THIRD DIVISION

ORLANDO D. GARCIA, JR., G.R. No. 168512

doing business under the name and
style COMMUNITY DIAGNOSTIC
CENTER and BU CASTRO,[1]
Petitioners, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,

Callejo, Sr.,
Chico-Nazario, and
Nachura, JJ.

RANIDA D. SALVADOR and

RAMON SALVADOR, Promulgated:
Respondents.
March 20, 2007
x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:

This is a petition for review ] under Rule 45 of the Rules of Court assailing the February 27, 2004
Decision of the Court of Appeals in CA-G.R. CV No. 58668 finding petitioner Orlando D. Garcia liable for
gross negligence; and its June 16, 2005 Resolution denying petitioners motion for reconsideration.

On October 1, 1993, 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 result 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.

When Ranida submitted the test result to Dr. Sto. Domingo, the Company physician, the latter
apprised her that the findings indicated that she is suffering from Hepatitis B, a liver disease. Thus, based
on the medical report submitted by Sto. Domingo, the Company terminated Ranidas employment for
failing the physical examination.

When Ranida informed her father, Ramon, about her ailment, the latter suffered a heart attack and was
confined at the Bataan Doctors Hospital. During Ramons confinement, Ranida underwent another HBs Ag
test at the said hospital and the result indicated that she is non-reactive. She informed Sto. Domingo of
this development but was told that the test conducted by CDC was more reliable because it used the
Micro-Elisa Method.

Thus, Ranida went back to CDC for confirmatory testing, and this time, the Anti-HBs test conducted on her
indicated a Negative result.

Ranida also underwent another HBs Ag test at the Bataan Doctors Hospital using the Micro-Elisa
Method. The result indicated that she was non-reactive.

Ranida submitted the test results from Bataan Doctors Hospital and CDC to the Executive Officer of the
Company who requested her to undergo another similar test before her re-employment would be
considered. Thus, CDC conducted another HBs Ag test on Ranida which indicated a Negative result. Ma.
Ruby G. Calderon, Med-Tech Officer-in-Charge of CDC, issued a Certification correcting the initial result and
explaining that the examining medical technologist (Garcia) interpreted the delayed reaction as positive or
reactive.

Thereafter, the Company rehired Ranida.

On July 25, 1994, Ranida and Ramon filed a complaint for damages against petitioner Garcia and a
purportedly unknown pathologist of CDC, claiming that, by reason of the erroneous interpretation of the
results of Ranidas examination, she lost her job and suffered serious mental anxiety, trauma and sleepless
nights, while Ramon was hospitalized and lost business opportunities.

On September 26, 1994, respondents amended their complaint by naming Castro as the unknown
pathologist.

Garcia denied the allegations of gross negligence and incompetence and reiterated the scientific
explanation for the false positive result of the first HBs Ag test in his December 7, 1993 letter to the
respondents.

For his part, Castro claimed that as pathologist, he rarely went to CDC and only when a case was
referred to him; that he did not examine Ranida; and that the test results bore only his rubber-stamp
signature.

On September 1, 1997, the trial court dismissed the complaint for failure of the respondents to present
sufficient evidence to prove the liability of Garcia and Castro. It held that respondents should have
presented Sto. Domingo because he was the one who interpreted the test result issued by CDC. Likewise,

respondents should have presented a medical expert to refute the testimonies of Garcia and Castro
regarding the medical explanation behind the conflicting test results on Ranida.

Respondents appealed to the Court of Appeals which reversed the trial courts findings, the dispositive
portion of which states:
WHEREFORE, the decision appealed from is REVERSED and SET ASIDE and another
one entered ORDERING defendant-appellee Orlando D. Garcia, Jr. to pay plaintiff-appellant
Ranida D. Salvador moral damages in the amount of P50,000.00, exemplary damages in the
amount of P50,000.00 and attorneys fees in the amount of P25,000.00.
SO ORDERED:

The appellate court found Garcia liable for damages for negligently issuing an erroneous HBs Ag result. On
the other hand, it exonerated Castro for lack of participation in the issuance of the results.

After the denial of his motion for reconsideration, Garcia filed the instant petition.

