520 Phil. 730
AUSTRIA-MARTINEZ, J.:
WHEREFORE, judgment is rendered ordering defendant Ongkeko to pay plaintiff the following:The Regional Trial Court (RTC) of Makati, Branch 135, in its Decision dated July 10, 2000[3] and Order dated October 2, 2000,[4] affirmed the MTC Decision.1. the amount of P22,476.61 as of May 12, 1996 plus the interest of 3% per month and 1% penalty charge per month from date of the filing of the complaint on May 28, 1996 until the account is fully paid;
2. 25% of the amount due as attorney's fees or P10,000.00 whichever is lesser;
3. cost of suit.
SO ORDERED.[2]
1. Petitioner is not liable for the purchases made by Lodovica after the expiration of the original term of the credit card because he was not notified of the renewal of the credit and the increase of the credit limit;Petitioner's case is not a novel one. In the analogous case of Molino v. Security Diners International Corporation,[8] the Court already had the occasion to rule that suretyship under these circumstances is a continuing one and the surety is bound by the liabilities of the principal until it has been fully paid.
2. The surety undertaking, being a contract of adhesion, should have been taken against Respondent;
3. Petitioner is not liable for the purchases made by Lodovica after the expiration of the original term of the credit card because the circumstances at the time he agreed to act as surety for Lodovica were no longer existing at the time of the renewal.[7]
There is no doubt that the upgrading was a novation of the original agreement covering the first credit card issued to Danilo Alto, basically since it was committed with the intent of cancelling and replacing the said card. However, the novation did not serve to release petitioner from her surety obligations because in the Surety Undertaking she expressly waived discharge in case of change or novation in the agreement governing the use of the first credit card.
The nature and extent of petitioner's obligations are set out in clear and unmistakable terms in the Surety Undertaking. Thus:1. She bound herself jointly and severally with Danilo Alto to pay SDIC all obligations and charges in the use of the Diners Club Card, including fees, interest, attorney's fees, and costs;
2. She declared that "any change or novation in the Agreement or any extension of time granted by SECURITY DINERS to pay such obligation, charges, and fees, shall not release (her) from this Surety Undertaking";
3. "(S)aid undertaking is a continuous one and shall subsist and bind (her) until all such obligations, charges, and fees have been fully paid and satisfied"; and
4. "The indication of a credit limit to the cardholder shall not relieve (her) of liability for charges and all other amounts voluntarily incurred by the cardholder in excess of said credit limit."
We cannot give any additional meaning to the plain language of the subject undertaking. The extent of a surety's liability is determined by the language of the suretyship contract or bond itself. Article 1370 of the Civil Code provides: "If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control."
This case is no different from Pacific Banking Corporation vs. IAC, supra, correctly applied by the Court of Appeals, which involved a Guarantor's Undertaking (although thus denominated, it was in substance a contract of surety) signed by the husband for the credit card application of his wife. Like herein petitioner, the husband also argued that his liability should be limited to the credit limit allowed under his wife's card but the Court declared him liable to the full extent of his wife's indebtedness. x x xPetitioner's undertaking in this case is similar to that of the petitioner in the Molino case and the Pacific Banking Corporation case[10] cited therein. It reads, in part:x x x Private respondent Roberto Regala, Jr., as surety of his wife, expressly bound himself up to the extent of the debtor's (Celia's) indebtedness likewise expressly waiving any "discharge in case of any change or novation of the terms and conditions in connection with the issuance of the Pacificard credit card." Roberto, in fact, made his commitment as a surety a continuing one, binding upon himself until all the liabilities of Celia Regala have been fully paid. All these were clear under the "Guarantor's Undertaking" Roberto signed, thus: x x x[9] (Emphasis supplied)
Petitioner's undertaking is clear and concise. He solidarily obliged himself to pay respondent all the liabilities incurred under the credit card account, whether under the principal, renewal, or extension card issued, regardless of the changes or novation in the terms and conditions in the issuance and use of the credit card. Petitioner's liability shall be extinguished only when the obligations are fully paid and satisfied.SURETY UNDERTAKING
I/We, the undersigned, bind myself/ourselves, jointly and severally with ____________ and/or his/her extension card user, to pay the BPI EXPRESS CARD CORP. all the obligations, charges, and liabilities incurred under and with the use of the BPI EXPRESS CREDIT CARD or the renewals and extensions thereof, issued to said credit cardholder and/or extension user by the BPI EXPRESS CREDIT CARD in accordance with the terms, conditions, covenance and stipulations governing the issuance and use of the BPI EXPRESS CREDIT CARD set forth herewith. Notwithstanding any change or novation in the terms and conditions governing the issuance and use of the BPI EXPRESS CREDIT CARD, or any extension of time given the cardholder and/or extension user of the card to pay such obligations, charges and liabilities this undertaking shall continue to be binding upon me/us until all such obligations, charges and liabilities shall have been fully paid and satisfied.[11] (Underscoring supplied)
x x x Prospective sureties to credit card applicants would be well-advised to study carefully the terms of the agreements prepared by the credit card companies before giving their consent, and pay heed to stipulations that could lead to onerous effects x x x.[13]WHEREFORE, the petition is DENIED for lack of merit.