Doctrine: Compensation, be it legal or conventional, requires confluence in the parties of the characters of mutual debtors and creditors, although

their rights as such creditors or their obligations as such debtors need not spring from one and the same contract or transaction. Nisce vs Equitable PCI Bank G.R. No. 167434 February 19, 2007 Facts: Spouses Ramon and Natividad Nisce contracted loans evidenced by promissory notes with herein respondent Equitable PCI Bank, Inc secured by a real mortgage on the formers parcel of land. 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 account 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 had a 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 petitioners obligation? Ruling: Admittedly, PCI Capital is a subsidiary of respondent Bank. Even then, PCI Capital [PCI Express Padala (HK) Ltd.] 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 On hindsight, petitioners could have spared themselves the expenses and tribulation of a litigation had they just withdrawn their deposit from the PCI Capital and remitted the same to respondent.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 setoff.