THIRD DIVISION

[G.R. No. 164273. March 28, 2007.]

EMMANUEL B. AZNAR, petitioner, vs. CITIBANK, N.A.,

(Philippines), respondent.

DECISION

AUSTRIA-MARTINEZ, J : p

Before this Court is a Petition for Review assailing the Decision 1 of the
Court of Appeals (CA) in CA-G.R. CV No. 62554 dated January 30, 2004 which
set aside the November 25, 1998 Order of the Regional Trial Court (RTC)
Branch 10, Cebu City and reinstated the Decision of RTC Branch 20 of Cebu City
dated May 29, 1998 in Civil Case No. CEB-16474; and the CA Resolution dated
May 26, 2004 denying petitioner's motion for reconsideration. CDScaT

The facts are as follows:

Emmanuel B. Aznar (Aznar), a known businessman 2 in Cebu, is a holder of
a Preferred Master Credit Card (Mastercard) bearing number 5423-3920-0786-
7012 issued by Citibank with a credit limit of P150,000.00. As he and his wife,
Zoraida, planned to take their two grandchildren, Melissa and Richard Beane,
on an Asian tour, Aznar made a total advance deposit of P485,000.00 with
Citibank with the intention of increasing his credit limit to P635,000.00. 3

With the use of his Mastercard, Aznar purchased plane tickets to Kuala
Lumpur for his group worth P237,000.00. On July 17, 1994, Aznar, his wife and
grandchildren left Cebu for the said destination. 4 DEICTS

Aznar claims that when he presented his Mastercard in some

establishments in Malaysia, Singapore and Indonesia, the same was not
honored. 5 And when he tried to use the same in Ingtan Tour and Travel Agency
(Ingtan Agency) in Indonesia to purchase plane tickets to Bali, it was again
dishonored for the reason that his card was blacklisted by Citibank. Such
dishonor forced him to buy the tickets in cash. 6 He further claims that his
humiliation caused by the denial of his card was aggravated when Ingtan
Agency spoke of swindlers trying to use blacklisted cards. 7 Aznar and his group
returned to the Philippines on August 10, 1994. 8
On August 26, 1994, Aznar filed a complaint for damages against
Citibank, docketed as Civil Case No. CEB-16474 and raffled to RTC Branch 20,
Cebu City, claiming that Citibank fraudulently or with gross negligence
blacklisted his Mastercard which forced him, his wife and grandchildren to abort
important tour destinations and prevented them from buying certain items in
their tour. 9 He further claimed that he suffered mental anguish, serious
anxiety, wounded feelings, besmirched reputation and social humiliation due to
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 the wrongful blacklisting of his card. 10 To prove that Citibank blacklisted his
Mastercard, Aznar presented a computer print-out, denominated as ON-LINE
AUTHORIZATIONS FOREIGN ACCOUNT ACTIVITY REPORT, issued to him by
Ingtan Agency (Exh. "G") with the signature of one Victrina Elnado Nubi (Nubi)
11 which shows that his card in question was "DECL OVERLIMIT" or declared
over the limit. 12 AEDISC

Citibank denied the allegation that it blacklisted Aznar's card. It also

contended that under the terms and conditions governing the issuance and use
of its credit cards, Citibank is exempt from any liability for the dishonor of its
cards by any merchant affiliate, and that its liability for any action or incident
which may be brought against it in relation to the issuance and use of its credit
cards is limited to P1,000.00 or the actual damage proven whichever is lesser.
13

To prove that they did not blacklist Aznar's card, Citibank's Credit Card
Department Head, Dennis Flores, presented Warning Cancellation Bulletins
which contained the list of its canceled cards covering the period of Aznar's
trip. 14
On May 29, 1998, RTC Branch 20, Cebu City, through Judge Ferdinand J.
Marcos, rendered its decision dismissing Aznar's complaint for lack of merit. 15
The trial court held that as between the computer print-out 16 presented by
Aznar and the Warning Cancellation Bulletins 17 presented by Citibank, the
latter had more weight as their due execution and authenticity were duly
established by Citibank. 18 The trial court also held that even if it was shown
that Aznar's credit card was dishonored by a merchant establishment, Citibank
was not shown to have acted with malice or bad faith when the same was
dishonored. 19 CHaDIT

