Professional Services, Inc. vs. Natividad

FIRST DIVISION
PROFESSIONAL SERVICES, INC.,

difficulty of bowel movement and bloody anal discharge. After a series
of medical examinations, Dr. Miguel Ampil, petitioner in G.R. No.
127590, diagnosed her to be suffering from “cancer of the sigmoid.”
G.R. No. 126297

Petitioner,
- versus NATIVIDAD and ENRIQUE AGANA,
Respondents.
x-----------------------x
NATIVIDAD (Substituted by her children MARCELINO
AGANA III, ENRIQUE AGANA, JR., EMMA AGANA
ANDAYA, JESUS AGANA, and RAYMUND AGANA) and
ENRIQUE AGANA,
Petitioners,

On April 11, 1984, Dr. Ampil, assisted by the medical staff [4] of
the Medical City Hospital, performed an anterior resection surgery on
Natividad. He found that the malignancy in her sigmoid area had
spread on her left ovary, necessitating the removal of certain portions
of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband,
Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No.
126467, to perform hysterectomy on her.
G.R. No. 126467

After Dr. Fuentes had completed the hysterectomy, Dr. Ampil
took over, completed the operation and closed the incision.

- versus JUAN FUENTES,
Respondent.

However, the operation appeared to be flawed. In the
corresponding Record of Operation dated April 11, 1984, the attending
nurses entered these remarks:

x- - - - - - - - - - - - - - - - - - - -- - - - x
MIGUEL AMPIL,
Petitioner,
- versus -

G.R. No. 127590
Present:
NATIVIDAD AGANA and ENRIQUE AGANA,
Respondents.

“sponge count lacking 2
“announced
to
surgeon
searched (sic) done but to
no
avail continue
for
closure.”

PUNO,
SANDOVAL-GUTIERREZ,
CORONA,
On April 24, 1984, Natividad was released from the hospital. Her
AZCUNA, hospital and medical bills, including the doctors’ fees, amounted
*
GARCIA,
to P60,000.00.
Promulgated:

January 31, 2007
After a couple of days, Natividad complained of excruciating pain
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -in- -her
- - anal
- - - -region.
x
She consulted both Dr. Ampil and Dr. Fuentes about
it. They told her that the pain was the natural consequence of the
surgery.
Dr. Ampil then recommended that she consult an
DECISION
oncologist to examine the cancerous nodes which were not removed
during the operation.
SANDOVAL-GUTIERREZ, J.:
Hospitals, having undertaken one of mankind’s most important
and delicate endeavors, must assume the grave responsibility of
pursuing it with appropriate care. The care and service dispensed
through this high trust, however technical, complex and esoteric its
character may be, must meet standards of responsibility
commensurate with the undertaking to preserve and protect the health,
and indeed, the very lives of those placed in the hospital’s keeping. [1]

Assailed in these three consolidated petitions for review on
certiorari is the Court of Appeals’ Decision [2] dated September 6,
1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198 affirming
with modification the Decision[3] datedMarch 17, 1993 of the Regional
Trial Court (RTC), Branch 96, Quezon City in Civil Case No. Q-43322
and nullifying its Order dated September 21, 1993.

The facts, as culled from the records, are:

On April 4, 1984, Natividad Agana was rushed to
the Medical City General Hospital (Medical City Hospital) because of

On May 9, 1984, Natividad, accompanied by her husband, went
to the United States to seek further treatment. After four months of
consultations and laboratory examinations, Natividad was told she was
free of cancer. Hence, she was advised to return to the Philippines.

On August 31, 1984, Natividad flew back to the Philippines, still
suffering from pains. Two weeks thereafter, her daughter found a
piece of gauze protruding from her vagina. Upon being informed about
it, Dr. Ampil proceeded to her house where he managed to extract by
hand a piece of gauze measuring 1.5 inches in width. He then assured
her that the pains would soon vanish.

Dr. Ampil’s assurance did not come true. Instead, the pains
intensified, prompting Natividad to seek treatment at the Polymedic
General Hospital. While confined there, Dr. Ramon Gutierrez detected
the presence of another foreign object in her vagina -- a foul-smelling
gauze measuring 1.5 inches in width which badly infected her vaginal
vault. A recto-vaginal fistula had formed in her reproductive organs
which forced stool to excrete through the vagina. Another surgical
operation was needed to remedy the damage. Thus, in October 1984,
Natividad underwent another surgery.

On November 12, 1984, Natividad and her husband filed with
the RTC, Branch 96, Quezon City a complaint for damages against the
Professional
Services,
Inc.
(PSI),
owner
of
the Medical City Hospital,
Dr. Ampil, and Dr. Fuentes, docketed
as Civil Case No. Q-43322. They alleged that the latter are liable
for negligence for leaving two pieces of gauze inside Natividad’s body
and malpractice for concealing their acts of negligence.

Meanwhile, Enrique Agana also filed with the Professional
Regulation Commission (PRC) an administrative complaint for gross
negligence and malpractice against Dr. Ampil and Dr. Fuentes,
docketed as Administrative Case No. 1690. The PRC Board of
Medicine heard the case only with respect to Dr. Fuentes because it
failed to acquire jurisdiction over Dr. Ampil who was then in the United
States.

On February 16, 1986, pending the outcome of the above
cases, Natividad died and was duly substituted by her above-named
children (the Aganas).

On March 17, 1993, the RTC rendered its Decision in favor of
the Aganas, finding PSI, Dr. Ampil and Dr. Fuentes liable for
negligence and malpractice, the decretal part of which reads:

WHEREFORE,
judgment
is
hereby
rendered for the plaintiffs ordering the
defendants PROFESSIONAL SERVICES, INC.,
DR.
MIGUEL
AMPIL and DR.
JUAN
FUENTES to pay to the plaintiffs, jointly and
severally, except in respect of the award for
exemplary damages and the interest thereon
which are the liabilities of defendants Dr. Ampil
and Dr. Fuentes only, as follows:
1.

As actual damages, the following amounts:
a.

The equivalent in
Philippine Currency of
the
total
of
US$19,900.00 at the
rate
of P21.60US$1.00,
as
reimbursement
of
actual
expenses
incurred in the United
States of America;

b.

The sum of P4,800.00
as travel taxes of
plaintiffs
and
their
physician daughter;

c.

The
total
sum
of P45,802.50,
representing the cost of
hospitalization
at Polymedic Hospital,
medical fees, and cost
of the saline solution;

2.

As moral damages, the sum of P2,000,000.00;

3.

As exemplary damages, the sum of P300,000.00;

4.

As attorney’s fees, the sum of P250,000.00;

5.

Legal interest on items 1 (a), (b), and (c); 2;
and 3 hereinabove, from date of filing of the
complaint until full payment; and

6.

Costs of suit.

SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an
appeal to the Court of Appeals, docketed as CA-G.R. CV No. 42062.

Incidentally, on April 3, 1993, the Aganas filed with the RTC a
motion for a partial execution of its Decision, which was granted in an
Order dated May 11, 1993. Thereafter, the sheriff levied upon certain
properties of Dr. Ampil and sold them for P451,275.00 and delivered
the amount to the Aganas.

