Mercury Drug Corporation vs. Huang

An employer is solidarily liable with its employee for damages caused by the latter's quasi-delict unless the employer proves that it exercised the diligence of a good father of a family in both the selection and supervision of the employee. The employer's liability under Article 2180 of the Civil Code is direct and immediate, not conditioned on prior recourse against the negligent employee, and requires concrete proof, including documentary evidence, of compliance with the diligence requirements.

Petitioner Mercury Drug Corporation is the registered owner of a six-wheeler 1990 Mitsubishi Truck with plate number PRE 641, and employs petitioner Rolando J. Del Rosario as a driver. Respondent spouses Richard and Carmen Huang are the parents of respondent Stephen Huang, who owns a red 1991 Toyota Corolla GLI Sedan with plate number PTT 775. The case involves a quasi-delict action under Articles 2176 and 2180 of the Civil Code, which govern liability for fault or negligence where no pre-existing contractual relation exists between the parties, and impose vicarious liability on employers for damages caused by their employees.

Petitioner Mercury Drug Corporation is the registered owner of a six-wheeler 1990 Mitsubishi Truck with plate number PRE 641, and employs petitioner Rolando J. Del Rosario as its driver. Respondent spouses Richard and Carmen Huang are the parents of respondent Stephen Huang, who owns a red 1991 Toyota Corolla GLI Sedan with plate number PTT 775. On December 20, 1996, at around 10:30 p.m., within the municipality of Taguig, Metro Manila, these two vehicles figured in a road accident. Respondent Stephen Huang was driving the car, weighing 1,450 kg., while petitioner Del Rosario was driving the truck, weighing 14,058 kg. Both were traversing the C-5 Highway, north bound, coming from the general direction of Alabang going to Pasig City. The car was on the left innermost lane while the truck was on the next lane to its right, when the truck suddenly swerved to its left and slammed into the front right side of the car. The collision hurled the car over the island where it hit a lamppost, spun around and landed on the opposite lane. The truck also hit a lamppost, ran over the car and zigzagged towards, and finally stopped in front of Buellah Land Church.

At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt (TVR), as his driver's license had been confiscated because he had been previously apprehended for reckless driving. The car, valued at ₱300,000.00, was a total wreck. Respondent Stephen Huang sustained massive injuries to his spinal cord, head, face, and lung. Despite a series of operations, respondent Stephen Huang is paralyzed for life from his chest down and requires continuous medical and rehabilitation treatment. Respondents faulted petitioner Del Rosario for committing gross negligence and reckless imprudence while driving, and petitioner Mercury Drug for failing to exercise the diligence of a good father of a family in the selection and supervision of its driver.

Petitioners, in contrast, alleged that the immediate and proximate cause of the accident was respondent Stephen Huang's recklessness. According to petitioner Del Rosario, he was driving on the left innermost lane when the car bumped the truck's front right tire. The truck then swerved to the left, smashed into an electric post, crossed the center island, and stopped on the other side of the highway. The car likewise crossed over the center island and landed on the same portion of C-5. Petitioner Mercury Drug further claimed that it exercised due diligence of a good father of a family in the selection and supervision of all its employees.

The trial court found petitioners Mercury Drug and Del Rosario jointly and severally liable to pay respondents actual, compensatory, moral and exemplary damages, attorney's fees, and litigation expenses. The Court of Appeals affirmed the decision of the trial court but reduced the award of moral damages to ₱1,000,000.00, and denied the motion for reconsideration filed by petitioners. The Supreme Court affirmed the findings of the trial court and the appellate court that petitioner Del Rosario was negligent, noting that the evidence did not support petitioners' claim that the truck was at the left inner lane and that it was respondent Stephen Huang's car, at its right, which bumped the right front side of the truck. The Court also found that petitioner Mercury Drug failed to prove that it exercised due diligence in the selection and supervision of its employee, and upheld the awards of damages.