Aznar filed a motion for reconsideration with motion to re-raffle the case
saying that Judge Marcos could not be impartial as he himself is a holder of a
Citibank credit card. 20 The case was re-raffled 21 and on November 25, 1998,
the RTC, this time through Judge Jesus S. De la Peña of Branch 10 of Cebu City,
issued an Order granting Aznar's motion for reconsideration, as follows:
WHEREFORE, the Motion for Reconsideration is hereby GRANTED.
The DECISION dated May 29, 1998 is hereby reconsidered, and
consequently, the defendant is hereby condemned liable to pay the
following sums of money:

a) P10,000,000.00 as moral damages;

b) P5,000,000.00 as exemplary damages;

c) P1,000,000.00 as attorney's fees; and

d) P200,000.00 as litigation expenses. 22 IcHTED

Judge De la Peña ruled that: it is improbable that a man of Aznar's stature

would fabricate Exh. "G" or the computer print-out which shows that Aznar's
Mastercard was dishonored for the reason that it was declared over the limit;
Exh. "G" was printed out by Nubi in the ordinary or regular course of business in
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 the modern credit card industry and Nubi was not able to testify as she was in a
foreign country and cannot be reached by subpoena; taking judicial notice of
the practice of automated teller machines (ATMs) and credit card facilities
which readily print out bank account status, Exh. "G" can be received as prima
facie evidence of the dishonor of Aznar's Mastercard; no rebutting evidence
was presented by Citibank to prove that Aznar's Mastercard was not
dishonored, as all it proved was that said credit card was not included in the
blacklisted cards; when Citibank accepted the additional deposit of P485,000.00
from Aznar, there was an implied novation and Citibank was obligated to
increase Aznar's credit limit and ensure that Aznar will not encounter any
embarrassing situation with the use of his Mastercard; Citibank's failure to
comply with its obligation constitutes gross negligence as it caused Aznar
inconvenience, mental anguish and social humiliation; the fine prints in the flyer
of the credit card limiting the liability of the bank to P1,000.00 or the actual
damage proven, whichever is lower, is a contract of adhesion which must be
interpreted against Citibank. 23
Citibank filed an appeal with the CA and its counsel filed an administrative
case against Judge De la Peña for grave misconduct, gross ignorance of the law
and incompetence, claiming among others that said judge rendered his decision
without having read the transcripts. The administrative case was held in
abeyance pending the outcome of the appeal filed by Citibank with the CA. 24 ASaTHc

On January 30, 2004, the CA rendered its Decision granting Citibank's

appeal thus:
WHEREFORE, the instant appeal is GRANTED. The assailed order
of the Regional Trial Court, 7th Judicial Region, Branch 10, Cebu City, in
Civil Case No. CEB-16474, is hereby SET ASIDE and the decision, dated
29 May 1998 of the Regional Trial Court, 7th Judicial Region, Branch
20, Cebu City in this case is REINSTATED. aASDTE

SO ORDERED. 25

The CA ruled that: Aznar had no personal knowledge of the blacklisting of

his card and only presumed the same when it was dishonored in certain
establishments; such dishonor is not sufficient to prove that his card was
blacklisted by Citibank; Exh. "G" is an electronic document which must be
authenticated pursuant to Section 2, Rule 5 of the Rules on Electronic Evidence
26 or under Section 20 of Rule 132 of the Rules of Court 27 by anyone who saw

the document executed or written; Aznar, however, failed to prove the

authenticity of Exh. "G", thus it must be excluded; the unrefuted testimony of
Aznar that his credit card was dishonored by Ingtan Agency and certain
establishments abroad is not sufficient to justify the award of damages in his
favor, absent any showing that Citibank had anything to do with the said
dishonor; Citibank had no absolute control over the actions of its merchant
affiliates, thus it should not be held liable for the dishonor of Aznar's credit card
by said establishments. 28

Aznar filed a motion for reconsideration which the CA dismissed in its

Resolution dated May 26, 2004. 29 IEDHAT

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 Parenthetically, the administrative case against Judge De la Peña was
activated and on April 29, 2005, the Court's Third Division 30 found respondent
judge guilty of knowingly rendering an unjust judgment and ordered his
suspension for six months. The Court held that Judge De la Peña erred in basing
his Order on a manifestation submitted by Aznar to support his Motion for
Reconsideration, when no copy of such manifestation was served on the
adverse party and it was filed beyond office hours. The Court also noted that
Judge De la Peña made an egregiously large award of damages in favor of
Aznar which opened himself to suspicion. 31
Aznar now comes before this Court on a petition for review alleging that:
the CA erroneously made its own factual finding that his Mastercard was not
blacklisted when the matter of blacklisting was already a non-issue in the
November 25, 1998 Order of the RTC; the RTC found that Aznar's Mastercard
was dishonored for the reason that it was declared over the credit limit; this
factual finding is supported by Exh. "G" and by his (Aznar's) testimony; the
issue of dishonor on the ground of 'DECL OVERLIMIT', although not alleged in
the complaint, was tried with the implied consent of the parties and should be
treated as if raised in the pleadings pursuant to Section 5, Rule 10 of the Rules
of Civil Procedure; 32 Exh. "G" cannot be excluded as it qualifies as an
electronic evidence following the Rules on Electronic Evidence which provides
that print-outs are also originals for purposes of the Best Evidence Rule; Exh.
"G" has remained complete and unaltered, apart from the signature of Nubi,
thus the same is reliable for the purpose for which it was generated; the RTC
judge correctly credited the testimony of Aznar on the issuance of the
computer print-out as Aznar saw that it was signed by Nubi; said testimony
constitutes the "other evidence showing the integrity and reliability of the print-
out to the satisfaction of the judge" which is required under the Rules on
Electronic Evidence; the trial court was also correct in finding that Citibank was
grossly negligent in failing to credit the additional deposit and make the
necessary entries in its systems to prevent Aznar from encountering any
embarrassing situation with the use of his Mastercard. 33 TcEaDS

