Credit - 6
Producers Bank of the Philippines vs CA (2003)
Doctrine:
Facts:
 Vives (will be the creditor in this case) was asked by his friend Sanchez
to help the latter’s friend, Doronilla (will be the debtor in this case) in
incorporating Doronilla’s business “Strela”. This “help” basically
involved Vives depositing a certain amount of money in Strela’s bank
account for purposes of incorporation (rationale: Doronilla had to show
that he had sufficient funds for incorporation). This amount shall later
be returned to Vives.
 Relying on the assurances and representations of Sanchez and
Doronilla, Vives issued a check of P200,00 in favor of Strela and
deposited the same into Strela’s newly-opened bank account (the
passbook was given to the wife of Vives and the passbook had an
instruction that no withdrawals/deposits will be allowed unless the
passbook is presented).
 Later on, Vives learned that Strela was no longer holding office in the
address previously given to him. He later found out that the funds had
already been withdrawn leaving only a balance of P90,000. The Vives
spouses tried to withdraw the amount, but it was unable to since the
balance had to answer for certain postdated checks issued by Doronilla.
 Doronilla made various tenders of check in favor of Vives in order to
pay his debt. All of which were dishonored.
 Hence, Vives filed an action for recovery of sum against Doronilla,
Sanchez, Dumagpi and Producer’s Bank.
 TC & CA: ruled in favor of Vives.
Issue/s:
(1) WON the transaction is a commodatum or a mutuum.
COMMODATUM.
(2) WON the fact that there is an additional P 12,000 (allegedly
representing interest) in the amount to be returned to Vives
converts the transaction from commodatum to mutuum. NO.
(3) WON Producer’s Bank is solidarily liable to Vives, considering that it
was not privy to the transaction between Vives and Doronilla. YES.
Held/Ratio:
(1) The transaction is a commodatum.
 CC 1933 (the provision distinguishing between the two kinds of loans)
seem to imply that if the subject of the contract is a consummable
thing, such as money, the contract would be a mutuum. However,
there are instances when a commodatum may have for its object a
consummable thing. Such can be found in CC 1936 which states that
“consummable goods may be the subject of commodatum if the
purpose of the contract is not the consumption of the object, as when
it is merely for exhibition”. In this case, the intention of the parties was
merely for exhibition. Vives agreed to deposit his money in Strela’s
account specifically for purpose of making it appear that Streal had
sufficient capitalization for incorporation, with the promise that the
amount should be returned withing 30 days.
(2) CC 1935 states that “the bailee in commodatum acquires the use of the
thing loaned but not its fruits”. In this case, the additional P 12,000
corresponds to the fruits of the lending of the P 200,000.
(3) Atienza, the Branch Manager of Producer’s Bank, allowed the
withdrawals on the account of Strela despite the rule written in the
passbook that neither a deposit, nor a withdrawal will be permitted
except upon the production of the passbook (recall in this case that the
passbook was in the possession of the wife of Vives all along). Hence,
this only proves to show that Atienza allowed the withdrawals because
he was party to Doronilla’s scheme of defrauding Vives. By virtue of CC
2180, PNB, as employer, is held primarily and solidarily liable for
damages caused by their employees acting within the scope of their
assigned tasks. Atienza’s acts, in helpong Doronilla, a customer of the
bank, were obviously done in furtherance of the business of the bank,
even though in the process, Atienza violated some rules.
FACTS:

Sometime in 1979, private respondent Franklin Vives was asked by his

neighbor and friend Angeles Sanchez to help her friend and townmate, Col. HELD: NO.
