"x x x.
The relationship between the credit card issuer and the credit card holder is a contractual one that isgoverned by the terms and conditions found in the card membership agreement.16 Such terms and conditions constitute the law between the parties. In case of their breach, moral damages may be recovered where the defendant is shown to have acted fraudulently or in bad faith.17 Malice or bad faith implies a conscious and intentional design to do a wrongful actfor a dishonest purpose or moral obliquity.18 However, a conscious or intentional design need not always be present because negligence may occasionally be so gross as to amount to malice or bad faith.19 Hence, bad faith in the context of Article 2220 of the Civil Code includes gross negligence.20
BPI Express Credit contends thatit was not grossly negligent in refusing to lift the suspension of Armovit’s credit card privileges inasmuch as she had not complied with the requisite submission of a new application form; and that under the circumstances its negligence, if any, was not so gross as to amount to malice or bad faith following the ruling in Far East Bank and Trust Company v. Court of Appeals.21
The Court disagrees with the contentions of BPI Express Credit.1âwphi1 The Terms and Conditions Governing the Issuance and Use of the BPI Express Credit Card22 printed on the credit card application form spelled out the terms and conditions of the contract between BPI Express Credit and its card holders, including Armovit. Such terms and conditions determined the rights and obligations of the parties.23 Yet, a review of such terms and conditions did not reveal that Armovit needed to submit her new application as the antecedent condition for her credit card to be taken out of the list of suspended cards.
Considering that the terms and conditions nowhere stated that the card holder must submit the new application form in order to reactivate her credit card, to allow BPI Express Credit toimpose the duty to submit the new application form in order to enableArmovit to reactivate the credit card would contravene the Parol Evidence Rule.24 Indeed, there was no agreement between the parties to add the submission of the new application form as the means to reactivate the credit card. When she did not promptly settle her outstanding balance, BPI Express Credit sent a message on March 19, 1992 demanding payment with the warning that her failure to pay would force it to temporarily suspend her credit card effective March 31, 1992. It then sent another demand letter dated March 31, 1992 requesting her to settle her obligation in order to lift the suspension of her credit card and prevent its cancellation. In April 1992, she paid her obligation. In the context of the contemporaneous and subsequent acts of the parties, the only condition for the reinstatement of her credit card was the payment of her outstanding obligation.25 Had it intended otherwise, BPI Express Credit would have surelyu informed her of the additional requirement in its letters of March 19, 1992 and March 31, 1992. That it did not do so confirmed that they did not agree on having her submit the new application form as the condition to reactivate her credit card.
The letter of BPI Express Credit dated April 8, 1992 did not clearly and categorically inform Armovit that the submission of the new application form was the pre-condition for the reactivation of her credit card. The statement in the letter (i.e., "… accomplish the enclosed application form and provide us with informations/documents that can help our Credit Committee in reevaluating your existingfacility with us.") merely raised doubt as to whether the requirement had really been a pre-condition or not. With BPI Express Credit being the party causing the confusion, the interpretation of the contract could not be donein its favor.26 Moreover, it cannot be denied that a credit card contract is considered as a contract of adhesion because its terms and conditions are solely prepared by the credit card issuer. Consequently, the terms and conditions have to be construed against BPI Express Credit as the party who drafted the contract.27
Bereft of the clear basis to continuewith the suspension of the credit card privileges of Armovit, BPI Express Credit acted in wanton disregard of its contractual obligations with her. We concur with the apt observation by the CA that BPI Express Credit’s negligence was even confirmed by the telegraphic message it had addressed and sent to Armovit apologizing for the inconvenience caused in inadvertently including her credit card in the caution list. It was of no consequence that the telegraphic message could have been intended for another client, as BPI Express Credit apparently sought to convey subsequently, because the tenor ofthe apology included its admission of negligence in dealing with its clients, Armovit included. Indeed, BPI Express Credit did not observe the prudence expected of banks whose business was imbued with public interest.
We hold that the CA rightly sustained the award of P100,000.00 as moral damages. To us, too, that amount was fair and reasonable under the circumstances. Similarly, the grant of exemplary damages was warranted under Article 2232 of the New Civil Code because BPI Express Credit acted in a reckless and oppressive manner. Finally, with Armovit having been forced to litigate in order to protect her rights and interests, she was entitled to recover attorney's fees and expenses oflitigation.28
x x x."
