Case Digest (G.R. No. 210928)
Facts:
Petitioner Rex G. Rico held a Union Bank of the Philippines Visa credit card and disputed several charges, including Tiger Airways airline tickets, which remained unresolved. On November 20, 2005 his card was declined at Gourdo’s Restaurant, prompting a complaint for damages in RTC, which awarded large moral, exemplary, and attorney’s fees; the Court of Appeals affirmed but greatly reduced the awards, and Rico sought further review under Rule 45.
Issues:
- Whether Petitioner Rex G. Rico is entitled to moral damages, exemplary damages, and attorney’s fees against Respondent Union Bank of the Philippines for gross negligence in dishonoring his credit card on November 20, 2005?
Ruling:
The petition was denied. The Court reversed and set aside the June 28, 2013 Decision and January 21, 2014 Resolution of the Court of Appeals and dismissed the complaint for damages in RTC Civil Case No. 06-0029.
Ratio:
The Court held that the use of a credit card is only an offer to enter a loan agreement and the issuer is not obliged to approve every purchase, citing Pantaleon v. American Express International, Inc. At the time of the Gourdo’s incident the Tiger Airways charges were still disputed and the minimum payment remained unpaid, justifying the bank’s automatic revocation of privileges; therefore Union Bank did not breach any legal duty. Because no legal injury resulted from a breach, the case was one of damnum absque injuria, so the awards of moral and exemplary damages and attorney’s fees lacked basis under Article 2220 and Article 2208.
Doctrine:
- A credit card transaction is an offer to enter into a loan agreement, and the issuer need not approve every purchase, per Pantaleon v. American Express International, Inc.
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