Estrada v. Desierto cited in CITIBANK, N.A. and Investor’s Finance Corporation v.

Modesta R. Sebeniano, G.R. No. 156132, October 12, 2006

Doctrine: 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

Facts:
Modesta Sabeniano is a client of Citibank and FNCB Finance. On February 1978,
Sabeniano obtained a loan of Php 200,000 from Citibank. This loan was followed with
several other loans – some were paid, while some were not. Those that were not paid
upon maturity were rolled over, reflecting a total unpaid loan of Php 1,069,847.40 as of
September 1979.
These loans were secured by Sabeniano’s money market placements with FNCB
Finance through a Deed of Assignment plus a Declaration of Pledge which states that
all present and future fiduciary placements held in her personal and/or joint name with
Citibank Switzerland, will secure all claims that Citibank may have or, in the future,
acquire against her.

The Deeds of Assignment were duly notarized, while the Declaration of Pledge was not
notarized and Citibank’s copy was undated, while that of Sabeniano bore the date,
September 24, 1979.

Since Sabeniano failed to pay her obligations to Citibank, the latter sent demand letters
to request payment. Her total unpaid loan initially amounted to Php 2,123,843.20
(inclusive of interests).

Still failing to pay, Citibank executed the Deeds of Assignment and used the proceeds
of Sabeniano’s money market placement from FNCB Finance which totaled Php
1,022,916.66 and her deposits with Citibank which totaled Php 31,079.14 to set-off her
loan. This reduced the unpaid balance to Php 1,069,847.40 as previously mentioned.
Since the loan remains unpaid, Citibank proceeded to execute the Declaration of
Pledge and remitted a total of $149,632.99 from Sabeniano’s Citibank-Geneva accounts
to off-set the loan.

Sabeniano then filed a complaint against Citibank for damages and specific
performance (for proper accounting and return of the remitted proceeds from her
personal accounts). She also contended that the proceeds of 2 promissory notes (PN)
from her money market placements with Citibank were rolled over or reinvested into the
petitioner bank, and these should also be returned to her.

Regarding the execution of the pledge, the RTC declared this illegal, null and void.
Citibank was ordered to return the $149,632.99 to Sabeniano’s Citibank-Geneva
account with a legal interest of 12% per annum. The RTC also ordered Sabeniano to
pay her outstanding loan to Citibank without interests and penalty charges.

Both parties appealed to the CA which affirmed the RTC’s decision, but further ruled
entirely in favor of Sabeniano – holding that Citibank failed to establish her
indebtedness and that all the executed deeds should be returned to her account. The
case has now reached the Supreme Court.

Issue: Whether the court of appeals is correct in dismissing the documentary evidence
submitted by the petitioners

Ruling:
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

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. 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 respondent's receipt of the proceeds of her
loans from petitioner Citibank, when he helped Attys. Cleofe and Fernandez, the bank's
legal counsels, to reconstruct the records of respondent's 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. 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 roll-over. 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 7th 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 7th 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 respondent's loans, as
an exception to the best evidence rule.

In Estrada v. Desierto, this Court had occasion to rule that — It is true that the Court
relied not upon the original but only copy of the Angara Diary as published in the
Philippine Daily Inquirer on February 4-6, 2001. In doing so, the Court, did not, however,
violate the best evidence rule. Wigmore, in his book on evidence, states that:
"Production of the original may be dispensed with, in the trial court's discretion,
whenever in the case in hand the opponent does not bona fide dispute the contents of
the document and no other useful purpose will be served by requiring production.