OBLICON

Title: Panteleon vs. American Express International, Inc. (Motion for Reconsideration)
Petitioner: Polo Pantaloon
Respondent: American Express Internation, Inc. (AMEX)

Date: August 24, 2010

GR No.174260
Ponente: Brion, J;

Nature of the case: Motion for reconsideration on the decision of CA to have ruled respondent,
AMEX, (1) guilty of culpable delay and (2) liable for moral, exemplary damages, attorney’s fees and
costs of litigation.

Facts:
May 8, 2009 decision, courts held AMEX 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, it was found
that AMEX failed to timely act on Pantaleon’s purchases.

Issues:
1. Is respondent guilty of culpable delay?
2. Is respondent liable for damages?

Ratio:
1. AMEX has no obligation to approve the purchase requests of its credit cardholders, Pantaleon
cannot claim that AMEX defaulted in its obligation. Article 1169 of the Civil Code, which provides the
requisites to hold a debtor guilty of culpable delay, states:

Article 1169.Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfilment of their obligation.
.

The three requisites for a finding of default are: (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.

Based on the above, 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.

2. Pateleon is not entitled to damages and no basis for exemplary damages, attorney’s fess, and
costs of litigation, because AMEX did not act in culpable delay or with wilful intent to cause delay.

WHEREFORE premises considered, May 8, 2009 Decision is SET ASIDE and GRANT the present
motion for reconsideration. The Court of Appeals Decision dated August 18, 2006 is hereby
AFFIRMED. No Costs.

Notes:
Every credit card transaction involves three contracts, namely: (a) the sales contract between the
credit card holder and the merchant or the business establishment which accepted the credit card;
(b) the loan agreement between the credit card issuer and the credit card holder; and lastly, (c) the
promise to pay between the credit card issuer and the merchant or business establishment