Following their receipt of the money, the Aganas entered into an
agreement with PSI and Dr. Fuentes to indefinitely suspend any further
execution of the RTC Decision. However, not long thereafter, the
Aganas again filed a motion for analias writ of execution against the
properties of PSI and Dr. Fuentes. On September 21, 1993, the RTC
granted the motion and issued the corresponding writ, prompting Dr.
Fuentes to file with the Court of Appeals a petition for certiorari and
prohibition, with prayer for preliminary injunction, docketed as CA-G.R.
SP No. 32198. During its pendency, the Court of Appeals issued a
Resolution[5] dated October 29, 1993 granting Dr. Fuentes’ prayer for
injunctive relief.

On January 24, 1994, CA-G.R. SP No. 32198 was consolidated
with CA-G.R. CV No. 42062.

Meanwhile, on January 23, 1995, the PRC Board of Medicine
rendered its Decision[6] in Administrative Case No. 1690 dismissing the
case against Dr. Fuentes. The Board held that the prosecution failed
to show that Dr. Fuentes was the one who left the two pieces of gauze
inside Natividad’s body; and that he concealed such fact from
Natividad.

On September 6, 1996, the Court of Appeals rendered its
Decision jointly disposing of CA-G.R. CV No. 42062 and CA-G.R. SP
No. 32198, thus:

WHEREFORE, except for the modification
that the case against defendant-appellant Dr.
Juan Fuentes is hereby DISMISSED, and with
the pronouncement that defendant-appellant Dr.
Miguel Ampil is liable to reimburse defendantappellant Professional Services, Inc., whatever
amount the latter will pay or had paid to the
plaintiffs-appellees, the decision appealed from is
hereby AFFIRMED and
the
instant
appeal DISMISSED.
Concomitant with the above, the petition
for certiorari and prohibition filed by herein
defendant-appellant Dr. Juan Fuentes in CA-G.R.
SP No. 32198 is hereby GRANTED and the
challenged order of the respondent judge
dated September 21, 1993, as well as the alias
writ of execution issued pursuant thereto are
hereby NULLIFIED and SET ASIDE. The bond
posted by the petitioner in connection with the
writ of preliminary injunction issued by this Court
on November 29, 1993 is hereby cancelled.

Costs against defendants-appellants Dr.
Miguel Ampil and Professional Services, Inc.

mindful that Dr. Ampil examined his
in order.

(Dr. Fuentes’) work and found it

SO ORDERED.

Only Dr. Ampil filed a motion for reconsideration, but it was
denied in a Resolution[7] dated December 19, 1996.

Hence, the instant consolidated petitions.

In G.R. No. 126297, PSI alleged in its petition that the Court of
Appeals erred in holding that: (1) it is estopped from raising the
defense that Dr. Ampil is not its employee; (2) it is solidarily liable with
Dr. Ampil; and (3) it is not entitled to its counterclaim against the
Aganas. PSI contends that Dr. Ampil is not its employee, but a mere
consultant or independent contractor. As such, he alone should
answer for his negligence.

In G.R. No. 126467, the Aganas maintain that the Court of
Appeals erred in finding that Dr. Fuentes is not guilty of negligence or
medical
malpractice,
invoking
the
doctrine
of res
ipsa
loquitur. They contend that the pieces of gauze areprima facie proofs
that the operating surgeons have been negligent.

Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of
Appeals erred in finding him liable for negligence and
malpractice sans evidence that he left the two pieces of gauze in
Natividad’s vagina. He pointed to other probable causes, such
as: (1) it was Dr. Fuentes who used gauzes in performing the
hysterectomy; (2) the attending nurses’ failure to properly count the
gauzes used during surgery; and (3) the medical intervention of the
American doctors who examined Natividad in the United States of
America.

For our resolution are these three vital issues: first, whether
the Court of Appeals erred in holding Dr. Ampil liable for negligence
and malpractice; second, whether the Court of Appeals erred in
absolving Dr. Fuentes of any liability; andthird, whether PSI may be
held solidarily liable for the negligence of Dr. Ampil.

I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil
Liable for Negligence and Malpractice.

Dr. Ampil, in an attempt to absolve himself, gears the Court’s
attention to other possible causes of Natividad’s detriment. He argues
that the Court should not discount either of the following
possibilities: first,
Dr. Fuentes left the gauzes in Natividad’s body
after performing hysterectomy; second, the attending nurses erred in
counting the gauzes; and third, the American doctors were the ones
who placed the gauzes in Natividad’s body.

Dr. Ampil’s arguments are purely conjectural and without
basis. Records show that he did not present any evidence to prove that
the American doctors were the ones who put or left the gauzes in
Natividad’s body. Neither did he submit evidence to rebut the
correctness of the record of operation, particularly the number of
gauzes used. As to the alleged negligence of Dr. Fuentes, we are

The glaring truth is that all the major circumstances, taken
together, as specified by the Court of Appeals, directly point to Dr.
Ampil as the negligent party, thus:

First, it is not disputed that the
surgeons used gauzes as sponges to control the
bleeding of the patient during the surgical
operation.
Second, immediately
after
the
operation, the nurses who assisted in the surgery
noted in their report that the ‘sponge count (was)
lacking 2’; that such anomaly was ‘announced
to surgeon’ and that a ‘search was done but
to no avail’ prompting Dr. Ampil to ‘continue
for closure’ x x x.
Third, after the operation, two (2)
gauzes were extracted from the same spot of the
body of Mrs. Agana where the surgery was
performed.

An operation requiring the placing of sponges in the incision
is not complete until the sponges are properly removed, and it is
settled that the leaving of sponges or other foreign substances in the
wound
after
the
incision
has
been
closed
is
at
least prima facie negligence by the operating surgeon.[8] To put it
simply, such act is considered so inconsistent with due care as to raise
an inference of negligence. There are even legions of authorities to
the effect that such act is negligence per se.[9]

Of course, the Court is not blind to the reality that there are
times when danger to a patient’s life precludes a surgeon from further
searching missing sponges or foreign objects left in the body. But
this does not leave him free from any obligation. Even if it has
been shown that a surgeon was required by the urgent necessities of
the case to leave a sponge in his patient’s abdomen, because of the
dangers attendant upon delay, still, it is his legal duty to so inform
his patient within a reasonable time thereafter by advising her of
what he had been compelled to do. This is in order that she might
seek relief from the effects of the foreign object left in her body as her
condition might permit. The ruling in Smith v. Zeagler[10] is explicit,
thus:
The removal of all sponges used is
part of a surgical operation, and when a
physician or surgeon fails to remove a sponge he
has placed in his patient’s body that should be
removed as part of the operation, he thereby
leaves his operation uncompleted and creates a
new condition which imposes upon him the
legal duty of calling the new condition to his
patient’s attention, and endeavoring with the
means he has at hand to minimize and avoid
untoward results likely to ensue therefrom.

Here, Dr. Ampil did not inform Natividad about the missing
two pieces of gauze. Worse, he even misled her that the pain she
was experiencing was the ordinary consequence of her
operation. Had he been more candid, Natividad could have taken the
immediate and appropriate medical remedy to remove the gauzes from
her body. To our mind, what was initially an act of negligence by Dr.
Ampil has ripened into a deliberate wrongful act of deceiving his
patient.

