Doctrine: Compensation, be it egal or conventional, requires confluence in the parties ofthe characters of mutual
debtors and creditors, although their rights as such creditors or their obligations as such debtors: nee! not spring from
one and the same contract or transaction
Nisee vs Equitable PCT Bank
GRNo, 167454
February 19, 2007
Facts: Spouses Ramon and Natividad Nisce contracted loans evidenced by promissory notes with herein respondent
Equitable PCI Bank, Ine secured by a real mortgage on the former's parcel ofland. Having defaulted, respondent as
creditor-mortgagee filed a petition for extrajudicial foreclosure. Petitioners alleged, among others, that the bank should
have compensated their debt with their dollar aecount which they maintain with PCI Capital Asia Ltd. (Hong Kong), a
subsidiary of Equitable, ‘The Bank, for its part, contends that although the spouses’ debt was restructured, they
nevertheless failed to pay. Moreover, it alleged that there cannot be legal compensation because PCI Capital h
separate and distinct personality from the PCIB, and a claim against the former cannot be made against the latter.
Issue: Whether or not legal compensation may operate to extinguish the petitioner's obligation?
Ruling: Admittedly, PCI Capital isa subsidiary of respondent Bank. Even then, PCL Ci Hk)
Lid] has an independent and separate juridical personality from that of the respondent Bank, its parent company; hence,
any claim against the subsidiary is not'a claim against the parent company and vice versa. On hindsight, petitioners
could have spared themselves the expenses and tribulation of a litigation had they just withdrawn their deposit from the
PCI Capital and remitted the same to respondent. However, petitioner insisted on their contention of setoft.