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

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478 SUPREME COURT REPORTS ANNOTATED


Professional Services, Inc. vs. Agana

*
G.R. No. 126297. January 31, 2007.

PROFESSIONAL SERVICES, INC., petitioner, vs. NATIVIDAD


and ENRIQUE AGANA, respondents.
*
G.R. No. 126467. January 31, 2007.

NATIVIDAD and ENRIQUE AGANA, respondents. NATIVIDAD


(Substituted by her children MARCELINO AGANA III, ENRIQUE
AGANA, JR., EMMA AGANA ANDAYA, JESUS AGANA, and
RAYMUND AGANA) and ENRIQUE AGANA, petitioners, vs.
JUAN FUENTES, respondent.
*
G.R. No. 127590. January 31, 2007.

MIGUEL AMPIL, petitioner, vs. NATIVIDAD AGANA and


ENRIQUE AGANA, respondents.

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Professional Services, Inc. vs. Agana

Civil Law; Damages; Negligence; 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.— 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. To put it simply, such act
is considered so inconsistent with due care as to raise an inference of

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negligence. There are even legions of authorities to the effect that such act is
negligence per se.

Same; Same; Same; To the mind of the Court, what was initially an act
of negligence by Dr. Ampil has ripened into a deliberate wrongful act of
deceiving his patient.—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.

Same; Same; Same; Doctrine of Res Ipsa Loquitur; Requisites for the
Applicability of the Doctrine.—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. 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. 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

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Professional Services, Inc. vs. Agana

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.”

Same; Same; Same; Same; 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.—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
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evidentiary rule. 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.

Same; Same; Same; 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.—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.”

Same; Same; Same; In this jurisdiction, the nature of the relationship


between the hospital and the physicians is rendered inconsequential in view
of the pronouncement in Ramos vs. Court of Appeals, 321 SCRA 584 (1999),
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.—In our shores, the nature of the
relationship between the hospital and the physicians is rendered
inconsequential in view of our categorical pronouncement in Ramos v.
Court of Appeals, 321 SCRA 584 (1999), that for purposes of apportioning
responsibility in

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Professional Services, Inc. vs. Agana

medical negligence cases, an employer-employee relationship in effect exists


between hospitals and their attending and visiting physicians.

Same;Same; Same; PSI’s liability is also anchored upon the agency


principle of apparent authority or agency by estoppel and the doctrine of
corporate negligence.—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
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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. 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.

Same; Same; Same; 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.—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., 415 So. 2d 55 (1982).
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

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Professional Services, Inc. vs. Agana

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.

Same; Same; Same; 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.—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
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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.

PETITION for review on certiorari of the decisions of the Court of


Appeals.
The facts are stated in the opinion of the Court.
        Bengzon, Narciso, Cudala, Pecson, Bengzon & Jimenez for
petitioner Professional Services, Inc.
          Enrique Agana & Associates for petitioners Natividad and
Enrique Agana.
     The Law Firm of Raymundo M. Armovit for petitioner Miguel
Ampil.
          Agcaoili Law Offices collaborating counsel for Heirs of
Natividad Agana.
     Benjamin M. Tongol for Juan Fuentes.

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Professional Services, Inc. vs. Agana

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
1
very lives of those placed in the hospital’s keeping.
Assailed in these three consolidated petitions for review on
2
certiorari is the Court of Appeals’ Decision dated September 6,
1996 in CA-G.R. CV No. 42062 and 3 CA-G.R. SP No. 32198
affirming with modification the Decision 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

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medical examinations, Dr. Miguel Ampil, petitioner in G.R. No.


127590, diagnosed her to be suffering from “cancer of the sigmoid.”

1 Beeck v. Tucson General Hospital Darling v.


Charleston Community Memorial Hospital
2

Rollo

Rollo

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Professional Services, Inc. vs. Agana

4
On April 11, 1984, 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.
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
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.
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

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was free of cancer. Hence, she was advised to return to the


Philippines.

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Professional Services, Inc. vs. Agana

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 abovenamed
children (the Aganas).

486

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486 SUPREME COURT REPORTS ANNOTATED


Professional Services, Inc. vs. Agana

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

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Professional Services, Inc. vs. Agana

them for P451,275.00 and delivered the amount to the Aganas.

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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. 5
During its
pendency, the Court of Appeals issued a Resolution 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
6
23, 1995, the PRC Board of Medicine
rendered its Decision 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.

“WHEREFORE, let a writ of preliminary injunction be issued upon petitioner’s posting of


bond in the amount of P20,000.00, ENJOINING public respondents from implementing the
questioned order dated September 21, 1993 and from further taking any action in Civil Case
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.

6 Rollo

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Professional Services, Inc. vs. Agana

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.

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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. Ampil7 filed a motion for reconsideration, but it was denied
in a Resolution 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.

7 Rollo

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Professional Services, Inc. vs. Agana

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

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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

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Professional Services, Inc. vs. Agana

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 x x.
Third, after the operation, two (2) gauzes were extracted from the same
spot of the body of Mrs. Agana where the surgery was performed.

