SECOND DIVISION
[G.R. No. 128899. June 8, 1999]
AMERICAN EXPRESS INTERNATIONAL, INC., petitioner, vs. COURT OF APPEALS, and M R TRAVEL SERVICES INC. respondents.
D E C I S I O N
BELLOSILLO, J.:
This petition for review on certiorari
under Rule 45 of the Rules of Court seeks to review and set aside the decision
of the Court of Appeals in CA G.R. CV No. 43667, “M R Travel Services,
Inc., v. American Express International, Inc.,”
promulgated 17 April 1997.
Petitioner American Express International,
Inc. (AMEXCO) is a foreign corporation doing business in the country by
maintaining a credit system known as American Express Card Service. On 10 July 1986 petitioner entered into a
“Travel Agreement” with M R Travel Services, Inc. (M R TRAVEL), a domestic
corporation transacting business as a travel agency. Under the agreement AMEXCO cardholders would be allowed to charge
purchases of travel services from M R TRAVEL under the following terms and
conditions: (a) The card shall be
presented prior to its expiration, and at the time of its presentation, M R
TRAVEL shall not have been notified of its cancellation; (b) The card shall
bear the signature of the person whose name is stamped on its face and the
charge record form signed by the customer with the same signature; and, (c)
AMEXCO’s responsibility shall be limited to $100.00 unless it has priorly
authorized M R TRAVEL to accept a
charge for a larger amount.[1]
Further, it was stipulated that M
R TRAVEL would promptly send to AMEXCO at least once each week completed charge
record forms indicating the dates when the charges were incurred;[2] otherwise, AMEXCO would not
answer for charges that were not sent to it within ten (10) days from the date
they were incurred.[3]
On 14 December 1987 M R TRAVEL
sent AMEXCO five (5) charge record
forms reflecting charge purchases made by AMEXCO cardholders with the
corresponding particulars, to wit:[4]
Cardholder Date Amount S/A No.
Samat Kadir 12/08/87 P 29,468.04
0326
Woon Man Voon 12/10/87 28,935.00 0335
Lau Lee Chuan A. 12/12/87 23,533.60 0341
Carl McCabe 12/14/87 31,794.00 0343
John Demoss 12/14/87 31,794.00 0347
P 145,524.64
AMEXCO refused to honor these
accounts on the ground that the dates of the transactions were not indicated in
the forms and that the charges were confirmed by the cardholders concerned to
have been fraudulently made.[5] With respect to the charge
purchases of John Demoss, AMEXCO claimed that the signature on the charge
record form was not that of the cardholder, and as regards Carl McCabe, his
charge record form contained no approval code.[6]
M R TRAVEL insisted on demanding
payment of the above charges from AMEXCO but to no avail. On 4 January 1988 AMEXCO unilaterally
terminated their “Travel Agreement.”
Aggrieved, M R TRAVEL commenced a suit for collection and
damages against AMEXCO. The court a
quo found that:[7] (a) M R TRAVEL failed to
secure prior authorization from AMEXCO to charge beyond $100.00; (b) All the
five (5) charge record forms did not reflect the dates when the charges were
incurred, which was fatal since the period of payment was to be reckoned from
those dates; (c) M R TRAVEL failed to verify the identities of the cardholders considering
that the airplane tickets bought on credit with the use of the AMEXCO cards
were not in the name of the AMEXCO cardholders; and, (d) The signatures of the
AMEXCO cardholders were forged since the AMEXCO cards concerned were reported
lost and/or stolen and the signatures appearing on the charge slips were
different from those of the cardholders.
Based on the foregoing, the lower
court concluded that M R TRAVEL violated the provisions of its agreement with
AMEXCO and, thus, the latter was justified in refusing to pay the claims of M R
TRAVEL.
M R TRAVEL appealed to the Court
of Appeals which reversed and set aside the trial court’s decision resolving
that its findings and conclusions were bereft of support and that M R TRAVEL
substantially complied with all the conditions set forth in their “Travel
Agreement.”[8]
AMEXCO now assails the conclusions
of the Court of Appeals and maintains that it should not be held liable to M R
TRAVEL for the payment of the charges incurred.
Well-settled is the rule that in
the exercise of the power to review the findings of fact of the Court of
Appeals are conclusive and binding on this Court. However, there are recognized exceptions among which is when the
factual findings of the trial court and the appellate court are conflicting.[9] The instant case falls
within this exception and we are thus constrained to examine the arguments
presented by petitioner.
AMEXCO questions the finding of
the Court of Appeals that the conclusions of the trial court were devoid of
support. Petitioner argues that the
testimony of Miguel Licarte, fraud analyst of AMEXCO, was conclusive in
establishing the findings of the trial court.
