Sps. Yulo v. BPI, G.R. No.

217044, January 16, 2019 Case Digest

Gerardo, Desmund A.

FACTS:
Petitioner spouses Rainer Yulo and Juliet Yulo are both Bank of the Philippine Islands
credit card holders (BPI). When the petitioners fell behind on their payments, BPI began
sending out demand letters and later filed a complaint against them for a sum of money.
Spouses admitted using the Bank of the Philippine Islands-issued credit cards, but
claimed their total liability was only P20,000.00. In addition, they claimed that the Bank
of the Philippine Islands did not fully disclose to them the Terms and Conditions
governing their use of the issued credit cards, and that BPI failed to establish their
liability. The lower court ruled in favour of BPI and ordered the petitioners to pay
P229,378.68 to the bank. Both the Regional Trial Court and the Court of Appeals denied
the petitioners' appeal. The Court of Appeals determined that the Yulo Spouses'
acceptance of the charges on their monthly Statements of Account was evidenced by
their failure to contest the charges. It was also stated that Rainier, an insurance
underwriter, was familiar with contractual clauses; consequently, he could not claim
ignorance regarding his contractual obligation to the Bank of the Philippine Islands.

ISSUE:
Whether or not petitioners Rainier Jose M. Yulo and Juliet L. Yulo are bound by
respondent's credit card usage terms and conditions.

RULING:
No. As the recipient of an unsolicited credit card, a pre-screened client is free to accept
or decline it. When petitioners accepted the credit card of the respondent and used it to
purchase goods and services, a contractual relationship was formed between them
"governed by the card membership agreement's Terms and Conditions. These
conditions are the law between the parties ". However, when issuing a pre-screened or
pre-approved credit card, the credit card issuer must demonstrate that the cardholder
has read and agreed to the terms and conditions governing the card's use. In the
absence of consent evidence, the client cannot be bound by the terms and conditions,
despite the admitted use of the credit card. Respondent's failure to demonstrate
Rainier's compliance and acceptance of the Terms and Conditions precludes petitioners
from being bound by its terms. The ruling of the Metropolitan Trial Court was upheld by
the Regional Trial Court and the Court of Appeals. Since the petitioner did not agree to
the Terms and Conditions governing his credit card, the outstanding balance must be
modified by removing the interests, penalties, and other fees previously assessed.