Citibank v Sebeniano

8/9/2019 Citibank v Sebeniano

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378 SUPREME COURT REPORTS ANNOTATED

Citibank, N.A. (Formerly First National City Bank) vs. Sabeniano

G.R. No. 156132. October 16, 2006.*

CITIBANK, N.A. (Formerly First National City Bank) and INVESTORS FINANCE

CORPORATION, doing business under the name and style of FNCB Finance,petitioners,vs.MODESTA R. SABENIANO, respondent.

Actions; Pleadings and Practice; Forum Shopping; Motions for Extension of Time; The

Petition for Review would constitute the initiatory pleading before the Supreme Court, upon

the timely filing of which, the case before the Court commences, much in the same way a case

is initiated by the filing of a Complaint before the trial courtand, without such a Petition,

there is technically no case before the Court; A Motion for Extension of Time within which to

file a Petition for Review does not serve the same purpose as the Petition for Review itself.

Although it may seem at first glance that respondent was simultaneously seeking recourse

from the Court of Appeals and this Court, a careful and closer scrutiny of the details of the

case at bar would reveal otherwise. 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, respondent failed to submit to this

Court her intended Petition within the reglementary period. Consequently, this Court was

prompted to issue a Resolution, dated 13 November 2002, declaring G.R. No. 152985

terminated, and the therein assailed Court of Appeals Decision final and executory. G.R.

No. 152985, therefore, did not progress and respondents appeal was unperfected. The

Petition for Review would constitute the initiatory pleading before this Court, upon the

timely filing of which, the case before this Court commences; much in the same way a case

is initiated by the filing of a Complaint before the trial court. The Petition for Reviewestablishes the identity of parties, rights or causes of action, and relief sought from this

Court, and without such a Petition, there is technically no case before this Court. The

Motion filed by respondent seeking extension of time within which to file her Petition for

Review does not serve the same purpose as the Petition for Review itself. Such a Motion

merely presents the important dates and the justification for the additional time requested

for, but it does

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*FIRST DIVISION.

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not go into the details of the appealed case. Without any particular idea as to the

assignments of error or the relief respondent intended to seek from this Court, in light of

her failure to file her Petition for Review, there is actually no second case involving the same

parties, rights or causes of action, and relief sought, as that in CA-G.R. CV No. 51930.

Same; Same; Same; Certification Against Forum Shopping;Contents; The Certification

against Forum Shopping is required to be attached to the initiatory pleading.It should also

be noted that the Certification against Forum Shopping is required to be attached to theinitiatory pleading, which, in G.R. No. 152985, should have been respondents Petition for

Review. It is in that Certification wherein respondent certifies, under oath, that: (a) she has

not commenced any action or filed any claim involving the same issues in any court,

tribunal or quasi-judicial agency and, to the best of her knowledge, no such other action or

claim is pending therein; (b) if there is such other pending action or claim, that she is
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presenting a complete statement of the present status thereof; and (c) if she should

thereafter learn that the same or similar action or claim has been filed or is pending, she

shall report that fact within five days therefrom to this Court. Without her Petition for

Review, respondent had no obligation to execute and submit the foregoing Certification

against Forum Shopping. Thus, respondent did not violate Rule 7, Section 5 of the Revised

Rules of Court; neither did she mislead this Court as to the pendency of another similar

case.

Appeals; Findings of fact of the Court of Appeals are conclusive upon the Supreme

Court; Exceptions.It is already a well-settled rule that the jurisdiction of this Court in

cases brought before it from the Court of Appeals by virtue of Rule 45 of the Revised Rules

of Court is limited to reviewing errors of law. Findings of fact of the Court of Appeals are

conclusive upon this Court. There are, however, recognized exceptions to the foregoing rule,

namely: (1) when the findings are grounded entirely on speculation, surmises, or

conjectures; (2) when the interference made is manifestly mistaken, absurd, or impossible;

(3) when there is grave abuse of discretion; (4) when the judgment is based on amisapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making

its findings, the Court of Appeals went beyond the issues of the case, or its findings are

contrary to the admissions of both the appellant and the

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SUPREME COURT REPORTS ANNOTATED


appellee; (7) when the findings are contrary to those of the trial court; (8) when the

findings are conclusions without citation of specific evidence on which they are based; (9)

when the facts set forth in the petition as well as in the petitioners main and reply briefs

are not disputed by the respondent; and (10) when the findings of fact are premised on the

supposed absence of evidence and contradicted by the evidence on record.

Judges; That the trial court judge who decided a case 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.What

deserves stressing is that, in this jurisdiction, there exists a disputable presumption that

the RTC Decision was rendered by the judge in the regular performance of his official

duties. While the said presumption is only disputable, it is satisfactory unless contradicted

or overcame by other evidence. Encompassed in this presumption of regularity is thepresumption 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.

Evidence; Admissions; Documentary Evidence; Promissory Notes; By the admission of

the genuineness and due execution of an instrument is meant that the party whose signature

it bears admits that he signed it or that it was signed by another for him with his authority,

that at the time it was signed it was in words and figures exactly as set out in the pleading of

the party relying on it, that the document was delivered, and that any formal requisites

required by law, are waived by him; The effect of an admission is such that in the case of a

promissory note a prima facie case is made for the plaintiff which dispenses with the

necessity of evidence on his part and entitles him to a judgment on the pleadings unless a

special defense of new matter, such as payment, is interposed by the defendant.Petitioner

Citibank did not deny the existence nor questioned the authenticity of PNs No. 23356 and


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23357 it issued in favor of respondent for her money market placements. In fact, it admitted

the genuineness and due execution of the said PNs, but qualified that they were no longer

outstanding. InHibberd v. Rohde and McMillian, 32 Phil. 476, this

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Court delineated the consequences of such an admissionBy the admission of the

genuineness and due execution of an instrument, as provided in this section, is meant that

the party whose signature it bears admits that he signed it or that it was signed by another

for him with his authority; that at the time it was signed it was in words and figures exactly

as set out in the pleading of the party relying upon it; that the document was delivered; and

that any formal requisites required by law, such as a seal, an acknowledgment, or revenue

stamp, which it lacks, are waived by him. Hence, such defenses as that the signature is a

forgery (Puritan Mfg. Co. vs. Toti & Gradi, 14 N. M., 425;Cox vs. Northwestern Stage Co., 1Idaho, 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, 137 Mich., 441) or of a

corporation (Merchant vs. International Banking Corporation, 6 Phil Rep., 314;Wanita vs.