This is a clear case of medical malpractice or more
appropriately, medical negligence. To successfully pursue this kind of
case, a patient must only prove that a health care provider either failed
to do something which a reasonably prudent health care provider
would have done, or that he did something that a reasonably prudent
provider would not have done; and that failure or action caused injury
to
the
patient.[11] Simply
put,
the
elements
are duty, breach, injury and proximate causation. Dr, Ampil, as the
lead surgeon, had the duty to remove all foreign objects, such as
gauzes, from Natividad’s body before closure of the incision. When
he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil
breached both duties. Such breach caused injury to Natividad,
necessitating her further examination by American doctors and another
surgery. That Dr. Ampil’s negligence is the proximate cause [12] of
Natividad’s injury could be traced from hisact of closing the incision
despite the information given by the attending nurses that two
pieces of gauze were still missing. That they were later on extracted
from Natividad’s vagina established the causal link between Dr. Ampil’s
negligence and the injury. And what further aggravated such injury was
his deliberate concealment of the missing gauzes from the knowledge
of Natividad and her family.

II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case
against Dr. Fuentes on the ground that it is contrary to the doctrine
of res ipsa loquitur. According to them, the fact that the two pieces of
gauze were left inside Natividad’s body is a prima facie evidence of Dr.
Fuentes’ negligence.

We are not convinced.

Literally, res ipsa loquitur means “the thing speaks for itself.” It is
the rule that the fact of the occurrence of an injury, taken with the
surrounding circumstances, may permit an inference or raise a
presumption of negligence, or make out a plaintiff’s prima facie case,
and present a question of fact for defendant to meet with an
explanation.[13] Stated differently, where the thing which caused the
injury, without the fault of the injured, is under the exclusive control of
the defendant and the injury is such that it should not have occurred if
he, having such control used proper care, it affords reasonable
evidence, in the absence of explanation that the injury arose from the
defendant’s want of care, and the burden of proof is shifted to him to
establish that he has observed due care and diligence.[14]

From the foregoing statements of the rule, the requisites for the
applicability of the doctrine of res ipsa loquitur are: (1) the occurrence
of an injury; (2) the thing which caused the injury was under the control
and management of the defendant; (3) the occurrence was such that in
the ordinary course of things, would not have happened if those who
had control or management used proper care; and (4) the absence of
explanation by the defendant. Of the foregoing requisites, the most
instrumental is the “control and management of the thing which
caused the injury.”[15]

We find the element of “control and management of the thing
which caused the injury” to be wanting. Hence, the doctrine of res ipsa
loquitur will not lie.

It was duly established that Dr. Ampil was the lead
surgeon during the operation of Natividad. He requested the

assistance of Dr. Fuentes only to perform hysterectomy when he (Dr.
Ampil) found that the malignancy in her sigmoid area had spread to her
left ovary. Dr. Fuentes performed the surgery and thereafter reported
and showed his work to Dr. Ampil. The latter examined it and
finding everything to be in order, allowed
Dr. Fuentes to leave
the operating room.Dr. Ampil then resumed operating on
Natividad. He was about to finish the procedure when the attending
nurses informed him that two pieces of gauze were missing. A “diligent
search” was conducted, but the misplaced gauzes were not found.Dr.
Ampil then directed that the incision be closed. During this entire
period, Dr. Fuentes was no longer in the operating room and had, in
fact, left the hospital.

Under the “Captain of the Ship” rule, the operating surgeon is
the person in complete charge of the surgery room and all personnel
connected with the operation. Their duty is to obey his orders. [16] As
stated before, Dr. Ampil was the lead surgeon. In other words, he
was the “Captain of the Ship.” That he discharged such role is evident
from his following conduct: (1) calling Dr. Fuentes to perform a
hysterectomy; (2) examining the work of Dr. Fuentes and finding it in
order;(3) granting Dr. Fuentes’ permission to leave; and (4) ordering
the closure of the incision. To our mind, it was this act of ordering
the closure of the incision notwithstanding that two pieces of
gauze remained unaccounted for, that caused injury to
Natividad’s body. Clearly, the control and management of the thing
which caused the injury was in the hands of Dr. Ampil, not Dr.
Fuentes.

In this jurisdiction, res ipsa loquitur is not a rule of substantive
law, hence, does not per se create or constitute an independent or
separate ground of liability, being a mere evidentiary rule. [17] In other
words, mere invocation and application of the doctrine does not
dispense with the requirement of proof of negligence. Here, the
negligence was proven to have been committed by Dr. Ampil and not
by Dr. Fuentes.
III - G.R. No. 126297
Whether PSI Is Liable for the Negligence of Dr. Ampil

The third issue necessitates a glimpse at the historical
development of hospitals and the resulting theories concerning their
liability for the negligence of physicians.

Until the mid-nineteenth century, hospitals were generally
charitable institutions, providing medical services to the lowest classes
of society, without regard for a patient’s ability to pay. [18] Those who
could afford medical treatment were usually treated at home by their
doctors.[19] However, the days of house calls and philanthropic health
care are over. The modern health care industry continues to distance
itself from its charitable past and has experienced a significant
conversion from a not-for-profit health care to for-profit hospital
businesses. Consequently, significant changes in health law have
accompanied the business-related changes in the hospital industry.
One important legal change is an increase in hospital liability for
medical malpractice. Many courts now allow claims for hospital
vicarious liability under the theories of respondeat superior, apparent
authority, ostensible authority, or agency by estoppel. [20]

In this jurisdiction, the statute governing liability for negligent
acts is Article 2176 of the Civil Code, which reads:

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 preexisting contractual relation between the parties,
is called a quasi-delict and is governed by the
provisions of this Chapter.

A derivative of this provision is Article 2180, the rule
governing vicarious liability under the doctrine of respondeat
superior, thus:

ART. 2180. The obligation imposed by
Article 2176 is demandable not only for one’s
own acts or omissions, but also for those of
persons for whom one is responsible.
x x x
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
x x

x

The responsibility treated of in this article
shall cease when the persons herein mentioned
prove that they observed all the diligence of a
good father of a family to prevent damage.

A prominent civilist commented that professionals engaged by
an employer, such as physicians, dentists, and pharmacists, are not
“employees” under this article because the manner in which they
perform their work is not within the control of the latter (employer). In
other words, professionals are considered personally liable for
the fault or negligence they commit in the discharge of their
duties, and their employer cannot be held liable for such fault or
negligence. In the context of the present case, “a hospital cannot be
held liable for the fault or negligence of a physician or surgeon in the
treatment or operation of patients.”[21]

The foregoing view is grounded on the traditional notion that
the professional status and the very nature of the physician’s calling
preclude him from being classed as an agent or employee of a
hospital, whenever he acts in a professional capacity.[22] It has been
said that medical practice strictly involves highly developed and
specialized knowledge,[23] such that physicians are generally free to
exercise their own skill and judgment in rendering medical
services sans interference.[24] Hence, when a doctor practices
medicine in a hospital setting, the hospital and its employees are
deemed to subserve him in his ministrations to the patient and his
actions are of his own responsibility.[25]

The case of Schloendorff v. Society of New York Hospital [26] was
then considered an authority for this view. The “Schloendorff doctrine”
regards a physician, even if employed by a hospital, as
an independent contractor because of the skill he exercises and the
lack of control exerted over his work. Under this doctrine, hospitals are
exempt from the application of the respondeat superior principle for

fault or negligence committed by physicians in the discharge of their
profession.

