G.R. No. L-73867. February 29, 1988.
TELEFAST COMMUNICATIONS/PHILIPPINE WIRELESS, INC., petitioner, vs. IGNACIO CASTRO, SR., ET AL., and HONORABLE INTERMEDIATE APPELLATE COURT, respondents.

FACTS

On November 2, 1956, Consolacion Bravo-Castro died in Lingayen, Pangasinan. Her daughter, respondent Sofia C. Crouch, who was then in the Philippines, paid the required fees to petitioner Telefast Communications at its Dagupan office to send a telegram to her father, Ignacio Castro, Sr., in Indiana, USA, announcing the death. The telegram was never delivered. Consequently, the burial proceeded with only Sofia in attendance, as the other family members, all residing in the United States, were unaware of the death. Upon Sofia’s return to the U.S., she discovered the telegram had not been received. The Castro family filed an action for damages against the petitioner for breach of contract in the Court of First Instance of Pangasinan.
The petitioner’s sole defense was its inability to transmit the telegram due to “technical and atmospheric factors beyond its control.” The trial court found the petitioner liable and awarded moral and exemplary damages, attorney’s fees, and costs to the respondents. On appeal, the Intermediate Appellate Court largely affirmed but modified some awards. The petitioner now seeks a review, contending its liability should be limited only to the refund of the telegram fee, arguing the award of moral damages requires proof of fraud, malice, or recklessness, which it claims was absent.

ISSUE

Whether the petitioner is liable for moral and exemplary damages arising from its failure to transmit the telegram, despite its claim that the failure was due to factors beyond its control and not attended by fraud or malice.

RULING

Yes. The Supreme Court denied the petition and sustained the awards for damages. The Court applied Articles 1170 and 2176 of the Civil Code, which hold persons liable for damages who are guilty of fraud, negligence, or delay in the performance of obligations, or who cause damage by fault or negligence. The contract for the telegram’s transmission was perfected upon payment, and the petitioner’s failure to send it constituted a breach. This liability is not limited to actual or liquidated damages, such as a mere refund of the fee, as such a rule would be grossly inequitable, especially given the decades-old cost involved.
Crucially, moral damages are recoverable under Article 2217 when they are the proximate result of a wrongful act or omission. The Court found the petitioner’s omission, characterized as gross negligence, was the direct cause of the respondents’ profound mental anguish, shock, and sorrow from being deprived of the opportunity to pay their last respects. The failure to even notify the sender of the transmission problem compounded this negligence. Furthermore, the award of exemplary damages was justified to serve as a deterrent and to emphasize the public utility’s duty of diligence. Compensatory damages for Sofia Crouch’s travel expenses to testify were also upheld as a direct consequence of the breach. The decision was modified to standardize the moral damages at P10,000 for each respondent and reinstate exemplary damages of P1,000 each, alongside other affirmed awards.