Rollins, 75 Miss., 253;Barnes vs. Spencer & Barnes Co., 162 Mich., 509); or that, in the case

of the latter, that the corporation was authorized under its charter to sign the instrument

(Merchant vs. International Banking Corporation,supra); or that the party charged signed

the instrument in some other capacity than that alleged in the pleading setting it out

(Payne vs. National Bank, 16 Kan., 147); or that it was never delivered (Hunt vs. Weir, 29

Ill., 83;Elbring vs. Mullen, 4 Idaho, 199;Thorp vs. Keokuk Coal Co., 48 N.Y., 253;Fire

Association of Philadelphia vs. Ruby, 60 Neb., 216) are cut off by the admission of its

genuineness and due execution. The effect of the admission is such that in the case of a

promissory note aprima faciecase is made for the plaintiff which dispenses with the

necessity of evidence on his part and entitles him to a judgment 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, 14 Phil.

Rep., 222;Banco Espaol-Filipino vs. McKay & Zoeller, 27 Phil. Rep., 183). x x x

Same; Obligations and Contracts; Payments; As a general rule, one who pleads paymenthas the burden of proving iteven where the plaintiff must allege non-payment, the general

rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff

to prove non-payment.Since the genuineness and due execution of

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PNs No. 23356 and 23357 are uncontested, respondent was able to establishprima

faciethat petitioner Citibank is liable to her for the amounts stated therein. The assertion

of petitioner Citibank of payment of the said PNs is an affirmative allegation of a newmatter, the burden of proof as to such resting on petitioner Citibank. Respondent having

proved the existence of the obligation, the burden of proof was upon petitioner Citibank to

show that it had been discharged. It has already been established by this Court thatAs a

general rule, one who pleads payment has the burden of proving it. Even where the plaintiff

must allege non-payment, the general rule is that the burden rests on the defendant to


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prove payment, rather than on the plaintiff to prove non-payment. The debtor has the

burden of showing with legal certainty that the obligation has been discharged by payment.

When the existence of a debt is fully established by the evidence contained in the record, the

burden of proving that it has been extinguished by payment devolves upon the debtor who

offers such defense to the claim of the creditor. Where the debtor introduces some evidence

of payment, the burden of going forward with the evidenceas distinct from the general

burden of proofshifts to the creditor, who is then under the duty of producing some

evidence of non-payment.

Same; Witnesses; Taking into consideration the substantial length of time between the

transactions and the witnesses testimonies, as well as the undeniable fact that bank officers

deal with multiple clients and process numerous transactions during their tenure, the Court

is reluctant to give much weight to such bank officials testimonies regarding the payment of

promissory notes and the use of the proceeds thereof for opening time deposit accountsthe

Court finds it implausible that they should remember, after all these years, the particular

transaction with respondent involving her promissory notes and her time deposit accounts.Before anything else, it should be noted that when Mr. Pujedas testimony before the RTC

was made on 12 March 1990 and Mr. Tans deposition in Hong Kong was conducted on 3

September 1990, more than a decade had passed from the time the transactions they were

testifying on took place. This Court had previously recognized the frailty and unreliability

of human memory with regards to figures after the lapse of five years. Taking into

consideration the substantial length of time between the transactions and the witnesses

testimonies, as well as the undeniable fact that bank officers deal with multiple clients and

process

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numerous transactions during their tenure, this Court is reluctant to give much weight

to the testimonies of Mr. Pujeda and Mr. Tan regarding the payment of PNs No. 23356 and

23357 and the use by respondent of the proceeds thereof for opening TD accounts. This

Court finds it implausible that they should remember, after all these years, this particular

transaction with respondent involving her PNs No. 23356 and 23357 and TD accounts. Both

witnesses did not give any reason as to why, from among all the clients they had dealt with

and all the transactions they had processed as officers of petitioner Citibank, they speciallyremembered respondent and her PNs No. 23356 and 23357. Their testimonies likewise

lacked details on the circumstances surrounding 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, mode of payment, and the manner and context by which respondent relayed her

instructions to the officers of petitioner Citibank to use the proceeds of her two PNs in

opening the TD accounts.

Same; Preponderance of Evidence; Words and Phrases; Preponderant evidence means

that, as a whole, the evidence adduced by one side outweighs that of the adverse party.

After going through the testimonial and documentary evidence presented by both sides to

this case, it is this Courts assessment that respondent did indeed have outstanding loans

with petitioner Citibank at the time it effected the off-set or compensation on 25 July 1979

(using respondents savings deposit with petitioner Citibank), 5 September 1979 (using the

proceeds of respondents money market placements with petitioner FNCB Finance) and 26

October 1979 (using respondents dollar accounts remitted from Citibank-Geneva). The

totality of petitioners evidence as to the existence of the said loans preponderates over


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respondents. Preponderant evidence means that, as a whole, the evidence adduced by one

side outweighs that of the adverse party.

Banks and Banking; Checks; Managers Checks (MCs) are drawn by the banks

manager upon the bank itself and regarded to be as good as the money it represents.It

bears to emphasize that the proceeds of the loans were paid to respondent in MCs, with the

respondent specifically named as payee. MCs checks are drawn by the banks manager upon

the bank itself and regarded to be as good

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as the money it represents. Moreover, the MCs were crossed checks, with the words

Payees Account Only.

