GR 138550; (October, 2005) (Digest)
G.R. No. 138550. October 14, 2005.
AMERICAN EXPRESS INTERNATIONAL, INC., Petitioner, vs. NOEL CORDERO, Respondent.
FACTS
Petitioner American Express International, Inc. issued an extension charge card to respondent Noel Cordero. In November 1991, while Cordero was on holiday in Hong Kong, an attempt was made by an unidentified person in Hong Kong to use a card with the same number. Petitioner’s Hong Kong office, upon verifying that Cordero was in Manila, placed his card in the “Inspect Airwarn Support System,” a security protocol requiring identity verification upon use. Petitioner did not inform Cordero of this incident.
Later that month, Cordero attempted to use his card at a store in Hong Kong. The store clerk, following procedure, called petitioner’s office. Petitioner’s representative requested to speak to Cordero to verify his identity, but Cordero refused. Consequently, the store manager confiscated and cut the card in half in front of Cordero’s family, causing him alleged humiliation. Cordero filed a complaint for damages.
ISSUE
Whether petitioner American Express is liable for damages arising from the confiscation of respondent Cordero’s charge card.
RULING
The Supreme Court ruled in favor of the petitioner, reversing the Court of Appeals. The legal logic centers on the absence of negligence or contractual breach by American Express. The Cardmember Agreement explicitly authorized the revocation or request for surrender of the card without notice, absolving petitioner from liability for statements made during such recovery. The proximate cause of the confiscation was not petitioner’s failure to notify Cordero of the prior suspicious activity, but Cordero’s own refusal to verify his identity when requested by the store clerk acting on petitioner’s security protocol.
The Court found no basis for an award of damages. For moral damages under Article 2217 of the Civil Code, a wrongful act or omission must be present. Here, petitioner was merely enforcing a valid contractual stipulation for security purposes, an act done without bad faith or negligence. The cutting of the card was a direct result of the security procedure triggered by the prior fraud attempt and Cordero’s non-cooperation. Since no actionable wrong by the petitioner was established, the awards for moral and exemplary damages, including attorney’s fees, had no legal foundation. The petition was granted.