Jarco Marketing v. CA

Jarco Marketing, Leonardo Kong, Jose Tiope, Elisa Panelo v. CA, Sps. Conrado and Criselda Aguilar

1999 / Davide, Jr. [Negligence > Standard of conduct > Children]

Facts

Jarco Marketing owns Syvel's Department Store; Kong, Tiope, and Panelo are store managers; Sps. Aguilar are the parents of daughter Zhieneth.

Criselda and Zhieneth Aguilar (6 years old) were at the 2nd floor of Syvel's Department Store. Criselda was signing her credit card slip when she felt a sudden gust of wind and heard a loud thud. When she looked behind her, she saw her daughter pinned by the bulk of the store's gift wrapping counter. She asked the assistance of the people around her, and she was immediately rushed to Makati Medical Center where she was operated. The next day, she lost her speech. She died 14 days after the accident. The cause of her death was attributed to the injuries sustained. 

     After her burial, Sps. Aguilar demanded the reimbursement of hospitalization, medical bills, and wake and funeral expenses from the petitioners, but they refused to pay. Sps. Aguilar filed a complaint for damages, seeking the payment of actual [157k~] and moral [300k] damages, attorney's fees [20k], and for loss of income and exemplary damages.

The petitioners denied any liability for Zhieneth's injuries and death. They also said the complaint was malicious, so they sought the dismissal of the complaint and an award of moral and exemplary damages, as well as attorney's fees.

• Criselda was negligent in exercising care and diligence over her daughter by allowing her to freely roam around in a store with glassware and appliances
• Zhieneth was guilty of contributory negligence for climbing the counter, thereby triggering its collapse
• Counter was made of sturdy wood with strong support, and it has never fell nor collapsed for the past 15 years since its construction
• Jarco Marketing maintained that it observed due diligence of a good father of the family
• Other petitioners raised due care and diligence in the performance of its duties

RTC found that the preponderance of evidence favored the store, et al, saying that the proximate cause was Zhieneth's act of clinging to the counter, and that Criselda's negligence contributed to the accident. The RTC found that the counter was not an attractive nuisance [something that would attract children to approach, get on or use it], since the counter was situated at the end or corner of the 2nd floor.

Here are the assertions of Sps. Aguilar:

• Zhieneth should be entitled to the conclusive presumption that a child below 9 is incapable of contributory negligence.
• Even if she is capable of contributory negligence, it was physically impossible for her to have propped herself on the counter considering her small frame, and height and weight of the counter.
• The fact that a former employee of the store, Gonzales, accompanied Zhieneth to the hospital belied the theory that Zhieneth climbed the counter.
• This employee Gonzales said that when Zhieneth was asked by the doctor what she did, she said "Nothing, I did not come near the counter and the counter just fell on me." This should be accorded credit according to the spouses.
• Negligence could not be imputed to Criselda since it was reasonable for her to let go of Zhieneth at that moment that she was signing the credit card slip.
• The proximate cause was petitioner's negligence in failing to institute measures to have the counter permanently nailed.

In response, here is what the petitioners have to say:

• Zhieneth's death was an ACCIDENT.
• Nailing the counter to the ground was not necessary because it has been there for the longest time without any prior accident and it's just in a corner.
• The criminal case for homicide through simple negligence filed against them was dismissed, and they were acquitted.

The CA reversed RTC, ruling in favor of Sps. Aguilar. 

• Petitioners were negligent in maintaining a structurally dangerous counter [it's shaped like an inverted L; the top is wider than the base; weight of the upper portion not evenly distributed nor supported by the narrow base]. Two former employees brought this to the attention of the management but the latter ignored their concern. CA said the incident could have been avoided had petitioners repaired this defective counter. The contention that it has been there for a long time without a prior incident is immaterial. 
• Zhieneth was incapable of negligence or other tort.
• Criselda was absolved of any negligence.
• Testimony of Gonzales (former employee) given credit
• Awarded actual damages, compensatory damages [denied award of funeral expenses for lack of proof to substantiate it]

CA denied petitioners' MfR, so they are now seeking the reversal of said decision, saying that since the action is based on tort, any finding of negligence on the part of Sps. Aguilar would negate their claim for damages, where said negligence was the proximate cause of the injury sustained. They also assailed the testimony of Gonzales who was already separated from the store (tarnished by ill-feelings and all).