Same; Same; Crossed Checks; A crossed check cannot be presented to the drawee bank

for payment in cashthe check can only be deposited with the payees bank which, in turn,must present it for payment against the drawee bank in the course of normal banking hours;

The crossed check can only be deposited and the drawee bank may only pay to another bank

in the payees or indorsers account.In general, a crossed check cannot be presented to the

drawee bank for payment in cash. Instead, the check can only be deposited with the payees

bank which, in turn, must present it for payment against the drawee bank in the course of

normal banking hours. The crossed check cannot be presented for payment, but it can only

be deposited and the drawee bank may only pay to another bank in the payees or indorsers

account. The effect of crossing a check was described by this Court inPhilippine

Commercial International Bank v. Court of Appeals, 350 SCRA 446 (2001)[T]he crossing

of a check with the phrase Payees Account Only is a warning that the check should be

deposited in the account of the payee. Thus, it is the duty of the collecting bank PCI Bank to

ascertain that the check be deposited in payees account only. It is bound to scrutinize the

check and to know its depositors before it can make the clearing indorsement all prior

indorsements and/or lack of indorsement guaranteed.

Same; Same; Same; Presumptions; Given that a check is more than just an instrument

of credit used in commercial transactions for it also serves as a receipt or evidence for the

drawee bank of the cancellation of the said check due to payment, then, the possession by the

drawee bank of the said Managers Checks (MCs), duly stamped Paid gives rise to the

presumption that the said Managers Checks (MCs) were already paid out to the intendedpayee.The crossed MCs presented by petitioner Bank were indeed deposited in several

different bank accounts and cleared by the Clearing Office of the Central Bank of the

Philippines, as evidenced by the stamp marks and notations on the said checks. The crossed

MCs are already in the possession of petitioner Citibank, the drawee bank, which was

ultimately responsible for the payment of the amount stated in the checks. Given that a

check is more than just an instrument of credit used in commercial transactions for it also

serves as a receipt or evidence for the drawee bank of the cancellation of the said check

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5Citibank, N.A. (Formerly First National City Bank) vs. Sabeniano

due to payment, then, the possession by petitioner Citibank of the said MCs, duly

stamped Paid gives rise to the presumption that the said MCs were already paid out to the

intended payee, who was in this case, the respondent.


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Same; Same; Same; Same; It is presumed that private transactions have been fair and

regular, and that the ordinary course of business has been followed.This Court finds

applicable herein the presumptions that private transactions have been fair and regular,

and that the ordinary course of business has been followed. There is no question that the

loan transaction between petitioner Citibank and the respondent is a private transaction.

The transactions revolving around the crossed MCsfrom their issuance by petitioner

Citibank to respondent as payment of the proceeds of her loans; to its deposit in

respondents accounts with several different banks; to the clearing of the MCs by an

independent clearing house; and finally, to the payment of the MCs by petitioner Citibank

as the drawee bank of the said checksare all private transactions which shall be

presumed to have been fair and regular to all the parties concerned. In addition, the banks

involved in the foregoing transactions are also presumed to have followed the ordinary

course of business in the acceptance of the crossed MCs for deposit in respondents

accounts, submitting them for clearing, and their eventual payment and cancellation.

Same; Same; Same; Same; Where checks crossed for payees account only were actuallydeposited, cleared, and paid, then the presumption would be that the said checks were

properly deposited to the account of the payee, who was clearly named as such in the checks;

The mere fact that the Managers Checks (MCs) do not bear the payees signature at the back

does not negate deposit thereof in her account.Respondent denied ever receiving MCs No.

220701 and 226467. However, considering that the said checks were crossed for payees

account only, and that they were actually deposited, cleared, and paid, then the

presumption would be that the said checks were properly deposited to the account of

respondent, who was clearly named the payee in the checks. Respondents bare allegations

that she did not receive the two checks fail to convince this Court, for to sustain her, would

be for this Court to conclude that an irregularity had occurred somewhere from the time of

the issuance of the said checks, to their deposit, clearance, and payment, and which would

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have involved not only petitioner Citibank, but also BPI, which accepted the checks for

deposit, and the Central Bank of the Philippines, which cleared the checks. It falls upon the

respondent to overcome or dispute the presumption that the crossed checks were issued,

accepted for deposit, cleared, and paid for by the banks involved following the ordinarycourse of their business. The mere fact that MCs No. 220701 and 226467 do not bear

respondents signature at the back does not negate deposit thereof in her account. The

liability for the lack of indorsement on the MCs no longer fall on petitioner Citibank, but on

the bank who received the same for deposit, in this case, BPI Cubao Branch. Once again, it

must be noted that the MCs were crossed, for payees account only, and the 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 verify whether it was receiving the crossed MCs in accordance with the instructions

on the face thereof. If, indeed, the MCs were deposited in accounts other than respondents,

then the respondent would have a cause of action against BPI.

Same; Same; Same; A check, whether a managers 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.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


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was merely to acknowledge the delivery of the checks to the possession of the bank, but not

yet of payment. 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. InPhilippine Airlines, Inc. v. Court of Appeals, 181

SCRA 557 (1990), 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 managers 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

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Citibank, N.A. (Formerly First National City Bank) vs. Sabenianodoes 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).

Same; Loans; Words and Phrases; Booking the loan means recording it in the General

Ledger.Ms. Cristina Dondoyano, who worked at petitioner Citibank as a loan processor,

was responsible for booking respondents loans. Booking the loans means recording it in the

General Ledger. She explained the procedure for booking loans, as follows: The account

officer, in the Marketing Department, deals directly with the clients who wish to borrow

money from petitioner Citibank. The Marketing Department will forward a loan booking

checklist, together with the borrowing clients PNs and other supporting documents, to the

loan pre-processor, who will check whether the details in the loan booking checklist are the

same as those in the PNs. The documents are then sent to Signature Control for verification

of the clients signature in the PNs, after which, they are returned to the loan pre-processor,

to be forwarded finally to the loan processor. The loan processor shall book the loan in the

General Ledger, indicating therein the client name, loan amount, interest rate, maturity

date, and the corresponding PN number. Since she booked respondents loans personally,

Ms. Dondoyano testified that she saw the original PNs. In 1986, Atty. Fernandez of

petitioner Citibank requested her to prepare an accounting of respondents loans, which she

did, and which was presented as Exhibit 120 for the petitioners. The figures from the saidexhibit were culled from the bookings in the General Ledger, a fact which respondents

counsel was even willing to stipulate.

