Sie sind auf Seite 1von 5

CITIBANK, N.A.

(Formerly FirstNational
City Bank)
and
INVESTORS
FINANCE
CORPORATION, doing business under the
name and style of FNCB Finance,
Petitioners,
- versusMODESTA R. SABENIANO,
Respondent.
Facts:

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.

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


Finance. Regrettably, the business relations among the parties subsequently went awry.

Respondent filed a Complaint (Accounting, Sum of Money and Damages ) [5] against petitioners.
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.

In their joint Answer, petitioners admitted that respondent had deposits and money market placements
with them, including dollar accounts in the Citibank branch in Geneva, Switzerland (CitibankGeneva). Petitioners further alleged that the respondent later obtained several loans from petitioner
Citibank, for which she executed Promissory Notes (PNs), and secured by (a) a Declaration of Pledge of
her dollar accounts 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 requests for 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.

and

FNCB

RTC:
a. illegal, null and void the setoff 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;
b. Declaring the plaintiff [respondent Sabeniano] indebted to the defendant Bank [petitioner Citibank,
however, without interest and penalty charges from the time the illegal setoff was effected on 31
October 1979;
All the parties appealed the foregoing Decision of the RTC to the Court of Appeals. CA ruled:
AFFIRMED RTC decision with MODIFICATION, as follows:
a. (same with RTC);
b. 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;
c. 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 contending parties
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 (Modesta R. Sabeniano vs. Court of Appeals, et al). judgment sought to be reviewed
has become final and executory. Respondents failed to file, within the reglementary period, a Motion
for Reconsideration or an appeal of the Resolution of the Court of Appeals
G.R. No. 156132 (Citibank vs CA, et al): affirmed with modification- deleted subparagraph 3 of the assailed CA
decision
Issues:
1. WON the Court of Appeals erred in not considering the photocopies and microfilm copies of the PNs, MCs,
and letters submitted by the petitioners to establish the existence of respondents loans? YES
2. WON the Court of Appeals erred in not considering the Deeds of Assignment because of petitioners failure to
produce the original copies thereof in violation of the best evidence rule? YES
2. WON the Best Evidence rule applies in cases where a document is assailed on the basis of forgery? YES
Ruling:
(background lng sa best evidence rule)
Best evidence rule
This Court disagrees in the pronouncement made by the Court of Appeals summarily dismissing the
documentary evidence submitted by petitioners based on its broad and indiscriminate application of the best
evidence rule.
In general, 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,[113] to the exclusion of any secondary or substitutionary evidence. [114]
The best evidence rule has been made part of the revised Rules of Court, Rule 130, Section 3, which
reads
SEC. 3. Original document must be produced; exceptions. When the subject of inquiry
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.
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 thus
But even with respect to documentary evidence, the best evidence rule applies only
when the content of such document is the subject of the inquiry. Where the issue is only as to
whether such 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 [115]
1. This Court did not violate the best evidence rule when it considered and weighed in evidence the
photocopies and microfilm copies of the PNs, MCs, and letters submitted by the petitioners to establish
the existence of respondents loans. The terms or contents of these documents were never the point of
contention in the Petition at bar. It was respondents position that the PNs in the first set (with the
exception of PN No. 34534) never existed, while the PNs in the second set (again, excluding PN No.
34534) were merely executed to cover simulated loan transactions. As for the MCs representing the
proceeds of the loans, the respondent either denied receipt of certain MCs or admitted receipt of the
other MCs but for another purpose. Respondent further admitted the letters she wrote personally or
through her representatives to Mr. Tan of petitioner Citibank acknowledging the loans, except that she
claimed that these letters were just meant to keep up the ruse of the simulated loans. Thus,

