NO. 1

SERGIO F. NAGUIAT, doing business under the name and style SERGIO F. NAGUIAT ENT., INC., & CLARK FIELD TAXI, INC., petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), NATIONAL ORGANIZATION OF WORKINGMEN and its members, LEONARDO T. GALANG, et al., respondents.

FACTS:

Petitioner CLARK FIELD TAXI, INC. (CFTI) held a concessionaire's contract with the Army Air Force Exchange Services ("AAFES") for the operation of taxi services within Clark Air Base. Sergio F. Naguiat was CFTI's president, while Antolin T. Naguiat was its vice-president.

CFTI was a family-owned corporation which is like Sergio F. Naguiat Enterprises, Incorporated ("Naguiat Enterprises"), a trading firm.

Individual respondents were previously employed by CFTI as taxicab drivers.

Due to the phase-out of the US military bases in the Philippines, from which Clark Air Base was not spared, the AAFES was dissolved, and the services of individual respondents were officially terminated.

AAFES Taxi Drivers Association ("drivers' union") and the company arrived at an agreement that the separated drivers will be given P500.00 for every year of service as severance pay.

However, after disaffiliating themselves from the drivers' union, individual respondents, through the National Organization of Workingmen ("NOWM"), a labor organization which they subsequently joined, filed a complaint 5against "Sergio F. Naguiat doing business under the name and style Sergio F. Naguiat Enterprises, Inc., for payment of separation pay.

They claimed to have been assigned to Naguiat Enterprises after having been hired by CFTI, and that the former thence managed, controlled and supervised their employment. They averred further that they were entitled to separation pay based on their latest daily earnings of US$15.00 for working sixteen (16) days a month.

ISSUE:

WON the president of CFTI jointly and severally liable for the obligations of the corporation to its dismissed employees particularly on the separation pay?

WON there was corporate tort?

RULING:

Yes.

According to the Labor Code, "Employer" includes any person acting in the interest of an employer, directly or indirectly.

Sergio F. Naguiat admittedly, was the president of CFTI who actively managed the business. Thus, he falls within the meaning of an "employer" as contemplated by the Labor Code, who may be held jointly and severally liable for the obligations of the corporation to its dismissed employees.

Essentially, "tort" consists in the violation of a right given or the omission of a duty imposed by law. 35 Simply stated, tort is a breach of a legal duty. 36 Article 283 of the Labor Code mandates the employer to grant separation pay to employees in case of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, which is the condition obtaining at bar. CFTI failed to comply with this law-imposed duty or obligation. Consequently, its stockholder who was actively engaged in the management or operation of the business should be held personally liable.

Moreover, the fifth paragraph of Section 100 of the Corporation Code specifically imposes personal liability upon the stockholder actively managing or operating the business and affairs of the close corporation.

(5) To the extent that the stockholders are actively engage(d) in the management or operation of the business and affairs of a close corporation, the stockholders shall be held to strict fiduciary duties to each other and among themselves. Said stockholders shall be personally liable for corporate torts unless the corporation has obtained reasonably adequate liability insurance. (emphasis supplied)

NO. 2

LIWAYWAY VINZONS-CHATO, petitioner, vs.FORTUNE TOBACCO CORPORATION, respondent.

FACTS:

Petitioner Liwayway Vinzons-Chato was then the Commissioner of Internal Revenue while respondent Fortune Tobacco Corporation is an entity engaged in the manufacture of different brands of cigarettes, among which are "Champion," "Hope," and "More" cigarettes.

On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), which took effect on July 3, 1993. Prior to its effectivity, cigarette brands ‘Champion," "Hope," and "More" were considered local brands subjected to an ad valorem tax at the rate of 20-45%. However, on July 1, 1993, or two days before RA 7654 took effect, petitioner issued RMC 37-93 reclassifying "Champion," "Hope," and "More" as locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax.4 RMC 37-93 in effect subjected "Hope," "More," and "Champion" cigarettes to the provisions of RA 7654, specifically, to Sec. 142,5 (c)(1) on locally manufactured cigarettes which are currently classified and taxed at 55%, and which imposes an ad valorem tax of "55% provided that the minimum tax shall not be less than Five Pesos (P5.00) per pack."6

The CTA ruled that RMC 37-93 is defective, invalid, and unenforceable and further enjoined petitioner from collecting the deficiency tax assessment issued pursuant to RMC No. 37-93. This ruling was affirmed by the Court of Appeals, and finally by the SC.

Respondent filed before the RTC a complaint11 for damages against petitioner in her private capacity. Respondent contended that the latter should be held liable for damages under Article 32 of the Civil Code considering that the issuance of RMC 37-93 violated its constitutional right against deprivation of property without due process of law and the right to equal protection of the laws.

