DANILO A. DAVID VS. BANK OF PHILIPPINE ISLANDS

 

FACTS:

          BPI issued petitioner David a pre-approved credit card. The terms and conditions provide that the cardholder agrees to pay all charges incurred within twenty calendar days from the assigned cut-off date without need for demand. Any unpaid amount thereafter is subject to monthly 3.25% interest and 6% penalty charge. He started delaying in his payments. Demands for payment were unheeded thus the bank sued petitioner and his wife for sum of money. Petitioner denied that he had agreed to the terms and conditions, specifically the payment of interest and penalty charges. The MeTC ruled that petitioner was liable for interest and penalty charges. The RTC affirmed the MeTC decision. The CA computed anew petitioner’s obligation.

ISSUE:

     What should be the reckoning point of the petitioner’s obligation?

RULING:

     The SC held that what is on track, accurate, and correct are the concurrent findings of the MeTC and RTC that the reference point is P223,749.48 per the internal record of the bank. Under Article 1253 of the New Civil Code, "if the debt produces interest, payment of the principal shall not be deemed to have been made until the interests have been covered. “But this is not what the trial courts did. For they applied all the payments exclusively to the principal amount, unmindful of the interests. The petitioner’s computation was also wrong, his reference computation was wrong, and he totally omitted to include interests. The petitioner was made to pay Ninety-Eight Thousand Five Hundred Twenty-Seven Pesos and 40/100 (P98,527.40) representing the principal obligation plus twelve percent (12%) interest per annum from September 2008 until June 30, 2013, and six percent (6%) interest per annum from July 1, 2013 until finality of the decision. The total amount due shall in turn earn six percent (6%) interest per annum from finality of the decision until fully paid.