MERCURY DRUG CORPORATION, PETITIONER, VS. ATTY. RODRIGO B. LIBUNAO, RESPONDENT.

Mercury Drug versus Libunao

The Case

This is a petition for review on certiorari brought by Mercury Drug Corporation against Atty. Rodrigo Libunao, arising from a complaint for damages. Libunao sued Mercury Drug, its president, its store manager, and a security guard after an altercation at the drugstore in Robinson's Galleria. The case matters because it fixes who is the employer of a security guard assigned to a client's premises, and therefore who answers for the guard's harmful acts. It is a study in the last paragraph of Article 2180 of the New Civil Code, in the employer's liability for the acts of employees, and in the rule that the security agency, not the client, is the employer of the guard.

Procedural History

Libunao filed his complaint for damages with the Regional Trial Court of Quezon City, which rendered judgment in his favor and against the security guard Remigio Sido, Mercury Drug Corporation, and store manager Vilma Santos, ordering them to pay moral damages, exemplary damages, attorney's fees, and costs. The trial court later granted the store manager's motion for reconsideration and dismissed the complaint against her, but denied the motion for reconsideration of Mercury Drug. Mercury Drug appealed to the Court of Appeals, which affirmed the trial court with modification, deleting the attorney's fees and reducing the moral and exemplary damages. The Court of Appeals held that Sido was an employee of Mercury Drug and that Mercury Drug was solidarily liable with him. Mercury Drug then filed the present petition for review on certiorari before the Supreme Court.

Facts

At about eight in the evening on May 25, 1992, Atty. Rodrigo Libunao, a corporate lawyer of Caltex Philippines, and his friend Jesus Bustos Atencio had dinner at Robinson's Galleria. They then went to the self-service section of the Mercury Drug Store, where Libunao bought items, including antibiotics. He paid, was given a tape receipt, and placed the receipt in his pocket as the cashier bagged his purchases.

As Libunao and Atencio were leaving, the security guard at the door, Remigio Sido, held Libunao's upper right arm and demanded the receipt. It took Libunao about ten seconds to get the receipt from his pocket because Sido was still holding his arm, and Sido remarked that there seemed to be no receipt. When Libunao showed the receipt close to Sido's face and asked if he was satisfied, Sido angrily hurled invectives. Libunao retorted in kind. Sido lunged at him, hit him on the face twice, on the nose, the chin, and the mouth, then pointed his revolver at Libunao and threatened to shoot him. Libunao fled with Atencio and reported the incident to the building's security detachment. When the store manager, Vilma Santos, was asked to surrender Sido, she at first refused and told them to leave, but eventually relented. Libunao later consulted a psychiatrist and was found to be suffering from post-traumatic depression syndrome.

For its part, the defense testified that Sido was employed by the Black Shield Security Services Corporation and assigned to the Mercury Drug Store. Sido gave his own version of the confrontation, denying that he boxed Libunao or poked a gun at him. Santos testified that Sido was not an employee of Mercury Drug but of the security agency, and that Libunao himself had told her she should not have accompanied Sido because he was not a Mercury Drug employee.

Issues

• Whether or not the certification against forum shopping executed by the petitioner's in-house counsel is sufficient compliance with the Rules of Court.
• Whether or not the remedy of a petition for review under Rule 45 is proper despite the rule that only questions of law may be raised.
• Whether or not Mercury Drug Corporation is liable for damages for the tortious and delictual acts of the security guard Sido.

Applicable Provisions

Article 2180 of the New Civil Code provides:

The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. 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.

This is the provision on which the trial court and the Court of Appeals held Mercury Drug liable, and which the Supreme Court holds was misapplied because Mercury Drug was not Sido's employer.

Ruling

On the first issue, the Court held that the certification was sufficient. The in-house counsel who signed it was the officer in the best position to verify the truthfulness of the allegations and to determine whether a similar petition was pending elsewhere. The Court relied on its earlier ruling that a certification executed by an in-house counsel substantially complies with the Rules.

On the second issue, the Court held that the petition for review was the proper remedy. Although only questions of law may be raised under Rule 45, the Court recognized exceptions, including when the judgment is based on a misapprehension of facts, when the findings are contrary to the admissions of the parties, and when relevant facts were overlooked. The Court found that these exceptions were present.

On the third issue, the Court ruled that Mercury Drug was not Sido's employer and could not be held liable under Article 2180. The respondent bore the burden of proving the employment but failed to discharge it. The respondent's own counsel had admitted during trial that Sido was not an employee of the company, and such stipulations are conclusive on the parties. Santos and Sido both testified that Sido was employed by the security agency, and the contract between Mercury Drug and the agency expressly provided that security guards are employees of the agency and not of the client. The Court held that where a security agency recruits, hires, and assigns its guards, the agency is the employer, and liability for the guards' illegal acts attaches to the agency, not to the client, since the client has no hand in selecting the guards. The fact that the client may give instructions or directions to the guards does not by itself make the client an employer.

Doctrine

Where a security agency recruits, hires, and assigns its security guards to a client, the agency is the employer of the guards, and liability for their illegal or harmful acts attaches to the agency and not to the client. The client has no hand in selecting the guards, so the duty to observe the diligence of a good father of a family in their selection cannot be demanded from the client. The fact that a client company may give instructions or directions to the guards assigned to it does not, by itself, render the client responsible as an employer or liable for their wrongful acts. Under Article 2180, the employer's liability for the acts of employees requires first that an employer-employee relationship exists.

Disposition

The petition was granted; the decision and resolution of the Court of Appeals were reversed and set aside, and the complaint against Mercury Drug Corporation was dismissed, with its counterclaims also dismissed and no costs.

Remember This

The single line to memorize: the security agency, not the client, is the employer of the guard, so the client is not liable under Article 2180 for the guard's harmful acts. Examiners use this case to test employer liability for the acts of security guards and the effect of a client's instructions to guards assigned to its premises.