Professional Services vs. Natividad and Agana 2007

8/9/2019 Professional Services vs. Natividad and Agana 2007

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 126297 January 31, 2007

PROFESSIONAL SERVICES, INC.,Petitioner,vs.NATIVIDAD and ENRIQUE AGANA,Respondents.

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G.R. No. 126467 January 31, 2007

NATIVIDAD (Substituted by her children MARCELINOAGANA III, ENRIQUE AGANA, JR., EMMA AGANA ANDAYA,JESUS AGANA, and RAYMUND AGANA) and ENRIQUEAGANA, Petitioners,vs.JUAN FUENTES,Respondent.

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G.R. No. 127590 January 31, 2007

MIGUEL AMPIL, Petitioner,vs.NATIVIDAD AGANA and ENRIQUE AGANA,Respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J .:

Hospitals, having undertaken one of mankinds most importantand delicate endeavors, must assume the grave responsibility ofpursuing it with appropriate care. The care and service dispensed


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through this high trust, however technical, complex and esotericits character may be, must meet standards of responsibilitycommensurate with the undertaking to preserve and protect thehealth, and indeed, the very lives of those placed in the hospitals

keeping.1

Assailed in these three consolidated petitions for review oncertiorari is the Court of Appeals Decision

2dated September 6,1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198affirming with modification the Decision3dated March 17, 1993 ofthe Regional Trial Court (RTC), Branch 96, Quezon City in CivilCase 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 CityGeneral Hospital (Medical City Hospital) because of difficulty ofbowel movement and bloody anal discharge. After a series ofmedical examinations, Dr. Miguel Ampil, petitioner in G.R. No.127590, diagnosed her to be suffering from "cancer of the

sigmoid."

On April 11, 1984, Dr. Ampil, assisted by the medical staff4of theMedical City Hospital, performed an anterior resection surgery onNatividad. He found that the malignancy in her sigmoid area hadspread on her left ovary, necessitating the removal of certainportions of it. Thus, Dr. Ampil obtained the consent of Natividadshusband, Enrique Agana, to permit Dr. Juan Fuentes, respondentin G.R. No. 126467, to perform hysterectomy on her.

After Dr. Fuentes had completed the hysterectomy, Dr. Ampil tookover, completed the operation and closed the incision.
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Gutierrez detected the presence of another foreign object in hervagina -- a foul-smelling gauze measuring 1.5 inches in widthwhich badly infected her vaginal vault. A recto-vaginal fistula hadformed in her reproductive organs which forced stool to excrete

through the vagina. Another surgical operation was needed toremedy the damage. Thus, in October 1984, Natividad underwentanother surgery.

On November 12, 1984, Natividad and her husband filed with theRTC, Branch 96, Quezon City a complaint for damages againstthe Professional Services, Inc. (PSI), owner of the Medical CityHospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No.

Q-43322. They alleged that the latter are liable for negligence forleaving two pieces of gauze inside Natividads body andmalpractice for concealing their acts of negligence.

Meanwhile, Enrique Agana also filed with the ProfessionalRegulation Commission (PRC) an administrative complaint forgross negligence and malpractice against Dr. Ampil and Dr.Fuentes, docketed as Administrative Case No. 1690. The PRCBoard of Medicine heard the case only with respect to Dr.

Fuentes because it failed to acquire jurisdiction over Dr. Ampilwho 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-namedchildren (the Aganas).

On March 17, 1993, the RTC rendered its Decision in favor of theAganas, 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 plaintiffsordering 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


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damages and the interest thereon which are the liabilities ofdefendants Dr. Ampil and Dr. Fuentes only, as follows:

1. As actual damages, the following amounts:

a. The equivalent in Philippine Currency of the total ofUS$19,900.00 at the rate of P21.60-US$1.00, asreimbursement of actual expenses incurred in theUnited States of America;

b. The sum of P4,800.00 as travel taxes of plaintiffs andtheir physician daughter;

c. The total sum of P45,802.50, representing the cost ofhospitalization at Polymedic Hospital, medical fees, andcost 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 attorneys fees, the sum of P250,000.00;

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

6. Costs of suit.

SO ORDERED.

