FRANCO ANTHOHNY P. AGUDO JD 3A
Subject:
Topic:
Case Title:
Ponente:
TORTS AND DAMAGES
Damages
American Express International, Case No:
Inc. v Cordero
SANDOVAL-GUTIERREZ, J.
Date penned:
G.R. No. 138550,
October 14, 2005
DOCTRINE:
“Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter”
FACTS:
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Sometime in 1988, Nilda Cordero, wife of the respondent Noel Cordero, applied for and was
issued an American Express charge card and an extension card was likewise issued to respondent
Noel Cordero.
On November 29, 1991, the respondent, with his wife Nilda, sister-in-law and uncle-in-law, went
on a three-day holiday trip to Hong Kong.
On the evening of November 30, 1991, the group visited Watson’s Chemist Shop. Noel Cordero
selected some chocolate candies and handed his American Express extension charge card to the
sales clerk for payment.
The clerk verified the card by calling the American Express Office in Hong Kong. Shortly after,
Susan Chong, the store manager informed the respondent that the said card had to be
confiscated. She then cut the respondent’s American Express card in half with a pair of scissors.
The respondent felt humiliated and embarrassed, as the said action occurred in front of his
family and other customers waiting in line at the checkout. As a result, Nilda has to use her own
American Express charge card to pay for the purchase
Nilda Corder was able to talk to Senior Authorizer Johnny Chen, who informed her that on
November 1, 1991, a person in Hong Kong attempted to use a charge card with the same
number as respondent’s card.
Pursuant to the procedure observed under the “Inspect Airwarn Support System” is a system
utilized by petitioner as protection both for the company and the cardholder against the
fraudulent use of their charge cards”, the Watson’s sales clerk called up the petitioner’s Hong
Kong office, it representative wanted to talk to the respondent in order to verify the latter’s
identity. However, respondent refused.
On March 31, 1992, respondent filed with the Regional Trial Court, Branch V, Manila, a complaint
for damages against petitioner, docketed as Civil Case No. 92-60807. He prayed for the award of
moral damages and exemplary damages, as well as attorney’s fees as a result of the humiliation
he suffered.
FRANCO ANTHOHNY P. AGUDO JD 3A
ISSUE:
Whether the lower courts gravely erred in holding American Express liable to Cordero for moral
damages, exemplary damages and attorney’s fees.
RULING:
The Supreme Court says that it cannot sustain the trial court’s conclusion.
Respondent anchors his cause of action on the following provision of the Civil Code:
“Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this
Chapter”
For an obligation based on quasi-delict to arise, typically, there should be no pre-existing contract
between the parties. However, exceptions exist where a liability for tort cab still arise even with a
contract in place, especially if the tort breachers the contract. If an act that breaches a contract
would also constitute a quasi-delict, the contract can be considered breached by tort, allowing tort
rules to apply.
Additionally, for a quasi-delict to be established, the fault or negligence must be the proximate cause
of the damage or injury suffered. Proximate cause is the direct cause of the injury, without which the
injury would not have occurred, and is determined based on the facts of each case.
The trial court found that the petitioner should have informed the respondent that on November 1,
1991, someone in Hong Kong attempted to used a charge card with a similar number to the
respondent’s card. The petitioner’s failure to do so was deemed the proximate cause of the
confiscation and cutting of the respondent’s card, which led to public humiliation, making the
petitioner liable.
As explained but he respondent himself, he could have used his card upon the verification by the
sales clerk of Watson’s Chemist Shop that indeed he is the authorized cardholder. This could have
been accomplished had the respondent talked to the petitioner’s representative, enabling the latter
to determine the respondent is indeed the true holder of the card. Clearly, no negligence which
breaches the contract can be attributed to the petitioner. If at all, the cause of respondent’s
humiliation and embarrassment was his refusal to talk to the petitioner’s representative.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. CV
No. 51671 is REVERSED.
SO ORDERED.