Torts Ermitano vs CA 1

ERMITAÑO VS CA [GR NO. 127246] April 21, 1999 FACTS: Luis applied for a credit card from BPI Express Card Corp. (BECC), it! "a#uelita, Luis$ ife, as exte#sio# card!older, a#d credit limit of %&'. T!e ofte# exceed t!is ut BECC did#*t protest. "a#uelita*s a+ as s#atc!ed, i#cludi#+ t!e card, o# Au+ust - t!ereafter, s!e called BECC to i#form it of t!e loss. After t!e call, s!e rote a letter to BECC t!e folloi#+ da surre#dered Luis$ card a#d as'ed for replaceme#t cards. /# Au+ust 0&, t!e ere c!ar+ed for purc!ases t!e did#*t do (t!ru t!e lost card). "a#uelita rote BECC a+ai#. BECC re#eed card u#til "arc! %--%. BECC co#ti#ued to !old Luis liale for t!e u#aut!ori1ed c!ar+es o# t!e +rou#d t!at t!ere is a stipulatio# i# t!eir co#tract t!at sas: 2I# t!e e3e#t t!e card is lost or stole#, t!e card!older a+rees to immediatel report its loss or t!eft i# riti#+ to BECC . . . purc!ases made4i#curred arisi#+ from t!e use of t!e lost4stole# card s!all e for t!e exclusi3e accou#t of t!e card!older a#d t!e card!older co#ti#ues to e liale for t!e purc!ases made t!rou+! t!e use of t!e lost4stole# lost4stole# BPI Express Express Card u#til u#til after suc! #otice #otice !as ee# +i3e# to BECC a#d t!e latter !as commu#icated suc! loss4t!eft to its memer estalis!me#ts.5 6!e# Luis used !is card at Caltex, it as dis!o#ored (*cos t!e u#aut!ori1ed c!ar+es ere added to !is ala#ce so !e reac!ed !is credit limit). Luis i#sisted t!at purc!ases ere made after t!e reported t!e card loss. BECC ca#celled t!eir cards a#d told spouses to pa immediatel or else t!e ill e sued for collectio# of mo#e. Spouses sued BECC for dama+es. 7TC ruled i# t!eir fa3or. CA re3ersed t!e decisio#. •

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ISS8E: S!ould a card!older pa for t!e u#aut!ori1ed purc!ases made after !e reported t!e card$s loss to t!e a#'9 78LI;: /. I# t!e i#sta#t case, t!e spouses s!ould #ot e !eld liale for t!e u#aut!ori1ed c!ar+es a#d must e aarded dama+es. Prompt #otice  t!e card!older to t!e credit card compa# of t!e loss or t!eft of !is card s!ould e e#ou+! to relie3e t!e former of a# liailit occasio#ed  t!e u#aut!ori1ed use of !is lost or stole# card. T!e ust. T!e Court ca##ot +i3e its asse#t to suc! a stipulatio# !ic! could clearl ru# a+ai#st pulic polic. /# t!e matter of t!e dama+es petitio#ers are see'i#+, e must delete t!e aard of exemplar dama+es, ase#t a# clear s!oi#+ t!at BECC acted i# a a#to#, fraudule#t, rec'less, oppressi3e, or male3ole#t ma##er, as re