Pantaleon v. American Express International, Inc.,
GR 174269
Aug. 25, 2010, 629 SCRA 276
FACTS:
Petitioner Polo Pantaleon and his family went to Europe for an organized tour. During the
tour, Mrs. Pantaleon bought pieces of jewelry which totaled U.S. $13,826.00. Polo Pantaleon then
used his American Express credit card to pay for the said pieces of jewelry. Unfortunately, the
store clerk informed Pantaleon that his AmexCard had not yet been approved. The credit card
issue then became a reason for the Pantaleon family to delay the tour. 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.
After their tour in Europe, the Pantaleon family went to America with which Polo
Pantaleon used his AmexCard for their expenses. After coming back to Manila, Pantaleon sent a
letter 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. Since respondent refused to
accede to Pantaleon’s demand for an apology, the aggrieved cardholder instituted an action for
damages with the RTC. The RTC then ruled in favor of Pantaleon. On the other hand, the CA
reversed the decision of the lower court holding that respondent had not breached its
obligations to petitioner.
In the SC’s May 8, 2009 decision, it reversed the appellate court’s decision and held that
AMEX was guilty of mora solvendi, or debtor’s default. AMEX, as debtor, had an obligation as the
credit provider to act on Pantaleon’s purchase requests, whether to approve or disapprove them,
with "timely dispatch." Based on the evidence on record, we found that AMEX failed to timely
act on Pantaleon’s purchases.
Due to the previous decision of the SC, the respondent then filed a motion for
reconsideration arguing that this Court erred when it found AMEX guilty of culpable delay in
complying with its obligation to act with timely dispatch on Pantaleon’s purchases. While AMEX
admits that it normally takes seconds to approve charge purchases, it emphasizes that
Pantaleon experienced delay in Amsterdam because his transaction was not a normal one. To
recall, Pantaleon sought to charge in a single transaction jewelry items purchased from Coster
in the total amount of US$13,826.00 or ₱383,746.16. While the total amount of Pantaleon’s
previous purchases using his AMEX credit card did exceed US$13,826.00, AMEX points out that
these purchases were made in a span of more than 10 years, not in a single transaction
ISSUE:
Whether or not Amex is liable for breach of its contractual obligations?
RULING:
No. The issuance of a credit card is but an offer to extend a line of open account credit. 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. Thus, under this view, each credit
card transaction is considered a separate offer and acceptance.
From the loan agreement perspective, the contractual relationship begins to exist only
upon the meeting of the offer and acceptance of the parties involved. In more concrete terms,
when cardholders use their credit cards to pay for their purchases, they merely 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, in keeping with Article 1319 of the
Civil Code, which provides:
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.
AMEX’s credit authorizer, Edgardo Jaurigue, explained that having no pre-set spending limit in a
credit card simply means that the charges made by the cardholder are approved based on his
ability to pay, as demonstrated by his past spending, payment patterns, and personal resources.
Nevertheless, every time Pantaleon charges a purchase on his credit card, the credit card
company still has to determine whether it will allow this charge, based on his past credit
history. This right to review a card holder’s credit history, although not specifically set out in the
card membership agreement, is a necessary implication of AMEX’s right to deny authorization
for any requested charge.
Gonzales-Saldana v. Niamatali
GR 226587. Nov. 21, 2018, 886 SCRA 479
FACTS:
In January 2002, respondent-spouses Gordon and Amy Niamatali (Respondents), then
residing in the United States of America, informed DOLE employee Donabelle Gonzales-Saldana
(Petitioner) of their intention to acquire real properties in Metro Manila. Respondent informed
them that a certain parcel of land located in Las Pifias City would be sold in a public auction
conducted by the DOLE Sheriff's Office.
Respondents asked Petitioner to participate in the public auction and remitted
US$60,000.00 or P3,000,000.00 for purchase of the property. However, Petitioner informed them
that the auction did not push through because of a third-party claim.
Despite this, the judgment creditor agreed to sell the Paranaque and Manila properties
which were also levied on execution to Petitioner. Petitioner bought them without approval of
the Respondents.
When Respondents returned to the country in July 2002, petitioner brought respondentspouses to the Las Pinas property but it was locked up and a signboard was posted, on which the
words "Future Home of Lutheran School and Community Center" were written so they informed
Petitioner that they were no longer interested in acquiring the Las Pinas property and asked for
the return of the P3,000,000.00, to which petitioner agreed.
Despite several demands from Respondents, Petitioner failed to return the P3,000,000.00
to them. She told them that she would return their money but she had to sell first the Manila and
Paranaque properties so they filed a collection suit against her.:
ISSUE:
Whether petitioner is liable for the payment of interest on the amount due.
RULING:
Yes. The kinds of interest that may be imposed in a judgment are the monetary interest
and the compensatory interest.
As a form of damages, compensatory interest is due only if the obligor is proven to have
failed to comply with his obligation. In this case, petitioner's principal obligation was to purchase
the Las Piñas property for respondent-spouses. Consequently, when she was informed that the
auction sale of the Las Piñas property would have to be cancelled, petitioner should have simply
returned the P3,000,000.00 to respondent-spouses instead of purchasing the Manila and
Parañaque properties without the latter's knowledge and consent. Moreover, she insists that she
would return such amount only after she successfully sells the Manila and Parañaque properties.
