PANTALEON VS AMERICAN EXPRESS

FACTS:
After the Amsterdam incident that happened
involving the delay of American Express Card to
approve his credit card purchases worth
US$13,826.00 at the Coster store, Pantaleon
commenced a complaint for moral and exemplary
damages before the RTC against American
Express. He said that he and his family
experienced inconvenience and humiliation due
to the delays in credit authorization. RTC rendered
a decision in favor of Pantaleon. CA reversed the
award of damages in favor of Pantaleon, holding
that AmEx had not breached its obligations to
Pantaleon, as the purchase at Coster deviated
from Pantaleon's established charge purchase
pattern.
ISSUE:
1. Whether or not AmEx had committed a breach
of
its
obligations
to
Pantaleon.
2. Whether or not AmEx is liable for damages.
RULING:
1. Yes. 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
customers purchase, much less one specifically
contracted upon by the parties. One hour appears
to be patently unreasonable length of time to
approve or disapprove a credit card purchase.
The culpable failure of AmEx 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 AmExs credit authorizers did not
have sufficient basis on hand to make a judgment,
we see no reason why it could not have promptly
informed Pantaleon the reason for the delay, and
duly advised him that resolving the same could
take
some
time.

2. Yes. The reason why Pantaleon is entitled to

damages is not simply because AmEx incurred
delay, but because the delay, for which culpability
lies under Article 1170, led to the particular
injuries under Article 2217 of the Civil Code for
which moral damages are remunerative. The
somewhat unusual attending circumstances to the
purchase at Coster that there was a deadline for
the completion of that purchase by petitioner
before any delay would redound to the injury of
his several traveling companions gave rise to the
moral shock, mental anguish, serious anxiety,
wounded feelings and social humiliation sustained
by Pantaleon, as concluded by the RTC.
MOTION:
The Supreme Court said that the credit card
company was not liable to pay damages in this
case because the period of time it took to send its
approval was justified. The Court also said:
The use of a credit card to pay for a purchase is
only an offer to the credit card company to enter
a loan agreement with the credit card
holder. Before the credit card issuer accepts this
offer, no obligation relating to the loan
agreement exists between them.
In fact, credit card application forms typically
contain terms stating that the credit card
company reserves the right to deny authorization
for any requested charge.
But in this case, the card purchase was approved
ALBEIT with some delay because the card
company claimed that it had to examine the
credit history and purchase experience of the
cardholder first to ensure that the transaction
was not a fraudulent purchase, considering that
it was a single purchase worth more than
$13,000, and it was the first time that the
cardholder spent that much on one transaction.
The Supreme Court did not find anything wrong
with the delay in this case stating that :

The right to review a card holders credit history,

although not specifically set out in the card
membership agreement, is a necessary
implication of (the credit card companys) right to
deny authorization for any requested charge.
Added to that, it also noted that:
There is no provision in the (credit
card) agreement that obligates (the credit card
company) to act on all cardholder purchase
requests within a specifically defined period of
time.

ANGELES V. CALASANZ
Facts:
Ursula and Tomas Calasanz (D) sold a piece of land
to Buenaventura Angeles (P) and Teofila Juani
covered
by
a
contract
to
sell.
Angeles paid a downpayment upon the execution
of the contract and started paying the balance in
monthly installments. Angeles (P) paid monthly
installments for nine years with only a few
remaining installments left to pay. Although
Calasanz accepted late payments before, Angeles
was
now
five
months
late.
Calasanz demanded payment of past due
accounts, but did not receive any. Eventually,
Calansanz canceled the said contract because
Angeles failed to pay the subsequent payments.
Angeles asked for reconsideration, but was
denied.
Angeles filed a case to compel the Calasanz to
execute in their favor the final deed of sale
alleging that they have already fully paid the total
price of the property. Calasanz (D) alleged in their
answer that Angeles (P) violated the contract to
sell when they failed to pay a monthly installment.
A provision in the contract to sell gave Calasanz
(D) the right to cancel the contract and consider
the amounts paid as rent for the property.
However, the lower court ruled that the contract
was not validly canceled and ordered Calasanz (D)
to execute a final Deed of Sale in favor of Angeles
(P)

Issues: Was the contract to sell validly canceled?

