FIRST DIVISION
G.R. No. 239092, June 26, 2019
BANK OF THE PHILIPPINE ISLANDS, PETITIONER, v. SPOUSES RAM M. SARDA AND JANE DOE SARDA, RESPONDENTS.
D E C I S I O N
GESMUNDO, J.:
Before us is an appeal from the April 27, 2018 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 106788, which reversed and set aside the April 12, 2016 Decision2 of the Regional Trial Court (RTC) of Makati City, Branch 143, in Civil Case No. 14-351. The RTC ordered respondents to pay petitioner the accumulated amounts for credit card purchases plus interest and charges and attorney's fees.
The first issue to be resolved is whether defendant Ram M. Sarda has received the credit card from Melissa Tandogon who initially received the said credit card. The fact is that the initial receipt of the credit card by Melissa Tandogon (whom Ram Sarda admitted that Melissa was his former employee) does not discount the possibility that the credit card may have been subsequently received by Ram Sarda. Defendant failed to present evidence that Melissa Tandogon has no authority to receive any delivery for Ram Sarda, nor did they show proof that at the time Melissa received the credit card, she was no longer an employee of Ram Sarda. If this is the fact, Ram Sarda should have brought to the attention of BPI the non-receipt of the said credit card from whomsoever received it since the first billing statement was sent to their residence. Even if the address in both complaint and answer was different from the address where the monthly billings were sent, said fact of residence was verified when Ram Sarda received the demand letter at the address similar to that indicated in the billing statements. Thus, this will only show that Ram Sarda is in fact residing in the very address where the billing statements were sent. In fact, plaintiff attached as evidence not only one but numerous billing statements. Accordingly, Ram Sarda has several opportunities to bring to the attention of BPI that they were not in possession of the said credit card if [that] is the fact. On the contrary, this only solidifies the claim of the plaintiff that Ram Sarda was the one receiving the billing statement and paying for the same. Otherwise stated, he is in possession of the credit card. No one in his right mind will keep receiving billing statements if the same is not his. It is for the defendant to establish by clear evidence that he was not the one who used the credit card.Dissatisfied, respondents appealed to the CA, arguing that BPI failed to establish the alleged obligation of respondents under the subject principal and supplementary credit cards.
Furthermore, it is a common practice here in the Philippines and even in foreign countries that the card holder is being asked to present identification card to determine if the credit card he is presenting is really his credit card. Otherwise stated, the establishments like [Resorts] World, Manila, Philippine Airlines, Casinos and Hotels (in or outside the country) will not accept credit card if no valid identification bearing the same name as that in the credit card is presented. Meanwhile, assuming that it was Melissa Tandogon who really made use of the credit card, she could not have used it for she does not have any identification bearing the name Ram M. Sarda. Thus, there can be no logical conclusion except that it was defendant Ram M. Sarda who used the credit card.
xxx the plaintiff was able to establish the obligation of the defendant. Corollarily, the defendant failed to pay the said obligation that's why the plaintiff sent a formal demand letter to the defendant to (sic) which the latter ignored.
On the other hand, this court finds the award of the attorney's fees in the amount equal [to] 25% of the principal obligation as unconscionable and excessive in which case this Court reduces said claim to only 15% based from the principal obligation, said amount is considered as fair and reasonable.
Meanwhile, this Court also reduces the claim for finance charges from 3.25% per month to only .5% per month or 6% per annum. The claim for late payment charge of 6% per month is also reduced to only .5% per month or 6% per annum. Said interest payment to be computed from March 28, 2014, the date when the complaint was filed.
xxxx
WHEREFORE, viewed in the light of the foregoing premises, judgment is hereby rendered in favor of the plaintiff and against defendants SPS. RAM M. SARDA and JANE DOE SARDA ordering them to pay the plaintiff, jointly and severally, the sum of:Costs against the defendants.
- P1,213,114.19, representing the principal (loan) obligation;
- 15% representing attorney's fee(s], the same to be computed based from the principal obligation;
- .5% per month or 6% per annum, representing Finance Charges based from the principal obligation to be computed starting from March 28, 2014; and
- .5% per month or 6% per annum, representing Late Payment Charges based from the principal obligation to be computed starting from March 28, 2014.
SO ORDERED.8
WHEREFORE, premises considered, the appeal is GRANTED. The Decision dated 12 April 2016 of Branch 143 of the Regional Trial Court of Makati City in Civil Case No. 14-351 is REVERSED and SET ASIDE. The complaint for collection of sum of money in Civil Case No. 14-351 is DISMISSED.