Issues and Holding

1. WON Zhieneth's death was accidental or attributable to negligence. ATTRIBUTABLE TO NEGLIGENCE
2. WON negligence was attributable to petitioners [for maintaining a defective counter] or to Sps. Aguilar [for failing to exercise due and reasonable care while inside the store]. FAULT OF PETITIONERS

Ratio

Accident v. Negligence - they are intrinsically contradictory

• ACCIDENT pertains to an unforeseen event in which no fault or negligence attaches to defendant (or if it happens wholly or partly through human agency, it is an event which under the circumstances is unusual or unexpected by the person to whom it happens); there is exercise of ordinary care here
• NEGLIGENCE is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do
• • Alternatively, it is the failure to observe, for the protection of another person's interest, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury

Picart v. Smith lays down the test to determine WON negligence exists: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinary prudent person would have used in the same situation? If not, he is guilty of negligence.

SC found that Zhieneth performed no act that facilitated her death. Basis is her statement to the doctor as related by former employee Gonzales. It was made part of the res gestae since she made the statement immediately subsequent to the startling occurrence. It is axiomatic that matters relating to declarations of pain or suffering and statements made to a physician are generally considered declarations and admissions. Also, the court considered the fact that Zhieneth was of a tender age (and in so much pain!), so it would be unthinkable that she would lie.

Other findings:

• Petitioners were informed of the danger posed by the unstable counter, yet they did not act on the matter, so they failed to discharge the due diligence required of a good father of a family.
• They failed to establish that the testimonies of former employees were biased.
• Conclusive presumption that children below 9 are incapable of contributory negligence is applied.
• • Judge Sangco [book author] says that children below 9 is conclusively presumed to have acted without discernment, and are exempt from criminal liability. Since negligence may be a felony and a QD, it required discernment as a condition of liability, so therefore, said children are presumed to be incapable of negligence.
  • Even if contributory negligence would be attributed to Zhieneth, no injury should have occurred if petitioners' theory that the counter is stable and sturdy is to be believed.
• Criselda is absolved from any contributory negligence, since it was reasonable for her to let go of her child to sign a slip.
• Zhieneth was just a foot away from her mother, and the counter was just four meters away from Criselda (contrary to statements that Zhieneth was loitering at that time).

Consolidated Bank v. CA

Consolidated Bank and Trust Corp. v. CA + L.C. Diaz and Company (2003) / Carpio

Facts

LC Diaz [professional partnership engaged in accounting] opened a savings account with Solidbank. LC Diaz's cashier, Macaraya, filled up two savings deposit slips, and she gave them + passbook to messenger Calapre and instructed him to deposit the money with Solidbank. Calapre presented the deposit slips and passbook to the teller. He left the passbook with Solidbank first as he had to make another deposit at Allied Bank, but when he returned, he was informed that somebody got the passbook. Calapre reported this to Macaraya. Macaraya + Calapre went back to Solidbank with a deposit slip [P200k check]. When Macaraya asked about the passbook, the teller said that someone shorter than Calapre got it. Macaraya reported this matter. 

     The following day, CEO Diaz called Solidbank to stop any transaction using the passbook until the company could open a new account. It was found out that learned that P300k was withdrawn from the account the previous day. The withdrawal slip bore the signatures of two authorized signatories of LC Diaz but they denied signing it. Noel Tamayo received this sum of money.

     An information for Estafa through Falsification of Commercial Document was filed against one of their messengers (Ilagan) and one Roscoe Verdazola (first time they appeared in the case discussion), but the RTC dismissed the criminal case. LC Diaz demanded the return of their money from Solidbank, but the latter refused and a complaint for recovery of a sum of money was filed against them. However, Solidbank was absolved.

