Mercury Drug Corporation vs. Sebastian M. Baking

A drugstore, whose business is imbued with public interest, and its employer are liable under Articles 2176 and 2180 of the Civil Code for damages caused by the gross negligence of its employee in dispensing the wrong medicine; the employer is solidarily liable unless it proves the diligence of a good father of a family in the employee’s selection and supervision. Such negligence is the proximate cause of the injury where the accident would not have occurred had the employee exercised care in reading the prescription.

Mercury Drug Corporation operates a drugstore business, including an Alabang branch, while Sebastian M. Baking was a patient of Dr. Cesar Sy who was prescribed Diamicron for his blood sugar and Benalize tablets for his triglyceride. The sale of medicines affects public health and safety, and the drugstore business is therefore imbued with public interest. The Civil Code governs liability for quasi-delicts and for employers whose employees cause damage through negligence.

Sebastian M. Baking went to the clinic of Dr. Cesar Sy on November 25, 1993 for a medical check-up. On the following day, after undergoing ECG, blood, and hematology examinations and urinalysis, Dr. Sy found that Baking’s blood sugar and triglyceride were above normal levels. Dr. Sy then gave Baking two medical prescriptions—Diamicron for his blood sugar and Benalize tablets for his triglyceride. Baking proceeded to Mercury Drug Corporation (Alabang Branch) to buy the prescribed medicines. The saleslady misread the prescription for Diamicron as a prescription for Dormicum, and what was sold to Baking was Dormicum, a potent sleeping tablet.

Unaware that he had been given the wrong medicine, Baking took one pill of Dormicum on three consecutive days—November 6, 1993 at 9:00 p.m., November 7 at 6:00 a.m., and November 8 at 7:30 a.m. On November 8, or on the third day he took the medicine, he figured in a vehicular accident; the car he was driving collided with the car of Josie Peralta. Baking fell asleep while driving and could not remember anything about the collision nor felt its impact.

Suspecting that the tablet he took may have had a bearing on his physical and mental state at the time of the collision, Baking returned to Dr. Sy’s clinic. Upon being shown the medicine, Dr. Sy was shocked to find that what was sold to Baking was Dormicum instead of the prescribed Diamicron. On April 14, 1994, Baking filed with the Regional Trial Court, Branch 80 of Quezon City a complaint for damages against Mercury Drug, docketed as Civil Case No. Q-94-20193.

The trial court and the Court of Appeals found that the medicine sold to Baking was Dormicum instead of the prescribed Diamicron and that Mercury Drug’s employee was negligent.

• Proximate Cause: Petitioner argued that the proximate cause of the accident was respondent’s negligence in driving his car.
• Not in Accord with Law: Petitioner contended that the Decision of the Court of Appeals is not in accord with law or prevailing jurisprudence.

• Lack of Merit: Respondent maintained that the petition lacks merit and should be denied.

• Negligence and Proximate Cause: Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of respondent’s accident.
• Damages: Whether the award of moral damages, attorney’s fees, litigation expenses, and cost of the suit is justified.

• Negligence and Proximate Cause: Yes. Petitioner’s employee was grossly negligent in selling Dormicum instead of the prescribed Diamicron; petitioner failed to prove diligence of a good father of a family in selection and supervision, making it solidarily liable under Articles 2176 and 2180. Such negligence was the proximate cause of the accident.
• Damages: Partly. Moral damages are warranted but reduced to ₱50,000.00; exemplary damages of ₱25,000.00 are awarded; attorney’s fees and litigation expenses are deleted for lack of basis in the trial court’s decision.

