Republic of the Philippines was already worried about further inconveniencing the
SUPREME COURT tour group, Pantaleon asked the store clerk to cancel
Manila
SECOND DIVISION
G.R. No. 174269 May 8, 2009
POLO S. PANTALEON, Petitioner,
vs.
AMERICAN EXPRESS INTERNATIONAL,
INC., Respondent.
DECISION
TINGA, J.:
The petitioner, lawyer Polo Pantaleon, his wife
Julialinda, daughter Anna Regina and son Adrian
Roberto, joined an escorted tour of Western Europe
organized by Trafalgar Tours of Europe, Ltd., in
October of 1991. The tour group arrived in Amsterdam
in the afternoon of 25 October 1991, the second to the
last day of the tour. As the group had arrived late in
the city, they failed to engage in any sight-seeing.
Instead, it was agreed upon that they would start
early the next day to see the entire city before ending
the tour.
The following day, the last day of the tour, the group
arrived at the Coster Diamond House in Amsterdam
around 10 minutes before 9:00 a.m. The group had
agreed that the visit to Coster should end by 9:30
a.m. to allow enough time to take in a guided city tour
of Amsterdam. The group was ushered into Coster
shortly before 9:00 a.m., and listened to a lecture on
the art of diamond polishing that lasted for around ten
minutes.1 Afterwards, the group was led to the store’s
showroom to allow them to select items for purchase.
Mrs. Pantaleon had already planned to purchase even
before the tour began a 2.5 karat diamond brilliant
cut, and she found a diamond close enough in
approximation that she decided to buy.2 Mrs.
Pantaleon also selected for purchase a pendant and a
chain,3 all of which totaled U.S. $13,826.00.
To pay for these purchases, Pantaleon presented his
American Express credit card together with his
passport to the Coster sales clerk. This occurred at
around 9:15 a.m., or 15 minutes before the tour
group was slated to depart from the store. The sales
clerk took the card’s imprint, and asked Pantaleon to
sign the charge slip. The charge purchase was then
referred electronically to respondent’s Amsterdam
office at 9:20 a.m.
Ten minutes later, the store clerk informed Pantaleon
that his AmexCard had not yet been approved. His
son, who had already boarded the tour bus, soon
returned to Coster and informed the other members
of the Pantaleon family that the entire tour group was
waiting for them. As it was already 9:40 a.m., and he
the sale. The store manager though asked plaintiff to
wait a few more minutes. After 15 minutes, the store
manager informed Pantaleon that respondent had
demanded bank references. Pantaleon supplied the
names of his depositary banks, then instructed his
daughter to return to the bus and apologize to the tour
group for the delay.
At around 10:00 a.m, or around 45 minutes after
Pantaleon had presented his AmexCard, and 30
minutes after the tour group was supposed to have
left the store, Coster decided to release the items even
without respondent’s approval of the purchase. The
spouses Pantaleon returned to the bus. It is alleged
that their offers of apology were met by their
tourmates with stony silence.4 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 remaining time, as they had to
catch a 3:00 p.m. ferry at Calais, Belgium to
London.5 Mrs. Pantaleon ended up weeping, while her
husband had to take a tranquilizer to calm his nerves.
It later emerged that Pantaleon’s purchase was first
transmitted for approval to respondent’s Amsterdam
office at 9:20 a.m., Amsterdam time, then referred to
respondent’s Manila office at 9:33 a.m, then finally
approved at 10:19 a.m., Amsterdam time.6 The
Approval Code was transmitted to respondent’s
Amsterdam office at 10:38 a.m., several minutes after
petitioner had already left Coster, and 78 minutes
from the time the purchases were electronically
transmitted by the jewelry store to respondent’s
Amsterdam office.
After the star-crossed tour had ended, the Pantaleon
family proceeded to the United States before returning
to Manila on 12 November 1992. 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.
On 30 October 1991, Pantaleon purchased golf
equipment amounting to US $1,475.00 using his
AmEx card, but he cancelled his credit card purchase
and borrowed money instead from a friend, after more
than 30 minutes had transpired without the purchase
having been approved. On 3 November 1991,
Pantaleon used the card to purchase children’s shoes
worth $87.00 at a store in Boston, and it took 20
minutes before this transaction was approved by
respondent.
On 4 March 1992, after coming back to Manila,
Pantaleon sent a letter7 through counsel to the
respondent, demanding an apology for the
"inconvenience, humiliation and embarrassment he
and his family thereby suffered" for respondent’s
refusal to provide credit authorization for the
aforementioned purchases.8 In response, respondent
sent a letter dated 24 March 1992,9 stating among
others that the delay in authorizing the purchase from
Coster was attributable to the circumstance that the
charged purchase of US $13,826.00 "was out of the
usual charge purchase pattern established."10 Since
respondent refused to accede to Pantaleon’s demand
for an apology, the aggrieved cardholder instituted an
action for damages with the Regional Trial Court (RTC)
of Makati City, Branch 145.11 Pantaleon prayed that he
be awarded ₱2,000,000.00, as moral damages;
₱500,000.00, as exemplary damages; ₱100,000.00,
as attorney’s fees; and ₱50,000.00 as litigation
expenses.12
On 5 August 1996, the Makati City RTC rendered a
decision13 in favor of Pantaleon, awarding him