• Denial of Motion for Reconsideration: Petitioners argued that the Court of Appeals committed reversible error in denying outrightly the motion for reconsideration on the ground that it was allegedly filed out of time for one day.
• Weight of Evidence: Petitioners argued that the Court of Appeals erred in according greater weight to the evidence adduced by respondents and completely disregarding the defense interposed by petitioners.
• Disregard of Evidence: Petitioners argued that the Court of Appeals erred in disregarding completely all evidence presented by petitioners and proceeding to render its decision based on presumptions and personal opinions of people who were not witnesses to the accident.
• Award of Damages: Petitioners argued that the Court of Appeals erred in awarding damages in favor of respondents.
• Employer's Diligence: Petitioners argued that the Court of Appeals erred in finding that Mercury Drug Corporation failed to exercise the diligence required in supervising its employees despite overwhelming evidence presented by the petitioner company.
• Driver's Negligence: Petitioners argued that the Court of Appeals erred in finding that petitioner Rolando Del Rosario was negligent in driving the truck at the time of the accident and totally disregarding the evidence presented during the trial.
• Selective Presentation of Testimonies: Petitioners argued that the Court of Appeals erred in presenting only in the decision testimonies favorable to respondents and completely disregarding the evidence presented by petitioners which contradicted such testimonies, not only through oral testimonies but as well as documentary evidence.

N/A — The decision does not separately recount the respondents' arguments on appeal beyond their position at trial that petitioner Del Rosario committed gross negligence and reckless imprudence while driving, and that petitioner Mercury Drug failed to exercise the diligence of a good father of a family in the selection and supervision of its driver.

• Negligence of the Driver: Whether petitioner Del Rosario was negligent in driving the truck at the time of the accident.
• Employer's Vicarious Liability: Whether petitioner Mercury Drug Corporation failed to exercise the diligence of a good father of a family in the selection and supervision of its employee, petitioner Del Rosario.
• Award of Damages: Whether the awards of actual, compensatory, moral, and exemplary damages, and attorney's fees in favor of respondents were proper.

• Negligence of the Driver: Yes. Petitioner Del Rosario was negligent, and his negligence was the direct and proximate cause of the injuries suffered by respondent Stephen Huang. The evidence failed to support petitioners' claim that the car hit the truck, and Del Rosario's own admissions, including his failure to apply his brakes, established his negligence.
• Employer's Vicarious Liability: Yes. Petitioner Mercury Drug Corporation failed to discharge its burden of proving that it exercised due diligence in the selection and supervision of its employee, petitioner Del Rosario, and is therefore solidarily liable with him under Article 2180 of the Civil Code.
• Award of Damages: Yes. The awards of actual damages, compensatory damages for life care cost and loss of earning capacity, moral damages (as reduced to ₱1,000,000.00 by the Court of Appeals), exemplary damages, and attorney's fees were all upheld as proper and supported by the evidence and applicable law.

