Citibank v. Jimenez
REITERATIONFacts
The Antecedents: Spouses Rufino C. Jimenez, Sr. and Basilia B. Templa opened a Foreign Currency Time Deposit with petitioner Citibank, N.A. in the amount of $10,000.00. In 1993, respondent Rufino C. Jimenez, Sr. requested the transfer of the deposit proceeds to his account in Citibank San Francisco upon maturity. A letter requesting the transfer was sent by Mr. Robert S. Ostrovsky of Citibank San Francisco to petitioner, allegedly by mail and fax. Petitioner replied that it could not comply because Basilia Templa had preterminated the deposit and transferred the proceeds to her own account. Procedural History: Respondent sued petitioner and Basilia Templa for damages, alleging fraudulent and malicious transfer of the deposit. The case against Basilia was archived. The RTC-Marikina City ruled in favor of respondent, finding petitioner negligent for allowing the pretermination despite the alleged faxed request. The RTC ordered petitioner to pay the value of the deposit and attorney's fees. The Court of Appeals modified the decision by deleting the award for attorney's fees. Petitioner appealed to the Supreme Court. The Petition: Petitioner contends that the Court of Appeals erred in ruling that it was negligent, arguing that it did not have prior notice of the transfer request, that the fax transmission was not established, and that the lower courts relied on hearsay evidence. Petitioner also argues that it was justified in allowing the pretermination due to the "and/or" nature of the account.
Issue(s)
Whether petitioner Citibank, N.A. was negligent in allowing the pretermination of the foreign currency time deposit, considering the prior notice of respondent's request for transfer by facsimile transmission. Whether the lower courts erred in admitting and relying on certain evidence.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, holding petitioner Citibank, N.A. liable for negligence.
Ratio Decidendi
On the issue of negligence and prior notice of transfer request: The Court affirmed the factual findings of the lower courts that petitioner received respondent's letter-request for transfer by facsimile transmission prior to the pretermination by Basilia Templa. This conclusion was supported by petitioner's own letter dated February 2, 1995 (Exhibit "F"), which, despite denying action on faxed instructions, implicitly acknowledged receipt of the original letter after the pretermination. The Court found petitioner's denial of admission unconvailing against the clear import of Exhibit "F." The Court emphasized that the fax transmission was from a branch manager of the same bank, not just any client, and that petitioner could have verified its genuineness. While acknowledging the "and/or" nature of the account, the Court found that petitioner's reliance on this provision to justify pretermination was misplaced given the prior faxed request for transfer. The Court reiterated that banks owe the highest degree of care to depositors, and simple prudence would have required petitioner to verify the faxed transmission before allowing the pretermination. Disregarding the faxed transmission constituted negligence. On the issue of evidence: The Court found evidentiary support for the lower courts' conclusions. The Court reiterated the rule that factual findings of the trial court, affirmed by the Court of Appeals, are binding and conclusive upon the Supreme Court, barring a showing of grave abuse of discretion or that the findings are totally devoid of support in the record. The Court found that Exhibit "F" provided sufficient basis for the lower courts' conclusion regarding the receipt of the faxed request.
Main Doctrine
A bank is negligent in allowing the pretermination of a foreign currency time deposit when it disregards a facsimile transmission request for transfer, even if it claims not to act on faxed instructions, especially when the transmission is from a branch of the same bank, and simple prudence would require verification before allowing the pretermination.