Citibank, in its Comment, contends that: Aznar never had personal

knowledge that his credit card was blacklisted as he only presumed such fact;
the issue of dishonor on the ground that the card was declared over the limit
was also never tried with the implied consent of both parties; Aznar's self-
serving testimony is not sufficient to prove the integrity and reliability of Exh.
"G"; Aznar did not declare that it was Nubi who printed the document and that
said document was printed in his presence as he merely said that the print-out
was provided him; there is also no annotation on Exh. "G" to establish that it
was Nubi who printed the same; assuming further that Exh. "G" is admissible
and Aznar's credit card was dishonored, Citibank still cannot be held liable for
damages as it only shows that Aznar's credit card was dishonored for having
been declared over the limit; Aznar's cause of action against Citibank hinged on
the alleged blacklisting of his card which purportedly caused its dishonor;
dishonor alone, however, is not sufficient to award Aznar damages as he must
prove that the dishonor was caused by a grossly negligent act of Citibank; the
award of damages in favor of Aznar was based on Article 1170 34 of the Civil
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 Code, i.e ., there was fraud, negligence or delay in the performance of its
obligation; there was no proof, however that Citibank committed fraud or delay
or that it contravened its obligations towards Aznar; the terms and conditions of
the credit card cannot be considered as a contract of adhesion since Aznar was
entirely free to reject the card if he did not want the conditions stipulated
therein; a person whose stature is such that he is expected to be more prudent
with respect to his transactions cannot later on be heard to complain for being
ignorant or having been forced into merely consenting to the contract. 35
In his Reply, Aznar contended that to a layman, the term "blacklisting" is
synonymous with the words "hot list" or "declared overlimit"; and whether his
card was blacklisted or declared over the limit, the same was dishonored due to
the fault or gross negligence of Citibank. 36 TIDHCc

Aznar also filed a Memorandum raising as issues the following:

I. Whether or not the augmentation deposit in the amount of
P485,000.00 of the Petitioner constitutes relative extinctive
novation;

II. Whether or not the purchases made by Petitioner were beyond

his credit limit;
III. Whether or not the issues of dishonor by reason of overlimit was
tried with the consent of the parties;
IV. Whether or not the "On Line Authorization Report" is an
electronic document."
V. Whether or not the "On Line Authorization Report" constitutes
electronic evidence;
VI. Whether or not the agreement between the parties is a contract
of adhesion;

VII. Whether or not the Respondent is negligent in not crediting the

deposits of the Respondent. 37EacHCD

Aznar further averred in his Memorandum that Citibank assured him that
with the use of his Mastercard, he would never be turned down by any
merchant store, and that under Section 43, Rule 130 of the Rules of Court, Exh.
"G" is admissible in evidence. 38
Citibank also filed a Memorandum reiterating its earlier arguments. 39

Stripped to its essentials, the only question that needs to be answered is:
whether Aznar has established his claim against Citibank.

The answer is no.

It is basic that in civil cases, the burden of proof rests on the plaintiff to
establish his case based on a preponderance of evidence. The party that
alleges a fact also has the burden of proving it. 40
In the complaint Aznar filed before the RTC, he claimed that Citibank
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 blacklisted his Mastercard which caused its dishonor in several establishments
in Malaysia, Singapore, and Indonesia, particularly in Ingtan Agency in
Indonesia where he was humiliated when its staff insinuated that he could be a
swindler trying to use a blacklisted card. CScaDH

As correctly found by the RTC in its May 29, 1998 Decision, Aznar failed to
prove with a preponderance of evidence that Citibank blacklisted his
Mastercard or placed the same on the "hot list." 41
Aznar in his testimony admitted that he had no personal knowledge that
his Mastercard was blacklisted by Citibank and only presumed such fact from
the dishonor of his card. ASTcEa

