Sanitary Steam Laundry, Inc. vs. The Court of Appeals

An employer is liable for the negligent acts of its driver when it fails to prove the diligence of a good father of the family in the selection and supervision of its employees; such diligence requires more than unproven, unwritten policies and may be demonstrated by pre-employment testing, training, and actual supervision. Alleged traffic violations by the other driver do not constitute contributory negligence unless shown to be a proximate or contributing cause of the injury.

Sanitary Steam Laundry, Inc. owned the Mercedes Benz panel truck involved in the collision and employed Herman Hernandez as its driver. The Cimarron was owned by Salvador Salenga and driven by Rolando Hernandez; its passengers were mostly employees of Project Management Consultants, Inc. who had visited a project site in Lian, Batangas, joined by family members and friends. The dispute concerns civil liability for quasi-delict and the employer’s vicarious liability for damages arising from a vehicular accident.

On August 31, 1980, a group mostly composed of employees of Project Management Consultants, Inc. (PMCI) had visited the construction site of a company project at Lian, Batangas. They were joined by family members and friends invited to an excursion to the beach after the visit. The group stayed at Lian beach until 5:30 p.m., when they decided to return to Manila. They rode in a Cimarron with Plate No. 840-45, owned by Salvador Salenga, father of one of the PMCI employees, and driven by Rolando Hernandez.

At about 8:00 p.m., as the Cimarron traveled along Aguinaldo Highway in Imus, Cavite on its way back to Manila, it was hit on its front portion by petitioner’s panel truck, bearing Plate No. 581 XM, which was traveling in the opposite direction. The panel truck was on its way to petitioner’s plant in Dasmariñas, Cavite after delivering linen to the Makati Medical Center. Petitioner’s driver, Herman Hernandez, claimed that a jeepney in front of him suddenly stopped; he stepped on the brakes to avoid hitting it, causing his vehicle to swerve to the left and encroach on a portion of the opposite lane. The panel truck then collided with the Cimarron on the north-bound lane.

The collision killed Rolando Hernandez, Jason Bernabe, and Dalmacio Salunoy. Several other passengers were injured and taken to various hospitals. According to the panel truck driver, the distance between his vehicle and the jeepney ahead was about 12 meters, and he was running at 60 miles per hour; he later tried to correct himself by saying the speedometer measured kilometers, but his testimony became muddled on cross-examination. The maximum allowable speed for trucks and buses on open country roads such as Aguinaldo Highway was 50 kilometers per hour. The panel truck driver also testified that his vehicle swerved beyond the center line by about 1 1/4 to 1 1/2 feet. Nicanor Bernabe III testified that he saw a glare of light coming toward them at a fast pace before the impact. Charito Estolano, seated in front of the Cimarron, testified that an approaching vehicle from the opposite direction hit them, that its light glared and blinded them, and that their vehicle was on the right lane. The police investigator did not state in his report or testimony that the Cimarron had only one headlight on.

On December 4, 1980, private respondents filed a civil case for damages before the then Court of First Instance of Rizal, Pasig Branch, against petitioner. The trial court found petitioner’s driver responsible for the accident and held petitioner liable to private respondents. It found that no tests of skill, physical, mental, or emotional were conducted on would-be employees; no on-the-job training or seminars on road courtesies and rules were done; no instructions were given on how to react in emergencies or what to do after an emergency; and no 204 file was presented. It also noted that the swerving of petitioner’s panel truck to the opposite lane could mean high speed and tailgating the jeepney ahead. The Court of Appeals affirmed the trial court’s decision in toto.