However, the efficacy of the foregoing doctrine has
weakened with the significant developments in medical care. Courts
came to realize that modern hospitals are increasingly taking active
role in supplying and regulating medical care to patients. No longer
were a hospital’s functions limited to furnishing room, food, facilities for
treatment and operation, and attendants for its patients. Thus, in Bing
v. Thunig,[27] the New York Court of Appeals deviated from
the Schloendorffdoctrine, noting that modern hospitals actually do far
more than provide facilities for treatment. Rather, they regularly
employ, on a salaried basis, a large staff of physicians, interns, nurses,
administrative and manual workers. They charge patients for medical
care and treatment, even collecting for such services through legal
action, if necessary. The court then concluded that there is no reason
to exempt hospitals from the universal rule of respondeat superior.

In our shores, the nature of the relationship between the hospital
and the physicians is rendered inconsequential in view of our
categorical pronouncement in Ramos v. Court of Appeals[28] that for
purposes of apportioning responsibility in medical negligence
cases, an employer-employee relationship in effect exists between
hospitals and their attending and visiting physicians. This Court
held:

“We now discuss the responsibility of
the hospital in this particular incident. The unique
practice (among private hospitals) of filling up
specialist staff with attending and visiting
“consultants,” who are allegedly not hospital
employees, presents problems in apportioning
responsibility for negligence in medical
malpractice cases. However, the difficulty is more
apparent than real.
In the first place, hospitals exercise
significant control in the hiring and firing of
consultants and in the conduct of their work
within the hospital premises. Doctors who
apply for ‘consultant’ slots, visiting or
attending, are required to submit proof of
completion of residency, their educational
qualifications,
generally,
evidence
of
accreditation by the appropriate board
(diplomate), evidence of fellowship in most
cases, and references. These requirements
are carefully scrutinized by members of the
hospital administration or by a review
committee set up by the hospital who either
accept or reject the application.
x x x.
After a physician is accepted, either
as a visiting or attending consultant, he is
normally
required
to
attend
clinicopathological conferences, conduct bedside
rounds for clerks, interns and residents,
moderate grand rounds and patient audits
and perform other tasks and responsibilities,
for the privilege of being able to maintain a
clinic in the hospital, and/or for the privilege
of admitting patients into the hospital. In
addition to these, the physician’s performance as
a specialist is generally evaluated by a peer
review committee on the basis of mortality and
morbidity statistics, and feedback from patients,
nurses, interns and residents. A consultant
remiss in his duties, or a consultant who
regularly falls short of the minimum
standards acceptable to the hospital or its

peer review committee, is normally politely
terminated.
In other words, private hospitals,
hire, fire and exercise real control over their
attending and visiting ‘consultant’ staff. While
‘consultants’
are
not,
technically
employees, x x x, the control exercised, the
hiring, and the right to terminate consultants
all fulfill the important hallmarks of an
employer-employee relationship, with the
exception of the payment of wages. In
assessing whether such a relationship in fact
exists,
the
control
test
is
determining. Accordingly, on the basis of the
foregoing, we rule that for the purpose of
allocating
responsibility
in
medical
negligence cases, an employer-employee
relationship in effect exists between hospitals
and their attending and visiting physicians. ”

But the Ramos pronouncement is not our only basis in
sustaining PSI’s liability. Its liability is also anchored upon the
agency principle of apparent authority or agency by estoppel and
the doctrine of corporate negligence which havegained acceptance in
the determination of a hospital’s liability for negligent acts of health
professionals. The present case serves as a perfect platform to test
the applicability of these doctrines, thus, enriching our jurisprudence.

Apparent authority, or what is sometimes referred to as
the “holding out” theory, or doctrine of ostensible agency or agency
by estoppel,[29] has its origin from the law of agency. It imposes
liability, not as the result of the reality of a contractual relationship, but
rather because of the actions of a principal or an employer in somehow
misleading the public into believing that the relationship or the authority
exists.[30] The concept is essentially one of estoppel and has been
explained in this manner:

“The principal is bound by the acts of his
agent with the apparent authority which he
knowingly permits the agent to assume, or which
he holds the agent out to the public as
possessing. The question in every case is
whether the principal has by his voluntary act
placed the agent in such a situation that a person
of ordinary prudence, conversant with business
usages and the nature of the particular business,
is justified in presuming that such agent has
authority to perform the particular act in question.

ART. 1869. Agency may be express, or
implied from the acts of the principal, from his
silence or lack of action, or his failure to
repudiate the agency, knowing that another
person is acting on his behalf without authority.

In this case, PSI publicly displays in the lobby of
the Medical City Hospital the names and specializations of the
physicians associated or accredited by it, including those of Dr. Ampil
and Dr. Fuentes. We concur with the Court of Appeals’ conclusion that
it “is now estopped from passing all the blame to the physicians
whose names it proudly paraded in the public directory leading
the public to believe that it vouched for their skill and
competence.” Indeed, PSI’s act is tantamount to holding out to the
public that Medical City Hospital, through its accredited physicians,
offers quality health care services. By accrediting Dr. Ampil and Dr.
Fuentes and publicly advertising their qualifications, the hospital
created the impression that they were its agents, authorized to perform
medical or surgical services for its patients. As expected, these
patients, Natividad being one of them, accepted the services on the
reasonable belief that such were being rendered by the hospital or its
employees, agents, or servants. The trial court correctly pointed out:

x x x regardless of the education and
status in life of the patient, he ought not be
burdened with the defense of absence of
employer-employee relationship between the
hospital and the independent physician whose
name and competence are certainly certified to
the general public by the hospital’s act of listing
him and his specialty in its lobby directory, as in
the case herein. The high costs of today’s
medical and health care should at least exact on
the hospital greater, if not broader, legal
responsibility for the conduct of treatment and
surgery within its facility by its accredited
physician or surgeon, regardless of whether he
is independent or employed.”[33]

The wisdom of the foregoing ratiocination is easy to discern.
Corporate entities, like PSI, are capable of acting only through other
individuals, such as physicians. If these accredited physicians do their
job well, the hospital succeeds in its mission of offering quality medical
services and thus profits financially. Logically, where negligence
mars the quality of its services, the hospital should not be allowed to
escape liability for the acts of its ostensible agents.

[31]

We
now
proceed
to
the
negligence or corporate responsibility.
The applicability of apparent authority in the field of hospital
liability was upheld long time ago in Irving v. Doctor Hospital of Lake
Worth, Inc.[32] There, it was explicitly stated that “there does not
appear to be any rational basis for excluding the concept of
apparent authority from the field of hospital liability.” Thus, in
cases where it can be shown that a hospital, by its actions, has held
out a particular physician as its agent and/or employee and that a
patient has accepted treatment from that physician in the reasonable
belief that it is being rendered in behalf of the hospital, then the
hospital will be liable for the physician’s negligence.

doctrine

of corporate

One allegation in the complaint in Civil Case No. Q-43332 for
negligence and malpractice is that PSI as owner, operator and
manager of Medical City Hospital, “did not perform the necessary
supervision nor exercise diligent efforts in the supervision of Drs.
Ampil and Fuentes and its nursing staff, resident doctors, and
medical interns who assisted Drs. Ampil and Fuentes in the
performance of their duties as surgeons.”[34] Premised on the
doctrine of corporate negligence, the trial court held that PSI is directly
liable for such breach of duty.

Our jurisdiction recognizes the concept of an agency by
implication or estoppel. Article 1869 of the Civil Code reads:
We agree with the trial court.

