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Geraldez v.

CA (1994)
Parties in the case: Petitioner: Lydia Geraldez v. Private
Respondent: Kenstar Travel Corporation
Relevant Law: None really in the case; to understand better,
refer to Art. 1171

Oct, 1989: Geraldez read about Kenstar from the newspaper and
was sent a brochure from their representative Alberto Cruz, which
discussed their tours for Europe and the highlights. Her and her
sister chose the Volare 3 tour which covered 22 days in Europe
for 2,990 dollars.

Geraldez filed a civil action against Kenstar for committing FRAUD
in contracting an obligation, which was due to the following

1. There was no European tour manager for the group
2. Hotels were not first class and lacked basic amenities
(soap, shampoo, toilet paper, etc)
3. The UGC leather Factory (where you get really good
leather for cheap) was not visited even though it was a
specifically added HIGHLIGHT of the tour
4. The Filipino lady tour guide was a first timer (first time
in Europe), Rowena Zapanta
a. Felt uneasy and unsafe with her
STATED IN THE BROCHURE that these would be available/happen

July 9 1991: Court decision was Kenstar should pay Geraldez
moral damages, nominal damages, exemplary damages, attorneys
fees (500k,200k,300k,50k)

Kenstar appealed and respondent court deleted the award of the
moral and exemplary and reduced the nominal and attorneys fees
to (30k and 10k). Hence, this petition.

WON Kenstar acted in bad faith or with gross negligence in
discharging its obligations under the contract?

HELD: YES. Failed to comply faithfully with its commitments
under the Volare 3 tour program
Thus, Kenstar had to pay Geraldez moral, exemplary, and
attorneys fees again (100k, 50k, 20k)

European Tour Manager
o There was none at all present.
o Local Europeans were not made available as well
o Defense of Kenstar: claimed that European
Tour Manager was not a person but an organization who helped
plain the itinerary (despite advertisements that made others
think otherwise)
The meaning that will determine the legal effect of a
contract is that which is arrived by objective standards; one is
bound, not by what he subjectively intends, but by what he leads
others reasonably to think he intends
UGC leather factory
o they went when it was closed hence unable to
go shopping. A wasted highlight of the tour; also shows Zapantas
neglect and ineptness to follow the itinerary
o Defense of Kenstar: Out of the 33 locations,
they went to all except just this (not the point. This was a
highlight and a must see)
First Class hotels
o not first class; lack of basic amenities,
o claimed that the hotels were conveniently
located not true
o two witnesses for Geraldez (a couple who were
o Defense of Kenstar: First class in Europe is
different from first class in the Philippines/ standards wise, and
certain publications claimed in their listing that the hotels were
first class (bad excuse: basic amenities must be a must anyway)
First Time Filipina Tour Guide
o inexperienced, did not attend to the routinely
needs of tourists, was not able to anticipate possible needs and
problems, did not make it her duty to see that the basic personal
necessities were provided, did not actively arrange for medical
o her daily calls to Manila was not a sign of
diligence but of inexperience and need for constant instruction
o because she was so inexperienced, she caused
agitation and anxiety on the part of the tourists

Kenstars last defense: They had a responsibilities section
in the brochure of the Volare program which said that they shall
be responsible only for booking and making arrangements as your
agents. They assume no responsibility or liability arising or in
connection with the services or lack of services neither will they
be responsible for any acy, error or omission, or of any damages,
injury loss, accident, delay or irregularity which may be occasioned
by reason or any defect etc
o Adhesion contracts:
Those which are drafted by only one party and the
participation of the other party is only to affix his signature to
the agreement and the result deprives the latter of changes for
negotiation or opportunity for bargaining on equal footing
Adhesion contracts are not necessarily void but are
construed strictly against the one who drafted the same esp.
when stipulations are printed in fine letters are and are hardly
o This defense will not hold (even if the adhesion
contract in this case were enforceable) because Kenstar cannot be
freed from responsibility arising from fraudulent acts (thus it
cannot be stipulated because it is against public policy).

Negligence of Kenstar:
1. Selection of Zapanta was a deliberate and conscious
choice in order to afford her on the job training and equip her
with proper opportunities to gain experience
a. Made the tour like a virtual project experimentation for
b. Negligence based on all other factors that happened
during the tour as mentioned above

Awarding damages:
Moral damages may be awarded in breaches of contract where
the obligor acted fraudently or in bad faith. Kenstar can be
faulted with fraud in the inducement, which is employed by the
party to a contract in securing the consent of the other.

Fraud employed at the time of the birth or perfection of a
contract can either be dolo causante or dolo incidente.
Dolo causante deceptions or misrepresentations of a serious
character employed by one party and without which the other
party would not have entered into the contract; essential cause
of consent; results in nullity of the contract and indeminification
of damages

Dolo Incidente are those which are not serious in character and
without which the other party would still have entered into the
contract; some particular or accident of the obligation; obliges the
person employing it to pay damages