The main issue for resolution is whether the Court of Appeals, in reversing the decision of the trial
court, correctly found petitioner liable for damages to the respondents for issuing an incorrect HBsAG test
result.

Garcia maintains he is not negligent, thus not liable for damages, because he followed the appropriate
laboratory measures and procedures as dictated by his training and experience; and that he did everything
within his professional competence to arrive at an objective, impartial and impersonal result.

At the outset, we note that the issues raised are factual in nature. Whether a person is negligent or
not is a question of fact which we cannot pass upon in a petition for review on certiorari which is limited to
reviewing errors of law.

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, 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; 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.

Owners and operators of clinical laboratories have the duty to comply with statutes, as well as rules
and regulations, purposely promulgated to protect and promote the health of the people by preventing the
operation of substandard, improperly managed and inadequately supported clinical laboratories and by
improving the quality of performance of clinical laboratory examinations. [22] Their business is impressed
with public interest, as such, high standards of performance are expected from them.
In F.F. Cruz and Co., Inc. v. Court of Appeals, we found the owner of a furniture shop liable for the
destruction of the plaintiffs house in a fire which started in his establishment in view of his failure to
comply with an ordinance which required the construction of a firewall. In Teague v. Fernandez, we stated
that where the very injury which was intended to be prevented by the ordinance has happened, noncompliance with the ordinance was not only an act of negligence, but also the proximate cause of the
death.

In fine, violation of a statutory duty is negligence. Where the law imposes upon a person the duty to
do something, his omission or non-performance will render him liable to whoever may be injured thereby.

Section 2 of Republic Act (R.A.) No. 4688, otherwise known as The Clinical Laboratory Law, provides:
Sec. 2. It shall be unlawful for any person to be professionally in-charge of a
registered clinical laboratory unless he is a licensed physician duly qualified in laboratory
medicine and authorized by the Secretary of Health, such authorization to be renewed
annually.
No license shall be granted or renewed by the Secretary of Health for the operation
and maintenance of a clinical laboratory unless such laboratory is under the administration,
direction and supervision of an authorized physician, as provided for in the preceding
paragraph.

Corollarily, Sections 9(9.1)(1), 11 and 25(25.1)(1) of the DOH Administrative Order No. 49-B Series
of 1988, otherwise known as the Revised Rules and Regulations Governing the Registration, Operation and
Maintenance of Clinical Laboratories in the Philippines, read:
Sec. 9. Management of the Clinical Laboratory:
9.1

Head of the Clinical Laboratory: The head is that person who

assumes technical and administrative supervision and control of the
activities in the laboratory.

For all categories of clinical laboratories, the head shall be a

licensed physician certified by the Philippine Board of Pathology in
either Anatomic or Clinical Pathology or both provided that:
(1)
This shall be mandatory for all categories of free-standing
clinical laboratories; all tertiary category hospital laboratories and for
all secondary category hospital laboratories located in areas with
sufficient available pathologist.
xxxx
Sec. 11. Reporting: All laboratory requests shall be considered as consultations
between the requesting physician and pathologist of the laboratory. As such all laboratory
reports on various examinations of human specimens shall be construed as consultation
report and shall bear the name of the pathologist or his associate. No person in clinical
laboratory shall issue a report, orally or in writing, whole portions thereof without a directive
from the pathologist or his authorized associate and only to the requesting physician or his
authorized representative except in emergencies when the results may be released as
authorized by the pathologist.
xxxx
Sec. 25. Violations:
25.1 The license to operate a clinical laboratory may be suspended or revoked by the
Undersecretary of Health for Standards and Regulation upon violation of R.A. 4688 or the
rules and regulations issued in pursuance thereto or the commission of the following acts by
the persons owning or operating a clinical laboratory and the persons under their authority.
(1) Operation of a Clinical Laboratory without a certified pathologist or
qualified licensed physician authorized by the Undersecretary of Health
or without employing a registered medical technologist or a person not
registered as a medical technologist in such a position.
And Section 29(b) of R.A. No. 5527, otherwise known as The Philippine Medical Technology Act of
1969, reads:
Section 29. Penal Provisions.- Without prejudice to the provision of the Medical Act of 1959,
as amended relating to illegal practice of Medicine, the following shall be punished by a fine
of not less than two thousand pesos nor more than five thousand pesos, or imprisonment for
not less than six months nor more than two years, or both, in the discretion of the court:
xxxx
(b) Any medical technologist, even if duly registered, who shall practice medical
technology in the Philippines without the necessary supervision of a qualified pathologist or
physician authorized by the Department of Health;

From the foregoing laws and 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.

