Bank of the Philippine Islands Express Card Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Atty. Ricardo J. Marasigan (private respondent) was a credit cardholder of BPI Express Card Corporation (BECC, petitioner). His membership was renewed, and his credit limit increased. He had previously exceeded his limits, but this was tolerated. However, his statement of account for October 1989, amounting to P8,987.84, was not paid on time due to his commitments in Quezon province. He was informed by his secretary that BECC was demanding immediate payment, requiring a P15,000.00 check to cover future bills, and threatening to suspend his card. He issued a postdated check for P15,000.00, dated December 15, 1989, which was received by BECC on November 23, 1989. On November 28, 1989, BECC sent Marasigan a letter by ordinary mail informing him of the temporary suspension of his credit card privileges and inclusion in their Caution List, warning him to refrain from further use and stating that his membership would be permanently cancelled if he did not settle his account within 5 days. On December 8, 1989, Marasigan entertained guests at Café Adriatico and presented his credit card for a bill of P735.32, but it was dishonored. One of his guests paid the bill. Marasigan subsequently sent letters to BECC requesting the return of his postdated check, asserting that the agreement was that the card would not be suspended if he issued the check. He also requested his correct billing and an explanation for the dishonor, threatening legal action. BECC sent a final demand letter requiring payment and replacement of the postdated check with cash, or face criminal suit for violation of the Bouncing Check Law. Procedural History: Marasigan filed a complaint for damages against BECC. The Regional Trial Court (RTC) ruled in favor of Marasigan, finding that BECC abused its right under Article 19 of the Civil Code and ordering BECC to pay moral damages, exemplary damages, and attorney's fees. The RTC also ordered Marasigan to pay his outstanding obligation. The Court of Appeals (CA) affirmed the RTC's decision with modifications to the awarded damages and attorney's fees. BECC appealed to the Supreme Court. The Petition: BECC questions the lower courts' findings that there was an agreement not to suspend the card upon issuance of the postdated check and that BECC abused its right, leading to liability for damages.
Issue(s)
Whether there was an agreement between the parties that the private respondent's credit card would not be suspended or cancelled upon his issuance of a postdated check for P15,000.00. Whether the petitioner abused its right in suspending and subsequently dishonoring the private respondent's credit card, thereby rendering it liable for damages, including the issue of proper notice of suspension.
Ruling
The petition is meritorious. The decision of the Court of Appeals is SET ASIDE. Private respondent is DIRECTED to pay his outstanding obligation with the petitioner in the amount of P14,439.41.
Ratio Decidendi
On the issue of whether there was an agreement not to suspend the card: The Court found that while there was an arrangement for the private respondent to issue a P15,000.00 check for his outstanding account, this was for immediate payment to prevent suspension. However, the private respondent issued a postdated check, which, under settled doctrine, is not considered immediate payment. The Court noted that the private respondent himself admitted that there was no written agreement and that a check, especially a postdated one, is not cash. Therefore, the issuance of the postdated check did not comply with the obligation for immediate payment, and the petitioner was justified in suspending the credit card. On the issue of abuse of right and liability for damages, including the issue of proper notice of suspension: The Court held that BECC did not abuse its right. Under the terms and conditions of the credit card contract, BECC had the right to automatically suspend any card with outstanding balances unpaid after thirty (30) days from the original billing/statement date. The private respondent admitted to being in default for more than two months. The Court found that BECC's actions did not constitute bad faith; in fact, BECC could have suspended the card earlier but allowed its use for several weeks and even notified the private respondent of the impending suspension. The Court also pointed out that the private respondent's own negligence in failing to settle his obligation was the proximate cause of the dishonor and the resulting embarrassment. The principle of damnum absque injuria applies, meaning there was damage without an actionable injury because no legal duty was breached by BECC. The Court disagreed with the CA's finding that BECC was liable for failing to properly inform the private respondent of the suspension. The contract clearly stated that suspension could be automatic without need for demand. Furthermore, BECC did send a letter by ordinary mail on November 28, 1989, notifying the private respondent of the suspension. Under the Rules of Evidence, there is a disputable presumption that letters mailed were received. The private respondent's bare denial was insufficient to rebut this presumption, and he even admitted receiving a cancellation notice after November 27. Thus, the award of damages by the respondent court was unjustified.
Main Doctrine
A credit card issuer is justified in suspending or canceling a credit card upon the cardholder's failure to pay outstanding obligations within the period stipulated in the contract, and the issuance of a postdated check does not constitute immediate payment, especially when the check is subsequently dishonored or payment is stopped.