tG.R. No.

174269               May 8, 2009

POLO S. PANTALEON, Petitioner,
vs.
AMERICAN EXPRESS INTERNATIONAL, INC., Respondent.
TINGA, J.:

FACTS:
Atty. Polo Pantaleon together with his wife and children joined an escorted tour of Western Europe organized by Trafalgar
Tours. In the last day of their tour, the group arrived at the Coster Diamond House in Amsterdam and agreed that the visit
to Coster should end by 9:30 a.m. to allow enough time for city tour of Amsterdam. Mrs. Pantaleon already planned to
purchas a 2.5 karat diamond brilliant cut, and she also selected for purchase a pendant and a chain, all of which totaled U.S.
$13,826.00.To pay for these purchases, Pantaleon presented his American Express credit card together with his passpor t.
However, there is an unusual delay in approval of his credit purchase, which took 1hr and 18 mins.
The timeline for the transaction is as follows:
9:15 - Credit card and passport were presented and Pantaleon to signed the charge slip
9:20 - charge purchase referred electronically to AmEx- Amsterdam office
9:30 - Pantaleon was informed that his AmexCard had not yet been approved
9:33 - referred to AmEx Manila by AmEx-Amsterdam
9:40 - Pantaleon asked the store clerk to cancel the sale, then the store manager asked to wait a few more minutes
9:45 - store manager informed Pantaleon that AmEx demanded bank references (Pantaleon supplied the names of his depositary banks)
10:00 - (almost 45 mins from the start of transaction) Coster decided to release the items even without AmEx approval of the purchase.
10:19 - AmEx Manila approved
10:38 - Approval code ws transmitted to AmEx-Amsterdam (but panteleon already left)
Because of the said delay, the tour group was irritated and even aggravated when the tour guide announced that the city
tour of Amsterdam was to be canceled due to lack of remaining time. Mrs. Pantaleon ended up weeping, while her husband
had to take a tranquilizer to calm his nerves.

After the tour, Pantaleon family proceeded to US before returning to Manila. While in US, Pantaleon continued to
use his AmEx card, several times without hassle or delay, but with two other incidents similar to the Amsterdam. One is
when he purchased golf equipment and the other is the purchase of children’s shoes.
Back in Manila, Pantaleon sent a letter demanding AmEx an apology for the "inconvenience, humiliation and
embarrassment” for AmEx’s refusal to provide credit authorization. In response, AmEx stated that the delay was
attributable to the circumstance that the charged purchase of US $13,826.00 "was out of the usual charge purchase pattern
established."
Since respondent refused to accede to Pantaleon’s demand for an apology, the aggrieved cardholder instituted an
action for damages in RTC of Makati City
Pantaleon prayed:
₱2,000,000.00, as moral damages;
₱500,000.00, as exemplary damages;
₱100,000.00, as attorney’s fees;
₱50,000.00 as litigation expenses.

RTC: In favor of Pantaleon

₱500,000.00 as moral damages
₱300,000.00 as exemplary damages,
₱100,000.00 as attorney’s fees,
₱85,233.01 as expenses of litigation
AmEx filed a Notice of Appeal, while Pantaleon moved for partial reconsideration to increased amount
RTC denied Pantaleon’s motion for partial reconsideratio

CA
Reversed the award of damages, holding that respondent had not breached its obligations to petitioner. Hence, this
petition.

ISSUE: WON AmEx had committed a breach of its obligations to Pantaleon.

WON AmEx is liable for damages in favor of Panteleon.

Pantaleon’s contention
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, AmEx characterizes its obligation to him as "to approve purchases
instantaneously or in a matter of seconds."
RULING:
1. WON AmEx had committed a breach of its obligations to Pantaleon. YES
Panteleon correctly cited Mora Solvendi as the basis of the breach.
Under mora solvendi, the three requisites for a finding of default are:
1. that the obligation is demandable and liquidated;
2. the debtor delays performance; and
3. the creditor judicially or extrajudicially requires the debtor’s performance.
(Mora solvendi - a delay in the fulfillment of an obligation, by reason of a cause imputable to the debtor)
Generally, the relationship between a credit card provider and its card holders is that of creditor-debtor.
 Card company - Creditor (extending loans and credit)
 Card holder - Debtor (obliged to repay the creditor)
This is different from bank:
 Bank - debtor
 Depositor - creditor
Petitioner is asking us, to shift perspectives and see the credit card company as the debtor (like the Bank-Depositor
relationship), insofar as it has the obligation to the customer as creditor to act promptly on its purchases on credit. This
perspective appears more sensible than if we were to still regard respondent as the creditor in the context of this cause of
action.
RTC amply established that the tardiness on the part of respondent in acting on petitioner’s purchase at Coster did
constitute culpable delay. Both parties have testified that normal approval time for purchases was a matter of seconds.
Coster Diamond House was way beyond the normal approval time of a "matter of seconds" (1 hr and 18 mins).The delay in
the processing is apparent to be undue as shown from the frantic successive queries of Amexco Amsterdam sent at 01:33,
01:37, 01:40, 01:45, 01:52 and 02:0. Manila Amexco could be unaware of the need for speed in resolving the charge
purchase referred to it, yet it sat on its hand, unconcerned. 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. One hour appears to be patently unreasonable
length of time to approve or disapprove a credit card purchase.
The culpable failure of AmEx 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. AmEx did not promptly informed
Pantaleon the reason for the delay, and duly advised him that resolving the same could take some time.

2. WON AmEx is liable for damages in favor of Panteleon. YES .

The reason why Pantaleon is entitled to damages is not simply because AmEx 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. 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 Pantaleon, as concluded by the RTC. 

We sustain the amount of moral damages awarded to petitioner by the RTC.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.