## Facts

- American Express issued a credit card to Robert A. Martin in 1972.
- In 1975, Martin voluntarily gave the card to E.L. McBride, a business associate, for use in a joint venture.
- Martin claimed he orally limited McBride’s permission to charges totaling $500 and separately claimed he asked American Express to prevent his account from exceeding $1,000.
- Martin later received a statement reflecting approximately $5,300 in charges; he denied signing the charge slips and refused to pay amounts above his claimed limit.
- American Express sued Martin to recover the outstanding balance.
- The trial court granted summary judgment for American Express based primarily on Martin’s deposition admissions that he gave McBride the card and permitted its use.

## Issues

1. Whether charges made by a person who received the card from the cardholder with permission to use it constitute “unauthorized use” under the Truth in Lending Act, such that the cardholder’s liability is limited by 15 U.S.C. § 1643.

## Decision

- The Alabama Court of Civil Appeals affirmed summary judgment for American Express.
- McBride’s charges were not “unauthorized use” under TILA because Martin voluntarily delivered the card and authorized its use.
- Martin’s private spending limit to McBride, and his claimed request that the issuer cap charges, did not create a triable issue or limit liability under TILA.
- With no “unauthorized use,” American Express was entitled to judgment as a matter of law for the account balance.

## Legal Principles

- Under TILA, “unauthorized use” requires use without the cardholder’s actual, implied, or apparent authority; entrusting the card and permitting its use supplies authority for TILA purposes.
- A cardholder cannot invoke TILA’s liability cap for “unauthorized use” when the cardholder voluntarily gave the card to the user, even if the user exceeded a privately imposed limit.
- For summary judgment, a dispute over private restrictions between the cardholder and the permitted user is not material where the undisputed facts show voluntary delivery of the card and permission to use it.

## Conclusion

Because Martin voluntarily gave McBride the credit card and allowed him to use it, McBride’s transactions did not qualify as “unauthorized use” under TILA, and Martin remained liable for the resulting charges; summary judgment for American Express was properly affirmed.


Martin v. American Express, Inc., 361 So. 2d 597 (Ala. Civ. App. 1978)