BPI Express Card Corporation vs. Ma. Antonina R.

Armovit
G. R. No. 163654; October 8, 2014
Bersamin, J.:

Doctrine:
The relationship between the credit card issuer and the credit card holder is a
contractual one that is governed by the terms and conditions found in the card membership
agreement. In case of breach, moral damages may be recovered where the defendant is
shown to have acted in bad faith or fraudulently.

Facts:
Respondent Armovit handed her BPI Express Credit Card to the waiter as a mode of
payment to settle for the food that she and her British friends ate at the restaurant but to her
astonishment, she was informed that her card was cancelled upon verification with the BPI
Express Card. Petitioner claimed that her card was cancelled for failure to pay outstanding
obligations and the non-submission of the required application form for the reactivation of
the credit card privileges. Respondent, however, denied having defaulted on her payments
and claimed that she did not have any unpaid bills at the time of the incident, hence, she
demanded for compensation for the shame and embarrassment she suffered. Later on,
respondent received a telegraphic message from BPI apologizing for its error on
inadvertently including her credit card in Caution List sent to its merchants. Respondent
filed with the RTC a complaint for damages where the RTC ruled in favor of her awarding
her moral and exemplary damages.

Issue:
Whether or not respondent is entitled to moral and exemplary damages despite the
absence of bad faith on the part of BPI.

Ruling:
Yes, respondent is entitled to moral and exemplary damages. The relationship between
the credit card issuer and the credit card holder is a contractual one that is governed by the
terms and conditions found in the card membership agreement, hence, such terms and
conditions constitute the law between the parties. In case of breach, moral damages may be
recovered where the defendant is shown to have acted fraudulently or in bad faith as malice
or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest
purpose or moral obliquity. However, a conscious or intentional design need not always be
present because negligence may occasionally be so gross as to amount to malice. The Court
ruled that the award of P100,000.00 as moral damages was fair and reasonable under Article
2232 of the New Civil Code because BPI Express Credit Card acted in a reckless and
oppressive manner; and finally, with Armovit having forced to litigate in order to protect her
rights and interests, she was entitled to recover attorney’s fees and costs of suit.