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.
_______________
* FIRST DIVISION.
479
VOL. 513, JANUARY 31, 2007 479
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 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
480

480 SUPREME COURT REPORTS ANNOTATED

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 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
481

VOL. 513, JANUARY 31, 2007 481

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 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
482

482 SUPREME COURT REPORTS ANNOTATED

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 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.
483
VOL. 513, JANUARY 31, 2007 483
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 very lives of those placed in the hospital’s
keeping. 1

Assailed in these three consolidated petitions for review on

certiorari is the Court of Appeals’ Decision dated September 6,
2

1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198

affirming with modification the Decision dated March 17, 1993 of
3

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.”
_______________
1 Beeck v. Tucson General Hospital, 500 P. 2d 1153 (1972), citing Darling v.
Charleston Community Memorial Hospital, 33 Ill. 2d 326, 211 N.E. 2d 253.
2 Penned by Associate Justice Cancio C. Garcia (now a member of the Supreme
Court) and concurred in by Associate Justices Eugenio S. Labitoria and Artemio
G. Tuquero (both retired), Rollo, G.R. No. 126297, pp. 36-51; 126467, pp. 27-42;
127590, pp. 23-38.
3 Penned by Judge Lucas P. Bersamin (now Justice of the Court of Appeals),
Rollo, G.R. No. 126647, pp. 69-83.
484
484 SUPREME COURT REPORTS ANNOTATED
Professional Services, Inc. vs. Agana

On April 11, 1984, Dr. Ampil, assisted by the medical staff of the 4

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 was free of cancer. Hence, she was advised to return to the
Philippines.
_______________
4 The medical staff was composed of physicians, both residents and interns, as
well as nurses.
485
VOL. 513, JANUARY 31, 2007 485
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
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. 1.
As actual damages, the following amounts:
2. 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;
3. b.
The sum of P4,800.00 as travel taxes of plaintiffs and their
physician daughter;
4. c.
The total sum of P45,802.50, representing the cost of
hospitalization at Polymedic Hospital, medical fees, and cost of the
saline solution;
1. 2.
As moral damages, the sum of P2,000,000.00;
2. 3.
As exemplary damages, the sum of P300,000.00;
3. 4.
As attorney’s fees, the sum of P250,000.00;
4. 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
5. 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
487
 VOL. 513, JANUARY 31, 2007 487
Professional Services, Inc. vs. Agana

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 Resolution 5

dated October 29, 1993 granting Dr. Fuentes’ prayer for injunctive
relief.
On January 24, 1994, CA-G.R. SP No. 32198 was consolidated
with CA-G.R. CV No. 42062.
Meanwhile, on January 23, 1995, the PRC Board of Medicine
rendered its Decision in Administrative Case No. 1690 dismissing
6

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.
_______________
5 The dispositive portion reads:
“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 of G.R. No. 126467, pp. 84-89.
488
488 SUPREME COURT REPORTS ANNOTATED
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.
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 Resolution dated December 19, 1996.
7

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 of G.R. No. 127590, p. 40.
489
VOL. 513, JANUARY 31, 2007 489
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
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
490
490 SUPREME COURT REPORTS ANNOTATED
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 closed is at least prima facie
negligence by the operating surgeon. To put it simply, such act is
8

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

_______________
8 Rule v. Cheeseman, 317 P. 2d 472 (1957), citing Russel v. Newman, 116 Kan.
268 P. 752; Bernsden v. Johnson, 174 Kan. 230, 255 P. 2d 1033.
9 Smith v. Zeagler, 157 So. 328 Fla. (1934), citing Ruth v. Johnson, (C.C.A.) 172
F. 191; Reeves v. Lutz, 179 Mo. App. 61, 162 S.W. 280; Rayburn v. Day, 126 Or.
135, 68 P. 1002, 59 A.L.R. 1062; Wynne v. Harvey, 96 Wash. 379, 165 P. 67;
Harris v. Fall (C.C.A.), 177 F. 79,
491
VOL. 513, JANUARY 31, 2007 491
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 as her condition might permit. The
ruling in Smith v. Zeagler is explicit, thus:
10

“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
_______________
27 L.R.A. (N.S.) 1174; Moore v. Ivey, (Tex. Civ. App.) 264 S.W. 283; 21 R.C. L.
388.
10 157 So. 328 Fla. (1934)
492
492 SUPREME COURT REPORTS ANNOTATED
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 action caused injury to the patient. Simply put, the elements
11

are duty, breach, injury and proximate causation. Dr, Ampil, as

the lead surgeon, had the duty to remove all foreign objects, such
as gauzes, from Natividad’s body before closure of the incision.
When he failed to do so, it was his duty to inform Natividad about
it. Dr. Ampil breached both duties. Such breach caused injury to
Natividad, necessitating her further examination by American
doctors and another surgery. That Dr. Ampil’s negligence is the
proximate cause of Natividad’s injury could be traced from his act
12

