PROFESSIONAL SERVICES, g.r. No. 126297
- v e r s u s - LEONARDO-DE CASTRO,
THE COURT OF APPEALS and NATIVIDAD and ENRIQUE
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NATIVIDAD [substituted by her G.R. No. 126467
children Marcelino Agana III,
Enrique Agana, Jr.,
Jesus Agana and Raymund
- v e r s u s -
THE COURT OF APPEALS and JUAN FUENTES,
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MIGUEL AMPIL, G.R. No. 127590
- v e r s u s -
NATIVIDAD and ENRIQUE
February 2, 2010
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R E S O L U T I O N
With prior leave of court, petitioner Professional Services, Inc. (PSI) filed a second motion for reconsideration urging referral thereof to the Court en banc and seeking modification of the decision dated January 31, 2007 and resolution dated February 11, 2008 which affirmed its vicarious and direct liability for damages to respondents Enrique Agana and the heirs of Natividad Agana (Aganas).
Manila Medical Services, Inc. (MMSI), Asian Hospital, Inc. (AHI), and Private Hospital Association of the Philippines (PHAP) all sought to intervene in these cases invoking the common ground that, unless modified, the assailed decision and resolution will jeopardize the financial viability of private hospitals and jack up the cost of health care.
The Special First Division of the Court granted the motions for intervention of MMSI, AHI and PHAP (hereafter intervenors), and referred en consulta to the Court en banc the motion for prior leave of court and the second motion for reconsideration of PSI.
Due to paramount public interest, the Court en banc accepted the referral and heard the parties on oral arguments on one particular issue: whether a hospital may be held liable for the negligence of physicians-consultants allowed to practice in its premises.
To recall the salient facts, PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in a complaint for damages filed in the Regional Trial Court (RTC) of Quezon City, Branch 96, for the injuries suffered by Natividad when Dr. Ampil and Dr. Fuentes neglected to remove from her body two gauzes which were used in the surgery they performed on her on April 11, 1984 at the Medical City General Hospital. PSI was impleaded as owner, operator and manager of the hospital.
In a decision
On petition for review, this Court, in
The Court premised the direct liability of PSI to the Aganas on the following facts and law:
First, there existed between PSI and
Dr. Ampil an employer-employee relationship as contemplated in the
Second, by accrediting Dr. Ampil and advertising his
qualifications, PSI created the public impression that he was its agent.
Enrique testified that it was on account of Dr. Ampil's accreditation with PSI
that he conferred with said doctor about his wife's (Natividad's) condition.
After his meeting with Dr. Ampil, Enrique asked Natividad to personally consult
Dr. Ampil. In
effect, when Enrigue and Natividad engaged the services of Dr. Ampil, at the
back of their minds was that the latter was a staff member of a prestigious
hospital. Thus, under the doctrine of apparent authority applied in
Finally, as owner and operator of
PSI is now asking this Court to reconsider the foregoing rulings for these reasons:
The declaration in the 31 January 2007 Decision vis-a-vis the 11 February 2009 Resolution that the ruling in Ramos vs. Court of Appeals (G.R. No. 134354, December 29, 1999) that an employer-employee relations exists between hospital and their consultants stays should be set aside for being inconsistent with or contrary to the import of the resolution granting the hospital's motion for reconsideration in Ramos vs. Court of Appeals (G.R. No. 134354, April 11, 2002), which is applicable to PSI since the Aganas failed to prove an employer-employee relationship between PSI and Dr. Ampil and PSI proved that it has no control over Dr. Ampil. In fact, the trial court has found that there is no employer-employee relationship in this case and that the doctor's are independent contractors.
Respondents Aganas engaged Dr. Miguel Ampil as their doctor and did not primarily and specifically look to the Medical City Hospital (PSI) for medical care and support; otherwise stated, respondents Aganas did not select Medical City Hospital (PSI) to provide medical care because of any apparent authority of Dr. Miguel Ampil as its agent since the latter was chosen primarily and specifically based on his qualifications and being friend and neighbor.
PSI cannot be liable under doctrine of corporate negligence since the proximate cause of Mrs. Agana's injury was the negligence of Dr. Ampil, which is an element of the principle of corporate negligence.
