SECOND
DIVISION
CRISOSTOMO ALCARAZ, G.R. No. 152202
Petitioner,
Present:
PUNO, J., Chairperson,
- versus - SANDOVAL-GUTIERREZ,
AZCUNA,
and
GARCIA,
JJ.
COURT OF APPEALS and
EQUITABLE CREDIT CARD Promulgated:
NETWORK, INC.,
Respondents.
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D E C I S I O N
PUNO,
J.:
Assailed before this
Court in a Petition for Review on Certiorari is the decision of the
Court of Appeals in CA-G.R. CV No. 65911, entitled “Equitable Credit Card
Network, Inc. v. Crisostomo Alcaraz,” affirming the decision of Branch 147 of
the
The facts of this case
are undisputed.
Private respondent,
Equitable Credit Card Network, Inc. (Equitable), is a company engaged in the
business of extending credit accommodations/facilities through the use of the
credit cards issued to its clientele.
Through these credit cards, cash advances may be availed from automated
teller machines or ATMs, and goods or services may be purchased on credit from
accredited merchant shops.[1]
In
May 1995, private respondent Equitable issued a credit card, Equitable Visa
Gold International Card with card number 4921-0100-0743-2013 and account base
number 4921-0100-0743-2005 with peso and dollar accounts/facilities, to
petitioner Crisostomo Alcaraz. The
petitioner through the use of the said credit card secured cash advances and
purchased goods and services on credit with private respondent Equitable’s
affiliated merchant establishments.[2] Thus, the petitioner accumulated unpaid
credit with private respondent and despite the receipt of several demand
letters, failed to pay his outstanding obligations.[3]
In its complaint before
the lower court, private respondent Equitable sought the payment of the
accumulated outstanding balance including interest of 2.5% per month as well as
a monthly late penalty/surcharge of 1.5% for the peso account, and 1.5% monthly
interest and 1% late penalty/surcharge per month for the dollar account until
full payment thereof as provided in the “Terms and Conditions Governing the
Issuance and Use of Equitable Visa Card” (hereinafter referred to as the Terms
and Conditions). The private respondent
also prayed for liquidated damages of 25% of the total amount of both accounts
and attorney’s fees at the same rate allegedly also in accordance with the Terms
and Conditions.[4] Private respondent Equitable claims
petitioner Alcaraz has an accumulated outstanding balance of US$8,970.54 in his
dollar account as of P192,500.00
on his peso account as of
The petitioner admitted he had made use of the credit card
issued in his name by private respondent Equitable, but contested the amount of
his liability. Petitioner alleged that
he was issued the credit card as an “honorary member.” As such, he was not required to submit any
application or sign any document prior to the issuance of the card and he was entitled
to pay on an installment basis without any interest. He denied signing the document Terms and
Conditions Governing the Issuance and Use of Equitable Visa Card. Petitioner Alcaraz
further alleged that prior to the filing of the complaint, he formally
requested for a reconciliation of his accounts with the private respondent but
the same has remained unanswered until the present day. Thus, the case filed against him was premature.
After
several postponements of the pretrial conference, the trial court declared
petitioner Alcaraz as in default upon motion of private respondent Equitable
and allowed the latter to present its evidence ex parte.[6] After the private respondent’s presentation
of evidence which included the testimony of its sole witness, one of its
collection officers, and the submission of documents, the court ruled in favor
of private respondent Equitable. It,
however, rejected private respondent Equitable’s claim for liquidated and
exemplary damages.[7] Petitioner Alcaraz filed a Motion for New
Trial which was denied.[8] The petitioner elevated the case to the
appellate court.
The
Court of Appeals partially affirmed the decision of the trial court. It modified the trial court’s judgment by
ordering petitioner Alcaraz to pay private respondent Equitable “the principal
amount of P81,000.00, on his peso account, and the amount of US$4,397.34
or its peso equivalent, on his dollar account” with 12% annual interest from P20,000.00.[9]
Undaunted,
petitioner comes to this Court via a petition for review on certiorari raising
the following issues: (1) whether the
trial court violated the petitioner’s right to due process when the private
respondent was allowed to present its evidence ex parte; and (2) whether
the monetary award ordered by the Court of Appeals is in accord with the
evidence, and applicable law and jurisprudence.
