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MERCURY DRUG CORPORATION v. SPS. RICHARD HUANG

FACTS:

The case involves an appeal of the decision and resolution of the Court of Appeals affirming with modification the decision of the Regional Trial Court (RTC) of Makati City. The trial court found the petitioners, Mercury Drug Corporation and Rolando J. del Rosario, jointly and severally liable to pay damages to the respondents, Richard and Carmen Huang, and their son Stephen Huang, for injuries sustained by Stephen in a road accident. The accident occurred on December 20, 1996, when the car driven by Stephen and the truck driven by del Rosario collided on C-5 Highway in Taguig, Metro Manila. The car was a total wreck and Stephen suffered severe injuries, resulting in permanent paralysis from the chest down.

Respondents attribute the accident to the gross negligence and reckless imprudence of del Rosario and the failure of Mercury Drug to exercise diligence in the selection and supervision of its driver. Petitioners, on the other hand, claim that the accident was caused by Stephen's recklessness and that they had exercised due diligence in selecting and supervising their employees.

The trial court held Mercury Drug and del Rosario liable for actual, compensatory, moral, and exemplary damages, as well as attorney's fees and litigation expenses. The Court of Appeals affirmed the decision with modification, reducing the award of moral damages. Petitioners now appeal this decision, raising several grounds for their appeal.

In this case, the petitioners argued that their truck was hit by the car of respondent Stephen Huang, causing the accident. However, the trial court and the appellate court found the petitioner, Del Rosario, to be negligent based on the evidence presented. The court noted that Del Rosario could not precisely identify which part of the truck was hit by the car and could not explain why the car landed on the opposite side of the road. The court also considered the testimony of an expert in physics, Dr. Daza, who stated that if the lighter vehicle hit the right front portion of the heavier vehicle, the general direction of the light vehicle after impact should be to the right side of the heavy vehicle. The court further found that the attempt to show damages on the front right side of the truck was unconvincing since there were damages on the left side as well. Del Rosario admitted that he lost control of the truck and failed to apply the brakes after the impact, which the court found to be disproportionate to the alleged impact caused by the car. Thus, the court upheld the findings of negligence against Del Rosario.

ISSUES:

  1. Whether petitioner Del Rosario's negligence was the direct and proximate cause of the injuries suffered by respondent Stephen Huang.

  2. Whether petitioner Mercury Drug can be held liable for the acts of its employee.

  3. Whether petitioner Mercury Drug exercised the diligence of a good father of a family in the selection and supervision of its employee.

  4. Whether the actual damages claimed by the respondents were supported by receipts.

  5. Whether the award for life care cost and loss of earning capacity are proper.

  6. Whether the award for moral and exemplary damages and attorney's fees should be upheld.

  7. Whether the award of exemplary damages and attorney's fees to the respondents is justified.

  8. Whether the petitioners should be held liable for the injuries sustained by the respondent.

RULING:

  1. The Court finds that petitioner Del Rosario's negligence was the direct and proximate cause of the injuries suffered by respondent Stephen Huang. The evidence proves that petitioner Del Rosario failed to do what a reasonable and prudent man would have done under the circumstances.

  2. Petitioner Mercury Drug can be held liable for the acts of its employee under Articles 2176 and 2180 of the Civil Code. The liability of the employer is direct or immediate and joint and solidary with the employee.

  3. Petitioner Mercury Drug failed to establish that it exercised the diligence of a good father of a family in the selection and supervision of its employee. It did not conduct the necessary driving tests and psychological examination for the specific position of Truck Man, and there were no tests conducted on the motor skills development, perceptual speed, visual attention, depth visualization, eye and hand coordination, and steadiness of petitioner Del Rosario. Further, petitioner Mercury Drug did not have a policy requiring back-up drivers for long trips, and it did not take any disciplinary action against petitioner Del Rosario despite him driving without a license and having a record for reckless driving.

  4. The actual damages claimed by the respondents were supported by receipts. Art. 2199 of the Civil Code provides that one is entitled to an adequate compensation for pecuniary loss suffered as duly proved. In this case, the respondents were able to present receipts amounting to P2,973,000.00 for hospital expenses, medicines, medical services and supplies, and nursing care services provided to the respondent Stephen from the day of the accident until December 1998.

  5. The petitioners are liable for all damages which are the natural and probable consequences of the act complained of. In this case, the doctors who attended to respondent Stephen testified that his chances of walking again and performing basic body functions are nil. It was also established that he will need continuous rehabilitation and therapy for the rest of his life. The court affirmed the award for life care cost amounting to P23,461,062.00 and loss of earning capacity amounting to P10,000,000.00, considering his age, probable life expectancy, health condition, and mental and physical condition before the accident.

  6. The court upheld the award for moral and exemplary damages and attorney's fees. Moral damages are designed to compensate for the physical suffering, mental anguish, fright, serious anxiety, and similar injuries caused by the wrongful act. The amount of the award must be proportionate to the suffering inflicted. Exemplary damages are intended to serve as an example or deterrent for similar acts in the future. Finally, attorney's fees are granted to the prevailing party to defray the expenses incurred in the litigation of the case.

  7. The award of exemplary damages and attorney's fees to the respondents is justified. The petitioner, Del Rosario, was driving without a license at the time of the accident and failed to step on his brakes immediately after the impact. These acts show gross negligence on his part, which warrants the grant of exemplary damages. Moreover, attorney's fees may be granted when a party is compelled to litigate or incur expenses to protect their interests by reason of an unjustified act of the other party.

  8. The petitioners should be held liable for the injuries sustained by the respondent. The records show that the accident was caused by the negligence of the petitioner, Del Rosario, who was an employee of the petitioner, Mercury Drug. The doctrine of vicarious liability applies in this case, making the petitioners liable for the acts of their employees committed within the course of their employment.

PRINCIPLES:

  • Negligence as the direct and proximate cause of damages.

  • Employer's liability for the acts of its employees under Articles 2176 and 2180 of the Civil Code.

  • Employer's duty to exercise the diligence of a good father of a family in the selection and supervision of its employees.

  • Actual damages may be awarded if duly proved by the claimant.

  • Damages that are the natural and probable consequences of the act complained of may be awarded.

  • Moral damages are designed to compensate for the physical and mental suffering caused by the wrongful act.

  • Exemplary damages serve as an example or deterrent for similar acts in the future.

  • Attorney's fees may be awarded to the prevailing party to cover the expenses incurred in litigation.

  • Under Article 2231 of the Civil Code, exemplary damages may be granted in cases of quasi-delicts if the defendant acted with gross negligence.

  • The doctrine of vicarious liability holds employers liable for the acts of their employees committed within the course of their employment.

  • Attorney's fees may be granted when a party is compelled to litigate or incur expenses to protect their interests by reason of an unjustified act of the other party.