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

Incidentally, on April 3, 1993, the Aganas filed with the RTC amotion for a partial execution of its Decision, which was granted inan Order dated May 11, 1993. Thereafter, the sheriff levied upon


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certain properties of Dr. Ampil and sold them for P451,275.00 anddelivered 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 anyfurther execution of the RTC Decision. However, not longthereafter, the Aganas again filed a motion for an alias writ ofexecution against the properties of PSI and Dr. Fuentes. OnSeptember 21, 1993, the RTC granted the motion and issued thecorresponding writ, prompting Dr. Fuentes to file with the Court of

Appeals a petition for certiorari and prohibition, with prayer forpreliminary injunction, docketed as CA-G.R. SP No. 32198.

During its pendency, the Court of Appeals issued aResolution5dated October 29, 1993 granting Dr. Fuentes prayerfor injunctive relief.

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

Meanwhile, on January 23, 1995, the PRC Board of Medicinerendered its Decision6in Administrative Case No. 1690

dismissing the case against Dr. Fuentes. The Board held that theprosecution failed to show that Dr. Fuentes was the one who leftthe two pieces of gauze inside Natividads body; and that heconcealed such fact from Natividad.

On September 6, 1996, the Court of Appeals rendered itsDecision 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 againstdefendant-appellant Dr. Juan Fuentes is hereby DISMISSED, andwith the pronouncement that defendant-appellant Dr. Miguel

Ampil is liable to reimburse defendant-appellant ProfessionalServices, Inc., whatever amount the latter will pay or had paid to
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the plaintiffs-appellees, the decision appealed from is herebyAFFIRMED and the instant appeal DISMISSED.

Concomitant with the above, the petition for certiorari and

prohibition filed by herein defendant-appellant Dr. Juan Fuentes inCA-G.R. SP No. 32198 is hereby GRANTED and the challengedorder of the respondent judge dated September 21, 1993, as wellas the alias writ of execution issued pursuant thereto are herebyNULLIFIED and SET ASIDE. The bond posted by the petitioner inconnection with the writ of preliminary injunction issued by thisCourt on November 29, 1993 is hereby cancelled.

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

SO ORDERED.

Only Dr. Ampil filed a motion for reconsideration, but it wasdenied in a Resolution7dated December 19, 1996.

Hence, the instant consolidated petitions.

In G.R. No. 126297, PSI alleged in its petition that the Court ofAppeals erred in holding that: (1) it is estopped from raising thedefense that Dr. Ampil is not its employee; (2) it is solidarily liablewith Dr. Ampil; and (3) it is not entitled to its counterclaim againstthe Aganas. PSI contends that Dr. Ampil is not its employee, but amere consultant or independent contractor. As such, he aloneshould answer for his negligence.

In G.R. No. 126467, the Aganas maintain that the Court ofAppeals erred in finding that Dr. Fuentes is not guilty ofnegligence or medical malpractice, invoking the doctrine of resipsa loquitur. They contend that the pieces of gauze are primafacie proofs that the operating surgeons have been negligent.
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Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court ofAppeals erred in finding him liable for negligence and malpracticesans evidence that he left the two pieces of gauze in Natividadsvagina. 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 usedduring surgery; and (3) the medical intervention of the Americandoctors who examined Natividad in the United States of America.

For our resolution are these three vital issues: first, whether theCourt of Appeals erred in holding Dr. Ampil liable for negligenceand malpractice; second, whether the Court of Appeals erred in

absolving Dr. Fuentes of any liability; and third, whether PSI maybe 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 Courts

attention to other possible causes of Natividads detriment. Heargues that the Court should not discount either of the followingpossibilities: first, Dr. Fuentes left the gauzes in Natividads bodyafter performing hysterectomy; second, the attending nurseserred in counting the gauzes; and third, the American doctorswere the ones who placed the gauzes in Natividads body.

Dr. Ampils arguments are purely conjectural and without basis.

Records show that he did not present any evidence to prove thatthe American doctors were the ones who put or left the gauzes inNatividads body. Neither did he submit evidence to rebut thecorrectness of the record of operation, particularly the number ofgauzes used. As to the alleged negligence of Dr. Fuentes, we are


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mindful that Dr. Ampil examined his (Dr. Fuentes) work and foundit in order.

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 assponges to control the bleeding of the patient during thesurgical operation.

Second, immediately after the operation, the nurses whoassisted in the surgery noted in their report that the sponge

count (was) lacking 2; that such anomaly was announced tosurgeon and that a search was done but to no availprompting Dr. Ampil to continue for closure x x x.

Third, after the operation, two (2) gauzes were extractedfrom the same spot of the body of Mrs. Agana where thesurgery was performed.

