G.R. No. 200868 - Ledda vs. Bank of the Philippine Islands

Anita A. Ledda, as a valued client of the Bank of the Philippine Islands (BPI), was issued a pre-approved credit card under Customer Account Number 020100-9-00-3041167.
The BPI Credit Card Package, which included the Terms and Conditions governing the use of the credit card, was delivered to Ledda’s residence on 1 July 2005.
By availing of this credit accommodation, Ledda engaged in various transactions, including purchases of goods, availment of services from accredited merchants, and cash advances.

Ledda incurred an outstanding balance amounting to P548,143.73 as per the Statement of Account dated 9 September 2007.
Despite BPI’s repeated verbal and written demands for the payment—including sending letters that detailed the principal obligation, finance charge (3.25% per month), and late payment charge (6% per month)—Ledda failed to settle her account.
BPI initiated a collection suit based on her default in payment.

The collection suit was filed before the Regional Trial Court, Makati City, Branch 61.
Initially, Ledda defaulted by failing to file an Answer within the prescribed period, even after receipt of the complaint and summons.
Upon filing a motion for reconsideration, the trial court lifted the default order and admitted her Answer ad cautelam.
However, Ledda and her counsel did not appear during the continuation of the pre-trial, which led the trial court to allow BPI to present its evidence ex-parte.
In its Decision of 4 June 2009, the trial court ruled in favor of BPI, ordering Ledda to pay the total outstanding obligation (inclusive of finance and late-payment charges), along with attorney’s fees and costs of suit.

The Court of Appeals reviewed the case after partially granting Ledda’s appeal and modifying the regional trial court’s decision.
It clarified that the document containing the Terms and Conditions is not an actionable document under Section 7, Rule 8 of the 1997 Rules of Civil Procedure, because the cause of action was based on Ledda’s use of the credit facilities and her non-payment.
The Court of Appeals reduced the finance charge from 3.25% and the late payment charge from 6% per month to 1% each, effectively recalculating the obligation by deducting P226,000.15 (interest and charges) from the initial sum, thereby isolating the principal amount at P322,138.58.
BPI was awarded attorney’s fees set at Php10,000 based on precedent, though this award was later scrutinized.

While BPI imposed a combined interest and penalty rate of 9.25% per month initially, the Court of Appeals found such a rate exorbitant and unconscionable, leading to its reduction guided by earlier jurisprudence.
Ledda argued that, as a pre-screened client who did not sign any document attesting to the Terms and Conditions, the stipulations (including those on interest and penalty charges) were not binding on her.
Additionally, the trial court’s award of attorney’s fees was challenged because it was not sufficiently supported by factual and legal findings within the body of its decision.

Whether the document containing the Terms and Conditions governing the issuance and use of the credit card is an actionable document under Section 7, Rule 8 of the 1997 Rules of Civil Procedure.

Whether the appropriate precedent for determining the applicable interest and penalty rates should be Alcaraz v. Court of Appeals, considering Ledda’s lack of consent and awareness of the credit card’s Terms and Conditions, rather than Macalinao v. Bank of the Philippine Islands.

Whether the award of attorney’s fees in favor of BPI was proper, given that the trial court failed to state the factual and legal basis for such award in the body of its decision.