Geraldez Vs CA

BANGASAN, Roxanne Angela Claire L.
LYDIA L. GERALDEZ v. HON. COURT OF APPEALS and KENSTAR TRAVEL

CORPORATION
[G.R. No. 108253. February 23, 1994.]
FACTS
 After the parties failed to arrive at an amicable settlement, an action for damages by
reason of contractual breach was filed by petitioner Lydia L. Geraldez against private
respondent Kenstar Travel Corporation.
 Sometime in October 1989, the petitioner came to know about private respondent from
numerous advertisements in newspapers of general circulation regarding tours in Europe
and chose the classification denominated as "VOLARE 3" covering a 22-day tour of
Europe for $2,990.00. The petitioner herein paid the total equivalent amount of
P190,000.00 for her and her sister to the private respondent.
 Petitioner claimed that, during the tour, there was no European tour manager for their
group of tourists, the hotels in which she and the group were billeted were not first-class,
the UGC Leather Factory which was specifically added as a highlight of the tour was not
visited, and the Filipino lady tour guide by private respondent was a first timer as if she
was performing her duties and responsibilities for the first time.
 On July 9, 1991, the court rendered its decision ordering private respondent to pay the
petitioner P500.000.00 for moral damages, P200,000.00 for nominal damages,
P300,000.00 for exemplary damages, P50,000.00 for attorney’s fees, and the costs of the
suit. On appeal, respondent court deleted the award for moral and exemplary damages,
and reduced the awards for nominal damages and attorney’s fees to P30,000.00 and
P10,000.00, respectively.
ISSUE
(1) Whether or not private respondent acted in bad faith or with gross negligence in discharging
its obligations under the contract. (YES)
(2) Whether or not the private respondent is liable for moral damages? (YES)
(3) Whether or not the private respondent is liable for exemplary damages? (YES)
RULING
1. The private respondent acted in bad faith in discharging its obligations under the contract
because the private respondent failed to present even one member of the tour group to
substantiate its claim. Under the law, it is a basic rule of evidence that a party must prove his
own affirmative allegations. Therefore, the private respondent acted in bad faith in discharging
its obligation under the contract because he did not comply with the agreement to provide tour
group not only with a European tour manger but also local European tour guides.
2. The private respondent cannot escape responsibility by seeking refuge under the listing of
first-class hotels in publications like the "Official Hotel and Resort Guide" and "Worldwide
Hotel Guide. Under the law, moral damages may be awarded in breaches of contract where the
obligor acted fraudulently or in bad faith. Therefore, the court held that an award of P100,000.00
is sufficient and reasonable.
3. When moral damages are awarded, especially for fraudulent conduct, exemplary damages may
also be decreed. Under the law, exemplary damages are imposed by way of example or
correction for the public good, in addition to moral, temperate, liquidated or compensatory
damages. Therefore, the court considered and held that the amount of P50,000.00 is sufficient.
WHEREFORE, the CA ordered the private respondent Kenstar Travel Corporation to pay
petitioner Lydia L. Geraldez the sums of P100,000.00 by way of moral damages and
P50,000.00 for exemplary damages.
CASE PROBLEM:
In October 1989, the petitioner came to know about the advertisement of the private respondent
in a newspaper regarding 22-day tours in Europe for only $2,990.00 providing the inclusions of
the trip and one of those is having a tour guide in their entire stay to visit the famous places in
the said country. After seeing the advertisement, the petitioner therein paid the private
respondent right away for her and her sister a total amount of P190,000.00.
During their trip to Europe, the herein petitioner together with her sister is all-set to roam around
from the place where they stayed and waiting for the local European tour guide and tour manager
but after hours of waiting, no local tour guides or tour manager have shown up.
The petitioner filed a case against the private respondent alleging that in their agreement in the
contract, the private respondent included and assured her that there is an available tour guides
that will help them for them to enjoy their entire trip once she avail the promo and it is included
for what they have paid for but no tour guide has showed up from their first day until the last
day.
QUESTIONS:
1. Is the private respondent guilty of fraud? Explain. (3 pts)
2. Distinguish fraud from negligence. (2 pts)
3. What do you think is the kind of obligation entered into by the parties? (2 pts)
4. Define and explain the concept of contractual negligence? (2 pts)
5. What is breach of contract? (1 pt)
ANSWERS:
1. YES, the private respondent is guilty of fraud because he has the obligation but failed to
present even one member of the tour group which is stated in their contract or agreement. Under
the law, fraud is a deliberate intention to cause damage and injury towards another. Since the
private respondent has intention to cause damage to the petitioner, he is guilty of fraud.
2. In fraud, there is a deliberate intention to cause damage or injury and must be clearly proved
with mere preponderance of evidence while in negligence, there is no such intention and is
presumed from breach of a contractual obligation.
3. The kind of obligation entered by the parties is PERSONAL OBLIGATION (Positive)
because the private respondent is obliged to give or do something for the petitioner which is to
provide tour guides for the private respondent that is stated in the contract.
4. CONTRACTUAL NEGLIGENCE refers to culpa contractual. This is where it makes the
debtor liable for damages in view of his negligence in the fulfillment of a pre-existing obligation
resulting in its breach or non-fulfillment.
5. BREACH OF CONTRACT is the failure without justifiable excuse or reason to comply with
the terms of contract.

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BANGASAN, Roxanne Angela Claire L.

LYDIA L. GERALDEZ v. HON. COURT OF APPEALS and KENSTAR TRAVEL

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