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EMMANUEL B. AZNAR v. CITIBANK

FACTS:

This case involves a dispute between Aznar and Citibank regarding the dishonor of Aznar's credit card and the liability of Citibank for damages. Aznar claimed that his credit card was blacklisted by Citibank, causing inconvenience, mental anguish, and social humiliation. Citibank argued that Aznar had no personal knowledge of the blacklisting and that the dishonor of his card was due to being declared over the credit limit.

The Regional Trial Court (RTC) initially ruled in favor of Aznar and awarded damages, finding Citibank grossly negligent. However, Citibank appealed the decision to the Court of Appeals (CA) and filed an administrative case against Judge De la Peña.

The CA granted Citibank's appeal, concluding that Aznar failed to prove that his card was blacklisted and that the dishonor of his card by certain establishments was not sufficient to hold Citibank liable.

Aznar filed a petition for review with the Supreme Court, arguing that the CA erred in making its own factual finding regarding the blacklisting of his card when this issue was already resolved in the RTC's order. He also contended that an electronic document should be admitted as evidence and that Citibank should be held liable for damages due to its alleged gross negligence.

Citibank disputed Aznar's claims, asserting that Aznar had no personal knowledge of the blacklisting and that the dishonor of his card was solely due to being over the credit limit. Citibank also challenged the admissibility and reliability of the electronic document and argued that even if Aznar's card was dishonored, it does not automatically warrant damages without proving Citibank's gross negligence or violation of its obligations.

In his complaint, Aznar alleged that his Citibank Mastercard was blacklisted, causing its dishonor in several establishments. He claimed that he suffered humiliation as a result. Aznar argued that Citibank committed fraud or delay and contravened its obligations towards him. However, there was no proof presented that Citibank committed fraud or delay. It was also argued that the terms and conditions of the credit card could not be considered a contract of adhesion because Aznar was free to reject the card if he did not agree with the stipulated conditions. Aznar claimed that the card was dishonored due to the fault or gross negligence of Citibank.

Citibank argued that Aznar failed to establish his claim against them. Aznar admitted in his testimony that he had no personal knowledge that his Mastercard was blacklisted by Citibank and only presumed such fact from the dishonor of his card. The dishonor of Aznar's card was thus deemed insufficient to establish his claim against Citibank.

ISSUES:

  1. Whether Aznar has proven with a preponderance of evidence that Citibank blacklisted his Mastercard or placed it on the "hot list."

  2. Whether the computer print-out presented by Aznar as evidence of the blacklisting of his Mastercard is admissible and authentic.

  3. Whether the computer print-out presented by the petitioner is admissible as evidence.

  4. Whether the petitioner has proven gross negligence or fraud on the part of the respondent bank.

  5. Whether the Warning Cancellation Bulletins presented by the defendant are entitled to greater weight than the plaintiff's computer print out.

  6. Whether Citibank was under obligation to increase the petitioner's credit limit.

  7. Whether Citibank is liable for damages for the dishonor of the plaintiff's Mastercard.

  8. Whether damages can be awarded in favor of the petitioner despite the invalidity of the terms and conditions invoked by Citibank.

  9. Whether the petitioner has established a breach of duty by Citibank and a causal connection between the breach and the damages suffered.

  10. Whether moral damages are recoverable in a breach of contract case.

RULING:

  1. Aznar failed to prove with a preponderance of evidence that Citibank blacklisted his Mastercard or placed it on the "hot list." The mere dishonor of his card is not sufficient to support such a conclusion.

  2. The computer print-out presented by Aznar as evidence is not admissible and authentic. His testimony regarding the authenticity of the document was insufficient, as he did not witness the execution of the document nor provide evidence of the genuineness of the signature or handwriting. Furthermore, even if examined under the Rules on Electronic Evidence, the authentication of the document would still be found wanting.

  3. The computer print-out presented by the petitioner is not admissible as evidence. It does not show on its face that it was issued by the agency mentioned by the petitioner. The person who printed the print-out and the professional capacity in which they made the entries were not established. The petitioner also failed to demonstrate how the information reflected on the print-out was generated and how it could be relied upon as true.

  4. The petitioner has not proven gross negligence or fraud on the part of the respondent bank. The respondent bank presented documents, known as Warning Cancellation Bulletins, which showed that the petitioner's credit card was not placed in a hot list or blacklisted during the relevant period.

  5. The Warning Cancellation Bulletins presented by the defendant are entitled to greater weight than the plaintiff's computer print out because they were duly authenticated and their due execution had been established. The plaintiff's computer print out, on the other hand, was not authenticated.

  6. Citibank was not under obligation to increase the petitioner's credit limit as there was no implied novation. Citibank did credit the petitioner's additional deposit to his account, but this does not obligate them to increase the credit limit.

  7. Citibank is not liable for damages for the dishonor of the plaintiff's Mastercard. The terms and conditions of Citibank's Mastercard, which limit their liability to P1,000.00 or the actual damage proven, whichever is lesser, are considered contracts of adhesion. However, the provision that Citibank is not responsible if the card is not honored by any merchant affiliate for any reason is vague and should be construed against Citibank.

  8. The Court cannot award damages in favor of the petitioner despite the invalidity of the terms and conditions invoked by Citibank.

  9. The petitioner failed to establish a breach of duty by Citibank and a causal connection between the breach and the damages suffered.

  10. Moral damages are recoverable in a breach of contract case only if the defendant acted fraudulently or in bad faith, or if there was gross negligence amounting to bad faith or wanton disregard of contractual obligations.

PRINCIPLES:

  • Dishonor of a credit card does not necessarily imply blacklisting by the issuing bank. Additional evidence is needed to support such a claim.

  • Authentication of a document requires proof of its due execution and authenticity, either by witnessing its execution or by providing evidence of the genuineness of the signature or handwriting of the maker.

  • The burden of proving the authenticity of an electronic document lies with the person seeking to introduce it in a legal proceeding. The authentication can be achieved through digital signature, appropriate security procedures or devices authorized by the Supreme Court or by law, or by other evidence showing its integrity and reliability to the satisfaction of the judge.

  • Entries made in the course of business may be received as prima facie evidence if certain conditions are met, including that the person who made the entry was in a position to know the facts stated and made the entry in their professional capacity or in the performance of duty in the ordinary or regular course of business or duty. (Section 43, Rule 130 of the Rules of Court)

  • Duly authenticated commercial documents carry greater evidentiary weight than unauthenticated private documents.

  • An additional deposit in a bank account does not automatically result in an increase in the credit limit.

  • Contracts between cardholders and credit card companies are contracts of adhesion and any ambiguity in their provisions must be construed against the party who prepared the contract. Unconscionable provisions limiting liability to a small amount, even if damages are proven, may be deemed invalid.

  • Damages can be awarded if there is a breach of duty and a causal connection between the breach and the damages suffered.

  • Injury is the illegal invasion of a legal right, while damage is the loss resulting from the injury.

  • Damages are only awarded for violations of legal duties, and there can be damage without injury in cases where the loss or harm was not the result of a violation of a legal duty.

  • Moral damages are recoverable in breach of contract cases if the defendant acted fraudulently, in bad faith, or with gross negligence amounting to bad faith or wanton disregard of contractual obligations.