SPOUSES LUIGI M. GUANIO and ANNA HERNANDEZ-GUANIO, petitioners, vs.

MAKATI SHANGRI-LA
HOTEL and RESORT, INC., also doing business under the name of SHANGRI-LA HOTEL MANILA,
respondent.

A couple sues a hotel for breach of contract and damages after experiencing numerous issues during
their wedding reception, leading to the Supreme Court partially reversing the decision and ordering the
hotel to pay nominal damages. Some of these issues are the delay in the service of the dinner; certain
items listed in the menu were unavailable; the hotel's waiters were rude and unapologetic when
confronted about the delay; additional fee of P8,000 per hour for the extended three hours that they
acquired even though they are promised there would be no charge for the extension of the reception
beyond 12:00 midnight; they also had a problem with their drinks where they claimed that they brought
wine and liquor in accordance with their open bar arrangement, but were not served to the guests and
were forced to pay for their drinks.

In accordance with all these issue, the couple sent a compliant to the Makati Shangri-la Hotel and
Resort, Inc. and received an apology from the assistant manager in charge of food and beverages. And
despite that, they proceed to file a complaint for breach of contract and damages to the Regional Trial
Court of Makati.

In culpa contractual, a breach of a contract allows the injured party to recover lost or suffered benefits.
This remedy preserves the promissee's interests, including expectation, reliance, and restitution
interests. Agreements are essential for their creators and society, and every infraction creates a new
duty to compensate the injured party. The injured party must show evidence of due diligence or
attendance of a fortuitous event to excuse their ensuing liability. In essence, agreements are essential
for achieving success for both parties involved.

Facts:

Spouses Luigi M. Guanio and Anna Hernandez-Guanio booked their wedding reception at the Makati
Shangri-La Hotel on July 28, 2001.

Initial food tasting was scheduled for seven people, but the hotel prepared for only six.

Petitioners chose a set menu costing P1,000 per person, later opting for a P950 per person menu
replacing king prawns with salmon.

Three days before the event, a final food tasting revealed smaller salmon portions, leading to a final
price agreement of P1,150 per person.

During the reception, the hotel's representatives did not show up as promised.
Guests complained about delayed dinner service, unavailable menu items, and rude waiters.

Petitioners were billed P8,000 per hour for a three-hour extension despite a verbal agreement of no
charge for extension beyond 12am.

Wine and liquor brought by the petitioners were not served, forcing guests to pay for their drinks.

Petitioners filed a complaint for breach of contract and damages before the RTC of Makati City.

The hotel defended by attributing the price increase to a combination of king prawns and salmon and
the delay in service to an unexpected increase in guests.

RTC ruled in favor of the petitioners, awarding them damages.

The Court of Appeals reversed the decision, attributing the proximate cause of the injury to the
petitioners' responsibility for the increased number of guests.

Issues:

Ruling:

Yes, the hotel breached its contract with the petitioners.

The petitioners are entitled to nominal damages a

Ratio:

The doctrine of proximate cause does not apply to breach of contract cases; Article 1170 of the Civil
Code applies, holding parties liable for damages due to fraud, negligence, or delay.

Proof of the contract's existence and its non-compliance justifies a right to relief.

Petitioners' failure to inform the hotel of the increased number of guests excused the hotel from liability
for related damages or inconvenience.

The hotel, despite i

DELAY

GUIANO VS MAKATI SHANG (MORA SOLVENDI--DELAY OF THE DEBTOR-MAKATI SHANG) SPOUSES LUIGI
M. GUANIO AND ANNA HERNANDEZ-GUANIO VS. MAKATI SHANGRI-LA HOTEL & RESORT, INC., also
doing business under the name of SHANGRI-LA HOTEL MANILA G.R. No. 190601, 7 February 2011,
SECOND DIVISION, (Carpio-Morales, J.)