Contrary to petitioner's argument, however, the obligation to return the amount is not
dependent upon the sale of the Manila and Parañaque properties. The obligation to return the
money is a consequence of her failure to comply with her principal obligation, the breach thereof
entitles respondent-spouses to the payment of interest at the rate of 6% per annum, which, as
pronounced in Eastern Shipping Lines and subsequently reiterated in Nacar v. Gallery Frames, is
the rate of interest applicable in transactions involving the payment of indemnities in the concept
of damages arising from the breach or a delay in the performance of obligations in general. The
payment of interest should be reckoned from the date of filing of the Complaint or on March 6,
2006
Estores v. Sps. Supangan,
GR 175139,
Apr. 18, 2012, 670 SCRA 95
FACTS:
The parties entered into a contract of conditional deed of sale for a parcel of land located at
Naic Cavite in consideration for 4.7 million and stipulated among others that, If and after the
vendor has completed all necessary documents for registration of the title and the vendee fails
to complete payment as per agreement, a forfeiture fee of 25% or downpayment, shall be
applied. However, if the vendor fails to complete necessary documents within thirty days
without any sufficient reason, or without informing the vendee of its status, vendee has the
right to demand return of full amount of down payment.. After almost seven years from the
time of the execution of the contract and notwithstanding payment of ₱3.5 million on the part
of respondent-spouses, petitioner still failed to comply with her obligation. A case was filed at
RTC Malabon against Estores and his agent, which rendered a decision in favor of the spouses
respondent but up to 6% of interest annually and was also awarded for damages. On appeal,
the RTC decision was affirmed with modification to the award of the amount of damages.
ISSUE: Whether it is proper to impose interest for an obligation that does not involve a loan or
forbearance of money in the absence of stipulation of the parties.
RULING:
YES. Interest may be imposed even in the absence of stipulation in the contract. Article
2210 of the Civil Code expressly provides that “[i]nterest may, in the discretion of the court, be
allowed upon damages awarded for breach of contract.” In this case, there is no question that
petitioner is legally obligated to return the P3.5 million because of her failure to fulfill the
obligation under the Conditional Deed of Sale, despite demand. Petitioner enjoyed the use of
the money from the time it was given to her until now. Thus, she is already in default of her
obligation from the date of demand.
Forbearance is defined as a “contractual obligation of lender or creditor to refrain during a
given period of time, from requiring the borrower or debtor to repay a loan or debt then due
and payable.”
This definition describes a loan where a debtor is given a period within which to pay a loan or
debt. In such case, “forbearance of money, goods or credits” will have no distinct definition
from a loan. We believe however, that the phrase “forbearance of money, goods or credits” is
meant to have a separate meaning from a loan, otherwise there would have been no need to
add that phrase as a loan is already sufficiently defined in the Civil Code. Forbearance of
money, goods or credits should therefore refer to arrangements other than loan agreements,
where a person acquiesces to the temporary use of his money, goods or credits pending
happening of certain events or fulfillment of certain conditions. In this case, the respondentspouses parted with their money even before the conditions were fulfilled. They have therefore
allowed or granted forbearance to the seller (petitioner) to use their money pending fulfillment
of the conditions. They were deprived of the use of their money for the period pending
fulfillment of the conditions and when those conditions were breached, they are entitled not
only to the return of the principal amount paid, but also to compensation for the use of their
money. And the compensation for the use of their money, absent any stipulation, should be the
same rate of legal interest applicable to a loan since the use or deprivation of funds is similar to
a loan.
Q1: What is interest?
A: It is the compensation allowed by law or fixed by the parties for the loan or forbearance of
money, goods, or credits.
Q2: What is the general rule on payment of interest?
A: GR - no interest shall be due unless it is stipulated in writing. It is allowed when there is an
express agreement and reduced in written form.
Q3: Provide a legal provision related to interest.
A: Art. 1956 of CC - No interest shall be due unless it has been expressly stipulated in writing. /
Art. 2212 of CC - Interest due shall eearn legaal interest from the time it is judicially demanded,
although the obligationmay be silent upon this point.
Q4: Give an instance wherein right to interest arises?
A: By virtue of a contract or stipulation regarding interest or by way of damages for delay or
failure to pay the principal on which interest is demanded, at the time when the debtor is
obliged to make such payment.
Q5: What are the 2 kinds of interest? Define.
A: 1. Monetary Interest- refers to the compensation set by the parties for the use or
forbearance of money.
2. Compensatory Interest- refers to the penalty or indemnity for damages imposed by laws or
by the court and may either be:
A. The interest agreed upon; or
B. In the absence of stipulation, the legal interest which is 6% per annum.
Q6: Define Forbearance of Money or Credit
A: - Refers to arrangements, other than loan agreements, where a person acquiesces to the
temporary use of his money, goods, or credits pending the happening of certain events or
fulfillment of certain conditions. (Case of Estores Vs. Supangan)
Q7: What are the requisites in order for interest to be recovered?
A: Requisites: All must concur
1. The payment of interest must be expressly agreed upon by the parties;
2. The agreement must be reduced to writing, and
3. The interest stipulated must be lawful and not unconscionable.