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, G.R. No. 118141, September 5, 1997, 278 SCRA
769.
12 In the leading case of Vda. de Bataclan v. Medina, (102 Phil. 181 [1957]), this
Court laid down the following definition of proximate cause in this jurisdiction as
follows:
[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
VOL. 513, JANUARY 31, 2007 493
Professional Services, Inc. vs. Agana
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. Stated differently, where the thing which caused the
13

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 defen-
_______________
13 Ramos v. Court of Appeals, G.R. No. 124354, December 29, 1999, 321 SCRA
584.
14 Africa v. Caltex (Phils.) Inc., 123 Phil. 280; 16 SCRA 448 (1966).
494
494 SUPREME COURT REPORTS ANNOTATED
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
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. As 16

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. In Ramos, the phrase used is “control of the
instrumentality which caused the damage,” citing St. John’s Hospital and School
of Nursing v. Chapman, 434 P2d 160 (1967).
16 Rural Educational Assn v. Bush, 42 Tenn. App. 34, 298 S.W. 2d 761 (1956).
495
 VOL. 513, JANUARY 31, 2007 495
Professional Services, Inc. vs. Agana

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. In 17

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. However, the days of house calls and
19

philanthropic health care are over. The modern health care

industry continues to distance itself from its
_______________
17 Ramos v. Court of Appeals, supra at footnote 13.
18 Levin, Hospital Vicarious Liability for Negligence by Independent Contractor
Physicians: A New Rule for New Times, October 17, 2005.
19 Id.
 496
496 SUPREME COURT REPORTS ANNOTATED
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, 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.
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.
497
 VOL. 513, JANUARY 31, 2007 497
Professional Services, Inc. vs. Agana

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. It has been
22

said that medical practice strictly involves highly developed and

specialized knowledge, such that physicians are generally free to
23

exercise their own skill

_______________
21 Tolentino, The Civil Code of the Philippines, Volume V, 1992 Ed., p. 616.
22 Arkansas M.R. Co. v. Pearson, 98 Ark. 442, 153 SW 595 (1911); Runyan v.
Goodrum, 147 Ark. 281, 228 SW 397, 13 ALR 1403 (1921); Rosane v. Senger,
112 Colo. 363, 149 P. 2d 372 (superseded by statute on other grounds); Moon v.
Mercy Hosp., 150 Col. 430, 373 P. 2d 944 (1962); Austin v. Litvak, 682 P. 2d 41,
50 ALR 4th 225 (1984); Western Ins. Co. v. Brochner, 682 P. 2d 1213 (1983);
Rodriguez v. Denver, 702 P. 2d 1349 (1984).
23 Arkansas M.R. Co. v. Pearson, Id.; Nieto v. State, 952 P. 2d 834 (1997). But
see Beeck v. Tucson General Hosp., 18 Ariz. App. 165, 500 P. 2d 1153 (1972);
Paintsville Hosp. Co., 683 SW 2d 255 (1985); Kelley v. Rossi, 395 Mass. 659,
481 NE 2d 1340 (1985) which held that a physician’s professional status does
not prevent him or her from being a servant or agent of the hospital.
498
 498 SUPREME COURT REPORTS ANNOTATED
Professional Services, Inc. vs. Agana

and judgment in rendering medical services sans interference. 24

Hence, when a doctor practices medicine in a hospital setting, the

hospital and its employees are deemed to subserve him in his
ministrations to the patient and his actions are of his own
responsibility. 25

The case of Schloendorff v. Society of New York Hospital was 26

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, the New York Court of Appeals deviated from the
27

Schloendorff doctrine, noting that modern hospitals actually do far

more than provide facilities for treatment. Rather, they regularly
_______________
24 Fridena v. Evans, 127 Ariz. 516, 522 P. 2d 463 (1980).
25 Kitto v. Gilbert, 39 Colo App 374, 570 P. 2d 544 (1977).
26 211 N.Y. 125, 105 N.E. 92, 52 L.R.A., N.S., 505 (1914). The court in
Schloendorff opined that a hospital does not act through physicians but merely
procures them to act on their own initiative and responsibility. For subsequent
application of the doctrine, see for instance, Hendrickson v. Hodkin, 250 App. Div
649, 294 NYS 982, revd on other grounds, 276 NY 252, 11 NE 2d 899 (1937);
Necolayff v. Genesee Hosp., 270 App. Div. 648, 61 NYS 2d 832, affd 296 NY
936, 73 NE2d 117 (1946); Davie v. Lenox Hill Hosp., Inc., 81 NYS 2d 583 (1948);
Roth v. Beth El Hosp., Inc., 279 App. Div 917, 110 NYS 2d 583 (1952); Rufino v.
US, 126 F. Supp. 132 (1954); Mrachek v. Sunshine Biscuit, Inc., 308 NY 116,
123 N.E. 2d 801 (1954).
27 2 NY 2d 656, 163 NYS 2d 3, 143 N.E. 2d 3 (1957).
499
VOL. 513, JANUARY 31, 2007 499
Professional Services, Inc. vs. Agana

employ, on a salaried basis, a large staff of physicians, interns,

nurses, administrative and manual workers. They charge patients
for medical care and treatment, even collecting for such services
through legal action, if necessary. The court then concluded that
there is no reason to exempt hospitals from the universal rule of
respondeat superior.
In our shores, the nature of the relationship between the hospital
and the physicians is rendered inconsequential in view of our
categorical pronouncement in Ramos v. Court of Appeals that for 28

