Title
BPI Express Card Corp. vs. Armovit
Case
G.R. No. 163654
Decision Date
Oct 8, 2014
BPI Express Credit suspended Armovit's card without clear notice, causing embarrassment. SC upheld damages for bad faith and negligence, affirming CA's ruling.
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Case Digest (G.R. No. 163654)

Facts:

Background of the Case

  • Petitioner: BPI Express Card Corporation (BPI Express Credit).
  • Respondent: Ma. Antonia R. Armovit, a credit card holder.
  • Issue: Claim for damages due to the suspension of her credit card privileges.

Credit Card Issuance and Suspension

  • Armovit was issued a pre-approved BPI Express Credit Card in 1989 with a credit limit of P20,000.00, set to expire in March 1993.
  • On November 21, 1992, Armovit attempted to use her credit card at Mario's Restaurant but was informed it had been canceled.
  • She later learned her card was suspended due to alleged unpaid obligations, which she denied.

Demand for Compensation

  • Armovit demanded P2,000,000.00 in compensation for the embarrassment and humiliation she suffered.
  • BPI Express Credit claimed it had sent her a telegraphic message on March 19, 1992, requesting payment of arrears, and suspended her card on March 31, 1992, due to non-payment.
  • BPI Express Credit stated that while her obligation was settled by April 1992, she failed to submit a required application form to reactivate her card.

Legal Proceedings

  • Armovit sued BPI Express Credit for damages, claiming she was in good standing and had no unpaid bills.
  • BPI Express Credit defended itself by stating Armovit had defaulted on her obligations and was notified of the suspension.

RTC and CA Decisions

  • The RTC ruled in favor of Armovit, awarding her moral damages, exemplary damages, attorney's fees, and costs of suit.
  • The CA affirmed the RTC's decision, noting that Armovit had not signed any application form and was unaware of the terms and conditions.

Issue:

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Ruling:

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Ratio:

  1. Contractual Relationship: The relationship between a credit card issuer and holder is governed by the terms and conditions of the card membership agreement.
  2. Bad Faith and Gross Negligence: BPI Express Credit acted in bad faith and with gross negligence by failing to clearly inform Armovit of the reactivation requirements and by erroneously including her card in a caution list.
  3. Parol Evidence Rule: The Court applied the Parol Evidence Rule, stating that the terms and conditions of the contract could not be altered by BPI Express Credit's unilateral imposition of additional requirements.
  4. Damages: The award of moral damages (P100,000.00), exemplary damages (P10,000.00), and attorney's fees was justified due to the embarrassment and inconvenience caused to Armovit.

Conclusion:

The Supreme Court upheld the CA's decision, affirming the award of damages to Armovit and ordering BPI Express Credit to pay the costs of suit.


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