Evidence; Preponderance of Evidence; Words and Phrases; 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 becomes the determining

factor.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 factorThe preponderance of evidence may be determined, under certain

conditions, by the number of witnesses testifying to a particular fact or

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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.)

Same; Best Evidence Rule; Words and Phrases; In general, the best evidence rule

requires that the highest available degree of proof must be produced, and, for documentary

evidence, the contents of a document are best proved by the production of the document itself,

to the exclusion of any secondary or substitutionary evidence.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, to the exclusion of any secondary or substitutionary evidence. The best

evidence rule has been made part of the revised Rules of Court, Rule 130, Section 3, which

readsSEC. 3.Original document must be produced; exceptions.When the subject ofinquiry 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.

Same; Same; Even with respect to documentary evidence, the best evidence rule applies

only when the content of such document is the subject of the inquiry.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 thusBut

even with respect to documentary evidence, the best evidence rule applies only when

thecontentof such document is the subject of the inquiry. Where the issue is only as to

whether such

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document was actually executed, or exists, or on the circumstances relevant to or

surrounding its execution, the best evidence rule does not apply and testimonial evidence is

admissible (5 Moran, op. cit., pp. 76-66; 4 Martin, op. cit., p. 78). Any other substitutionary

evidence is likewise admissible without need for accounting for the original. Thus, when a

document is presented to prove its existence or condition it is offered not as documentary,

but as real, evidence. Parol evidence of the fact of execution of the documents is allowed

(Hernaez, et al. vs. McGrath, etc., et al., 91 Phil 565). x x x

Same; A basic rule of evidence 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.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


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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. The rationale for the rule is explained thusThe 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 underwhich he may find himself at a given time may likewise change and thus induce him to act

in a

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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.

Banks and Banking; Compensation; Compensation takes place by operation of law.

There is little controversy when it comes to the right of petitioner Citibank to compensate

respondents outstanding loans with her deposit account. As already found by this Court,

petitioner Citibank was the creditor of respondent for her outstanding loans. At the same

time, respondent was the creditor of petitioner Citibank, as far as her deposit account was

concerned, since bank deposits, whether fixed, savings, or current, should be considered as

simple loan ormutuumby the depositor to the banking institution. Both debts consist in

sums of money. By June 1979, all of respondents PNs in the second set had matured and

became demandable, while respondents savings account was demandable anytime. Neither

was there any retention or controversy over the PNs and the deposit account commenced bya third person and communicated in due time to the debtor concerned. Compensation takes

place by operation of law, therefore, even in the absence of an expressed authority from

respondent, petitioner Citibank had the right to effect, on 25 June 1979, the partial

compensation or off-set of respondents outstanding loans with her deposit account,

amounting to P31,079.14.

Evidence; Notarial Law; On the evidentiary value of notarized documents, it should be

recalled that the notarization of a private document converts it into a public one and renders

it admissible in court without further proof of its authenticity.The Deeds of Assignment of

the money market placements with petitioner FNCB Finance were notarized documents,

thus, admissible in evidence. Rule 132, Section 30 of the Rules of Court provides that

SEC. 30.Proof of notarial documents.Every instrument duly acknowledged or proved and

certified as provided by law, may be presented in evidence without further proof, the

certificate of acknowledgement beingprima facieevidence of the execution of the

instrument or document involved. Significant herein is this Courts elucidation inDe Jesus

v. Court of Appeals, 217 SCRA 307 (1993), which readsOn the evidentiary value of these


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documents, it should be recalled that the notarization of a private document converts it into

a public

391

VOL. 504, OCTOBER 16, 2006 39

1


one and renders it admissible in court without further proof of its authenticity (Joson

vs. Baltazar, 194 SCRA 114 [1991]). This is so because a public document duly executed and

entered in the proper registry is presumed to be valid and genuine until the contrary is

shown by clear and convincing proof (Asido vs. Guzman, 57 Phil. 652 [1918];U.S. vs.

Enriquez, 1 Phil. 241 [1902];Favor vs. Court of Appeals, 194 SCRA 308 [1991]). As such, the

party challenging the recital of the document must prove his claim with clear and

convincing evidence (Diaz vs. Court of Appeals, 145 SCRA 346 [1986]).

Same; Same; The certificate of acknowledgment in notarized Deeds of Assignment

constitutes prima facie evidence of the execution thereof.The rule on the evidentiary weightthat must be accorded a notarized document is clear and unambiguous. The certificate of

acknowledgement in the notarized Deeds of Assignment constitutedprima facieevidence of

the execution thereof. Thus, the burden of refuting this presumption fell on respondent. She

could have presented evidence of any defect or irregularity in the execution of the said

documents or raised questions as to the verity of the notary publics acknowledgment and

certificate in the Deeds. But again, respondent admitted executing the Deeds of

Assignment, dated 2 March 1978 and 9 March 1978, although claiming that the loans for

which they were executed as security were already paid. And, she assailed the Deeds of

Assignment, dated 25 August 1978, with nothing more than her bare denial of execution

thereof, hardly the clear and convincing evidence required to trounce the presumption of

due execution of a notarized document.

