Name: Michelle Jude G.

Tinio
Topic: Deposit

G.R. No. 156335               November 28, 2007

SPOUSES RAUL and AMALIA PANLILIO, Petitioners,
vs.
CITIBANK, N.A., Respondent.

FACTS:
A complaint for a sum of money and damages was filed by Spouses Raul and Amalia Panlilio
against Citibank. Amalia went to the Makati City Office and opened a current. Because PRPN (Peso
Repriceable Promissory Note – a product with a higher interest) was not available that day, Amalia
instructed Lee (bank’s employee) to put her money in the Citihi savings account.

More than a month later, Amalia communicated that she wanted to invest P3,000,000.00. She
went to the bank and instructed Lee on what to do with the said money. Amalia later on learned
P2,134,635.87 out of the total amount was placed by Citibank in a Long-Term Commercial Paper (LTCP).
The rest of the money was placed in two PRPN accounts, in trust for each of Amalia's children. When the
Certificate of Investment (COI) was sent to Amalia, she demanded that the investment in LTCP be
withdrawn and placed in a PRPN. Amalia then went to preterminate the LTCP and their other
investments. However, she was told that liquidation of the amount of the LTCP can only be made if there
is a willing buyer and this will be difficult since there as an economic crisis at that time. Aggrieved, she
then sent a written demand to the bank "for a withdrawal of her investment as soon as possible." The
Bank answered that that the investment had a 2003 maturity, was not a deposit, and thus, its return to the
investor was not guaranteed by the bank. The bank added that the LTCP may be sold prior to maturity
and had in fact been put up for sale, but such sale was "subject to the availability of buyers in the
secondary market." Without recourse to recover the money,
Spouses Panlilio filed against respondent a case for the recovery of sum of money and damages.

ISSUE:
Is the PRPN Investment a deposit?

HELD:
No. The PRPN Investment is not a deposit.

According to the DIMA (Directional Investment Management Agreement) the withdrawal of

income or principal of the investment is subject to availability of funds and taking into consideration the
commitment of the account to third parties, the investor may withdraw the income/principal of the Portfolio
or portion thereof upon request or application thereof from the Bank.

It is clear then that since the money is committed to C&P Homes via LTCP for five years, or until
2003, Spouses may not seek its recovery from the bank prior to the lapse of this period. Spouses must
wait and meanwhile just be content with receiving their interest regularly. If Spouses want the immediate
return of their investment before the maturity date, their only way is to find a willing buyer to purchase the
LTCP at an agreed price, or to go directly against the issuer C&P Homes, not against the bank.

Hence, prior to the expiry of the term, which in the case of the C&P Homes LTCP is five years,
the Spouses may not claim back their investment, especially not from respondent bank because such is
not a deposit. and is not guaranteed by respondent. Absent any fraud or bad faith, the recourse of
petitioners in the LTCP is solely against the issuer, C&P Homes, and only upon maturity.