₱500,000.00 as moral damages, ₱300,000.00 as
exemplary damages, ₱100,000.00 as attorney’s fees,
and ₱85,233.01 as expenses of litigation. Respondent
filed a Notice of Appeal, while Pantaleon moved for
partial reconsideration, praying that the trial court
award the increased amount of moral and exemplary
damages he had prayed for.14 The RTC denied
Pantaleon’s motion for partial reconsideration, and
thereafter gave due course to respondent’s Notice of
Appeal.15
On 18 August 2006, the Court of Appeals rendered a
decision16 reversing the award of damages in favor of
Pantaleon, holding that respondent had not breached
its obligations to petitioner. Hence, this petition.
The key question is whether respondent, in connection
with the aforementioned transactions, had committed
a breach of its obligations to Pantaleon. In addition,
Pantaleon submits that even assuming that
respondent had not been in breach of its obligations,
it still remained liable for damages under Article 21 of
the Civil Code.
The RTC had concluded, based on the testimonial
representations of Pantaleon and respondent’s credit
authorizer, Edgardo Jaurigue, that the normal
approval time for purchases was "a matter of
seconds." Based on that standard, respondent had
been in clear delay with respect to the three subject
transactions. As it appears, the Court of Appeals
conceded that there had been delay on the part of
respondent in approving the purchases. However, it
made two critical conclusions in favor of respondent.
First, the appellate court ruled that the delay was not
attended by bad faith, malice, or gross negligence.
Second, it ruled that respondent "had exercised
diligent efforts to effect the approval" of the
purchases, which were "not in accordance with the
charge pattern" petitioner had established for himself,
as exemplified by the fact that at Coster, he was
"making his very first single charge purchase of
US$13,826," and "the record of [petitioner]’s past
spending with [respondent] at the time does not
favorably support his ability to pay for such
purchase."17
On the premise that there was an obligation on the
part of respondent "to approve or disapprove with
dispatch the charge purchase," petitioner argues that
the failure to timely approve or disapprove the
purchase constituted mora solvendi on the part of
respondent in the performance of its obligation. For its
part, respondent characterizes the depiction by
petitioner of its obligation to him as "to approve
purchases instantaneously or in a matter of seconds."
Petitioner correctly cites that under mora solvendi, the
three requisites for a finding of default are that the
obligation is demandable and liquidated; the debtor
delays performance; and the creditor judicially or
extrajudicially requires the debtor’s
performance.18 Petitioner asserts that the Court of
Appeals had wrongly applied the principle of mora
accipiendi, which relates to delay on the part of the
obligee in accepting the performance of the obligation
by the obligor. The requisites of mora accipiendi are:
an offer of performance by the debtor who has the
required capacity; the offer must be to comply with
the prestation as it should be performed; and the
creditor refuses the performance without just
cause.19 The error of the appellate court, argues
petitioner, is in relying on the invocation by
respondent of "just cause" for the delay, since while
just cause is determinative of mora accipiendi, it is not
so with the case of mora solvendi.
We can see the possible source of confusion as to
which type of mora to appreciate. Generally, the
relationship between a credit card provider and its
card holders is that of creditor-debtor,20 with the card
company as the creditor extending loans and credit to
the card holder, who as debtor is obliged to repay the
creditor. This 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.21 Petitioner
is asking us, not baselessly, to again 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.
Ultimately, petitioner’s perspective appears more
sensible than if we were to still regard respondent as
the creditor in the context of this cause of action. If
there was delay on the part of respondent in its normal
role as creditor to the cardholder, such delay would
not have been in the 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 constituted. Herein, 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
respondent credit card company.
Still, in order for us to appreciate that respondent was
in mora solvendi, we will have to first recognize that
there was indeed an obligation on the part of
respondent to act on petitioner’s purchases with
"timely dispatch," or for the purposes of this case,
within a period significantly less than the one hour it speed in resolving the charge purchase referred to it,
apparently took before the purchase at Coster was yet it sat on its hand, unconcerned.
finally approved.
xxx
The findings of the trial court, to our mind, amply
established that the tardiness on the part of
To repeat, the Credit Authorization System (CAS)
respondent in acting on petitioner’s purchase at
record on the Amsterdam transaction shows how
Coster did constitute culpable delay on its part in
Amexco Netherlands viewed the delay as unusually
complying with its obligation to act promptly on its
frustrating. In sequence expressed in Phoenix time
customer’s purchase request, whether such action be
from 01:20 when the charge purchased was referred
favorable or unfavorable. We quote the trial court,
for authorization, defendants own record shows:
thus:

01:22 – the authorization is referred to

As to the first issue, both parties have testified that
Manila Amexco
normal approval time for purchases was a matter of
seconds.
01:32 – Netherlands gives information that
the identification of the cardmember has
Plaintiff testified that his personal experience with the
been presented and he is buying jewelries
use of the card was that except for the three charge
worth US $13,826.
purchases subject of this case, approvals of his charge
purchases were always obtained in a matter of
seconds. 01:33 – Netherlands asks "How long will this
take?"
Defendant’s credit authorizer Edgardo Jaurique
likewise testified: 02:08 – Netherlands is still asking "How long
will this take?"
Q. – You also testified that on normal
occasions, the normal approval time for The Court is convinced that defendants delay
charges would be 3 to 4 seconds? constitute[s] breach of its contractual obligation to act
on his use of the card abroad "with special
handling."22 (Citations omitted)
A. – Yes, Ma’am.

xxx
Both parties likewise presented evidence that the
processing and approval of plaintiff’s charge purchase
at the Coster Diamond House was way beyond the Notwithstanding the popular notion that credit card
normal approval time of a "matter of seconds". purchases are approved "within seconds," there really
is no strict, legally determinative point of demarcation
on how long must it take for a credit card company to
Plaintiff testified that he presented his AmexCard to
approve or disapprove a customer’s purchase, much
the sales clerk at Coster, at 9:15 a.m. and by the time
less one specifically contracted upon by the parties.
he had to leave the store at 10:05 a.m., no approval
Yet this is one of those instances when "you’d know it
had yet been received. In fact, the Credit
when you’d see it," and one hour appears to be an
Authorization System (CAS) record of defendant at
awfully long, patently unreasonable length of time to
Phoenix Amex shows that defendant’s Amsterdam
approve or disapprove a credit card purchase. It is
office received the request to approve plaintiff’s
long enough time for the customer to walk to a bank
charge purchase at 9:20 a.m., Amsterdam time or
a kilometer away, withdraw money over the counter,
01:20, Phoenix time, and that the defendant relayed
and return to the store.
its approval to Coster at 10:38 a.m., Amsterdam time,
or 2:38, Phoenix time, or a total time lapse of one
hour and [18] minutes. And even then, the approval Notably, petitioner frames the obligation of
was conditional as it directed in computerese [sic] respondent as "to approve or disapprove" the
"Positive Identification of Card holder necessary purchase "in timely dispatch," and not "to approve the
further charges require bank information due to high purchase instantaneously or within seconds."
exposure. By Jack Manila." Certainly, had respondent disapproved petitioner’s
purchase "within seconds" or within a timely manner,
this particular action would have never seen the light
The delay in the processing is apparent to be undue
of day. Petitioner and his family would have returned
as shown from the frantic successive queries of
to the bus without delay – internally humiliated
Amexco Amsterdam which reads: "US$13,826.
perhaps over the rejection of his card – yet spared the
Cardmember buying jewels. ID seen. Advise how long
shame of being held accountable by newly-made
will this take?" They were sent at 01:33, 01:37,
friends for making them miss the chance to tour the
01:40, 01:45, 01:52 and 02:08, all times Phoenix.
city of Amsterdam.
Manila Amexco could be unaware of the need for
We do not wish do dispute that respondent has the
right, if not the obligation, 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 that respondent’s credit authorizers did not
have sufficient basis on hand to make a judgment, we
see no reason why respondent 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, petitioner was left
uncomfortably dangling in the chilly autumn winds in
a foreign land and soon forced to confront the wrath
of foreign folk.