Recent years have seen the doctrine of corporate negligence as
the judicial answer to the problem of allocating hospital’s liability for the
negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation
proceeds from the judiciary’s acknowledgment that in these modern
times, the duty of providing quality medical service is no longer the
sole prerogative and responsibility of the physician. The modern
hospitals have changed structure. Hospitals now tend to organize a
highly professional medical staff whose competence and performance
need to be monitored by the hospitals commensurate with their
inherent responsibility to provide quality medical care.[35]

The doctrine has its genesis in Darling v. Charleston
Community Hospital.[36] There, the Supreme Court of Illinois held
that “the jury could have found a hospital negligent, inter alia, in
failing to have a sufficient number of trained nurses attending the
patient; failing to require a consultation with or examination by
members of the hospital staff; and failing to review the treatment
rendered to the patient.” On the basis of Darling, other jurisdictions
held that a hospital’s corporate negligence extends to permitting a
physician known to be incompetent to practice at the hospital.
[37]
With the passage of time, more duties were expected from
hospitals, among them: (1) the use of reasonable care in the
maintenance
of
safe
and
adequate
facilities
and
equipment; (2) the selection
and
retention
of
competent
physicians; (3) the overseeing or supervision of all persons who
practice medicine within its walls; and (4) the formulation, adoption
and enforcement of adequate rules and policies that ensure quality
care for its patients.[38] Thus, in Tucson Medical Center, Inc. v.
Misevich,[39] it was held that a hospital, following the doctrine of
corporate responsibility, has the duty to see that it meets the standards
of responsibilities for the care of patients. Such duty includes the
proper supervision of the members of its medical staff. And
in Bost v. Riley,[40] the court concluded that a patient who enters a
hospital does so with the reasonable expectation that it will attempt to
cure him. The hospital accordingly has the duty to make a
reasonable effort to monitor and oversee the treatment prescribed
and administered by the physicians practicing in its premises.

In the present case, it was duly established that PSI operates
the Medical City Hospital for the purpose and under the concept of
providing comprehensive medical services to the public. Accordingly, it
has the duty to exercise reasonable care to protect from harm all
patients
admitted
into
its
facility
for
medical
treatment. Unfortunately, PSI failed to perform such duty. The
findings of the trial court are convincing, thus:

x x x PSI’s liability is traceable to its
failure to conduct an investigation of the matter
reported in the nota bene of the count nurse.
Such failure established PSI’s part in the dark
conspiracy of silence and concealment about
the gauzes. Ethical considerations, if not also legal,
dictated the holding of an immediate inquiry into the
events, if not for the benefit of the patient to whom
the duty is primarily owed, then in the interest of
arriving at the truth. The Court cannot accept that
the medical and the healing professions, through
their members like defendant surgeons, and their
institutions like PSI’s hospital facility, can callously
turn their backs on and disregard even a mere
probability of mistake or negligence by refusing or
failing to investigate a report of such seriousness as
the one in Natividad’s case.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated
on Natividad with the assistance of the Medical City Hospital’s staff,
composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator of the hospital,
has actual or constructive knowledge of the procedures carried

out, particularly the report of the attending nurses that the two
pieces of gauze were missing. In Fridena v. Evans,[41] it was held
that a corporation isbound by the knowledge acquired by or notice
given to its agents or officers within the scope of their authority and in
reference to a matter to which their authority extends. This means that
the knowledge of any of the staff of Medical City Hospitalconstitutes
knowledge of PSI. Now, the failure of PSI, despite the attending
nurses’ report, to investigate and inform Natividad regarding the
missing gauzes amounts to callous negligence. Not only did PSI
breach its duties to oversee or supervise all persons who practice
medicine within its walls, it also failed to take an active step in
fixing the negligence committed. This renders PSI, not only
vicariously liable for the negligence of Dr. Ampil under Article 2180 of
the Civil Code, but also directly liable for its own negligence under
Article 2176. In Fridena, the Supreme Court of Arizona held:

x x x In recent years, however, the duty
of care owed to the patient by the hospital has
expanded. The emerging trend is to hold the
hospital responsible where the hospital has
failed to monitor and review medical services
being provided within its
walls. See KahnHospital Malpractice
Prevention, 27 De Paul . Rev. 23 (1977).
Among the cases indicative of the
‘emerging trend’ is Purcell v. Zimbelman,
18 Ariz. App. 75,500 P. 2d 335 (1972).
In Purcell, the hospital argued that it could not be
held liable for the malpractice of a medical
practitioner because he was an independent
contractor within the hospital. The Court of
Appeals pointed out that the hospital had
created
a
professional
staff
whose
competence and performance was to be
monitored and reviewed by the governing
body of the hospital, and the court held that a
hospital would be negligent where it had
knowledge or reason to believe that a doctor
using the facilities was employing a method
of treatment or care which fell below the
recognized standard of care.
Subsequent to the Purcell decision,
the Arizona Court of Appeals held that a
hospital has certain inherent responsibilities
regarding the quality of medical care
furnished to patients within its walls and it
must meet the standards of responsibility
commensurate with this undertaking. Beeck
v. Tucson General Hospital, 18 Ariz. App. 165,
500 P. 2d 1153 (1972). This court has confirmed
the rulings of the Court of Appeals that a hospital
has the duty of supervising the competence of
the doctors on its staff. x x x.

x

x

x
x

x

x

In the amended complaint, the plaintiffs
did plead that the operation was performed at the
hospital with its knowledge, aid, and assistance,
and that the negligence of the defendants was
the proximate cause of the patient’s injuries. We
find that such general allegations of
negligence, along with the evidence produced
at the trial of this case, are sufficient to
support the hospital’s liability based on the
theory of negligent supervision.”

Anent the corollary issue of whether PSI is solidarily liable
with
Dr. Ampil for damages, let it be emphasized that PSI,
apart from a general denial of its responsibility, failed to adduce

evidence showing that it exercised the diligence of a good father of a
family in the accreditation and supervision of the latter. In neglecting to
offer such proof, PSI failed to discharge its burden under the last
paragraph of Article 2180 cited earlier, and, therefore, must be
adjudged solidarily liable with Dr. Ampil. Moreover, as we have
discussed, PSI is also directly liable to the Aganas.

x-------------------x
NATIVIDAD [substituted by her
children Marcelino Agana III,
Enrique Agana, Jr.,
Emma Agana-Andaya,
Jesus Agana and Raymund
Agana] and ENRIQUE AGANA,
Petitioners,

One final word. Once a physician undertakes the treatment and
care of a patient, the law imposes on him certain obligations. In order
to escape liability, he must possess that reasonable degree of learning,
skill and experience required by his profession. At the same time, he
must apply reasonable care and diligence in the exercise of his skill
and the application of his knowledge, and exert his best judgment.

-

WHEREFORE, we DENY all the petitions and AFFIRM the
challenged Decision of the Court of Appeals in CA-G.R. CV No. 42062
and CA-G.R. SP No. 32198.

G.R. No. 126467

versus -

THE
COURT OF
APPEALS
and JUAN
FUENTES,
Respondents.
x-------------------x
MIGUEL AMPIL,
Petitioner,

G.R. No. 127590

Costs against petitioners PSI and Dr. Miguel Ampil.
- versus NATIVIDAD and ENRIQUE
AGANA,
Respondents.

SO ORDERED.

