J.A.B. Bulao & Associates

CASE 2011-0114: OCEAN BUILDERS CONSTRUCTION CORP. AND/OR DENNIS HAO VS. SPOUSES ANTONIO AND ANICIA CUBACUB (G.R. NO. 150898, 13 APRIL 2011, CARPIO MORALES, J.) SUBJECTS: DAMAGE BASED ON TORTS; WHETHER EMPLOYER IS LIABLE FOR DEATH OF EMPLOYEE. (BRIEF TITLE: OCEAN BUILDERS VS. SPOUSES CUBACUB).

Republic of thePhilippines

Supreme Court

BaguioCity

THIRD DIVISION

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D E C I S I O N

CARPIO MORALES, J.:

          Bladimir Cubacub (Bladimir) was employed as maintenance man by petitioner company Ocean Builders Construction Corp. at its office inCaloocanCity. 

On April 9, 1995, Bladimir was afflicted with chicken pox.  He was thus advised by petitioner Dennis Hao (Hao), the company’s general manager, to rest for three days which he did at the company’s “barracks” where he lives free of charge.  

Three days later or on April 12, 1995, Bladimir went about his usual chores of manning the gate of the company premises and even cleaned the company vehicles.  Later in the afternoon, however, he asked a co-worker, Ignacio Silangga (Silangga), to accompany him to his house in Capas, Tarlac so he could rest.  Informed by Silangga of Bladimir’s intention, Hao gave Bladimir P1,000.00 and ordered Silangga to instead bring Bladimir to the nearest hospital. 

Along with co-workers Narding and Tito Vergado, Silangga thus brought Bladimir to theCaybigaCommunityHospital(CaybigaHospital), a primary-care hospital around one kilometer away from the office of the company. 

The hospital did not allow Bladimir to leave the hospital.  He was then confined, with Narding keeping watch over him.  The next day, April 13, 1995, a doctor of the hospital informed Narding that they needed to talk to Bladimir’s parents, hence, on Silangga’s request, their co-workers June Matias and Joel Edrene fetched Bladimir’s parents from Tarlac. 

At about 8 o’clock in the evening of the same day, April 13, 1995, Bladimir’s parents-respondent spouses Cubacub, with their friend Dr. Hermes Frias (Dr. Frias), arrived at the Caybiga Hospital and transferred Bladimir to the Quezon City General Hospital (QCGH) where he was placed in the intensive care unit and died the following day, April 14, 1995. 

The death certificate issued by the QCGH recorded Bladimir’s immediate cause of death as cardio-respiratory arrest and the antecedent cause as pneumonia.  On the other hand, the death certificate issued by Dr. Frias recorded the causes of death as cardiac arrest, multiple organ system failure, septicemia and chicken pox.

          Bladimir’s parents-herein respondents later filed on August 17, 1995 before the Tarlac Regional Trial Court (RTC) at Capas a complaint for damages against petitioners, alleging that Hao was guilty of negligence which resulted in the deterioration of Bladimir’s condition leading to his death.

          By Decision of April 14, 1997,^[1][1] Branch 66 of the Tarlac RTC at Capas dismissed the complaint, holding that Hao was not negligent.  It ruled that Hao was not under any obligation to bring Bladimir to better tertiary hospitals, and assuming that Bladimir died of chicken pox aggravated by pneumonia or some other complications due to lack of adequate facilities at the hospital, the same cannot be attributed to Hao.

          On respondents’ appeal, the Court of Appeals, by Decision of June 22, 2001, reversed the trial court’s decision, holding that by Hao’s failure to bring Bladimir to a better-equipped hospital, he violated Article 161 of the Labor Code.  It went on to state that Hao should have foreseen that Bladimir, an adult, could suffer complications from chicken pox and, had he been brought to hospitals like St. Luke’s, Capitol Medical Center, Philippine General Hospital and the like, Bladimir could have been saved. 