In their respective memoranda, intervenors raise parallel arguments that the Court's ruling on the existence of an employer-employee relationship between private hospitals and consultants will force a drastic and complex alteration in the long-established and currently prevailing relationships among patient, physician and hospital, with burdensome operational and financial consequences and adverse effects on all three parties.
The Aganas comment that the arguments of PSI need no longer be entertained for they have all been traversed in the assailed decision and resolution.
After gathering its thoughts on the issues, this Court holds that PSI is liable to the Aganas, not under the principle of respondeat superior for lack of evidence of an employment relationship with Dr. Ampil but under the principle of ostensible agency for the negligence of Dr. Ampil and, pro hac vice, under the principle of corporate negligence for its failure to perform its duties as a hospital.
While in theory a hospital as a juridical entity cannot practice medicine, in reality it utilizes doctors, surgeons and medical practitioners in the conduct of its business of facilitating medical and surgical treatment. Within that reality, three legal relationships crisscross: (1) between the hospital and the doctor practicing within its premises; (2) between the hospital and the patient being treated or examined within its premises and (3) between the patient and the doctor. The exact nature of each relationship determines the basis and extent of the liability of the hospital for the negligence of the doctor.
Where an employment relationship exists, the hospital may be held vicariously liable under Article 2176 in relation to Article 2180 of the Civil Code or the principle of respondeat superior. Even when no employment relationship exists but it is shown that the hospital holds out to the patient that the doctor is its agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 1431 and Article 1869 of the Civil Code or the principle of apparent authority. Moreover, regardless of its relationship with the doctor, the hospital may be held directly liable to the patient for its own negligence or failure to follow established standard of conduct to which it should conform as a corporation.
This Court still employs the control test to determine the existence of an employer-employee relationship between hospital and doctor. In Calamba Medical Center, Inc. v. National Labor Relations Commission, et al. it held:
Under the "control test", an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task.
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As priorly stated, private respondents maintained specific work-schedules, as determined by petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under pain of administrative sanctions.
That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being enough that it has the right to wield the power. (emphasis supplied)
In the present case, it appears to have escaped the
Court's attention that both the RTC and the CA found no employment relationship
between PSI and Dr. Ampil, and that the Aganas did not question such
finding. In its
PSI, Dr. Ampil and Dr. Fuentes appealed
from the RTC decision but only on the issues of negligence, agency and
corporate liability. In its
The Aganas appealed from the CA decision, but only to question the exoneration of Dr. Fuentes. PSI also appealed from the CA decision, and it was then that the issue of employment, though long settled, was unwittingly resurrected.
In fine, as there was no dispute over the RTC finding that PSI and Dr. Ampil had no employer-employee relationship, such finding became final and conclusive even to this Court. There was no reason for PSI to have raised it as an issue in its petition. Thus, whatever discussion on the matter that may have ensued was purely academic.
Nonetheless, to allay the anxiety of the intervenors, the Court holds that, in this particular instance, the concurrent finding of the RTC and the CA that PSI was not the employer of Dr. Ampil is correct. Control as a determinative factor in testing the employer-employee relationship between doctor and hospital under which the hospital could be held vicariously liable to a patient in medical negligence cases is a requisite fact to be established by preponderance of evidence. Here, there was insufficient evidence that PSI exercised the power of control or wielded such power over the means and the details of the specific process by which Dr. Ampil applied his skills in the treatment of Natividad. Consequently, PSI cannot be held vicariously liable for the negligence of Dr. Ampil under the principle of respondeat superior.
There is, however, ample evidence that the hospital (PSI) held out to the patient (Natividad) that the doctor (Dr. Ampil) was its agent. Present are the two factors that determine apparent authority: first, the hospital's implied manifestation to the patient which led the latter to conclude that the doctor was the hospital's agent; and second, the patients reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence.
Enrique testified that on April 2, 1984, he consulted Dr. Ampil regarding the condition of his wife; that after the meeting and as advised by Dr. Ampil, he asked [his] wife to go to Medical City to be examined by [Dr. Ampil]; and that the next day, April 3, he told his daughter to take her mother to Dr. Ampil. This timeline indicates that it was Enrique who actually made the decision on whom Natividad should consult and where, and that the latter merely acceded to it. It explains the testimony of Natividad that she consulted Dr. Ampil at the instigation of her daughter.