These rules are intended for the protection of the public by preventing performance of substandard
clinical examinations by laboratories whose personnel are not properly supervised. The public demands no
less than an effective and efficient performance of clinical laboratory examinations through compliance
with the quality standards set by laws and regulations.

We find that petitioner Garcia failed to comply with these standards.

First, CDC is not administered, directed and supervised by a licensed physician as required by law,
but by Ma. Ruby C. Calderon, a licensed Medical Technologist. In the License to Open and Operate a Clinical
Laboratory for the years 1993 and 1996 issued by Dr. Juan R. Naagas, M.D., Undersecretary for Health
Facilities, Standards and Regulation, defendant-appellee Castro was named as the head of CDC. However,
in his Answer with Counterclaim, he stated:
3.
By way of affirmative and special defenses, defendant pathologist further avers and
plead as follows:
Defendant pathologist is not the owner of the Community Diagnostic Center nor an
employee of the same nor the employer of its employees. Defendant pathologist comes to
the CommunityDiagnostic Center when and where a problem is referred to him. Its
employees are licensed under the Medical Technology Law (Republic Act No. 5527) and are
certified by, and registered with, the Professional Regulation Commission after having
passed their Board Examinations. They are competent within the sphere of their own
profession in so far as conducting laboratory examinations and are allowed to sign for and in
behalf of the clinical laboratory. The defendant pathologist, and all pathologists in general,
are hired by laboratories for purposes of complying with the rules and regulations and orders
issued by the Department of Health through the Bureau of Research and
Laboratories. Defendant pathologist does not stay that long period of time at
the Community Diagnostic Center but only periodically or whenever a case is referred to him
by the laboratory. Defendant pathologist does not appoint or select the employees of the
laboratory nor does he arrange or approve their schedules of duty.

Castros infrequent visit to the clinical laboratory barely qualifies as an effective administrative
supervision and control over the activities in the laboratory. Supervision and control means the authority to
act directly whenever a specific function is entrusted by law or regulation to a subordinate; direct the
performance of duty; restrain the commission of acts; review, approve, revise or modify acts and decisions
of subordinate officials or units.

Second, Garcia conducted the HBsAG test of respondent Ranida without the supervision of
defendant-appellee Castro, who admitted that:
[He] does not know, and has never known or met, the plaintiff-patient even up to this
time nor has he personally examined any specimen, blood, urine or any other tissue, from
the plaintiff-patient otherwise his own handwritten signature would have appeared in the
result and not merely stamped as shown in Annex B of the Amended Complaint.

Last, the disputed HBsAG test result was released to respondent Ranida without the authorization of
defendant-appellee Castro.

Garcia may not have intended to cause the consequences which followed after the release of the
HBsAG test result. However, his failure to comply with the laws and rules promulgated and issued for the
protection of public safety and interest is failure to observe that care which a reasonably prudent health
care provider would observe. Thus, his act or omission constitutes a breach of duty.

Indubitably, Ranida suffered injury as a direct consequence of Garcias failure to comply with the
mandate of the laws and rules aforequoted. She was terminated from the service for failing the physical
examination; suffered anxiety because of the diagnosis; and was compelled to undergo several more
tests. All these could have been avoided had the proper safeguards been scrupulously followed in
conducting the clinical examination and releasing the clinical report.

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. This was incorporated by the
Code Commission to provide relief to a person who suffers damage because another has violated some
legal provision.

We find the Court of Appeals award of moral damages reasonable under the circumstances bearing
in mind the mental trauma suffered by respondent Ranida who thought she was afflicted by Hepatitis B,
making her unfit or unsafe for any type of employment. Having established her right to moral damages,
we see no reason to disturb the award of exemplary damages and attorneys fees. Exemplary damages are
imposed, by way of example or correction for the public good, in addition to moral, temperate, liquidated
or compensatory damages, and attorneys fees may be recovered when, as in the instant case, exemplary
damages are awarded.

