G.R No. 70766 November 9, 1988 AMERICAN EXPRESS INTERNATIONAL INC., petitioner, VS.

INTERMEDIATE APPELLATE COURT AND JOSE M. ALEJANDRINO, respondents, FACTS: The case is an appeal to reduce the amount of moral and exemplary damages in Civil Case
No. 8882-P of the then Court of First Instance of Rizal, Seventh Judicial District, to P240,000 and P100,000 respectively, and the latter, dated April 29, 1985, restoring the amount of the damages awarded by the trial court: P2,000,000 as moral damages and P400,000 as exemplary damages with interest thereon at 12% per annum from notice of judgment, plus costs of suit. In November 1979, petitioner mailed to Alejandrino at his Philippine address a bill for US $70 (joining fee of US $35 and a December 1979 account of US $35). When it did not receive any payment, petitioner sent Alejandrino another statement of account in January 1980. As there was still no remittance made, petitioner cancelled Alejandrino's account in February 1980. Alejandrino knew of this cancellation. However, on May 2, 1980, Alejandrino received from the Manila office of petitioner, thru a private courier service, another statement of account. This happened because the Hongkong office did not inform the Manila office of the status of Alejandrino's account. Alejandrino sent to petitioner a check for US $70. Petitioner received the amount but it did not reinstate Alejandrino's account. Instead it merely entered the payment as a credit in said account. Alejandrino was not informed about this action taken by petitioner. In

August 1980, Alejandrino received the July 1980 statement of account for US $70. Having previously paid a similar bill in May 1980, and not having ever used his credit card before, Alejandrino wrote petitioner inquiring what the bill was for. He did not receive any reply. ISSUE:
(a) Whether the Supreme Court has jurisdiction to take cognizance of petitioner's motion, filed on May 15, 1985, for extension of time to file a petition for review of the Court of Appeals' resolution dated April 29, 1985, in view of Section 39 of B. P. Blg. 129, in relation to Section 5(2), Art. VIII of the 1987 Constitution; and (b) whether this Court has jurisdiction to entertain the petition for review filed in this case, without leave of court, -by waiving the requirement of Section 2, Rule 45, of the Rules of Court, and without the petition containing an assignment of errors. RULING: On May 7, 1985, petitioner received a copy of the, Court of Appeals' resolution dated April 29, 1985 which am . the original decision of February 7, 1985 by restoring the damages granted by the trial court. Eight (8) days afterwards on May 15, 1985, within the reglementary period, petitioner filed with this Court a motion for extension of 30 days counted from May 16, 1985 within which to file its petition for review on June 10, 1985. This Court gave due course to the petition for review in its resolution dated October 28, 1985. The petition for review was seasonably filed. There is no infirmity in its filing. The appeal on questions of law to this Court thru a petition for review on certiorari is governed by Rule 45 of the Rules of Court and Section 25 of the Interim Rules, and not by B.P. Blg. 129. In fact, the Supreme Court is outside the scope of B.P. Blg. 129. Besides, there is nothing sacred about the procedure of pleadings.This Court may go beyond the pleadings when the interest of justice so warrants. It has the prerogative to suspend its rule for the same purpose. In the language of Mr. Justice Moreland, "a litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys the other. It is rather, a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and

technicalities of procedure, asks that justice be done upon the merits. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts." WHEREFORE, the assailed decision of the then Intermediate Appellate Court (IAC) is hereby SET ASIDE, and a new one is hereby rendered, ordering petitioner to pay private respondent the sum of One Hundred Thousand (P100,000.00) Pesos as moral damages, with six (6%) percent interest thereon computed from the finality of this decision until paid. No costs. G.R. No. 72275 November 13, 1991 PACIFIC BANKING CORPORATION, petitioner, vs. HON INTERMEDIATE APPELLATE COURT AND ROBERTO REGALA, JR., respondents.