• Contributory Negligence: Petitioner argued that the Cimarron driver was guilty of contributory negligence because he violated traffic rules and regulations at the time of the mishap, and under Art. 2185 of the Civil Code he was presumed negligent. The alleged violations were that the Cimarron was overloaded with 20 to 25 passengers when its capacity was only 17, that its front seat was occupied by four adults including the driver, and that it had only one functioning headlight. Petitioner cited Art. III, §2 of R.A. No. 4136, which prohibits allowing more passengers than registered capacity, and Art. IV, §3(e), which requires two lighted headlights at night.
• Swerving Not Negligence Per Se: Petitioner asserted that the fact that its panel truck encroached on a portion of the Cimarron’s lane did not show that its driver was negligent, citing Bayasen vs. Court of Appeals, which allegedly held that the sudden swerving of a vehicle caused by its driver stepping on the brakes is not negligence per se.
• Last Clear Chance: Petitioner invoked McKee vs. Intermediate Appellate Court and the doctrine of last clear chance, arguing that even if the panel truck driver was initially negligent, the Cimarron driver had the last opportunity to avoid the accident but failed to do so because of his own negligence, such as using only one headlight and overcrowding the front seat.
• Employer’s Due Diligence: Petitioner contended that the non-submission of the NBI clearance and police clearance of its driver did not mean it failed to exercise the diligence of a good father of a family in selection and supervision, because no law requires employees to submit NBI and police clearances prior to employment. It also argued that there is no law requiring psychological and physical tests before employment, and that its employment of Herman Hernandez meant he had passed the company’s screening tests, including submission of those documents.

• Contributory Negligence: Whether the Cimarron driver’s alleged traffic violations constituted contributory negligence that mitigated or extinguished petitioner’s liability.
• Proximate Cause and Negligence: Whether the panel truck driver’s swerving and encroachment on the opposite lane was negligence and the proximate cause of the collision, and whether Bayasen vs. Court of Appeals applied.
• Last Clear Chance: Whether the doctrine of last clear chance applied to exonerate petitioner because the Cimarron driver allegedly had the last opportunity to avoid the collision.
• Employer’s Liability and Due Diligence: Whether petitioner exercised the diligence of a good father of a family in the selection and supervision of its driver, and whether the absence of NBI and police clearances and psychological and physical tests proved a failure of such diligence.
• Damages: Whether the awards of actual damages, moral damages, death indemnity, loss of earning capacity, and attorney’s fees were proper.

• Contributory Negligence: No. The alleged traffic violations were not shown to have contributed to the collision; negligence consisting of violation of law is without legal consequence unless it is a contributing cause of the injury.
• Proximate Cause and Negligence: Yes. The panel truck driver lost control of his vehicle and bumped the Cimarron; the proximate cause of the accident was his negligence, and Bayasen did not apply because that case involved skidding on a wet and slippery road, while here the road was dry and safe.
• Last Clear Chance: No. McKee was misplaced because in that case the at-fault truck had an opportunity to avoid the collision, whereas here everything happened so quickly that the Cimarron had no such opportunity.
• Employer’s Liability and Due Diligence: Yes, petitioner is liable. It failed to prove the diligence of a good father of a family in selection and supervision; its policies were unwritten, it did not present the driver’s NBI and police records, and it showed no psychological or physical testing, training, instructions, or actual supervision.
• Damages: Actual and moral damages were affirmed, as was the P50,000.00 death indemnity for Jason Bernabe. The P100,000.00 award to Dalmacio Salunoy’s heirs was deleted and replaced with P124,300.00 for loss of earning capacity and P50,000.00 death indemnity; attorney’s fees were disallowed for lack of justification.