Same; Pledge; Although the pertinent documents were entitled Deeds of Assignment,

they were, in reality, more of a pledge.Petitioner Citibank was only acting upon the

authority granted to it under the foregoing Deeds when it finally used the proceeds of PNs

No. 20138 and 20139, paid by petitioner FNCB Finance, to partly pay for respondents

outstanding loans. Strictly speaking, it did not effect a legal compensation or off-set under

Article 1278 of the Civil Code, but rather, it partly extinguished respondents obligations

through the application of the security given by the respondent for her loans. Although the

pertinent documents were entitled Deeds of Assignment, they were, in reality, more of apledge by respondent to petitioner Citibank of her credit due from petitioner FNCB Finance

by virtue of her money market placements with the latter. According

392

3

92



to Article 2118 of the Civil CodeART. 2118. If a credit has been pledged becomes due

before it is redeemed, the pledgee may collect and receive the amount due. He shall apply

the same to the payment of his claim, and deliver the surplus, should there be any, to the

pledgor.Same; Same; Conflict of Laws; Processual Presumptions;Words and Phrases; In the

absence of any allegation and evidence presented of the specific rules and laws governing the

constitution of a pledge in Geneva, Switzerland, they will be presumed to be the same as

Philippine local or domestic lawsthis is known as processual presumption.Certain

principles of private international law should be considered herein because the property


11/72

pledged was in the possession of an entity in a foreign country, namely, Citibank-Geneva. In

the absence of any allegation and evidence presented by petitioners of the specific rules and

laws governing the constitution of a pledge in Geneva, Switzerland, they will be presumed

to be the same as Philippine local or domestic laws; this is known as processual

presumption.

Same; Best Evidence Rule; Forgery; When a document is assailed on the basis of forgery,

the best evidence rule applies;Without the original document containing the alleged forged

signature, one cannot make a definitive comparison which would establish forgerya

comparison based on a mere xerox copy or reproduction of the document under controversy

cannot produce reliable results.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 appliesBasic 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 inadmissiblepursuant 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

393

VOL. 504, OCTOBER 16, 2006 39

3


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.

Same; Presumptions; It is presumed that evidence willfully suppressed by a party would

be adverse to said party if the evidence is produced.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, petitioner Citibank failed to comply with

the production of the original Declaration of Pledge. It is admitted that Citibank-Genevahad possession of the original copy of the pledge. While petitioner Citibank in Manila and

its branch in Geneva may be separate and distinct entities, they are still incontestably

related, and between petitioner Citibank and respondent, the former had more influence

and resources to convince Citibank-Geneva to return, albeit temporarily, the original

Declaration of Pledge. Petitioner Citibank did not present any evidence to convince this

Court that it had exerted diligent efforts to secure the original copy of the pledge, nor did it

proffer the reason why Citibank-Geneva obstinately refused to give it back, when such

document would have been very vital to the case of petitioner Citibank. There is thus no

justification to allow the presentation of a mere photocopy of the Declaration of Pledge in

lieu of the original, and the photocopy of the pledge presented by petitioner Citibank has nil

probative value. In addition, even if this Court cannot make a categorical finding that

respondents signature on the original copy of the pledge was forged, it is persuaded that

petitioner Citibank willfully suppressed the presentation of the original document, and

takes into consideration the presumption that the evidence willfully suppressed would be

adverse to petitioner Citibank if produced.


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Appeals; Review of matters, even those not assigned as errors in the appeal, may be

authorized if the consideration thereof is necessary in arriving at a just decision of the case,

and there is a close interrelation between the omitted assignment of error and those actually

assigned and discussed by the appellant.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 consid-

394

3

94



ered, 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 interrelation between the omitted assignment of error and those actually assigned and

discussed by the appellant. Thus, the Court of Appeals did not err in awarding the damageswhen it already made findings that would justify and support the said award.

Banks and Banking; Banking is impressed with public interest and its fiduciary

character requires high standards of integrity and performancea 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.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. 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. The bank must record every single transaction accurately, down to the last centavo,

and as promptly as possible. Petitioner Citibank evidently failed to exercise the required

degree of care and transparency in its transactions with respondent, thus, resulting in thewrongful deprivation of her property.

Damages; The award of moral damages is meant to compensate for the actual injury

suffered by a party, not to enrich her.For the mental anguish, serious anxiety, besmirched

reputation, moral shock and social humiliation suffered by the respondent, the award of

moral damages is but proper. However, this Court reduces the amount thereof to

P300,000.00, for the award of moral damages is

395

VOL. 504, OCTOBER 16, 2006 39

5

Citibank, N.A. (Formerly First National City Bank) vs. Sabenianomeant to compensate for the actual injury suffered by the respondent, not to enrich her.

PETITION for review on certiorari of the decision and resolution of the Court of

Appeals.

The facts are stated in the opinion of the Court.

Agcaoili & Associatesfor petitioners.


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Angara, Abello, Concepcion, Regala & Cruzco-counsel for petitioners.

Moises R. Tolentino, Jr.for respondent.

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review onCertiorari,1under Rule 45 of the Revised

Rules of Court, of the Decision2of the Court of Appeals in CA-G.R. CV No. 51930,

dated 26 March 2002, and the Resolution,3dated 20 November 2002, of the same

court which, although modifying its earlier Decision, still denied for the most part

the Motion for Reconsideration of herein petitioners.

Petitioner Citibank, N.A. (formerly known as the First National City Bank) is a

banking corporation duly authorized and existing under the laws of the United

States of America and licensed to do commercial banking activities and perform

trust functions in the Philippines.Petitioner Investors Finance Corporation, which did business under the name

and style of FNCB Finance, was an affiliate company of petitioner Citibank,

specifically handling money market placements for its clients. It is now, by virtue

_______________

1Rollo, pp. 165-325.

2Penned by Associate Justice Andres B. Reyes, Jr. with Associate Justices Conrado M. Vasquez, Jr. and

Amelita G. Tolentino, concurring;Id., at pp. 327-366.

3Id., at pp. 368-374.



of a merger, doing business as part of its successor-in-interest, BPI Card Finance

Corporation. However, so as to consistently establish its identity in the Petition at

bar, the said petitioner shall still be referred to herein as FNCB Finance.4

Respondent Modesta R. Sabeniano was a client of both petitioners Citibank and

FNCB Finance. Regrettably, the business relations among the parties subsequently

went awry.