Ruling: No. The rule that it is not always necessary
for the injured party to resort to court for
rescission of the contract when the contract itself
provides was qualified by this Court in Universal
Food Corporation vs. Court of Appeals (33 SCRA 1)
the
Court
stated
that:
The general rule is that rescission of a contract will
not be permitted for a slight or casual breach, but
only for such substantial and fundamental breach
as would defeat the very object of the parties in
making the agreement. (Song Fo & Co. vs.
Hawaiian-Philippine Co., 47 Phil. 821) The
question of whether a breach of a contract is
substantial depends upon the attendant
circumstances. The breach of the contract alleged
by Calasanz is so slight considering that Angeles
had already paid monthly installments for almost
nine years. In only a short time, the entire
obligation would have been paid. To sanction the
rescission made by Calasanz (D) will work injustice
to Angeles (P) and unjustly enrich Calasanz (D).

ROQUE

v.

LAPUS

FACTS:
Sometime in 1964, plaintiff and defendant
entered into an agreement of sale covering Lots
1, 2 and 9, Block 1, of said property, payable in
120 equal monthly installments at the rate of
P16.00, P15.00 per square meter, respectively.
In accordance with said agreement, defendant
paid to plaintiff the sum of P150.00 as deposit
and the further sum of P740.56 to complete the
payment of four monthly installments covering
the months of July, August, September, and
October,
1954.
On January 24, 1955, defendant requested
plaintiff that he be allowed to abandon and
substitute Lots 1, 2 and 9, the subject with Lots
4 and 12, Block 2 of the Rockville Subdivision,
2

which are corner lots, to which request plaintiff

graciously acceded. The evidence discloses that
defendant proposed to plaintiff modification of
their previous contract to sell because he found
it quite difficult to pay the monthly installments
on the three lots, and besides the two lots he
had chosen were better lots, being corner lots.

The Court of Appeals rendered its decision that

the defendant Nicanor Lapuz is granted a period
of ninety (90) days from entry hereof within
which to pay the balance. Hence, this appeal.

In addition, it was agreed that the purchase

price of these two lots would be at the uniform
rate of P17.00 per square meter payable in 120
equal monthly installments, with interest at 8%
annually on the balance unpaid. Pursuant to
this new agreement, defendant occupied and
possessed Lots 4 and 12, and enclosed them,
including the portion where his house now
stands, with barbed wires and adobe walls.
However, aside from the deposit of P150.00
and the amount of P740.56, which were paid
under their previous agreement, defendant
failed to make any further payment on account
of the agreed monthly installments for the two
lots in dispute, under the new contract to sell.
Plaintiff demanded upon defendant not only to
pay the stipulated monthly installments in
arrears, but also to make up-to-date his
payments, but defendant refused to comply
with
plaintiff's
demands.

RULING:

On or about November 3, 1957, plaintiff

demanded upon defendant to vacate the lots in
question and to pay the reasonable rentals
thereon at the rate of P60.00 per month from
August, 1955. On January 22, 1960, petitioner
Felipe C, Roque filed the complaint against
defendant Nicanor Lapuz for rescission and
cancellation of the agreement of sale between
them involving the two lots in question and
prayed that judgment be rendered ordering the
rescission and cancellation of the agreement of
sale, the defendant to vacate the two parcels of
land and remove his house therefrom and to
pay to the plaintiff the reasonable rental
thereof at the rate of P60.00 a month from
August 1955 until such time as he shall have
vacated the premises, and to pay the sum of
P2,000.00 as attorney's fees, costs of the suit
and award such other relief or remedy as may
be deemed just and equitable in the premises.