SO ORDERED.12
WHETHER OR NOT MR. SARDA SHOULD BE HELD LIABLE TO PAY THE TOTAL AMOUNTS DUE UNDER THE PRINCIPAL AND SUPPLEMENTARY CREDIT CARDS ISSUED BY BPI.Petitioner's Arguments
The issuance of a supplementary card without Mr. Sarda having applied for it is significant because the statements of account covering the period September 2011 to November 2012 showed huge amounts of purchases/cash advances using the supplementary card.30 While payments were made on the single account of Mr. Sarda for both cards, there were penalty charges added (late payment) and the sums paid were insufficient to cover the outstanding obligation which had ballooned to P1,213,114.19 as of September 22, 2013.31 That it was Mr. Sarda who used the supplementary card cannot be inferred solely from the fact that such payments were made, in the absence of proof of his actual receipt of the card and identity of the payor.
ATTY. DANTE DESIERTO: Is there an application form submitted to Bank of the Philippine Islands for the issuance of a supplementary credit card to Ms. Melissa Tandogon? WITNESS: I believe there is none sir because this was a pre-qualified account of the bank, sir. ATTY. DANTE DESIERTO: And kindly explain the meaning of a pre-qualified account? WITNESS: Pre-qualified accounts were given to bank clients of Bank of the Philippine Islands who have a business relation with the bank having a deposit or certain loan programs with the bank sir. ATTY. DANTE DESIERTO: Are you trying to tell me, Mr. Witness, that the defendant in this case, Mr. Ram Sarda, did not have to request the plaintiff BPI for the issuance of its supplementary credit card in [favor] of Melissa Tandogon because she is pre-qualified? WITNESS: The request is done just through phone call sir. ATTY. DANTE DESIERTO: Are you trying to tell me that there was a phone call from plaintiff rather the defendant Ram Sarda to the plaintiff BPI requesting for the issuance of the supplementary card? WITNESS: Yes, sir. ATTY. DANTE DESIERTO: Do you have the record of that phone call? WITNESS: None sir. ATTY. DANTE DESIERTO: Did you take that phone call? WITNESS: Me, personally? No sir. ATTY. DANTE DESIERTO: Then how did you know that there is a phone call? WITNESS: Just base[d] on the records of the bank sir. ATTY. DANTE DESIERTO: What record? WITNESS: During the application, a certain requests (sic) were forwarded to our department. xxxx ATTY DANTE DESIERTO: So what you are saying is there is an application form both for the principal card and the supplementary credit card? WITNESS: No actual application form but there was a request for application of the credit card. ATTY. DANTE DESIERTO: There is no written request? WITNESS: Yes, there is no written request. ATTY. DANTE DESIERTO: But there is a verbal request? WITNESS: Yes. ATTY. DANTE DESIERTO: And it was made through phone call? WITNESS: Yes sir. ATTY. DANTE DESIERTO: Do you know who took the phone (sic)? WITNESS: No sir. ATTY. DANTE DESIERTO: Is there anyone in your company who would probably know the identity of the person who took the call? WITNESS: I cannot answer that sir because the issuance is by year 2009 perhaps some of the staffs were already resigned (sic). ATTY. DANTE DESIERTO: Mr. Witness, are these phone calls received by call center agents, if you know? WITNESS: No sir. There are times that we hire a certain company to make a call to our clients if they are willing to have a credit card or a loan in the bank sir. ATTY. DANTE DESIERTO: So there was a phone call from BPI to Mr. Sarda offering the issuance of the supplementary credit card? WITNESS: Offering the issuance of the account sir because the account both at the same time of Mr. Ram Sarda and Melissa Tandogon were generated sir. ATTY. DANTE DESIERTO: So are those phone calls or phone conversations, are they recorded? WITNESS: I cannot answer that sir...I do not have a personal knowledge on that sir.29 (emphases supplied)
SECTION 1. Preponderance of evidence, how determined. - In civil cases, the party having [the] burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses' manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.Since BPI clearly failed to present adequate proof that it was respondents who made purchases and cash advances using the cards, the CA did not err in dismissing its complaint.
Endnotes:
* Designated as Additional Member in lieu of Associate Justice Francis H. Jardeleza, who takes no part due to association of a family member with a party, per Raffle dated April 10, 2019.