FACTS: The case is a petition for review on certiorari of the decision of the Intermediate Appellate Court. In the case, Cecilia Regala obtained a Pacific Credit Card and her spouse, Roberto Regala signed as her guarantor. The holder of the card purchased goods and/or services under the pacificard amounting to P92, 803.98. Despite the execution of demand from the bank, the couple did not comply. The trial court renders
judgment for the plaintiff and against the defendants condemning the latter, jointly and severally, to pay said plaintiff the amount of P92,803.98, with interest thereon at 14% per annum, compounded annually, from the time of demand on November 17, 1978 until said principal amount is fully paid; plus 15% of the principal obligation as and for attorney's fees and expense of suit; and the costs. The defendants appealed to the Intermediate Appellate Court. Wherein the said court modified only as to appellant Roberto Regala, Jr., so as to make him liable only for the purchases made by defendant Celia Aurora Syjuco Regala with the use of the Pacificard from October 29, 1975 up to October 29, 1976 up to the amount of P2,000.00 per month only, with interest from the filing of the complaint up to the payment at the rate of 14% per annum without pronouncement as to costs. ISSUE: Whether or not, Roberto Regalado as a guarantor is limited to pay up to only P2000 per month in the liability of his spouse to the said bank, DECISION: The undertaking signed by Roberto Regala, Jr. although denominated "Guarantor's Undertaking," was in substance a contract of surety. As distinguished from a contract of guaranty where the guarantor binds himself to the creditor to fulfill the obligation of the principal debtor only in case the latter should fail to do so, in a contract of suretyship, the surety binds himself solidarily with the principal debtor. It is true that under Article 2054 of the Civil Code, "(A) guarantor may bind himself for less, but not for more than the principal debtor, both as regards the amount and the onerous nature of the conditions. It is likewise not disputed by the parties that the credit limit granted to Celia Regala was P2,000.00 per month and that Celia Regala succeeded in using the card beyond the original period of its effectivity, October 29, 1979. We do not agree however, that Roberto Jr.'s liability should be limited to that extent. A guarantor or surety does not incur liability unless the principal debtor is held liable. It is in this sense that a surety, although solidarily liable with the principal debtor, is different from the debtor. It does not mean, however, that the surety cannot be held liable to the same extent as

the principal debtor. The nature and extent of the liabilities of a guarantor or a surety is determined by the clauses in the contract of suretyship. ACCORDINGLY, the petition is GRANTED. The questioned decision of respondent appellate court is SET ASIDE and the decision of the trial court is REINSTATED. G.R. No. 152609 June 29, 2005 COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. AMERICAN EXPRESS INTERNATIONAL, INC. (PHILIPPINE BRANCH), Respondent. FACTS: American Express International, Inc. is a Philippine branch of American Express International, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, U.S.A., with office in the Philippines. It is a servicing unit of American Express International, Inc. - Hongkong Branch (Amex-HK) and is engaged primarily to facilitate the collections of Amex-HK receivables from card members situated in the Philippines and payment to service establishments in the Philippines.Amex Philippines registered itself with the Bureau of Internal Revenue (BIR), Revenue District Office No. 47 (East Makati) as a value-added tax (VAT) taxpayer effective March 1988 and was issued VAT Registration Certificate No. 088445 bearing VAT Registration No. 32A-3-004868.On April 13, 1999, [respondent] filed with the BIR a letter-request for the refund of its 1997 excess input taxes in the amount of P3,751,067.04, which amount was arrived at after deducting from its total input VAT paid ofP3,763,060.43 its applied output VAT liabilities only for the third and fourth quarters of 1997 amounting to P5,193.66 and P6,799.43, respectively. The Court of tax appeal finds the [petition] meritorious and in accordance with law. Accordingly, [petitioner] is hereby ORDERED to REFUND to [respondent] the amount of P3, 352,406.59 representing the latters excess input VAT paid for the year 1997. Thus, the Court of Appeal affirmed the decision of the CTA. ISSUE: Whether or not the Court of Appeals committed reversible error in holding that respondent is entitled to the refund of the amount of P3, 352,406.59 allegedly representing excess input VAT for the year 1997. DECISION: The legislature is presumed to have reenacted the law with full knowledge of the contents of the revenue regulations then in force regarding the VAT, and to have approved or confirmed them because they would carry out the legislative purpose. The particular provisions of the regulations we have mentioned earlier are, therefore, re-enforced. "When a statute is susceptible of the meaning placed upon it by a ruling of the government agency charged with its enforcement and the [l]egislature thereafter [reenacts] the provisions [without] substantial change, such action is to some extent confirmatory that the ruling carries out the legislative purpose."92 In sum, having resolved that transactions of respondent are zero-rated, the Court upholds the formers entitlement to the refund as determined by the appellate court. Moreover, there is no conflict between the decisions of the CTA and CA. This Court respects the findings and conclusions of a specialized court like the CTA "which, by the nature of its functions, is dedicated exclusively to the study and consideration of tax cases and has necessarily developed an expertise on the subject."93 Furthermore, under a zero-rating scheme, the sale or exchange of a particular service is completely freed from the VAT, because the seller is entitled to recover, by way of a refund or

