FIRST DIVISION
[G.R. No. 256533. August 31, 2022.]
ELVIRA A. CALINGACION, petitioner, vs.BANK OF PHILIPPINE ISLANDS, 1respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedAugust 31, 2022which reads as follows:
"G.R. No. 256533 (Elvira A. Calingacion v. Bank of Philippine Islands). — This is a Petition 2 for Review on Certiorari (petition) assailing the Decision 3 dated 30 September 2020 and Resolution 4 dated 20 May 2021 of the Court of Appeals (CA) in CA-G.R. CV No. 111559.
After a careful review of the instant Petition and its annexes, as well as the assailed Decision and Resolution of the CA, the Court resolves to DENY the petition for lack of merit.
Petitioner Elvira A. Calingacion (petitioner) raises as an error the imposition of finance charges and late payment fees beginning October 2009. By the terms and conditions set by respondent Bank of Philippine Islands (BPI) on the issuance and use of a BPI credit card, petitioner undertook to pay all charges incurred through the use of her BPI credit card within 20 calendar days from the assigned cut-off date without the necessity of demand. 5 Here, Branch 58, Regional Trial Court (RTC) of Makati City and the CA both found that sometime in October 2009, petitioner failed to pay her obligation to BPI. 6 Likewise, petitioner never disputed this date, but simply found it unfair that she is being ordered to pay interest from October 2009 despite the delays in the disposition of the case due to causes attributable to BPI. 7 In short, petitioner is appealing to compassion, even though there is no law that excuses a debtor from paying interest on account of delays caused by the adverse party in the disposition of the case.
Petitioner is obligated to pay interest from the time she defaulted based on the Extended Payment Agreement 8 (EPA) between the parties, and such stipulation is the law between them. 9 However, while parties are generally free to stipulate their preferred rate, courts are allowed to equitably temper interest rates that are found to be excessive, iniquitous, unconscionable, and/or exorbitant, such as stipulated interest rates of 3% per month or higher. 10 Hence, upon finding the rates to be excessive and unconscionable, the RTC reduced the interest rate of 3.4% per month to 6% per annum, and the late payment charges of 6% per month to 12% per annum. Nonetheless, the Court deems it proper to adjust the amount of monetary interest pursuant to prevailing jurisprudence. cTDaEH
In such instances, We clarify that only the unconscionable interest rate is nullified and deemed not written in the contract while the parties' agreement on the payment of interest on the principal loan obligation subsists. It is as if the parties failed to specify the interest rate to be imposed on the principal amount, in which case the legal rate of interest prevailing at the time the agreement was entered into would have to be applied by the Court. This is because, according to jurisprudence, the legal rate of interest is the presumptive reasonable compensation for borrowed money. 11 Such monetary interest should be computed from default, i.e., from extrajudicial or judicial demand, until full payment. Since the stipulated rates were struck down for being unconscionable, the Court finds that a straight monetary interest at the prevailing rate of 12% per annum at that time 12 should instead be imposed on the principal obligation, reckoned from the date of default, i.e., October 2009, until full payment.
In addition, the aforesaid monetary interest shall itself earn compensatory interest at the rate of 12% per annum from the date of judicial demand, i.e., the filing of the complaint on 07 June 2011, until 30 June 2013, and the rate of 6% per annum shall be imposed from 01 July 2013, pursuant to Article 2212 of the Civil Code, which states that "[i]nterest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point."
As to the award of attorney's fees, petitioner argues that the CA should have deleted this award since it has no basis. Petitioner claims that the EPA does not grant BPI the right to recover attorney's fees and yet the RTC awarded attorney's fees on the basis of the Terms and Conditions on the issuance of the credit card. 13
The argument has no merit. Petitioner was sued on the basis of both the EPA and the Terms and Conditions on the issuance of the credit card. While BPI relied on the EPA to determine petitioner's outstanding debt, it can nonetheless demand the payment of attorney's fees based on a stipulation contained in the Terms and Conditions on the issuance of the credit card. Considering that the original obligation remains compatible with the agreement under the EPA, the same subsists and can be the basis for BPI's demand for attorney's fees. Thus, petitioner is bound by the Terms and Conditions on the issuance of the credit card to pay the attorney's fees demanded by BPI, the rate of which was found by the CA to be 5% of the total amount due. This shall also earn legal interest at the rate of 6% per annum from the finality of this Resolution until full payment. 14
WHEREFORE, the Decision dated 30 September 2020 and Resolution dated 20 May 2021 of the Court of Appeals in CA-G.R. CV No. 111559 is AFFIRMED with MODIFICATION. Petitioner Elvira A. Calingacion is ordered to pay respondent Bank of Philippine Islands the following:
1. The principal obligation amounting to P253,684.29, plus monetary interest at the rate of 12% per annum, to be computed from October 2009 or when petitioner defaulted, until fully paid;
2. Compensatory interest on the accrued monetary interest at the rate of 12% per annum from the date of judicial demand on 07 June 2011 until 30 June 2013, and thereafter, at the rate of 6% per annum from 01 July 2013 until full payment; and
3. Attorney's fees at 5% of the total amount due, plus legal interest at the rate of 6% per annum, to be computed from the finality of this Resolution until full payment. cSaATC
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1. The bank is also referred to as "Bank of the Philippine Islands."
2. Rollo, pp. 23-40.
3. Id. at 8-17. Penned by Associate Justice Ramon A. Cruz and concurred in by Associate Justices Perpetua Susana T. Atal-Paño and Walter S. Ong.
4. Id. at 18-20. Penned by Associate Justice Ramon A. Cruz and concurred in by Associate Justices Perpetua Susana T. Atal-Paño and Walter S. Ong.
5. Id. at 9.
6. Id. at 47.
7. Id. at 27.
8. Id. at 67.
9. CIVIL CODE, Art. 1159.
10. Uysipuo v. RCBC Bankard Services Corp., G.R. No. 248898, 07 September 2020.
11. Id. at p. 6.
12. The 6% per annum legal interest prescribed under Bangko Sentral ng Pilipinas Monetary Board Circular No. 799 took effect on 01 July 2013 and could only be applied prospectively.
13. Rollo, p. 34.
14. Supra note 10.