Moral damages avail in cases of breach of contract
where the defendant acted fraudulently or in bad faith,
and the court should find that under the
circumstances, such damages are due. The findings of
the trial court are ample in establishing the bad faith
and unjustified neglect of respondent, attributable in
particular to the "dilly-dallying" of respondent’s Manila
credit authorizer, Edgardo Jaurique.23 Wrote the trial
court:
While it is true that the Cardmembership Agreement,
which defendant prepared, is silent as to the amount
of time it should take defendant to grant authorization
for a charge purchase, defendant acknowledged that
the normal time for approval should only be three to
four seconds. Specially so with cards used abroad
which requires "special handling", meaning with
priority. Otherwise, the object of credit or charge
cards would be lost; it would be so inconvenient to use
that buyers and consumers would be better off
carrying bundles of currency or traveller’s checks,
which can be delivered and accepted quickly. Such
right was not accorded to plaintiff in the instances
complained off for reasons known only to defendant
at that time. This, to the Court’s mind, amounts to a
wanton and deliberate refusal to comply with its
contractual obligations, or at least abuse of its rights,
under the contract.24
xxx
The delay committed by defendant was clearly
attended by unjustified neglect and bad faith, since it
alleges to have consumed more than one hour to
simply go over plaintiff’s past credit history with
defendant, his payment record and his credit and bank
references, when all such data are already stored and
readily available from its computer. This Court also
takes note of the fact that there is nothing in plaintiff’s
billing history that would warrant the imprudent
suspension of action by defendant in processing the
purchase. Defendant’s witness Jaurique admits:
Q. – But did you discover that he did not have
any outstanding account?
A. – Nothing in arrears at that time.
Q. – You were well aware of this fact on this
very date?
A. – Yes, sir.
Mr. Jaurique further testified that there were no
"delinquencies" in plaintiff’s account.25
It should be emphasized that the reason why
petitioner is entitled to damages is not simply because
respondent incurred delay, but because the delay, for
which culpability lies under Article 1170, led to the
particular injuries under Article 2217 of the Civil Code
for which moral damages are remunerative.26 Moral
damages do not avail to soothe the plaints of the
simply impatient, so this decision should not be cause
for relief for those who time the length of their credit
card transactions with a stopwatch. The somewhat
unusual attending circumstances to the purchase at
Coster – that there was a deadline for the completion
of that purchase by petitioner 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 the petitioner, as concluded
by the RTC.27 Those circumstances are fairly unusual,
and should not give rise to a general entitlement for
damages under a more mundane set of facts.
We sustain the amount of moral damages awarded to
petitioner by the RTC. 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.28 Petitioner’s original prayer for
₱5,000,000.00 for moral damages is excessive under
the circumstances, and the amount awarded by the
trial court of ₱500,000.00 in moral damages more
seemly.1avvphi1
Likewise, we deem exemplary damages available
under the circumstances, and the amount of
₱300,000.00 appropriate. There is similarly no cause
though to disturb the determined award of
₱100,000.00 as attorney’s fees, and ₱85,233.01 as
expenses of litigation.
WHEREFORE, the petition is GRANTED. The assailed
Decision of the Court of Appeals is REVERSED and SET
ASIDE. The Decision of the Regional Trial Court of
Makati, Branch 145 in Civil Case No. 92-1665 is
hereby REINSTATED. Costs against respondent.
SO ORDERED.
 DANTE O. TINGA 4
Id. at 20.
Associate Justice
5
Id. at 20-21.
WE CONCUR:
6
Id. at 21-22; citing defendant’s Exhibit "9-
CONCHITA CARPIO MORALES* G," "9-H" and "9-I."
Associate Justice
Acting Chairperson 7
Id. at 330-331.