• Negligence of the Driver: The Court affirmed the findings of the trial court and the appellate court that petitioner Del Rosario was negligent. The evidence did not support petitioners' claim that at the time of the accident, the truck was at the left inner lane and that it was respondent Stephen Huang's car, at its right, which bumped the right front side of the truck. Firstly, petitioner Del Rosario could not precisely tell which part of the truck was hit by the car, despite the fact that the truck was snub-nosed and a lot higher than the car. Petitioner Del Rosario could not also explain why the car landed on the opposite lane of C-5 which was on its left side. The Court relied on the testimony of Dr. Marlon Rosendo H. Daza, an expert in the field of physics, who conducted a study based on the assumptions provided by respondents. Dr. Daza testified that given the assumptions, if the lighter vehicle hits the right front portion of the heavier vehicle, the general direction of the light vehicle after the impact would be to the right side of the heavy vehicle, not the other way around. The truck, he opined, is more difficult to move as it is heavier. It is the car, the lighter vehicle, which would move to the right of, and away from the truck. Thus, there is very little chance that the car will move towards the opposite side, i.e., to the left of the truck. Dr. Daza also gave a further study on the basis of the same assumptions except that the car is on the left side of the truck, in accordance with the testimony of respondent Stephen Huang. Dr. Daza concluded that the general direction of the car after impact would be to the left of the truck. In this situation, the middle island against which the car was pinned would slow down the car, and enable the truck to catch up and hit the car again, before running over it. The Court also noted that the photographs presented by petitioners were taken a month after the accident, and the automechanic who repaired the truck admitted that there were damages also on the left side of the truck. Worse still, petitioner Del Rosario admitted that after the impact, he lost control of the truck and failed to apply his brakes. Considering that the car was smaller and lighter than the six-wheeler truck, the impact allegedly caused by the car when it hit the truck could not possibly be so great to cause petitioner to lose all control that he failed to even step on the brakes. The Court found no cogent reason to disturb the findings of the RTC and the Court of Appeals, concluding that petitioner Del Rosario failed to do what a reasonable and prudent man would have done under the circumstances.
• Employer's Vicarious Liability: The Court cited Articles 2176 and 2180 of the Civil Code, which provide that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done, and that the obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. The Court held that the liability of the employer under Art. 2180 of the Civil Code is direct or immediate, not conditioned on a prior recourse against the negligent employee, or a prior showing of insolvency of such employee, and is joint and solidary with the employee. To be relieved of liability, petitioner Mercury Drug should show that it exercised the diligence of a good father of a family, both in the selection of the employee and in the supervision of the performance of his duties. In the selection of its prospective employees, the employer is required to examine them as to their qualifications, experience, and service records. With respect to the supervision of its employees, the employer should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for their breach. To establish compliance with these requirements, employers must submit concrete proof, including documentary evidence. In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring procedure, but the Recruitment and Training Manager admitted that petitioner Del Rosario took the driving tests and psychological examination when he applied for the position of Delivery Man, but not when he applied for the position of Truck Man. She also admitted that petitioner Del Rosario used a Galant, a light vehicle, instead of a truck during the driving tests. No tests were conducted on the motor skills development, perceptual speed, visual attention, depth visualization, eye and hand coordination and steadiness of petitioner Del Rosario. No NBI and police clearances were also presented. Petitioner Del Rosario attended only three driving seminars, and the only seminar he attended before the accident which occurred in 1996 was held twelve years ago in 1984. It also appeared that petitioner Mercury Drug does not provide for a back-up driver for long trips, and at the time of the accident, petitioner Del Rosario had been out on the road for more than thirteen hours, without any alternate. Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the supervision and discipline over its employees. On the day of the accident, petitioner Del Rosario was driving without a license, holding a TVR for reckless driving. He testified that he reported the incident to his superior, but nothing was done about it, and he was not suspended or reprimanded. No disciplinary action whatsoever was taken against petitioner Del Rosario. The Court therefore affirmed the finding that petitioner Mercury Drug failed to discharge its burden of proving that it exercised due diligence in the selection and supervision of its employee.
• Award of Damages: The Court upheld the award of actual damages, citing Art. 2199 of the Civil Code, which provides that one is entitled to adequate compensation only for such pecuniary loss suffered by him as he has duly proved. The actual damages claimed by respondents were supported by receipts, representing cost of hospital expenses, medicines, medical services and supplies, and nursing care services provided respondent Stephen from December 20, 1996, the day of the accident, until December 1998. The Court also upheld the award of ₱23,461,062.00 for the life care cost of respondent Stephen Huang, based on his average monthly expense and the actuarial computation of the remaining years that he is expected to live, and the conservative amount of ₱10,000,000.00 for the loss or impairment of his earning capacity, considering his age, probable life expectancy, the state of his health, and his mental and physical condition before the accident. The Court noted that respondent Stephen Huang was only seventeen years old, nearly six feet tall and weighed 175 pounds, in fourth year high school, a member of the school varsity basketball team, class president and editor-in-chief of the school annual, and had passed the entrance examinations of the University of the Philippines, De La Salle University, and the University of Asia and the Pacific. The Court likewise upheld the award of moral damages, noting that the award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante, and that respondent Stephen Huang and respondent spouses testified to the intense suffering they continue to experience as a result of the accident. On the matter of exemplary damages, the Court cited Art. 2231 of the Civil Code, which provides that in cases of quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. The records show that at the time of the accident, petitioner Del Rosario was driving without a license because he was previously ticketed for reckless driving, and that he failed to step on his brakes immediately after the impact. The Court held that wanton acts such as that committed by petitioner Del Rosario need be suppressed, and employers like petitioner Mercury Drug should be more circumspect in the observance of due diligence in the selection and supervision of their employees. With the award of exemplary damages, the Court also affirmed the grant of attorney's fees to respondents, citing Art. 2208 of the Civil Code.