An operation requiring the placing of sponges in the incision is notcomplete until the sponges are properly removed, and it is settledthat the leaving of sponges or other foreign substances in thewound after the incision has been closed is at least prima facienegligence by the operating surgeon.8To put it simply, such act isconsidered so inconsistent with due care as to raise an inferenceof negligence. There are even legions of authorities to the effectthat such act is negligence per se.9

Of course, the Court is not blind to the reality that there are timeswhen danger to a patients life precludes a surgeon from furthersearching missing sponges or foreign objects left in the body. Butthis does not leave him free from any obligation. Even if it hasbeen shown that a surgeon was required by the urgentnecessities of the case to leave a sponge in his patients
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abdomen, because of the dangers attendant upon delay, still, it ishis legal duty to so inform his patient within a reasonable timethereafter 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. Theruling in Smith v. Zeagler10is 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 hasplaced in his patients body that should be removed as part of theoperation, he thereby leaves his operation uncompleted andcreates a new condition which imposes upon him the legal duty of

calling the new condition to his patients attention, andendeavoring with the means he has at hand to minimize andavoid untoward results likely to ensue therefrom.

Here, Dr. Ampil did not inform Natividad about the missing twopieces of gauze. Worse, he even misled her that the pain she wasexperiencing was the ordinary consequence of her operation. Hadhe been more candid, Natividad could have taken the immediateand 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 hispatient.

This is a clear case of medical malpractice or more appropriately,medical negligence. To successfully pursue this kind of case, apatient must only prove that a health care provider either failed todo something which a reasonably prudent health care providerwould have done, or that he did something that a reasonablyprudent provider would not have done; and that failure or actioncaused injury to the patient.11Simply put, the elements are duty,breach, injury and proximate causation. Dr, Ampil, as the leadsurgeon, had the duty to remove all foreign objects, such asgauzes, from Natividads body before closure of the incision.
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affords reasonable evidence, in the absence of explanation thatthe injury arose from the defendants want of care, and the burdenof proof is shifted to him to establish that he has observed duecare and diligence.14

From the foregoing statements of the rule, the requisites for theapplicability of the doctrine of res ipsa loquitur are: (1) theoccurrence of an injury; (2) the thing which caused the injury wasunder the control and management of the defendant; (3) theoccurrence was such that in the ordinary course of things, wouldnot have happened if those who had control or management usedproper care; and (4) the absence of explanation by the defendant.

Of the foregoing requisites, the most instrumental is the "controland management of the thing which caused the injury."15

We find the element of "control and management of the thingwhich caused the injury" to be wanting. Hence, the doctrine of resipsa loquitur will not lie.

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

Fuentes only to perform hysterectomy when he (Dr. Ampil) foundthat the malignancy in her sigmoid area had spread to her leftovary. Dr. Fuentes performed the surgery and thereafter reportedand showed his work to Dr. Ampil. The latter examined it andfinding everything to be in order, allowed Dr. Fuentes to leave theoperating room. Dr. Ampil then resumed operating on Natividad.He was about to finish the procedure when the attending nursesinformed him that two pieces of gauze were missing. A "diligentsearch" was conducted, but the misplaced gauzes were notfound. Dr. Ampil then directed that the incision be closed. Duringthis entire period, Dr. Fuentes was no longer in the operatingroom and had, in fact, left the hospital.

Under the "Captain of the Ship" rule, the operating surgeon is theperson in complete charge of the surgery room and all personnel


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and has experienced a significant conversion from a not-for-profithealth 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 underthe theories of respondeat superior, apparent authority, ostensibleauthority, or agency by estoppel.20

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

Art. 2176. Whoever by act or omission causes damage toanother, there being fault or negligence, is obliged to pay for thedamage done. Such fault or negligence, if there is no pre-existingcontractual relation between the parties, is called a quasi-delictand is governed by the provisions of this Chapter.

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

ART. 2180. The obligation imposed by Article 2176 isdemandable not only for ones own acts or omissions, but also forthose of persons for whom one is responsible.

x x x x x x

The owners and managers of an establishment or enterprise arelikewise responsible for damages caused by their employees inthe 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 theiremployees and household helpers acting within the scope of theirassigned tasks even though the former are not engaged in anybusiness or industry.
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x x x x x x

The responsibility treated of in this article shall cease when thepersons 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 anemployer, such as physicians, dentists, and pharmacists, are not"employees" under this article because the manner in which theyperform their work is not within the control of the latter (employer).In other words, professionals are considered personally liable forthe fault or negligence they commit in the discharge of theirduties, and their employer cannot be held liable for such fault ornegligence. In the context of the present case, "a hospital cannotbe held liable for the fault or negligence of a physician or surgeonin the treatment or operation of patients."21

