Art. 1157 1170 Cathay Pacific v. Vasquez Facts: Dr.

. Vasquez and his spouse, as frequent flyers of Cathay Pacific and Gold Card members of Marco Polo Club, were given seat upgrades from Business Class to First Class during their flight from Hong Kong to Manila. However, the spouses declined this privilege since they were with their colleagues whom they wanted to talk to during their flight, which is why they all selected Business Class seats. The flight attendant, Ms. Chiu, then consulted her supervisor regarding the issue and her supervisor told her to insist the Vasquezes to take the seat changes because the Business Class was fully booked and if they did not take the privilege, they wouldnt be able to take the flight. Because of this, the Vasquezes had no choice so they accepted the upgraded and proceeded to the First Class section of the plane. When the Vasquezes returned to Manila, they demanded P1,000,000 as damages from Cathay and also a written apology. Cathay replied that they would first investigate about the incident and they will get back to their request. However, Cathay failed to reply during the self-imposed date by the Vasquezes. The Vasquezes filed for damages to the Regional Trial Court of Makati and they rendered their decision in favor of the spouses because there was a breach on behalf of Cathay because Cathays obligation is to transport their passengers in the class the passengers have chosen and that Cathay cannot change said choices involuntarily. The CA affirmed the decision of the trial court but they made modifications regarding the damages because the bad faith of the employees was not sufficiently proven by the spouses. Issues: 1.) Whether or not Cathay committed breach of contract of carriage when they upgraded the seats of the Vasquezes 2.) Whether or not there was bad faith involved 3.) Whether or not the Vasquezes are entitled to damages

Held: 1.) The Court held that there was indeed a breach because even if the Vasquezes were entitled to such privilege, this privilege could be waived by the declination of the spouses for whatever reason. Because Cathay insisted on the acceptance of the upgrade, they breached their contract of carriage with the Vasquezes. 2.) 3.) The Court held that there was no persuasive proof of the bad faith or fraud that was allegedly committed by Cathay or their employees. Since the bad faith or fraud of the petitioners was not proven, moral damages (pursuant to Art. 2220) and exemplary damages (no bad faith) were deleted. Only the nominal damages should be paid for by Cathay pursuant to Art. 2221. Oblicon Doctrines: 1.) Breach of contract is defined as the failure without legal reason to comply with the terms of a contract. It is also defined as the [f]ailure, without legal excuse, to perform any promise which forms the whole or part of the contract. 2.) Identity of Payment Debtor must deliver the specific obligation that is due. San Pedros Comments: Sir feels that there was negligence on part of Cathay because the flight attendant did not think of offering the flight upgrade to other passengers in the business class instead of insisting the Vasquezes to take the first class. Cathay should have been liable for moral and exemplary damages since Cathay did not exercise all means to prevent the humiliation and anguish that was experienced by the Vasquezes.

Art. 1169 Almocera v. Ong Art. 1174 Ace-Agro v. CA Facts:

Cosmos was a soft drinks manufacturer and Ace-Agro cleaned soft drinks bottles and repaired wooden shells for Cosmos in San Francisco, Pampanga. Cosmos and AceAgro had a contract of service with a period from January 1, 1990 to December 31, 1990. Cosmos also has a contract of service with Aren Enterprises which was working outside the factory of Cosmos and was also able to cope with Cosmos daily production of 8.000 softdrinks. On April 25, 1990, there was a fire in Cosmos plantation which destroyed even the working area of Ace-Agro. Because of the fire, Ace-Agros employees were not able to continue their work. On May 15, 1990, Ace-Agro was asking for the resumption of work but Cosmos declined because the whole area was still recuperating from the fire and asked for the termination of the contract with Ace-Agro. Ace-Agro asked for a Cosmos reconsideration regarding the termination and there was no reply from the respondent so the petitioner said that they need to recuperate from the termination of the contract with Cosmos and they had to dismiss the employees. The employees then filed for an illegal dismissal case. Cosmos received another letter of reconsideration from the petitioner regarding the displaced workers. Cosmos then informed Ace-Agro that the contract resumed but the petitioner had to work outside the plantation of Cosmos. Petitioner complained, claiming that the original terms of the contract were not sufficient for such a change. Cosmos then told Ace-Agro that they may resume working on wooden shells in the plantation, but Ace-Agro still complained about the pending illegal dismissal cases against them because of the premature termination of the existing contract with Cosmos. Petitioner filed for damages in the RTC due to breach of contract allegedly committed by the respondent and the RTC ruled in favor of Ace-Agro because it found that Cosmos did commit breach. After filing for an appeal by the respondent, the trial court then reversed the decision of the RTC. Issues: 1.) Whether or not it was justified for Cosmos to terminate the contract due to force majeure (fire) 2.) Whether or not it was the unjustified refusal of Ace-Agro that terminated the contract between the two parties Held:

1.)

According to Tolentino, In some contracts, either because of its indeterminate duration or because of the nature of the prestation which is its object, one of the parties may free himself from the contractual tie by his own will (unilateral extinguishment). Cosmos termination of the contract was due to the loss of objects of the prestation (soft drinks bottles and wooden shells) because of the fire, which was an unseen event (force majeure). Ace-Agro was expecting an extension of the contract because of the force majeure, however, a force majeure only suspends the obligation of the parties but the period is still running (Tolentiono).

2.)

The Court held that there was unjust refusal on the part of Ace-Agro because despite their requests being compromised with by Cosmos, they still refused to their terms. The complaint regarding Aren Enterprises was also found to have no basis since there was no stipulation in the contract of Ace-Agro and Cosmos regarding the latters being prohibited to contract the services of companies. other

Oblicon Doctrine: 1.) The stipulation that in the event of a fortuitous event or force majeure the contract shall be deemed suspended during the said period does not mean that the happening of any of those events stops the running of the period the contract has been agreed upon to run. It only relieves the parties from the fulfillment of their respective obligations during that time. San Pedros Comments: Ace-Agro should have added In case of occurrence of force majeure, (regarding the extension of the period of the contract). Art. 1190 1192 Cannu v. Galang Solid Homes v. Tan Art. 1207 1222 Boston v. CA Art. 1236 1243 Republic v. De Guzman