The
petition is without merit.
Petitioner
Alcaraz laments that the trial court did not postpone
and reschedule the pretrial conference on February 23, 1999 despite the
manifestation of petitioner’s wife that petitioner Alcaraz suffered a stroke
which rendered him paralyzed while Atty. Ben Ibuyan, the petitioner’s counsel,
suffered from a “lingering gall bladder ailment.” Instead, upon motion of private respondent
Equitable, the trial court declared the petitioner as in default and allowed
the private respondent to present its evidence ex-parte.[10] Petitioner Alcaraz also charge the trial
court with arbitrariness and of depriving him of the right to have the case
against him heard before an impartial judge or tribunal. In support of his allegations, he maintains
that, aside from brushing aside the clearly meritorious reasons for his and his
counsel’s absence on the
With regard to the first issue, it is
well-settled that this Court is not a trier of facts. This Court accords due respect to the findings
of the trial court and the appellate court save in clearly exceptional cases.[12] This case, however, does not fall within
those exceptions. The trial court
clearly has the discretion on whether to grant or deny a motion to postpone
and/or reschedule the pretrial conference in accordance with the circumstances
then obtaining in the case.[13] This must be so as it is the trial court which
was able to witness firsthand the events as they unfolded in the trial of a
case. Postponements, while permissible,
must not be countenanced except for clearly meritorious grounds and in light of
the attendant circumstances.[14] The
trial court’s discretion on this matter, however, is not unbridled. The trial courts are well advised to
reasonably and wisely exercise such discretion.
This Court will not hesitate to strike down clearly arbitrary acts or
orders of the lower court. This,
however, is not the situation in this case.
While it is true that private respondent Equitable and inclement weather
have on occasion caused the postponement of the pretrial conference, the
repeated resetting of the pretrial conference was primarily due to the petitioner.
As
to the reasons proffered by the petitioner’s wife at the
A
charge of arbitrariness and bias against the trial court, in this case against the
judge as well as all the court personnel, is a serious charge that must be
substantiated. Bare allegations of
partiality will not suffice. It must be
shown that the trial court committed acts or engaged in conduct clearly
indicative of bias or pre-judgment against a party. The petitioner failed to do so in this case. The disallowance of a motion for postponement
is not sufficient to show arbitrariness and partiality of the trial court. As this Court ruled in the case of Gochan
v. Gochan,[18] to wit:
. . . . A
motion for continuance or postponement is not a matter of right, but a request
addressed to the sound discretion of the court.
Parties asking for postponement have absolutely no right to assume
that their motions would be granted. Thus, they must be prepared on the day of
the hearing.
Given this rule, the question of the correctness of
the denial of respondents’ requests for postponements was addressed to the
sound discretion of Judge Dicdican. His action thereon cannot be
disturbed by appellate courts in the absence of any clear and manifest abuse of
discretion resulting in a denial of substantial justice. Since there was no such finding with regard
to the disallowance of the requests for postponement, the CA [Court of Appeals]
cannot overturn the decision of the judge. Much less can it assume his bias
and partiality based merely on the denial of the requests for postponement.[19]
With
regard to the second issue, the petitioner never disputed his use of the credit
card issued to him by the private respondent.
While he maintains that there is a “great disparity” between the amount
of credit he availed of and what was actually being collected from him by the private
respondent, nowhere in the records of this case, however, did petitioner
Alcaraz contest any specific purchase or cash advance charged to the credit
card, whether the peso or the dollar account.
