Chan v. Bank of the Philippine Islands, G.R. No.

247776 (Notice), November 13, 2019

FACTS:
Bank of the Philippine Islands (BPI) extended credit accommodation to Chan through a credit card with
the customer number 020-100-3-00-1180769. Chan made various purchases using the card, amounting
to P729,119.48 based on his Statement of Account dated March 12, 2014. The Statement of Account
provided a breakdown of the charges, including installment dues, finance charges, and late payment
charges.

BPI demanded payment from Chan, but he did not comply. Consequently, BPI filed a complaint for a
sum of money against him before the Regional Trial Court (RTC).

During the trial, the RTC excluded several pieces of evidence presented by BPI, including a Special Power
of Attorney (SPA) authorizing a witness to testify, the Terms and Conditions of Chan's card, the previous
Statements of Account, and a Demand Letter. The exclusion of these pieces of evidence was based on
various grounds, such as irrelevance, lack of personal knowledge, absence of Chan's signature, and
insufficient proof of receipt.

BPI made a formal tender of the excluded evidence, but Chan filed a demurrer to evidence, seeking the
dismissal of the complaint due to the exclusion of the evidence that BPI presented to prove his non-
payment.

On May 26, 2016, the RTC granted Chan's demurrer to evidence and dismissed the case for insufficiency
of evidence. The RTC ruled that BPI failed to establish its right to collect from Chan due to the exclusion
of the statements of account and the demand letter.

BPI appealed the decision to the Court of Appeals (CA), which partially granted the appeal on November
16, 2018. The CA ordered Chan to pay BPI the principal sum of P729,119.48, along with one percent (1%)
interest per month and one percent (1%) penalty charge per month from the date of demand until full
payment. The CA held that the statements of account were admissible as evidence and deemed it
necessary to reduce the interest and finance charges.

Chan filed a motion for reconsideration, which was denied by the CA. Subsequently, Chan filed a Petition
for Review on Certiorari before the Supreme Court, challenging the ruling of the CA.

ISSUE:
Whether or not the Court of Appeals (CA) erred in reversing the decision of the Regional Trial Court
(RTC) and ordering Chan to pay BPI.

RULING:
No. The Supreme Court agreed with the CA's finding that the hearsay evidence rule was inapplicable to
the case. The statements of account were deemed admissible under Section 1, Rule 8 of the Rules on
Electronic Evidence, which exempts electronic records kept in the regular course of business from being
considered hearsay evidence. Coros, an officer of BPI who had custody of the documents, was qualified
to testify regarding the statements.
The Supreme Court also upheld the CA's determination that Chan's liability for the principal amount was
established. Both parties had stipulated during pre-trial that Chan used the credit card, thereby
admitting his liability.

However, the Supreme Court found that the CA erred in simply reducing the interest and penalty
charges claimed by BPI. It was noted that BPI had stipulated that Chan did not sign the credit card's
terms and conditions, and the interest and penalty charges were not indicated in those terms and
conditions. Consequently, BPI could not collect the stipulated interest and penalty charges from Chan
because there was no proof of his agreement to these charges. The Court ordered Chan to pay the
principal amount, excluding the finance charges and late payment charges.

Therefore, the Supreme Court affirmed the CA's decision to reverse the RTC's ruling and order Chan to
pay BPI, with the modification that the interest and penalty charges should be excluded.