Guanio v. Makati Shangri-La Hotel

G.R. No. 190601 (February 7, 2011)

Luigi and Anna Guanio received P50,000 from the Supreme Court for Makati Shangri-La's service breach.

Facts:

On July 28, 2001, spouses Luigi M. Guanio and Anna Hernandez-Guanio (petitioners) booked their wedding reception at the Makati Shangri-La Hotel (respondent). Prior to the event, an initial food tasting was scheduled, during which the petitioners requested a meal for seven people, including themselves, their parents, and their wedding coordinator. However, the hotel only prepared for six. The couple initially selected a set menu priced at P1,000.00 per person, which included black cod and king prawns, but later opted for salmon at P950.00 per person during the tasting.

Three days before the wedding, a final food tasting occurred, where the petitioners noted that the salmon served was half the size of what they had previously tasted. The hotel quoted a higher price of P1,200.00 for the larger portion, but the parties eventually agreed on a final price of P1,150.00 per person. On July 27, 2001, the day before the event, the contract was finalized.

During the reception, the petitioners claimed that the hotel representatives, including the Catering Director and Sales Manager, did not attend as promised. Guests complained about delays in meal service, unavailability of certain menu items, and rude service from the waitstaff. Despite assurances that there would be no charge for extending the reception past midnight, the petitioners were billed P8,000 for a three-hour extension. Additionally, wine and liquor brought by the petitioners for an open bar arrangement were not served, forcing guests to pay for their drinks.

Following the event, the petitioners sent a letter of complaint to the hotel, which received a reply from the Executive Assistant Manager expressing distress over the service issues. The petitioners subsequently filed a complaint for breach of contract and damages in the Regional Trial Court (RTC) of Makati City.

In its answer, the respondent contended that the petitioners had requested a combination of king prawns and salmon, justifying the price increase. The hotel also claimed that the representatives were present during the event, albeit not stationed there due to other functions. The respondent attributed the service delays to an unexpected increase in guests, from a guaranteed minimum of 350 to 470 attendees.

Legal Issues:

  1. Whether the respondent breached the contract with the petitioners regarding the service and food provided during the wedding reception.
  2. Whether the petitioners' failure to inform the hotel of the increased number of guests absolved the respondent of liability for the alleged service failures.
  3. The implications of the letter from the hotel’s Executive Assistant Manager as an admission of liability.

Arguments:

Petitioners' Arguments:

  • The hotel failed to provide the agreed-upon services, including the presence of hotel representatives and timely meal service.
  • The service received was substandard, as evidenced by the complaints from guests and the letter from the hotel manager acknowledging the issues.
  • The petitioners were wrongfully charged for the extension of the reception despite prior assurances that it would be free.

Respondent's Arguments:

  • The increase in the number of guests was the proximate cause of the service issues, and the petitioners did not inform the hotel of this change as required by the contract.
  • The hotel representatives were present during the event, and any delays were due to the petitioners' wedding coordinator's insistence on serving certain guests first.
  • The letter from the hotel manager was not an admission of liability but a standard response to customer complaints.

Court's Decision and Legal Reasoning:

The RTC ruled in favor of the petitioners, awarding them damages based on the hotel’s failure to meet the contractual obligations. The trial court heavily relied on the letter from the hotel manager, interpreting it as an admission of substandard service.

On appeal, the Court of Appeals reversed the RTC's decision, stating that the unexpected increase in guests was the proximate cause of the issues experienced during the reception. The appellate court held that the petitioners' failure to notify the hotel of the increased guest count excused the hotel from liability for any resulting damages.

The Supreme Court found that the doctrine of proximate cause does not apply in breach of contract cases, as the obligations arise from the contract itself. Instead, Article 1170 of the Civil Code applies, which holds parties liable for damages resulting from fraud, negligence, or delay in the performance of contractual obligations.

The Court noted that the hotel’s written contract, finalized the day before the event, governed the parties' obligations. The Court also addressed the letter from the hotel manager, clarifying that it was a standard procedure to acknowledge customer complaints and did not constitute an admission of liability.

Ultimately, the Supreme Court partially reversed the appellate court's decision, awarding the petitioners P50,000.00 in nominal damages for the distress caused during their wedding reception, recognizing their right to dignity and respect.

Significant Legal Principles Established:

  • The doctrine of proximate cause is not applicable in breach of contract cases; obligations arise from the contract itself.
  • Article 1170 of the Civil Code holds parties liable for damages due to fraud, negligence, or delay in fulfilling contractual obligations.
  • Written contracts govern the obligations of the parties, and verbal agreements may be superseded by the written terms.