TERESITA 8
Id. at 331.
PRESBITERO J.
LEONARDO DE
VELASCO, JR.
CASTRO**
Associate Justice 9
Id. at 332-333.
Associate Justice

10
Id. at 332.
ARTURO D. BRION
Associate Justice
11
Docketed as Civil Case No. 92-1665. Id. at
335-340.
ATTESTATION
12
Id. at 339.
I attest that the conclusions in the above Decision had
been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s
13
Penned by Judge Francisco Donato
Division. Villanueva; id. at 92-110.

CONCHITA CARPIO MORALES

14
Id. at 348-351.
Associate Justice
Acting Chairperson, Second Division 15
Id. at 360-362.

CERTIFICATION 16
Decision penned by Court of Appeals
Associate Justice E.J. Asuncion, , concurred
Pursuant to Section 13, Article VIII of the Constitution, by Associate Justices J. Mendoza and A.
and the Division Acting Chairperson’s Attestation, it is Tayag.
hereby certified that the conclusions in the above
Decision had been reached in consultation before the 17
Rollo, p. 80.
case was assigned to the writer of the opinion of the
Court’s Division.
18
See, e.g., Selegna Management v. UCPB,
G.R. No. 165662, 3 May 2006.
REYNATO S. PUNO
Chief Justice
19
A. Tolentino, IV Civil Code of the
Philippines (1991 ed.), at 108.

20
See, e.g., Pacific Banking Corp. v. IAC,
Footnotes G.R. No. 72275, 13 November 1991, 203
SCRA 496; Molino v. Security Diners
* Acting Chairperson. International Corp., G.R. No. 136780, 16
August 2001, 358 SCRA 363.
** Per Special Order No. 619, Justice
Teresita J. Leonardo-De Castro is hereby
21
See, e.g., Citibank, N.A. v. Cabamongan,
designated as additional member of the G.R. No. 146918, 2 May 2006, 488 SCRA
Second Division in lieu of Justice Leonardo A. 517.
Quisumbing, who is on official leave
22
Rollo, pp. 97-99.
1
Id. at 747.
23
Id. at 101.
2
Id. at 748-749.
24
Id. at 105-106.
3
Id. at 750.
25
Id. at 104.
26
"Moral damages include physical suffering,
mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings,
moral shocks, social humiliation, and similar
injury. Though incapable of pecuniary
computation, moral damages may be
recovered if they are the proximate result of
the defendant's wrongful act or omission."

27
See rollo, p. 107.

28
Mercury Drug v. Baking, G.R. No.
156037, May 25, 2007, 523 SCRA 184, 191.