On 8 August 1985, respondent filed a Complaint5

against petitioners, docketed asCivil Case No. 11336, before the Regional Trial Court (RTC) of Makati City.

Respondent claimed to have 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 money market placements despite her repeated

demands, thus, compelling respondent to file Civil Case No. 11336 against

petitioners for Accounting, Sum of Money and Damages. Respondent eventuallyfiled an Amended Complaint6on 9 October 1985 to include additional claims to

deposits and money market placements inadvertently left out from her original

Complaint.

In their joint Answer7and Answer to Amended Complaint,8filed on 12 September

1985 and 6 November 1985, respectively, petitioners admitted that respondent had
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deposits and money market placements with them, including dollar accounts in the

Citibank branch in Geneva, Switzerland (Citibank-Geneva). Petitioners further

alleged that the respondent

_______________

4TSN, Deposition of Mr. Francisco Tan, 3 September 1990, pp. 9-10.

5Records, Vol. I, pp. 1-8.

6Id., at pp. 148-157.

7Id., at pp. 40-51.

8Id., at pp. 208-227.

397

VOL. 504, OCTOBER 16, 2006 397


later obtained several loans from petitioner Citibank, for which she executed

Promissory Notes (PNs), and secured by (a) a Declaration of Pledge of her dollaraccounts in Citibank-Geneva, and (b) Deeds of Assignment of her money market

placements with petitioner FNCB Finance. When respondent failed to pay her loans

despite repeated demands by petitioner Citibank, the latter exercised its right to off-

set or compensate respondents outstanding loans with her deposits and money

market placements, pursuant to the Declaration of Pledge and the Deeds of

Assignment executed by respondent in its favor. Petitioner Citibank supposedly

informed respondent Sabeniano of the foregoing compensation through letters,

dated 28 September 1979 and 31 October 1979. Petitioners were therefore surprised

when six years later, in 1985, respondent and her counsel made repeated requestsfor the withdrawal of respondents deposits and money market placements with

petitioner Citibank, including her dollar accounts with Citibank-Geneva and her

money market placements with petitioner FNCB Finance. Thus, petitioners prayed

for the dismissal of the Complaint and for the award of actual, moral, and

exemplary damages, and attorneys fees.

When the parties failed to reach a compromise during the pre-trial hearing,9trial

proper ensued and the parties proceeded with the presentation of their respective

evidence. Ten years after the filing of the Complaint on 8 August 1985, a

Decision10was finally rendered in Civil Case No. 11336 on 24 August 1995 by the

fourth Judge11who handled the said case,

_______________

9Order, dated 11 December 1985, penned by Judge Ansberto P. Paredes, Records, Vol. I, p. 346.

10Penned by Judge Manuel D. Victorio, Records, Vol. III, pp. 1607-1621.

11Civil Case No. 11336 was raffled and re-reffled to four different Judges of the Makati RTC before it

was finally resolved. It was originally raffled to Makati RTC, Branch 140, presided by Judge Ansberto P.

Paredes. On 4 February 1987, before the termination of the re-direct examination of herein respondent

(plaintiff before the

398



Judge Manuel D. Victorio, the dispositive portion of which reads

WHEREFORE, in view of all the foregoing, decision is hereby rendered as follows:
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(1) Declaring as illegal, null and void the set-off effected by the defendant Bank

[petitioner Citibank] of plaintiffs [respondent Sabeniano] dollar deposit with Citibank,

Switzerland, in the amount of US$149,632.99, and ordering the said defendant [petitioner

Citibank] to refund the said amount to the plaintiff 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) 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 set-off 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.

_______________

RTC), the case was transferred to Makati RTC, Branch 57, presided by Judge Francisco X. Velez, for

reasons not disclosed in the Records. Judge Velez was able to try and hear the case until the presentation

of the evidence by herein petitioners (defendants before the RTC). Respondent again took the stand to

present rebuttal evidence, but even before she could finish her testimony, Judge Velez inhibited himself

upon petitioners motion (Order, dated 10 April 1992, penned by Judge Francisco X. Velez, Records, Vol.

11, p. 1085). The case was transferred to Makati RTC, Branch 141, presided by Judge Marcelino F.

Bautista, Jr. For reasons not disclosed in the Records, Judge Manuel D. Victorio took over Makati RTC,

Branch 141. After the parties submitted their respective Memoranda, Judge Victorio declared the case

submitted for decision (Order, dated 9 December 1994, penned by Judge Manuel D. Victorio, Records, Vol.

III, p. 1602). Judge Victorio rendered his Decision in Civil Case No. 11336 on 24 August 1995 (Records,

Vol. III, pp. 1607-1621).

399

VOL. 504, OCTOBER 16, 2006 399


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 Decision12affirming 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 1995Decisionof the courta quois

herebyAFFIRMED 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;


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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 con-

_______________

12Rollo, pp. 365-366.

400



tending parties as evidenced by the certificates of investments, to wit:

1.(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.;

2.(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.;

3.(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.;

4.(iv)FNCB NNPN Serial No. 05758 (Cancels and Supersedes NNPN No. 04962),

issued on 02 June 1977, P500,000.00 with 17% interestper annum;

5.(v)The Two Million (P2,000,000.00) money market placements of Ms. Sabeniano with

the Ayala Investment & Development Corporation (AIDC) with legal interest at the

rate of twelve percent (12%)per annumcompounded yearly, from 30 September

1976 until fully paid;

4. Ordering defendants-appellants to jointly and severally pay the plaintiff-appellant the

sum of 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 THOUSAND PESOS (P100,000.00) as attorneys fees.Apparently, the parties to the case, namely, the respondent, on one hand, and the

petitioners, on the other, made separate attempts to bring the aforementioned

Decision of the Court of Appeals, dated 26 March 2002, before this Court for review.

