Pergamino, Hazel Anne C.

12-0732
Lydia L. Geraldez, petitioner, v. Hon. Court of Appeals and Kenstar Travel Corporation,
respondents
G.R. No. 108253 | Feb. 23, 1994
[Topic: ART. 1338 – Fraud or ​dolo]​

FACTS:
Petitioner Lydia Geraldez came to know about respondent Kenstar Travel Corp. through numerous
advertisements found in newspapers regarding tour packages in Europe. She then contacted Kenstar
Travel to avail of a European tour package. She chose the “Volare 3” package for her and her sister,
Dolores, which covers a 22-day tour of Europe worth $2,990.
Petitioner alleges in this complaint against Kenstar Travel that she was very disappointed and
uneasy throughout the duration of the European tour because things turned out contrary to what was
stated and promised in the brochure for the Volare 3 package: there was no European tour manager who
appeared for their group of tourists, the hotels they stayed in were substandard when they were expecting
to stay in first-class hotels, the UGC Leather Factory (which was specifically made a highlight of the tour)
was not visited, and the tour guide provided was a Filipina first-timer in Europe.

ISSUE:
Whether or not respondent Kenstar Travel acted with fraud by making misrepresentations amounting to
bad faith to the prejudice of petitioner Lydia and the other members of the Volare 3 package tour group
[YES].

HELD:
The Court ruled in the affirmative, holding that the actions of respondent Kenstar Travel evidently show
that it committed fraudulent misrepresentations when it failed to comply faithfully to its commitments
under the Volare 3 tour package.
Firstly, this was manifested by Kenstar Travel providing an inexperienced and first-timer Filipino
tour guide. Such a person cannot effectively perform the duties of a tour guide because she herself is new
to the place. She could neither properly acquaint the group with the interesting sites and places, nor render
the necessary assistance. The Court finds that this was a deliberate and conscious choice on the part of
Kenstar Travel in order to give the said tour guide an on-the-job training so as to qualify her later on as an
“experienced” tour guide and eventually become an asset of respondent Kenstar Travel.
Secondly, Kenstar Travel failed to provide a European tour manager, contrary to its promise to
provide a local European tour manager who was supposed to accompany the Filipino tour guide. The
Court holds that Kenstar Travel was obligated to do so.
Thirdly, Kenstar Travel again committed another grave misrepresentation when it assured the
members of its Volare 3 tour package group that the chosen hotels were all first-class with complete
amenities as well as being located conveniently near the places in the group’s itinerary. However, this all
proved to be false. None of the hotel they stayed in were first-class, and worse, some hotels lacked even
the basic facilities such as soap, bath towels, and even toilet paper. Some hotels were described to even
have dilapidating floors and cabinets. They were also located far away from the places they were
supposed to visit in the tour.
Fourth, one of the highlights of the tour was the visit to the UGC Leather Factory. However, they
were not able to visit it because the group arrived too late in the day and the factory was already closed.
This manifests the neglect and ineptness of the supposed Filipino first-timer tour guide who accompanied
the group.
It is clear from the foregoing considerations that respondent Kenstar Travel has committed ​dolo
causante o​ r dolo incidente by making misrepresentations in its contracts with petitioner Lydia and the the
other members of the tour group.
This fraud or ​dolo which is present at the birth of a contract may either be ​dolo causante ​or dolo
incidente. ​The former is causal fraud which is found in Art. 1338 and it refers to those deceptions or
misrepresentations of a serious character employed by one party and without which the other party would
not have entered into the contract. The latter is incidental fraud which is found in Art. 1344 and it refers to
those not of a serious character and without which the other party would still have entered into the
contract.

DISPOSITION:
Assailed decision of the CA is set aside, and respondent Kenstar Travel is ordered to pay petitioner Lydia
for damages.