Professional Services Inc. (PSI) v. Agana, G.R. No. 126297, 31 January 2007.

FACTS:
Natividad Agana was rushed to the Medical City General Hospital (Medical City Hospital) because
of difficulty of bowel movement and bloody anal discharge. After a series of medical examinations,
Dr. Miguel Ampil diagnosed her to be suffering from “cancer of the sigmoid.” Dr. Ampil, assisted
by the medical staff 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. Thereafter, Dr. Ampil took over, completed the operation and
closed the incision. However, based on the record of the hospital, the attending nurses indicated
nota bene that 2 sponges were missing. The same was reported to Dr. Ampil but were not found
after “diligent seach”.

After couple of days, Natividad complained of excruciating pain in her anal region. 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 oncologist to examine the
cancerous nodes which were not removed during the operation. Natividad went to the United
States for four months but she was only declared free of cancer. In Natividad’s return to the
Philippines, 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. But 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. Natividad underwent another surgical operation to remedy the damage. Civil
and administrative complaints, for damages and gross negligence respectively, were filed against
Professional Services Inc., owner of Medical City Hospital, Dr. Ampil and Dr. Fuentes.
ISSUE(S):
Are the following liable?
(1) Professional Services Inc., based on
(a) “employer-employee relationship”;
(b) “doctrine of apparent authority”;
(c) “corporate negligence”;
(2) Dr. Ampil,
(a) for medical negligence;
(b) under the “captain of the ship doctrine”;
(3) Dr.Fuentes, under the doctrine of res ipsa loquitor;

HELD:
(1)
(a) YES.
[P]rivate 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.
(b) YES.
Apparent authority, or what is sometimes referred to as the “holding out” theory, or doctrine of
ostensible agency or agency by estoppel, 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. xxx 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.
(c) YES.
Hospital’s corporate negligence extends to permitting a physician known to be incompetent to
practice at the hospital. xxx [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.
(2)
(a) YES.
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. 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 of Natividad’s injury could be traced from his act 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.
(b) YES.
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.
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.
(3) NO.
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.”
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.