Pantaleon v. American Express International, Inc.

Facts:

The petitioner, lawyer Polo Pantaleon, his wife Julialinda, daughter Anna Regina and son Adrian Roberto, joined an escorted tour of Western Europeorganized by Trafalgar Tours of Europe, Ltd., in October of 1991. The tour group arrived in Amsterdam in the afternoon of 25 October 1991, the second to the last day of the tour. As the group had arrived late in the city, they failed to engage in any sight-seeing. Instead, it was agreed upon that they would start early the next day to see the entire city before ending the tour.

Mrs. Pantaleon had already planned to purchase even before the tour began a 2.5 karat diamond brilliant cut, and she found a diamond close enough in approximation that she decided to buy. Mrs. Pantaleon also selected for purchase a pendant and a chain, all of which totaled U.S. $13,826.00.

Pantaleon presented his American Express credit card together with his passport to the Coster sales clerk. This occurred at around 9:15 a.m., or 15 minutes before the tour group was slated to depart from the store. The sales clerk took the cards imprint, and asked Pantaleon to sign the charge slip. The charge purchase was then referred electronically to respondents Amsterdam office at 9:20 a.m.

The store clerk informed Pantaleon that his AmexCard had not yet been approved. His son, who had already boarded the tour bus, soon returned to Coster and informed the other members of the Pantaleon family that the entire tour group was waiting for them. As it was already 9:40 a.m., and he was already worried about further inconveniencing the tour group, Pantaleon asked the store clerk to cancel the sale. After 15 minutes, the store manager informed Pantaleon that respondent had demanded bank references. Pantaleon supplied the names of his depositary banks, then instructed his daughter to return to the bus and apologize to the tour group for the delay.

At around 10:00 a.m, Coster decided to release the items even without respondents approval of the purchase. The spouses Pantaleon returned to the bus. It is alleged that their offers of apology were met by their tourmates with stony silence. The tour groups 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, as they had to catch a 3:00 p.m. ferry at Calais, Belgium to London. Mrs. Pantaleon ended up weeping, while her husband had to take a tranquilizer to calm his nerves.

The Approval Code was transmitted to respondents Amsterdam office at 10:38 a.m., several minutes after petitioner had already left Coster, and 78 minutes from the time the purchases were electronically transmitted by the jewelry store to respondents Amsterdam office.

Pantaleon family proceeded to the United States before returning to Manila on 12 November 1992. While in the United States, Pantaleon continued to use his AmEx card, several times without hassle or delay, but with two other incidents similar to the Amsterdambrouhaha. On 30 October 1991, Pantaleon purchased golf equipment amounting to US $1,475.00 using his AmEx card, but he cancelled his credit card purchase and borrowed money instead from a friend, after more than 30 minutes had transpired without the purchase having been approved. On 3 November 1991, Pantaleon used the card to purchase childrens shoes worth $87.00 at a store in Boston, and it took 20 minutes before this transaction was approved by respondent.

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 respondents refusal to provide credit authorization for the aforementioned purchases. In response, respondent sent a letter dated 24 March 1992, stating among others that the delay in authorizing the purchase from Coster 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 Pantaleons demand for an apology, the aggrieved cardholder instituted an action for damages with RTC Makati.

RTC ruled in favor of Pantaleon. CA reversed the decision.

Held:

Generally, the relationship between a credit card provider and its card holders is that of creditor-debtor, with the card company as the creditor extending loans and credit to the card holder, who as debtor is obliged to repay the creditor. This relationship already takes exception to the general rule that as between a bank and its depositors, the bank is deemed as the debtor while the depositor is considered as the creditor.

Petitioner’s perspective appears more sensible than if we were to still regard respondent as the creditor in the context of this cause of action. If there was delay on the part of respondent in its normal role as creditor to the cardholder, such delay would not have been in the acceptance of the performance of the debtors obligation, but it would be delay in the extension of the credit in the first place.

Notwithstanding 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. Yet this is one of those instances when you’d know it when you’d see it, and one hour appears to be an awfully long, patently unreasonable length of time to approve or disapprove a credit card purchase.

The culpable failure of respondent herein is not the failure to timely approve petitioners purchase, but the more elemental failure to timely act on the same, whether favorably or unfavorably. Even assuming that respondents credit authorizers did not have sufficient basis on hand to make a judgment, we see no reason why respondent could not have promptly informed petitioner the reason for the delay, and duly advised him that resolving the same could take some time. In that way, petitioner would have had informed basis on whether or not to pursue the transaction at Coster, given the attending circumstances. Instead, petitioner was left uncomfortably dangling in the chilly autumn winds in a foreign land and soon forced to confront the wrath of foreign folk.