Licarte testified that upon verification the cardholders denied using their
cards as they were outside of the Philippines at the time the transactions were
supposedly made.[10] From the foregoing
evidence, petitioner avers that it can be deduced that the cards were stolen or
lost and the signatures on the charge record forms were forged.[11] There was therefore no
reason for the Court of Appeals to discard Licarte’s testimony and label it as
hearsay. Citing Top Weld
Manufacturing, Inc. v. ECED,[12] petitioner argues that
since no objection was made at the time the testimonial evidence was presented
it should be admitted and given value as such.
Licarte’s testimony does not
qualify as hearsay and must be admitted.
Where evidence is based on what was supposedly told the witness, the
same is patently hearsay and is without evidentiary weight. However, the hearsay rule admits of
exceptions, one of which is where, regardless of the truth or falsity of a
statement, the fact that it has been made is relevant.[13] Where the statements or
utterances of specific words are the facts in issue the testimony of witnesses
thereto is not hearsay.[14] In other words, if the fact
sought to be established is that certain words were spoken, without reference
to the truth and falsity of the words, the testimony of any person who heard
the statement uttered is original evidence and not hearsay.[15] It must be emphasized
however that such evidence is admitted merely for the purpose of establishing
the utterance of the words and not their truth.[16]
In the instant case, the testimony
of Licarte underscored his conversations with the cardholders and their respective
denials which simply established that AMEXCO verified the transactions and that
Licarte was told that the cardholders did not use their cards, as they were
outside of the Philippines. Whether the
cardholders indeed used their cards or were in fact out of the country was,
however, never ascertained. The cardholders themselves were never presented
before the trial court. Hence, despite
admission of the testimony of Licarte the same still does not sufficiently establish
the truth of any of the claims of AMEXCO.
Consequently, the testimony of Licarte failed to prove the theft or loss
of the AMEXCO cards, particularly so when he did not elucidate on how the theft
occurred and later on reported. As M R
TRAVEL pointed out, it was the usual standard operating procedure for credit
companies to require their cardholders to report a loss immediately[17] but Licarte failed to dwell
on this matter in his testimony.
Moreover, under the “Travel
Agreement,” AMEXCO is obliged to notify M R TRAVEL of any cancellation of cards. Absent this notification, M R TRAVEL is
called upon to honor any AMEXCO card presented and to allow charge purchases of
travel services. Since M R TRAVEL was not notified of any cancellation of cards
the allegation of theft or loss becomes doubtful if not highly questionable.
Licarte’s testimony likewise
failed to demonstrate the existence of forgery. He only stated that the cardholders denied having made the
transactions as they were allegedly not in the Philippines. Forgery cannot be deduced therefrom. As stated in Tenio-Obsequio v. Court of
Appeals,[18] forgery cannot be presumed;
it must be proved by clear, positive and convincing evidence. In imputing discrepancy in the signatures appearing
in the charge forms and those appearing on the credit cards as well as in its
records, AMEXCO should have conducted an examination of the signatures before
the court.[19] A comparison of both the
differences and similarities in the questioned signatures should have been made
to satisfy the demands of evidence.
Failing to introduce ample proof to substantiate its claim of forgery,
petitioner’s case has no leg to stand on.
AMEXCO contends that the Court of
Appeals erred in finding that M R TRAVEL substantially complied with all the
requirements set forth in their agreement when it failed to apply Art. 1159 of
the New Civil Code which states that obligations have the force of law between
the parties. AMEXCO insists that the
“Travel Agreement” was very clear in requiring that the date should be
indicated in the charge record forms since it was on those dates that the time
of billing the cardholders was derived.[20] AMEXCO further argues that
the designation of dates was critical due to petitioner’s policy not to be
obligated by any charges that were not sent to it within ten days from the
dates they were incurred.[21] Being an essential feature
of the “Travel Agreement,” petitioner contends that M R TRAVEL’s failure to
indicate the dates should be considered a breach.
We hold that there was no breach
of agreement since failure to indicate the dates cannot lead to the conclusion
that private respondent M R TRAVEL failed to comply with its obligations. The indispensability of the date requirement
was belied by the testimony of Licarte when he said that it was used for
billing the cardholder and not for billing the establishment.[22] As correctly observed by M
R TRAVEL, the lack of date could not have led to the automatic denial of the
charge slip as AMEXCO could still confirm the purchase with the cardholder[23] or through records in
petitioner’s possession.[24]
No inference could have been drawn
from the fact that compliance with the date requirement was of extreme
necessity. The primary object of the
agreement was to enable AMEXCO cardholders to purchase travel services from M R
TRAVEL and charge these through their cards.