    RTC applied rules on savings account written on the passbook ["Possession of this book shall raise the presumption of ownership and any payment or payments made by the bank upon the production of the said book and entry therein of the withdrawal shall have the same effect as if made to the depositor personally."] RTC said that the burden of proof shifted to LC Diaz to prove that the signatures are not forged. Also, they applied the rule that the holder of the passport is presumed to be the owner. It was also held that Solidbank did not have any participation in the custody and care of the passbook and as such, their act of allowing the withdrawal was not the proximate cause of the loss. The proximate cause was LC Diaz’ negligence. As regards the contention that LC Diaz and Solidbank had precautionary procedures (like a secret handshake of sorts) whenever the former withdrew a large sum, RTC pointed out that LC Diaz disregarded this in the past withdrawal.

     CA, on the other hand, said that the proximate cause of the unauthorized withdrawal is Solidbank's negligence, applying NCC 2176. CA said the 3 elements of QD are present [damages; fault or negligence; connection of cause and effect]. The teller could have called up LC Diaz since the amount being drawn was significant. Proximate cause is teller's failure to call LC Diaz. CA ruled that while LC Diaz was negligent in entrusting its deposits to its messenger and its messenger in leaving the passbook with the teller, Solidbank could not escape liability because of the doctrine of “last clear chance.” Solidbank could have averted the injury had it called up LC Diaz to verify the withdrawal.

RATIO

On Solidbank's fiduciary duty under the law

SC says that Solidbank is liable for breach of K due to negligence [culpa contractual]. K [savings deposit agreement] between bank and depositor governed by provisions on simple loan; bank is the debtor and depositor is the creditor. Banks are under obligation to treat accounts of depositors with meticulous care [higher than diligence of a good father of a family standard], bearing in mind the fiduciary nature of their relationship. The bank's obligation to observe high standards of integrity and performance is deemed written in every deposit agreement. However, this nature does not convert K from a simple loan to a trust agreement (failure by bank to pay depositor is failure to pay a simple loan only).

Solidbank's breach of K-tual obligation

For breach of the savings deposit agreement due to negligence, or culpa contractual, the bank is liable to its depositor. When the passbook is in the possession of Solidbank’s tellers during withdrawals, the law imposes an even higher degree of diligence. Likewise, tellers must exercise a high degree of diligence in insuring that they return the passbook only to the depositor or authorized representative.

     In culpa contractual, once the plaintiff proves a breach of contract, there is a presumption that the defendant was at fault or negligent. The burden is on the defendant to prove that he was not at fault or negligent. In culpa aquiliana, the plaintiff has the burden of proof. Solidbank failed to discharge this burden, after LC Diaz establishing the breach of K-tual obligation. Hence, Solidbank is bound by the negligence of its employees. The defense of exercising required diligence in selecting, supervising employees is NOT a complete defense in culpa contractual, unlike in culpa aquiliana.

Proximate cause of unauthorized withdrawal

Solidbank’s negligence in not returning the passbook to Calapre was the proximate cause. [Definition: cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury and without which the result would not have occurred.]

     RTC said that LC Diaz’ negligence was the proximate cause. However, SC says LC Diaz was not at fault that the passbook landed in the hands of the impostor. In fact, it was in the possession of the bank while the deposit was being processed. CA said that teller's failure to call LC Diaz was the proximate cause. SC says the bank did not have the duty to call LC Diaz to confirm withdrawal.

Doctrine of last clear chance

"Where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss."

     SC DOES NOT APPLY IT HERE. Solidbank is liable for breach of contract due to negligence in the performance of its contractual obligation to LC Diaz. This is a case of culpa contractual, where neither the contributory negligence of the plaintiff nor his last clear chance to avoid the loss, would exonerate the defendant from liability. Since LC Diaz was guilty of contributory negligence, Solidbank's liability should be reduced.