documents involved, which could be proven by evidence other

met. than the original copies of the said documents.

What petitioner Citibank actually did was to exercise its rights Moreover, the Deeds of Assignment of the money market

to the proceeds of respondents money market placements with placements with petitioner FNCB Finance were notarized documents,

petitioner FNCB Finance by virtue of the Deeds of Assignment thus, admissible in evidence. Rule 132, Section 30 of the Rules of

executed by respondent in its favor. Court provides that

 SEC. 30. Proof of notarial documents. Every
instrument duly acknowledged or proved and certified which they were executed as security were already paid. And, she
as provided by law, may be presented in evidence
without further proof, the certificate of assailed the Deeds of Assignment, dated 25 August 1978, with
acknowledgement being prima facie evidence of the
nothing more than her bare denial of execution thereof, hardly the
execution of the instrument or document involved.
clear and convincing evidence required to trounce the presumption of
Significant herein is this Courts elucidation in De Jesus v.
due execution of a notarized document.
Court of Appeals,[124] which reads

On the evidentiary value of these documents,

it should be recalled that the notarization of a private Petitioners not only presented the notarized Deeds of Assignment, but
document converts it into a public one and renders it
admissible in court without further proof of its even secured certified literal copies thereof from the National
authenticity (Joson vs. Baltazar, 194 SCRA 114
[1991]). This is so because a public document duly Archives.[127] Mr. Renato Medua, an archivist, working at the Records
executed and entered in the proper registry is
presumed to be valid and genuine until the contrary is Management and Archives Office of the National Library, testified that
shown by clear and convincing proof (Asido vs.
the copies of the Deeds presented before the RTC were certified literal
Guzman, 57 Phil. 652 [1918]; U.S. vs. Enriquez, 1
Phil 241 [1902]; Favor vs. Court of Appeals, 194 copies of those contained in the Notarial Registries of the notary
SCRA 308 [1991]). As such, the party challenging the
recital of the document must prove his claim with clear publics concerned, which were already in the possession of the
and convincing evidence (Diaz vs. Court of Appeals,
145 SCRA 346 [1986]). National Archives.He also explained that he could not bring to the RTC

the Notarial Registries containing the original copies of the Deeds of

The rule on the evidentiary weight that must be accorded a Assignment, because the Department of Justice (DOJ) Circular No.

notarized document is clear and unambiguous. The certificate of 97, dated 8 November 1968, prohibits the bringing of original

acknowledgement in the notarized Deeds of Assignment documents to the courts to prevent the loss of irreplaceable and

constituted prima facie evidence of the execution thereof. Thus, the priceless documents.[128]

burden of refuting this presumption fell on respondent. She could have

presented evidence of any defect or irregularity in the execution of the Accordingly, this Court gives the Deeds of Assignment grave

said documents[125] or raised questions as to the verity of the notary importance in establishing the authority given by the respondent to

publics acknowledgment and certificate in the Deeds. [126] But again, petitioner Citibank to use as security for her loans her money her

respondent admitted executing the Deeds of Assignment, dated 2 market placements with petitioner FNCB Finance, represented by PNs

March 1978 and 9 March 1978, although claiming that the loans for No. 8167 and 8169, later to be rolled-over as PNs No. 20138 and
20139. These Deeds of Assignment constitute the law between the application of the security given by the respondent for her

parties, and the obligations arising therefrom shall have the force of loans. Although the pertinent documents were entitled Deeds of

law between the parties and should be complied with in good Assignment, they were, in reality, more of a pledge by respondent to

faith.[129] Standard clauses in all of the Deeds provide that petitioner Citibank of her credit due from petitioner FNCB Finance by

The ASSIGNOR and the ASSIGNEE hereby virtue of her money market placements with the latter. According to
further agree as follows:
Article 2118 of the Civil Code
xxxx
ART. 2118. If a credit has been pledged
2. In the event the OBLIGATIONS are not
becomes due before it is redeemed, the pledgee may
paid at maturity or upon demand, as the case may be,
collect and receive the amount due. He shall apply
the ASSIGNEE is fully authorized and empowered to
the same to the payment of his claim, and deliver the
collect and receive the PLACEMENT (or so much
surplus, should there be any, to the pledgor.
thereof as may be necessary) and apply the same in
payment of the OBLIGATIONS. Furthermore, the
ASSIGNOR agrees that at any time, and from time to
time, upon request by the ASSIGNEE, the PNs No. 20138 and 20139 matured on 3 September 1979, without
ASSIGNOR will promptly execute and deliver any and
all such further instruments and documents as may them being redeemed by respondent, so that petitioner Citibank
be necessary to effectuate this Assignment.
collected from petitioner FNCB Finance the proceeds thereof, which
xxxx
included the principal amounts and interests earned by the money
5. This Assignment shall be considered as
sufficient authority to FNCB Finance to pay and market placements, amounting to P1,022,916.66, and applied the
deliver the PLACEMENT or so much thereof as may same against respondents outstanding loans, leaving no surplus to be
be necessary to liquidate the OBLIGATIONS, to the
ASSIGNEE in accordance with terms and provisions delivered to respondent.
hereof.[130]