The foregoing view is grounded on the traditional notion that theprofessional status and the very nature of the physicians callingpreclude him from being classed as an agent or employee of ahospital, whenever he acts in a professional capacity.22It has

been said that medical practice strictly involves highly developedand specialized knowledge,23such that physicians are generallyfree to exercise their own skill and judgment in rendering medicalservices sans interference.24Hence, when a doctor practicesmedicine in a hospital setting, the hospital and its employees aredeemed to subserve him in his ministrations to the patient and hisactions are of his own responsibility.25

The case of Schloendorff v. Society of New York Hospital26was

then considered an authority for this view. The "Schloendorffdoctrine" regards a physician, even if employed by a hospital, asan independent contractor because of the skill he exercises andthe lack of control exerted over his work. Under this doctrine,hospitals are exempt from the application of the respondeat
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superior principle for fault or negligence committed by physiciansin the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened

with the significant developments in medical care. Courts came torealize that modern hospitals are increasingly taking active role insupplying and regulating medical care to patients. No longer werea hospitals functions limited to furnishing room, food, facilities fortreatment and operation, and attendants for its patients. Thus, inBing v. Thunig,27the New York Court of Appeals deviated fromthe Schloendorff doctrine, noting that modern hospitals actuallydo 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 chargepatients for medical care and treatment, even collecting for suchservices through legal action, if necessary. The court thenconcluded that there is no reason to exempt hospitals from theuniversal rule of respondeat superior.

In our shores, the nature of the relationship between the hospitaland the physicians is rendered inconsequential in view of our

categorical pronouncement in Ramos v. Court of Appeals28thatfor purposes of apportioning responsibility in medical negligencecases, an employer-employee relationship in effect existsbetween hospitals and their attending and visiting physicians. ThisCourt held:

"We now discuss the responsibility of the hospital in this particularincident. The unique practice (among private hospitals) of fillingup specialist staff with attending and visiting "consultants," whoare allegedly not hospital employees, presents problems inapportioning responsibility for negligence in medical malpracticecases. However, the difficulty is more apparent than real.

In the first place, hospitals exercise significant control in the hiringand firing of consultants and in the conduct of their work within the


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hospital premises. Doctors who apply for consultant slots, visitingor attending, are required to submit proof of completion ofresidency, their educational qualifications, generally, evidence ofaccreditation by the appropriate board (diplomate), evidence of

fellowship in most cases, and references. These requirements arecarefully scrutinized by members of the hospital administration orby a review committee set up by the hospital who either accept orreject the application. x x x.

After a physician is accepted, either as a visiting or attendingconsultant, he is normally required to attend clinico-pathologicalconferences, conduct bedside rounds for clerks, interns and

residents, moderate grand rounds and patient audits and performother tasks and responsibilities, for the privilege of being able tomaintain a clinic in the hospital, and/or for the privilege ofadmitting patients into the hospital. In addition to these, thephysicians performance as a specialist is generally evaluated bya peer review committee on the basis of mortality and morbiditystatistics, and feedback from patients, nurses, interns andresidents. A consultant remiss in his duties, or a consultant whoregularly falls short of the minimum standards acceptable to the

hospital or its peer review committee, is normally politelyterminated.

In other words, private hospitals, hire, fire and exercise realcontrol over their attending and visiting consultant staff. Whileconsultants are not, technically employees, x x x, the controlexercised, the hiring, and the right to terminate consultants allfulfill the important hallmarks of an employer-employee

relationship, with the exception of the payment of wages. Inassessing whether such a relationship in fact exists, the controltest is determining. Accordingly, on the basis of the foregoing, werule that for the purpose of allocating responsibility in medicalnegligence cases, an employer-employee relationship in effect


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exists between hospitals and their attending and visitingphysicians. "

But the Ramos pronouncement is not our only basis in sustaining

PSIs liability. Its liability is also anchored upon the agencyprinciple of apparent authority or agency by estoppel and thedoctrine of corporate negligence which have gained acceptancein the determination of a hospitals liability for negligent acts ofhealth professionals. The present case serves as a perfectplatform to test the applicability of these doctrines, thus, enrichingour jurisprudence.

