G.R. No. 138550 - American Express International, Inc. vs. Cordero

Petitioner: American Express International, Inc. (AEII), a foreign corporation issuing charge cards to customers for purchases at accredited merchants worldwide.
Respondent: Noel Cordero, defendant in the petition but plaintiff in the lower courts.

In 1988, Nilda Cordero (respondent’s wife) applied for and was issued an American Express charge card (No. 3769-895901-010020).
Nilda accepted the terms of the Amex Cardmember Agreement by signing the back of the card.
Respondent Noel Cordero received an extension charge card (No. 3769-895901-01010), which he also signed.

Noel Cordero and his family went on a three-day holiday to Hong Kong.
Around 7:00 PM, Noel tried to purchase chocolates at Watson’s Chemist Shop by tendering his American Express extension card.
The sales clerk verified the card by calling AEII’s Hong Kong Office.
Store manager Susan Chong then confiscated and cut Noel’s card in half in front of his family and other customers, causing humiliation.
Nilda paid for the purchase with her American Express card.

Upon return to the hotel, Nilda contacted AEII’s Hong Kong office and spoke to Senior Authorizer Johnny Chen.
AEII informed her that on November 1, 1991, someone had tried to use a card with the same number as Noel’s card in Hong Kong.
AEII placed Noel’s card under the “Inspect Airwarn Support System,” a system to protect against fraudulent card use, which requires verification of identity when the card is tendered.
AEII’s representative requested to talk to Noel to verify his identity, but Noel refused.
Failure to verify led to AEII revoking and instructing the confiscation of the card.

On March 31, 1992, Noel filed a complaint for damages against AEII for embarrassment and humiliation caused by the confiscation and cutting of his card.
Trial court found AEII liable due to its failure to inform Noel about the fraudulent use attempt and ruled that this negligence caused the humiliation.
Trial court awarded:

Whether the lower courts erred in attributing respondent’s public humiliation to AEII.
Whether AEII could be held liable for moral damages, exemplary damages, and attorney’s fees.

Raised issue of facts beyond the Court’s domain but acknowledged exceptions for review by the Supreme Court when findings are based on speculation or grave abuse of discretion.

Did the lower courts gravely err in attributing to AEII the public humiliation suffered by Noel Cordero due to the confiscation and cutting of his American Express card?

Did the lower courts gravely err in holding AEII liable for moral damages, exemplary damages, and attorney’s fees arising from the incident?