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 58668 dated February 27,
2004 finding petitioner Orlando D. Garcia, Jr. guilty of gross negligence and liable to pay to
respondents P50,000.00 as moral damages, P50,000.00 as exemplary damages, and P25,000.00 as
attorneys fees, is AFFIRMED.

SO ORDERED.

G.R. No. 156037 May 28, 2007

MERCURY DRUG CORPORATION, Petitioner,
vs.
SEBASTIAN M. BAKING, Respondent.
DECISION
SANDOVAL-GUTIERREZ,
J.: For our resolution is the instant Petition for Review on Certiorari assailing the Decision dated May 30,
2002and Resolution dated November 5, 2002 of the Court of Appeals in CA-G.R. CV No. 57435, entitled
"Sebastian M. Baking, plaintiff-appellee, versus Mercury Drug Co. Inc., defendant-appellant."
The facts are: On November 25, 1993, Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy
for a medical check-up. On the following day, after undergoing an ECG, blood, and hematology
examinations and urinalysis, Dr. Sy found that respondents blood sugar and triglyceride were above
normal levels. Dr. Sy then gave respondent two medical prescriptions Diamicron for his blood sugar and
Benalize tablets for his triglyceride.Respondent then proceeded to petitioner Mercury Drug Corporation
(Alabang Branch) to buy the prescribed medicines. However, the saleslady misread the prescription for
Diamicron as a prescription for Dormicum. Thus, what was sold to respondent was Dormicum, a potent
sleeping tablet. Unaware that what was given to him was the wrong medicine, respondent took one pill of
Dormicum on three consecutive days November 6, 1993 at 9:00 p.m., November 7 at 6:00 a.m., and
November 8 at 7:30 a.m. On November 8 or on the third day he took the medicine, respondent figured in a
vehicular accident. The car he was driving collided with the car of one Josie Peralta. Respondent fell asleep
while driving. He could not remember anything about the collision nor felt its impact. Suspecting that the
tablet he took may have a bearing on his physical and mental state at the time of the collision, respondent
returned to Dr. Sys clinic. Upon being shown the medicine, Dr. Sy was shocked to find that what was sold
to respondent was Dormicum, instead of the prescribed Diamicron. Thus, on April 14, 1994, respondent
filed with the Regional Trial Court (RTC), Branch 80 of Quezon City a complaint for damages against
petitioner, docketed as Civil Case No. Q-94-20193. After hearing, the trial court rendered its Decision
dated March 18, 1997 in favor of respondent, thus: WHEREFORE, premises considered, by preponderance
of evidence, the Court hereby renders judgment in favor of the plaintiff and against the defendant ordering
the latter to pay mitigated damages as follows:
1. P250,000.00 as moral damages;
2. P20,000.00 as attorneys fees and litigation expenses;
3. plus % of the cost of the suit.SO ORDERED.On appeal, the Court of Appeals, in its Decision, affirmed in
toto the RTC judgment. Petitioner filed a motion forreconsideration but it was denied in a Resolution dated
November 5, 2002.

Hence,this petition. Petitioner contends that the Decision of the Court of Appeals is not in accord with law
or prevailing jurisprudence. Respondent, on the other hand, maintains that the petition lacks merit and,
therefore, should be denied. The issues for our resolution are:
1. Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of
respondents accident; and