1Rollo, pp. 97-106; penned by Associate Justice Germano Francisco D. Legaspi, with Associate Justices Ramon R. Garcia and Myra V. Garcia-Fernandez, concurring.
2 Id. at 108-110; penned by Judge Maximo M. De Leon.
3 Records (Vol. I), pp. 1-2.
4 Id. at 3.
5 Id. at 80-81.
6 Id. at 29; Exhibit "C".
7 Id. at 30; Exhibit "D".
8 Records (Vol. II). pp. 135-137.
9Rollo, pp. 100-105.
10 Id. at 103-104.
11 Id. at 104-105.
12 Id. at 105.
13 Id. at 65.
14 "AN ACT REGULATING THE ISSUANCE AND USE OF ACCESS DEVICES, PROHIBITING FRAUDULENT ACTS COMMITTED RELATIVE THERETO, PROVIDING PENALTIES AND FOR OTHER PURPOSES." Approved on February 11, 1998.
15Rollo, pp. 66-68.
16 Id. at 71-77.
17 Id. at 344-348.
18 423 Phil. 593 (2001).
19Rollo, pp. 348-366.
20 Id. at 368-378.
21Carbonell v. Carbonnel-Mendes, 762 Phil. 529, 537 (2015), citing Republic of the Phils. v. Belmonte, 719 Phil. 393, 400 (2013).
22 TSN, April15, 2015, pp. 16-17.
23Alcaraz v. Court of Appeals, et al., 529 Phil. 77, 86 (2006).
24 Records (Vol. I), p. 29.
25 See Spouses Yulo, et al. v. Bank of the Philippine Islands, G.R. No. 217044, January 16, 2019.
26 Id.
27 Records (Vol. II), pp. 31-72, (Vol. I), pp. 31-58.
28 TSN, April 15, 2015, pp. 29-34.
29 TSN, June 10, 2015, pp. 7-12.
30 Records (Vol. I), pp. 31-40; (Vol. II), pp. 49-72.
31 Records (Vol. I), p. 58.
32Citibank, N.A. Mastercard v. Teodoro, 458 Phil. 480, 488 (2003), citing Intestate Estate of the Late Don Mariano San Pedro y Esteban v. Court of Appeals, et al., 333 Phil. 597, 621-622 (1996); Trans-Pacific Industrial Supllies, Inc. v. Court of Appeals, et al., 305 Phil. 534, 542 (1994).
33 BSP Circular No. 702, Sec. 2, series of 2010.
AMENDED REGULATIONS TO ENHANCE CONSUMER PROTECTION IN THE CREDIT CARD OPERATIONS OF BANKS AND THEIR SUBSIDIARY OR AFFILIATE CREDIT CARD COMPANIES
Pursuant to Monetary Board Resolution No. 1728 dated 02 December 2010, the provisions of the Manual Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) are hereby amended, as follows:
xxxx
Section 2. The provisions of Subsection X320.3 of the MORB, and Subsections 4320Q.3 (2008-43370.3) and 4301N.3 of the MORNBFI on the minimum requirements before issuing credit cards are hereby amended to read as follows:Banks/Quasi-banks and their subsidiary or affiliate credit card companies shall not issue pre-approved credit cards.34 BSP Circular No. 845, Secs. 2 and 3, series of 2014.
Before issuing credit cards, banks/quasi-banks and/or their subsidiary/affiliate credit card companies must exercise, in accordance with the provisions of Subsection X304.1/4304Q.1 (2008-4312Q.1)/4312N.1, proper diligence by ascertaining that applicants possess good credit standing and are financially capable of fulfilling their credit commitments.
The net take home pay of applicants who are employed, the net monthly receipts of those engaged in trade or business, or the net worth or cash flow inferred from deposits of those who are neither employed nor engaged in trade or business or the credit behavior exhibited by the applicant from his other existing credit cards, or other lifestyle indicators such as, but not limited to, club memberships, ownership and location of residence and motor vehicle ownership shall be determined and used as basis for setting credit limits. The gross monthly income may also be used provided reasonable deductions are estimated of income taxes, premium contributions, loan amortizations and other deductions.
All credit card applications, specifically those solicited by third party representatives/agents, shall undergo a strict credit risk assessment process and the information stated thereon validated and verified by authorized personnel of the banks/quasi-banks and their subsidiary or affiliate credit card companies, other than those handling marketing.