Apparent authority, or what is sometimes referred to as the"holding

out" theory, or doctrine of ostensible agency or agency byestoppel,29has its origin from the law of agency. It imposesliability, not as the result of the reality of a contractual relationship,but rather because of the actions of a principal or an employer insomehow misleading the public into believing that the relationshipor the authority exists.30The 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 apparentauthority which he knowingly permits the agent to assume, orwhich he holds the agent out to the public as possessing. Thequestion in every case is whether the principal has by hisvoluntary act placed the agent in such a situation that a person ofordinary prudence, conversant with business usages and thenature of the particular business, is justified in presuming that

such agent has authority to perform the particular act inquestion.31

The applicability of apparent authority in the field of hospitalliability was upheld long time ago in Irving v. Doctor Hospital ofLake Worth, Inc.32There, it was explicitly stated that "there does
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not appear to be any rational basis for excluding the concept ofapparent authority from the field of hospital liability." Thus, incases where it can be shown that a hospital, by its actions, hasheld out a particular physician as its agent and/or employee and

that a patient has accepted treatment from that physician in thereasonable belief that it is being rendered in behalf of the hospital,then the hospital will be liable for the physicians negligence.

Our jurisdiction recognizes the concept of an agency byimplication or estoppel. Article 1869 of the Civil Code reads:

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

In this case, PSI publicly displays in the lobby of the Medical CityHospital the names and specializations of the physiciansassociated 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 leadingthe public to believe that it vouched for their skill andcompetence." Indeed, PSIs act is tantamount to holding out tothe public that Medical City Hospital, through its accreditedphysicians, 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 werebeing rendered by the hospital or its employees, agents, orservants. 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


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employer-employee relationship between the hospital and theindependent physician whose name and competence arecertainly certified to the general public by the hospitals act oflisting him and his specialty in its lobby directory, as in the case

herein. The high costs of todays medical and health care shouldat least exact on the hospital greater, if not broader, legalresponsibility for the conduct of treatment and surgery within itsfacility by its accredited physician or surgeon, regardless ofwhether 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 accreditedphysicians do their job well, the hospital succeeds in its mission ofoffering quality medical services and thus profits financially.Logically, where negligence mars the quality of its services, thehospital should not be allowed to escape liability for the acts of itsostensible agents.

We now proceed to the doctrine of corporate negligence orcorporate responsibility.

One allegation in the complaint in Civil Case No. Q-43332 fornegligence and malpractice is that PSI as owner, operator andmanager of Medical City Hospital, "did not perform the necessarysupervision nor exercise diligent efforts in the supervision of Drs.

Ampil and Fuentes and its nursing staff, resident doctors, andmedical interns who assisted Drs. Ampil and Fuentes in theperformance of their duties as surgeons."34Premised on thedoctrine of corporate negligence, the trial court held that PSI isdirectly liable for such breach of duty.

We agree with the trial court.

Recent years have seen the doctrine of corporate negligence asthe judicial answer to the problem of allocating hospitals liability
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for the negligent acts of health practitioners, absent facts tosupport the application of respondeat superior or apparentauthority. Its formulation proceeds from the judiciarysacknowledgment that in these modern times, the duty of providing

quality medical service is no longer the sole prerogative andresponsibility of the physician. The modern hospitals havechanged structure. Hospitals now tend to organize a highlyprofessional medical staff whose competence and performanceneed to be monitored by the hospitals commensurate with theirinherent 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 jurycould have found a hospital negligent, inter alia, in failing to havea sufficient number of trained nurses attending the patient; failingto require a consultation with or examination by members of thehospital staff; and failing to review the treatment rendered to thepatient." On the basis of Darling, other jurisdictions held that ahospitals corporate negligence extends to permitting a physicianknown to be incompetent to practice at the hospital.37With thepassage of time, more duties were expected from hospitals,

among them: (1) the use of reasonable care in the maintenanceof safe and adequate facilities and equipment; (2) the selectionand retention of competent physicians; (3) the overseeing orsupervision of all persons who practice medicine within its walls;and (4) the formulation, adoption and enforcement of adequaterules and policies that ensure quality care for its patients.38Thus,in Tucson Medical Center, Inc. v. Misevich,39it was held that ahospital, following the doctrine of corporate responsibility, has the

duty to see that it meets the standards of responsibilities for thecare of patients. Such duty includes the proper supervision of themembers of its medical staff. And in Bost v. Riley,40the courtconcluded that a patient who enters a hospital does so with thereasonable expectation that it will attempt to cure him. Thehospital accordingly has the duty to make a reasonable effort to
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monitor and oversee the treatment prescribed and administeredby 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 ofproviding comprehensive medical services to the public.

