Citibank v. Sabeniano
REITERATIONFacts
The Antecedents: Respondent Modesta R. Sabeniano initiated a complaint against petitioners Citibank, N.A. and Investors' Finance Corporation (FNCB Finance) for accounting, sum of money, and damages. Sabeniano alleged that the banks refused to return her substantial deposits and money market placements, despite repeated demands. Petitioners admitted to holding these funds but asserted that Sabeniano had obtained several loans from Citibank, for which she executed Promissory Notes and executed a Declaration of Pledge for her dollar accounts in Citibank-Geneva and Deeds of Assignment for her money market placements with FNCB Finance. Citibank claimed it exercised its right to offset Sabeniano's outstanding loans against her deposits and money market placements, informing her of this action via letters in 1979. Procedural History: The Regional Trial Court (RTC) of Makati City, after a lengthy trial, rendered a decision declaring Citibank's set-off of Sabeniano's dollar deposit with Citibank-Geneva as illegal and ordering its refund with legal interest. The RTC also declared Sabeniano indebted to Citibank for a specific amount, ordering her to pay without interest from the date of the illegal set-off, and dismissing all other claims. Both parties appealed to the Court of Appeals (CA). The CA modified the RTC decision, affirming the illegality of the dollar deposit set-off, declaring Citibank's set-off of Sabeniano's peso accounts as without legal basis, ordering the return of her money market placements, and awarding moral and exemplary damages, and attorney's fees. Sabeniano filed a motion for extension to file a petition for review with the Supreme Court (SC), which was declared terminated due to her failure to file the petition. Petitioners filed a motion for reconsideration with the CA, which partially granted their motion by deleting a specific award. Petitioners then filed the present Petition for Review on Certiorari with the SC. The Petition: Petitioners Citibank, N.A. and FNCB Finance filed a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, assailing the Decision of the Court of Appeals dated March 26, 2002, and its Resolution dated November 20, 2002. They argue that the CA erred in its findings of fact and law, particularly concerning the illegality of the set-off of Sabeniano's deposits and money market placements. Petitioners contend that they validly offset Sabeniano's loans against her accounts. They also raise the issue of whether Sabeniano committed forum shopping by filing a motion for extension with the SC while her motion for reconsideration was pending before the CA. The SC agreed to review the factual findings of the CA, citing exceptions to the general rule against reviewing facts, and proceeded to re-evaluate the evidence to determine the validity of the loans and the alleged payments and set-offs.
Issue(s)
Whether the Resolution in G.R. No. 152985, declaring the CA Decision final and executory, binds the petitioners in G.R. No. 156132. Whether respondent committed forum shopping. Whether the Supreme Court can take cognizance of questions of fact. Whether the RTC Decision, penned by a judge who did not hear the case, is erroneous. Whether petitioner Citibank paid the money market placements evidenced by PNs No. 23356 and 23357. Whether respondent is entitled to the return of her money market placements with FNCB Finance, evidenced by PNs No. 5757 and 5758. Whether respondent is entitled to the return of her savings and current accounts with petitioner Citibank, and her dollar accounts with Citibank-Geneva. Whether petitioner Citibank established by preponderance of evidence the existence of respondent's loans; and whether the offset of funds from respondent's accounts was valid. Whether the offset of funds from respondent's accounts was valid.
Ruling
The Supreme Court ruled that the Resolution in G.R. No. 152985 only declared the CA Decision final and executory with respect to respondent Sabeniano, and did not affect the appeal filed by petitioners. The Court found no basis for forum shopping. It took cognizance of factual issues due to exceptions to the general rule. The Court held that a judge penning a decision without having heard the case does not automatically render it erroneous if the records are complete. The Court found that petitioner Citibank failed to prove payment of PNs No. 23356 and 23357, and thus these remain outstanding. The Court found that PNs No. 5757 and 5758 were superseded by subsequent PNs, and that petitioner FNCB Finance sufficiently proved payment of these later PNs. The Court affirmed the findings of the lower courts regarding the savings and current accounts and the dollar accounts with Citibank-Geneva, limiting the recoverable amount to what was already recognized by the lower courts. The Court found that petitioner Citibank established the existence of respondent's loans by preponderance of evidence.