ISSUE: Can private respondent be entitled to

the benefits of the third paragraph of Article
1191, New Civil Code, for the fixing of period

No. Having been in default and acted in bad

faith, he is not entitled to the new period of 90
days from entry of judgment within which to
pay petitioner the balance of P11,434.44 with
interest due on the purchase price of
P12,325.00 for the two lots. To allow and grant
respondent an additional period for him to pay
the balance of the purchase price, which
balance is about 92% of the agreed price, would
be tantamount to excusing his bad faith and
sanctioning the deliberate infringement of a
contractual obligation that is repugnant and
contrary to the stability, security and
obligatory force of contracts. Moreover,
respondent's failure to pay the succeeding 116
monthly installments after paying only 4
monthly installments is a substantial and
material breach on his part, not merely casual,
which takes the case out of the application of
the benefits of pa paragraph 3, Art. 1191, N.C.C.
Pursuant to Art. 1191, New Civil Code,
petitioner is entitled to rescission with payment
of damages which the trial court and the
appellate court, in the latter's original decision,
granted in the form of rental at the rate of
P60.00 per month from August, 1955 until
respondent shall have actually vacated the
premises, plus P2,000.00 as attorney's fees

AYSON-SIMON VS. ADAMOS

FACTS:
On December 13, 1943, Nicolas Adamos and
Vicente Feria defendants-appellants herein
purchased two lots from Juan Porciuncula.
Porciunculas successor in interest sought for the
annulment and cancellation of the sale which the
court
a
quo
favorably
ruled.

In the meantime during the pendency of the

above mentioned case, defendants-appellants
sold to Generosa Ayson Simon the lots in
question. Due to the failure of defendants
appellants to comply with their commitment to
have the subdivision plan of the lots approved
and to deliver to deliver the titles and possession
to Generosa, the latter filed suit for specific
performance. As a result of the sale of the lot to
said defendants sppellants being null and void,
there is impossibity that they can comply with
their commitment to Generosa, the latter then
seek the rescission of the contract plus damages.

tobacco to be sold at P1.30 per kilo. It is also

stated therethat the proceeds in the amount of P799.50
will be given to Ayroso as soon as it was sold. It was signed by
the appellant and witnessed by the complainants sister
Salud Bantug and thelatters maid Genoveva Ruiz. The
appellant that time was bringing jeep, and the tobacco
wassimply loaded in the jeep. However, of the total value of
P799.50, the appellant had paid to Ayroso only P240.00
and this was paid on three different times. As
no further amount was paid,complainant Ayroso filed
a complaint against appellant Lim for estafa. Judgment was
renderedagainst appellant. In this petition for review on
certiorari, appellant claimed that the obligationdoes not fix a
period and that the court should fix the duration thereof
pursuant to Article 1197 ofthe Civil Code.

The
defendants-appellants
contend
that
Generosas action had prescribed, considering
that she had only four years from May 29, 1946 to
rescind the transaction.

ISSUE: Is appellants contention, saying that Article 1197

applies, correct?

ISSUE:

No. It is clear in the agreement that the proceeds of the sale

of the tobacco should beturned over to the complainant as
soon as the same was sold, or, that the obligation
wasimmediately demandable as soon as the tobacco was
disposed of. The agreement constitutedher as an agent with
the obligation to return the tobacco if the same was not sold.
The fact thatappellant received the tobacco and the
proceeds to be given to complainant as soon as it wassold,
strongly negates transfer of ownership of the goods to the
appellant. Furthermore, where aperson obliged himself to
pay to another the p roceeds of the latters tobacco as soon
as they are disposed of, a period exists for payment of the
obligation and, therefore, Article 1197 doesnot apply. The
receipt, therefore, should be considered as a contract of
agency to sell thesubject tobacco between the appellant and
complainant.

Whether or not the action to rescind the

obligation has prescribed.
HELD:
Article 1191 of the Civil Code provides that an
injured party may also seek rescission if the
fulfillment should have become impossible. The
cause of action to claim rescission arises when the
fulfillment of the obligation became imppossible
when the court declared that the sale was null
and void. The Generosa cannot be assailed on the
ground that she slept on her rights.

RULING:

LIM VS. PEOPLE

133 SCRA 333FACTS:
On January 10, 1966, appellant Lourdes Valerion Lim who is
a businesswoman went to the house of Maria Ayroso and
proposed to sell Ayrosos tobacco consisting of 615 kilos at
P1.30 a kilo. The appellant was to receive the overprice for
which she could sell the tobacco.
This agreement was made in the presence of the plaintiffs
sister, Salud Bantug. Salvador Bantug drew the document
which apprised of a certification that appellant had received
from Ayroso the amount of 615 kilos of leaf