Accordingly, it has the duty to exercise reasonable care to protectfrom harm all patients admitted into its facility for medicaltreatment. Unfortunately, PSI failed to perform such duty. Thefindings of the trial court are convincing, thus:

x x x PSIs liability is traceable to its failure to conduct aninvestigation of the matter reported in the nota bene of the countnurse. Such failure established PSIs part in the dark conspiracyof silence and concealment about the gauzes. Ethicalconsiderations, if not also legal, dictated the holding of animmediate inquiry into the events, if not for the benefit of thepatient to whom the duty is primarily owed, then in the interest ofarriving at the truth. The Court cannot accept that the medical andthe healing professions, through their members like defendantsurgeons, and their institutions like PSIs hospital facility, can

callously turn their backs on and disregard even a mereprobability of mistake or negligence by refusing or failing toinvestigate a report of such seriousness as the one in Natividadscase.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated onNatividad with the assistance of the Medical City Hospitals staff,composed of resident doctors, nurses, and interns. As such, it isreasonable to conclude that PSI, as the operator of the hospital,has actual or constructive knowledge of the procedures carriedout, particularly the report of the attending nurses that the twopieces of gauze were missing. In Fridena v. Evans,41it was heldthat a corporation is bound by the knowledge acquired by ornotice given to its agents or officers within the scope of their
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authority and in reference to a matter to which their authorityextends. This means that the knowledge of any of the staff ofMedical City Hospital constitutes knowledge of PSI. Now, thefailure of PSI, despite the attending nurses report, to investigate

and inform Natividad regarding the missing gauzes amounts tocallous negligence. Not only did PSI breach its duties to overseeor supervise all persons who practice medicine within its walls, italso failed to take an active step in fixing the negligencecommitted. This renders PSI, not only vicariously liable for thenegligence of Dr. Ampil under Article 2180 of the Civil Code, butalso directly liable for its own negligence under Article 2176. InFridena, the Supreme Court of Arizona held:

x x x In recent years, however, the duty of care owed to thepatient by the hospital has expanded. The emerging trend is tohold the hospital responsible where the hospital has failed tomonitor and review medical services being provided within itswalls. See Kahn Hospital 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, thehospital argued that it could not be held liable for the malpracticeof a medical practitioner because he was an independentcontractor within the hospital. The Court of Appeals pointed outthat the hospital had created a professional staff whosecompetence and performance was to be monitored and reviewedby the governing body of the hospital, and the court held that ahospital would be negligent where it had knowledge or reason to

believe that a doctor using the facilities was employing a methodof treatment or care which fell below the recognized standard ofcare.

Subsequent to the Purcell decision, the Arizona Court of Appealsheld that a hospital has certain inherent responsibilities regarding


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the quality of medical care furnished to patients within its wallsand it must meet the standards of responsibility commensuratewith 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 ofsupervising 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 theoperation was performed at the hospital with its knowledge, aid,and assistance, and that the negligence of the defendants wasthe proximate cause of the patients injuries. We find that such

general allegations of negligence, along with the evidenceproduced at the trial of this case, are sufficient to support thehospitals 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 ageneral denial of its responsibility, failed to adduce evidenceshowing that it exercised the diligence of a good father of a family

in the accreditation and supervision of the latter. In neglecting tooffer such proof, PSI failed to discharge its burden under the lastparagraph of Article 2180 cited earlier, and, therefore, must beadjudged solidarily liable with Dr. Ampil. Moreover, as we havediscussed, PSI is also directly liable to the Aganas.

One final word. Once a physician undertakes the treatment andcare of a patient, the law imposes on him certain obligations. Inorder to escape liability, he must possess that reasonable degree

of learning, skill and experience required by his profession. At thesame time, he must apply reasonable care and diligence in theexercise of his skill and the application of his knowledge, andexert his best judgment.


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

Costs against petitioners PSI and Dr. Miguel Ampil.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson

RENATO C. CORONAAssociate Justice

ADOLFO S. AZCUNAAsscociate Justice

(No Part)CANCIO C. GARCIA

Associate Justice

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of the Constitution, it is herebycertified that the conclusions in the above Decision were reachedin consultation before the case was assigned to the writer of theopinion of the Courts Division.

REYNATO S. PUNOChief Justice


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Footnotes

*No part. Ponente of the assailed Decision in the Court ofAppeals.

