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423 Phil. 593


[ G.R. No. 131086, December 14, 2001 ]




This petition for review seeks to annul the decision[1] of the Court of Appeals in CA-G.R. CV No. 49618, reversing the order[2] of the Regional Trial Court, Branch 145, of Makati City which held Eddie C. Olalia liable to BPI Express Card Corporation (BECC) in the amount of P136, 290.97. The CA found only the amount of P13,883.27 to be due and owing to BECC. Petitioner's motion for reconsideration was denied through a resolution,[3] also before us on review.

The factual antecedents of this case are as follows:

Petitioner operates a credit card system under the name of BPI Express Card Corporation (BECC) through which it extends credit accommodations to its cardholders for the purchase of goods and other services from member establishments of petitioner to be reimbursed later on by the cardholder upon proper billing.

Respondent Eddie C. Olalia applied[4] for and was granted membership and credit accommodation with BECC. BECC Card No. 020100-3-00-0281667 was issued in his name with a credit limit of P5,000.

In January 1991, Olalia's card expired and a renewal card was issued. BECC also issued Card No. 020100-2-01-0281667 in the name of Cristina G. Olalia, respondent's ex-wife. This second card was an extension of Olalia's credit card. BECC alleges that the extension card was delivered and received by Olalia at the same time as the renewal card. However, Olalia denies ever having applied for, much less receiving, the extension card.

As evidenced by charge slips presented and identified in court, it was found that the extension card in the name of Cristina G. Olalia was used for purchases made from March to April 1991, particularly in the province of Iloilo and the City of Bacolod. Total unpaid charges from the use of this card amounted to P101,844.54.

BECC sent a demand letter to Olalia, to which the latter denied liability saying that said purchases were not made under his own credit card and that he did not apply for nor receive the extension card in the name of his wife. He has likewise not used or allowed anybody in his family to receive or use the extension card. Moreover, his wife, from whom he was already divorced, left for the States in 1986 and has since resided there. In addition, neither he nor Cristina was in Bacolod or Iloilo at the time the questioned purchases were made. She was dropped as defendant by the trial court, in an Order dated September 29, 1995.[5]

A case for collection was filed by BECC before the RTC but Olalia only admits responsibility for the amount of P13,883.27, representing purchases made under his own credit card. After trial on the merits, a decision was rendered as follows:
WHEREFORE, judgment is rendered ordering defendant Eddie C. Olalia to pay plaintiff the sum of Thirteen Thousand Eight Hundred Eighty-Three Pesos and Twenty-seven Centavos (P13, 883.27), Philippine Currency with interest thereon at the legal rate from June 18, 1991, until fully paid; and to pay the costs.

From the aforesaid decision, a Motion for Reconsideration was filed, alleging that Olalia should also be held liable for the purchases arising from the use of the extension card since he allegedly received the same, as evidenced by his signature appearing in the Renewal Card Acknowledgement Receipt[7] and by the express provision of paragraph 2 of the terms and conditions governing the use and issuance of a BPI Express Card, making the cardholder and his extension jointly and severally liable for all purchases and availments made through the use of the card.

On April 28, 1995, the Motion for Reconsideration was granted and an Order was issued, stating:
Defendant Eddie C. Olalia has not filed any reaction paper up to the present relative to plaintiff's MOTION FOR RECONSIDERATION dated December 20, 1994.

Finding the allegations in said motion to be meritorious, the same is hereby granted.

WHEREFORE, the dispositive portion of the decision dated November 25, 1994, is reconsidered and accordingly amended/corrected to read as follows:
WHEREFORE, judgment is rendered ordering defendant Eddie C. Olalia to pay plaintiff the sum of One Hundred Thirty Six Thousand Two Hundred Ninety Pesos and Ninety-seven Centavos (P136,290.97) Philippine Currency, as of October 27, 1991.

Olalia appealed to the Court of Appeals and was there sustained in a decision dated November 28, 1996. The CA ruled as follows:
THE FOREGOING CONSIDERED, the contested Decision, while affirmed, is hereby modified by limiting appellant's liability only to P13,883.27, but with interest at 3% per month in addition to penalty fee of 3% of the amount due every month, until full payment.[9]
BECC filed a Motion for Reconsideration but the CA denied the same through a Resolution dated October 17, 1997.