P
romulgate
d:
February 2, 2010

EN BANC
PROFESSIONAL SERVICES,
INC.,
Petitioner,

x--------------------------------------------------x

G.R. No. 126297
Present:
P
UNO, C.J
.,

RESOLUTION
CORONA, J.:

C
ARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,

- versus -

THE
COURT OF
APPEALS
and NATIVI
DAD
and
ENRIQUE
AGANA,

NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,*
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ and
MENDOZA, JJ.**

With prior leave of court,[1] petitioner Professional Services,
Inc. (PSI) filed a second motion for reconsideration[2] urging referral
thereof to the Court en banc and seeking modification of the decision
dated January 31, 2007 and resolution dated February 11, 2008 which
affirmed its vicarious and direct liability for damages to respondents
Enrique Agana and the heirs of Natividad Agana (Aganas).

Manila Medical Services, Inc. (MMSI),[3] Asian Hospital, Inc.
(AHI),[4] and Private Hospital Association of the Philippines (PHAP) [5] all
sought to intervene in these cases invoking the common ground that,
unless modified, the assailed decision and resolution will jeopardize
the financial viability of private hospitals and jack up the cost of health
care.

The Special First Division of the Court granted the motions
for intervention of MMSI, AHI and PHAP (hereafter intervenors), [6] and
referred en consulta to the Court en banc the motion for prior leave of
court and the second motion for reconsideration of PSI.[7]

Respondents.

Due to paramount public interest, the Court en banc accepted
the referral[8] and heard the parties on oral arguments on one particular
issue: whether a hospital may be held liable for the negligence of
physicians-consultants allowed to practice in its premises.[9]

To recall the salient facts, PSI, together with Dr. Miguel Ampil
(Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded
by Enrique Agana and Natividad Agana (later substituted by her
heirs), in a complaint[10] for damages filed in the Regional Trial Court
(RTC) of Quezon City, Branch 96, for the injuries suffered by
Natividad when Dr. Ampil and Dr. Fuentes neglected to remove from
her body two gauzes[11] which were used in the surgery they performed
on her on April 11, 1984 at the Medical City General Hospital. PSI was
impleaded as owner, operator and manager of the hospital.

In a decision[12] dated March 17, 1993, the RTC held PSI
solidarily liable with Dr. Ampil and Dr. Fuentes for damages. [13] On
appeal, the Court of Appeals (CA), absolved Dr. Fuentes but affirmed
the liability of Dr. Ampil and PSI, subject to the right of PSI to claim
reimbursement from Dr. Ampil.[14]

On petition for review, this Court, in its January 31,
2007 decision, affirmed the CA decision.[15] PSI filed a motion for
reconsideration[16] but the Court denied it in a resolution dated February
11, 2008.[17]

persons who practiced medicine within its walls, and to take active
steps in fixing any form of negligence committed within its premises.
[27]
PSI committed a serious breach of its corporate duty when it failed
to conduct an immediate investigation into the reported missing
gauzes.[28]

PSI is now asking this Court to reconsider the foregoing
rulings for these reasons:
I

The declaration in the 31 January 2007
Decision vis-a-vis the 11 February 2009 Resolution
that the ruling in Ramos vs. Court of Appeals (G.R.
No. 134354, December 29, 1999) that “an
employer-employee relations exists between
hospital and their consultants” stays should be set
aside for being inconsistent with or contrary to the
import of the resolution granting the hospital's
motion for reconsideration in Ramos vs. Court of
Appeals (G.R. No. 134354, April 11, 2002), which is
applicable to PSI since the Aganas failed to prove
an employer-employee relationship between PSI
and Dr. Ampil and PSI proved that it has no control
over Dr. Ampil. In fact, the trial court has found that
there is no employer-employee relationship in this
case and that the doctor's are independent
contractors.

The Court premised the direct liability of PSI to the Aganas
on the following facts and law:
II

First, there existed between PSI and Dr. Ampil an employeremployee relationship as contemplated in the December 29,
1999 decision in Ramos v. Court of Appeals[18] that “for purposes of
allocating responsibility in medical negligence cases, an employeremployee relationship exists between hospitals and their
consultants.”[19] Although the Court in Ramos later issued a Resolution
dated April 11, 2002[20] reversing its earlier finding on the existence of
an employment relationship between hospital and doctor, a similar
reversal was not warranted in the present case because the defense
raised by PSI consisted of a mere general denial of control or
responsibility over the actions of Dr. Ampil.[21]

Respondents Aganas engaged Dr. Miguel
Ampil as their doctor and did not primarily and
specifically look to the Medical City Hospital (PSI)
for medical care and support; otherwise stated,
respondents Aganas did not select Medical City
Hospital (PSI) to provide medical care because of
any apparent authority of Dr. Miguel Ampil as its
agent since the latter was chosen primarily and
specifically based on his qualifications and being
friend and neighbor.

III
Second, by accrediting Dr. Ampil and advertising his
qualifications, PSI created the public impression that he was its agent.
[22]
Enrique testified that it was on account of Dr. Ampil's accreditation
with PSI that he conferred with said doctor about his wife's
(Natividad's) condition.[23] After his meeting with Dr. Ampil, Enrique
asked Natividad to personally consult Dr. Ampil. [24] In effect, when
Enrigue and Natividad engaged the services of Dr. Ampil, at the back
of their minds was that the latter was a staff member of a prestigious
hospital. Thus, under the doctrine of apparent authority applied
in Nogales, et al. v. Capitol Medical Center, et al.,[25] PSI was liable for
the negligence of Dr. Ampil.

Finally,
as
owner
and
operator
of Medical City General Hospital, PSI was bound by its duty to provide
comprehensive medical services to Natividad Agana, to exercise
reasonable care to protect her from harm,[26] to oversee or supervise all

PSI cannot be liable under doctrine of
corporate negligence since the proximate cause of
Mrs. Agana's injury was the negligence of Dr. Ampil,
which is an element of the principle of corporate
negligence.[29]

In their respective memoranda, intervenors raise parallel
arguments that the Court's ruling on the existence of an employeremployee relationship between private hospitals and consultants will
force a drastic and complex alteration in the long-established and
currently prevailing relationships among patient, physician and
hospital, with burdensome operational and financial consequences and
adverse effects on all three parties.[30]

The Aganas comment that the arguments of PSI need no
longer be entertained for they have all been traversed in the assailed
decision and resolution.[31]

After gathering its thoughts on the issues, this Court holds that
PSI is liable to the Aganas, not under the principle of respondeat
superior for lack of evidence of an employment relationship with Dr.
Ampil but under the principle of ostensible agency for the negligence of
Dr. Ampil and, pro hac vice, under the principle of corporate negligence
for its failure to perform its duties as a hospital.
While in theory a hospital as a juridical entity cannot practice
medicine,[32] in reality it utilizes doctors, surgeons and medical
practitioners in the conduct of its business of facilitating medical and
surgical treatment.[33] Within that reality, three legal relationships
crisscross: (1) between the hospital and the doctor practicing within its
premises; (2) between the hospital and the patient being treated or
examined within its premises and (3) between the patient and the
doctor. The exact nature of each relationship determines the basis and
extent of the liability of the hospital for the negligence of the doctor.

