Mandarin Villa vs.

CA
G.R. No. 119850 | 257 SCRA 538 | June 20, 1996 | Francisco, J.
Petition: Petition for review on certiorari of decision of CA
Petitioners: Mandarin Villa, Inc.
Respondents: Court of Appeals and Clodualdo de Jesus
Art 1311

DOCTRINE

A card holders offer to pay by means of his credit card constitutes not
only an acceptance of the provisions of a stipulation pour autri but also
an explicit communication of his acceptance to the obligor.

FACTS

Private respondent, Clodualdo de Jesus, hosted dinner for his friends at

the petitioners restaurant, the Mandarin Villa Seafoods Village,
Greenhills, Mandaluyong.
After dinner, waiter handed him the bill in the amount of P2,658.50 where
he offered to pay through his credit card issued by Phil Commercial
Credit Card, Inc (BANKARD).
Waiter accepted but ten minutes later, he returned and informed private
respondent that his credit card had expired.
o However, the card was yet to expire on Sept 1990. As embossed on
its face (it was still October 19, 1989)
Private respondents and his two guests approached the cashier and the
same information was produced card expired.
Professor Lirag, another guest, uttered Clody, may problem aba? Baka
kailangang maghugas na kami ng pinggan?
Private respondent used his BPI Express Credit Card to pay. This was
accepted and honored by the cashier after verification.
This triggered the filing of a suit for damages by private respondent.
Court Proceedings / Procedural History
o Trial court: directed petitioner and BANKARD to pay jointly and
severally the private respondents
o CA: modified decision; Mandarin solely liable and Bankard
absolved form responsibility

ISSUES
1. W/N petitioner is negligent under the circumstances Yes

RULING & RATIO

1. Yes, petitioner is at fault.
a. Petitioner: it cannot be faulted for its cashiers refusal to accept
private respondents BANKARD credit card, the same not being
a legal tender. It also argues that private respondents offer to
pay by means of a credit card partook of a nature of a proposal
to novate an existing obligation for which petitioner, as creditor,

must first give its consent otherwise there will be no binding

contract between them.
i. Court: Petitioner cannot disclaim its obligation to accept
private respondents BANKARD credit card without
violating the equitable principle of estoppel.
ii. Miranda Villa Seafood Village is affiliated with
BANKARD. In fact, they had an Agreement wherein
merchant shall honor validly PCCCI Credit cards
presented provided card is not expired, etc.
iii. While private respondent may not be a party to the said
agreement, the stipulation conferred in favor of private
respondent, a holder of credit card validly issued by
BANKARD.
1. This stipulation is a stipulation pour autri.
2. Under Art 1311, private respondent may
demand
its
fulfillment
provided
he
communicated his acceptance to the petitioner
before its revocation.
a. In this case, private respondents offer
to pay by means of his BANKARD credit
card constitutes not only an acceptance
of the said stipulation but also an explicit
communication of his acceptance to the
obligor.
iv. In addition, petitioner posted a logo inside Mandarin that
Bankard is accepted here
1. This representation is conclusive upon petitioner
which it cannot deny or disprove as against the
private respondent.
2. Petitioner is negligent.
a. Petitioner: since the verification machine flashed an information
that the credit card is expired, petitioner could not be expected to
honor the same much less be adjudged negligent for dishonoring
it.
b. Court: The Point of Sale Guidelines outlined the steps that
petitioner must follow under the circumstances. (check notes)
i. Whenever the words card EXPIRED flashes on the
screen of the verification machine, petitioner should
check the credit cards expiry date embossed on the
card itself.
1. If unexpired, petitioner should honor the card
provided it is not invalid, cancelled or otherwise
suspended.
2. If expired, petitioner should not honor the card.
ii. In this case, private respondents BANKARD has clearly
not yet expired.
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1. Petitioner did not use the reasonable care and

caution which an ordinary prudent person would
have used in the same situation and as such
petitioner is guilty of negligence.

DISPOSITION

Petition dismissed.

NOTES
"CARD EXPIRED
a. Check expiry date on card.
b. If unexpired, refer to CB.
b.1. If valid, honor up to maximum of SPL only.
b.2. If in CB as Lost, do procedures 2a to 2e.,
b.3. If in CB as Suspended/Cancelled, do not honor card.
c. If expired, do not honor card."

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