SECOND DIVISION
MANUEL C. ACOL, substituted G.R. No. 135149
by MANUEL RAYMOND ACOL,
Petitioner, Present:
PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
-
v e r s u s - CORONA,
AZCUNA
and
GARCIA,
JJ.
PHILIPPINE COMMERCIAL
CREDIT CARD INCORPORATED,
Respondent. Promulgated:
July 25, 2006
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D E C I S I O N
CORONA, J.:
In this
petition for review on certiorari from a decision[1]
and a resolution[2]
of the Court of Appeals, petitioner assails as contrary to public policy a
particular stipulation contained in the terms and conditions governing the use
of his Bankard credit card.
The facts of the case follow.[3]
On August 20, 1982, petitioner Manuel Acol applied with respondent for a Bankard
credit card and extension.[4] Both were issued to him shortly thereafter.
For several years, he regularly used this card, purchasing from respondent’s
accredited establishments and paying the corresponding charges for such
purchases.
Late in the evening of April 18, 1987,
petitioner discovered the loss of his credit card. After exhausting all efforts to find it, the
first hour of the following day, April 19, 1987, a Sunday, he called up
respondent’s office and reported the loss. The representative he spoke to told
him that his card would be immediately included in the circular of lost
cards.
Again, on April 20, 1987, petitioner
called up respondent to reiterate his report on the loss of his card. He inquired if there were other requirements
he needed to comply with in connection with the loss. Respondent’s representative advised him to
put into writing the notice of loss and to submit it, together with the
extension cards of his wife and daughter. Petitioner promptly wrote a letter dated
April 20, 1987 confirming the loss and sent it to respondent which received it
on April 22, 1987.
On April 21, 1987, a day before
receiving the written notice, respondent issued a special cancellation bulletin
informing its accredited establishments of the loss of the cards of the
enumerated holders, including petitioner’s.
Unfortunately, it turned out that
somebody used petitioner’s card on April 19 and 20, 1987 to buy commodities
worth P76,067.28. The accredited establishments reported the invoices
for such purchases to respondent which then billed petitioner for that amount.
Petitioner informed respondent he would
not pay for the purchases made after April 19, 1987, the day he notified
respondent of the loss. Immediately after receiving his statement of account
for the period ending April 30, 1987, petitioner confirmed his exceptions to
the billing in writing.
At first, respondent agreed to reverse
the disputed billings, pending the result of an investigation of petitioner’s
account. After the investigation and review, the respondent, through its
Executive Vice-President and General Manager, Atty. Serapio S. Gabriel, confirmed that it was not the
petitioner who used his Bankard on April 19 and 20,
1987.
Nonetheless, respondent reversed its earlier position to delete the
disputed billings and insisted on collecting within 15 days from notice. It
alleged that it was the most “practicable procedure and policy of the company.”
It cited provision no. 1 of the “Terms and Conditions Governing The Issuance
and Use of the Bankard” found at the back of the
application form:
xxx Holder’s
responsibility for all charges made through the use of the card shall continue
until the expiration or its return to the Card Issuer or until a reasonable
time after receipt by the Card Issuer of written notice of loss of the Card and
its actual inclusion in the Cancellation Bulletin. xxx
Petitioner, through his lawyer, wrote
respondent to deny liability for the disputed charges. In short order, however, respondent filed
suit in the Regional Trial Court (RTC) of Manila[5]
against petitioner for the collection of P76,067.28, plus interest and
penalty charges.[6]
After considering the evidence, the
trial court dismissed the case and ordered the respondent-plaintiff to pay
petitioner attorney’s fees of P10,000 and the costs of the suit.[7] The RTC denied respondent’s motion for reconsideration.[8]
Respondent appealed to the Court of
Appeals, which, while not disputing factual findings, reversed the RTC ruling
and held petitioner liable for the P76,067.28. The Court of Appeals
denied petitioner’s motion for reconsideration.
Thus, this petition.
The basic issue in this case is whether
or not the contested provision in the contract (provision no. 1 of the Terms
and Conditions) was valid and binding on the petitioner, given that the contract was one of
adhesion.
The
petition has merit.
The facts of this case are virtually
identical with those of Ermitaño v. Court
of Appeals.[9]
In that case, petitioner-extension cardholder Manuelita
Ermitaño lost her card on the night of August 29,
1989 when her bag was snatched in Makati. That very same
evening, she reported the loss and immediately thereafter sent written notice
to the respondent credit card company, BPI Express Card Corp. (BECC).