• Contributory Negligence: Petitioner bore the burden of showing a causal connection between the alleged traffic violations and the injury. It had to show that the violation of the Land Transportation and Traffic Code was the proximate or legal cause of the injury or substantially contributed thereto. Petitioner’s allegations that the Cimarron was overloaded, had an overcrowded front seat, and used only one headlight merely suggested increased risk, decreased visibility, and decreased maneuverability, but did not discharge the burden of proving that such alleged negligence contributed to the collision. The police investigator did not state that the Cimarron had only one headlight on, and only petitioner’s driver claimed so. The evidence also showed no way either driver could have avoided the collision, as the panel truck driver lost control and bumped the Cimarron despite applying the brakes.
• Proximate Cause and Negligence: The panel truck driver testified that a jeepney ahead suddenly stopped, that he stepped on the brakes, and that his vehicle swerved to the left by about 1 1/4 to 1 1/2 feet beyond the center line. Private respondents’ testimonies were consistent that the panel truck went out of control and smashed into the Cimarron. Even if both headlights of the Cimarron had been lighted, it would have been bumped just the same because the panel truck driver could not stop despite applying the brakes. There was no basis for the claim that decreased visibility or decreased maneuverability prevented the Cimarron driver from avoiding the panel truck. The trial court noted that the swerving could mean the panel truck was running at very high speed and tailgating the jeepney. The panel truck driver claimed a distance of about 12 meters from the jeepney, which would have allowed him to stop, and he testified to a speed of 60 miles per hour, later muddled as to miles or kilometers. In any event, the maximum allowable speed for trucks and buses on open country roads was 50 kilometers per hour, so the panel truck was overspeeding. Bayasen did not apply because there the vehicle skidded due to a wet and slippery road, while here the road was dry and safe and the only explanation was human error.
• Last Clear Chance: McKee was not applicable. In that case, the driver of the truck at fault had an opportunity to avoid the collision but ignored signals from the other vehicle to slow down and allow it to pass the bridge. Here, no such opportunity was given to the Cimarron on the night of the mishap. Everything happened so quickly that before the passengers of the Cimarron knew it, the vehicle had been bumped by the truck.
• Employer’s Liability and Due Diligence: The Court of Appeals did not hold that petitioner’s failure to submit NBI and police clearances was itself proof of failure to exercise due diligence. Rather, it held that petitioner’s policy of requiring prospective employees to submit NBI and police clearances and to have at least two years of driving experience was not enough to prove due diligence, and that petitioner failed to prove even this policy because it did not present the driver’s NBI and police records during trial. Although no law requires psychological and physical tests before employment, such tests would be a reliable indicator of due diligence. The trial court found no tests of skill, physical, mental, or emotional were conducted; no on-the-job training or seminars on road courtesies and rules; no instructions on how to react in emergencies or what to do after an emergency; and no 204 file was presented. Driving exacts a more than usual toll on the senses, so employers must exert extra care in the selection and supervision of employees and go beyond minimum legal requirements. Petitioner’s office manager testified that petitioner had a policy of requiring clearances and experience, but the policies were not in writing, and he did not show how he supervised the drivers to ensure safe driving.
• Damages: Actual damages require competent proof of the actual amount of loss, and credence can be given only to claims duly supported by receipts. The actual damages claimed were supported by receipts and appeared to have been really incurred. Moral damages were reasonable and necessary because private respondents suffered sleepless nights, mental anguish, serious anxiety, and wounded feelings within the meaning of Art. 2217 of the Civil Code; some lost loved ones while others lost their future. The P50,000.00 death indemnity to the heirs of Jason Bernabe was in accordance with law. The P100,000.00 award to the heirs of Dalmacio Salunoy, denominated as moral damages and unearned income, could not be upheld because the heirs were already included among those awarded moral damages. The amount was presumably for loss of earning capacity but had to be modified. Using the formula 2/3 multiplied by (80 minus the age of the deceased), and since Salunoy was 46 years old at death, his life expectancy was 22.6 years. His annual gross earning was about P11,000.00, from which 50% was deducted as reasonable and necessary living expenses, leaving net annual earnings of P5,500.00. His net earning capacity was P124,300.00. In addition, his heirs should be paid P50,000.00 as death indemnity. Attorney’s fees were disallowed because the trial court did not give any justification for granting them; awards of attorney’s fees must be based on findings of fact and law stated in the trial court’s decision.

• Vicarious Liability of Employers — An employer is liable for the negligent acts of its employees, but may escape liability by proving the diligence of a good father of a family in the selection and supervision of the employee. In this case, petitioner failed to prove such diligence: its employment policies were unwritten, it did not present the driver’s NBI and police records, and it showed no psychological or physical testing, training, instructions, or actual supervision.
• Contributory Negligence and Causal Connection — Negligence consisting in whole or in part of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury. Petitioner’s allegations that the Cimarron was overloaded, had an overcrowded front seat, and used only one headlight did not establish that those violations proximately caused or contributed to the collision.
• Proximate Cause — The proximate cause of the accident was the negligence of petitioner’s driver, who lost control of the panel truck, encroached on the opposite lane, and bumped the Cimarron. The fact that the Cimarron may have had only one headlight did not negate the panel truck driver’s negligence, because the collision would have occurred even with two headlights.
• Last Clear Chance — The doctrine of last clear chance applies where the person with the last opportunity to avoid the accident, notwithstanding the negligent acts of the opponent, is solely responsible for the consequences. It did not apply here because the Cimarron had no such opportunity; the events happened so quickly that its passengers did not know of the impending collision until impact.
• Damages and Attorney’s Fees — Actual damages require competent proof and receipts; moral damages may be awarded for sleepless nights, mental anguish, serious anxiety, and wounded feelings under Art. 2217 of the Civil Code; death indemnity is recoverable; loss of earning capacity is computed using the formula 2/3 × (80 − age) × net annual income; and attorney’s fees must be based on findings of fact and law stated in the trial court’s decision.