Arturo Doronilla, in incorporating his business, the Sterela Marketing and A circumspect examination of the records reveals that the transaction
Services (“Sterela” for brevity).   Specifically, Sanchez asked private between them was a commodatum.  Article 1933 of the Civil Code
respondent to deposit in a bank a certain amount of money in the bank distinguishes between the two kinds of loans in this wise:
account of Sterela for purposes of its incorporation.   She assured private
respondent that he could withdraw his money from said account within a
month’s time. With this, Mrs. Vivies, Sanchez and a certain Estrella
By the contract of loan, one of the parties delivers to another, either
Dumagpi, secretary of Doronilla, went to the bank to open an account with
something not consumable so that the latter may use the same for a certain
Mrs. Vives and Sanchez as signatories. A passbook was then issued to Mrs.
time and return it, in which case the contract is called a commodatum; or
Vives. Subsequently, private respondent learned that part of the money was
money or other consumable thing, upon the condition that the same
withdrawn without presentment of the passbook as it was his wife got hold
amount of the same kind and quality shall be paid, in which case the
of such. Mrs. Vives could not also withdraw said remaining amount because
contract is simply called a loan or mutuum.
it had to answer for some postdated checks issued by Doronilla who opened
a current account for Sterela and authorized the bank to debit savings.

Commodatum is essentially gratuitous.

Private respondent referred the matter to a lawyer, who made a written
demand upon Doronilla for the return of his client’s money.   Doronilla
issued another check for P212,000.00 in private respondent’s favor but the
Simple loan may be gratuitous or with a stipulation to pay interest.
check was again dishonored for insufficiency of funds.

In commodatum, the bailor retains the ownership of the thing loaned, while
Private respondent instituted an action for recovery of sum of money in the
in simple loan, ownership passes to the borrower.
Regional Trial Court (RTC) in Pasig, Metro Manila against Doronilla, Sanchez,
Dumagpi and petitioner.  The RTC ruled in favor of the private respondent
which was also affirmed in toto by the CA. Hence this petition.
The foregoing provision seems to imply that if the subject of the contract is
a consumable thing, such as money, the contract would be a mutuum.  
However, there are some instances where a commodatum may have for its
ISSUE:  WON THE TRANSACTION BETWEEN THE DORONILLA AND
object a consumable thing.  Article 1936 of the Civil Code provides:
RESPONDENT VIVES WAS ONE OF SIMPLE LOAN.

Consumable goods may be the subject of commodatum if the purpose of
the contract is not the consumption of the object, as when it is merely for
exhibition.
Thus, if consumable goods are loaned only for purposes of exhibition, or
when the intention of the parties is to lend consumable goods and to have
the very same goods returned at the end of the period agreed upon, the
loan is a commodatum and not a mutuum.
The rule is that the intention of the parties thereto shall be accorded
primordial consideration in determining the actual character of a contract.
In case of doubt, the contemporaneous and subsequent acts of the parties
shall be considered in such determination.
4. Pajuyo v. CA
GR No. 146364 June 3, 2004
Facts: Pajuyo entrusted a house to Guevara for the latter's
use provided he should return the same upon demand and
with the condition that Guevara should be responsible of the
maintenance of the property. Upon demand Guevara refused
to return the property to Pajuyo. The petitioner then filed an
ejectment case against Guevara with the MTC who ruled in
favor of the petitioner. On appeal with the CA, the appellate
court reversed the judgment of the lower court on the
ground that both parties are illegal settlers on the property
thus have no legal right so that the Court should leave the
present situation with respect to possession of the property
as it is, and ruling further that the contractual relationship of
Pajuyo and Guevara was that of a commodatum.
Issue: Is the contractual relationship of Pajuyo and Guevara
that of a commodatum?
Held: No. The Court of Appeals’ theory that the Kasunduan is
one of commodatum is devoid of merit. In a contract of
commodatum, one of the parties delivers to another
something not consumable so that the latter may use the
same for a certain time and return it. An essential feature of
commodatum is that it is gratuitous. Another feature of
commodatum is that the use of the thing belonging to
another is for a certain period. Thus, the bailor cannot
demand the return of the thing loaned until after expiration
of the period stipulated, or after accomplishment of the use
for which the commodatum is constituted. If the bailor
should have urgent need of the thing, he may demand its
return for temporary use. If the use of the thing is merely
tolerated by the bailor, he can demand the return of the
thing at will, in which case the contractual relation is called a
precarium. Under the Civil Code, precarium is a kind of
commodatum. The Kasunduan reveals that the
accommodation accorded by Pajuyo to Guevarra was not
essentially gratuitous. While the Kasunduan did not require
Guevarra to pay rent, it obligated him to maintain the
property in good condition. The imposition of this obligation
makes the Kasunduan a contract different from a
commodatum. The effects of the Kasunduan are also
different from that of a commodatum. Case law on ejectment
has treated relationship based on tolerance as one that is
akin to a landlord-tenant relationship where the withdrawal
of permission would result in the termination of the lease.