• Negligence and Proximate Cause: Under Article 2176, a quasi-delict requires (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and (c) connection of cause and effect between the fault or negligence and the damage. Damage is undisputed. The drugstore business is imbued with public interest; the health and safety of the people would be jeopardized if drugstore employees did not exercise the highest degree of care and diligence in selling medicines. Negligence is a question of fact, and the trial court’s finding, affirmed by the Court of Appeals, is deferred to. Petitioner’s employee was grossly negligent in selling Dormicum instead of the prescribed Diamicron; she should have verified whether the medicine she gave was indeed the one prescribed. The care required must be commensurate with the danger involved, and the skill employed must correspond with the superior knowledge of the business which the law demands. On proximate cause, it is any cause that produces injury in a natural and continuous sequence, unbroken by any efficient intervening cause, such that the result would not have occurred otherwise; it is determined from the facts of each case upon a combined consideration of logic, common sense, policy, and precedent. The vehicular accident could not have occurred had petitioner’s employee been careful in reading Dr. Sy’s prescription; without the potent effects of Dormicum, it was unlikely that respondent would fall asleep while driving, resulting in a collision. Under Article 2180, 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. When an injury is caused by the negligence of an employee, a presumption arises that the employer was negligent in the selection or supervision of the employee; the presumption may be rebutted by a clear showing that the employer exercised the care and diligence of a good father of a family. Petitioner failed to prove such diligence, so it is solidarily liable for the damages caused by its employee.
• Damages: Moral damages may be awarded whenever the defendant’s wrongful act or omission is the proximate cause of the plaintiff’s physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury in the cases specified or analogous to those provided in Article 2219 of the Civil Code. Respondent adequately established the factual basis for moral damages when he testified that he suffered mental anguish and anxiety as a result of the accident caused by the negligence of petitioner’s employee. There is no hard-and-fast rule in determining a fair and reasonable amount of moral damages; each case must be governed by its own peculiar facts, and the amount must be commensurate to the loss or injury suffered. The trial court’s award of ₱250,000.00 is exorbitant and is reduced to ₱50,000.00. Exemplary damages are also warranted under Article 2229 by way of example or correction for the public good. The drugstore business is affected with public interest; petitioner should have exerted utmost diligence in the selection and supervision of its employees, and the employee should have been extremely cautious in dispensing pharmaceutical products. Petitioner must at all times maintain a high level of meticulousness, so exemplary damages of ₱25,000.00 are in order. On attorney’s fees and expenses of litigation, the reasons or grounds for the award must be set forth in the decision of the court. Because the trial court’s decision did not give the basis of the award, the award of attorney’s fees and litigation expenses is deleted. Vibram Manufacturing Corporation vs. Manila Electric Company held that an award for attorney’s fees must be stated in the text of the court’s decision and not in the dispositive portion only, and the same is true for litigation expenses where the body of the decision discussed nothing for its basis.

• Quasi-delict under Article 2176 — A person who by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done; if there is no pre-existing contractual relation, the fault or negligence is a quasi-delict. The requisites are (a) damage suffered by the plaintiff, (b) fault or negligence of the defendant, and (c) connection of cause and effect between the fault or negligence and the damage. The Court applied these requisites: damage was undisputed, the employee was negligent, and that negligence caused the accident.
• Employer liability under Article 2180 — 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. When an injury is caused by the negligence of an employee, a presumption arises that the employer was negligent in the selection or supervision of the employee; the presumption may be rebutted by a clear showing of the care and diligence of a good father of a family. Mercury Drug failed to prove such diligence and was held solidarily liable.
• Proximate cause — Any cause that produces injury in a natural and continuous sequence, unbroken by any efficient intervening cause, such that the result would not have occurred otherwise. It is determined from the facts of each case upon a combined consideration of logic, common sense, policy, and precedent. The wrong medicine was the proximate cause because the accident would not have occurred had the employee been careful and because Dormicum caused respondent to fall asleep while driving.
• Drugstore business imbued with public interest — The health and safety of the people would be jeopardized if drugstore employees did not exercise the highest degree of care and diligence in selling medicines. The care required must be commensurate with the danger involved, and the skill employed must correspond with the superior knowledge of the business which the law demands. The Court found the employee grossly negligent and required petitioner to maintain a high level of meticulousness.
• Moral damages — Moral damages may be awarded whenever the defendant’s wrongful act or omission is the proximate cause of the plaintiff’s physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury in the cases specified or analogous to Article 2219. There is no hard-and-fast rule for the amount; it must be commensurate to the loss or injury. The Court reduced the award from ₱250,000.00 to ₱50,000.00.
• Exemplary damages — Exemplary damages may be granted by way of example or correction for the public good under Article 2229. Because the drugstore business is affected with public interest, the Court awarded ₱25,000.00.
• Attorney’s fees and litigation expenses — The reasons or grounds for the award must be set forth in the decision of the court, not merely in the dispositive portion. Because the trial court’s decision did not give the basis, the Court deleted the award.