An operation requiring the placing of sponges in the incision is not


complete until the sponges are properly removed, and it is settled
that the leaving of sponges or other foreign substances in the wound
after the incision has been
8
closed is at least prima facie negligence
by the operating surgeon. To put it simply, such act is considered so
inconsistent with due care as to raise an inference of negligence.

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There are even legions


9
of authorities to the effect that such act is
negligence per se.

8 Rule v. Cheeseman Russel v. Newman


Bernsden v. Johnson
9 Smith v. Zeagler Ruth v. Johnson
Reeves v. Lutz Rayburn v. Day
Wynne v. Harvey Harris v. Fall
(C.C.A.)

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Professional Services, Inc. vs. Agana

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
10
as
her condition might permit. The ruling in Smith v. Zeagler 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

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Moore v. Ivey

10

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Professional Services, Inc. vs. Agana

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
11
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
12
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

11 Garcia-Rueda v. Pascasio

12 Vda. de Bataclan v. Medina

[T]hat cause, which, in natural and continuous sequence unbroken by any efficient intervening
cause, produces the injury and without which the result would not have occurred. And more
comprehensively, the proximate cause is that acting first and producing the injury, either
immediately or by setting other events in motion, all constituting a natural and continuous
chain of events, each having a close causal connection with the immediate predecessor, the
final event in the chain immediately effecting the injury as a natural and probable result of the
cause which first acted, under which circumstances that the person responsible for the first
event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect
at the moment of his act or default that an injury to some person might probably result
therefrom.

493

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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
13
explanation. 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 to14 him to establish that he has observed due care and
diligence.
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 defen-

13 Ramos v. Court of Appeals

14 Africa v. Caltex (Phils.) Inc

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Professional Services, Inc. vs. Agana

dant; (3) the occurrence was such that in the ordinary course of
things, would not have happened if those who had control or
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management used proper care; and (4) the absence of explanation by


the defendant. Of the foregoing requisites, the most instrumental is
the “control
15
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.
Under the “Captain of the Ship” rule, the operating surgeon is the
person in complete charge of the surgery room and all personnel 16
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

15 Ranos v. Court of Appeals, supra Ramos


St. John’s Hospital and School of
Nursing v. Chapman
16 Rural Educational Assn v. Bush

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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.
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In this jurisdiction, res ipsa loquitur is not a rule of substantive


law, hence, does not per se create or constitute an independent
17
or
separate ground of liability, being a mere evidentiary rule. 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 18
classes of society, without regard for a patient’s ability to pay.
Those who could afford19medical treatment were usually treated at
home by their doctors. However, the days of house calls and
philanthropic health care are over. The modern health care industry
continues to distance itself from its

17 Ramos v. Court of Appeals, supra .


18 Hospital Vicarious Liability for Negligence by Independent Contractor
Physicians: A New Rule for New Times
19 Id

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Professional Services, Inc. vs. Agana

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, 20
apparent
authority, ostensible authority, or agency by estoppel.
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
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parties, is called a quasi-delict and is governed by the provisions of this


Chapter.

A derivative of this provision is Article 2180, the rule governing


vicarious liability under the doctrine of respondeat superior, thus:

ART. 2180. The obligation imposed by Article 2176 is demandable not only
for one’s own acts or omissions, but also for those of persons for whom one
is responsible.
x x x      x x x
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their
functions.
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks even
though the former are not engaged in any business or industry.
x x x      x x x

20 Id

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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 negligence21of a physician or surgeon in
the treatment or operation of patients.”
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 22
of a
hospital, whenever he acts in a professional capacity. It has been
said that medical practice
23
strictly involves highly developed and
specialized knowledge, such that physicians are generally free to
exercise their own skill
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21 The Civil Code of the Philippines


22 Arkansas M.R. Co. v. Pearson Runyan v.
Goodrum Rosane v. Senger
Moon v. Mercy
Hosp. Austin v. Litvak
Western Ins. Co. v. Brochner Rodriguez v.
Denver
23 Arkansas M.R. Co. v. Pearson, Id. Nieto v. State
Beeck v. Tucson General Hosp Paintsville
Hosp. Co Kelley v. Rossi

498

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Professional Services, Inc. vs. Agana

24
and judgment in rendering medical services sans interference.
Hence, when a doctor practices medicine in a hospital setting, the
hospital and its employees are deemed to subserve him in his
ministrations 25to the patient and his actions are of his own
responsibility. 26
The case of Schloendorff v. Society of New York Hospital 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,
27
and attendants for its patients. Thus, in
Bing v. Thunig, 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

24 Fridena v. Evans
25 Kitto v. Gilbert

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26

Schloendorff

Hendrickson v. Hodkin

Necolayff v. Genesee Hosp


Davie v. Lenox Hill Hosp., Inc Roth v.
Beth El Hosp., Inc. Rufino v. US
Mrachek v. Sunshine Biscuit, Inc

27

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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 28
of our
categorical pronouncement in Ramos v. Court of Appeals that for
purposes of apportioning responsibility in medical negligence cases,
an employer-employee relationship in effect exists between hospitals
and their attending and visiting physicians. This Court held:

“We now discuss the responsibility of the hospital in this particular incident.
The unique practice (among private hospitals) of filling up specialist staff
with attending and visiting “consultants,” who are allegedly not hospital
employees, presents problems in apportioning responsibility for negligence
in medical malpractice cases. However, the difficulty is more apparent than
real.
In the first place, hospitals exercise significant control in the hiring
and firing of consultants and in the conduct of their work within the
hospital premises. Doctors who apply for ‘consultant’ slots, visiting or
attending, are required to submit proof of completion of residency, their
educational qualifications, generally, evidence of accreditation by the
appropriate board (diplomate), evidence of fellowship in most cases,
and references. These requirements are carefully scrutinized by
members of the hospital administration or by a review committee set up
by the hospital who either accept or reject the application. x x x.
After a physician is accepted, either as a visiting or attending
consultant, he is normally required to attend clinicopathological
conferences, conduct bedside rounds for clerks, interns and residents,

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moderate grand rounds and patient audits and perform other tasks and
responsibilities, for the

_______________

28 Supra at footnote 13.

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Professional Services, Inc. vs. Agana

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 employeremployee 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 29out” theory, or doctrine of ostensible agency or agency by
estoppel, has its origin from the law of agency. It

29

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Baker v. Werner Adamski v. Tacoma Gen. Hosp

501

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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 30
public into believing that the
relationship or the authority exists. 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
31
has authority to perform the particular act in question.

The applicability of apparent authority in the field of hospital


liability was upheld long time ago in Irving v. Doctor Hos-

Agency by estoppel

supra

Apparent authority

Supra
30 Irving v. Doctors Hospital of Lake Worth, Inc.
Arthur v. St. Peters Hospital
31 Id Hudson v. C., Loan Assn., Inc. v. Horowytz

502

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Professional Services, Inc. vs. Agana

32
pital of Lake Worth, Inc. 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:

32 Supra

503

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Professional Services, Inc. vs. Agana

“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

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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
33
whether he is independent or employed.”

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 34
and Fuentes in the
performance of their duties as surgeons.” 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.

33 Rollo
34 Rollo

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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
35
with their inherent responsibility to provide quality medical care.

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The doctrine has its genesis in Darling v. Charleston Community


36
Hospital. 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
37
known to be incompetent to practice at the hospital. 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

35 Purcell v. Zimbelman
36 Supra
37 Corleto v. Hospital
Purcell v. Zimbelman Hospital
Authority v. Joiner

505

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38
and policies that ensure quality care 39 for its patients. Thus, in
Tucson Medical Center, Inc. v. Misevich, 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
40
medical staff. And in Bost v. Riley, 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:

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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.”

38 Welsh v. Bulger
39

40

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Professional Services, Inc. vs. Agana

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
41
gauze were missing. In Fridena v. Evans, 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

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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

_______________

41 127 Ariz. 516, 622 P. 2d 463 (1980).

507

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and performance was to be monitored and reviewed by the governing


body of the hospital, and the court held that a hospital would be
negligent where it had knowledge or reason to believe that a doctor
using the facilities was employing a method of treatment or care which
fell below the recognized standard of care.
Subsequent to the Purcell decision, the Arizona Court of Appeals
held that a hospital has certain inherent responsibilities regarding the
quality of medical care furnished to patients within its walls and it must
meet the standards of responsibility commensurate with this
undertaking. Beeck v. Tucson General Hospital, 18 Ariz. App. 165, 500 P.
2d 1153 (1972). This court has confirmed the rulings of the Court of
Appeals that a hospital has the duty of supervising the competence of the
doctors on its staff. x x x.
x x x      x x x
In the amended complaint, the plaintiffs did plead that the operation was
performed at the hospital with its knowledge, aid, and assistance, and that
the negligence of the defendants was the proximate cause of the patient’s
injuries. We find that such general allegations of negligence, along with
the evidence produced at the trial of this case, are sufficient to support
the hospital’s liability based on the theory of negligent supervision.”

Anent the corollary issue of whether PSI is solidarily liable with Dr.
Ampil for damages, let it be emphasized that PSI, apart from a
general denial of its responsibility, failed to adduce evidence
showing that it exercised the diligence of a good father of a family
in the accreditation and supervision of the latter. In neglecting to
offer such proof, PSI failed to discharge its burden under the last
paragraph of Article 2180 cited earlier, and, therefore, must be
adjudged solidarily liable with Dr. Ampil. Moreover, as we have
discussed, PSI is also directly liable to the Aganas.
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3/25/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 513

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

508

508 SUPREME COURT REPORTS ANNOTATED


Professional Services, Inc. vs. Agana

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.

     Puno (C.J., Chairperson), Corona and Azcuna, JJ., concur.


     Garcia, J., No part.

Petitions denied, challenged CA decision in CA-G.R. No. CV No.


42062 and CA-G.R. SP No. 32198 affirmed.

Note.—Under the Captain-of-the-Ship Doctrine, a surgeon is


likened to a captain of the ship in that it is his duty to control
everything going on in the operating room. (Ramos vs. Court of
Appeals, 380 SCRA 467 [2002])

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509

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