Q Now, paragraph 12 also states and I quote: "its entry in the "hot"
list was confirmed to be authentic".
Now, who confirmed that the blacklisting of your Preferred
Citibank Mastercard was authentic?
A. Okey. When I presented this Mastercard, my card rather, at the
Merchant's store, I do not know, they called up somebody for
verification then later they told me that "your card is being
denied". So, I am not in a position to answer that. I do not know
whom they called up; where they verified. So, when it is
denied that's presumed to be blacklisted. IESDCH

Q. So the word that was used was denied?

A. Denied.
Q. And after you were told that your card was denied you
presumed that it was blacklisted?
A. Definitely.
Q. So your statement that your card was allegedly
blacklisted is only your presumption drawn from the fact,
from your allegations, that it was denied at the
merchandise store?

A. Yes, sir. 42 (Emphasis supplied)

The dishonor of Aznar's Mastercard is not sufficient to support a

conclusion that said credit card was blacklisted by Citibank, especially in view
of Aznar's own admission that in other merchant establishments in Kuala
Lumpur and Singapore, his Mastercard was accepted and honored. 43

Aznar puts much weight on the ON-LINE AUTHORIZATION FOREIGN

ACCOUNT ACTIVITY REPORT, a computer print-out handed to Aznar by Ingtan
Agency, marked as Exh. "G", to prove that his Mastercard was dishonored for
being blacklisted. On said print-out appears the words "DECL OVERLIMIT"
opposite Account No. 5423-3920-0786-7012. TEIHDa

As correctly pointed out by the RTC and the CA, however, such exhibit
cannot be considered admissible as its authenticity and due execution were not
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 sufficiently established by petitioner.

The prevailing rule at the time of the promulgation of the RTC Decision is
Section 20 of Rule 132 of the Rules of Court. It provides that whenever any
private document offered as authentic is received in evidence, its due
execution and authenticity must be proved either by (a) anyone who saw the
document executed or written; or (b) by evidence of the genuineness of the
signature or handwriting of the maker. HCISED

Aznar, who testified on the authenticity of Exh. "G," did not actually see
the document executed or written, neither was he able to provide evidence on
the genuineness of the signature or handwriting of Nubi, who handed to him
said computer print-out. Indeed, all he was able to allege in his testimony are
the following:
Q I show to you a Computer Print Out captioned as On Line
Authorization Activity Report where it is shown that the Preferred
Master Card Number 5423392007867012 was denied as per
notation on the margin of this Computer Print Out, is this the
document evidencing the dishonor of your Preferred Master
Card? cTADCH

xxx xxx xxx

A Yes sir, after that Ingtan incident, I went straight to the Service
Agency there and on the left hand side you will be able to see the
name of the person in-charged [sic] there certifying that really
my card is being blacklisted and there is the signature there of
the agency.

ATTY. NAVARRO:
The witness, your honor, is pointing to the signature over the
handwritten name of Victrina Elnado Nubi which I pray, your
honor, that the Computer Print Out be marked as our Exhibit "G"
and the remarks at the left hand bottom portion of Victorina
Elnado Nubi with her signature thereon be encircled and be
marked as our Exhibit "G-1".

xxx xxx xxx

Q Mr. Aznar, where did you secure this Computer Print Out
marked as Exhibit "G"? HSIADc

A This is provided by that Agency, your honor. They were

the ones who provided me with this. So what the lady did,
she gave me the Statement and I requested her to sign to
show proof that my Preferred Master Card has been
rejected. 44 (Emphasis supplied). CIHAED

Even if examined under the Rules on Electronic Evidence, which took

effect on August 1, 2001, and which is being invoked by Aznar in this case, the
authentication of Exh. "G" would still be found wanting.

Pertinent sections of Rule 5 read:

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 Section 1. Burden of proving authenticity. — The person
seeking to introduce an electronic document in any legal proceeding
has the burden of proving its authenticity in the manner provided in
this Rule. cCDAHE

Section 2. Manner of authentication. — Before any private

electronic document offered as authentic is received in evidence, its
authenticity must be proved by any of the following means:
(a) by evidence that it had been digitally signed by the
person purported to have signed the same; ScAIaT

(b) by evidence that other appropriate security procedures or

devices as may be authorized by the Supreme Court or by
law for authentication of electronic documents were
applied to the document; or

(c) by other evidence showing its integrity and reliability to

the satisfaction of the judge.

Aznar claims that his testimony complies with par. (c), i.e ., it constitutes
the "other evidence showing integrity and reliability of Exh. "G" to the
satisfaction of the judge." The Court is not convinced. Aznar's testimony that
the person from Ingtan Agency merely handed him the computer print-out and
that he thereafter asked said person to sign the same cannot be considered as
sufficient to show said print-out's integrity and reliability. As correctly pointed
out by Judge Marcos in his May 29, 1998 Decision, Exh. "G" does not show on
its face that it was issued by Ingtan Agency as Aznar merely mentioned in
passing how he was able to secure the print-out from the agency; Aznar also
failed to show the specific business address of the source of the computer print-
out because while the name of Ingtan Agency was mentioned by Aznar, its
business address was not reflected in the print-out. 45 HSIaAT

Indeed, Aznar failed to demonstrate how the information reflected on the

print-out was generated and how the said information could be relied upon as
true. In fact, Aznar to repeat, testified as follows:
ATTY. NERI

Q Now, paragraph 12 also states and I quote: "its entry in the "hot"
list was confirmed to be authentic"

Now, who confirmed that the blacklisting of your Preferred

Citibank Mastercard was authentic?
A Okey. When I presented this Mastercard, my card rather, at the
Merchant's store, I do not know, they called up somebody for
verification then later they told me that "your card is being
denied ". So, I am not in a position to answer that. I do not
know whom they called up; where they verified. So, when
it is denied that's presumed to be blacklisted. 46 (Emphasis
supplied) jurcda

Aznar next invokes Section 43 of Rule 130 of the Rules of Court, which
pertains to entries in the course of business, to support Exh. "G". Said provision
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 reads: ITaCEc

Sec. 43. Entries in the course of business. — Entries made at,

or near the time of the transactions to which they refer, by a person
deceased or unable to testify, who was in a position to know the facts
therein stated, may be received as prima facie evidence, if such person
made the entries in his professional capacity or in the performance of
duty and in the ordinary or regular course of business or duty.

Under this rule, however, the following conditions are required:

1. the person who made the entry must be dead, or unable to
testify;
2. the entries were made at or near the time of the transactions to
which they refer;
3. the entrant was in a position to know the facts stated in the
entries;
4. the entries were made in his professional capacity or in the
performance of a duty, whether legal, contractual, moral or
religious; and
5. the entries were made in the ordinary or regular course of
business or duty. 47 DAEaTS

As correctly pointed out by the RTC in its May 29, 1998 Decision, there
appears on the computer print-out the name of a certain "Victrina Elnado Nubi"
and a signature purportedly belonging to her, and at the left dorsal side were
handwritten the words "Sorry for the delay since the records had to be
retrieved. Regards. Darryl Mario ." It is not clear therefore if it was Nubi who
encoded the information stated in the print-out and was the one who printed
the same. The handwritten annotation signed by a certain Darryl Mario even
suggests that it was Mario who printed the same and only handed the print-out
to Nubi. The identity of the entrant, required by the provision above mentioned,
was therefore not established. Neither did petitioner establish in what
professional capacity did Mario or Nubi make the entries, or whether the entries
were made in the performance of their duty in the ordinary or regular course of
business or duty.

And even if Exh. "G" is admitted as evidence, it only shows that the use of
the credit card of petitioner was denied because it was already over the limit.
There is no allegation in the Complaint or evidence to show that there was
gross negligence on the part of Citibank in declaring that the credit card has
been used over the limit. TaDAIS

The Court is also perplexed that stated on Exh. "G" is the amount of
"6,289,195.10" opposite petitioner's account number, which data, petitioner did
not clarify. 48 As plaintiff in this case, it was incumbent on him to prove that he
did not actually incur the said amount which is above his credit limit. As it is,
the Court cannot see how Exh. "G" could help petitioner's claim for damages.

The claim of petitioner that Citibank blacklisted his card through fraud or
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 gross negligence is likewise effectively negated by the evidence of Citibank
which was correctly upheld by the RTC and the CA, to wit:
. . . Mr. Dennis Flores, the Head of the Credit Card Department of
defendant Bank, presented documents known as Warning Cancellation
Bulletin for July 10, 17, 24, and 31, 1994 (Exhibits '3', '3-1' to '3-38', '4',
'4-1' to '4-38' '5', '5-1' to '5-39' and '6', '6-1' to '6-39'), for August 7,
1994 (Exhibit[s] '7', '7-1' to '7-37'), for August 8, 1994 (Exhibit[s] '8', '8-
1' to '8-20') which show that plaintiff's Citibank preferred mastercard
was not placed in a hot list or was not blacklisted. HEITAD

