Wednesday, March 07, 2012

Secosa vs. Heirs of Francisco, [G.R. No. 160039. June 29, 2004]

Facts: Francisco, an 18 year old 3rd year physical therapy student was riding a motorcycle. A sand and gravel truck was traveling behind the motorcycle, which in turn was being tailed by the Isuzu truck driven by Secosa. The Isuzu cargo truck was owned by Dassad Warehousing and Port Services, Inc.. The three vehicles were traversing the southbound lane at a fairly high speed. When Secosa overtook the sand and gravel truck, he bumped the motorcycle causing Francisco to fall. The rear wheels of the Isuzu truck then ran over Francisco, which resulted in his instantaneous death. Secosa left his truck and fled the scene of the collision. 

The parents of Francisco, respondents herein, filed an action for damages against Secosa, Dassad Warehousing and Port Services, Inc. and Dassad’s president, El Buenasucenso Sy. 

The court a quo rendered a decision in favor of herein respondents; thus petitioners appealed the decision to the Court of Appeals, which unfortunately affirmed the appealed decision in toto. Hence, the present petition. 

Issues: 
(1) Whether or not Dassad Warehousing and Port Services, Inc. exercised the diligence of a good father of a family in the selection and supervision of its employees; hence it cannot be held solidary liable with the negligence of its employee. 

(2) Whether or not Dassad’s president, El Buenasucenso Sy, can be held solidary liable with co-petitioners. 

Held: 
(1) No. Dassad Warehousing and Port Services, Inc. did not exercise the required diligence of a good father of a family in the selection and supervision of its employees. Hence, it cannot be held solidary liable with the negligence of its employee. 

Article 2176 of the Civil Code provides: 

Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. 

On the other hand, Article 2180, in pertinent part, states: 

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 x x x. 

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry x x x. 

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. 

Based on the foregoing provisions, when an injury is caused by the negligence of an employee, there instantly arises a presumption that there was negligence on the part of the employer, which however, may be rebutted by a clear evidence showing on the part of the employer that it exercised the care and diligence of a good father of a family in the selection and supervision of his employee. 

In the selection of prospective employees, employers are required to examine them as to their qualifications, experience, and service records. On the other hand, with respect to the supervision of employees, employers should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for breaches thereof. To establish these factors in a trial involving the issue of explicit liability, employers must submit concrete proof, including documentary evidence. The reason for this is to obviate the biased nature of the employer’s testimony or that of his witnesses. 

In the case at bar, Dassad Warehousing and Port Services, Inc. failed to conclusively prove that it had exercised the requisite diligence of a good father of a family in the selection and supervision of its employees. Dassad Warehousing and Port Services, Inc. failed to support the testimony of its lone witness, Edilberto Duerme, with documentary evidence which would have strengthened its claim of due diligence in the selection and supervision of its employees. Such an omission is fatal on account of which, Dassad can be rightfully held solidarily liable with its co-petitioner Secosa for the damages suffered by the heirs of Francisco. 

(2) No. Sy cannot be held solidarily liable with his co-petitioners. While it may be true that Sy is the president of Dassad Warehousing and Port Services, Inc., such fact is not by itself sufficient to hold him solidarily liable for the liabilities adjudged against his co-petitioners. 

A corporation has a personality separate from that of its stockholders or members. The doctrine of ‘veil of corporation’ treats as separate and distinct the affairs of a corporation and its officers and stockholders. As a rule, a corporation will be looked upon as a legal entity, unless and until sufficient reason to the contrary appears. When the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons. Also, the corporate entity may be disregarded in the interest of justice in such cases as fraud that may work inequities among members of the corporation internally, involving no rights of the public or third persons. In both instances, there must have been fraud and proof of it. 

The records of the case does not point toward the presence of any grounds enumerated above that will justify the piercing of the veil of corporate entity such as to hold Sy, the president of Dassad Warehousing and Port Services, Inc., solidarily liable with it. 

Furthermore, the Isuzu cargo truck which ran over Francisco was registered in the name of Dassad and not in the name of Sy. Secosa is an employee of Dassad and not of Sy. These facts showed Sy’s exclusion from liability for damages arising from the death of Francisco.

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