Hence, this petition wherein BECC contends, as its lone assignment of error,[10] that the Court of Appeals erred in limiting the liability of respondent to only P13,883.27 exclusive of interest and penalty fee notwithstanding receipt and availment of the extension card.

More precisely, the issues are: 1) Whether or not an extension card in the name of Cristina G. Olalia was validly issued and in fact received by respondent Eddie C. Olalia; and 2) Whether or not Eddie C. Olalia can be held liable for the purchases made using the extension card.

We discuss the issues jointly.

Under stipulation No. 10 of the terms and conditions governing the issuance and use of the BPI Express Credit Card, the following is stated:
10. EXTENSIONS/SUPPLEMENTARY CARDS - Extension of the CARD issued to the Cardholder may be given to the latter's spouse or children upon payment of the necessary fee thereof, and the submission of an application for the purpose; and the use of such CARD, as well as the extensions, thereof, shall be governed by this Agreement, and secured by the Surety Undertaking hereto. Any reference to the CARD issued to the Cardholder hereafter shall also apply to extensions and/or renewals. Should a CARD be issued to the spouse/children of a Cardholder upon the Cardholder's request, the Cardholder shall be responsible for all charges including all fees, interest and other charges made through the CARD. In the event of separation, legal or otherwise, the Cardholder shall continue to be responsible for all such charges to be made through the extension CARD unless Cardholder request in writing that the privileges of such extension Cardholder under this Agreement be terminated, provided all charges incurred shall have been fully paid and satisfied. (Emphasis ours)[11]
From the foregoing stipulation, it is clear that there are two requirements before an extension/supplementary card is issued. They are: 1) payment of the necessary fee, and 2) submission of an application for the purpose. None of these requirements were shown to have been complied with by Olalia. Both the trial and appellate courts have found that in Olalia's applications for the original as well as the renewal card, he never applied for an extension card in the name of his wife. BECC also failed to show any receipt for any fee given in payment for the purpose of securing an extension card.

BECC supports its allegation that Eddie C. Olalia received the extension card in the name of his wife, by presenting the Renewal Card Acknowledgement Receipt wherein Olalia affixed his signature. Such will not suffice to prove to this Court that the requirements for the issuance of the extension card have been complied with, especially in the face of respondent's firm denial.

We have previously held that contracts of this nature are contracts of adhesion, so-called because their terms are prepared by only one party while the other merely affixes his signature signifying his adhesion thereto.[12] As such, their terms are construed strictly against the party who drafted it.[13] In this case, it was BECC who made the foregoing stipulation, thus, they are now tasked to show vigilance for its compliance.

BECC failed to explain why a card was issued without accomplishment of the requirements. Moreover, BECC did not even secure the specimen signature of the purported extension cardholder, such that it cannot now counter Eddie C. Olalia's contention that the signatures appearing on the charge slips of the questioned transactions were not that of his former wife, Cristina G. Olalia.

We note too that respondent Eddie C. Olalia did not indicate nor declare that he had a spouse when he applied for a credit card with BECC. In fact, at the time the extension card was issued and allegedly received by respondent, Cristina had long left the Philippines.

BECC's negligence absolves respondent Olalia from liability.

In sum, we agree with the Court of Appeals that respondent Olalia should not be held liable for the purchases made under the so-called extension card irregularly issued by petitioner and used for purchases made by an unauthorized party for whose actions the respondent could not be legally made answerable. This being the case, respondent Olalia could only be held liable for P13,883.27 representing purchases made under his own credit card, exclusive of interest and penalty thereon, if any.

WHEREFORE, the instant petition is DENIED, and the decision of the Court of Appeals is hereby AFFIRMED.


Bellosillo, (Chairman), Mendoza, and De Leon, Jr., JJ., concur.
Buena, J., on official leave.

[1] Rollo, pp. 22-28.

[2] Id. at 20.

[3] Id. at 30

[4] Records, p. 4.

[5] Id. at 38.

[6] Rollo, p. 18.

[7] Records, p. 57.

[8] Rollo, p. 20.

[9] Id. at 11.

[10] Ibid.

[11] Records, p. 114 (back).

[12] ErmitaƱo vs. Court of Appeals, G.R. No. 127246, 306 SCRA 218, 224 (1999).

[13] Palmares vs. Court of Appeals, G.R. No. 126490, 288 SCRA 422, 433 (1998), citing Philippine Airlines vs. Court of Appeals, et al., G.R. No. 119706, 255 SCRA 48, 58 (1996).

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