Thus the appellate court disposed:

          WHEREFORE, the decision of the Regional Trial Court of Capas, Tarlac, Branch 66 in Civil Case No. 349 dated April 14, 1997 is hereby REVERSED and SET ASIDE and a new one rendered holding the defendants solidarily liable to plaintiffs-appellants for the following:

1.      P50,000.00 for the life of Bladimir Cubacub;

2.      P584,630.00 for loss of Bladimir’s earning capacity;

3.      P4,834.60 as reimbursement of expenses incurred atQuezon City GeneralHospitalas evidenced by Exhibits “E” to “E-14” inclusive;

4.      P18,107.75 as reimbursement of expenses for the 5-day wake covered by Exhibits “F” to “F-17”;

5.      P30,000.00 as funeral expenses at Prudential Funeral Homes covered by Exhibit “I”;

6.      P6,700.00 for acquisition of memorial lot at Sto.RosarioMemorial Parkcovered by Exhibit “J”;

7.      P50,000.00 as moral damages;

8.      P20,000.00 as exemplary damages;

9.      P15,000.00 as attorney’s fees and

10.  Cost of suit.

SO ORDERED.^[2][2]

          The motion for reconsideration was denied by Resolution^[3][3] of November 26, 2001, hence this petition.

          Petitioners maintain that Hao exercised the diligence more than what the law requires, hence, they are not liable for damages.

          The petition is meritorious.

          At the onset, the Court notes that the present case is one for damages based on torts, the employer-employee relationship being merely incidental.  To successfully prosecute an action anchored on torts, three elements must be present, viz:  (1) duty (2) breach (3) injury and proximate causation.   The assailed decision of the appellate court held that it was the duty of petitioners to provide adequate medical assistance to the employees under Art. 161 of the Labor Code, failing which a breach is committed.

          Art. 161 of the Labor Code provides:

                      ART. 161.  Assistance of employer. – It shall be the duty of any employer to provide all the necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick employee in case of emergency.  (emphasis and underscoring supplied)

The Implementing Rules of the Code do not enlighten what the phrase “adequate and immediate” medical attendance means in relation to an “emergency.”  It would thus appear that the determination of what it means is left to the employer, except when a full-time registered nurse or physician are available on-site as required, also under the Labor Code, specifically Art. 157 which provides:

                      Article 157.  Emergency Medical and Dental Services. ─ It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of:

(a)          The services of a full-time registered nurse when the number of employees exceeds fifty (50) but not more than two hundred (200) except when the employer does not maintain hazardous workplaces, in which case, the services of a graduate first-aider shall be provided for the protection of workers, where no registered nurse is available.  The Secretary of Labor and Employment shall provide by appropriate regulations, the services that shall be required where the number of employees does not exceed fifty (50) and shall determine by appropriate order, hazardous workplaces for purposes of this Article;

(b)         The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when the number of employees exceeds two hundred (200) but not more than three hundred (300); and

(c)          The services of a full-time physician, dentist and a full-time registered nurse as well as a dental clinic and an infirmary or emergency hospital with one bed capacity for every one hundred (100) employees when the number of employees exceeds three hundred (300).  (emphasis and underscoring supplied)

In the present case, there is no allegation that the company premises are hazardous.  Neither is there any allegation on the number of employees the company has.  If Hao’s testimony^[4][4] would be believed, the company had only seven regular employees and 20 contractual    employees ─ still short of the minimum 50 workers that an establishment must have for it to be required to have a full-time registered nurse. 

The Court can thus only determine whether the actions taken by petitioners when Bladimir became ill amounted to the “necessary assistance” to ensure “adequate and immediate medical . . . attendance” to Bladimir as required under Art. 161 of the Labor Code.  

As found by the trial court and borne by the records, petitioner Hao’s advice for  Bladimir to, as he did, take a 3-day rest and to later have him brought to the nearest hospital constituted “adequate and immediate medical” attendance that he is mandated, under Art. 161, to provide to a sick employee in an emergency.

Chicken pox is self-limiting.  Hao does not appear to have a medical background.  He may not be thus expected to have known that Bladimir needed to be brought to a hospital with better facilities than the CaybigaHospital, contrary to appellate court’s ruling.

AT ALL EVENTS, the alleged negligence of Hao cannot be considered as the proximate cause of the death of Bladimir.  Proximate cause is that which, in natural and continuous sequence, unbroken by an efficient intervening cause, produces injury, and without which, the result would not have occurred.^[5][5]  An injury or damage is proximately caused by an act or failure to act, whenever it appears from the evidence in the case that the act or omission played a substantial part in bringing about or actually causing the injury or damage, and that the injury or damage was either a direct result or a reasonably probable consequence of the act or omission.^[6][6] 

          Verily, the issue in this case is essentially factual in nature.  The dissent, apart from adopting the appellate court’s findings, finds that Bladimir contracted chicken pox from a co-worker and Hao was negligent in not bringing that co-worker to the nearest physician, or isolating him as well.  This finding is not, however, borne by the records.  Nowhere in the appellate court’s or even the trial court’s decision is there any such definite finding that Bladimir contracted chicken pox from a co-worker.  At best, the only allusion to another employee being afflicted with chicken pox was when Hao testified that he knew it to heal within three days as was the case of another worker, without reference, however, as to when it happened.^[7][7]

On the issue of which of the two death certificates is more credible, the dissent, noting that Dr. Frias attended to Bladimir during his “last illness,” holds that the certificate which he issued ─ citing chicken pox as antecedent cause ─ deserves more credence. 

