GR 119850; (June, 1996) (Digest)
G.R. No. 119850 June 20, 1996
MANDARIN VILLA, INC., petitioner, vs. COURT OF APPEALS, and CLODUALDO DE JESUS, respondents.
FACTS
Private respondent Clodualdo de Jesus, a lawyer, hosted a dinner at petitioner Mandarin Villa’s restaurant. After the meal, he offered to pay the bill using his BANKARD credit card, which was embossed with a September 1990 expiration date. The waiter verified the card at the cashier’s terminal, which displayed “CARD EXPIRED,” and audibly announced this dishonor to De Jesus and his guests. De Jesus protested, showing the unexpired date on the card, but a second verification yielded the same result. A guest then remarked, “Clody, may problema ba? Baka kailangang maghugas na kami ng pinggan?” Humiliated, De Jesus retrieved his BPI Express Credit Card from his car, which was subsequently accepted and honored by the restaurant.
De Jesus filed a suit for damages. The trial court held Mandarin Villa and BANKARD jointly and severally liable. The Court of Appeals modified the decision, holding Mandarin Villa solely liable and reducing the awards for moral damages to P25,000 and exemplary damages to P10,000, while absolving BANKARD.
ISSUE
The core issues are: (1) whether Mandarin Villa was obligated to accept payment via the BANKARD credit card; (2) whether it was negligent in dishonoring the card; and (3) whether such negligence was the proximate cause of the damages suffered by De Jesus.
RULING
The Supreme Court dismissed the petition and affirmed the findings of the Court of Appeals. On the first issue, the Court ruled that petitioner was bound to accept the BANKARD card. Mandarin Villa had an agreement with BANKARD to honor validly issued cards, a stipulation pour autrui in favor of cardholders like De Jesus. His offer to pay constituted acceptance of this stipulation. Furthermore, by posting a logo stating “Bankard is accepted here,” petitioner was estopped from denying its obligation to honor the card.
On the second issue, the Court found petitioner negligent. The Point of Sale guidelines required the cashier to physically check the card’s embossed expiration date if the terminal flashed “CARD EXPIRED.” Petitioner’s employees failed to perform this simple manual check, which would have confirmed the card was still valid. This failure to exercise the ordinary care and caution of a prudent person constituted negligence.
Finally, this negligence was the proximate cause of the injury. The humiliation and embarrassment were directly caused by the wrongful dishonor, not by De Jesus’s lack of cash or the guest’s subsequent remark, which merely aggravated the situation. The current commercial practice of accepting credit cards refuted the claim that De Jesus was negligent for not carrying sufficient cash. Thus, petitioner was correctly held liable for damages.