Case Title: PANTALEON V. AMERICAN EXPRESS INTERNATIONAL (G.R. NO.

153004,
May 8, 2009)
Ticker: Purchase of diamond at Coster

FACTS

 Petitioner, Polo Pantaleon, together with his family joined an escorted tour of Western Europe.
During the last day of the tour, the group arrived at the Diamond House in Amsterdam around
10 mins before 9AM. The group agreed that the visit to Coster [oldest diamond polishing
factory in the world] should end by 9:30AM to allow enough time to take in a guided city tour
of Amsterdam. 
 In the Coster’s showroom, Mrs. Pantaleon purchased a 2.5 karat diamond brilliant cut, a
pendant and a chain which totaled 13,826USD. 
 To pay for the 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 stated to depart from the store. 
 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 was already worried about further inconveniencing
the tour group, Pantaleon asked the store clerk to cancel the sale. The store manager though
asked Mrs. Pantaleon to wait a few more minutes.
 At around 10AM, or around 45 mins after Pantaleon had already presented his AmexCard, and
30mins 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 and was greeted by the tour group’s irritation
because 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 3PM ferry at Belgium to London. 
 This was followed by a similar incident in their trip to US where Pantaleon used his AmEx
card again to purchase golf equipment but he cancelled his credit card purchase and borrowed
money instead from a friend, after more than 30 mins had transpired without the purchase
having been approved. 
 On March 4, 1992, after coming back to Manila, Pantaleon sent a letter to AMEX through
counsel, demanding an apology for the “inconvenience, humiliation and embarrassment he and
his family suffered” for the respondent's refusal to provide credit authorization for their
purchases in their recent trip. 
 In response, respondent sent a letter stating that the delay in authorizing the purchase from
Coster was attributable to the circumstance that the charged purchase of 13,826USD “was out
of the usual charge purchase pattern established”.
 Since the respondent refused to accede to Pantaleon’s demand for an apology, the aggrieved
cardholder instituted an action for damages. 

ISSUE/S

Whether the delay is mora solvendi or mora accipiendi? Mora solvendi

Whether the respondent had committed delay in authorizing the purchase of Mrs. Pantaleon? Yes

RULING

Petitioner correctly cites that under mora solvendi, the three requisites for a finding for a finding of
default are the that the obligation is demandable and liquidated; the debtor delays performance; and the
creditor judicially or extrajudicially requires the debtor’s performance. 

The SC held that Atty. Pantaleon was correct in citing the principle of mora solvendi (delay on
the part of the debtor to fulfill his obligation), not mora accipiendi.

Generally, the relationship between a credit card provider and its card holders is that of
creditor-debtor, with the card company as the creditor extending loans and credit to the card
holder, who as debtor is obliged to repay the creditor. However, The said traditional role of a
credit card company as creditor applies when the cardholder has already incurred a debt. In
this case, the debt had not yet been created; the purchase was still pending approval or
disapproval by Amex. Thus, under mora solvendi, Amex is not creditor but debtor “insofar as
it has the obligation to the customer … to act promptly on its purchases on credit.

DELAY
The SC found that the delay on the part of respondent in acting on petitioner’s purchase at Coster did
constitute culpable delay on its part in complying with its obligation to act promptly on its customer’s
purchase request, whether such action be favorable or unfavorable. 

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 card
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 when 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 purchase.

The culpable failure of respondent 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 judgement, we see
no reason why respondent could not have promptly informed the petitioner the reason for the delay,
and duly advised him that resolving the same could take some time. 

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, and no “delinquencies” found in
Pantaleon’s account.”

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.

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 gave rise to the moral
shock, mental anguish, serious anxiety, wounded feelings and social humiliation sustained by the
 petitioner, as concluded by the RTC. Those circumstances are fairly unusual, and should not give
rise to a general entitlement for damages under a more mundane set of facts.

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or
delay, and those who in any manner contravene the tenor thereof, are liable for damages.