The tenant’s withholding of the property would then be
unlawful.
G.R. No. 160892
SPOUSES ANTONIO and LOLITA TAN vs.
CARMELITO VILLAPAZ

Facts:
On February 6, 1992, respondent Villapaz issued a Philippine Bank of
Communications (PBCom) crossed check in the amount of P250,000.00,
payable to the order of petitioner Tony Tan. On that date, the check was
deposited at the drawee bank, PBCom Davao City branch at Monteverde
Avenue, to the account of petitioner Antonio Tan also at said bank.
On November 7, 1994 respondent filed a Complaint for sum of money
against the spouses, alleging that on February 6, 1992, the spouses went to
his place of business at Malita, Davao and obtained a loan of P250,000.00,
hence, his issuance of the February 6, 1992 PBCom crossed check which
loan was to be settled interest-free in six (6) months.
On the maturity date of the loan or on August 6, 1992, petitioner Antonio
Tan failed to settle the same, and despite repeated demands, petitioners never
did, drawing Villapaz to file the complaint; and on account of the willful
refusal of petitioners to honor their obligation, he suffered moral damages in
the amount of P50,000.00, among other things.
The spouses denied having gone to Malita and having obtained a loan from
respondent, alleging that the check was issued by respondent in Davao City
on February 6, 1992 "in exchange for equivalent cash"; they never received
from respondent any demand for payment, be it verbal or written, respecting
the alleged loan; since the alleged loan was one with a period — payable in
six months, it should have been expressly stipulated upon in writing by the
parties but it was not, hence, the essential requisite for the validity and
enforceability of a loan is wanting; and the check is inadmissible to prove the
existence of a loan for P250,000.00.
Petitioners maintain that they did not secure a loan from respondent, insisting
that they encashed in Davao City respondent's February 6, 1992 crossed
check; in the ordinary course of business, prudence dictates that a contract of
loan must be in writing as in fact the New Civil Code provides that to be
enforceable "contracts where the amount involved exceed[s] P500.00 must
appear in writing even a private one," hence, respondent's "self-serving"
claim does not suffice to prove the existence of a loan; respondent's
allegation that no memorandum in writing of the transaction was executed
because he and they are "kumpadres" does not inspire belief for respondent,
being a businessman himself, was with more reason expected to be more
prudent; and the mere encashment of the check is not a contractual
transaction such as a sale or a loan which ordinarily requires a receipt and
that explains why they did not issue a receipt when they encashed the check
of respondent.
Petitioners furthermore maintain that they were financially stable on
February 6, 1992 as shown by the entries of their bank passbook hence, there
was no reason for them to go to a distant place like Malita to borrow money.
The lower Court gave four reasons for ruling out a loan:
(a) the defense of spouses Tan that they did not go to Villapaz's place on
February 6, 1992, date the check was given to them;
(b) Spouses Tan could not have borrowed money on that date because from
January to March, 1992, they had an average daily deposit of P700,000 and
on February 6, 1992, they had P1,211,400.64 in the bank, hence, they had
"surely no reason nor logic" to borrow money from Villapaz;
(c) the alleged loan was not reduced in writing and
 the check could not be a competent evidence of loan.
Issue:
Whether or not the transaction in dispute was a contract of loan and not a
mere matter of check encashment as found by the trial court. YES.
Held:
The four-fold reasoning cannot be sustained. They are faulty and do not
accord either with law or ordinary conduct of men. For one thing, the first
two given reasons partake more of alibi and speculation, hence, deserve scant
consideration. For another, the last two miss the applicable provisions of law.
