Professional Services v. Agana, G.R. No. 126297 consequence of the surgery. Dr.
Ampil then recommended that
January 31, 2007
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’ Decision2 dated September
6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No.
32198 affirming with modification the Decision3 dated March
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
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."
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.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil
took over, completed the operation and closed the incision.
However, the operation appeared to be flawed. In the
corresponding Record of Operation dated April 11, 1984, the
attending nurses entered these remarks:
"sponge count lacking 2
"announced to surgeon searched (sic) done but to no avail
continue for closure."
On April 24, 1984, Natividad was released from the hospital.
Her hospital and medical bills, including the doctors’ fees,
amounted to P60,000.00.
After a 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
she consult an oncologist to examine the cancerous nodes
which were not removed during the operation.
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 P21.60-US$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 an alias 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
Resolution5 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 Decision6 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 defendant-
appellant 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.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration, but it was
denied in a Resolution7 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 are
prima 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; and
third, 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 mindful that Dr. Ampil
examined his (Dr. Fuentes’) work and found it 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 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
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. Zeagler10 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 cause12 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.
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 pre-
existing 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.
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.
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
Hospital26 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 Schloendorff
doctrine, 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
Appeals28 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 clinico-
pathological 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 have gained
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.31
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.
Our jurisdiction recognizes the concept of an agency by
implication or estoppel. Article 1869 of the Civil Code reads:
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.
We now proceed to the doctrine of corporate negligence or
corporate responsibility.
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.
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 is bound 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 Hospital
constitutes 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 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, 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.
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.

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.

Costs against petitioners PSI and Dr. Miguel Ampil.

SO ORDERED.