THIRD DIVISION
G.R. No. 217044, January 16, 2019
SPOUSES RAINIER JOSE M. YULO AND JULIET L. YULO, Petitioners, v. BANK OF THE PHILIPPINE ISLANDS, Respondent.
D E C I S I O N
LEONEN, J.:
When issuing a pre-screened or pre-approved credit card, the credit card provider must prove that its client read and consented to the terms and conditions governing the credit card's use. Failure to prove consent means that the client cannot be bound by the provisions of the terms and conditions, despite admitted use of the credit card.
This resolves the Petition for Review on Certiorari1 filed by Spouses Rainier Jose M. Yulo (Rainier) and Juliet L. Yulo (Juliet), assailing the Court of Appeals February 20, 2015 Decision2 in CA-G.R. SP No. 131192, which upheld the June 26, 2013 Decision3 of the Regional Trial Court, Branch 62, Makati City.
On October 9, 2006,4 the Bank of the Philippine Islands issued Rainier a pre-approved credit card. His wife, Juliet, was also given a credit card as an extension of his account. Rainier and Juliet (the Yulo Spouses) used their respective credit cards by regularly charging goods and services on them.5
The Yulo Spouses regularly settled their accounts with the Bank of the Philippine Islands at first, but started to be delinquent with their payments by July 2008. Their outstanding balance ballooned to P264,773.56 by November 29, 2008.6
On November 11, 2008, the Bank of the Philippine Islands sent Spouses Yulo a Demand Letter7 for the immediate payment of their outstanding balance of P253,017.62.
On February 12, 2009, the Bank of the Philippine Islands sent another Demand Letter8 for the immediate settlement of their outstanding balance of P325,398.42.
On February 23, 2009, the Bank of the Philippine Islands filed a Complaint9 before the Metropolitan Trial Court of Makati City for sum of money against the Yulo Spouses. This was initially raffled to the Metropolitan Trial Court Branch 67, Makati City, and was docketed as Civil Case No. 97470.
In their Answer,10 the Yulo Spouses admitted that they used the credit cards issued by the Bank of the Philippine Islands but claimed that their total liability was only P20,000.00. They also alleged that the Bank of the Philippine Islands did not fully disclose to them the Terms and Conditions on their use of the issued credit cards.11
Several attempts at mediation12 between the parties were unsuccessful; thus, the case was re-raffled to the Metropolitan Trial Court Branch 65, Makati City, and proceeded with both parties presenting their respective witnesses.13
On June 29, 2012,14 the Metropolitan Trial Court, in its Decision,15 ruled in favor of the Bank of the Philippine Islands and ordered the Spouses Yulo to pay the bank the sum of P229,378.68.
The Metropolitan Trial Court found that the Bank of the Philippine Islands successfully proved by preponderance of evidence that the Yulo Spouses failed to comply with the Terms and Conditions of their contract. Nonetheless, it equitably reduced the monthly three percent (3%) interest and three percent (3%) penalty charged under the Terms and Conditions to one percent (1%) interest and one percent (1%) penalty, to be computed from demand.16
The dispositive portion of the Metropolitan Trial Court's June 29, 2012 Decision read:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendants SPS. RAINER (sic) JOSE M. YULO and JULIET L. YULO, jointly and severally, to pay plaintiff the amount of P229,378.68 plus 1% interest and 1% penalty per month from February 12, 2009 until the whole amount is fully paid and the amount of P15,000.00 as and by way of attorney's fees; and, the costs.The Yulo Spouses filed an Appeal, but it was dismissed on June 26, 201318 by the Regional Trial Court Branch 62, Makati City, which affirmed the Metropolitan Trial Court Decision.
SO ORDERED.17 (Emphasis in the original, citation omitted)
IN VIEW WHEREOF, the appeals interposed by spouses Yulo is DISMISSED and the assailed decision dated June 29, 2011 (2012) of the Metropolitan Trial Court of Makati City Branch 65 is AFFIRMED in toto.The Yulo Spouses then filed a Petition for Review before the Court of Appeals.23 On February 20, 2015, the Court of Appeals denied the Petition and affirmed the Regional Trial Court Decision.24
SO ORDERED.22 (Emphasis in the original)
WHEREFORE, the Petition is hereby DENIED. The Decision dated 26 June 2013 of the Regional Trial Court of Makati City, Branch 62, in Civil Case No. 12-945, is AFFIRMED.The Yulo Spouses then elevated the case to this Court through this Petition.