FACTS: Spouses Luigi and Anna Guanio (petitioner) entered into contract with Makati Shangri-La Hotel
and Resort, Inc. (respondent) for the latter to render its catering services to the former’s wedding
reception. Reportedly during the reception, respondent’s representatives, Catering Director Bea
Marquez and Sales Manager Tessa Alvarez did not show up; there was a delay in the service of the
dinner; certain items in the published menu were unavailable; respondent’s waiters were rude and
unapologetic when confronted by the guest about the delay; wine and liquor brought by the petitioners
in accordance with their open bar agreement were not served to the guests and thus the latter were
forced to pay for their drinks; and despite Sales Manager Alvarez’s promise that would be no charge for
the extension of the reception beyond 12:00 midnight, petitioners were billed PHP 8,000.00 per hour for
the three-hour extension of the event which they paid for. In view of the foregoing, petitioner’s sent a
letter-complaint to respondent and received an apologetic reply from respondent’s Hotel Executive
Assistant Krister Svenson. Nevertheless, the former filed a complaint for breach of contract and
damages before the Regional Trial Court of Makati City. In its Answer, respondent claimed that Marquez
and Alvarez were present during the event, albeit they were not permanently stationed thereat as they
were also attending to three other functions; that the said delay in the service dinner was occasioned by
the sudden increase of guests to 470 from the guaranteed expected minimum number of 350– 380. In
bears mentioning in this regard, that said increase of guests was not relayed by petitioners to
respondents beforehand which is remiss on the part of the former as they are required to do so at least
48 hours before the scheduled date and time of the function which is stipulated in the Banquet and
Meeting Services Contract between both parties. Notwithstanding respondent’s contentions, the Makati
RTC rendered judgement in favor of the petitioners and ordered respondent to pay the petitioners
actual, moral and exemplary damages; and attorney’s fees. However, on appeal, the Court of Appeals
reversed the trial court’s decision, it holding that the proximate cause of petitioners’ injury was the
increase in their guests which respondent did not expect. ISSUE: Whether or not the doctrine of
proximate cause is applicable to actions involving breach of contract.

HELD: The Supreme Court held that proximate cause is applicable only in actions for quasi-delicts, not in
action involving breach of contract. What applies in the instant case is rather Art. 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 of damages. The mere
proof of the existence of the contract and the failure of its compliance justify a corresponding right of
relief by the injured contracting party. However, it must be stressed that petitioner’s failure to inform
respondent of the change in the number of the guests is a clear failure on the part of the former to
discharge such obligation which is stipulated in the Banquet and Meeting Services Contract between
them. The failure of petitioner to inform respondent about the change in the number of guests
notwithstanding, the Court notes that respondent could have managed the situation better in view of its
vast experience in the business which warrants the safe presumption that this is not the first time they
have encountered booked events exceeding the guaranteed cover. It is therefore reasonable to expect
that certain measures are placed in case predicaments such as the instant case crops up. That regardless
of these measures, respondent still received complaints from the petitioner. As such, the Court deems it
just to award petitioners only nominal damages. The Decision of the Court of Appeals is PARTIALLY
REVERSED. Spouses Guanio V Makati Shangri-La Facts Spouses Guanio booked their wedding reception
at Shangri-La Hotel Makati. A day before the reception the parties finalized their contract. Petitioners
claim that during the reception the guests complained of the delay in the service of their diner and some
items were unavailable, the waiters were said to be rude when asked about the delay. Because of what
happened, petitioners sent a letter complaint to Makati Shangri-la Hotel and received an apologetic
reply from Krister Svensson, the hotels Executive Assistant Manager in charge of Food and Beverage.
Despite the apology, they filed a complaint for breach of contract and damages before the Regional Trial
Court (RTC) of Makati City.

RTC ruled in favor of the petitioner and ordered the respondent to pay for damages. RTC relying on the
letter of Svensson observed that from the tenor of the letter that respondent admits that the services
the plaintiff received were unacceptable and definitely not up to their standards. The respondent denied
that Svensson’s letter is an admission of liability and that it was meant to maintain goodwill to its
customer. On Appeal, CA however reversed the RTC’s decision in holding that the proximate cause of
petitioners’ injury was the unexpected increase in their guest. Issue Whether or not Makati Shangri-La is
guilty of breach of contract/Whether or not proximate cause is applicable to actions involving breach of
contract. Ruling According to the SC, proximate cause is not applicable in the case since petitioner’s
complaint arose from a contract. “The doctrine of proximate cause is applicable only in actions for quasi-
delicts, not in actions involving breach of contract.” What applies in the present case is Article 1170 of
the Civil Code 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.
The court citing RCPI v. Verchez, et al 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. Xxx A
breach upon the contract confers upon the injured party a valid cause for recovering that which may
have been lost or suffered. Xxx Breach of contract is defined as the failure without legal reason to
comply with the terms of a contract. It is also defined as the [f]ailure, without legal excuse, to perform
any promise which forms the whole or part of the contract. Petitioners’ failure to discharge their
obligation to inform the respondents of the increase in their guest excused the latter liability for any
damage or inconvenience occasioned thereby as provided in their contract. 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.
Regarding the letter of letter of Svensson, as explained by respondent Catering director the hotel’s
procedure on receiving and processing complaints is mainly to show empathy and to ensure the client
that there will be investigation and it is not in any way that they are admitting any fault . 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. 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. The Court deems it just to award the
amount of P50,000.00 by way of nominal damages to petitioners, for the discomfiture that they were
subjected to during to the event. 2. SSS VS MOONWALK (NO DELAY OR NO MORA ACCIPIENDI--DELAY
OF THE CREDITOR MOONWALK) Social Security System v. Moonwalk Development & Housing
Corporation G.R. No. 73345 (April 7,1993) Facts: 1.Plaintiff (SSS) approved the application of the
defendant (Moonwalk) for an interim loan. 2.The loan was released to the Moonwalk. 3.Moonwalk
made a payment to SSS for the loan principal released to it. 4.The last payment made by Moonwalk was
based on theStatement of Accountprepared by the SSS. 5.After the settlement of the account, SSS
issued to Moonwalk theRelease of Mortgage of Moonwalk’s mortgaged properties 6.In the letters to
Moonwalk, SSS alleged that it committed an honest mistake in releasing Moonwalk (in the mortgage).
7.Moonwalk replied in a letter that it had completely paid its obligations to SSS. Issue/s: 1.Whether or
not the 12% penalty demandable even after the extinguishment of the principal obligation 2.Whether or
not Moonwalk was in default (mora) Ruling: 1.No. Obligation was already extinguished by the payment
by Moonwalk of its indebtedness to SSS and by the latter’s act.