The existence of a contract of loan cannot be denied merely because it is not
reduced in writing. Surely, there can be a verbal loan. Contracts are binding
between the parties, whether oral or written. The law is explicit that contracts
shall be obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. A loan
(simple loan or mutuum) exists when a person receives a loan of money or
any other fungible thing and acquires the ownership thereof. He is bound to
pay to the creditor the equal amount of the same kind and quality.
Contracts are perfected by mere consent, and from that moment the parties
are bound not only to the fulfillment of what has been expressly stipulated
but also to all the consequences which, according to their nature, maybe in
keeping with good faith, usage and law.

The lower Court misplaced its reliance on Article 1358 of the Civil Code
providing that to be enforceable, contracts where the amount involved exceed
five hundred pesos, must appear in writing. Such requirement, it has been
held, is only for convenience, not for validity. It bears emphasis that at the
time Villapaz delivered the crossed-check to the petitioner spouses, Villapaz
had no account whatsoever with them. Spouses' contention that they did not
obtain any loan but merely exchanged the latter's check for cash is not borne
by any evidence.
That apart from the check, no written proof of the grant of the loan was
executed was credibly explained by respondent when he declared that
petitioners' son being his godson, he, out of trust and respect, believed that
the crossed check sufficed to prove their transaction.
As for petitioners' reliance on Art. 1358[22] of the Civil Code, the same is
misplaced for the requirement that contracts where the amount involved
exceeds P500.00 must appear in writing is only for convenience.
At all events, a check, the entries of which are no doubt in writing, could
prove a loan transaction.
Carolyn M. Garcia
-vs-
Rica Marie S. Thio
GR No. 154878, 16 March 2007
FACTS
            Respondent Thio received from petitioner Garcia two crossed
checks which amount to US$100,000 and US$500,000, respectively,
payable to the order of Marilou Santiago. According to petitioner,
respondent failed to pay the principal amounts of the loans when they
fell due and so she filed a complaint for sum of money and damages
with the RTC. Respondent denied that she contracted the two loans
and countered that it was Marilou Satiago to whom petitioner lent the
money. She claimed she was merely asked y petitioner to give the
checks to Santiago. She issued the checks for P76,000 and P20,000
not as payment of interest but to accommodate petitioner’s request
that respondent use her own checks instead of Santiago’s.
            RTC ruled in favor of petitioner. CA reversed RTC and ruled
that there was no contract of loan between the parties.
ISSUE
(1)   Whether or not there was a contract of loan between petitioner and
respondent.
(2)   Who borrowed money from petitioner, the respondent or Marilou
Santiago?
HELD
(1)           The Court held in the affirmative. A loan is a real
contract, not consensual, and as such I perfected only upon the
delivery of the object of the contract. Upon delivery of the contract of
loan (in this case the money received by the debtor when the checks
were encashed) the debtor acquires ownership of such money or loan
proceeds and is bound to pay the creditor an equal amount. It is
undisputed that the checks were delivered to respondent.
(2)           However, the checks were crossed and payable not
to the order of the respondent but to the order of a certain Marilou
Santiago. Delivery is the act by which the res or substance is thereof
placed within the actual or constructive possession or control of
another. Although respondent did not physically receive the proceeds
of the checks, these instruments were placed in her control and
possession under an arrangement whereby she actually re-lent the
amount to Santiago.
Petition granted; judgment and resolution reversed and set aside.
Rose Packing Co. vs. Court of Appeals 167 SCRA 309
Facts: This is a petition for review on certiorari of the decision of the Court
of Appeals in CA-G.R. No. 431 98-12 promulgated on December 16, 1070.
On December 12, 1962 respondent bank Philippine Commercial and
Industrial Bank (PCIB) approved a letter request by petitioner for the
reactivation of its overdraft line of P50,000.00, discounting line of
P100,000.00 and a letter of credit-trust receipt line of P550,000.00 as well as
an application for loan of P300,000.00 on fully secured real estate and chattel
mortgage and on the further condition that respondent PCIB appoint its
executive vice-president Roberto S. Benedicto as its representative in
petitioner’s board of directors.