1Beeck v. Tucson General Hospital, 500 P. 2d 1153 (1972),citing Darling v. Charleston Community Memorial Hospital,33 Ill. 2d 326, 211 N.E. 2d 253.

2Penned by Associate Justice Cancio C. Garcia (now amember of the Supreme Court) and concurred in by

Associate Justices Eugenio S. Labitoria and Artemio G.Tuquero (both retired), Rollo, G.R. Nos. 126297, pp. 36-51;

126467, pp. 27-42; 127590, pp. 23-38.3Penned by Judge Lucas P. Bersamin (now Justice of theCourt of Appeals), Rollo, G.R. No. 126647, pp. 69-83.

4The medical staff was composed of physicians, bothresidents and interns, as well as nurses.

5The dispositive portion reads:

"WHEREFORE, let a writ of preliminary injunction beissued upon petitioners posting of bond in the amountof P20,000.00, ENJOINING public respondents fromimplementing the questioned order dated September21, 1993 and from further taking any action in CivilCase No. Q-43322 entitled Natividad G. Agana, et al.,plaintiffs, versus Professional Services, Inc., et al.,

defendants pending resolution of the instant petition.

SO ORDERED." See Rollo, G.R. No. 126297, p. 42.

6Rollo of G.R. No. 126467, pp. 84-89.

7Rollo of G.R. No. 127590, p. 40.
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8Rule v. Cheeseman, 317 P. 2d 472 (1957), citing Russel v.Newman, 116 Kan. 268 P. 752; Bernsden v. Johnson, 174Kan. 230, 255 P. 2d 1033.

9

Smith v. Zeagler, 157 So. 328 Fla. (1934), citing Ruth v.Johnson, (C.C.A.) 172 F. 191; Reeves v. Lutz, 179 Mo. App.61, 162 S.W. 280; Rayburn v. Day, 126 Or. 135,268 P. 1002,59 A.L.R. 1062; Wynne v. Harvey, 96 Wash. 379, 165 P. 67;Harris v. Fall (C.C.A.) 177 F. 79, 27 L.R.A. (N.S.) 1174;Moore v. Ivey, (Tex. Civ. App.) 264 S.W. 283; 21 R.C. L.388.

10157 So. 328 Fla. (1934)

11Garcia-Rueda v. Pascasio, G.R. No. 118141, September5, 1997, 278 SCRA 769.

12In the leading case of Vda. de Bataclan v. Medina, (102Phil. 181 [1957]), this Court laid down the following definitionof proximate cause in this jurisdiction as follows:

[T]hat cause, which, in natural and continuoussequence unbroken by any efficient intervening cause,produces the injury and without which the result wouldnot have occurred. And more comprehensively, theproximate cause is that acting first and producing theinjury, either immediately or by setting other events inmotion, all constituting a natural and continuous chainof events, each having a close causal connection withthe immediate predecessor, the final event in the chain

immediately effecting the injury as a natural andprobable result of the cause which first acted, underwhich circumstances that the person responsible for thefirst event should, as an ordinarily prudent andintelligent person, have reasonable ground to expect at
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the moment of his act or default that an injury to someperson might probably result therefrom.

13Ramos v. Court of Appeals, G.R. No. 124354, December

29, 1999, 321 SCRA 584.14Africa v. Caltex (Phils.) Inc., 123 Phil. 280 (1966).

15Ranos v. Court of Appeals, supra. In Ramos, the phraseused is "control of the instrumentality which caused thedamage," citing St. Johns Hospital and School of Nursing v.Chapman, 434 P2d 160 (1967).

16

Rural Educational Assn v. Bush, 42 Tenn. App. 34, 298S.W. 2d 761 (1956).

17Ramos v. Court of Appeals, supra at footnote 13.

18Levin, Hospital Vicarious Liability for Negligence byIndependent Contractor Physicians: A New Rule for NewTimes, October 17, 2005.

19

Id.20Id.

21Tolentino, The Civil Code of the Philippines, Volume V,1992 Ed., p. 616.