• "Negligence, consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury." — This states the ratio for rejecting petitioner’s contributory negligence defense based on alleged traffic violations; the Court required proof that the violations proximately caused or contributed to the collision.
• "All these point to the fact that the proximate cause of the accident was the negligence of petitioner's driver." — This is the Court’s conclusion on proximate cause, after finding that the panel truck driver lost control, encroached on the opposite lane, and bumped the Cimarron.
• "Indeed, driving exacts a more than usual toll on the senses. Accordingly, it behooves employers to exert extra care in the selection and supervision of their employees. They must go beyond the minimum requirements fixed by law." — This articulates the standard of due diligence for employers of drivers and supports the finding that petitioner failed to prove adequate selection and supervision.
• "It is now settled that awards of attorney's fees must be based on findings of fact and law, stated in the decision of the trial court." — This is the basis for disallowing the P50,000.00 attorney’s fees award because the trial court gave no justification for it.

• Bayasen vs. Court of Appeals, 103 SCRA 197 (1981) — Petitioner cited this for the proposition that sudden swerving caused by stepping on the brakes is not negligence per se. The Court distinguished it because that case involved skidding on a wet and slippery road, whereas the present case involved swerving on a dry and safe road due to human error.
• McKee vs. Intermediate Appellate Court, 211 SCRA 517 (1992) — Petitioner invoked this for the doctrine of last clear chance. The Court distinguished it because in that case the at-fault truck had an opportunity to avoid the collision but ignored signals, while here the Cimarron had no such opportunity.
• Valenzuela vs. Court of Appeals, 253 SCRA 316 (1996) — Cited for the principle that driving exacts a more than usual toll on the senses, requiring employers to exert extra care in selecting and supervising drivers.
• People vs. Marollano, G.R. No. 105004, July 20, 1997 — Cited for the rule that actual damages require competent proof of the actual amount of loss and that credence can be given only to claims duly supported by receipts.
• Philtranco Service Enterprises vs. Court of Appeals, G.R. No. 120553, June 17, 1997 — Cited for the award of moral damages to allow victims to obtain means, diversion, or amusement to alleviate moral suffering.
• Metro Manila Transit Corporation vs. Court of Appeals, G.R. No. 116617, Nov. 16, 1998; Negros Navigation Co., Inc. vs. Court of Appeals, 281 SCRA 534 (1997); Villa-Rey Transit, Inc. vs. Court of Appeals, 31 SCRA 511 (1970) — Cited for the formula in determining life expectancy and loss of earning capacity.
• Salao vs. Court of Appeals, G.R. No. 107725, Jan. 22, 1998 — Cited for the rule that awards of attorney’s fees must be based on findings of fact and law stated in the trial court’s decision.

• Art. 2185, Civil Code — Petitioner invoked this provision to argue that the Cimarron driver was presumed negligent because he violated traffic rules. The Court held that the alleged violations did not constitute contributory negligence because they were not shown to be a proximate or contributing cause of the injury.
• Art. III, §2, R.A. No. 4136 (Land Transportation and Traffic Code) — Petitioner cited this provision, which prohibits allowing more passengers than the registered carry capacity, to support its claim that the Cimarron was overloaded. The Court found no causal connection between the alleged overload and the collision.
• Art. IV, §3(e), R.A. No. 4136 — Petitioner cited this provision, which requires every motor vehicle of more than one meter projected width to bear two headlights lighted at night, to support its claim that the Cimarron had only one functioning headlight. The Court found no basis for the claim and no causal connection to the collision.
• Art. I, §35(2), R.A. No. 4136 — The Court cited this provision, which sets the maximum allowable speed for trucks and buses on open country roads at 50 kilometers per hour, to support its finding that the panel truck was overspeeding.
• Art. 2217, Civil Code — The Court cited this provision in awarding moral damages, finding that private respondents suffered sleepless nights, mental anguish, serious anxiety, and wounded feelings due to petitioner’s culpable action.

Justices Bellosillo, Puno, and Martinez concurred.