On November 3, 1965 the National Investment and Development (NIDC),
approved a P2.6 million loan application of petitioner with certain
conditions. The NIDC released to petitioner the amount of P 100,000.00.
Petitioner purchased five (5) parcels of land in Pasig, Rizal making down
payment thereon.
August 3, 1966 and October 5,, 1966, respondent PCIB approved additional
accommodations to petitioner consisting of P 710,000.00 loan for the
payment of the balance of the purchase price of those lots in Pasig. However,
PCIB released only P 300,000.00 of the P 710,000.00 on approved loan for
the payment of the Pasig lands and some P 300, 000.00 for operating capital.
On June 29 1967, the Development Bank of the Philippines approved on
application by petitioner for a loan of P 1,840,000.00 and a guarantee for $
652,682.00 for the purchase of can making equipment. Petitioner advised
respondent PCIB of the availability of P 800,000.00 to partially pay off its
account and requested the release of the titles to the Pasig lots for delivery to
the DBP.
On January 5, 1968 respondent PCIB filed a complaint against petitioner and
Rene Knecht, its president for the collection of petitioner’s indebtedness to
respondent bank. The PCIB gave petitioner notice that it would cause the real
estate mortgage to be foreclosed at an auction sale.
Petitioner filed a complaint in the Court of First Instance of Rizal to enjoin
respondents PCIB and the sheriff from the proceeding with the foreclosure
sale, and to ask the lower court to fix a new period for the payment of the
obligations of petitioner to PCIB. The lower court issued an order denying
the petition. The petitioner filed with respondent Court of Appeals a petition
for certiorari with application for restraining order and preliminary
injunction. Hence, the petition is also denied.
Issue: Whether or not private respondent have the right to the extra-judicial
foreclosure sale of petitioner’s mortgaged properties before trial on the
merits.
Held: (1) The decision of the Court of Appeals is REVERSED insofar as it
sustained (a) the lower court’s denial of petitioner’s application for
preliminary injunction and (b) the validity of the foreclosure sale; (2) the
lower court is ordered to proceed with the trial on the merits of the main case
together with a determination of exactly how much are petitioner’s liabilities
in favor of respondent bank PCIB so that proper measures may be taken for
their eventual liquidation; (3) the preliminary
Injunction issued by this Court on April 28, 1971 remains in force until the
merits of the main case are resolved; and (4) the motion of respondent bank
dated April 1, 1981, for leave to lease the real properties in custodia legis is
denied.
The loans of petitioner corporation from respondent bank were supposed to
become due only at the time that if receives from the NIDC and PDCP the
proceeds of the approved scheme. As it is, the conditions did not happen.
For an obligation to become due there must generally a demand. Default
generally begins from the moment the creditor demands the performance of
the obligation. Without such demand, judicial or extra-judicial, the effects of
default will not arise.
BPI Investment Corp V. CA (2002)
 G.R. No. 133632  February 15, 2002
Lessons Applicable: Simple Loan
Laws Applicable:
Facts:
 Frank Roa obtained a loan with interest rate of 16 1/4%/annum
from Ayala Investment and Development Corporation (AIDC), the
predecessor of BPI Investment Corp. (BPIIC), for the construction
of a house on his lot in New Alabang Village, Muntinlupa.
 He mortgaged the house and lot to AIDC as security for the
loan.
 1980: Roa sold the house and lot to ALS Management &
Development Corp. and Antonio Litonjua for P850K who paid
P350K in cash and assumed the P500K indebtness of ROA with
AIDC.
 AIDC proposed to grant ALS and Litonjua a new loan
for P500K with interested rate of 20%/annum and service fee of
1%/annum on the outstanding balance payable within 10 years
through equal monthly amortization of P9,996.58 and penalty
interest of 21%/annum/day from the date
the amortization becomes due and payable.
 March 1981: ALS and Litonjua executed a mortgage deed
containing the new stipulation with the provision that the monthly
amortization will commence on May 1, 1981
 August 13, 1982: ALS and Litonjua paid BPIIC P190,601.35
reducing the P500K principal loan to P457,204.90.
