FIRST DIVISION January 31, 2007, finding PSI and Dr. Miguel Ampil, petitioner in G.R. No.

127590,
jointly and severally liable for medical negligence.
G.R. No. 126297 February 11, 2008
A brief revisit of the antecedent facts is imperative.
9.B. PROFESSIONAL SERVICES, INC., petitioner,
vs. On April 4, 1984, Natividad Agana was admitted at the Medical City General
THE COURT OF APPEALS and NATIVIDAD and ENRIQUE AGANA, respondents, Hospital (Medical City) because of difficulty of bowel movement and bloody anal
discharge. Dr. Ampil diagnosed her to be suffering from "cancer of the sigmoid."
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x Thus, on April 11, 1984, Dr. Ampil, assisted by the medical staff1 of Medical City,
performed an anterior resection surgery upon her. During the surgery, he found
G.R. No. 126467 February 11, 2008 that the malignancy in her sigmoid area had spread to her left ovary,
necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the
NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, consent of Atty. Enrique Agana, Natividad’s husband, to permit Dr. Juan Fuentes,
JR., EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE respondent in G.R. No. 126467, to perform hysterectomy upon Natividad.
AGANA, petitioners,
vs. Dr. Fuentes performed and completed the hysterectomy. Afterwards, Dr. Ampil
THE COURT OF APPEALS and JUAN FUENTES, respondents, took over, completed the operation and closed the incision. However, the
operation appeared to be flawed. In the corresponding Record of Operation
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x dated April 11, 1984, the attending nurses entered these remarks:

G.R. No. 127590 February 11, 2008 sponge count lacking 2

MIGUEL AMPIL, petitioner, announced to surgeon searched done (sic) but to no avail continue for closure.
vs.
THE COURT OF APPEALS and NATIVIDAD AGANA and ENRIQUE AGANA, After a couple of days, Natividad complained of excruciating pain in her anal
respondents. region. She consulted both Dr. Ampil and Dr. Fuentes about it. They told her that
the pain was the natural consequence of the surgical operation performed upon
RESOLUTION her. Dr. Ampil recommended that Natividad consult an oncologist to treat the
cancerous nodes which were not removed during the operation.
SANDOVAL-GUTIERREZ, J.:
On May 9, 1984, Natividad, accompanied by her husband, went to the United
As the hospital industry changes, so must the laws and jurisprudence governing States to seek further treatment. After four (4) months of consultations and
hospital liability. The immunity from medical malpractice traditionally accorded to laboratory examinations, Natividad was told that she was free of cancer. Hence,
hospitals has to be eroded if we are to balance the interest of the patients and she was advised to return to the Philippines.
hospitals under the present setting.
On August 31, 1984, Natividad flew back to the Philippines, still suffering from
Before this Court is a motion for reconsideration filed by Professional Services, Inc. pains. Two (2) weeks thereafter, her daughter found a piece of gauze protruding
(PSI), petitioner in G.R. No. 126297, assailing the Court’s First Division Decision dated from her vagina. Dr. Ampil was immediately informed. He proceeded to
Natividad’s house where he managed to extract by hand a piece of gauze its resident physicians and nurses and to take an active step in order to remedy
measuring 1.5 inches in width. Dr. Ampil then assured Natividad that the pains their negligence rendered it directly liable under the doctrine of corporate
would soon vanish. negligence.

Despite Dr. Ampil’s assurance, the pains intensified, prompting Natividad to seek In its motion for reconsideration, PSI contends that the Court erred in finding it
treatment at the Polymedic General Hospital. While confined thereat, Dr. Ramon liable under Article 2180 of the Civil Code, there being no employer-employee
Gutierrez detected the presence of a foreign object in her vagina -- a foul-smelling relationship between it and its consultant, Dr. Ampil. PSI stressed that the Court’s
gauze measuring 1.5 inches in width. The gauze had badly infected her vaginal Decision in Ramos holding that "an employer-employee relationship in effect
vault. A recto-vaginal fistula had formed in her reproductive organ which forced exists between hospitals and their attending and visiting physicians for the
stool to excrete through the vagina. Another surgical operation was needed to purpose of apportioning responsibility" had been reversed in a subsequent
remedy the situation. Thus, in October 1984, Natividad underwent another Resolution.3 Further, PSI argues that the doctrine of ostensible agency or agency
surgery. by estoppel cannot apply because spouses Agana failed to establish one requisite
of the doctrine, i.e., that Natividad relied on the representation of the hospital in
On November 12, 1984, Natividad and her husband filed with the Regional Trial engaging the services of Dr. Ampil. And lastly, PSI maintains that the doctrine of
Court, Branch 96, Quezon City a complaint for damages against PSI (owner of corporate negligence is misplaced because the proximate cause of Natividad’s
Medical City), Dr. Ampil and Dr. Fuentes. injury was Dr. Ampil’s negligence.

