Geraldez Vs Kenstar (1994)

Geraldez v. Kenstar Travel Corporation | G.R. No. 108253 | February 23, 1994 | Ponente: Regalado, J.
Nature of Case: Fraud or dolo

Petitioners(s): Lydia L. Geraldez
Respondent(s): Hon. Court of Appeals, Kenstar Travel Corporation
SUMMARY: xxx
FACTS
action for damages by reason of contractual breach was filed by petitioner against respondent Kenstar Travel Corp
petitioner availed from respondent VOLARE 3 which covers a 22-day tour of Europe for $2,990
- petitioner paid the total amount of P190,000.00 charged by respondent for her and her sister, Dolores
petitioner claimed that, during the tour, she was very uneasy and disappointed when it turned out that, contrary to what
was stated in the brochure
- there was no European tour manager for their group of tourists
- hotels in which she and the group were bullited were not first-class
- the UGC Leather Factory which was specifically added as a highlight of the tour was not visited
- the Filipino lady tour guide by respondent was a first timer (she was performing her duties and responsibilities for
the first time and admittedly had not even theretofore been to Europe)
petitioner
moved for the issuance of a writ of preliminary attachment against respondent on the ground that it
committed fraud in contracting an obligation (Sec. 1(d), Rule 57 of the Rules of Court)
during the pendancy of said civil case for damages, petitioner also filed other complaints before the Department of
Tourism and the Securities and Exchange Commission
- respondent was fined by the Commission of P10,000 and by the Department of P5,000
court
a quo rendered its decision ordering respondent to pay petitioner P500,000 as moral damages, P200,000 as
nominal damages, P300,000 as exemplary damages, P50,000 as and for attorneys 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(S) + RULING
1. WON respondent acted in bad faith or with gross negligence in discharging its obligations under the contract
YES
RE FILIPINO TOUR GUIDE: an inexperienced tour escort (Rowena Zapanta, Filipino) cannot effectively acquaint the
tourists with the interesting areas in the cities and places included in the program, or to promptly render necessary
assistance, especially where the latter are complete strangers thereto, like witnesses Luz Sui Haw and her husband
who went to Europe for their honeymoon
- selection of Zapanta as the groups tour guide was deliberate and conscious choice on the part of respondent
in order to afford her an on-the-job training and equip her with the proper opportunities so as to later qualify her as
an experienced tour guide
- to be true to its undertakings, respondent should have selected an experienced European tour guide, or it could
have allowed Zapanta to go merely as an understudy under the guidance, control and supervision of an
experienced and competent European or Filipino tour guide, who could give her the desired training
- a tour guide, especially by reason of her experience in previous tours, must be able to anticipate the possible
needs and problems of the tourists instead of waiting for them to bring it to her attention to this, Zapanta fell far
short of the performance expected by the tour group (her testimony in open court revealed her inexperience even
on the basic function of a tour guide)
- RE UGC LEATHER FACTORY: failure to visit the leather factory (which was one of the highlights of the VOLARE
3 program; quality leather goods could be bought there at lower prices) is likewise reflective of the neglect and
ineptness of Zapanta in attentively following the itinerary of the day
- the incompetence must necessarily be traced to the lack of due diligence on the part of respondent in the
selection of its employees
clearly,
respondent's choice of Zapanta as the tour guide is a manifest disregard of its specific assurances to the
tour group, resulting in agitation and anxiety on their part, and which deliberate omission is contrary to the elementary
rules of good faith and fair play
RE EUROPEAN TOUR MANAGER: respondent's advertisement in its tour contract declares and represents as follows:
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FILIPINO TOUR ESCORT!

He will accompany you throughout Europe. He speaks your language, shares your culture and feels your
excitement.
He won't be alone because you will also be accompanied by a . . .
EUROPEAN TOUR MANAGER!
You get the best of both worlds. Having done so may tours in the past with people like you, he knows your
sentiments, too. So knowledgeable about Europe, there is hardly a question he can't answer.
respondent conteds that the term "European Tour Manager" does not refer to an individual but to an organization,
allegedly the Kuoni Travel of Switzerland which supposedly prepared the itinerary for its "Volare Europe Tour
- a cursory reading of said advertisement will readily reveal the express representation that the contemplated
European tour manager is a natural person, and not a juridical one as private respondent asserts
- as to why the word "he" was used in the advertisement, respondent maintains that the pronoun "he" also
includes the word "it," as where it is used as a "nominative case form in general statements (as in
statutes) to include females, fictitious persons (as corporations)
- From its advertisement, it is beyond cavil that the import of the word "he" is a natural and not a juridical person.
There is no need for further interpretation when the wordings are clear.
- The meaning that will determine the legal effect of a contract is that which is arrived at by objective
standards; one is bound, not by what he subjectively intends, but by what he leads others reasonably to
think he intends.
respondent seeks sanctuary in the delimitation of its responsibility as printed on the face of its brochure on the Volare 3
program, to wit:
RESPONSIBILITIES: KENSTAR TRAVEL CORPORATION, YOUR TRAVEL AGENT, THEIR EMPLOYEES OR
SUB-AGENTS SHALL BE RESPONSIBLE ONLY FOR BOOKING AND MAKING ARRANGEMENTS AS YOUR
AGENTS x x x x x x x neither will they be responsible for any act, error or omission, or of any damages, injury,
loss, accident, delay or irregularity which may be occasioned by reason (of) or any defect in . . . lodging place or
any facilities . . . .
- there are certain contracts almost all the provisions of which have been drafted by only one party, usually a
corporation (Contracts of Adhesion)
- adhesion contract is not necessarily void but it must nevertheless be construed strictly against the
one who drafted the same
- assuming arguendo that the contractual limitation above is enforceable, private respondent still cannot be
exculpated for the reason that responsibility arising from fraudulent acts, as in the instant case, cannot be
stipulated against by reason of public policy
respondent
submits likewise that the tour was satisfactory, considering that only petitioner, out of eighteen participants
in the Volare 3 Tour Program, actually complained