 September 13, 1982: BPIIC released to ALS and
Litonjua P7,146.87, purporting to be what was left of their loan
after full payment of Roa’s loan
 June 1984: BPIIC instituted foreclosure proceedings against  other.  It is a basic principle in reciprocal obligations that neither party
ALS and Litonjua on the ground that they failed to pay the
mortgage indebtedness which from May 1, 1981 to June 30, 1984
amounting to P475,585.31
 August 13, 1984: Notice of sheriff's sale was published
 February 28, 1985: ALS and Litonjua filed Civil Case No.
52093 against BPIIC alleging that they are not in arrears and
instead they made an overpayment as of June 30, 1984 since the
P500K loan was only released September 13, 1982 which marked
the start of the amortization and since only P464,351.77 was
released applying legal compensation the balance of P35,648.23
should be applied to the monthly amortizations
 RTC: in favor of ALS and Litonjua and against BPIIC that the
loan granted by BPI to ALS and Litonjua was only in the principal
sum of P464,351.77 and awarding moral damages, exemplary
damages and attorneys fees for the publication
 CA: Affirmed reasoning that a simple loan is perfected upon
delivery of the object of the contract which is on September 13,
1982
ISSUE: W/N the contract of loan was perfected only on September 13, 1982
or the second release of the loan?
HELD: YES. AFFIRMED WITH MODIFICATION as to the award of
damages.  The award of moral and exemplary damages in favor of private
respondents is DELETED, but the award to them of attorney’s fees in the
amount of P50,000 is UPHELD. Additionally, petitioner is ORDERED to
pay private respondents P25,000 as nominal damages. Costs against
petitioner.
 obligation to pay commenced only on October 13, 1982, a month
after the perfection of the contract
 contract of loan involves a reciprocal obligation, wherein the
obligation or promise of each party is the consideration for that of the
incurs in delay, if the other does not comply or is not ready to comply in
a proper manner with what is incumbent upon him.  Consequently,
petitioner could only demand for the payment of the monthly
amortization after September 13, 1982 for it was only then when it
complied with its obligation under the loan contract.  
 BPIIC was negligent in relying merely on the entries found in the
deed of mortgage, without checking and correspondingly adjusting its
records on the amount actually released and the date when it was
released.  Such negligence resulted in damage for which an award of
nominal damages should be given 
  SSS where we awarded attorney’s fees because private respondents tour of Amsterdam was to be canceled due to lack of remaing time.
were compelled to litigate, we sustain the award of P50,000 in favor of
Mrs. Pantaleon ended up weeping.
private respondents as attorney’s fees
7. After the star-crossed tour had ended, the Pantaleon family

Pantaleon v. American Express International, Inc. G.R. No. proceeded to the United States before returning to Manila. While in
174269 (May 8, 2009)
the United States, Pantaleon continued to use his AmEx card, several
times without hassle or delay, but with two other incidents similar to
Facts:
the Amsterdam brouhaha.

1. The petitioner (Pantaleon) and his family, joined an escorted

Issue/s:
tour of Western Europe.
2. In Coster Diamond House, Amsterdam, Mrs. Pantaleon (wife)
1. Whether or not Amex was in default or mora.
was about to bought a 2.5 karat diamond brilliant cut, a pendant and a
2. Whether Amex (Credit Card Company) is in mora solvendi or
chain, all of which totaled U.S. $13,826.00.
in mora accipiendi.
3. To pay these purchases, around 9:15am, Pantaleon presented
his American Express Credit Card together with his passport. Ruling:
4. By 9:40am, Pantaleon was already worried about further
inconveniencing the tour group, he asked the store clerk to cancel the 1. Yes. The Court is convinced that Amex’s delay constituted
sale. the store manager though asked him to wait a few more minutes. breach of its contractual obligation to act on his use of the card abroad
5. Around 10:00am (around 45 minutes after Pantaleon had “with special handling.:
presented his AmexCard), Coster decided to release the items even
Notwithstanding the popular notion that credit card purchases are
without American Express International, Inc.’s (herein respondent,
approved “WITHIN SECONDS,” there really is no strict, legally
Amex for brevity) approval of the purchase. This was 30 minutes after
determinative point of demarcation on how long must it take for a
the tour group was supposed to have left the store.
