G.R. No. 200868 ; November 12, 2012
ANITA A. LEDDA, Petitioner, vs. BANK OF THE PHILIPPINE ISLANDS, Respondent.

FACTS

This case originated from a collection suit filed by respondent Bank of the Philippine Islands (BPI) against petitioner Anita Ledda for her unpaid credit card obligation. Ledda was issued a pre-approved BPI credit card, and the accompanying Terms and Conditions were delivered to her residence. She subsequently used the card for purchases and cash advances but defaulted on her payments. BPI demanded payment of P548,143.73, representing the principal with monthly finance and late payment charges of 3.25% and 6%, respectively. After Ledda failed to pay, BPI filed a collection case. The Regional Trial Court (RTC) ruled in favor of BPI, ordering Ledda to pay the full amount with the stipulated charges and attorney’s fees.
Ledda appealed to the Court of Appeals (CA). She argued that the Terms and Conditions constituted an actionable document under the Rules of Civil Procedure, which BPI failed to properly attach and allege. The CA partially granted her appeal. It held that BPI’s cause of action was based on Ledda’s use of the credit facilities and failure to pay, not solely on the written Terms and Conditions. However, citing Macalinao v. BPI, the CA found the combined 9.25% monthly interest and penalty charges unconscionable. It reduced the charges to a total of 2% per month (24% per annum) and recomputed the obligation, deducting excessive charges to arrive at a principal of P322,138.58. The CA also reduced the attorney’s fees to P10,000.

ISSUE

The core issues were: (1) whether the Terms and Conditions constituted an actionable document requiring specific pleading; (2) whether the CA correctly applied Macalinao in reducing the interest and penalty charges; and (3) the propriety of the attorney’s fees award.

RULING

The Supreme Court partially granted the petition, modifying the CA’s decision on the applicable interest rates. The Court affirmed that the Terms and Conditions were not an actionable document requiring attachment under Section 7, Rule 8 of the Rules of Court. BPI’s complaint was a simple action for collection of a sum of money based on Ledda’s use of the credit card and failure to pay, not an action predicated exclusively upon the interpretation or enforcement of that specific document. The allegations regarding the card’s issuance, use, and default were sufficient to establish a cause of action.
On the interest and penalty charges, the Court agreed with the CA that the stipulated 9.25% monthly charge was iniquitous and void. However, it held that the CA erred in applying the 24% per annum rate from Macalinao, as that case involved a different factual milieu. Following the doctrine in Alcaraz v. Court of Appeals, which directly involved BPI credit card charges, the Supreme Court ruled that in the absence of a valid stipulation, only the legal interest of 12% per annum (as the governing rate at the time) should apply from the time of judicial demand. Consequently, the Court imposed 12% per annum interest on the principal amount of P322,138.58 from the date of BPI’s judicial demand. The award of P10,000 in attorney’s fees was sustained as reasonable.