Pantaleon v. America Express International, Inc. (G.R. No. 174269, May 8, 2009)

G.R. No.
174269, May 8, 2009

POLO S. PANTALEON, Petitioner,
vs.
AMERICAN EXPRESS INTERNATIONAL, INC., Respondent.
TINGA, J.:
FACTS:
Petitioner Pantaleon encountered series of delay on the part of respondent with regard to the
approval of his credit card purchases (AMEX card) during his family trip in Amsterdam and some other
transactions in USA. Due to the inconvenience, humiliation and embarrassment he and his family
suffered, Pantaleon sent a letter demanding an apology from respondent.
AMEX replied that the delay in Amsterdam was due to the amount involved – the charged
purchase of US$13,826.00 deviated from Pantaleon’s established charge purchase pattern. Dissatisfied
with this explanation, Pantaleon filed an action for damages against the credit card company with the
Makati City Regional Trial Court.
RTC: In favor of Pantaleon. Found AMEX guilty of delay.

CA: Reversed. Pettioner is not entitled to damages for there was no breach of obligations on the part of
respondent.
On May 8, 2009, the SC reversed CA’s decision and rendered decision in favor of Pantaleon. Found A,EX
guilty of mora solvendi (debtor’s fault). The approval time for credit card charges would be 3-4 seconds
under regular circumstances. In Pantaleon’s case, it took AMEX 78 minutes to approve the Amsterdam
purchase.
Hence, this Motion for Reconsideration.
ISSUE: WON AMEX had committed a breach of its obligations to Pantaleon.
HELD: NO.
Nature of Credit Card:
A credit card is defined as "any card, plate, coupon book, or other credit device existing for the purpose
of obtaining money, goods, property, labor or services or anything of value on credit."
The bank credit card system involves a tripartite relationship between the issuer bank, the cardholder,
and merchants participating in the system. The issuer bank establishes an account on behalf of the
person to whom the card is issued, and the two parties enter into an agreement which governs their
relationship. This agreement provides that the bank will pay for cardholder’s account the amount of
merchandise or services purchased through the use of the credit card and will also make cash loans
available to the cardholder.
Relationship of Credit card issuer – cardholder relationship:

 US – no contractual relationship; It is unilateral and supported by no consideration. The offer may be
withdrawn at any time, without prior notice, for any reason or, indeed, for no reason at all, and its
withdrawal breaches no duty – for there is no duty to continue it – and violates no rights.
 Philippines – contractual; contract of adhesion; governed by the terms and conditions found in the
card membership agreement.
Is it a creditor-debtor relationship?
Contract of adhesion CR-DR Relationship
Mere agreement which provides for credit facility Only arises after the credit card issuer has approved
to the cardholder. the cardholder’s purchase request.
Involves the actual credit on loan agreement

involving three contracts, namely:
1. The sales contract between the credit card
holder and the merchant or the business
establishment which accepted the credit card;
2. The loan agreement between the credit card
issuer and the credit card holder; and
3. The promise to pay between the credit card
issuer and the merchant or business
establishment.
 From the loan agreement perspective, the contractual relationship begins to exist only upon the
meeting of the offer and acceptance of the parties involved.
 The use of credit cards to pay for their purchases is merely an offer to enter into loan agreements
with the credit card company.
 Only after the latter approves the purchase requests that the parties enter into binding loan
contracts. Article 1319:
Consent is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer.
Is AMEX guilty of culpable delay? – NO.

Since AMEX has no obligation to approve the purchase requests of its credit cardholders, Pantaleon
cannot claim that AMEX defaulted in its obligation.
Requisites of default (Art. 1169):
(a) That the obligation is demandable and liquidated;
(b) The debtor delays performance; and
(c) The creditor judicially or extrajudicially requires the debtor’s performance.
In the case at bar:
The first requisite is no longer met because AMEX, by the express terms of the credit card agreement, is
not obligated to approve Pantaleon’s purchase request. Without a demandable obligation, there can be
no finding of default.
Moreover, a demand presupposes the existence of an obligation between the parties. Pantaleon’s act of
"insisting on and waiting for the charge purchases to be approved by AMEX" is not the demand
contemplated by Art. 1169.
Note: Only issues pertaining to loans are included.

Pantaleon v. America Express International, Inc. (G.R. No. 174269, May 8, 2009)

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Pantaleon v. America Express International, Inc. (G.R. No. 174269, May 8, 2009)

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G.R. No.

174269, May 8, 2009

RTC: In favor of Pantaleon. Found AMEX guilty of delay.

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

Relationship of Credit card issuer – cardholder relationship:

Involves the actual credit on loan agreement

Is AMEX guilty of culpable delay? – NO.

Note: Only issues pertaining to loans are included.

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