G.R. No. 152985

Respondent no longer sought a reconsideration of the Decision of the Court of

Appeals in CA-G.R. CV No. 51930, dated 26 March 2002, and instead, filed

immediately with this Court on 3 May 2002 a Motion for Extension of Time to File a

401

VOL. 504, OCTOBER 16, 2006 401


Petition for Review,13which, after payment of the docket and other lawful fees, was

assigned the docket numberG.R. No. 152985. In the said Motion, respondent alleged

that she received a copy of the assailed Court of Appeals Decision on 18 April 2002


17/72

and, thus, had 15 days therefrom or until 3 May 2002 within which to file her

Petition for Review. Since she informed her counsel of her desire to pursue an

appeal of the Court of Appeals Decision only on 29 April 2002, her counsel neither

had enough time to file a motion for reconsideration of the said Decision with the

Court of Appeals, nor a Petition forCertiorariwith this Court. Yet, the Motion failedto state the exact extension period respondent was requesting for.

Since this Court did not act upon respondents Motion for Extension of Time to

file her Petition for Review, then the period for appeal continued to run and still

expired on 3 May 2002.14Respondent failed to file any Petition for Review within the

prescribed period for appeal and, hence, this Court issued a Resolution,15dated 13

November 2002, in which it pronounced that

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 on certiorari within the period

which expired on May 3, 2002, the Court Resolves toDECLARE THISCASE

TERMINATEDandDIRECTthe Division Clerk of Court toINFORMthe parties that the

judgment sought to be reviewed has become final and executory.

_______________

13Rolloof G.R. No. 152985, pp. 3-4.

14The filing of a motion for extension does not automatically suspend the running of the period for

appeal, since the purpose of such motion is to merely ask the court to grant an enlargement of the time

fixed by law. The movant, therefore, has no right to assume that his motion would be granted, and should

check with the court as to the outcome of his motion, so that if the same is denied, he can still perfect his

appeal. (Hon. Bello and Ferrer v. Fernando, 114 Phil. 101, 104; 4 SCRA 135, 138 [1962]).15Rolloof G.R. No. 156132, p. 1227.

402



The said Resolution was duly recorded in the Book of Entriesof Judgments on 3

January 2003.

G.R. No. 156132

Meanwhile, petitioners filed with the Court of Appeals a Motion for Reconsiderationof its Decision in CA-G.R. CV No. 51930, dated 26 March 2002. Acting upon the said

Motion, the Court of Appeals issued the Resolution,16dated 20 November 2002,

modifying its Decision of 26 March 2002, as follows

WHEREFORE,premises considered, the instantMotion for

ReconsiderationisPARTIALLY GRANTEDas Sub-paragraph (V) paragraph 3 of the

assailedDecisionsdispositive portion is hereby orderedDELETED.

The challenged 26 March 2002Decisionof the Court

isAFFIRMEDwithMODIFICATION.

Assailing the Decision and Resolution of the Court of Appeals in CA-G.R. CV No.51930, dated 26 March 2002 and 20 November 2002, respectively, petitioners filed

the present Petition, docketed as G.R. No. 156132. The Petition was initially

denied17by this Court for failure of the petitioners to attach thereto a Certification

against Forum Shopping. However, upon petitioners Motion and compliance with

the requirements, this Court resolved18to reinstate the Petition.
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The Petition presented fourteen (14) assignments of errors allegedly committed

by the Court of Appeals in its Decision, dated 26 March 2002, involving both

questions of fact and questions of law which this Court, for the sake of expediency,

discusses jointly, whenever possible, in the succeeding paragraphs.

_______________

16Rollo, p. 374.

17Resolution, dated 29 January 2003;Rollo, pp. 980-A-B.

18Resolution, dated 23 June 2003;Id., at pp. 1311-1312.

403

VOL. 504, OCTOBER 16, 2006 403


I

The Resolution of this Court, dated 13 November 2002, in G.R. No. 152985,

declaring the Decision of the Court of Appeals, dated 26 March 2002, final andexecutory, pertains to respondent Sabeniano alone.

Before proceeding to a discussion of the merits of the instant Petition, this Court

wishes to address first the argument, persistently advanced by respondent in her

pleadings on record, as well as her numerous personal and unofficial letters to this

Court which were no longer made part of the record, that the Decision of the Court

of Appeals in CA-G.R. CV No. 51930, dated 26 March 2002, had already become

final and executory by virtue of the Resolution of this Court in G.R. No. 152985,

dated 13 November 2002.

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

Motion for Extension of Time to File a Petition for Review. Respondent, though, did

not file her supposed 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 toG.R. No. 152985, respon-dents 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

404



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

Resolution20in 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
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[A]cting on Citibanks and FNCB FinancesMotion for Reconsideration, we resolved to grant

the motion, reinstate the petition and require Sabeniano to file a comment thereto in

ourResolutionof June 23, 2003. Sabeniano filed aCommentdated July 17, 2003 to which

Citibank and FNCB Finance filed aReplydated 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 theDecisionof the Court of Appeals has become final and executory.

More precisely, theDecisionbecame final and executoryonly withregard to

Sabenianoin 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 whosePetition for Reviewwas

duly reinstated and is now submitted for decision.

Accordingly, the instantUrgent Motionis 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

_______________

19Firestone Tire and Rubber Company of the Philippines v. Tempongko,137 Phil. 239, 244; 27 SCRA

418, 422 (1969);Singh v. Liberty Insurance Corp., 118 Phil. 532, 535; 8 SCRA 517, 519-520 (1963).

20Rollo, pp. 1443-1445.