2. Whether the award of moral damages, attorneys fees, litigation expenses, and cost of the suit is
justified. Article 2176 of the New Civil Code provides: Art. 2176. 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. To sustain a claim based on the above provision, the
following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the
defendant; and, (c) connection of cause and effect between the fault or negligence of the defendant and
the damage incurred by the plaintiff .There is no dispute that respondent suffered damages. It is generally
recognized that the drugstore business is imbued with public interest. The health and safety of the people
will be put into jeopardy if drugstore employees will not exercise the highest degree of care and diligence
in selling medicines. Inasmuch as the matter of negligence is a question of fact, we defer to the findings of
the trial court affirmed by the Court of Appeals.
Obviously, petitioners employee was grossly negligent in selling to respondent Dormicum, instead of the
prescribed Diamicron. Considering that a fatal mistake could be a matter of life and death for a buying
patient, the said employee should have been very cautious in dispensing medicines. She should have
verified whether the medicine she gave respondent was indeed the one prescribed by his physician. The
care required must be commensurate with the danger involved, and the skill employed must correspond
with the superior knowledge of the business which the law demands.
Petitioner contends that the proximate cause of the accident was respondents negligence in driving his
car.
We disagree. Proximate cause is defined as any cause that produces injury in a natural and continuous
sequence, unbroken by any efficient intervening cause, such that the result would not have occurred
otherwise. Proximate cause is determined from the facts of each case, upon a combined consideration of
logic, common sense, policy, and precedent.
Here, the vehicular accident could not have occurred had petitioners employee been careful in reading Dr.
Sys prescription. Without the potent effects of Dormicum, a sleeping tablet, it was unlikely that
respondent would fall asleep while driving his car, resulting in a collision. Complementing Article 2176 is
Article 2180 of the same Code which states:
RT. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions,
but also for those of persons for whom one is responsible.
x x x The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions .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 the diligence of a good father of a family to prevent damage. It is thus clear that the
employer of a negligent employee is liable for the damages caused by the latter. When an injury is caused
by the negligence of an employee, there instantly arises a presumption of the law that there has been
negligence on the part of the employer, either in the selection of his employee or in the supervision over

him, after such selection. The presumption, however, may be rebutted by a clear showing on the part of
the employer that he has exercised the care and diligence of a good father of a family in the selection and
supervision of his employee.
Here, petitioner's failure to prove that it exercised the due diligence of a good father of a family in the
selection and supervision of its employee will make it solidarily liable for damages caused by the latter. As
regards the award of moral damages, we hold the same to be in order. Moral damages may be awarded
whenever the defendants wrongful act or omission is the proximate cause of the plaintiffs physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar injury in the cases specified or analogous to those provided in Article 2219
of the Civil Code.
Respondent has adequately established the factual basis for the award of moral damages when he
testified that he suffered mental anguish and anxiety as a result of the accident caused by the negligence
of petitioners employee. There is no hard-and-fast rule in determining what would be a fair and
reasonable amount of moral damages, since each case must be governed by its own peculiar facts.
However, it must be commensurate to the loss or injury suffered.
Taking into consideration the attending circumstances here, we are convinced that the amount awarded
by the trial court is exorbitant. Thus, we reduce the amount of moral damages from P250,000.00to
P50,000.00 only.
In addition, we also deem it necessary to award exemplary damages. Article 2229 allows the grant of
exemplary damages by way of example or correction for the public good. As mentioned earlier, the
drugstore business is affected with public interest. Petitioner should have exerted utmost diligence in the
selection and supervision of its employees. On the part of the employee concerned, she should have been
extremely cautious in dispensing pharmaceutical products. Due to the sensitive nature of its business,
petitioner must at all times maintain a high level of meticulousness. Therefore, an award of exemplary
damages in the amount of P25,000.00 is in order.phi1.nt
On the matter of attorneys fees and expenses of litigation, it is settled that the reasons or grounds for the
award thereof must be set forth in the decision of the court.
9 Since the trial courts decision did not give the basis of the award, the same must be deleted. In
Vibram Manufacturing Corporation v. Manila ElectricCompany,
10 we held:
Likewise, the award for attorneys fees and litigation expenses should be deleted. Well
-enshrined is that "an
award for attorneys fees must be stated in the text of the courts decision and not in the dispositive
portion
only"
(Consolidated Bank and Trust Corporation (Solidbank) v. Court of Appeals, 246 SCRA 193 [1995] andKeng
Hua Paper Products, Inc. v. Court of Appeals, 286 SCRA 257 [1998])
. This is also true with the litigationexpenses where the body of the decision discussed nothing for its
basis.WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals
in CA-G.R. CV No. 57435 are AFFIRMED with modification in the sense that (a) the award of moral damages
torespondent is reduced from P250,000.00 to P50,000.00; (b) petitioner is likewise ordered to pay said
respondent exemplary damages in the amount of P
25,000.00; and (c) the award of attorneys fees and litigation
expenses is deleted.Costs against petitioner.
SO ORDERED.