Dollar accounts with Citibank-Geneva

Petitioner Citibank was only acting upon the authority granted to it

under the foregoing Deeds when it finally used the proceeds of PNs
Despite the legal compensation of respondents savings account and
No. 20138 and 20139, paid by petitioner FNCB Finance, to partly pay
the total application of the proceeds of PNs No. 20138 and 20139 to
for respondents outstanding loans. Strictly speaking, it did not effect a
respondents outstanding loans, there still remained a balance
legal compensation or off-set under Article 1278 of the Civil Code, but
of P1,069,847.40. Petitioner Citibank then proceeded to applying
rather, it partly extinguished respondents obligations through the
respondents dollar accounts with Citibank-Geneva against her that is extended to notarized documents, and petitioner Citibank must

remaining loan balance, pursuant to a Declaration of Pledge discharge the burden of proving due execution and authenticity of the

supposedly executed by respondent in its favor. Declaration of Pledge.

Certain principles of private international law should be considered Second, petitioner Citibank was unable to establish the date when the

herein because the property pledged was in the possession of an Declaration of Pledge was actually executed. The photocopy of the

entity in a foreign country, namely, Citibank-Geneva. In the absence Declaration of Pledge submitted by petitioner Citibank before the RTC

of any allegation and evidence presented by petitioners of the specific was undated.[132] It presented only a photocopy of the pledge because

rules and laws governing the constitution of a pledge in Geneva, it already forwarded the original copy thereof to Citibank-Geneva

Switzerland, they will be presumed to be the same as Philippine local when it requested for the remittance of respondents dollar accounts

or domestic laws; this is known as processual presumption. [131] pursuant thereto. Respondent, on the other hand, was able to secure

a copy of the Declaration of Pledge, certified by an officer of Citibank-

Upon closer scrutiny of the Declaration of Pledge, this Court finds the Geneva, which bore the date 24 September 1979. [133] Respondent,

same exceedingly suspicious and irregular. however, presented her passport and plane tickets to prove that she

was out of the country on the said date and could not have signed the

First of all, it escapes this Court why petitioner Citibank took care to pledge. Petitioner Citibank insisted that the pledge was signed before

have the Deeds of Assignment of the PNs notarized, yet left the 24 September 1979, but could not provide an explanation as to how

Declaration of Pledge unnotarized. This Court would think that and why the said date was written on the pledge. Although Mr. Tan

petitioner Citibank would take greater cautionary measures with the testified that the Declaration of Pledge was signed by respondent

preparation and execution of the Declaration of Pledge because it personally before him, he could not give the exact date when the said

involved respondents all present and future fiduciary placements with signing took place. It is important to note that the copy of the

a Citibank branch in another country, specifically, in Geneva, Declaration of Pledge submitted by the respondent to the RTC was

Switzerland. While there is no express legal requirement that the certified by an officer of Citibank-Geneva, which had possession of the

Declaration of Pledge had to be notarized to be effective, even so, it original copy of the pledge. It is dated 24 September 1979, and this

