Posted: April 12, 2017 in case digests, civil law, torts
G.R. No. 190601      February 7, 2011


Facts: Petitioner spouses, Luigi M. Guanio and Anna Hernandez-Guanio, booked respondent Makati Shangre-La Hotel for their wedding reception.

A week before their wedding reception, the hotel scheduled a food tasting. Eventually, the parties agreed to a package where the final price was P1,150.00 per person.
According to the complainants, when the actual reception took place, ” the respondent’s representatives did not show up despite their assurance that they would; their guests complained of the delay in the service of the dinner; certain items listed in the published menu were unavailable; the hotel’s waiters were rude and unapologetic when confronted about the delay; and despite Alvarez’s promise that there would be no charge for the extension of the reception beyond 12:00 midnight, they were billed and paid P8,000 per hour for the three-hour extension of the event up to 4:00 A.M. the next day. They further claim that they brought wine and liquor in accordance with their open bar arrangement, but these were not served to the guests who were forced to pay for their drinks. They sent a letter-complaint to hotel and received an apologetic reply from the hotel’s Executive Assistant Manager in charge of Food and Beverage.
They nevertheless filed a complaint for breach of contract and damages before the Regional Trial Court (RTC) of Makati City.
Answering, the hotel said that complainants requested a combination of king prawns and salmon, hence, the price was increased to P1,200.00 per person, but discounted at P1,150.00; that contrary to their claim, the hotel representatives were present during the event, albeit they were not permanently stationed thereat as there were three other hotel functions; that while there was a delay in the service of the meals, the same was occasioned by the sudden increase of guests to 470 from the guaranteed expected minimum number of guests of 350 to a maximum of 380, as stated in the Banquet Event Order (BEO);2 and the Banquet Service Director in fact relayed the delay in the service of the meals to complainant’s father.
The RTC, relying heavily on the letter of the hotel’s Executive Assistant ruled in favour of the complainants and awarded damages in their favour.
The Court of Appeals reversed the decision, noting that the proximate cause of the complainant’s injury was the unexpected increase in the number of their guests.



            WON Makati Shangri-La Hotel may be held liable for damages.




The Supreme Court reversed the Court of Appeals decision, noting that in this case, the obligation was based on a contract, hence, the concept of proximate cause has no application.


In absolving the hotel from damages, the Supreme Court noted that: “The appellate court, and even the trial court, observed that petitioners were remiss in their obligation to inform respondent of the change in the expected number of guests. The observation is reflected in the records of the case. Petitioners’ failure to discharge such obligation thus excused, as the above-quoted paragraph 4.5 of the parties’ contract provide, respondent from liability for “any damage or inconvenience” occasioned thereby”


Nevertheless, on grounds of equity, the High Court awarded P50,000.00 in favour of the complainants and justified it by saying:


“The exculpatory clause notwithstanding, the Court notes that respondent could have managed the “situation” better, it being held in high esteem in the hotel and service industry. Given respondent’s vast experience, it is safe to presume that this is not its first encounter with booked events exceeding the guaranteed cover. It is not audacious to expect that certain measures have been placed in case this predicament crops up. That regardless of these measures, respondent still received complaints as in the present case, does not amuse.


Respondent admitted that three hotel functions coincided with petitioners’ reception. To the Court, the delay in service might have been avoided or minimized if respondent exercised prescience in scheduling events. No less than quality service should be delivered especially in events which possibility of repetition is close to nil. Petitioners are not expected to get married twice in their lifetimes.”


What applies in the present case is Article 1170 of the Civil Code which reads:


Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages.


RCPI v. Verchez, et al. enlightens: In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered.


The remedy serves to preserve the interests of the promissee that may include his “expectation interest ,” which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his “reliance interest ,”which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his”restitution interest,” which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action.


The effect of every infraction is to create a new duty, that is, to make RECOMPENSE to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence or of the attendance of fortuitous event to excuse him from his ensuing liability.


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