Pantaleon-vs.-american-express.docx

Pantaleon v. American Express International, Inc. G.R. No. 174269 (May 8, 2009) Facts: 1. 2. 3. 4. 5.

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The petitioner (Pantaleon) and his family, joined an escorted tour of Western Europe. In Coster Diamond House, Amsterdam, Mrs. Pantaleon (wife) was about to bought a 2.5 karat diamond brilliant cut, a pendant and a chain, all of which totaled U.S. $13,826.00. To pay these purchases, around 9:15am, Pantaleon presented his American Express Credit Card together with his passport. By 9:40am, Pantaleon was already worried about further inconveniencing the tour group, he asked the store clerk to cancel the sale. the store manager though asked him to wait a few more minutes. Around 10:00am (around 45 minutes after Pantaleon had presented his AmexCard), Coster decided to release the items even without American Express International, Inc.’s (herein respondent, Amex for brevity) approval of the purchase. This was 30 minutes after the tour group was supposed to have left the store. The spouses Pantelon returned. Their offers of apology were met by their tourmates with stony silence. The tour group’s visible irritation was aggravated when the tour guide announced that the city tour of Amsterdam was to be canceled due to lack of remaing time. Mrs. Pantaleon ended up weeping. After the star-crossed tour had ended, the Pantaleon family proceeded to the United States before returning to Manila. While in the United States, Pantaleon continued to use his AmEx card, several times without hassle or delay, but with two other incidents similar to the Amsterdam brouhaha.

Issue/s: 1. 2.

Whether or not Amex was in default or mora. Whether Amex (Credit Card Company) is in mora solvendi or in mora accipiendi.

Ruling: 1.

Yes. The Court is convinced that Amex’s delay constituted breach of its contractual obligation to act on his use of the card abroad “with special handling.:

Notwithstanding the popular notion that credit card purchases are approved “WITHIN SECONDS,” there really is no strict, legally determinative point of demarcation on how long must it take for a credit car company to approve or disapprove a customer’s purchase, much less one specifically contracted upon by the parties. yet this is one of those instances when “you’d know it what you’d see it,” and one hour appears to be an awfully long, patently unreasonable length of time to approve or disapprove a credit card purchases. It is long enough time for the customer to walk to a bank a kilometer away, withdraw money over the counter, and return to the store. The Credit Authorization System (CAS) record on the Amsterdam transaction shows how Amexco Netherlands viewed the delay as unusually frustrating. In sequence expressed in Phoenix time from 01:20 when the charge purchased was referred for authorization: 01:22 – the authorization is referred to manila Amexco. 01:32 – Netherlands gives information that the identification of the card member has been presented and he is buying jewelries worth US $13,826 01:33 – Netherlands asks “How long will this take?” 02:08 – Netherlands is still asking “How long will this take?” The Amex has a right to verify whether the credit it is extending upon on a particular purchase was indeed contracted by the cardholder, and that the cardholder is within his means to make such transaction. The culpable failure of respondent herein is not the failure to timely approve petitioner’s purchase, but the more elemental failure to timely act on the same, whether favorably or unfavorably. Even assuming the respondent’s credit authorizers did not have sufficient basis on hand to make a judgment, we see no reason why Amex could not have promptly informed petitioner the reason for the delay, and duly advised him that resolving the same could take some time. In that way, petitioner would have had informed basis on whether or not to pursue the transaction at Coster, given the attending circumstances. instead, Pantaleon was left uncomfortably dangling in the chilly autumn winds in a foreign land and soon forced to confront the wrath of foreign folk. The delay committed by Amex was clearly attended by unjustified neglect and bad faith, since it alleges to have consumed more than one hour to simply go over Pantaleon’s pas credit history with Amex, his payment record and his credit and bank references, when all

such data are already stored and readily available from its computer. There is nothing in Pantaleon’s billing history that would warrant the imprudent suspension of action by Amex in processing the purchase. 2.

Amex is in mora solvendi. Generally, the relationship between a credit card provided and its card holder is that of creditordebtore, with the card company as a the creditor extending loans and credit to the card holder, who as debtor is obliged to repay the creditor. The relationship already takes exception to the general rule that as between a bank and its depositors, the bank is deemed as the debtor while the depositor is considered as the creditor. In the present case, we should shift perspectives and again see the credit card company as the debtor/obligor, insofar as it has the obligation to the customer as creditor/obligee to act promptly on its purchases on credit.

If there was delay on the part of Amex in its normal role as creditor to the cardholder, such delay would not have been in acceptance of the performance of the debtor’s obligation (i.e., the repayment of the debt), but it would be delay in the extension of the credit in the first place. Such delay would not fall under mora accipiendi, which contemplates that the obligation of the debtor, such as the actual purchases on credit has already been instituted. The establishment of the debt itself (purchases on credit of the jewelry) had not yet been perfected, as it remained pending the approval or consent of the credit card company. Notes / Doctrine: Requisites of Mora Solvendi (delay of debtor) 1. 2. 3.

Obligation is demandable and liquidated; debtor delays performance; and the creditor judicially or extrajudicially required the debtor’s performance.

Requisites of Mora Accipiendi 1. 2. 3.

An offer of performance by the debtor who has the required capacity; offer must be to comply with the prestation as it should be performed; and creditor refuses the performance without just cause.

Moral damages  

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Can be availed in cases of breach of contract where the defendant acted fraudulently or in bad faith. In the present case, there was a deadline for the completion of that purchase by Pantaleon before any delay would redound to the injury of his several traveling companions – gave rise to the moral shock, mental anguish, serious anxiety, wounded feelings and social humiliation sustained by Panaleon family. These circumstances are fairly unusual, and should not give rise to a general entitlement for damages under a more mundane set of facts. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages, since each case must be governed by its own peculiar facts, however, it must be commensurate to the loss or injury suffered.