could not enjoy the same prima facie presumption of due execution Court shall abide by the presumption that the written document is truly
dated.[134] Since it is undeniable that respondent was out of the country
on 24 September 1979, then she could not have executed the pledge
on the said date.
Third, the Declaration of Pledge was irregularly filled-out. The pledge
was in a standard printed form. It was constituted in favor of Citibank,
N.A., otherwise referred to therein as the Bank. It should be noted,
however, that in the space which should have named the pledgor, the
name of petitioner Citibank was typewritten, to wit
The pledge right herewith constituted shall secure all
claims which the Bank now has or in the future
acquires against Citibank, N.A., Manila (full name
and address of the Debtor), regardless of the legal
cause or the transaction (for example current
account, securities transactions, collections, credits,
payments, documentary credits and collections)
which gives rise thereto, and including principal, all
contractual and penalty interest, commissions,
charges, and costs.
The pledge, therefore, made no sense, the pledgor and pledgee being
the same entity. Was a mistake made by whoever filled-out the
form? Yes, it could be a possibility. Nonetheless, considering the
value of such a document, the mistake as to a significant detail in the
pledge could only be committed with gross carelessness on the part
of petitioner Citibank, and raised serious doubts as to the authenticity
and due execution of the same. The Declaration of Pledge had passed
through the hands of several bank officers in the country and abroad,
yet, surprisingly and implausibly, no one noticed such a glaring
mistake.
Lastly, respondent denied that it was her signature on the Declaration
of Pledge. She claimed that the signature was a forgery. When a
document is assailed on the basis of forgery, the best evidence rule
applies
Basic is the rule of evidence that when the
subject of inquiry is the contents of a document, no
evidence is admissible other than the original
document itself except in the instances mentioned in
Section 3, Rule 130 of the Revised Rules of Court.
Mere photocopies of documents are inadmissible
pursuant to the best evidence rule. This is especially
true when the issue is that of forgery.
As a rule, forgery cannot be presumed and
must be proved by clear, positive and convincing
evidence and the burden of proof lies on the party
alleging forgery. The best evidence of a forged
signature in an instrument is the instrument itself
reflecting the alleged forged signature. The fact of
forgery can only be established by a comparison
between the alleged forged signature and the
authentic and genuine signature of the person whose
signature is theorized upon to have been forged.
Without the original document containing the alleged
forged signature, one cannot make a definitive
comparison which would establish forgery. A
comparison based on a mere xerox copy or
reproduction of the document under controversy
cannot produce reliable results.[135]
Respondent made several attempts to have the original copy
of the pledge produced before the RTC so as to have it examined by
experts. Yet, despite several Orders by the RTC,[136] petitioner
Citibank failed to comply with the production of the original Declaration cannot effect legal compensation under Article 1278 of the Civil Code

of Pledge. It is admitted that Citibank-Geneva had possession of the since, petitioner Citibank itself admitted that Citibank-Geneva is a

original copy of the pledge. While petitioner Citibank in Manila and its distinct and separate entity. As for the dollar accounts, respondent

branch in Geneva may be separate and distinct entities, they are still was the creditor and Citibank-Geneva is the debtor; and as for the

incontestably related, and between petitioner Citibank and outstanding loans, petitioner Citibank was the creditor and respondent

respondent, the former had more influence and resources to convince was the debtor. The parties in these transactions were evidently not

Citibank-Geneva to return, albeit temporarily, the original Declaration the principal creditor of each other.

of Pledge. Petitioner Citibank did not present any evidence to

convince this Court that it had exerted diligent efforts to secure the Therefore, this Court declares that the remittance of respondents

original copy of the pledge, nor did it proffer the reason why Citibank- dollar accounts from Citibank-Geneva and the application thereof to

Geneva obstinately refused to give it back, when such document her outstanding loans with petitioner Citibank was illegal, and null and

would have been very vital to the case of petitioner Citibank.There is void. Resultantly, petitioner Citibank is obligated to return to

thus no justification to allow the presentation of a mere photocopy of respondent the amount of US$149,632,99 from her Citibank-Geneva

the Declaration of Pledge in lieu of the original, and the photocopy of accounts, or its present equivalent value in Philippine currency; and,

the pledge presented by petitioner Citibank has nil probative at the same time, respondent continues to be obligated to petitioner

value.[137] In addition, even if this Court cannot make a categorical Citibank for the balance of her outstanding loans which, as of 5

finding that respondents signature on the original copy of the pledge September 1979, amounted to P1,069,847.40.
V
was forged, it is persuaded that petitioner Citibank willfully suppressed

the presentation of the original document, and takes into consideration The parties shall
be liable for
the presumption that the evidence willfully suppressed would be interests on their
monetary
adverse to petitioner Citibank if produced.[138]
obligations to each
other, as
determined herein.
Without the Declaration of Pledge, petitioner Citibank had no