purposes of apportioning responsibility in medical negligence

cases, an employer-employee relationship in effect exists
between hospitals and their attending and visiting physicians. This
Court held:
“We now discuss the responsibility of the hospital in this particular
incident. The unique practice (among private hospitals) of filling up
specialist staff with attending and visiting “consultants,” who are
allegedly not hospital employees, presents problems in apportioning
responsibility for negligence in medical malpractice cases. However, the
difficulty is more apparent than real.
In the first place, hospitals exercise significant control in the hiring and
firing of consultants and in the conduct of their work within the hospital
premises. Doctors who apply for ‘consultant’ slots, visiting or attending,
are required to submit proof of completion of residency, their educational
qualifications, generally, evidence of accreditation by the appropriate
board (diplomate), evidence of fellowship in most cases, and references.
These requirements are carefully scrutinized by members of the hospital
administration or by a review committee set up by the hospital who either
accept or reject the application. x x x.
After a physician is accepted, either as a visiting or attending
consultant, he is normally required to attend clinicopathological
conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and
responsibilities, for the
_______________
28 Supra at footnote 13.
500
500 SUPREME COURT REPORTS ANNOTATED
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 out” theory, or doctrine of ostensible agency or agency
by estoppel, has its origin from the law of agency. It
29

_______________
29 Black’s Law Dictionary (6th Ed. 1990) 1100. The terms “ostensible agency,”
“agency by estoppel,” “apparent authority,” and “holding out” tend to be used
interchangeably by the courts to refer to this theory of liability. See for instance,
Baker v. Werner, 654 P2d 263 (1982) and Adamski v. Tacoma Gen. Hosp., 20
Wash App. 98,
501
VOL. 513, JANUARY 31, 2007 501
Professional Services, Inc. vs. Agana

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
30

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 Hos-
_______________
579 P2d 970 (1978). Agency by estoppel is defined as “one created by operation
of law and established by proof of such acts of the principal as reasonably lead
third persons to the conclusion of its existence. Arises where principal by
negligence in failing to supervise agent’s affairs, allows agent to exercise powers
not granted to him, thus justifying others in believing the agent possesses
requisite authority.” Black’s, supra, p. 62. An ostensible agency is “an implied or
presumptive agency which exists where one, either intentionally or from want of
ordinary care, induces another to believe that a third person is his agent, though
he never in fact, employed him. It is, strictly speaking, no agency at all, but is in
reality based entirely upon estoppel.” Apparent authority refers to “the power to
affect the legal relations of another person by transactions with third persons,
professedly as agent for the other, arising from and in accordance with the
other’s manifestations to such third persons.” Supra, p. 96.
30 Irving v. Doctors Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982), quoting
Arthur v. St. Peters Hospital, 169 N.J. 575, 405 A. 2d 443 (1979).
31 Id., citing Hudson v. C., Loan Assn., Inc. v. Horowytz, 116 N.J.L. 605, 608, 186
A 437 (Sup. Ct. 1936).
502
502 SUPREME COURT REPORTS ANNOTATED
Professional Services, Inc. vs. Agana

pital of Lake Worth, Inc. There, it was explicitly stated that “there
32

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
VOL. 513, JANUARY 31, 2007 503
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
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.” Premised on the 34

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 RTC Decision, p. 9, Rollo of G.R. No. 126467, p. 127.
34 RTC Decision, p. 2, Rollo of G.R. No. 126467, p. 120.
504
504 SUPREME COURT REPORTS ANNOTATED
Professional Services, Inc. vs. Agana

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. There, the Supreme Court of Illinois held that “the jury
36

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. With the 37
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, 18 Ariz. App. 75, 500 P2d 335 (1972).
36 Supra at footnote 1.
37 Corleto v. Hospital, 138 N.J. Super. 302, 350 A. 2d 534 (Super. Ct. Law
Div.1975); Purcell v. Zimbelman, 18 Ariz. App. 75,500 P. 2d 335 (1972); Hospital
Authority v. Joiner, 229 Ga. 140,189 S.E. 2d 412 (1972).
505
VOL. 513, JANUARY 31, 2007 505
Professional Services, Inc. vs. Agana

and policies that ensure quality care for its patients. Thus, in 38

Tucson Medical Center, Inc. v. Misevich, it was held that a

39

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, the court 40

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.”
_______________
38 Welsh v. Bulger, 548 Pa. 504, 698 A.2d 581 (1997).
39 115 Ariz. 34, 545 P2d 958 (1976).
40 262 S.E. 2d 391, cert denied 300 NC 194, 269 S.E. 2d 621 (1980).
506
506 SUPREME COURT REPORTS ANNOTATED
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 gauze were missing. In Fridena v. Evans, it was held 41

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
_______________
41 127 Ariz. 516, 622 P. 2d 463 (1980).
507
VOL. 513, JANUARY 31, 2007 507
Professional Services, Inc. vs. Agana

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.
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])
——o0o——