as an input tax credit, the tax that is included in the cost of purchases attributable to the sale or exchange.94 "[T]he tax paid or withheld is not deducted from the tax base."95 Having been applied for within the reglementary period,96 respondents refund is in order. WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. No pronouncement as to costs. G.R. No. 127246 April 21, 1999 SPOUSES LUIS M. ERMITAO and MANUELITA C. ERMITAO, petitioners, vs. THE COURT OF APPEALS AND BPI EXPRESS CARD CORP., respondents.

FACTS: Luis Ermitao applied for a card in the said BPI express and card corp., on October 8, 1986 with his wife as an extension cardholder. On August 29, 1989, Manuelitas bag was snatched and that night they reported the incident to the said bank followed by a letter sent on the following day. When Luis received his monthly bill, purchases after the incident were included in which the latter refused to pay for they contest that they are no longer liable for the unauthorized purchases. On April 10, 1991, Luis used his credit card which was dishonored for it already exceeded the P10,000 credit limit because the amount of the unauthorized purchases were transferred to his new card. The trial court
rendered in favor of the plaintiffs, Spouses Luis M. Ermitao and Manuelita C. Ermitao and against defendant BPI Express Card Corporation: Ordering the said defendant to pay the plaintiffs the sum of P100,000.00 as moral damages, P50,000.00 as exemplary damages. Twenty per cent (20%) of the amounts abovementioned as and for attorney's fees and expenses of litigation, and costs of suit. The judgment was reversed by the Court of Appeals ordering plaintiffs/appellees are hereby directed to pay the defendant/appellant the amount of P3,197.70 with 3% interest per month and an additional 3% penalty equivalent to the amount due every month until full payment. Without cost. ISSUE: Whether or not the CA erred in reversing the decision of the trial court DECISION: The cardholder was no longer in control of the procedure after it has notified BECC of the card's loss or theft. It was already BECC's responsibility to inform its member-establishments of the loss or theft of the card at the soonest possible time. We note that BECC is not a neophyte financial institution, unaware of the intricacies and risks of providing credit privileges to a large number of people. It should have anticipated an occurrence such as the one in this case and devised effective ways and means to prevent it, or otherwise insure itself against such risk. Prompt notice by the cardholder to the credit card company of the loss or theft of his card should be enough to relieve the former of any liability occasioned by the unauthorized use of his lost or stolen card. The questioned stipulation in this case, which still requires the cardholder to wait until the credit card company has notified all its member-establishments, puts the cardholder at the mercy of the credit card company which may delay indefinitely the notification of its members to minimize if not to eliminate the possibility of incurring any loss from unauthorized purchases. Or, as in this case, the credit card company may for some reason fail to promptly notify its members through absolutely no fault of the cardholder. To require the cardholder to still pay for unauthorized purchases after he has given prompt notice of the loss or theft of his card to the credit card company would simply be unfair and unjust. The Court cannot give its assent to such a stipulation which could clearly run against public policy. 17

