GR 142029; (February, 2001) (Digest)
G.R. No. 142029 February 28, 2001
ERLINDA FRANCISCO, doing business in the name and style of Cebu Fountainhead Bakeshop and JULIANA PAMAONG, petitioners, vs. RICARDO FERRER, JR., ANNETTE FERRER, ERNESTO LO AND REBECTA LO, respondents.
FACTS
Respondents ordered and fully paid for a three-layered wedding cake from petitioners’ bakeshop for delivery on December 14, 1992. On the wedding day, the cake failed to arrive at the agreed time. Upon follow-up, petitioners initially blamed traffic but later admitted the order slip was lost, resulting in no delivery. Respondents were compelled to purchase a substitute cake from the venue. The ordered cake arrived late, was the wrong configuration, and was rightly refused. Petitioners subsequently sent a letter of apology with a P5,000 check, which respondents rejected.
Respondents filed an action for breach of contract with damages. The trial court ruled in their favor, ordering petitioners to pay the cake’s cost, P30,000 in moral damages, attorney’s fees, and litigation costs. The Court of Appeals affirmed liability but increased moral damages to P250,000 and added P100,000 in exemplary damages.
ISSUE
Whether the Court of Appeals erred in awarding and increasing moral damages and in awarding exemplary damages for the breach of contract.
RULING
The Supreme Court modified the appellate decision, deleting the awards for moral and exemplary damages. The legal logic is anchored on the settled doctrine that moral damages in culpa contractual are recoverable only if the breach was attended by bad faith, fraud, malice, or wanton disregard of contractual obligations. The Court found no clear evidence of such culpable mental state on the part of petitioners. Their negligence, while constituting a breach, was not shown to be so reckless, oppressive, or malicious as to amount to bad faith. The subsequent apologies and offer of indemnity indicated an effort to rectify the error, not a conscious design to cause harm.
Consequently, the breach did not meet the stringent standard required for moral damages under Article 2220 of the Civil Code. Since the award of exemplary damages is contingent upon a valid award of moral, temperate, or compensatory damages, and no such valid basis existed, the exemplary damages were also unwarranted. The Court upheld the award for the cost of the cake, attorney’s fees, and litigation costs, and substituted the deleted moral damages with nominal damages of P10,000 to recognize the invasion of respondents’ rights.