Section 2. Addition of related appendices. Relative to Section I of this Circular, the acts tantamount to the act of issuing pre-approved credit cards shall form part of the List of Appendices of MORB and MORNBFI and shall be designated as follows:xxxxSection 3. Enhancement of the regulation that prohibits the issuance of pre-approved credit cards. The prohibition on the issuance of pre-approved credit cards by all BSP supervised financial entities with credit card operations under Subsection X320.3 of the MORB, and Subsections 4320Q.3 and 4301N.3 of the MORNBFI is enhanced by stressing, under said regulations, that the provisions of this Circular shall prevail notwithstanding any contrary stipulations in the contract.
Acts Tantamount to the Act of Issuing Pre-approved Credit CardsThe acts described above and other similar acts are deemed tantamount to the act of issuing pre-approved credit cards notwithstanding any contrary stipulations in the contract.
- Sending of credit cards to consumers with no prior application, written request and supporting documents required for prudent credit card evaluation;
- Sending of unsolicited supplementary cards and other cards with added features which are not in replacement or substitute to an existing cardholder's initial credit card;
- Unsolicited calls by credit card issuers requesting updated information from selected clients in order to be entitled to receive credit card as a reward for his/her continued patronage of the bank's other financial products;
- Unsolicited calls by the bank to its depositors informing them that they already have a credit card from the bank's Credit Card Department due to good standing as a depositor;
- Sending of mails with credit card enclosed which will be deemed accepted upon the receipt of such card by a receiver, whether authorized or not;
- Sending to a consumer an unsolicited credit card which is deemed accepted unless a request for termination is promptly instructed by the cardholder to the credit card issuer; and
- Sending of credit cards as free offers to consumers who availed themselves of the bank's other financial products.
Subsection X3203.3 of the MORB is hereby amended to read as follows:35 BSP Circular No. 845, Sec. 1, series of 2014.
§ X320.3 Minimum Requirements. Banks and their subsidiary or affiliate credit cards companies shall not issue pre-approved credit cards as provided under Appendix 103, notwithstanding any contrary stipulations in the contract.
Subsection X4320Q.3 of the MORNBFI is hereby amended to read as follows:
§ 4320Q.3 Minimum Requirements. QBs and their subsidiary or affiliate credit cards companies shall not issue pre-approved credit cards as provided under Appendix Q-61, notwithstanding any contrary stipulations in the contract.
Subsection X4301N.3 of the MORNBFI is hereby amended to read as follows:
§ 4301N.3 Minimum Requirements. NBFIs and their subsidiary or affiliate credit cards companies shall not issue pre-approved credit cards as provided under Appendix N-10, notwithstanding any contrary stipulations in the contract.Section 1. Inclusion under the definition of terms - xxx36 Approved on July 17, 2016.
xxxx
n. Application is a documented request of the credit card applicant to a credit card issuer for the availment of a credit card. The intention and consent for the availment of the credit card must be clear and explicit.
37 R.A. No. 10870, Sec. 7.
SECTION 7. Minimum Requirements for the Issuance of Credit Cards. - Before issuing credit cards. credit card issuers must conduct know-your-client (KYC) procedures and exercise proper diligence in ascertaining that applicants possess good credit standing and are financially capable of fulfilling their credit commitments.
38 R.A. No. 10870, Sec. 5(b).
SECTION 5. Definition of Terms. - As used in this Act, the following terms are defined as follows:
xxxx
(b) Acquirer refers to the institution that accepts and facilitates the processing of the credit card transaction which is initially accepted by the merchant[.]
39 R.A. No. 10870, Sec. 8.
SECTION 8. Service Level Agreement. - There shall be, in the service level agreement between the acquiring banks and their partner merchants, a provision requiring merchants to perform due diligence to establish the identity of the cardholders.
Nothing in this Act shall preclude a card issuer from verifying or seeking confirmation with the cardholder any purchase if in their assessment there is reasonable concern as to the validity of the purchase.
40 R.A. No. 10870, Sec. 27.
SECTION 27. Violation of this Act and Other Related Rules, Regulations, Orders or Instructions. A person who willfully violates any provision of this Act or any related rules, regulations, order or instructions, issued by the Monetary Board shall be punished by imprisonment of not less than two (2) years nor more than ten (10) years, or by a fine of not less than fifty thousand pesos (P50,000.00) but not more than two hundred thousand pesos (P200,000.00), or both, at the discretion of the court.