Where an employment relationship exists, the hospital may
be held vicariously liable under Article 2176 [34] in relation to Article
2180[35] of the Civil Code or the principle of respondeat superior. Even
when no employment relationship exists but it is shown that the
hospital holds out to the patient that the doctor is its agent, the hospital
may still be vicariously liable under Article 2176 in relation to Article
1431[36] and Article 1869[37] of the Civil Code or the principle of apparent
authority.[38] Moreover, regardless of its relationship with the doctor, the
hospital may be held directly liable to the patient for its own
negligence or failure to follow established standard of conduct to which
it should conform as a corporation.[39]

This Court still employs the “control test” to determine the
existence of an employer-employee relationship between hospital and
doctor. In Calamba Medical Center, Inc. v. National Labor Relations
Commission, et al.[40] it held:

Under the "control test", an employment
relationship exists between a physician and a
hospital if the hospital controls both the means and
the details of the process by which the physician is
to accomplish his task.

nursing supervisors, charge nurses and
orderlies. Without the approval or consent of
petitioner or its medical director, no operations
can be undertaken in those areas. For control
test to apply, it is not essential for the employer
to actually supervise the performance of duties
of the employee, it being enough that it has the
right to wield the power. (emphasis supplied)

Even in its December 29, 1999 decision[41] and April 11,
2002 resolution[42] in Ramos, the Court found the control test decisive.

In the present case, it appears to have escaped the Court's
attention that both the RTC and the CA found no employment
relationship between PSI and Dr. Ampil, and that the Aganas did not
question such finding. In its March 17, 1993decision, the RTC found
“that defendant doctors were not employees of PSI in its hospital, they
being merely consultants without any employer-employee relationship
and in the capacity of independent contractors.” [43] The Aganas never
questioned such finding.

PSI, Dr. Ampil and Dr. Fuentes appealed [44] from the RTC
decision but only on the issues of negligence, agency and corporate
liability. In its September 6, 1996 decision, the CA mistakenly referred
to PSI and Dr. Ampil as employer-employee, but it was clear in its
discussion on the matter that it viewed their relationship as one of mere
apparent agency.[45]

The Aganas appealed from the CA decision, but only to
question the exoneration of Dr. Fuentes. [46] PSI also appealed from the
CA decision, and it was then that the issue of employment, though long
settled, was unwittingly resurrected.

In fine, as there was no dispute over the RTC finding that
PSI and Dr. Ampil had no employer-employee relationship, such finding
became final and conclusive even to this Court. [47] There was no
reason for PSI to have raised it as an issue in its petition. Thus,
whatever discussion on the matter that may have ensued was purely
academic.

As priorly stated, private respondents
maintained specific work-schedules, as determined
by petitioner through its medical director, which
consisted of 24-hour shifts totaling forty-eight hours
each week and which were strictly to be observed
under pain of administrative sanctions.

Nonetheless, to allay the anxiety of the intervenors, the
Court holds that, in this particular instance, the concurrent finding of
the RTC and the CA that PSI was not the employer of Dr. Ampil is
correct. Control as a determinative factor in testing the employeremployee relationship between doctor and hospital under which the
hospital could be held vicariously liable to a patient in medical
negligence cases is a requisite fact to be established by
preponderance of evidence. Here, there was insufficient evidence that
PSI exercised the power of control or wielded such power over the
means and the details of the specific process by which Dr. Ampil
applied his skills in the treatment of Natividad. Consequently, PSI
cannot be held vicariously liable for the negligence of Dr. Ampil under
the principle of respondeat superior.

That petitioner exercised control over
respondents gains light from the undisputed
fact that in the emergency room, the operating
room, or any department or ward for that matter,
respondents' work is monitored through its

There is, however, ample evidence that the hospital (PSI)
held out to the patient (Natividad) [48] that the doctor (Dr. Ampil) was its
agent. Present are the two factors that determine apparent authority:
first, the hospital's implied manifestation to the patient which led the
latter to conclude that the doctor was the hospital's agent; and second,
the patient’s reliance upon the conduct of the hospital and the doctor,
consistent with ordinary care and prudence.[49]

xx xx xx

Dr. Ampil been affiliated with another hospital, he would still have been
chosen by the Aganas as Natividad's surgeon.[54]
Enrique testified that on April 2, 1984, he consulted Dr.
Ampil regarding the condition of his wife; that after the meeting and as
advised by Dr. Ampil, he “asked [his] wife to go to Medical City to be
examined by [Dr. Ampil]”; and that the next day, April 3, he told his
daughter to take her mother to Dr. Ampil.[50] This timeline indicates that
it was Enrique who actually made the decision on whom Natividad
should consult and where, and that the latter merely acceded to it. It
explains the testimony of Natividad that she consulted Dr. Ampil at the
instigation of her daughter.[51]

The Court cannot speculate on what could have been
behind the Aganas’ decision but would rather adhere strictly to the fact
that, under the circumstances at that time, Enrique decided to consult
Dr. Ampil for he believed him to be a staff member of a prominent and
known hospital. After his meeting with Dr. Ampil, Enrique advised his
wife Natividad to go to the Medical City General Hospital to be
examined by said doctor, and the hospital acted in a way that fortified
Enrique's belief.

Moreover, when asked what impelled him to choose Dr.
Ampil, Enrique testified:
Atty. Agcaoili

On that particular occasion, April 2, 1984,
what was your reason for choosing Dr. Ampil to
contact with in connection with your wife's illness?

A.
First, before that, I have known him to be a
specialist on that part of the body as a surgeon,
second, I have known him to be a staff member of
the Medical City which
is
a prominent
and
known hospital. And third, because he is a
neighbor, I expect more than the usual medical
service to be given to us, than his ordinary patients.
[52]
(emphasis supplied)

Clearly, the decision made by Enrique for Natividad to
consult Dr. Ampil was significantly influenced by the impression that Dr.
Ampil was a staff member of Medical City General Hospital, and that
said hospital was well known and prominent. Enrique looked upon Dr.
Ampil not as independent of but as integrally related to Medical City.

PSI's acts tended to confirm and reinforce, rather than
negate, Enrique's view. It is of record that PSI required a “consent for
hospital care”[53] to be signed preparatory to the surgery of Natividad.
The form reads:

Permission is hereby given to the medical, nursing
and
laboratory
staff
of
the Medical City General Hospital to perform such
diagnostic procedures and to administer such
medications and treatments as may be deemed
necessary or advisable by the physicians of this
hospital for and during the confinement of xxx.
(emphasis supplied)

By such statement, PSI virtually reinforced the public
impression that Dr. Ampil was a physician of its hospital, rather than
one independently practicing in it; that the medications and treatments
he prescribed were necessary and desirable; and that the hospital staff
was prepared to carry them out.

PSI pointed out in its memorandum that Dr. Ampil's hospital
affiliation was not the exclusive basis of the Aganas’ decision to have
Natividad treated in Medical City General Hospital, meaning that, had

This Court must therefore maintain the ruling that PSI is
vicariously liable for the negligence of Dr. Ampil as its ostensible agent.