SO ORDERED.27 (Emphasis in the original)
As record shows, [the Bank of the Philippine Islands] presented as evidence the Delivery Receipt marked in evidence as Exhibit "C". The [Bank of the Philippine Islands] credit card issued in favor [of] defendant-appellant Rainier Jose M. Yulo was received by his duly authorized representative, one Jessica Baitan. In fact, defendants-appellants admitted having made [use] and availed of the credits which plaintiff-appellees may have in its member establishments.43This was affirmed by the Court of Appeals, which stated, "The [Bank of the Philippine Islands] credit card issued to petitioner Rainier was received by his authorized representative, a certain Jessica Baitan, as evidenced by a Delivery Receipt."44
Out of the above given principles, sprung the creation an acceptance of the relationship of agency whereby one party, called the principal (mandante), authorizes another, called the agent (mandatario), to act for find (sic) in his behalf in transactions with third persons. The essential elements of agency are: (1) there is consent, express or implied, of the patties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agents (sic) acts as a representative and not for himself; and (4) the agent acts within the scope of his authority.50 (Emphasis in the original, citation omitted)Respondent fell short in establishing an agency relationship between petitioner Rainier and Baitan, as the evidence presented did not support its claim that petitioner Rainier authorized Baitan to act on his behalf. Without proof that petitioner Rainier read and agreed to the Terms and Conditions of his pre-approved credit card, petitioners cannot be bound by it.
ATTY. BAUTISTA:This case thus falls squarely within Alcaraz v. Court of Appeals56 and Ledda v. Bank of the Philippine Islands,57 where the credit card provider also failed to prove the pre-screened client's consent to the credit card's terms and conditions. Alcaraz ruled that when the credit card provider failed to prove its client's consent, even if the latter did not deny availing of the credit card by charging purchases on it, the credit card client may only be charged with legal interest:But would you admit that before June 2008 you made purchases?AYes, Ma'am.QWould you admit that those purchases were reflected in the Statement of Account?COURT:Were there disputed purchases before June 2008?ATTY. PUZON:None, Your Honor.COURT:That is improper because they are not disputing the purchases or transactions as stated in the Statement of Account earlier identified by the witness.ATTY. BAUTISTA:Mr. Witness, did you receive the Statement of Account sent to you by the plaintiff?ATTY. PUZON:Not covered by direct examination, Your Honor.ATTY. BAUTISTA:I'm on cross-examination, Your Honor.COURT:What Statement of Account? Give certain period. Are you referring to the Statement of Account after the June 2008?ATTY. BAUTISTA:Before the June 2008, Your Honor.COURT:There is no dispute as to the obligation as of June 2008, so that would be improper.55 (Emphasis supplied)
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. 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.The records reveal that as of the July 9, 2008 Statement of Account, petitioners had an outstanding balance of P229,378.68. The Metropolitan Trial Court stated:
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.58 (Emphasis supplied, citation omitted)
As of Statement Date July 9, 2008, wherein defendants made their last payment, the outstanding balance is P110,778.49. However, there are still installments due on the account; thus, the following must be included in his obligation:The Metropolitan Trial Court ruling was affirmed by both the Regional Trial Court and the Court of Appeals. However, since petitioner Rainier did not consent to the Terms and Conditions governing his credit card, there is a need to modify the outstanding balance by removing the interests, penalties, and other charges imposed before and on the July 9, 2008 Statement of Account.
Establishment Monthly Installment No. of Installments Due Amount DueAutomatic Centre 624.96 7 4,374.72Abenson 961.11 5 4,805.55Abenson 849.58 2 1,699.16EBC 2,738.85 3 8,216.55EBC 7,012.48 3 21,037.44EBC 8,718.53 9 78,466.77TOTAL 118,600.19
Thus, the amount of P118,600.19 must be added to P110,778.49, which would sum up to P229,378.68.59 (Emphasis in the original, citation omitted)
Thus, the finance charges, penalties, and interests amounting to P9,321.17 should be deducted from the outstanding balance of P229,378.68, leaving a new outstanding balance of P220,057.51. This outstanding balance shall then be subjected to 12% legal interest from November 11, 2008,74 the date of respondent's first extrajudicial demand75 until June 30, 2013, and six percent (6%) legal interest from July 1, 2013 until fully paid.76
Statement Date Finance Charge Penalties and InterestsMarch 9, 2008 P606.0161 641.1162 373.5863April 9, 2008 605.1964 431.6965 813.6166May 11, 2008 0June 9, 2008 1,510.8867 21.2868July 9, 2008 1,777.5569 338.2870 2,121.1071 7.9672 72.9373Sub-total 7,197.38 2,123.79Total P9,321.17
Very truly yours, (SGD) WILFREDO V. LAPITAN Division Clerk of Court |
Endnotes:
* Designated additional Member per Special Order No. 2624 dated November 28, 2018.
