Saturday, March 03, 2012

Geraldez vs. CA, [G.R. No. 108253. February 23, 1994]

Facts: 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, Petitioner came to know about private respondent from numerous advertisements in newspapers of general circulation regarding tours in Europe. She then contacted private respondent by phone and the latter sent its representative, who gave her the brochure for the tour and later discussed its highlights. The European tours offered were classified into four, and petitioner chose the classification denominated as "VOLARE 3" covering a 22-day tour of Europe for S2,990.00. She paid the total equivalent amount of P190,000.00 charged by private 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, the hotels in which she and the group stayed 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, that is, she was performing her duties and responsibilities as such for the first time. 

Issue: Whether or not the respondent company committed fraud in order for the petitioner to enter into the contract. 

Held: This fraud or dolo, which is present or employed at the time of birth or perfection of a contract, may either be dolo causante or dolo incidente. The first, or causal fraud referred to in Article 1338, are those deceptions or misrepresentations of a serious character employed by one party and without which the other party would not have entered into the contract. Dolo incidente, or incidental fraud which is referred to in Article 1344, are those, which are not serious in character and without which the other party would still have entered into the contract. Dolo causante determines or is the essential cause of the consent, while dolo incidente refers only to some particular or accident of the obligations. The effects of dolo causante are the nullity of the contract and the indemnification of damages, and dolo incidente also obliges the person employing it to pay damages. 

In either case, whether private respondent has committed dolo causante or dolo incidente by making misrepresentations in its contracts with petitioner and other members of the tour group, which deceptions became patent in the light of after-events when, contrary to its representations, it employed an inexperienced tour guide, housed the tourist group in substandard hotels, and reneged on its promise of a European tour manager and the visit to the leather factory, it is indubitably liable for damages to petitioner.

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