GR 135149; (July, 2006) (Digest)
G.R. No. 135149 ; July 25, 2006
MANUEL C. ACOL, substituted by MANUEL RAYMOND ACOL, petitioner, vs. PHILIPPINE COMMERCIAL CREDIT CARD INCORPORATED, respondent.
FACTS
Petitioner Manuel Acol was a Bankard credit card holder. On the evening of April 18, 1987, he discovered the loss of his card. He verbally reported the loss to respondent Philippine Commercial Credit Card Inc. (PCCI) the following morning, April 19, and submitted a written confirmation on April 20, which PCCI received on April 22. PCCI issued a cancellation bulletin on April 21. However, unauthorized purchases totaling P76,067.28 were made using the lost card on April 19 and 20. PCCI billed petitioner for these amounts, citing provision no. 1 of their contract, which stated the cardholder’s liability continues until the card issuer receives written notice of loss and includes the card in its cancellation bulletin.
Petitioner refused to pay the unauthorized charges. PCCI filed a collection suit. The Regional Trial Court dismissed the complaint, but the Court of Appeals reversed, holding petitioner liable based on the contractual stipulation.
ISSUE
Whether the contractual provision making a cardholder liable for unauthorized charges until the card issuer includes the lost card in a cancellation bulletin, even after receipt of notice of loss, is valid and binding.
RULING
The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the RTC decision. The Court declared the assailed stipulation contrary to public policy and therefore void.
The legal logic is anchored on the principle that contractual stipulations must not be contrary to public policy under Article 1306 of the Civil Code. The Court found the provision oppressive as it placed the cardholder’s relief from liability on an act entirely within the control of the card issuer—the issuance of the cancellation bulletin. This condition, coupled with the vague phrase “after a reasonable time,” could allow the issuer to delay notification indefinitely, potentially profiting from unauthorized charges while holding the cardholder liable. Following its precedent in Ermitaño v. Court of Appeals, the Court ruled that prompt notice of loss by the cardholder to the issuer should be sufficient to relieve the former of liability for subsequent unauthorized use. To require more places the cardholder at the mercy of the issuer and creates an unjust situation. Thus, the stipulation was struck down as invalid.