With or without the date, the obligation of one to provide travel
services, and the other, to be charged with the purchases, stands. The date requirement was only incidental to
this primary consideration and was required more for the convenience of the
parties rather than as a determining condition of the agreement. The agreement would continue to subsist
absent compliance with this stipulation and, hence, the omission was not fatal.
AMEXCO asserts that the Court of
Appeals failed to apply the legal principle that “when one or two innocent
persons must suffer by the wrongful act of a third person, the loss must be
borne by the one whose negligence was the proximate cause of the loss.”[25] AMEXCO argues that since
the fraud was successfully perpetrated because of M R TRAVEL’s negligence in
ascertaining the identity of the cardholders and in securing authorization from
its office,[26] it alone should bear the loss.
We disagree. As can be derived from the testimony of
Marlyn Rosas, M R TRAVEL followed its normal procedure in verifying the
identities of the cardholders.[27] The exercise of ordinary
diligence was sufficient enough in previous transactions made with private
respondent by AMEXCO cardholders. M R
TRAVEL cannot, thereafter, be required to observe a different degree of
diligence.
Likewise, M R TRAVEL cannot be
faulted in its method of securing authorization from petitioner which
prescribed the procedure itself.[28] When the questioned
transactions were made, compliance with this procedure resulted in the release
of approval codes, with the exception of that corresponding to the account of
Carl McCabe whose transaction, according to an employee of AMEXCO, no longer
needed one.[29] Hence, no negligence can be
imputed to private respondent. In fine,
we find the contentions of petitioner to be devoid of merit since M R TRAVEL
substantially and satisfactorily complied with its obligations under the
“Travel Agreement” with AMEXCO.
WHEREFORE, the assailed decision of the Court of Appeals
ordering petitioner American Express International, Inc., to pay private
respondent M R Travel Services, Inc., as actual damages the sum of P141,158.90
with interest at the rate of 6% per annum from 14 April 1988 is AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, Mendoza, Quisumbing, and Buena, JJ., concur.
[1] “Travel Agreement,” Rollo, pp. 51-53.
[2] Ibid.
[3] Ibid.
[4] Rollo, p. 31.
[5] Id., p. 32.
[6] Ibid.
[7] Id.,
p. 33.
[8] Decision penned by Justice Conchita Carpio-Morales, Sixteenth Division, 17 April
1997, Rollo, pp. 30-37.
[9] Security Bank & Trust Company v. Triumph
Lumber and Construction Corporation, G.R. No. 126696, 21 January 1999, citing
Borillo v. Court of Appeals, G.R. No. 109910, 5 April 1995, 209 SCRA 140;
Salvador v. Court of Appeals, G.R. No. 55691, 21 May 1992, 243 SCRA 239.
[10] TSN, 5 February 1990, pp. 9, 14-15, 19 &
21, cited in Petition, Rollo, pp. 18-19.
[11] Ibid.
[12] No. L-44944, 9 August 1985, 138 SCRA 118.
[13] Francisco,
Ricardo J., EVIDENCE, Rules of
Court in the Philippines, Rules 128-134,
3rd Ed. (1996), pp. 250,
251, citing Wharton on Evidence, Sec.
254; Greenleaf on Evidence, Sec. 100; People v. McCrea, 32 Cal. 98; People v.
Estrado, 49 Cal. 171.
[14] Id.,
p. 251.
[15] Ibid.
[16] Ibid.
[17] Comment on the Petition, Rollo, p. 78.
[18] G.R. No. 107967, 1 March 1994, 230 SCRA 550.
[19] Sec.
22. How genuineness of
handwriting proved. – The handwriting of a person may be proved by any witness who
believes it to be the handwriting of such person because he has seen the person
write, or has seen writing purporting to be his upon which the witness has
acted or been charged, and has thus acquired knowledge of the handwriting of
such person. Evidence respecting the
handwriting may also be given by a comparison, made by the witness or the
court, with writings admitted or treated as genuine by the party against whom
the evidence is offered, or proved to be genuine to the satisfaction of the
judge (Rule 132, Rules of Court).
[20] TSN,
5 February 1990, cited in Petition, Rollo,
p. 24.
[21] Id,
p. 23.
[22] Id.,
p. 88.
[23] Ibid.
[24] Rollo,
p. 89.
[25] Petition, Rollo, pp. 20-21.
[26] Ibid.
[27] TSN,
20 February 1990, cited in Comment to
the Petition, Rollo, pp. 81-82.
[28] Rollo, p. 83.
[29] Ibid.