There appears, however, to be no conflict in the two death certificates on the immediate cause of Bladimir’s death since both cite cardio-respiratory arrest due to complications ─ from pneumonia per QCGH, septicemia and chicken pox per Dr. Frias’.  In fact, Dr. Frias admitted that the causes of death in both certificates were the same.^[8][8] 

Be that as it may, Dr. Frias could not be considered as Bladimir’s attending physician, he having merely ordered Bladimir’s transfer to the QCGH after seeing him at the CaybigaHospital.  He thereafter left Bladimir to the care of doctors at QCGH, returning to Capas, Tarlac at 4 o’clock the following morning or eight hours after seeing Bladimir.  As he himself testified upon cross-examination, he did not personally attend to Bladimir anymore once the latter was brought to the ICU at QCGH.^[9][9] 

It bears emphasis that a duly-registered death certificate is considered a public document and the entries therein are presumed correct, unless the party who contests its accuracy can produce positive evidence establishing otherwise.^[10][10]  The QCGH death certificate was received by the City Civil Registrar on April 17, 1995.   Not only was the certificate shown by positive evidence to be inaccurate.  Its credibility, more than that issued by Dr. Frias, becomes more pronounced as note is taken of the fact that he was not around at the time of death.   

IN FINE, petitioner company and its co-petitioner manager Dennis Hao are not guilty of negligence.

WHEREFORE, the petition is GRANTED.  The challenged Decision of the Court of Appeals is REVERSED, and the complaint is hereby DISMISSED.

                                      CONCHITA CARPIO MORALES

                                                          Associate Justice

WE CONCUR:

ATTESTATION

          I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                      CONCHITA CARPIO MORALES                   

                       Associate Justice

                       Chairperson

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                     RENATO C. CORONA

                                                                Chief Justice

CASE NO. 2011-0113: BANK OF COMMERCE VS. GOODMAN  FIELDER INTERNATIONAL PHILIPPINES, INC. (G.R. NO. 191561, 7 MARCH 2011, CARPIO MORALES, J.) SUBJECT: INTERPRETATION OF AN INSTRUMENT. (BRIEF TITLE: BANK OF COMMERCE VS. GOODMAN).

THIRD DIVISION

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D E C I S I O N

CARPIO MORALES, J.

          Goodman Fielder International Philippines, Inc. (respondent), a corporation duly registered and existing under the laws of the Republic of the Philippines, is engaged in marketing of fats and oil shortening.^[1]

          Keraj Marketing Company (Keraj), represented by its purported owner Sunil K. Amarnani (Amarnani), sought a distributorship agreement from respondent.  As a pre-requisite to respondent’s consent, a credit line/bank guaranty in the amount of P500,000.00 was required from Keraj.  Amarnani thus applied for a credit line/bank guaranty with the Bacolod branch of Bank of Commerce (petitioner).

          Pending submission of the required documents for processing and approval of the credit line, Amarnani, by letter of August 21, 2000,^[2] requested the issuance of a conditional certification from petitioner’s branch manager Eli Aragon (Aragon) in this wise:

            Earlier I mentioned that one of my big suppliers is Goodman Fielder International where I get my baking supplies.

            They are requiring from me a certification issued by my bank that I am arranging for a credit line with my bank to be used if I cannot pay them. Please tell me the requirements for the credit line so I can apply. All I need is a conditional certification that I am arranging for a credit line from our bank. I will prepare the necessary documents you mentioned to me in your letter.

            I can offer you a property here in Bacolod as collateral for said credit line application.

            Please advi[s]e.  (emphasis, italics and underscoring supplied)

          Replying to Amarnani’s request, Aragon sent respondent a letter of August 23, 2000^[3] reading:

Gentlemen:

            At the request of our client, KERAJ MARKETING COMPANY with postal address at Door No. 2 Goldenfields Commercial Complex, Singcang, Bacolod City, we are pleased to inform you that said Corporation has arranged for a credit line in the amount of FIVE HUNDRED THOUSAND PESOS ONLY (P500,000.00), subject to the compliance by said client of the policies, terms and conditions imposed by the bank on said credit line. The said credit line will be used exclusively for settling any obligations of our client, KERAJ MARKETING COMPANY (sic), against your company.

