G.R. No. 152202 ; July 28, 2006
Crisostomo Alcaraz, petitioner, vs. Court of Appeals and Equitable Credit Card Network, Inc., respondents.

FACTS

Equitable Credit Card Network, Inc. issued a credit card to Crisostomo Alcaraz, which he used to obtain cash advances and purchase goods, accumulating unpaid obligations. Equitable filed a collection suit, alleging Alcaraz had outstanding balances on his peso and dollar accounts, inclusive of interest and surcharges as per the card’s Terms and Conditions. Alcaraz admitted using the card but contested the amount, claiming he was an “honorary member” not bound by the standard terms, and that he had requested an account reconciliation which was unanswered, making the suit premature.
During pre-trial, Alcaraz and his counsel were absent. The trial court, upon Equitable’s motion, declared Alcaraz in default and allowed ex parte presentation of evidence. The trial court ruled for Equitable, a decision later affirmed with modifications by the Court of Appeals, which fixed the principal amounts and imposed 12% annual interest. Alcaraz appealed to the Supreme Court, arguing denial of due process from the default order and that the monetary award was erroneous.

ISSUE

The issues are: (1) whether the trial court violated Alcaraz’s right to due process by declaring him in default and allowing ex parte proceedings; and (2) whether the monetary award was in accord with evidence and law.

RULING

The petition is without merit. On the first issue, the Supreme Court upheld the trial court’s discretion to deny a postponement and declare a party in default for failure to appear at pre-trial. The Court found no arbitrariness, as the discretion was reasonably exercised based on the circumstances, and the default order did not per se violate due process since Alcaraz was given the opportunity to be heard but forfeited it through non-appearance. The Court is not a trier of facts and found no exceptional reason to overturn the lower courts’ concurrent factual findings.
On the second issue, the Court affirmed the appellate court’s determination of the principal amounts (P81,000.00 and US$4,397.34) based on the evidence presented ex parte, which Alcaraz failed to rebut. However, it modified the interest computation. Applying the doctrine in Eastern Shipping Lines, the legal interest of 12% per annum should run from the date of extrajudicial demand, not from the filing of the complaint. The demand for the dollar account was made on June 25, 1996, and for the peso account on October 5, 1996. Thus, interest accrues from those respective dates until full payment. The award of attorney’s fees was sustained.