respondent questioned the documents as to their existence or execution, or when the former is
admitted, as to the purpose for which the documents were executed, matters which are, undoubtedly,
external to the documents, and which had nothing to do with the contents thereof.
Alternatively, even if it is granted that the best evidence rule should apply to the evidence presented
by petitioners regarding the existence of respondents loans, it should be borne in mind that the rule admits of
the following exceptions under Rule 130, Section 5 of the revised Rules of Court
SEC. 5. When the original document is unavailable. When the original document has
been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution
or existence and the cause of its unavailability without bad faith on his part, may prove its
contents by a copy, or by a recital of its contents in some authentic document, or by the
testimony of witnesses in the order stated.
The execution or existence of the original copies of the documents was established through the
testimonies of witnesses, such as Mr. Tan, before whom most of the documents were personally executed by
respondent. The original PNs also went through the whole loan booking system of petitioner Citibank from the
account officer in its Marketing Department, to the pre-processor, to the signature verifier, back to the preprocessor, then to the processor for booking. [117] The original PNs were seen by Ms. Dondoyano, the processor,
who recorded them in the General Ledger. Mr. Pujeda personally saw the original MCs, proving respondents
receipt of the proceeds of her loans from petitioner Citibank, when he helped Attys. Cleofe and Fernandez, the
banks legal counsels, to reconstruct the records of respondents loans. The original MCs were presented to Atty.
Cleofe who used the same during the preliminary investigation of the case, sometime in years 1986-1987. The
original MCs were subsequently turned over to the Control and Investigation Division of petitioner Citibank. [118]
It was only petitioner FNCB Finance who claimed that they lost the original copies of the PNs when it
moved to a new office. Citibank did not make a similar contention; instead, it explained that the original copies
of the PNs were returned to the borrower upon liquidation of the loan, either through payment or rollover. Petitioner Citibank proffered the excuse that they were still looking for the documents in their storage or
warehouse to explain the delay and difficulty in the retrieval thereof, but not their absence or loss. The original
documents in this case, such as the MCs and letters, were destroyed and, thus, unavailable for presentation
before the RTC only on 7 October 1987, when a fire broke out on the 7 th floor of the office building of petitioner
Citibank. There is no showing that the fire was intentionally set. The fire destroyed relevant documents, not
just of the present case, but also of other cases, since the 7 th floor housed the Control and Investigation
Division, in charge of keeping the necessary documents for cases in which petitioner Citibank was involved.
The foregoing would have been sufficient to allow the presentation of photocopies or microfilm copies
of the PNs, MCs, and letters by the petitioners as secondary evidence to establish the existence of respondents
loans, as an exception to the best evidence rule.

2. The Court of Appeals did not consider these Deeds of Assignment because of petitioners failure to produce
the original copies thereof in violation of the best evidence rule. This Court again finds itself in disagreement in
the application of the best evidence rule by the appellate court.

To recall, the best evidence rule, in so far as documentary evidence is concerned, requires the
presentation of the original copy of the document only when the context thereof is the subject of inquiry in the
case. Respondent does not question the contents of the Deeds of Assignment. While she admitted the
existence and execution of the Deeds of Assignment, dated 2 March 1978 and 9 March 1978, covering PNs No.
8169 and 8167 issued by petitioner FNCB Finance, she claimed, as defense, that the loans for which the said
Deeds were executed as security, were already paid. She denied ever executing both Deeds of Assignment,
dated 25 August 1978, covering PNs No. 20138 and 20139. These are again issues collateral to the contents of
the documents involved, which could be proven by evidence other than the original copies of the said
documents.

Moreover, 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 being prima facie evidence of the execution of the instrument
or document involved.
The rule on the evidentiary weight that must be accorded a notarized document is clear and
unambiguous. The certificate of acknowledgement in the notarized Deeds of Assignment constituted prima
facie evidence 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 [125] or raised
questions as to the verity of the notary publics acknowledgment and certificate in the Deeds. [126] 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.

Petitioners not only presented the notarized Deeds of Assignment, but even secured certified literal
copies thereof from the National Archives. [127] Mr. Renato Medua, an archivist, working at the Records
Management and Archives Office of the National Library, testified that the copies of the Deeds presented
before the RTC were certified literal copies of those contained in the Notarial Registries of the notary publics
concerned, which were already in the possession of the National Archives. He also explained that he could not
bring to the RTC the Notarial Registries containing the original copies of the Deeds of Assignment, because the
Department of Justice (DOJ) Circular No. 97, dated 8 November 1968, prohibits the bringing of original
documents to the courts to prevent the loss of irreplaceable and priceless documents.

3.

Lastly, 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 applies

Basic 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 inadmissible pursuant 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 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.[135]

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, [136] petitioner Citibank failed to
comply with the production of the original Declaration of Pledge. It is admitted that Citibank-Geneva had
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. [137] 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. [138]

Without the Declaration of Pledge, petitioner Citibank had no authority to demand the remittance of
respondents dollar accounts with Citibank-Geneva and to apply them to her outstanding loans. It cannot effect
legal compensation under Article 1278 of the Civil Code since, petitioner Citibank itself admitted that CitibankGeneva is a distinct and separate entity. As for the dollar accounts, respondent was the creditor and CitibankGeneva is the debtor; and as for the outstanding loans, petitioner Citibank was the creditor and respondent
was the debtor. The parties in these transactions were evidently not the principal creditor of each other.

Therefore, this Court declares that the remittance of respondents dollar accounts from Citibank-Geneva and
the application thereof to her outstanding loans with petitioner Citibank was illegal, and null and
void. Resultantly, petitioner Citibank is obligated to return to respondent the amount of US$149,632,99 from
her Citibank-Geneva accounts, or its present equivalent value in Philippine currency; and, at the same time,
respondent continues to be obligated to petitioner Citibank for the balance of her outstanding loans which, as
of 5 September 1979, amounted to P1,069,847.40.