authority to demand the remittance of respondents dollar accounts

with Citibank-Geneva and to apply them to her outstanding loans. It


In summary, petitioner Citibank is ordered by this Court to pay
respondent the proceeds of her money market placements,
represented by PNs No. 23356 and 23357, amounting to P318,897.34
and P203,150.00, respectively, earning an interest of 14.5% per
[139]
annum as stipulated in the PNs, beginning 17 March 1977, the
date of the placements.
Petitioner Citibank is also ordered to refund to respondent the
amount of US$149,632.99, or its equivalent in Philippine currency,
which had been remitted from her Citibank-Geneva accounts. These
dollar accounts, consisting of two fiduciary placements and current
accounts with Citibank-Geneva shall continue earning their respective
stipulated interests from 26 October 1979, the date of their remittance
by Citibank-Geneva to petitioner Citibank in Manila and applied
against respondents outstanding loans.
As for respondent, she is ordered to pay petitioner Citibank
the balance of her outstanding loans, which amounted
to P1,069,847.40 as of 5 September 1979. These loans continue to
earn interest, as stipulated in the corresponding PNs, from the time of
their respective maturity dates, since the supposed payment thereof
using respondents dollar accounts from Citibank-Geneva is deemed
illegal, null and void, and, thus, ineffective.
VI
Petitioner Citibank
shall be liable for
damages to
respondent.
Petitioners protest the award by the Court of Appeals of moral
damages, exemplary damages, and attorneys fees in favor of
respondent. They argued that the RTC did not award any damages,
and respondent, in her appeal before the Court of Appeals, did not
raise in issue the absence of such.
While it is true that the general rule is that only errors which have been
stated in the assignment of errors and properly argued in the brief shall
be considered, this Court has also recognized exceptions to the
general rule, wherein it authorized the review of matters, even those
not assigned as errors in the appeal, if the consideration thereof is
necessary in arriving at a just decision of the case, and there is a close
inter-relation between the omitted assignment of error and those
actually assigned and discussed by the appellant. [140] Thus, the Court
of Appeals did not err in awarding the damages when it already made
findings that would justify and support the said award.
Although this Court appreciates the right of petitioner Citibank to effect
legal compensation of respondents local deposits, as well as its right
to the proceeds of PNs No. 20138 and 20139 by virtue of the notarized
Deeds of Assignment, to partly extinguish respondents outstanding
loans, it finds that petitioner Citibank did commit wrong when it failed
to pay and properly account for the proceeds of respondents money

market placements, evidenced by PNs No. 23356 and 23357, and
when it sought the remittance of respondents dollar accounts from
Citibank-Geneva by virtue of a highly-suspect Declaration of Pledge
to be applied to the remaining balance of respondents outstanding
loans. It bears to emphasize that banking is impressed with public
interest and its fiduciary character requires high standards of integrity
and performance.[141] A bank is under the obligation to treat the
accounts of its depositors with meticulous care whether such accounts
consist only of a few hundred pesos or of millions of pesos. [142] The
bank must record every single transaction accurately, down to the last
centavo, and as promptly as possible.[143] Petitioner Citibank evidently
failed to exercise the required degree of care and transparency in its
transactions with respondent, thus, resulting in the wrongful
deprivation of her property.
Respondent had been deprived of substantial amounts of her
investments and deposits for more than two decades. During this span
of years, respondent had found herself in desperate need of the
amounts wrongfully withheld from her. In her testimony[144] before the
RTC, respondent narrated
Q By the way Mrs. Witness will you kindly tell us
again, you said before that you are a
businesswoman, will you tell us again what
are the businesses you are engaged into
[sic]?
A I am engaged in real estate. I am the owner of the
Modesta Village 1 and 2 in San Mateo,
Rizal. I am also the President and Chairman
of the Board of Macador [sic] Co. and
Business Inc. which operates the Macador
[sic] International Palace Hotel. I am also the
President of the Macador [sic] International
Palace Hotel, and also the Treasures Home
Industries, Inc. which I am the Chairman and
president of the Board and also operating
affiliated company in the name of Treasures
Motor Sales engaged in car dealers [sic] like
Delta Motors, we are the dealers of the whole
Northern Luzon and I am the president of the
Disto Company, Ltd., based in Hongkong
licensed in Honkong [sic] and now operating
in Los Angeles, California.
Q What is the business of that Disto Company Ltd.?
A Disto Company, Ltd., is engaged in real estate and
construction.
Q Aside from those businesses are you a member of
any national or community organization for
social and civil activities?
A Yes sir.
Q What are those?
A I am the Vice-President of thes [sic] Subdivision
Association of the Philippines in 1976, I am
also an officer of the Chamber of Real Estate
Business Association; I am also an officer of
the Chatholic [sic] Womens League and I am
also a member of the CMLI, I forgot the
definition.
Q How about any political affiliation or government
position held if any?
A I was also a candidate for Mayo last January 30,
1980.
Q Where?
A In Dagupan City, Pangasinan.
Q What else?