The verbal and written notices notwithstanding, respondent insisted on
billing petitioner Luis Ermitaño, Manuelita’s
husband and the principal cardholder, for purchases made after the date of the
loss totalling P3,197.70. To
justify the billing, respondent BECC cited the following stipulation in their
contract:
In the event the
card is lost or stolen, the cardholder agrees to immediately report its loss
or theft in writing to BECC…purchases made/incurred arising from the use of
the lost/stolen card shall be for the exclusive account of the cardholder and the
cardholder continues to be liable for the purchases made through the use of the
lost/stolen BPI Express Card until after such notice has been given to BECC and
the latter has communicated such loss/theft to its member establishments. (emphasis ours)
It is worth noting that, just like the assailed provision in this case,
the stipulation devised by respondent BECC required two conditions before the
cardholder could be relieved of responsibility from unauthorized charges: (1)
the receipt by the card issuer of a written notice from the cardholder regarding
the loss and (2) the notification to the issuer’s accredited establishments regarding
such loss.
We struck down this stipulation as contrary to public policy and granted
the Ermitaños’ petition:
Prompt notice by
the cardholder to the credit card company of the loss or theft of his card
should be enough to relieve the former of any liability occasioned by the
unauthorized use of his lost or stolen card. The questioned stipulation in this case, which
still requires the cardholder to wait until the credit card company has
notified all its member-establishments, puts the cardholder at the mercy of the
credit card company which may delay indefinitely the notification of its
members to minimize if not to eliminate the possibility of incurring any loss
from unauthorized purchases. Or, as in
this case, the credit card company may for some reason fail to promptly notify
its members through absolutely no fault of the cardholder. To require the cardholder to still pay for
the unauthorized purchases after he has given prompt notice of the loss or
theft of his card to the credit card company would simply be unfair and
unjust. The Court cannot give its assent
to such a stipulation which could clearly run against public policy. (emphasis
ours)
In
this case, the stipulation in question is just as repugnant to public policy as
that in Ermitaño. As petitioner points out, the effectivity of the cancellation of the lost card rests on
an act entirely beyond the control of the cardholder. Worse, the phrase “after
a reasonable time” gives the issuer the opportunity to actually profit from
unauthorized charges despite receipt of immediate written notice from the
cardholder.
Under such a stipulation, petitioner could have theoretically done
everything in his power to give respondent the required written notice. But if respondent
took a “reasonable” time (which could be indefinite) to include the card in its
cancellation bulletin, it could still hold the cardholder liable for whatever unauthorized
charges were incurred within that span of time. This would have been truly
iniquitous, considering the amount respondent wanted to hold petitioner liable
for.
Article
1306 of the Civil Code[10]
prohibits contracting parties from establishing stipulations contrary to public
policy. The assailed provision was just such a stipulation. It is without any
hesitation therefore that we strike it down.
WHEREFORE, the petition is hereby GRANTED.
The assailed decision of the Court of Appeals in CA-G.R.
CV No. 39590 is reversed. The decision of the Regional Trial Court of Manila on
September 30, 1991 in Civil Case No. 88-44115 is REINSTATED and the
complaint filed by Philippine Commercial Credit Card Incorporated against
petitioner is dismissed.
SO
ORDERED.
Associate Justice
WE CONCUR:
Associate
Justice
Chairperson
Associate Justice
I
attest that the conclusions in the above decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
Associate
Justice
Chairperson, Second
Division
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
Chief Justice
[1] Decision dated January 19, 1998 in CA-G.R. CV No. 39590, penned by Associate Justice Hilarion L. Aquino (retired) and concurred in by Associate Justices Emeterio C. Cui (retired) and Ramon U. Mabutas, Jr. (retired) of the Third Division of the Court of Appeals; rollo, pp. 52-63.
[2] Resolution dated August 10, 1998 (affirming the January 19, 1998 CA Decision) in CA-G.R. CV No. 39590, penned by Associate Justice Hilarion L. Aquino (retired) and concurred in by Associate Justices Emeterio C. Cui (retired) and Ramon U. Mabutas, Jr. (retired) of the Third Division of the Court of Appeals; id., pp. 65-66.
[3] Id., pp. 13-19.
[4] Id., pp. 72-73. Dorsal sides of application forms not included in pagination.
[5] Branch 24 presided by Judge Sergio D. Mabunay.
[6] Docketed as Civil Case No. 88-44115.
[7] Decision dated September 30, 1991, penned by Judge Sergio D. Mabunay; rollo, pp. 73-81.
[8] Order dated March 9, 1992, penned by Judge Sergio D. Mabunay; id., pp. 82-84.
[9] 365 Phil. 671 (1999).
[10] Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals good customs, public order or public policy.