The Warning Cancellation Bulletins (WCB) (Exhibits '3', '4', '5', '6',
'7', '8' and their submarkings) which covered the period of four (4) days
in July 1994 (from July 10, 17, 24 and 31, 1994), and two (2) days in
August 1994, (August 7 and 8, 1994), when plaintiff traveled in the
aforementioned Asian countries showed that said Citibank preferred
mastercard had never been placed in a 'hot list' or the same was
blacklisted, let alone the fact that all the credit cards which had been
cancelled by the defendant bank were all contained, reported and
listed in said Warning Cancellation Bulletin which were issued and
released on a regular basis. aTEHIC

These three hundred (300) Warning Cancellation Bulletins pieces

of documentary proofs, all in all, adduced by defendant pointed to the
fact that said plaintiff's credit car (sic) was not among those found in
said bulletins as having been cancelled for the period for which the said
bulletins had been issued.
Between said computer print out (Exhibit 'G') and the Warning
Cancellation Bulletins (Exhibits '3' to '8' and their submarkings) the
latter documents adduced by defendant are entitled to greater weight
than that said computer print out presented by plaintiff that bears on
the issue of whether the plaintiff's preferred master card was actually
placed in the 'hot list' or blacklisted for the following reasons:
The first reason is that the due execution and authentication of
these Warning Cancellation Bulletins (or WCB) have been duly
established and identified by defendant's own witness, Dennis Flores,
one of the bank's officers, who is the head of its credit card
department, and, therefore, competent to testify on the said bulletins
as having been issued by the defendant bank showing that plaintiff's
preferred master credit card was never blacklisted or placed in the
Bank's 'hot list'. But on the other hand, plaintiff's computer print out
(Exhibit 'G') was never authenticated or its due execution had never
been duly established. Thus, between a set of duly authenticated
commercial documents, the Warning Cancellation Bulletins (Exhibits '3'
to '8' and their submarkings), presented by defendants (sic) and an
unauthenticated private document, plaintiff's computer print out
(Exhibit 'G'), the former deserves greater evidentiary weight supporting
the findings of this Court that plaintiff's preferred master card (Exhibit
'1') had never been blacklisted at all or placed in a so-called 'hot list' by
defendant. 49 EcASIC

Petitioner next argues that with the additional deposit he made in his
account which was accepted by Citibank, there was an implied novation and
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 Citibank was under the obligation to increase his credit limit and make the
necessary entries in its computerized systems in order that petitioner may not
encounter any embarrassing situation with the use of his credit card. Again, the
Court finds that petitioner's argument on this point has no leg to stand on.
Citibank never denied that it received petitioner's additional deposit. 50 It
even claimed that petitioner was able to purchase plane tickets from Cebu to
Kuala Lumpur in the amount of P237,170.00, which amount was beyond his
P150,000.00 limit, because it was able to credit petitioner's additional deposit
to his account. Flores of Citibank testified:
COURT:
Q When was this ticket purchased, after the account was
augmented or before?
A After the account was augmented, Your Honor, because there is
no way we can approve a P250,000.00 purchase with a
P150,000.00 credit limit. 51

xxx xxx xxx

ATTY. NERI:
For the record, your honor, the deposit of P450,000.00
was made as per exhibit of the plaintiff on June 28. The
purchase of the tickets amount to P237,000.00 was
approved and debited on the account of Mr. Aznar on July
20, your honor. The deposit was made about a month
before the purchase of the tickets as per documentary
exhibits, your honor. ITScAE

COURT:
So, Atty. Navarro, what do you say to that explanation?

ATTY. NAVARRO [counsel of petitioner]:

That is correct, your honor, that is borne out by the

records, your honor. (Emphasis supplied)

COURT: (to witness)

Q So, I think Atty. Navarro is only after whether a credit line could
be extended?
A Yes, your honor.

Q Even if there is no augmenting?

A No, sir, it is not possible. So, the only way the P237,000.00
transaction could be approved was by way of advance
payment which actually happened in this case because
there is no way that the P237,000.00 can be approved
with the P150,000.00 credit limit. 52 (Emphasis supplied)

The allegations of blacklisting not having been proved, is Citibank liable

for damages for the dishonor of Aznar's Mastercard?
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 Again, the answer is no. HAEDIS

Citibank, in its attempt to evade liability, invokes paragraphs 7 and 15 of

the terms and conditions governing the issuance of its Mastercard which read:
7. MERCHANT AFFILIATES. [Citibank is] not responsible if the
Card is not honored by any merchant affiliate for any reason.
Furthermore, [the cardholder] will not hold [Citibank] responsible for
any defective product or service purchased through the Card. HSDIaC

xxx xxx xxx

15. LIMITATION OF LIABILITY. In any action arising from this
agreement or any incident thereto which [the cardholder] or any other
party may file against [Citibank], [Citibank's] liability shall not exceed
One Thousand Pesos [P1,000.00] or the actual damages proven,
whichever is lesser. 53