credit car company to approve or disapprove a customer’s purchase,
6. The spouses Pantelon returned. Their offers of apology were
much less one specifically contracted upon by the parties. yet this is
met by their tourmates with stony silence. The tour group’s visible
one of those instances when “you’d know it what you’d see it,” and one
irritation was aggravated when the tour guide announced that the city
hour appears to be an awfully long, patently unreasonable length of
time to approve or disapprove a credit card purchases. It is long
enough time for the customer to walk to a bank a kilometer away,
withdraw money over the counter, and return to the store.
The Credit Authorization System (CAS) record on the Amsterdam
transaction shows how Amexco Netherlands viewed the delay as
unusually frustrating. In sequence expressed in Phoenix time from
01:20 when the charge purchased was referred for authorization:
01:22 – the authorization is referred to manila Amexco.
01:32 – Netherlands gives information that the identification of the
card member has been presented and he is buying jewelries worth
US $13,826
01:33 – Netherlands asks “How long will this take?”
02:08 – Netherlands is still asking “How long will this take?”
2.
 The Amex has a right to verify whether the credit it is extending upon
on a particular purchase was indeed contracted by the cardholder, and
that the cardholder is within his means to make such transaction. The
culpable failure of respondent herein is not the failure to timely
approve petitioner’s purchase, but the more elemental failure to
timely act on the same, whether favorably or unfavorably. Even
assuming the respondent’s credit authorizers did not have sufficient
basis on hand to make a judgment, we see no reason why Amex 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, Pantaleon was left uncomfortably dangling in the chilly
autumn winds in a foreign land and soon forced to confront the wrath
of foreign folk.
The delay committed by Amex was clearly attended by unjustified
neglect and bad faith, since it alleges to have consumed more than one
hour to simply go over Pantaleon’s pas credit history with Amex, his
payment record and his credit and bank references, when all such data
are already stored and readily available from its computer. There is
nothing in Pantaleon’s billing history that would warrant the
imprudent suspension of action by Amex in processing the purchase.
Amex is in mora solvendi. Generally, the relationship between
a credit card provided and its card holder is that of creditor-debtore,
with the card company as a the creditor extending loans and credit to
the card holder, who as debtor is obliged to repay the creditor. The
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. In the present case,
we should shift perspectives and again see the credit card company as
the debtor/obligor, insofar as it has the obligation to the customer as
creditor/obligee to act promptly on its purchases on credit.
If there was delay on the part of Amex in its normal role as creditor to
the cardholder, such delay would not have been in acceptance of the
performance of the debtor’s obligation (i.e., the repayment of the
debt), but it would be delay in the extension of the credit in the first
place. Such delay would not fall under mora accipiendi, which
contemplates that the obligation of the debtor, such as the actual
purchases on credit has already been instituted. The establishment of
the debt itself (purchases on credit of the jewelry) had not yet been
perfected, as it remained pending the approval or consent of the credit
card company.
Notes / Doctrine:
Requisites of Mora Solvendi (delay of debtor)
1. Obligation is demandable and liquidated;
2. debtor delays performance; and
3. the creditor judicially or extrajudicially required the debtor’s
performance.
Requisites of Mora Accipiendi
1. An offer of performance by the debtor who has the required
capacity;
2. offer must be to comply with the prestation as it should be
performed; and
3. creditor refuses the performance without just cause.
Moral damages
 Can be availed in cases of breach of contract where the
defendant acted fraudulently or in bad faith.
 In the present case, there was a deadline for the completion of
that purchase by Pantaleon 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 Panaleon family. These circumstances are
fairly unusual, and should not give rise to a general entitlement for
damages under a more mundane set of facts.
 There is no hard-and-fast rule in determining what would be a
fair and reasonable amount of moral damages, since each case must
be governed by its own peculiar facts, however, it must be
commensurate to the loss or injury suffered.