CASE DIGEST: American Express International, Inc. VS Noel Cordero

American Express International, Inc.

VS

Noel Cordero

G.R. No. 138550 [October 14, 2005]

This is a petition for review of the decision of the Court of Appeals.

Factsof the Case:

American Express International was a foreign corporation that issued charge cards used to purchase goods and services at accredited merchants worldwide to its customers. Nilda Cordero, wife of respondent Noel Cordero, was issued an American Express charge card. An extension charge card, was likewise issued to respondent Noel Cordero which he also signed. Respondent, together with his family went on a three-day holiday trip to Hong Kong. The group went to the Watson’s Chemist Shop. While there, Noel picked up chocolate candies and handed his American Express extension charge card to the sales clerk to pay for his purchases. Susan Chong, the store manager, informed respondent that she had to confiscate the card. Thereupon, she cut respondent’s American Express card in half with a pair of scissors. This, according to respondent, caused him embarrassment and humiliation. Hence, Nilda had to pay for the purchases using her own American Express charge card.

The card was placed in the Inspect Airwarn Support System,  asystem utilized by petitioner as a protection both for the company and the cardholders against the fraudulent use of their charge cards.  Once a card suspected of unauthorized use is placed in the system, the person to whom the card is tendered must verify the identity of the holder. If the true identity of the card owner is established, the card is honored and the charges are approved. Otherwise, the card is revoked or confiscated.

Respondent filed with the Regional Trial Court a complaint for damages against petitioner. 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. According to the trial court, petitioner should have informed respondent that on November 1, 1991, a person in Hong Kong attempted to use a charge card bearing similar number to that of respondent’s card and that petitioner’s inexcusable failure to do so is the proximate cause of the “confiscation and cutting of respondent’s extension card which exposed the latter to public humiliation for which the petitioner should be held liable. Upon appeal, the Court of Appeals affirmed the trial court’s decision.

Issue:

Whether the lower courts gravely erred in awarding moral damages, exemplary damages and attorney’s fees to Cordero.

Ruling of the Court:

YES. The Court ruled that petitioner can revoke respondent’s card without notice, as was done. The subject card would not have been confiscated and cut had respondent talked to petitioner’s representative and identified himself as the genuine cardholder. As explained by respondent himself, he could have used his card upon verification by the sales clerk of Watson that indeed he is the authorized cardholder. That could have been accomplished had respondent talked to petitioner’s representative, enabling the latter to determine that respondent was indeed the true holder of the card. Clearly, no negligence which breached the contract could have been attributed to petitioner. If at all, the cause of respondent’s humiliation and embarrassment was his refusal to talk to petitioner’s representative. It was thus safe to conclude that there was no negligence on the part of petitioner and that, therefore, it cannot be held liable to respondent for damages.

            The petition was granted.