## FACTS:

The petitioner, Mandarin Villa Seafoods Village, and the private respondent, Clodualdo de Jesus, were involved in a dispute. In October 1989, de Jesus had a dinner at Mandarin Villa and attempted to pay the bill using his credit card issued by BANKARD. However, the waiter informed him that his credit card had expired, despite the expiration date not being until September 1990. De Jesus went to the restaurant's cashier, who also confirmed that the card had expired. One of de Jesus' guests made a comment about needing to wash dishes, prompting de Jesus to leave the restaurant and retrieve his BPI Express Credit Card to pay the bill. De Jesus filed a suit for damages against Mandarin Villa and BANKARD, which resulted in a ruling in favor of de Jesus. The court awarded moral and exemplary damages, attorney's fees, and litigation expenses. Both Mandarin Villa and BANKARD appealed the decision to the Court of Appeals, which modified the ruling. The Court of Appeals held Mandarin Villa solely accountable for damages and absolved BANKARD of any liability. Mandarin Villa then filed a petition with the Supreme Court, raising issues relating to its obligation to accept credit card payment, alleged negligence, and the proximate cause of de Jesus' damage.

## ISSUES:

1. Whether or not the petitioner is bound to accept payment by means of a credit card.

2. Whether or not the petitioner was negligent under the circumstances.

3. If negligent, whether such negligence is the proximate cause of the private respondent's damage.

## RULING:

1. The Court found that the petitioner was bound to accept the credit card payment because of the pre-existing agreement with BANKARD that mandated the restaurant to honor validly issued credit cards that have not expired. Further, the petitioner's display of a sign indicating the acceptance of Bankard reinforced this obligation.

2. The petitioner was found to be negligent. The negligence was established as the petitioner did not follow its own guidelines which required a manual check of the expiration date on the credit card when the verification machine erroneously showed it as expired. This failure breached the standard of care expected in such circumstances.

3. The negligence of the petitioner was found to be the proximate cause of the private respondent's damage. The Court dismissed the petitioner's arguments that the private respondent's lack of cash or the remarks made by a guest were the proximate causes of the damages incurred.

## PRINCIPLES:

• A stipulation pour autri that confers a benefit on a third party allows such party to demand its fulfilment if they communicated their acceptance to the obligor before its revocation.

• The principle of estoppel prevents a party from denying or disproving a fact that has already been established as a representation to another party who relied on it.

• Negligence is determined by the lack of reasonable care and caution that an ordinary prudent person would have used in the same situation.

• The proximate cause of damage is the cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred.