CASE NO.

34
Guanio vs. Makati Shangri-La Hotel, G.R. No. 190601

FACTS:
Spouses Guanio booked their wedding reception at Makati Shangri-La Hotel. A day
before the reception, the parties finalized their contract. But upon the actual reception,
the hotel representatives did not show up; their guests complained of the delay in the
service of the dinner; certain items were unavailable; the waiters were rude and
unapologetic when confronted about the delay; and despite the promise that there
would be no charge for the extension of the reception beyond midnight, they were billed
for the same. The petitioners sent a letter-complaint to the hotel and received an
apology from the Executive Assistant Manager in charge of Food and Beverage.
Despite this, the spouses filed a complaint for breach of contract and damages before
the RTC of Makati.

The RTC ruled in favor of the petitioners and ordered the hotel to pay for damages.
However, on appeal, the CA reversed the decision on the ground that the proximate
cause of petitioners’ injury was the unexpected increase in their guests.

ISSUES:
1. Whether proximate cause is applicable to actions involving breach of contract.
2. Whether Makati Shangri-La Hotel may be held liable for damages.

RULING:
1. No. Proximate cause is not applicable in the case since the petitioners’ complaint
arose from a contract. The doctrine of proximate cause is applicable only in actions
for quasi-delicts and not in actions involving breach of contract.

2. Yes. Although proximate cause is not applicable, Article 1170 of the Civil Code is. It
provides that, “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.” In culpa contractual, the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a corresponding right
of relief. A breach upon the contract confers upon the injured party a valid cause for
recovering that which may have been lost or suffered. The Court ruled that the hotel
could have managed the situation better, it being held in high esteem in the hotel
and service industry.