1Rollo. pp. 12-42.
2 Id. at 44-52. The Decision was penned by Associate Justice Japar B. Dimaampao and concurred in by Associate Justices Franchito N. Diamante and Carmelita S. Manahan of the Tenth Division Court of Appeals, Manila.
3 Id. at 72-75. The Decision, in the case docketed as Civil Case No. 12-945, was penned by Judge Selma Palacio Alaras of Branch 62, Regional Trial Court, Makati City.
4 Id. at 84.
5 Id. at 45.
6 Id.
7 Id. at 94.
8 Id. at 135.
9 Id. at 77-81.
10 Id. at 95-97.
11 Id. at 96.
12 Id. at 136.
13 Id. at 136-139.
14 Not June 29, 2011 as written in the Metropolitan Trial Court Decision.
15Rollo, pp. 136-140. The Decision, in the case docketed as Civil Case No. 97470, was penned by Presiding Judge Henry E. Laron of Branch 65, Metropolitan Trial Court, Makati City.
16 Id. at 139.
17 Id. at 140.
18 Id. at 72-75.
19 Id. at 73.
20 Id. at 73-74.
21 Id. at 74-75.
22 Id. at 75.
23 Id. at 44.
24 Id. at 44-52.
25 Id. at 47-49.
26 Id. at 49-50.
27 Id. at 52.
28 Id. at 12-33.
29 Id. at 23.
30 Id. at 28.
31 Id. at 24.
32 Id. at 25.
33 Id. at 27.
34 Id. at 29.
35 Id. at 239-245.
36 Id. at 239-240.
37 Id. at 241.
38 Id. at 241-242.
39 Id. at 247-1.
40 Id. at 248-252.
41Alcaraz v. Court of Appeals, 529 Phil. 77, 86 (2006) [Per J. Puno, Second Division].
42 Id.
43Rollo, p. 73.
44 Id. at 47.
45Alcaraz v. Court of Appeals, 529 Phil. 77, 87 (2006) [Per J. Puno, Second Division].
46Rollo, p. 84.
47 CIVIL CODE, art. 1868 provides:
ARTICLE 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter.
48 CIVIL CODE, art. 1869 provides:
ARTICLE 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority.
Agency may be oral, unless the law requires a specific form.
49 171 Phil. 222 (1978) [Per J. Muñoz Palma, First Division].
50Rallos v. Felix Go Chan & Sons Realty Corporation, 171 Phil. 222, 226-227 (1978) [Per J. Muñoz Palma, First Division].
51Rollo, p. 23.
52BPI Express Card Corporation v. Armovit, 745 Phil. 31, 36 (2014) [Per J. Bersamin, First Division].
53Rollo, pp. 48-49.
54 Id. at 138.
55 Id. at 192-194.
56 529 Phil. 77 (2006) [Per J. Puno, Second Division].
57 699 Phil. 273 (2012) [Per J. Carpio, Second Division].
58Alcaraz v. Court of Appeals, 529 Phil. 77, 88 (2006) [Per J. Puno, Second Division].
59Rollo, p. 139.
60 Id. at 103-121.
61 Id. at 103.
62 Id. at 105.
63 Id. at 106.
64 Id. at 107.
65 Id. at 109.
66 Id.
67 Id. at 118.
68 Id.
69 Id. at 119.
70 Id.
71 Id.
72 Id. at 121.
73 Id.
74 Id. at 94.
75 CIVIL CODE, art. 1169 provides:
ARTICLE 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist: (1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins.
76Nacar v. Gallery Frames, 716 Phil. 267 (2013) [Per J. Peralta, En Banc].
77Rollo, p. 140.
78Ledda v. Bank of the Philippine Islands, 699 Phil. 273, 283 (2012) [Per J. Carpio, Second Division].
79Rollo, p. 140.
80Nacar v. Gallery Frames, 716 Phil. 267 (2013) [Per J. Peralta, En Banc].