On February 16, 1986, pending the outcome of the above case, Natividad died. The motion lacks merit.
She was duly substituted by her above-named children (the Aganas).
As earlier mentioned, the First Division, in its assailed Decision, ruled that an
On March 17, 1993, the trial court rendered judgment in favor of spouses Agana employer-employee relationship "in effect" exists between the Medical City and
finding PSI, Dr. Ampil and Dr. Fuentes jointly and severally liable. On appeal, the Dr. Ampil. Consequently, both are jointly and severally liable to the Aganas. This
Court of Appeals, in its Decision dated September 6, 1996, affirmed the assailed ruling proceeds from the following ratiocination in Ramos:
judgment with modification in the sense that the complaint against Dr. Fuentes
was dismissed. We now discuss the responsibility of the hospital in this particular incident. The
unique practice (among private hospitals) of filling up specialist staff with
PSI, Dr. Ampil and the Aganas filed with this Court separate petitions for review attending and visiting "consultants," who are allegedly not hospital employees,
on certiorari. On January 31, 2007, the Court, through its First Division, rendered presents problems in apportioning responsibility for negligence in medical
a Decision holding that PSI is jointly and severally liable with Dr. Ampil for the malpractice cases. However, the difficulty is only more apparent than real.
following reasons: first, there is an employer-employee relationship between
Medical City and Dr. Ampil. The Court relied on Ramos v. Court of Appeals,2 In the first place, hospitals exercise significant control in the hiring and firing of
holding that for the purpose of apportioning responsibility in medical negligence consultants and in the conduct of their work within the hospital premises.
cases, an employer-employee relationship in effect exists between hospitals and Doctors who apply for "consultant" slots, visiting or attending, are required to
their attending and visiting physicians; second, PSI’s act of publicly displaying in submit proof of completion of residency, their educational qualifications;
the lobby of the Medical City the names and specializations of its accredited generally, evidence of accreditation by the appropriate board (diplomate),
physicians, including Dr. Ampil, estopped it from denying the existence of an evidence of fellowship in most cases, and references. These requirements are
employer-employee relationship between them under the doctrine of ostensible carefully scrutinized by members of the hospital administration or by a review
agency or agency by estoppel; and third, PSI’s failure to supervise Dr. Ampil and
committee set up by the hospital who either accept or reject the application. This Actually, contrary to PSI’s contention, the Court did not reverse its ruling in
is particularly true with respondent hospital. Ramos. What it clarified was that the De Los Santos Medical Clinic did not
exercise control over its consultant, hence, there is no employer-employee
After a physician is accepted, either as a visiting or attending consultant, he is relationship between them. Thus, despite the granting of the said hospital’s
normally required to attend clinico-pathological conferences, conduct bedside motion for reconsideration, the doctrine in Ramos stays, i.e., for the purpose of
rounds for clerks, interns and residents, moderate grand rounds and patient allocating responsibility in medical negligence cases, an employer-employee
audits and perform other tasks and responsibilities, for the privilege of being able relationship exists between hospitals and their consultants.
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 In the instant cases, PSI merely offered a general denial of responsibility,
is generally evaluated by a peer review committee on the basis of mortality and maintaining that consultants, like Dr. Ampil, are "independent contractors," not
morbidity statistics, and feedback from patients, nurses, interns and residents. A employees of the hospital. Even assuming that Dr. Ampil is not an employee of
consultant remiss in his duties, or a consultant who regularly falls short of the Medical City, but an independent contractor, still the said hospital is liable to the
minimum standards acceptable to the hospital or its peer review committee, is Aganas.
normally politely terminated.
In Nograles, et al. v. Capitol Medical Center, et al.,4 through Mr. Justice Antonio T.
In other words, private hospitals hire, fire and exercise real control over their Carpio, the Court held:
attending and visiting "consultant" staff. While "consultants" are not, technically
employees, a point which respondent hospital asserts in denying all responsibility The question now is whether CMC is automatically exempt from liability
for the patient’s condition, the control exercised, the hiring, and the right to considering that Dr. Estrada is an independent contractor-physician.
terminate consultants all fulfill the important hallmarks of an employer-employee
relationship, with the exception of the payment of wages. In assessing whether In general, a hospital is not liable for the negligence of an independent
such a relationship in fact exists, the control test is determining. Accordingly, on contractor-physician. There is, however, an exception to this principle. The
the basis of the foregoing, we rule that for the purpose of allocating responsibility hospital may be liable if the physician is the "ostensible" agent of the hospital.
in medical negligence cases, an employer-employee relationship in effect exists (Jones v. Philpott, 702 F. Supp. 1210 [1988]) This exception is also known as the
between hospitals and their attending and visiting physicians. This being the case, "doctrine of apparent authority." (Sometimes referred to as the apparent or
the question now arises as to whether or not respondent hospital is solidarily ostensible agency theory. [King v. Mitchell, 31 A.D.3rd 958, 819 N.Y. S.2d 169
liable with respondent doctors for petitioner’s condition. (2006)].