22Arkansas M.R. Co. v. Pearson, 98 Ark. 442, 153 SW 595(1911); Runyan v. Goodrum, 147 Ark. 281, 228 SW 397, 13

ALR 1403 (1921); Rosane v. Senger, 112 Colo. 363, 149 P.2d 372 (superseded by statute on other grounds); Moon v.Mercy Hosp., 150 Col. 430, 373 P. 2d 944 (1962); Austin v.Litvak, 682 P. 2d 41, 50 ALR 4th 225 (1984); Western Ins.Co. v. Brochner, 682 P. 2d 1213 (1983); Rodriguez v.Denver, 702 P. 2d 1349 (1984).
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23Arkansas M.R. Co. v. Pearson, id.; Nieto v. State, 952 P.2d 834 (1997). But see Beeck v. Tucson General Hosp., 18

Ariz. App. 165, 500 P. 2d 1153 (1972); Paintsville Hosp. Co.,683 SW 2d 255 (1985); Kelley v. Rossi, 395 Mass. 659, 481

NE 2d 1340 (1985) which held that a physiciansprofessional status does not prevent him or her from being aservant or agent of the hospital.

24Fridena v. Evans, 127 Ariz. 516, 522 P. 2d 463 (1980).

25Kitto v. Gilbert, 39 Colo App 374, 570 P. 2d 544 (1977).

26211 N.Y. 125, 105 N.E. 92, 52 L.R.A., N.S., 505 (1914).

The court in Schloendorff opined that a hospital does not actthrough physicians but merely procures them to act on theirown initiative and responsibility. For subsequent applicationof the doctrine, see for instance, Hendrickson v. Hodkin, 250

App. Div 649, 294 NYS 982, revd on other grounds, 276 NY252, 11 NE 2d 899 (1937); Necolayff v. Genesee Hosp., 270

App. Div. 648, 61 NYS 2d 832, affd 296 NY 936, 73 NE2d117 (1946); Davie v. Lenox Hill Hosp., Inc., 81 NYS 2d 583

(1948); Roth v. Beth El Hosp., Inc., 279 App. Div 917, 110NYS 2d 583 (1952); Rufino v. US, 126 F. Supp. 132 (1954);Mrachek v. Sunshine Biscuit, Inc., 308 NY 116, 123 N.E. 2d801 (1954).

272 NY 2d 656, 163 NYS 2d 3, 143 N.E. 2d 3 (1957).

28Supra at footnote 13.

29

Blacks Law Dictionary (6th Ed. 1990) 1100. The terms"ostensible agency," "agency by estoppel," "apparentauthority," and "holding out" tend to be used interchangeablyby the courts to refer to this theory of liability. See forinstance, Baker v. Werner, 654 P2d 263 (1982) and Adamskiv. Tacoma Gen. Hosp., 20 Wash App. 98, 579 P2d 970
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(1978). Agency by estoppel is defined as "one created byoperation of law and established by proof of such acts of theprincipal as reasonably lead third persons to the conclusionof its existence. Arises where principal by negligence in

failing to supervise agents affairs, allows agent to exercisepowers not granted to him, thus justifying others in believingthe agent possesses requisite authority." Blacks, supra, p.62. An ostensible agency is "an implied or presumptiveagency which exists where one, either intentionally or fromwant of ordinary care, induces another to believe that a thirdperson is his agent, though he never in fact, employed him.It is, strictly speaking, no agency at all, but is in reality based

entirely upon estoppel." Apparent authority refers to "thepower to affect the legal relations of another person bytransactions with third persons, professedly as agent for theother, arising from and in accordance with the othersmanifestations to such third persons." Supra, p. 96.

30Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d55 (1982), quoting Arthur v. St. Peters Hospital, 169 N.J.575, 405 A. 2d 443 (1979).

31Id., citing Hudson v. C., Loan Assn., Inc. v. Horowytz, 116N.J.L. 605, 608, 186 A 437 (Sup. Ct. 1936).

32Supra.

33RTC Decision, p. 9, Rollo of G.R. No. 126467, p. 127.

34RTC Decision, p. 2, Rollo of G.R. No. 126467, p. 120.

35Purcell v. Zimbelman, 18 Ariz. App. 75, 500 P2d 335(1972).

36Supra at footnote 1.
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37Corleto v. Hospital, 138 N.J. Super. 302, 350 A. 2d 534(Super. Ct. Law Div.1975); Purcell v. Zimbelman, 18 Ariz.

App. 75,500 P. 2d 335 (1972); Hospital Authority v. Joiner,229 Ga. 140,189 S.E. 2d 412 (1972).

38Welsh v. Bulger, 548 Pa. 504, 698 A.2d 581 (1997).

39115 Ariz. 34, 545 P2d 958 (1976).

40262 S.E. 2d 391, cert denied 300 NC 194, 269 S.E. 2d621 (1980).

41127 Ariz. 516, 622 P. 2d 463 (1980).
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