405

VOL. 504, OCTOBER 16, 2006 405


party, then not actually filing the intended Petition.21The 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 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,_______________

21Seethe case ofBorromeo v. Court of Appeals(162 Phil. 430, 438; 70 SCRA 329 [1976]) wherein this

Court pronounced that a partys right to appeal shall not be affected by theperfectionof another appeal

from the same decision; otherwise, it would lead to the absurd proposition that one party may be deprived

of the right to appeal from the portion of a decision against him just because the other party who had been


20/72

notified of the decision ahead had already perfected his appeal in so far as the said decision adversely

affects him. If the perfection of an appeal by one party would not bar the right of the other party to appeal

from the same decision, then an unperfected appeal, as in the case at bar, would have far less effect.

406



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 simultaneously or successively, for

the purpose of obtaining a favorable judgment.22The test for determining forum

shopping is whether in the two (or more) cases pending, there is an identity of

parties, rights or causes of action, and relief sought.23To guard against this

deplorable practice, Rule 7, Section 5 of the revised Rules of Court imposes the

following requirement

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.

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

_______________

22The Executive Secretary v. Gordon, 359 Phil. 266, 271; 298 SCRA 736, 740 (1998).

23Young v. John Keng Seng, 446 Phil. 823, 833; 398 SCRA 629, 638 (2003).

407

VOL. 504, OCTOBER 16, 2006 407


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.

Although it may seem at first glance that respondent was simultaneously seeking

recourse from the Court of Appeals and this Court, a careful and closer scrutiny of

the details of the case at bar would reveal otherwise.

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, respondent failed to submit to this
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Court her intended Petition within the reglementary period. Consequently, this

Court was prompted to issue a Resolution, dated 13 November 2002, declaring G.R.

No. 152985 terminated, and the therein assailed Court of Appeals Decision final

and executory.G.R. No. 152985, therefore, did not progress and respondents appeal

was unperfected.The Petition for Review would constitute the initiatory pleading before this

Court, upon the timely filing of which, the case before this Court commences; much

in the same way a case is initiated by the filing of a Complaint before the trial court.

The Petition for Review establishes the identity of parties, rights or causes of action,

and relief sought from this Court, and without such a Petition, there is technically

no case before this Court. The Motion filed by respondent seeking extension of time

within which to file her Petition for Review does not serve the same purpose as the

Petition for Review itself. Such a Motion merely presents the important dates and

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

details of the appealed case.

Without any particular idea as to the assignments of error or the relief

respondent intended to seek from this Court, in light of her failure to file her

Petition for Review, there is actually no second case involving the same parties,

rights or

408



causes of action, and relief sought, as that in CA-G.R. CV No. 51930.It should also be noted that the Certification against Forum Shopping is required

to be attached to the initiatory pleading, which, in G.R. No. 152985, should have

been re-spondents Petition for Review. It is in that Certification wherein respondent

certifies, under oath, that: (a) she has not commenced any action or filed any claim

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

best of her knowledge, no such other action or claim is pending therein; (b) if there

is such other pending action or claim, that she is presenting a complete statement of

the present status thereof; and (c) if she should thereafter learn that the same or

similar action or claim has been filed or is pending, she shall report that fact within

five days therefrom to this Court. Without her Petition for Review, respondent had

no obligation to execute and submit the foregoing Certification against Forum

Shopping. Thus, respondent did not violate Rule 7, Section 5 of the Revised Rules of

Court; neither did she mislead this Court as to the pendency of another similar

case.

Lastly, the fact alone that the Decision of the Court of Appeals, dated 26 March

2002, essentially ruled in favor of respondent, does not necessarily preclude her

from appealing the same. Granted that such a move is ostensibly irrational,nonetheless, it does not amount 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 presented

before this Court the grounds for respondents appeal and her arguments in support

thereof. Without said Petition, any reason attributed to the respondent for


22/72

appealing the 26 March 2002 Decision would be grounded on mere speculations, to

which this Court cannot give credence.

409

VOL. 504, OCTOBER 16, 2006 409


II

As an exception to the general rule, this Court takes cognizance of questions of fact

raised in the Petition at bar.

It is already a well-settled rule that the jurisdiction of this Court in cases brought

before it from the Court of Appeals by virtue of Rule 45 of the Revised Rules of

Court is limited to reviewing errors of law. Findings of fact of the Court of Appeals

are conclusive upon this Court. There are, however, recognized exceptions to the

foregoing rule, namely: (1) when the findings are grounded entirely on speculation,

surmises, or conjectures; (2) when the interference made is manifestly mistaken,absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the

judgment is based on a misapprehension of facts; (5) when the findings of fact are

conflicting; (6) when in making its findings, the Court of Appeals went beyond the

issues of the case, or its findings are contrary to the admissions of both the

appellant and the appellee; (7) when the findings are contrary to those of the trial

court; (8) when the findings are conclusions without citation of specific evidence on

which they are based; (9) when the facts set forth in the petition as well as in the

petitioners main and reply briefs are not disputed by the respondent; and (10) when

the findings of fact are premised on the supposed absence of evidence and

contradicted by the evidence on record.24

Several of the enumerated exceptions pertain to the Petition at bar.

It is indubitable that the Court of Appeals made factual findings that are

contrary to those of the RTC,25thus, result-

_______________

24Sps. Sta. Maria v. Court of Appeals, 349 Phil. 275, 282-283; 285 SCRA 351, 357-358 (1998).

25The Court of Appeals modified the trial courts findings and conclusions, as follows: (1) By declaring

the P1,069,847.40 alleged indebtedness of Ms. Sabeniano as non-existing for failure of Citibank

410



ing in its substantial modification of the trial courts Decision, and a ruling entirely

in favor of the respondent. In addition, petitioners invoked in the instant Petition for

Review several exceptions that would justify this Courts review of the factual

findings of the Court of Appeals,i.e., the Court of Appeals made conflicting findings

of fact; findings of fact which went beyond the issues raised on appeal before it; as

well as findings of fact premised on the supposed absence of evidence and

contradicted by the evidence on record.

On the basis of the foregoing, this Court shall proceed to reviewing and re-

evaluating the evidence on record in order to settle questions of fact raised in the

Petition at bar.
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Citibank v Sebeniano