While the petitioner did request the private respondent in writing for a
computation of his outstanding balance, the petitioner likewise in the very
same letter offered to pay his outstanding obligations in twelve (12) equal
monthly installments.[20] Private respondent Equitable responded by
proposing that the amount due as stated in the statement of accounts sent to
the petitioner instead be paid in six (6) equal monthly installments.[21] Petitioner Alcaraz likewise made partial
payments before and after he made the proposed payment scheme to the private
respondent. Clearly, what the petitioner
contests is the application of the interests, penalties and other charges as
provided for in the Terms and Conditions when he never signed nor conformed to
the said document. Petitioner Alcaraz
likewise claims that the contested provisions are not applicable to him because
he was considered an honorary member who is entitled to pay for his credit
purchases and cash advances on an installment basis free of any interest. The petitioner asserts that the “honorary”
status given to him was evidenced by the fact that private respondent Equitable
issued the credit card in his name without the necessity of any application or
document submitted and signed by him prior to such issuance.[22]
Private
respondent Equitable, on the other hand, avers that while petitioner Alcaraz did not file or sign an application for the credit
card, this did not exempt him from the provisions of the Terms and
Conditions. Petitioner’s claim of
honorary membership which allegedly entitles him to pay his obligations on an
interest-free installment basis is fallacious and groundless.[23] Private respondent Equitable contends that
the waiver of the filing of an application simply means that petitioner Alcaraz
has been pre-screened. Such a status is
conferred on a person by virtue of his good credit standing or upon
recommendation of a reputable client or officer of private respondent Equitable. It is private respondent Equitable’s
assertion that by signing the credit card and subsequently using the same, the
petitioner has agreed to the Terms and Conditions and any amendment thereto as
stated in the back of the credit card itself.[24] Except from his bare assertions that the
non-filing of application entitles him to pay for his credit card obligations
free of interest on an installment basis, the petitioner was not able to show
that it was in fact the agreement between him and the private respondent or
that the same is the policy and/or practice of the latter.
The
evidence sustains the claim of private respondent Equitable that petitioner Alcaraz is what is known as a pre-screened client. When a client is classified as pre-screened,
the usual screening procedures of prospective cardholders, such as the filing
of an application form and submission of other relevant documents prior to the
issuance of a credit card, are dispensed with and the credit card is issued
outright. Upon receipt of the card, the
pre-screened client has the option of accepting or rejecting the credit
card. In the case at bar, petitioner
Alcaraz signified his acceptance of the credit card by signing and subsequently
using the same. This, however, without
more, does not confer “honorary membership” status to the petitioner.
We come now to the application of the
provisions of the Terms and Conditions, particularly the interest rates,
penalties and surcharges, to petitioner Alcaraz. It is the petitioner’s contention that since
he never signed an application form or any other document containing the Terms
and Conditions, the same should not be applied to him as it violates one of the
most essential and basic tenets of contract law which is consent. It is petitioner Alcaraz’s position that he
is not bound by the Terms and Conditions as he never signed it.
Private
respondent Equitable, on the other hand, claims that at the back of the credit
card itself the following is stated:
By
signing or using this card, the holder agrees to be bound by Equitable Bank’s
Credit Card Agreement, all future amendments thereto. . . .[25]
The private respondent maintains that
the above stipulation is a standard clause printed at the back of each credit
card that it issued and that the Agreement mentioned therein refers to the
Terms and Conditions which governs the use of the credit card as contained in private
respondent Equitable’s standard application form.[26] Thus, by signing the back of the credit card,
petitioner Alcaraz has explicitly consented to the
Terms and Conditions including the applicable interests, service fees,
attorney’s fees and liquidated damages in the event of nonpayment within the
period stated in the statements of account regularly sent every month to the
petitioner.
It is a basic rule of evidence that a
party has the burden of proving his own affirmative allegations.[27] In the instant case, private respondent
Equitable has the burden of proving the material allegations of its complaint
with the requisite quantum of evidence.
One such material allegation is the applicability of the provisions of
the Terms and Conditions to petitioner Alcaraz.