The basis for holding an employer solidarily responsible for the negligence of its xxx
employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the The doctrine of apparent authority essentially involves two factors to determine
former’s responsibility under a relationship of partia ptetas. the liability of an independent contractor-physician.

Clearly, in Ramos, the Court considered the peculiar relationship between a The first factor focuses on the hospital’s manifestations and is sometimes
hospital and its consultants on the bases of certain factors. One such factor is the described as an inquiry whether the hospital acted in a manner which would lead
"control test" wherein the hospital exercises control in the hiring and firing of a reasonable person to conclude that the individual who was alleged to be
consultants, like Dr. Ampil, and in the conduct of their work. negligent was an employee or agent of the hospital. (Diggs v. Novant Health, Inc.,
628 S.E.2d 851 (2006) citing Hylton v. Koontz, 138 N.C. App. 629 (2000). In this
regard, the hospital need not make express representations to the patient that student in the University of the East School of Medicine at Ramon Magsaysay;
the treating physician is an employee of the hospital; rather a representation may and when my daughter opted to establish a hospital or a clinic, Dr. Ampil was one
be general and implied. (Id.) of our consultants on how to establish that hospital. And from there, I have
known that he was a specialist when it comes to that illness.
The doctrine of apparent authority is a specie of the doctrine of estoppel. Article
1431 of the Civil Code provides that "[t]hrough estoppel, an admission or Atty. Agcaoili
representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon." Estoppel rests on this On that particular occasion, April 2, 1984, what was your reason for choosing to
rule: "Whether a party has, by his own declaration, act, or omission, intentionally contact Dr. Ampil in connection with your wife’s illness?
and deliberately led another to believe a particular thing true, and to act upon
such belief, he cannot, in any litigation arising out of such declaration, act or A First, before that, I have known him to be a specialist on that part of the body
omission, be permitted to falsify it. (De Castro v. Ginete, 137 Phil. 453 [1969], as a surgeon; second, I have known him to be a staff member of the Medical City
citing Sec. 3, par. A, Rule 131 of the Rules of Court. See also King v. Mitchell, 31 which is a prominent and known hospital. And third, because he is a neighbor, I
A.D.3rd 958, 819 N.Y.S.2d 169 [2006]). expect more than the usual medical service to be given to us, than his ordinary
patients.5
xxx
Clearly, PSI is estopped from passing the blame solely to Dr. Ampil. Its act of
The second factor focuses on the patient’s reliance. It is sometimes characterized displaying his name and those of the other physicians in the public directory at
as an inquiry on whether the plaintiff acted in reliance upon the conduct of the the lobby of the hospital amounts to holding out to the public that it offers
hospital or its agent, consistent with ordinary care and prudence. (Diggs v. Novant quality medical service through the listed physicians. This justifies Atty. Agana’s
Health, Inc.) belief that Dr. Ampil was a member of the hospital’s staff. It must be stressed that
under the doctrine of apparent authority, the question in every case is whether
PSI argues that the doctrine of apparent authority cannot apply to these cases the principal has by his voluntary act placed the agent in such a situation that a
because spouses Agana failed to establish proof of their reliance on the person of ordinary prudence, conversant with business usages and the nature of
representation of Medical City that Dr. Ampil is its employee. the particular business, is justified in presuming that such agent has authority to
perform the particular act in question.6 In these cases, the circumstances yield a
The argument lacks merit. positive answer to the question.