• "It is generally recognized that the drugstore business is imbued with public interest. The health and safety of the people will be put into jeopardy if drugstore employees will not exercise the highest degree of care and diligence in selling medicines." — This states the standard of care applicable to drugstores and supplies the basis for finding the employee grossly negligent.
• "Proximate cause is defined as any cause that produces injury in a natural and continuous sequence, unbroken by any efficient intervening cause, such that the result would not have occurred otherwise. Proximate cause is determined from the facts of each case, upon a combined consideration of logic, common sense, policy, and precedent." — This is the Court’s canonical formulation of proximate cause, applied to reject petitioner’s argument that respondent’s driving was the proximate cause.
• "When an injury is caused by the negligence of an employee, there instantly arises a presumption of the law that there has been negligence on the part of the employer, either in the selection of his employee or in the supervision over him, after such selection. The presumption, however, may be rebutted by a clear showing on the part of the employer that he has exercised the care and diligence of a good father of a family in the selection and supervision of his employee." — This defines the employer’s presumptive negligence and the rebuttal standard under Article 2180.
• "Since the trial court’s decision did not give the basis of the award, the same must be deleted." — This is the ratio for deleting the award of attorney’s fees and litigation expenses because the decision failed to state their basis.

• FGU Insurance Corporation vs. Court of Appeals, G.R. No. 118889, March 23, 1998, 287 SCRA 718 — Cited for the requisites of a quasi-delict under Article 2176; the Court used it to enumerate damage, fault or negligence, and causal connection.
• United States vs. Pineda, 37 Phil. 456 (1918) — Cited for the principle that the care required must be commensurate with the danger involved and the skill employed must correspond with the superior knowledge of the business which the law demands.
• Quezon City Government vs. Dacara, G.R. No. 150304, June 15, 2005, 460 SCRA 343 — Cited for the definition of proximate cause and the factors of logic, common sense, policy, and precedent in determining it.
• Baliwag Transit, Inc. vs. Court of Appeals, G.R. No. 116624, September 20, 1996, 262 SCRA 230 — Cited for the presumption of employer negligence in the selection or supervision of an employee and the rebuttal by proof of the diligence of a good father of a family.
• Samson, Jr. vs. Bank of the Philippine Islands, G.R. No. 150487, July 10, 2003, 405 SCRA 607 — Cited for the rule that there is no hard-and-fast rule in determining a fair and reasonable amount of moral damages; the amount must be commensurate to the loss or injury.
• Cagungun vs. Planters Development Bank, G.R. No. 158674, October 17, 2005, 473 SCRA 259 — Cited for the requirement that the reasons or grounds for attorney’s fees must be set forth in the decision.
• Vibram Manufacturing Corporation vs. Manila Electric Company, G.R. No. 149052, August 9, 2005, 466 SCRA 178 — Cited for the rule that an award for attorney’s fees must be stated in the text of the court’s decision, not only in the dispositive portion, and that litigation expenses require a basis in the body of the decision.

• Article 2176, New Civil Code — Defines a quasi-delict and requires damage, fault or negligence, and causal connection. Applied: damage was undisputed; the employee was negligent; and that negligence caused the accident.
• Article 2180, New Civil Code — Makes owners and managers of an establishment liable for damages caused by employees in the service of the branches in which they are employed or on the occasion of their functions; the employer is presumed negligent in selection or supervision unless it proves the diligence of a good father of a family. Applied: Mercury Drug failed to prove such diligence and was held solidarily liable.
• Article 2219, New Civil Code — Allows moral damages in cases including quasi-delicts causing physical injuries and analogous cases. Applied: respondent’s mental anguish and anxiety from the accident supported the award.
• Article 2229, New Civil Code — Allows exemplary damages by way of example or correction for the public good. Applied: exemplary damages of ₱25,000.00 were awarded because the drugstore business is affected with public interest.
• Rule 45, 1997 Rules of Civil Procedure — Governs a petition for review on certiorari. Applied: the petition was filed under Rule 45.

The decision lists the following under “WE CONCUR”: Reynato S. Puno (Chief Justice, Chairperson, on leave), Renato C. Corona, Adolfo S. Azcuna, and Cancio C. Garcia.