Moving on to the next issue, the Court notes that PSI
made the following admission in its Motion for Reconsideration:

51.
Clearly, not being an agent or employee of
petitioner PSI, PSI [sic] is not liable for Dr. Ampil's
acts during the operation. Considering further that
Dr. Ampil was personally engaged as a doctor by
Mrs. Agana, it is incumbent upon Dr. Ampil, as
“Captain of the Ship”, and as the Agana's doctor to
advise her on what to do with her situation vis-a-vis
the two missing gauzes. In addition to noting the
missing gauzes, regular check-ups were made
and no signs of complications were exhibited
during her stay at the hospital, which could
have alerted petitioner PSI's hospital to render
and provide post-operation services to and
tread on Dr. Ampil's role as the doctor of Mrs.
Agana. The absence of negligence of PSI from
the patient's admission up to her discharge is
borne by the finding of facts in this case.
Likewise evident therefrom is the absence of
any complaint from Mrs. Agana after her
discharge from the hospital which had she
brought to the hospital's attention, could have
alerted petitioner PSI to act accordingly and
bring the matter to Dr. Ampil's attention. But this
was not the case. Ms. Agana complained ONLY
to Drs. Ampil and Fuentes, not the hospital. How
then could PSI possibly do something to fix the
negligence committed by Dr. Ampil when it was
not informed about it at all.[55] (emphasis
supplied)

PSI reiterated its admission when it stated that had Natividad
Agana “informed the hospital of her discomfort and pain, the hospital
would have been obliged to act on it.”[56]

The significance of the foregoing statements is critical.

First, they constitute judicial admission by PSI that while it
had no power to control the means or method by which Dr. Ampil
conducted the surgery on Natividad Agana, it had the power to review
or cause the review of what may have irregularly transpired within its
walls strictly for the purpose of determining whether some form of
negligence may have attended any procedure done inside its
premises, with the ultimate end of protecting its patients.

Second, it is a judicial admission that, by virtue of the nature
of its business as well as its prominence [57] in the hospital industry, it
assumed a duty to “tread on” the “captain of the ship” role of any
doctor rendering services within its premises for the purpose of
ensuring the safety of the patients availing themselves of its services
and facilities.

Third, by such admission, PSI defined the standards of its
corporate conduct under the circumstances of this case, specifically:
(a) that it had a corporate duty to Natividad even after her operation to
ensure her safety as a patient; (b) that its corporate duty was not
limited to having its nursing staff note or record the two missing gauzes
and (c) that its corporate duty extended to determining Dr. Ampil's role
in it, bringing the matter to his attention, and correcting his
negligence.

And finally, by such admission, PSI barred itself from arguing
in its second motion for reconsideration that the concept of corporate
responsibility was not yet in existence at the time Natividad underwent
treatment;[58] and that if it had any corporate responsibility, the same
was limited to reporting the missing gauzes and did not include “taking
an active step in fixing the negligence committed.” [59] An admission
made in the pleading cannot be controverted by the party making such
admission and is conclusive as to him, and all proofs submitted by him
contrary thereto or inconsistent therewith should be ignored, whether
or not objection is interposed by a party.[60]

Given the standard of conduct that PSI defined for itself,
the next relevant inquiry is whether the hospital measured up to it.

PSI excuses itself from fulfilling its corporate duty on the ground
that Dr. Ampil assumed the personal responsibility of informing
Natividad about the two missing gauzes.[61] Dr. Ricardo Jocson, who
was part of the group of doctors that attended to Natividad, testified
that toward the end of the surgery, their group talked about the missing
gauzes but Dr. Ampil assured them that he would personally notify the
patient about it.[62] Furthermore, PSI claimed that there was no reason
for it to act on the report on the two missing gauzes because Natividad
Agana showed no signs of complications. She did not even inform the
hospital about her discomfort.[63]

The excuses proffered by PSI are totally unacceptable.

To begin with, PSI could not simply wave off the problem
and nonchalantly delegate to Dr. Ampil the duty to review what
transpired during the operation. The purpose of such review would
have been to pinpoint when, how and by whom two surgical gauzes
were mislaid so that necessary remedial measures could be taken to
avert any jeopardy to Natividad’s recovery. Certainly, PSI could not
have expected that purpose to be achieved by merely hoping that the
person likely to have mislaid the gauzes might be able to retrace his
own steps. By its own standard of corporate conduct, PSI's duty to
initiate the review was non-delegable.

While Dr. Ampil may have had the primary responsibility of
notifying Natividad about the missing gauzes, PSI imposed upon itself
the separate and independent responsibility of initiating the inquiry into
the missing gauzes. The purpose of the first would have been to
apprise Natividad of what transpired during her surgery, while the
purpose of the second would have been to pinpoint any lapse in

procedure that led to the gauze count discrepancy, so as to prevent a
recurrence thereof and to determine corrective measures that would
ensure the safety of Natividad. That Dr. Ampil negligently failed to
notify Natividad did not release PSI from its self-imposed separate
responsibility.

Corollary to its non-delegable undertaking to review potential
incidents of negligence committed within its premises, PSI had the duty
to take notice of medical records prepared by its own staff and
submitted to its custody, especially when these bear earmarks of a
surgery gone awry. Thus, the record taken during the operation of
Natividad which reported a gauze count discrepancy should have
given PSI sufficient reason to initiate a review. It should not have
waited for Natividad to complain.

As it happened, PSI took no heed of the record of operation
and consequently did not initiate a review of what transpired during
Natividad’s operation. Rather, it shirked its responsibility and passed it
on to others – to Dr. Ampil whom it expected to inform Natividad, and
to Natividad herself to complain before it took any meaningful step. By
its inaction, therefore, PSI failed its own standard of hospital care. It
committed corporate negligence.

It should be borne in mind that the corporate negligence
ascribed to PSI is different from the medical negligence attributed to
Dr. Ampil. The duties of the hospital are distinct from those of the
doctor-consultant practicing within its premises in relation to the
patient; hence, the failure of PSI to fulfill its duties as a hospital
corporation gave rise to a direct liability to the Aganas distinct from that
of Dr. Ampil.

All this notwithstanding, we make it clear that PSI’s hospital
liability based on ostensible agency and corporate negligence
applies only to this case, pro hac vice. It is not intended to set a
precedent and should not serve as a basis to hold hospitals liable for
every form of negligence of their doctors-consultants under any and all
circumstances. The ruling is unique to this case, for the liability of PSI
arose from an implied agency with Dr. Ampil and an admitted corporate
duty to Natividad.[64]
Other circumstances peculiar to this case warrant this ruling,
not the least of which being that the agony wrought upon the
Aganas has gone on for 26 long years, with Natividad coming to the
end of her days racked in pain and agony. Such wretchedness could
have been avoided had PSI simply done what was logical: heed the
report of a guaze count discrepancy, initiate a review of what went
wrong and take corrective measures to ensure the safety of
Nativad. Rather, for 26 years, PSI hemmed and hawed at every turn,
disowning any such responsibility to its patient. Meanwhile, the
options left to the Aganas have all but dwindled, for the status of Dr.
Ampil can no longer be ascertained.[66]
[65]

Therefore, taking all the equities of this case into
consideration, this Court believes P15 million would be a fair and
reasonable liability of PSI, subject to 12% p.a. interest from the finality
of this resolution to full satisfaction.

WHEREFORE, the second motion for reconsideration
is DENIED and the motions for intervention are NOTED.

Professional Services, Inc. is ORDERED pro hac vice to
pay Natividad (substituted by her children Marcelino Agana III, Enrique

Agana, Jr., Emma Agana-Andaya, Jesus Agana and Raymund Agana)
and Enrique Agana the total amount of P15 million, subject to 12% p.a.
interest from the finality of this resolution to full satisfaction.

Let the long-delayed entry of judgment be made in this case
upon receipt by all concerned parties of this resolution.

SO ORDERED.
No further pleadings by any party shall be entertained in this
case.