On this point, the Court agrees with Aznar that the terms and conditions
of Citibank's Mastercard constitute a contract of adhesion. It is settled that
contracts between cardholders and the credit card companies are contracts of
adhesion, so-called, because their terms are prepared by only one party while
the other merely affixes his signature signifying his adhesion thereto. 54 IcESDA

In this case, paragraph 7 of the terms and conditions states that "
[Citibank is] not responsible if the Card is not honored by any merchant affiliate
for any reason . . . ". While it is true that Citibank may have no control of all the
actions of its merchant affiliates, and should not be held liable therefor, it is
incorrect, however, to give it blanket freedom from liability if its card is
dishonored by any merchant affiliate for any reason. Such phrase renders the
statement vague and as the said terms and conditions constitute a contract of
adhesion, any ambiguity in its provisions must be construed against the party
who prepared the contract, 55 in this case Citibank.

Citibank also invokes paragraph 15 of its terms and conditions which

limits its liability to P1,000.00 or the actual damage proven, whichever is lesser.
Again, such stipulation cannot be considered as valid for being
unconscionable as it precludes payment of a larger amount even though
damage may be clearly proven. This Court is not precluded from ruling out blind
adherence to the terms of a contract if the attendant facts and circumstances
show that they should be ignored for being obviously too one-sided. 56 TaISEH

The invalidity of the terms and conditions being invoked by Citibank,

notwithstanding, the Court still cannot award damages in favor of petitioner.

It is settled that in order that a plaintiff may maintain an action for the
injuries of which he complains, he must establish that such injuries resulted
from a breach of duty which the defendant owed to the plaintiff — a
concurrence of injury to the plaintiff and legal responsibility by the person
causing it. The underlying basis for the award of tort damages is the premise
that an individual was injured in contemplation of law; thus there must first be
a breach before damages may be awarded and the breach of such duty should
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 be the proximate cause of the injury. 57

It is not enough that one merely suffered sleepless nights, mental anguish
or serious anxiety as a result of the actuations of the other party. It is also
required that a culpable act or omission was factually established, that proof
that the wrongful act or omission of the defendant is shown as the proximate
cause of the damage sustained by the claimant and that the case is predicated
on any of the instances expressed or envisioned by Arts. 2219 58 and 2220 59 of
the Civil Code. 60 HSTCcD

In culpa contractualor breach of contract, moral damages are recoverable

only if the defendant has acted fraudulently or in bad faith, or is found guilty of
gross negligence amounting to bad faith, or in wanton disregard of his
contractual obligations. The breach must be wanton, reckless, malicious or in
bad faith, oppressive or abusive. 61 DEICHc

While the Court commiserates with Aznar for whatever undue

embarrassment he suffered when his credit card was dishonored by Ingtan
Agency, especially when the agency's personnel insinuated that he could be a
swindler trying to use blacklisted cards, the Court cannot grant his present
petition as he failed to show by preponderance of evidence that Citibank
breached any obligation that would make it answerable for said suffering.
As the Court pronounced in BPI Express Card Corporation v. Court of
Appeals, 62
We do not dispute the findings of the lower court that private
respondent suffered damages as a result of the cancellation of his
credit card. However, there is a material distinction between damages
and injury. Injury is the illegal invasion of a legal right; damage is the
loss, hurt, or harm which results from the injury; and damages are the
recompense or compensation awarded for the damage suffered. Thus,
there can be damage without injury to those instances in which the
loss or harm was not the result of a violation of a legal duty. In such
cases, the consequences must be borne by the injured person alone,
the law affords no remedy for damages resulting from an act which
does not amount to a legal injury or wrong. These situations are often
called damnum absque injuria. 63 SDHacT

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.

Ynares-Santiago, Callejo, Sr., Chico-Nazario and Nachura, JJ., concur.

Footnotes

1. Penned by Associate Justice Perlita J. Tria Tirona and concurred in by

Associate Justices Portia Aliño-Hormachuelos and Rosalinda Asuncion-
Vicente; rollo, pp. 51-76.
2. President and Chairman of the Board of E.B. Aznar Shipping Corp., E.B. Aznar
Mining Corp., and E.B. Aznar Guardian Security and Detective Agency;
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 Director and stockholder of Aznar Enterprises Inc.; and Director of Aznar
Brothers Realty Corp. and Southwestern University, TSN, Emmanuel Aznar,
February 22, 1995, pp. 5-6.
3. Rollo , p. 52 (CA Decision); Records p. 293 (RTC Decision).
4. Id.
5. Records, p. 293 (RTC Decision); TSN, Emmanuel Aznar, February 22, 1995,
pp. 11-12.