On the matter of the damages petitioners are seeking, we must delete the award of exemplary damages, absent any clear showing that BECC acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, as required by Article 2232 of the Civil Code. We likewise reduce the amount of moral damages to P50,000.00, considering the circumstances of the parties to the case. WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 47888 is hereby REVERSED and the decision of the Regional Trial Court, Branch 157, Pasig City in Civil Case No. 61375 is REINSTATED, with the MODIFICATION that the award of exemplary damages in the amount of P50,000.00 is hereby deleted; and the amount of moral damages is reduced to P50,000.00; but private respondent is further ordered to pay P25,000 as attorney's fees and litigation expenses. G.R. No. 131086 December 14, 2001 BPI EXPRESS CARD CORPORATION, petitioner, vs. EDDIE C. OLALIA, respondent. Eddie C. Olalia applied4 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, Olalias card expired and a renewal card was issued. BECC also issued Card No. 020100-2-01-0281667 in the name of Cristina G. Olalia, respondents ex-wife. This second card was an extension of Olalias credit card. BECC alleges that the extension card was delivered and received by Olalia at the same time as the renewal 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 with the sum of P101, 844.54. Olalia denies the said purchases and refused to pay such amount. The regional trial court 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. In the motion for reconsideration a 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 which rendered the contested decision, while

affirmed, is hereby modified by limiting appellants 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. And thus, denied the motion for reconsideration.
ISSUE: 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. Whether or not Eddie C. Olalia can be held liable for the purchases made using the extension card. DECISION: Both the trial and appellate courts have found that in Olalias 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 respondents 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 who 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. Olalias contention that the signatures appearing on the charge slips of the questioned transactions were not that of his former wife, Cristina G. Olalia. BECCs 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 socalled 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. G.R. No. 164273 March 28, 2007 EMMANUEL B. AZNAR, Petitioner, vs. CITIBANK, N.A., (Philippines), Respondent. Emmanuel B. Aznar is a holder of a Preferred Master Credit Card (Mastercard) bearing number 5423-3920-0786-7012 issued by Citibank with a credit limit of P150,000.00. As he and his wife, Zoraida, planned to take their two grandchildren, Melissa and Richard Beane, on an Asian tour, Aznar made a total advance deposit of P485,000.00 with Citibank with the intention of increasing his credit limit toP635,000.00.His group left cebu, for their destination Kuala Lumpur wherein the plane tickets cost P237,000.00 on July 17 1994. In their trip his card where dishonored several times and when they were about to buy plane tickets for Bali, Ingtan Agency declared that the card was blacklisted by Citibank. On August 10, 1994, Aznars group arrived in the Philippines and he filed a case against the bank on August 30, 1994. RTC through judge Marcos, dismissed the petition of Aznar for lack of merit. While according to judge Dela Pea granted the motion for reconsideration ordering the defendant to pay P10,000,000.00 as moral damages; P5,000,000.00 as exemplary damages; P1,000,000.00 as attorneys fees; and

P200,000.00 as litigation expenses. Citibank appealed to the CA where in the assailed order of the Regional Trial Court, 7th Judicial Region, Branch 10, Cebu City, in Civil Case No. CEB-16474, is hereby SET ASIDE and the decision, dated 29 May 1998 of the Regional Trial Court, 7th Judicial Region, Branch 20, Cebu City in this case is REINSTATED ISSUE: Whether or not the CA erred in reinstating the findings of the Regional Trial Court by Judge Marcos dated 29 May 1998 of the Regional Trial Court, 7th Judicial Region, Branch 20, Cebu City. DECISION:

It is settled that in order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law; thus there must first be a breach before damages may be awarded and the breach of such duty should be the proximate cause of the injury.57 It is not enough that one merely suffered sleepless nights, mental anguish or serious anxiety as a result of the actuations of the other party. It is also required that a culpable act or omission was factually established, that proof that the wrongful act or omission of the defendant is shown as the proximate cause of the damage sustained by the claimant and that the case is predicated on any of the instances expressed or envisioned by Arts. 221958 and 222059 of the Civil Code While the Court commiserates with Aznar for whatever undue embarrassment he suffered when his credit card was dishonored by Ingtan Agency, especially when the agencys personnel insinuated that he could be a swindler trying to use blacklisted cards, the Court cannot grant his present petition as he failed to show by preponderance of evidence that Citibank breached any obligation that would make it answerable for said suffering. As the Court pronounced in BPI Express Card Corporation v. Court of Appeals,62 We do not dispute the findings of the lower court that private respondent suffered damages as a result of the cancellation of his credit card. However, there is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury to those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone, the law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria.63 WHEREFORE, the petition is denied for lack of merit.

