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 REBECCA 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 informed respondents the delivery was delayed due to traffic, and later admitted the order slip was lost and no cake would be delivered. Respondents were compelled to purchase a substitute cake available at the venue. The ordered cake arrived at 10:00 PM, but respondents refused acceptance as it was a two-layered cake and the ceremony had concluded. Petitioners subsequently sent a letter of apology with a P5,000 check, which respondents rejected.
ISSUE
Whether the Court of Appeals erred in affirming and increasing the award of 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 Court reiterated that in culpa contractual or breach of contract, moral damages are recoverable only if the breach was attended by bad faith, fraud, malice, or wanton disregard of the contractual obligation. The breach must be palpably wanton, reckless, malicious, or oppressive. The Court found no such bad faith or gross negligence on the part of petitioners. The loss of the order slip constituted simple negligence, not the conscious doing of a wrong or a dishonest purpose required by law. Mere allegations of besmirched reputation, embarrassment, and anxiety are insufficient without clear proof that the proximate cause was an unlawful act done in bad faith. Since the basis for moral damages was removed, the award for exemplary damages, which is intended as a corrective measure and predicated upon a finding of moral damages, could not stand. The Court sustained the award for the cost of the cake, attorney’s fees, and litigation costs, and awarded nominal damages of P10,000.00 in recognition of the invasion of respondents’ rights, without need of proof of actual loss.