A I also ran as an Assemblywoman last May, 1984, For the mental anguish, serious anxiety, besmirched reputation, moral
Independent party in Regional I, Pangasinan.
shock and social humiliation suffered by the respondent, the award of
Q What happened to your businesses you mentioned
moral damages is but proper. However, this Court reduces the amount
as a result of your failure to recover you [sic]
investments and bank deposits from the thereof to P300,000.00, for the award of moral damages is meant to
defendants?
compensate for the actual injury suffered by the respondent, not to
A They are not all operating, in short, I was hampered
to push through the businesses that I have. enrich her.[145]

A [sic] Of all the businesses and enterprises that you

mentioned what are those that are paralyzed
and what remain inactive? Having failed to exercise more care and prudence than a

private individual in its dealings with respondent, petitioner Citibank

A Of all the company [sic] that I have, only the Disto
Company that is now operating in California. should be liable for exemplary damages, in the amount
Q How about your candidacy as Mayor of Dagupan, of P250,000.00, in accordance with Article 2229 [146] and 2234[147] of
[sic] City, and later as Assemblywoman of
Region I, what happened to this? the Civil Code.

A I won by voting but when election comes on [sic]

the counting I lost and I protested this, it is still
pending and because I dont have financial With the award of exemplary damages, then respondent shall also be
resources I was not able to push through the entitled to an award of attorneys fees.[148] Additionally, attorney's fees
case. I just have it pending in the Comelec.
may be awarded when a party is compelled to litigate or to incur
Q Now, do these things also affect your social and
civic activities? expenses to protect his interest by reason of an unjustified act of the

A Yes sir, definitely. other party.[149] In this case, an award of P200,000.00 attorneys fees

Q How? shall be satisfactory.

AI was embarrassed because being a

businesswoman I would like to inform the In contrast, this Court finds no sufficient basis to award damages to
Honorable Court that I was awarded as the
most outstanding businesswoman of the year petitioners. Respondent was compelled to institute the present case
in 1976 but when this money was not given
back to me I was not able to comply with the in the exercise of her rights and in the protection of her interests. In
commitments that I have promised to these
associations that I am engaged into [sic], sir. fact, although her Complaint before the RTC was not sustained in its
entirety, it did raise meritorious points and on which this Court rules in respondent the said amount, or its equivalent in Philippine currency

her favor. Any injury resulting from the exercise of ones rights using the exchange rate at the time of payment, plus the stipulated

is damnum absque injuria.[150] interest for each of the fiduciary placements and current accounts

involved, beginning 26 October 1979;

IN VIEW OF THE FOREGOING, the instant Petition

is PARTLY GRANTED. The assailed Decision of the Court of Appeals 3. Petitioner Citibank is ORDERED to pay respondent moral

in CA-G.R. No. 51930, dated 26 March 2002, as already modified by damages in the amount of Three Hundred Thousand Pesos

its Resolution, dated 20 November 2002, is hereby AFFIRMED WITH (P300,000.00); exemplary damages in the amount of Two Hundred

MODIFICATION, as follows Fifty Thousand Pesos (P250,000.00); and attorneys fees in the

amount of Two Hundred Thousand Pesos (P200,000.00); and

1. PNs No. 23356 and 23357 are DECLARED subsisting and

outstanding. Petitioner Citibank is ORDERED to return to respondent 4. Respondent is ORDERED to pay petitioner Citibank the

the principal amounts of the said PNs, amounting to Three Hundred balance of her outstanding loans, which, from the respective dates of

Eighteen Thousand Eight Hundred Ninety-Seven Pesos and Thirty- their maturity to 5 September 1979, was computed to be in the sum of

Four Centavos (P318,897.34) and Two Hundred Three Thousand One Million Sixty-Nine Thousand Eight Hundred Forty-Seven Pesos

One Hundred Fifty Pesos (P203,150.00), respectively, plus the and Forty Centavos (P1,069,847.40), inclusive of interest. These

stipulated interest of Fourteen and a half percent (14.5%) per annum, outstanding loans shall continue to earn interest, at the rates

beginning 17 March 1977; stipulated in the corresponding PNs, from 5 September 1979 until

payment thereof.
SO ORDERED.
2. The remittance of One Hundred Forty-Nine Thousand Six

Hundred Thirty Two US Dollars and Ninety-Nine Cents

(US$149,632.99) from respondents Citibank-Geneva accounts to

petitioner Citibank in Manila, and the application of the same against

respondents outstanding loans with the latter, is DECLARED illegal,

null and void. Petitioner Citibank is ORDERED to refund to