• Vicarious liability of employers under Article 2180 of the Civil Code — The employer's liability for the quasi-delict of its employee is direct and immediate, not conditioned on a prior recourse against the negligent employee or a prior showing of insolvency of such employee, and is joint and solidary with the employee. To be relieved of liability, the employer must prove that it exercised the diligence of a good father of a family, both in the selection of the employee and in the supervision of the performance of his duties. In the selection of prospective employees, the employer is required to examine them as to their qualifications, experience, and service records. With respect to supervision, the employer should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for their breach. To establish compliance, employers must submit concrete proof, including documentary evidence.
• Diligence of a good father of a family — The standard of care required of an employer in the selection and supervision of its employees. In this case, the employer failed to meet this standard because it did not conduct proper driving tests for the employee's position as Truck Man, did not test for various motor and perceptual skills, did not present NBI and police clearances, did not provide back-up drivers for long trips, and took no disciplinary action against the employee who was driving without a license at the time of the accident.
• Gross negligence as basis for exemplary damages in quasi-delicts — Under Article 2231 of the Civil Code, exemplary damages may be granted in cases of quasi-delicts if the defendant acted with gross negligence. In this case, the driver's act of driving without a license because he was previously ticketed for reckless driving, and his failure to apply his brakes immediately after the impact, constituted wanton acts that justified the award of exemplary damages.

• "The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is not conditioned on a prior recourse against the negligent employee, or a prior showing of insolvency of such employee. It is also joint and solidary with the employee." — This passage articulates the controlling doctrine on the employer's vicarious liability in quasi-delicts, establishing the direct and solidary nature of the employer's obligation.
• "To be relieved of liability, petitioner Mercury Drug should show that it exercised the diligence of a good father of a family, both in the selection of the employee and in the supervision of the performance of his duties." — This passage states the standard for an employer to escape vicarious liability under Article 2180, requiring proof of diligence in both the selection and supervision of the employee.
• "With respect to the supervision of its employees, the employer should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for their breach. To establish compliance with these requirements, employers must submit concrete proof, including documentary evidence." — This passage defines the requirements for proving diligence in the supervision of employees, emphasizing the need for concrete, documentary evidence of compliance.

• Estacion vs. Bernardo, G.R. No. 144723, February 27, 2006, 483 SCRA 222 — Cited as authority for the requirement that in the selection of prospective employees, the employer is required to examine them as to their qualifications, experience, and service records.
• Campo vs. Camarote, 100 Phil. 459, 463 (1956) — Cited as authority for the same proposition regarding the employer's duty in the selection of employees.
• Victory Liner, Inc. vs. Heirs of Andres Malecdan, G.R. No. 154278, December 27, 2002, 394 SCRA 520 — Cited as authority for the requirement that employers must submit concrete proof, including documentary evidence, to establish compliance with the diligence requirements in the supervision of employees.
• Roque vs. Torres, G.R. 157632, December 6, 2006 — Cited for the proposition that the award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante.
• Philippine National Railways vs. Brunty, G.R. No. 169891, November 2, 2006 — Cited for the proposition that moral damages are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused a person, and must be proportionate to the suffering inflicted.

• Article 2176, Civil Code — Provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done, and that such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict. This was the basis for the driver's liability for negligence.
• Article 2180, Civil Code — Provides that the obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible, and that owners and managers of an establishment or enterprise are responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. This was the basis for the employer's vicarious and solidary liability.
• Article 2194, Civil Code — Provides that the responsibility of two or more persons who are liable for a quasi-delict is solidary. This was cited to support the joint and solidary liability of the driver and the employer.
• Article 2199, Civil Code — Provides that one is entitled to adequate compensation only for such pecuniary loss suffered by him as he has duly proved. This was the basis for the award of actual damages, which were supported by receipts.
• Article 2202, Civil Code — Provides that in crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of. This was the basis for the award of damages for the life care cost and loss of earning capacity.
• Article 2205, Civil Code — Provides that damages may be recovered for loss or impairment of earning capacity in cases of temporary or permanent personal injury. This was the basis for the award of ₱10,000,000.00 for the loss or impairment of respondent Stephen Huang's earning capacity.
• Article 2208, Civil Code — Provides for the award of attorney's fees, including when a party is compelled to litigate or incur expenses to protect his interest by reason of an unjustified act of the other party. This was the basis for the award of attorney's fees.
• Article 2231, Civil Code — Provides that in cases of quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. This was the basis for the award of exemplary damages, given the driver's wanton acts.

• Sandoval-Gutierrez, J.
• Corona, J.
• Azcuna, J.
• Garcia, J.

N/A — No dissenting opinions were noted in the provided case text.