6. Id. at 293 (RTC Decision); Records, p. 3 (Complaint); TSN, Emmanuel Aznar,

February 22, 1995, p. 15.
7. Id. at 3 (Complaint).
8. Rollo , p. 53 (CA Decision).
9. Records, p. 4.
10. Id.
11. Spelled as Rubi in other parts of the records.
12. Id. at 153, 295.
13. Id. at 20-21.
14. Id. at 293.
15. Id. at 298.
16. Exh. "G".

17. Exhs. "3", "3-1" to "3-38", "4", "4-1" to "4-38", "5", "5-1" to "5-39", "6", "6-
1" to "6-39", "7", "7-1" to "7-37", "8", "8-1" to "8-20".

18. Records, p. 297.

19 Id. at 298.
20. Id. at 299-302.
21. Id. at 304.
22. Id. at 332.
23. Id. at 328-331.
24. See Neri v. De la Peña, A.M. No. RTJ-05-1896, April 29, 2005, 457 SCRA
539, 544.
25. Rollo , p. 76.
26. Section 2. Manner of authentication. — Before any private electronic
document offered as authentic is received in evidence, its authenticity must
be proved by any of the following means:

(a) by evidence that it had been digitally signed by the person purported to
have signed the same;

(b) by evidence that other appropriate security procedures or devices as may

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 be authorized by the Supreme Court or by law for authentication of electronic
documents were applied to the document; or

(c) by other evidence showing its integrity and reliability to the satisfaction of
the judge.
27. Sec. 20. Proof of private document. — Before any private document offered
as authentic is received in evidence, its due execution and authenticity must
be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the
maker.

Any other private document need only be identified as that which it is

claimed to be.
28. Rollo , pp. 68-76, (CA Decision, pp. 18-26).
29. Id. at 92.
30. Penned by Associate Justice Renato C. Corona and concurred in by
Associate Justices Artemio V. Panganiban, Angelina Sandoval-Gutierrez,
Conchita Carpio-Morales and Cancio C. Garcia.

31. Neri v. De la Peña, supra note 24, at 547-548.

32. Sec. 5. . . . When issues not raised by the pleadings are tried with the
express or implied consent of the parties, they shall be treated in all respects
as if they had been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to the evidence
and to raise these issues may be made upon motion of any party at any time,
even after judgment; but failure to amend does not affect the result of the
trial of these issues. . . .
33. Rollo , pp. 17-24.
34. Art. 1170. Those who in the performance of their obligation are guilty of
fraud, negligence, or delay and those who in any manner contravene the
tenor thereof, are liable for damages.

35. Rollo , pp. 104-118.

36. Id. at 137-142.
37. Id. at 164-165.
38. Id. at 165-171.
39. Id. at 190-224.
40. Citibank N.A. Mastercard v. Teodoro , 458 Phil. 480, 488 (2003).
41. See records, p. 297 (RTC Decision, p. 9).
42. TSN, March 22, 1995, p. 13.

43. Id. at 8; TSN, May 9, 1995, pp. 3-4.

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 44. TSN, February 22, 1995, pp. 15-17.
45. Records, p. 295.

46. TSN, March 22, 1995, p. 13.

47. Security Bank and Trust Company v. Gan, G.R. No. 150464, June 27, 2006,
493 SCRA 239, 244-245.

48. Records, p. 153.

49. CA rollo, pp. 150-151 (CA Decision, pp. 10-11).

50. TSN, Dennis Flores, September 18, 1995, p. 10.

51. Id. at 12.

52. TSN, Dennis Flores, October 9, 1995, pp. 5-6.

53. Records, p. 26, Annex "A."

54. BPI Express Card Corp. v. Olalia , 423 Phil. 593, 599 (2001).
55. Polotan, Sr. v. Court of Appeals, 357 Phil. 250, 258 (1998).
56. Id. at 259.
57. BPI Express Card Corporation v. Court of Appeals, 357 Phil. 262, 276
(1998).

58. Art. 2219. Moral damages may be recovered in the following and analogous
cases:
(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in article 309;

(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34,
and 35.
xxx xxx xxx

59. Art. 2220. Willful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances, such
damages are justly due. The same rule applies to breaches of contract where
the defendant acted fraudulently or in bad faith.
60. Equitable Banking Corp. v. Calderon, G.R. No. 156168, December 14, 2004,
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 446 SCRA 271, 276.

61. Id. at 277.

62. Supra note 57.
63. Id. at 275-276.

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