Atty. Agana categorically testified that one of the reasons why he chose Dr. Ampil The challenged Decision also anchors its ruling on the doctrine of corporate
was that he knew him to be a staff member of Medical City, a prominent and responsibility.7 The duty of providing quality medical service is no longer the sole
known hospital. prerogative and responsibility of the physician. This is because the modern
hospital now tends to organize a highly-professional medical staff whose
Q Will you tell us what transpired in your visit to Dr. Ampil? competence and performance need also to be monitored by the hospital
commensurate with its inherent responsibility to provide quality medical care.8
A Well, I saw Dr. Ampil at the Medical City, I know him to be a staff member Such responsibility includes the proper supervision of the members of its medical
there, and I told him about the case of my wife and he asked me to bring my wife staff. Accordingly, the hospital has the duty to make a reasonable effort to
over so she could be examined. Prior to that, I have known Dr. Ampil, first, he was monitor and oversee the treatment prescribed and administered by the
staying in front of our house, he was a neighbor, second, my daughter was his physicians practicing in its premises.
Unfortunately, PSI had been remiss in its duty. It did not conduct an immediate Court
investigation on the reported missing gauzes to the great prejudice and agony of
its patient. Dr. Jocson, a member of PSI’s medical staff, who testified on whether By that answer, would you mean to tell the Court that you were aware if there
the hospital conducted an investigation, was evasive, thus: was such a move done by the hospital?

Q We go back to the operative technique, this was signed by Dr. Puruganan, A I cannot answer that, your honor, because I did not have any more follow-up
was this submitted to the hospital? of the case that happened until now.9
A Yes, sir, this was submitted to the hospital with the record of the patient.
Q Was the hospital immediately informed about the missing sponges? The above testimony obviously shows Dr. Jocson’s lack of concern for the
A That is the duty of the surgeon, sir. patients. Such conduct is reflective of the hospital’s manner of supervision. Not
Q As a witness to an untoward incident in the operating room, was it not your only did PSI breach its duty to oversee or supervise all persons who practice
obligation, Dr., to also report to the hospital because you are under the control medicine within its walls, it also failed to take an active step in fixing the
and direction of the hospital? negligence committed. This renders PSI, not only vicariously liable for the
A The hospital already had the record of the two OS missing, sir. negligence of Dr. Ampil under Article 2180 of the Civil Code, but also directly
Q If you place yourself in the position of the hospital, how will you recover. liable for its own negligence under Article 2176.
A You do not answer my question with another question.
Q Did the hospital do anything about the missing gauzes? Moreover, there is merit in the trial court’s finding that the failure of PSI to
conduct an investigation "established PSI’s part in the dark conspiracy of silence
A The hospital left it up to the surgeon who was doing the operation, sir. and concealment about the gauzes." The following testimony of Atty. Agana
supports such findings, thus:
Q Did the hospital investigate the surgeon who did the operation?
Q You said you relied on the promise of Dr. Ampil and despite the promise you
A I am not in the position to answer that, sir. were not able to obtain the said record. Did you go back to the record custodian?

Q You never did hear the hospital investigating the doctors involved in this case A I did not because I was talking to Dr. Ampil. He promised me.
of those missing sponges, or did you hear something?
Q After your talk to Dr. Ampil, you went to the record custodian?
xxxxxx
A I went to the record custodian to get the clinical record of my wife, and I was
A I think we already made a report by just saying that two sponges were given a portion of the records consisting of the findings, among them, the entries
missing, it is up to the hospital to make the move. of the dates, but not the operating procedure and operative report.10

Atty. Agana In sum, we find no merit in the motion for reconsideration.

Precisely, I am asking you if the hospital did a move, if the hospital did a move. WHEREFORE, we DENY PSI’s motion for reconsideration with finality.

A I cannot answer that. SO ORDERED.