In support thereof private respondent Equitable presented a copy of the
Terms and Conditions as contained in its standard application form[28] and
a copy of its “Visa Card” issued to another client in order to show the alleged
standard stipulation printed at the back of the card.[29] The standard application form presented to
the court does not bear the signature of the petitioner. In fact, as admitted by private respondent
Equitable, petitioner Alcaraz, as a pre-screened client, did not submit or sign
any application form or document prior to the issuance of the credit card. Neither is there any evidence on record that
the petitioner was shown a copy of the Terms and Conditions before or after the
issuance of the credit card in his name, much less that he has given his
consent thereto. As correctly pointed
out by the Court of Appeals, the petitioner should not be condemned to pay the
interests and charges provided in the Terms and Conditions on the mere claim of
the private respondent without any proof of the former’s conformity and
acceptance of the stipulations contained therein.[30] Even if we are to accept the private
respondent’s averment that the stipulation quoted earlier is printed at the
back of each and every credit card issued by private respondent Equitable, such
stipulation is not sufficient to bind the petitioner to the Terms and
Conditions without a clear showing that the petitioner was aware of and
consented to the provisions of this document.
This, the private respondent failed to do.
It is, however, undeniable that
petitioner Alcaraz accumulated unpaid obligations both in his peso and dollar
accounts through the use of the credit card issued to him by private respondent
Equitable. As such, petitioner Alcaraz
is liable for the payment thereof. Since
the provisions of the Terms and Conditions are inapplicable to petitioner
Alcaraz, the legal interest on obligations consisting of loan or forbearance of
money shall apply. As this Court ruled
in the landmark case of Eastern Shipping Lines, Inc. v. Court of Appeals,[31] to wit:
1. When
the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may
have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil Code.[32]
. . . .
3. When
the judgment of the court awarding a sum of money becomes final and executory,
the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.[33]
In the present case, the records
reveal that the principal amount of the obligation on the peso account of the subject
credit card as of March 17, 1996 is P81,000.00,[34] while the dollar account of the same credit
card has an unpaid balance of $4,397.34 exclusive of any interests, penalties
and other charges as of March 3, 1996.[35] The extrajudicial demand for payment for the
dollar account was made on
IN VIEW WHEREOF,
the petition is DISMISSED and the
1. on the peso account of Equitable Visa Gold
International Card with card number
4921-0100-0743-2013 and account base number 4921-0100-0743-2005,
the principal amount of P81,000.00 with interests
thereon at the rate of 12% per annum from October 5, 1996 until full payment thereof;
2. on
the dollar account of Equitable Visa Gold International Card with card number
4921-0100-0743-2013 and account base number 4921-0100-0743-2005, the principal
amount of $4,397.34 with
interests thereon at the rate of 12% per annum from June 25, 1996 until the said amount is paid in full; and
3. the amount of P20,000.00 as and by way of attorney’s
fees.
No costs.
SO ORDERED.
REYNATO S. PUNO
Associate Justice
WE
CONCUR:
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
CANCIO C. GARCIA
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.
REYNATO S. PUNO
Associate Justice
Chairperson
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.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1]
Rollo,
p. 136.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12] Rosario Textile Mills, Inc. v. Court of
Appeals, G.R. No. 137326, August 25, 2003,
409 SCRA 515.
[13]
Domingo Padua v. Vicente Ericta, G.R. No. L-38570,
[14] Producer’s Bank of the Philippines v. Court
of Appeals, G.R. No. 125468,
October 9, 2000, 342 SCRA 327.
[15]
Revised Rules of Court, Rule 18,
Section 4.
[16]
[17]
Rollo,
pp. 33-34.
[18]
G.R. No. 143089,
[19]
Id., citing Republic v. Sandiganbayan, 301 SCRA 237, January 20, 1999; Iriga Telephone Co., Inc. v. NLRC, 286 SCRA
600, February 27, 1998; emphases supplied,
caption supplied.
[20]
Rollo,
p. 27.
[21]
[22]
[23]
[24]
[25]
Rollo,
p. 139, citing TSN, February 23, 1999, pp. 22-24; Records, Plaintiff’s Exhibits, pp. 67-110.
[26]
[27]
Revised Rules of Court, Rule 131,
Section 1.
[28]
Rollo,
p. 45.
[29]
[30]
[31] G.R. No. 97412,
[32] Eastern Shipping Lines, Inc. v. Court of
Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95; emphases
supplied.
[33]
[34]
Records, Plaintiff’s Exhibits, p.
67.
[35] Records, Plaintiff’s Exhibits, p. 68.