Case Digest (G.R. No. 133743)
Facts:
In Citibank, N.A. (formerly First National City Bank) and Investors’ Finance Corporation (FNCB Finance) vs. Modesta R. Sabeniano (G.R. No. 156132, February 6, 2007), respondent Sabeniano maintained various peso and dollar deposit accounts and money market placements with petitioners’ Philippine branches and the Geneva branch of Citibank. Simultaneously, she incurred peso‐denominated loans in Citibank‐Manila that became due by May 1979. Upon her nonpayment, Citibank‐Manila unilaterally applied her deposits and placements—including the remittance of US$149,632.99 from Citibank‐Geneva—to liquidate her obligations. Denying both the existence of any binding pledge and notice of set‐off, Sabeniano filed Civil Case No. 11336 in the Makati RTC seeking recovery of her funds and damages. In its August 24, 1995 Decision, the RTC declared the set‐off of the dollar accounts illegal, ordered their refund with interest, and recognized a peso debt of P1,069,847.40 without additional interest orCase Digest (G.R. No. 133743)
Facts:
- Parties and Procedural History
- Petitioners: Citibank, N.A. (formerly First National City Bank) and Investors’ Finance Corporation doing business as FNCB Finance.
- Respondent: Modesta R. Sabeniano.
- Litigation trail: RTC Decision (Aug. 24, 1995) → CA Decision (Mar. 26, 2002) → CA Resolution (Nov. 20, 2002) → SC Decision (Oct. 16, 2006) → motions for reconsideration.
- Banking Transactions and Dispute
- Respondent’s placements and loans:
- Savings and current accounts with Citibank-Manila.
- Money market placements with FNCB Finance.
- Dollar deposits with Citibank-Geneva.
- Outstanding peso loans at Citibank-Manila totaling ₱1,920,000.00 due May 1979.
- Off-setting by Citibank-Manila:
- Total debt as of Oct. 26, 1979: ₱2,156,940.58.
- Less FNCB placements: (₱1,022,916.66).
- Less Citibank-Manila deposits: (₱31,079.14).
- Less Citibank-Geneva dollar accounts (peso‐equivalent): (₱1,102,944.78).
- Resulting balance: ₱0.00.
- Respondent’s denial: No notice or consent to off-setting; no outstanding indebtedness.
- RTC ruling: Declared set‐off of US$149,632.99 illegal; ordered refund with interest; recognized indebtedness of ₱1,069,847.40; dismissed other claims.
- CA ruling: Affirmed with modifications — declared all contested set‐offs and failure to account, ordered return of various money market placements (including two peso PNs and US$149,632.99), awarded damages and fees.
- SC Decision (Oct. 16, 2006): Partly granted petition; modified CA Decision; clarified liabilities of both parties; denied motions for partial reconsideration.
Issues:
- Authority to Offset
- Can Citibank-Manila legally apply respondent’s Citibank-Geneva deposits against her peso loans without a valid pledge?
- Do the promissory notes’ “Citibank, N.A.” clause extend to all Citibank branches worldwide?
- Validity and Proof of Declaration of Pledge
- Was there a binding pledge of respondent’s dollar accounts in Geneva?
- What is the effect of non-production and forgery allegations?
- Separate Legal Personality of Bank Branches
- Are foreign branches and head office a single juridical entity for purposes of compensation?
- What governing statutes and jurisprudence apply?
- Currency Devaluation Adjustment
- Does Article 1250 of the Civil Code require adjustment for the 1997–1998 peso devaluation?
- What constitutes “extraordinary inflation” and who must prove it?
- Finality and Execution
- Can the SC declare its Decision final and executory on motion?
- Which dispositive provisions govern execution?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)