Case Digest: Delsan Transport Lines, Inc. vs. C&A Construction, Inc. G.R. No. 156034, October 1, 2003

 Torts and Damages

Ynares-Santiago, J.

Facts:

• C & A Construction, Inc. was engaged by the National Housing Authority (NHA) to construct a deflector wall at the Vitas Reclamation Area in Vitas, Tondo, Manila.

• The project was completed in 1994, but it was not formally turned over to NHA.

• On October 20, 1994, M/V Delsan Express, a ship owned by Delsan Transport Lines, Inc., was anchored at Navotas Fish Port for the purpose of installing a cargo pump and clearing the cargo oil tank.

• On October 21, 1994, after receiving a typhoon warning from Japan, Captain Demetrio Jusep attempted to move the vessel to North Harbor but could not enter due to congestion.

• Capt. Jusep dropped anchor near Vitas mouth but strong winds and waves pushed the vessel towards a Napocor power barge. 

• In trying to avoid collision, the ship hit the deflector wall, causing ₱456,198.24 worth of damage.

• C & A Construction demanded compensation for the damage.

• Delsan Transport refused, claiming the accident was a fortuitous event.

RTC-Manila: Dismissed the complaint, ruling that Delsan Transport was not negligent, citing the "emergency rule" and attributing the incident to typhoon "Katring," an act of God.

CA: Reversed the trial court's decision, finding Capt. Jusep negligent for delaying the vessel's transfer to North Harbor until 8:35 a.m. on October 21, 1994, and held Delsan Transport liable for damages.

• Delsan Transport argued that Capt. Jusep was not negligent as earlier transfer may not have ensured safety, and they exercised due diligence in the selection of Capt. Jusep who is a duly licensed and competent Master Mariner.

• They also contended that they cannot be held vicariously liable under Article 2180 of the Civil Code, as negligence in employee supervision was not alleged.

CFI-Manila: Found Gan guilty beyond reasonable doubt of Homicide through Reckless Imprudence.

• Gan appealed the decision.

CA: Modified the verdict, finding Gan guilty of Homicide through Simple Imprudence.

• She was sentenced to 3 months and 11 days of arresto mayor and ordered to indemnify the heirs of Isidoro Casino ₱12,000.

Issues:

1. Whether Capt. Jusep was negligent. YES

2. Whether petitioner is solidarily liable under Article 2180 of the Civil Code for the quasi-delict committed by Capt. Jusep. YES

Held:

Article 2176 of the Civil Code provides that 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. The test for determining the existence of negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use the reasonable care and caution which an ordinary prudent person would have used in the same situation? If not, then he is guilty of negligence.18

In the case at bar, the Court of Appeals was correct in holding that Capt. Jusep was negligent in deciding to transfer the vessel only at 8:35 in the morning of October 21, 1994. As early as 12:00 midnight of October 20, 1994, he received a report from his radio head operator in Japan that a typhoon was going to hit Manila after 8 hours. This, notwithstanding, he did nothing, until 8:35 in the morning of October 21, 1994, when he decided to seek shelter at the North Harbor, which unfortunately was already congested. The finding of negligence cannot be rebutted upon proof that the ship could not have sought refuge at the North Harbor even if the transfer was done earlier. It is not the speculative success or failure of a decision that determines the existence of negligence in the present case, but the failure to take immediate and appropriate action under the circumstances. Capt. Jusep, despite knowledge that the typhoon was to hit Manila in 8 hours, complacently waited for the lapse of more than 8 hours thinking that the typhoon might change direction. He cannot claim that he waited for the sun to rise instead of moving the vessel at midnight immediately after receiving the report because of the difficulty of traveling at night. The hour of 8:35 a.m. is way past sunrise. Furthermore, he did not transfer as soon as the sun rose because, according to him, it was not very cloudy and there was no weather disturbance yet.

