GR 122796; (December, 2001) (Digest)
G.R. No. 122796 ; December 10, 2001
PETROPHIL CORPORATION, petitioner, vs. COURT OF APPEALS, DR. AMANDA TERNIDA-CRUZ, JESSIE DE VERA, MARCIAL MULIG, ANTONIO CUENCA, and RUFINO CUENCA, respondents.
FACTS
Petrophil Corporation entered into a hauling contract with Dr. Amanda Ternida-Cruz. The contract allowed termination by Petrophil at any time with 30 days’ written notice under Paragraph 11, but also contained provisions for termination “for cause” due to breach or negligence, with an annexed Penalty Clause and a Hearing Committee procedure. In 1987, Petrophil terminated Cruz’s contract via a letter invoking Paragraph 11. Cruz filed a complaint, alleging the termination was retaliatory for her sympathizing with striking employees and reporting company anomalies, and that it caused loss of income. Her drivers also filed a separate damages case. The trial court ruled against Petrophil, awarding unearned hauling charges to Cruz and damages to the drivers, a decision affirmed with modification by the Court of Appeals.
ISSUE
Whether the Court of Appeals erred in: (1) invalidating the contractual termination under Paragraph 11 and finding the termination was “for cause,” thus requiring adherence to the Hearing Committee procedure; and (2) holding Petrophil liable for damages to the respondent-drivers.
RULING
The Supreme Court denied the petition and affirmed the appellate court. On the first issue, the contract contained two termination modes: under Paragraph 11 (without cause, with notice) and under Paragraph 7 (for cause, with a hearing). The Court applied the rule that obscure stipulations are interpreted against the party causing the obscurity. Since Petrophil prepared the contract, the ambiguity between these clauses was resolved against it. The termination was deemed to be “for cause,” as Petrophil’s own letter cited Cruz’s alleged refusal to load during a strike as the reason. Consequently, Petrophil was obligated to follow the contractual procedure for termination for cause, including the Hearing Committee, which it did not do. The termination was thus unjustified.
On the second issue, Petrophil argued it had no deliberate intent to harm the drivers. The Court held that under Article 20 of the Civil Code, indemnity is required when an act, contrary to law, willfully or negligently causes damage to another. The drivers’ loss of employment and income was a direct consequence of Petrophil’s wrongful termination of the hauling contract. The law does not require the act to be specifically directed at the injured party; it suffices that damage results from the wrongful act. Therefore, the award of damages to the drivers was proper.