            This certification is issued at the request of the client for whatever legal purpose it may serve them best. (emphasis and underscoring supplied)

          On October 2, 2000, respondent and Keraj entered into a Distributorship Agreement.

          Aragon subsequently issued a similar letter (dated October 18, 2000^[4]) in favor of Bacolod RK Distributors and Co., (Bacolod RK), an entity also allegedly owned by Amarnani, attesting to the arrangement by Keraj for a credit line in the amount ofP2,000,000.00, to be utilized for the settlement of Keraj’s accounts with respondent.

          Both letters of Aragon contain a “check write” on the left side indicating the amount applied for as credit line.  Keraj and Bacolod RK did not pursue their application for a credit line, however, despite follow-up advice from petitioner.

          A year later, respondent informed petitioner, by letter of October 24, 2001,^[5] its intent to claim against the bank guaranty issued to settle Keraj and Bacolod RK’s unpaid accounts.  By another letter dated November 20, 2001,^[6] respondent advised petitioner its intent to collect the amount of P1,817,691.30 representing Keraj and Bacolod RK’s unpaid obligations.

          Negotiations for the settlement of Keraj and Bacolod RK’s obligations having failed, respondent filed a complaint for collection of sum of money against Keraj, Amarnani, Bacolod RK, and petitioner and its manager Aragon before the Regional Trial Court (RTC) of Pasig.

          In defense, petitioner and Aragon claimed that the letters merely certified that Keraj and Bacolod RK applied for the issuance of a bank guaranty, but no actual bank guaranty was approved, both companies having failed to present the required documents for processing the application.

          Bacolod RK, on the other hand, denied any involvement in the transaction between Keraj and respondent.

          Only petitioner presented evidence.

          By Decision of July 20, 2007, Branch 268 of the Pasig RTC absolved Bacolod RK from liability, but faulted Keraj, Amarnani,Aragon and petitioner, disposing as follows:

WHEREFORE, foregoing premises considered, judgment is hereby rendered in favor of the plaintiff [respondent herein] and against defendants SUNIL AMARNANI, KERAJ MARKETING CO., ELI ARAGON and BANK OF COMMERCE, ordering the latter, jointly and severally, to pay the former the following sums:

1.      Php1,700,250.66 as actual damages plus interest at the legal rate from the date of extrajudicial demand and satisfaction of judgment;

2.      The sum equivalent to 25% of the total amount due as and by way of attorney’s fees, and;

3.      The cost of suits.

SO ORDERED.^[7] (capitalization in the original)

In holding petitioner jointly and severally liable with Amarnani, Keraj and Aragon, the trial court held:

From the evidence adduced by the plaintiff [Goodman], defendant bank is estopped from denying its liability relative to the subject bank guarantees. Defendant Bank of Commerce failed to sufficiently prove the foregoing defenses. Plaintiff relied on the apparent authority of its branch manager in issuing the subject documents. Defendant Bank is bound by the acts of its branch manager. The Supreme Court ruled: “What transpires in the corporate board room is entirely an internal matter. Hence, petitioner may not impute negligence on the part of respondent’s representative in failing to find out the scope of authority of petitioner’s Branch Manager. Indeed, the public has the right to rely on the trustworthiness of bank managers and their acts. Obviously, confidence in the banking system, which necessarily includes reliance on bank managers, is vital in the economic life of our society.” (BPI Family Savings Bank, Inc. versus First Metro Investment Corporation, G.R. No. 132390, May 21, 2004).^[8]   (italics in the original; emphasis supplied)

          The Court of Appeals, by the assailed Decision of June 17, 2009,^[9] opined that Aragon’s letters clearly showed approval by petitioner of the application for a credit line:

The word “guaranty” is not strictly required to appear in the said document to be able to say that it is as such. If the words of the contract appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. In the case at bench, it was clearly shown that the intention of the document was to guarantee the obligations that would be incurred by [herein petitioner’s] clients, defendants Keraj and Becolod (sic) RK. Such intention was expressed in the last phrase of the first paragraph and its limitations were specifically limited to Php500,000.00 and 2,000,000.00 respectively. There is nothing more left to doubt the intention of the parties included in the said bank guaranty.^[10]  (underscoring supplied)

The appellate court accordingly affirmed the trial court’s decision, with modification by deleting the award of attorney’s fees.