- Sec 28, Rule 130 of the Rules of Court: rights of a party cannot be prejudices by an act, declaration, or
omission of another
- it is a fact that there are tourists who, although the tour was far from what the tour operator undertook under the
contract, choose to remain silent and forego recourse to a suit just to avoid the expenses, hassle and rancor of
litigation, and not because the tour was in accord with was promised
- also two other members of the tour group, Luz Sui Haw and Ercilla Ampil, confirmed petitioner's complaints when
they testified as witnesses for her as plaintiff in the court below
RE HOTELS: respondent likewise committed a grave misrepresentation when it assured in its Volare 3 tour package
that the hotels it had chosen would provide the tourists complete amenities and were conveniently located along the
way for the daily itineraries
- some of the hotels were not sufficiently equipped with even the basic facilities and were at a distance from the
cities covered by the projected tour
- respondent contends that it merely provided such "first class" hotels which are commensurate to the tourists
budget, or which were, under the given circumstances, the "best for their money
- if it could not provide the tour participants with first-class lodgings on the basis of the amount that they
paid, it could and should have instead increased the price to enable it to arrange for the promised firstclass accommodations (in the first place it was respondent who fixed the charges for the package tour
and determined the services that could be availed of corresponding to such price)
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on the foregoing considerations, respondent court erred in deleting the award for moral and exemplary damages
- moral damages may be awarded in breaches of contract where the obligor acted fraudulently or in bad faith
respondent can be faulted with fraud in inducement, which is employed by a party to a contract in securing the
consent of the other
fraud or dolo which is present or employed at the time of birth or perfection of a contract may either be dolor causante
or dolo incidente
1. dolo causante/causal fraud (Art. 1338) - deceptions or misrepresentations of a serious character employed by
one party and without which the other party would not have entered into the contract; determines or is the
essential cause of the consent
- effect: nullity of the contract and the indemnification of damages
2. dolo incidente/incidental fraud (Art. 1344) - not serious in character and without which the other party would still
have entered into the contract; refers only to some particular or accident of the obligations
- effect: obliges the person employing it to pay damages
In the belief that an experienced tour escort and a European tour manager would accompany them, with the
concomitant reassuring and comforting thought of having security and assistance readily at hand, petitioner was
induced to join the Volare 3 tourists
- she suffered serious anxiety and distress when the group was unable to visit the leather factory and when she did
not receive first-class accommodations in their lodgings which were misrepresented as first-class hotels
- these justify the award for moral damages (an award designed to compensate the claimant for that
injury which she had suffered, and not as a penalty on the wrongdoer) = P100,000
when moral damages are awarded, especially for fraudulent conduct, exemplary damages may also be decreed
- Exemplary damages are imposed by way of example or correction for the public good, in addition to moral,
temperate, liquidated or compensatory damages
- an award, therefore, of P50,000 is called for to deter travel agencies from resorting to advertisements and
enticements with the intention of realizing considerable profit at the expense of the public, without ensuring
compliance with their express commitments
extraordinary diligence is not required in travel or tour contracts, still, the travel agency acting as tour operator must
nevertheless be held to strict accounting for contracted services, considering the public interest in tourism, whether in
the local or in the international scene
- the promise it made in the tour brochure may not be regarded only as "commendatory trade talk contrary to
respondents claim
WHEREFORE, premises considered, the decision of respondent Court of Appeals is hereby SET ASIDE, and
another one rendered, ordering private respondent Kenstar Travel Corporation to pay petitioner Lydia L. Geraldez the
sums of P100,000.00 by way of moral damages, P50,000.00 as exemplary damages, and P20,000.00 as and for
attorney's fees, with costs against private respondent. The award for nominal damages is hereby deleted.
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Geraldez v. Kenstar Travel Corporation | G.R. No. 108253 | February 23, 1994 | Ponente: Regalado, J.

Nature of Case: Fraud or dolo

FILIPINO TOUR ESCORT!

in the Volare 3 Tour Program, actually complained

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