Spouses Guanio v Makati Shangrila, G.R. No. 190601, Feb. 7, 2011 CASE DIGEST

Facts:

    For their wedding, the petitioner spouses booked at the Shangri-la Hotel Makati. Prior to the event, the parties agreed on a final price on the food to be served during the wedding reception. A day before the event, the parties finalized and forged their contract. The petitioners claim that the respondent failed to honor their agreement as stated in the contract. Petitioners thus sent a letter-complaint to the Makati Shangri-la Hotel and Resort, Inc. (respondent) and received an apologetic reply from the hotel’s Executive Assistant Manager. They nevertheless filed a complaint for breach of contract and damages. In its answer, the respondent claimed that the petitioner failed to inform the former of the change in the expected number of guest which led to the poor service.

Issue:

    WoN respondent failed to honor their contract?

Ruling:

(Article 1170; 1171; 1338; 1344)

    No, the respondents did not fail to honor their contract.

    Breach of contract is defined as the failure without a legal reason to comply with the terms of a contract. It is also defined as the failure, without legal excuse, to perform any promise which forms the whole or part of the contract.

    The appellate court, and even the trial court, observed that petitioners were remiss in their obligation to inform the 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 parties’ contract provides, the respondent from liability for "any damage or inconvenience" occasioned thereby. As for petitioners’ claim that respondent departed from its verbal agreement with petitioners, the same fails, given that the written contract which the parties entered into the day before the event, being the law between them.

    In the present petition, under considerations of equity, the Court deems it just to award by way of nominal damages to petitioners, for the discomfiture that they were subjected to during to the event. 

(Alternative)

Issue:

    WoN the doctrine of proximate cause is applicable to the case?

Ruling:

    No, the doctrine of proximate cause is no applicable.

    The doctrine of proximate cause is applicable only in actions for quasi-delicts, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created.