When he ignored the weather report notwithstanding reasonable foresight of harm, Capt. Jusep showed an inexcusable lack of care and caution which an ordinary prudent person would have observed in the same situation. Had he moved the vessel earlier, he could have had greater chances of finding a space at the North Harbor considering that the Navotas Port where they docked was very near North Harbor. Even if the latter was already congested, he would still have time to seek refuge in other ports.

The trial court erred in applying the emergency rule. Under this rule, one who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the danger in which he finds himself is brought about by his own negligence. Clearly, the emergency rule is not applicable to the instant case because the danger where Capt. Jusep found himself was caused by his own negligence.

Anent the second issue, we find petitioner vicariously liable for the negligent act of Capt. Jusep.

Under Article 2180 of the Civil Code an employer may be held solidarily liable for the negligent act of his employee. Thus –

Art. 2180. The obligation imposed in 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 x x x 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 x x x 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.

Whenever an employee’s negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. To avoid liability for a quasi-delict committed by his employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee.  

There is no question that petitioner, who is the owner/operator of M/V Delsan Express, is also the employer of Capt. Jusep who at the time of the incident acted within the scope of his duty. The defense raised by petitioner was that it exercised due diligence in the selection of Capt. Jusep because the latter is a licensed and competent Master Mariner. It should be stressed, however, that the required diligence of a good father of a family pertains not only to the selection, but also to the supervision of employees. It is not enough that the employees chosen be competent and qualified, inasmuch as the employer is still required to exercise due diligence in supervising its employees.

In Fabre, Jr. v. Court of Appeals, it was held that due diligence in supervision requires the formulation of rules and regulations for the guidance of employees and the issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the rules. 

Corollarily, in Ramos v. Court of Appeals, the Court stressed that once negligence on the part of the employees is shown, the burden of proving that he observed the diligence in the selection and supervision of its employees shifts to the employer.

In the case at bar, however, petitioner presented no evidence that it formulated rules/guidelines for the proper performance of functions of its employees and that it strictly implemented and monitored compliance therewith. Failing to discharge the burden, petitioner should therefore be held liable for the negligent act of Capt. Jusep.

So also, petitioner cannot disclaim liability on the basis of respondent’s failure to allege in its complaint that the former did not exercise due diligence in the selection and supervision of its employees. 

In Viron Transportation Co., Inc. v. Delos Santos, it was held that it is not necessary to state that petitioner was negligent in the supervision or selection of its employees, inasmuch as its negligence is presumed by operation of law. Allegations of negligence against the employee and that of an employer-employee relation in the complaint are enough to make out a case of quasi-delict under Article 2180 of the Civil Code. 

Considering that petitioner did not assail the damages awarded by the trial court, we find no reason to alter the same. 

The interest imposed should, however, be modified. In Eastern Shipping Lines, Inc. v. Court of Appeals, it was held that the rate of interest on obligations not constituting a loan or forbearance of money is six percent (6%) per annum. If the purchase price can be established with certainty at the time of the filing of the complaint, the six percent (6%) interest should be computed from the date the complaint was filed until finality of the decision. After the judgment becomes final and executory until the obligation is satisfied, the amount due shall earn interest at 12% per year, the interim period being deemed equivalent to a forbearance of credit.

Accordingly, the amount of P456,198.27 due the respondent shall earn 6% interest per annum from October 3, 1995 until the finality of this decision. If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum computed from the time the judgment becomes final and executory until it is fully satisfied.

WHEREFORE, in view of all the foregoing, the instant petition is DENIED.

The June 14, 2002 decision of the Court of Appeals in CA-G.R. CV No. 59034 ordering petitioner Delsan Transport Lines, Inc., to pay respondent C & A Construction, Inc., damages in the amount of P456,198.27, plus P30,000.00 as attorney’s fees, is AFFIRMED with the MODIFICATION that the award of P456,198.27 shall earn interest at the rate of 6% per annum from October 3, 1995, until finality of this decision, and 12% per annum thereafter on the principal and interest (or any part thereof) until full payment.

SO ORDERED.