Article 32 of the Civil Code provides:

ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates, or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

x x x x

(6) The right against deprivation of property without due process of law;

x x x x

(8) The right to the equal protection of the laws;

Petitioner averred that the Civil Code, specifically, Article 32 which allows recovery of damages for violation of constitutional rights, is a general law on the liability of public officers; while Section 38, Book I of the Administrative Code is a special law on the superior public officers’ liability, such that, if the complaint, as in the instant case, does not allege bad faith, malice, or gross negligence, the same is dismissible for failure to state a cause of action.

ISSUE:

WON the complaint filed by respondent stated a cause of action? Which law should be applied?

RULING:

The complaint filed by respondent stated a cause of action and that the decisive provision thereon is Article 32 of the Civil Code.

The rule is that where there are two acts, one of which is special and particular and the other general which, if standing alone, would include the same matter and thus conflict with the special act, the special law must prevail since it evinces the legislative intent more clearly than that of a general statute and must not be taken as intended to affect the more particular and specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at all.

Article 32 was patterned after the "tort" in American law.27 A tort is a wrong, a tortious act which has been defined as the commission or omission of an act by one, without right, whereby another receives some injury, directly or indirectly, in person, property, or reputation.

While the Civil Code, specifically, the Chapter on Human Relations is a general law, Article 32 of the same Chapter is a special and specific provision that holds a public officer liable for and allows redress from a particular class of wrongful acts that may be committed by public officers. Compared thus with Section 38 of the Administrative Code, which broadly deals with civil liability arising from errors in the performance of duties, Article 32 of the Civil Code is the specific provision which must be applied in the

instant case precisely filed to seek damages for violation of constitutional rights.

Considering that bad faith and malice are not necessary in an action based on Article 32 of the Civil Code, the failure to specifically allege the same will not amount to failure to state a cause of action. The courts below therefore correctly denied the motion to dismiss on the ground of failure to state a cause of action, since it is enough that the complaint avers a violation of a constitutional right of the plaintiff.

NO. 3

ORLANDO D. GARCIA, JR., doing business under the name and style COMMUNITY DIAGNOSTIC CENTER and BU CASTRO,1 Petitioners, vs.RANIDA D. SALVADOR and RAMON SALVADOR, Respondents.

FACTS:

Respondent Ranida D. Salvador started working as a trainee in the Accounting Department of Limay Bulk Handling Terminal, Inc. (the Company).

As a prerequisite for regular employment, she underwent a medical examination at the Community Diagnostic Center (CDC).

Garcia who is a medical technologist, conducted the HBs Ag (Hepatitis B Surface Antigen) test and on October 22, 1993, CDC issued the test result5 indicating that Ranida was "HBs Ag: Reactive." The result bore the name and signature of Garcia as examiner and the rubber stamp signature of Castro as pathologist.

The findings indicated that she is suffering from Hepatitis B, a liver disease. Thus, based on the medical report6submitted by Sto. Domingo, the Company terminated Ranida’s employment for failing the physical examination

However, after consulting several professionals, it turned out that Salvador has a "Negative" result.9

Thereafter, the Company rehired Ranida.

Ranida and Ramon filed a complaint13 for damages against petitioner Garcia and a purportedly unknown pathologist of CDC, claiming that, by reason of the erroneous interpretation of the results of Ranida’s examination, she lost her job and suffered serious mental anxiety, trauma and sleepless nights, while Ramon was hospitalized and lost business opportunities.

ISSUE:

WON petitioner Garcia is liable for damages to the respondents for issuing an incorrect HBsAG test result?

RULING:

Yes.

Negligence is the failure to observe for the protection of the interest of another person that degree of care, precaution and vigilance which the circumstances justly demand,20 whereby such other person suffers injury. For health care providers, the test of the existence of negligence is: did the health care provider either fail to do something which a reasonably prudent health care provider would have done, or that he or she did something that a

reasonably prudent health care provider would not have done; and that failure or action caused injury to the patient;21 if yes, then he is guilty of negligence.

Thus, the elements of an actionable conduct are: 1) duty, 2) breach, 3) injury, and 4) proximate causation.

All the elements are present in the case at bar.

From the rules, it is clear that a clinical laboratory must be administered, directed and supervised by a licensed physician authorized by the Secretary of Health, like a pathologist who is specially trained in methods of laboratory medicine; that the medical technologist must be under the supervision of the pathologist or a licensed physician; and that the results of any examination may be released only to the requesting physician or his authorized representative upon the direction of the laboratory pathologist.

Here, Garcia conducted the HBsAG test of respondent Ranida without the supervision of defendant-appellee Castro. Hence, he is liable for damages.

Also, Article 20 of the New Civil Code provides:

Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same.

The foregoing provision provides the legal basis for the award of damages to a party who suffers damage whenever one commits an act in violation of some legal provision.