G.R. No. 141761 July 28, 2006 BANKARD, INC., Petitioner, vs. DR. ANTONIO NOVAK FELICIANO, Respondent. FACTS: Antonio Novak Feliciano is the holder of PCIBank Mastercard and an extension of the card was issued to his wife, Mrs. Marietta N. Feliciano. On June 19, 1995, respondent used his PCIBank Mastercard but the card dishonored for payment. Respondent found out that according to the bank he failed to pay his last billing which he denied. He also connected with his secretary in the Philippines to verify the payment. The following day, respondent met with Dr. Bumanlag to reimburse her for the cost of the breakfast the previous day. Thereafter, Dr. Bumanlag accompanied the respondent to the Eddie Bauer Fairview Mall, a prestigious mall in Toronto, where the latter bought several dressing items. Respondent presented his PCIBankMastercard for payment. which was dishonored to the embarrassment of the respondent. Worse, the manager of the department store confiscated the card in front of Dr. Bumanlag and other shoppers. To end the commotion that ensued, respondent just asked for a receipt for the confiscated card. On October 5, 1995, respondent filed a case against the bank. On July 22, 1997, the trial court decided the case in favor of respondent. Although the claim for actual damages was disallowed for lack of proof, petitioner was ordered to pay: (1) P1,000,000.00 as moral damages, (2)P200,000.00 as exemplary damages, and

(3) P100,000.00 for attorneys fees and costs of suit. Petitioner was likewise ordered to restore respondents good name with the merchant establishment in Canada which confiscated his Mastercard, and to return the card with apologies to respondent. Petitioner assailed the decision in a petition for review with the Court of Appeals. In its Decision dated May 31, 1999, the Court of Appeals affirmed the trial courts but modified the trial courts decision by deleting the award for exemplary damages, and by reducing moral damages to P800,000.00, and attorneys fees and costs of suit to P50,000.00. Actual damages were still disallowed for lack of proof. Petitioners motion for partial reconsideration was denied ISSUE: Whether or not the petitioner is liable for respondent for moral damages and attorneys fees DECISION: Petitioner claims that it suspended respondents card to protect him from fraudulent transactions. Considering the widespread use of access devices in commercial and other transactions,petitioner and other issuers of credit cards should not only guard against fraudulent uses of credit cards but should also be protective of genuine uses thereof by the true cardholders. In the case at bar, the duty is much more demanding for the evidence shows that respondent is a credit cardholder for more than ten (10) years in good standing, and has not been shown to have violated any of the provisions of his credit card agreement with petitioner. Considering the attendant circumstances, we find petitioner to have been grossly negligent in suspending respondents credit card. To reiterate, moral damages may be awarded in a breach of contract when the defendant acted fraudulently or in bad faith, or is guilty of gross negligence amounting to bad faith. With respect to the amount of moral damages to be awarded, the well-entrenched principle is that the grant thereof depends upon the discretion of the court considering the circumstances of each case. In the case at bar, it is undisputed that respondents PCIBank Mastercard was dishonored in a foreign country where the respondent was not expected to have family members or close friends nearby to lend him a helping hand. It was twice dishonored in public places. Worse, the card was first dishonored during a breakfastcum-business meeting with respected medical colleagues based in that country. Respondent had absolutely no inkling then that there was a problem with his card. Moreover, he had no reason to think that something was amiss since he is a member in good standing for more than ten (10) years and had no previous bad experience with the card. However, since moral damages are patently not meant to enrich the complainant at the expense of the defendant and should only be commensurate with the actual loss or injury suffered, we reduce the amount awarded by the Court of Appeals from P800,000.00 to P500,000.00. We likewise affirm the award for attorneys fees. Plaintiff was compelled to litigate to protect his interest, and the lower courts deemed it just and equitable to award him attorneys fees. The respondent had to vindicate his rights up to the highest court of the land. IN VIEW WHEREOF, the petition is DENIED. The assailed Decision of the Court of Appeals, dated May 31, 1999, granting moral damages and attorneys fees to respondent, as well as its Resolution dated January 28, 2000 in CA-G.R. CV No. 56734, is AFFIRMED with the sole modification that the amount of moral damages is REDUCED to P500,000.00.