Facts:

wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio (petitioners)
booked at the Shangri-la Hotel Makati... scheduled an initial food tasting... for seven persons... two of
them, their respective parents, and the wedding coordinator.

Petitioners initially chose a set menu which included black cod, king prawns and angel hair pasta with
wild mushroom sauce for the main course which cost P1,000.00 per person... option in which salmon,
instead of king prawns, would be in the menu at P950.00 per person... salmon served was half the size
of what they were served during the initial food tasting... hotel quoted a much higher price (P1,200.00)
for the size that was... initially served to them... eventually agreed on a final price P1,150 per person

Catering Director Bea Marquez and Sales Manager Tessa Alvarez, did not show up despite their
assurance that they would

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

Issues:
filed a complaint for... breach of contract and damages... claimed that petitioners requested a
combination of king prawns and salmon... the price was increased to P1,200.00 per person, but
discounted at P1,150.00

Marquez and Alvarez were present... 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)

Ruling:

The amount of P350,000.00 by way of actual damages;

The amount of P250,000.00 for and as moral damages;

The amount of P100,000.00 as exemplary damages;

The amount of P100,000.00 for and as attorney's fees.

trial court relied heavily on the letter of Svensson... services you received were unacceptable and
definitely not up to our standards.

we have fallen short of your expectations... please to accept our profound apologies... set the chain of
events which resulted in the alleged inconveniences... only the Sps. Guanio may bear... whatever
consequential damages that they may have allegedly suffered... award the amount of P50,000.00 by way
of nominal damages to petitioners

Principles:

admits that the services... received were unacceptable and definitely not up to their standards...
petitioners' complaint arose from a contract... applicable only in actions for quasi-delicts... not in actions
involving breach of contract... obligation is created by law itself... 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

Article 1170 of the Civil Code

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.

culpa contractual... proof of the existence of the contract... failure of its compliance... remedy... serves
to preserve the interests of the promissee that may include his "expectation interest... benefit of his
bargain... reliance interest... reimbursed for loss caused by reliance... restitution interest... interest in
having restored

RECOMPENSE... unless he can show extenuating circumstances, like proof of his exercise of due
diligence... attendance of fortuitous... event

Banquet and Meeting Services Contrac... billed in accordance with the prescribed rate for the minimum
guaranteed number of persons... regardless of under attendance or non-appearance
Should the attendance exceed the minimum guaranteed... billed at the actual rate per cover in excess...
inform the HOTEL at least forty eight (48) hours before... exceed the minimum guaranteed numberby
ten percent (10%), the HOTEL shall not in any way be held liable for any damage or inconvenience

Breach of contract... failure without legal reason to comply... 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

Facts:

 For their wedding reception on July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-
Guanio (petitioners) booked at the Shangri-la Hotel Makati.
 Prior to the event, Makati Shangri-La Hotel & Resort, Inc. Petitioners claim that during the
reception, respondent’s representatives, Catering Director, 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 Catering Director ‘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.
Respondents averred that it was the increase in number of the unexpected guests that led to
the shortage claimed by the petitioners.

Issue/s:
  Whether the CA correctly held that the proximate cause of petitioners’ injury was an
unexpected increase in their guests.

Ruling:

 The Court finds that since petitioners ‘complaint arose from a contract, the doctrine of
proximate cause finds no application to it, the latter applicable only to actions for quasi delicts,
not in actions involving breach of contract.
 Breach of contract is defined as the failure without 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 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 respondent from liability for ―any
damage or inconvenience occasioned thereby.