Ratio Decidendi
On the finality of the CA Decision and its effect on petitioners: The Court clarified that G.R. No. 152985, which involved respondent's motion for extension to file a petition for review, was declared terminated due to her failure to file the petition. This declaration of finality and executory nature of the CA Decision pertained solely to respondent Sabeniano and did not preclude petitioners from pursuing their own appeal, docketed as G.R. No. 156132. To hold otherwise would create an unjust situation where one party could frustrate an appeal by merely filing a motion for extension and then failing to file the actual petition. The Court emphasized that the party failing to perfect its appeal bears the consequences of such failure. On forum shopping: The Court found no sufficient basis to hold respondent liable for forum shopping. While respondent filed a motion for extension to file a petition for review with the Supreme Court while her motion for reconsideration was pending before the Court of Appeals, this motion for extension did not constitute an "initiatory pleading" that would commence a case before the Supreme Court. The Court reasoned that a motion for extension merely seeks additional time and does not present the issues or relief sought, unlike a formal petition for review. Therefore, there was no "second case" involving the same parties, rights, causes of action, and relief sought, as required for forum shopping. On the Court's cognizance of factual issues: The Court reiterated the general rule that its review under Rule 45 is limited to questions of law. However, it acknowledged several exceptions, including when the CA's findings are grounded on speculation, manifestly mistaken, involve grave abuse of discretion, are a misapprehension of facts, are conflicting, go beyond the issues, are contrary to the RTC's findings, are conclusions without citation of specific evidence, are undisputed, or are premised on the absence of evidence contradicted by the record. The Court found that several of these exceptions applied, particularly the conflicting findings between the RTC and CA, and the CA's findings being premised on the supposed absence of evidence contradicted by the record, thus justifying its review of the factual findings. On the validity of an RTC Decision penned by a different judge: The Court held that the fact that the RTC Decision was penned by a judge who did not hear the case does not, by itself, render the decision erroneous. The Court invoked the disputable presumption of regularity in the performance of official duties, which includes the presumption that the judge reviewed and weighed all the evidence on record. The Court cited previous rulings, such as People v. Gazmen, emphasizing that as long as the transcripts of stenographic notes are complete and were examined, a judge can validly decide a case based on the record, even without having personally observed the witnesses' demeanor. The substance of the testimony and documentary evidence are paramount. On the payment of PNs No. 23356 and 23357: The Court found that petitioner Citibank failed to satisfactorily prove the payment of these promissory notes and the use of the proceeds for opening time deposit accounts. While bank officers testified about the transactions, their testimonies were given after a significant lapse of time and lacked specific details. Crucially, the supposed supporting documents for the payment and transfer were never presented in court. Given that the genuineness and due execution of the PNs were admitted, the burden of proving payment rested on Citibank, which it failed to discharge. Thus, these PNs were deemed still outstanding. On the money market placements with FNCB Finance (PNs No. 5757 and 5758): The Court noted that PNs No. 5757 and 5758 were canceled and superseded by PNs No. 8167 and 8169, respectively. Petitioner FNCB Finance presented checks as proof of payment for the principal and interest of PNs No. 8167 and 8169. Although these checks were initially returned to be reinvested, subsequent documentation indicated that the funds were eventually paid and used to liquidate respondent's loans. The Court found that FNCB Finance sufficiently proved the payment of these placements, and the CA erred in awarding the principal amounts of PNs No. 5757 and 5758 when they were already superseded. On savings and current accounts with Citibank and dollar accounts with Citibank-Geneva: The Court noted that both the RTC and CA consistently recognized only ₱31,079.14 from respondent's savings account being used to offset alleged loans. Since respondent did not appeal or move for reconsideration of this specific finding, it became binding. Therefore, the Court limited its review to whether the offset of this amount was valid, which depended on the validity of the loans. The Court gave credence to the computation provided by Citibank-Geneva itself, which showed a total of US$156,942.70 available funds. Of this amount, US$149,632.99 was transferred to petitioner Citibank in Manila and used to offset loans. The remaining balance was accounted for by transfers and charges. Similar to the savings account, respondent did not perfect an appeal of the CA's finding that she was only entitled to the return of the US$149,632.99, making this finding binding. On the existence of respondent's loans and the validity of the offset: The Court found that petitioner Citibank established the existence of respondent's loans by a preponderance of evidence. It presented promissory notes covering aggregate principal amounts, detailing dates of issuance, maturity, and release. The Court noted that these loans were rolled over or renewed, and the subsequent set-off involved funds from various sources, including the dollar remittance from Citibank-Geneva, the savings account, and the proceeds of FNCB Finance placements, which were all applied to liquidate these established loans. On the validity of the offset: The Court found that petitioner Citibank established the existence of respondent's loans by a preponderance of evidence. It presented promissory notes covering aggregate principal amounts, detailing dates of issuance, maturity, and release. The Court noted that these loans were rolled over or renewed, and the subsequent set-off involved funds from various sources, including the dollar remittance from Citibank-Geneva, the savings account, and the proceeds of FNCB Finance placements, which were all applied to liquidate these established loans.
Main Doctrine
The failure to file a Petition for Review within the reglementary period renders the appellate court's decision final and executory only with respect to the party who failed to appeal, and does not affect the appeal filed by the opposing party. Furthermore, the mere fact that a judge who penned a decision did not hear the case does not automatically render the decision erroneous, provided the records and transcripts are complete and were reviewed.