Case Digest (G.R. No. 102300)
Facts:
Citibank, N.A. v. Hon. Segundino G. Chua, et al., G.R. No. 102300, March 17, 1993, Supreme Court Second Division, Campos, Jr., J., writing for the Court.Petitioner Citibank, N.A. is a foreign commercial banking corporation doing business in the Philippines. On March 14, 1986 spouses Cresencio and Zenaida Velez (private respondents) filed Civil Case No. CEB-4751 before the Regional Trial Court (RTC) of Cebu, Branch 10, seeking specific performance and damages. They alleged that from September 4, 1985 to March 11, 1986 they availed themselves of an arrangement with petitioner whereby the bank would purchase their checks and issue manager’s checks daily; on March 11, 1986 six checks totalling P3,095,000.00 were allegedly refused by the bank and petitioner later sought to restructure the indebtedness, which led to the dispute.
Petitioner presented a contrary factual account: private respondent Crescencio Velez purportedly deposited unfunded personal checks while obtaining immediate credit and withdrawing manager’s checks that he then placed in other banks, thereby creating the appearance of funded deposits; on March 11, 1986 he allegedly deposited unfunded checks totalling P3,095,000.00, withdrew P3,244,000.00 and absconded. Thereafter, on August 19, 1986 petitioner filed criminal charges (Batas Pambansa Blg. 22 and estafa); the investigating fiscal recommended filing information on April 28, 1988.
Procedurally, petitioner filed its answer on June 13, 1989. Pre-trial was set for March 30, 1990; petitioner filed its pre-trial brief on that date and counsel appeared with a special power of attorney (SPA) by Citibank officer Florencia Tarriela. Private respondents orally moved to declare Citibank in default, arguing that the SPA was not executed by the Board of Directors. Petitioner filed a written opposition and produced another SPA executed by William W. Ferguson, a Citibank vice-president, appointing J.P. Garcia & Associates as attorney-in-fact. The RTC denied the oral motion on April 23, 1990 and reset the pre-trial for May 2, 1990. Petitioner later filed, and on May 23, 1990 lodged, an SPA by Ferguson appointing specific Citibank employees as attorneys-in-fact.
On August 15, 1990 the RTC issued an order declaring petitioner in default for lack of proper representation at the pre-trial, reasoning that corporate powers must be exercised by the board (citing Sections of the Corporation Code) and that the record lacked the requisite board resolution and SEC-approved by-laws. Petitioner’s motion for reconsideration was denied on December 10, 1990. Petitioner then sought relief from the Court of Appeals via a petition for certiorari, prohibition and mandamus; the Court of Appeals dismissed the petition on June 26, 1991, holding (inter alia) that no board resolution appointed the attorney-in-fact, petitioner’s by-laws lacked SEC imprimatur un...(Subscriber-Only)
Issues:
- Is a resolution of the board of directors always necessary to grant authority to an agent to represent a corporation in court?
- Are the by‑laws of a foreign corporation, previously licensed to do business in the Philippines, effective and sufficient to confer authority on its officers to delegate representation without a separate SEC approval of th...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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