          Petitioner’s motion for reconsideration having been denied by Resolution of March 8, 2010, it filed the present petition for review, faulting the appellate court as follows:

I.

            THE COURT OF APPEALS ERRONEOUSLY INTERPRETED THE NOTICE/CERTIFICATION ISSUED BY DEFENDANT ARAGON AS A BANK GUARANTEE AND NOT MERELY AS A LETTER-CERTIFICATION OF A PENDING CREDIT LINE APPLICATION;

II.

            THE DOCTRINE OF APPARENT AUTHORITY DOES NOT APPLY IN THIS CASE;

III.

            DEFENDANT BANCOMMERCE IS NOT ESTOPPED FROM DENYING LIABILITY ON THE PURPORTED BANK GUARANTEES. (underscoring supplied)

          The resolution of the case hinges on what Aragon’s statement in the letters sent to respondent that “… we are pleased to inform you that said Corporation has arranged for a credit line ” conveys.

Section 13, Rule 130, Rules of Court  on interpretation of an instrument provides:

SEC. 13. Interpretation according to circumstances – For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject thereof and of the parties to it, may be shown so that the judge may be placed in the position of those whose language he is to interpret.   (underscoring supplied)

          A consideration of the circumstances under which Aragon’s letter-certifications were issued is thus in order.

Amarnani’s letter-request of August 21, 2000 for a conditional certification from Aragon was granted two days later whenAragon issued the letter-certification addressed to respondent.   Within that period, it could not have been possible for petitioner to even process  the application, given that Amarnani had not even complied with the requirements as he, himself, indicated in his letter-request to Aragon to “please tell [him] the requirements for the credit line so [he] c[ould] apply.”
          The Distributorship Agreement between respondent and Keraj was forged on October 2, 2000 or 39 days after the issuance of the letter-certification, long enough for respondent to verify if indeed a bank guaranty was, to its impression, granted.  

By respondent’s finance manager Leonora Armi Salvador’s testimony, upon receipt of the two letter-certifications,^[11] she concluded that they were bank guarantees considering their similarity with other bank guarantees in favor of respondent by other distributors; and she made  inquiries with petitioner only after Keraj defaulted in the payment of its obligation to respondent.^[12]

In light of the foregoing circumstances, petitioner could not have conveyed that it was issuing a bank guaranty in favor of Amarnani.   

          Respondent’s reliance on Aragon’s use of a “check writer,” a machine used to input a numerical or written value impression in the “payment amount field” of a check that is very difficult to alter, on the left side of each letter- certification, was misplaced, what prevails being the wordings of the letter-certifications.^[13]  

          WHEREFORE, the challenged Court of Appeals Decision of June 17, 2009 is REVERSED and SET ASIDE. The complaint of respondent, Goodman Fielder International Philippines, Inc. is, with respect to petitioner, Bank of Commerce,DISMISSED.

          SO ORDERED.

CONCHITA CARPIO MORALES

                                                                    Associate Justice

                                                                       Chairperson

 WE CONCUR:

ATTESTATION

          I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                  CONCHITA CARPIO MORALES

                                      Associate Justice

                                   Chairperson

CERTIFICATION

          Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                     RENATO C. CORONA

                                                                Chief Justice

^*               Designated member per Special Order No. 940 dated February 7, 2011 in lieu of Associate Justice Arturo D. Brion.

^[1]               Records, Vol. 3, TSN taken on March 3, 2004, p. 553.

^[2]               Rollo, p. 74.

^[3]               Id. at  75.

^[4]               Id. at 78.

^[5]               Id. at 79.

^[6]               Id. at 80.

^[7]               Id. at 121.

^[8]               Id. at 120.

^[9]               Penned by Associate Justice Jose L. Sabio, Jr., with the concurrence of Associate Justices Vicente S.E. Veloso and Ricardo R. Rosario, id. at 43-62.

^[10]             Id. at 54.

^[11]             Records, Vol. 3, TSN of March 3, 2004, pp. 583-584.

^[12]             Id. at 644.

^[13]             http://en.wikipedia.org/wiki/Checkwriter citing http://www.google.com/search?q=history+of+paymaster+ribbon+writer&hl=en&tbs=tl:1&tbo=u&ei=e1JkS665K46H8QaOstyaAw&sa=X&oi=timeline_result&ct=title&resnum=11&ved=0CDEQ5wIwCg (visited February 24, 2011).