LOUH VS. BPI

WILLIAM & IRENE LOUH VS. BPI

G.R. No. 225562

March 8, 2017

FACTS:

Respondents BPI issued a credit card in William’s name with Irene as the extension card holder. Based on the terms and conditions, a 3.5% finance charge and 6% late payment charge shall be imposed monthly upon unpaid credit card availments.

Spouses Louh made purchases through the credit card and was able to pay regularly. However, they were remiss in their obligations starting Oct. 14, 2009. As of August 15, 2010, their account was unsettled prompting BPI to send demand letters dated Aug 7, 2010, January 25, 2011 and May 19, 2011. By September 14, 2010, the owed BPI the total amount of P533,836..27. Despite repeated verbal and written demands, the spouses Louh failed to pay BPI.

On August 4, 2011, BPI filed before the RTC of Makaty City a complaint for Collection of Sum of Money. William, then, filed a Motion for Extension of Time to file an Answer od Responsive Pleading. The RTC granted an extension of 15 days but spouses Louh failed to comply with in the prescribed period.

On July 24, 2012, the RTC issued an Order declaring the spouses Louh in default and setting BPI’s ex parte presentation of evidence. On Novemeber 29, 2012, the RTC rendered a Decision in favor of BPI. The spouses Louh filed a Motion for Reconsideration which the RTC denied. The appeal they filed was likewise denied by the CA in the assailed decision and resolution. Aggrieved, the spouses Louh filed an instant petition for review on certiorari to assail the Decision and Resolution of the CA.

ISSUE:

Whether or not the CA erred in sustaining BPI’s complaint.

HELD:

The Court affirms the herein assailed decision and resolution, but modifies the principal amount and attorney's fees awarded by the RTC and the CA.

The Spouses Louh reiterate that the RTC wrongly declared them in default since by reason of William's sickness, they were entitled to a relaxation of the rules. Moreover, BPI had failed to offer preponderant evidence relative to the actual amount of the Spouses Louh's indebtedness.

The foregoing claims are untenable.

In the case at bar, the CA aptly pointed out that the Spouses Louh filed their Answer with the RTC only on July 20, 2012 or more than three months after the prescribed period, which expired on March 4, 2012. When they were thereafter declared in default, they filed no motion to set aside the RTC's order, a remedy which is allowed under Rule 9, Section 3 of the Rules of Civil Procedure. The Spouses Louh failed to show that they exerted due diligence in timely pursuing their cause so as to entitle them to a liberal construction of the rules, which can only be made in exceptional cases.

The Spouses Louh claim as well that BPI's evidence are insufficient to prove the amounts of the former's obligation.

BPI had offered as evidence the (1) testimony of Account Specialist Carlito M. Igos, who executed a Judicial Affidavit in connection with the case, and (2) documentary exhibits, which included the (a) delivery receipts pertaining to the credit cards and the terms and conditions governing the use thereof signed by the Spouses Louh, (b) computer-generated authentic copies of the SOAs and (c) demand letters sent by BPI, which the Spouses Louh received. The Clerk of Court subsequently prepared a Commissioner's Report, from which the RTC based its judgment.

The Spouses Louh slept on their rights to refute BPI's evidence, including the receipt of the SOA’s and demand letters. BPI cannot be made to pay for the Spouses Louh's negligence, omission or belated actions.

Be that as it may, the Court finds excessive the principal amount and attorney’s fees awarded by the RTC and CA. A modification of the reckoning date relative to the computation of the charges is in order too.

In the case at bench, BPI imposed a cumulative annual interest of 114%, plus 25% of the amount due as attorney's fees. Inevitably, the RTC and the CA aptly reduced the charges imposed by BPI upon the Spouses Louh. Note that incorporated in the amount of ₱533,836.27 demanded by BPI as the Spouses Louh's obligation as of August 7, 2010 were the higher rates of finance and late payment charges, which the comis a quo had properly directed to be reduced.

In the SOA dated October 14, 2009, the principal amount indicated was ₱l13,756.83. In accordance with Macalinao, the finance and late payment charges to be imposed on the principal amount of ₱l13,756.83 are reduced to 12% each per annum, reckoned from October 14, 2009, the date when the Spouses Louh became initially remiss in the payment of their obligation to BPI, until full payment.

Anent BPI's litigation expenses, the Court retains the RTC and CA' s disquisition awarding ₱5,064.00 as filing or docket fees, and costs of suit.

However, the Court reduces the attorney's fees to five percent (5%) of the total amount due from the Spouses Louh pursuant to MCMP and Article 2227 of the New Civil Code.

The Decision and Resolution dated August 11, 2015 and May 23, 2016, respectively, of the CA, finding the spouses William and Irene Louh liable to the BPI  are AFFIRMED. The principal amount due, reckoning period of the computation of finance and late payment charges and attorney’s fees are, however, MODIFIED.

JLD