Pantaleon vs American Express

G.R. No. 174269, May 8 2009 [Credit Transaction]

FACTS:

After the Amsterdam incident that happened involving the delay of American Express Card to approve his credit card purchases worth US$13,826.00 at the Coster store, Pantaleon commenced a complaint for moral and exemplary damages before the RTC against American Express. He said that he and his family experienced inconvenience and humiliation due to the delays in credit authorization. RTC rendered a decision in favor of Pantaleon. CA reversed the award of damages in favor of Pantaleon, holding that AmEx had not breached its obligations to Pantaleon, as the purchase at Coster deviated from Pantaleon's established charge purchase pattern.

ISSUE:

1. Whether or not AmEx had committed a breach of its obligations to Pantaleon.
2. Whether or not AmEx is liable for damages.

RULING:

1. Yes. 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. 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. Even assuming that AmEx’s credit authorizers did not have sufficient basis on hand to make a judgment, we see no reason why it could not have promptly informed Pantaleon the reason for the delay, and duly advised him that resolving the same could take some time.

2. 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.