Moreover, when asked what impelled him to choose Dr. Ampil, Enrique testified:
On that particular occasion,
A. First, before that, I have known him to be a specialist on
that part of the body as a surgeon, second, I have known him to be a staff
member of the
the decision made by Enrique for Natividad
to consult Dr. Ampil was significantly influenced by the impression that
Dr. Ampil was a staff member of
PSI's acts tended to confirm and reinforce, rather than negate, Enrique's view. It is of record that PSI required a consent for hospital care to be signed preparatory to the surgery of Natividad. The form reads:
Permission is hereby given to
the medical, nursing and laboratory staff of the
By such statement, PSI virtually reinforced the public impression that Dr. Ampil was a physician of its hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out.
pointed out in its memorandum that Dr. Ampil's hospital affiliation was not the
exclusive basis of the Aganas decision to have Natividad treated in
The Court cannot speculate on
what could have been behind the Aganas decision but would rather adhere
strictly to the fact that, under the circumstances at that time, Enrique decided to consult Dr. Ampil for he believed him to be a staff member of a prominent and known
hospital. After his meeting with Dr. Ampil, Enrique advised his wife Natividad
to go to the
This Court must therefore maintain the ruling that PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent.
Moving on to the next issue, the Court notes that PSI made the following admission in its Motion for Reconsideration:
51. Clearly, not being an agent or employee of petitioner PSI, PSI
[sic] is not liable for Dr. Ampil's acts during the operation. Considering
further that Dr. Ampil was personally engaged as a doctor by Mrs. Agana, it is
incumbent upon Dr. Ampil, as Captain of the Ship, and as the
PSI reiterated its admission when it stated that had Natividad Agana informed the hospital of her discomfort and pain, the hospital would have been obliged to act on it.
The significance of the foregoing statements is critical.
First, they constitute judicial admission by PSI that while it had no power to control the means or method by which Dr. Ampil conducted the surgery on Natividad Agana, it had the power to review or cause the review of what may have irregularly transpired within its walls strictly for the purpose of determining whether some form of negligence may have attended any procedure done inside its premises, with the ultimate end of protecting its patients.
Second, it is a judicial admission that, by virtue of the nature of its business as well as its prominence in the hospital industry, it assumed a duty to tread on the captain of the ship role of any doctor rendering services within its premises for the purpose of ensuring the safety of the patients availing themselves of its services and facilities.
Third, by such admission, PSI defined the standards of its corporate conduct under the circumstances of this case, specifically: (a) that it had a corporate duty to Natividad even after her operation to ensure her safety as a patient; (b) that its corporate duty was not limited to having its nursing staff note or record the two missing gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it, bringing the matter to his attention, and correcting his negligence.
And finally, by such admission, PSI barred itself from arguing in its second motion for reconsideration that the concept of corporate responsibility was not yet in existence at the time Natividad underwent treatment; and that if it had any corporate responsibility, the same was limited to reporting the missing gauzes and did not include taking an active step in fixing the negligence committed. An admission made in the pleading cannot be controverted by the party making such admission and is conclusive as to him, and all proofs submitted by him contrary thereto or inconsistent therewith should be ignored, whether or not objection is interposed by a party.
Given the standard of conduct that PSI defined for itself, the next relevant inquiry is whether the hospital measured up to it.
PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the personal responsibility of informing Natividad about the two missing gauzes. Dr. Ricardo Jocson, who was part of the group of doctors that attended to Natividad, testified that toward the end of the surgery, their group talked about the missing gauzes but Dr. Ampil assured them that he would personally notify the patient about it. Furthermore, PSI claimed that there was no reason for it to act on the report on the two missing gauzes because Natividad Agana showed no signs of complications. She did not even inform the hospital about her discomfort.
The excuses proffered by PSI are totally unacceptable.
To begin with, PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil the duty to review what transpired during the operation. The purpose of such review would have been to pinpoint when, how and by whom two surgical gauzes were mislaid so that necessary remedial measures could be taken to avert any jeopardy to Natividads recovery. Certainly, PSI could not have expected that purpose to be achieved by merely hoping that the person likely to have mislaid the gauzes might be able to retrace his own steps. By its own standard of corporate conduct, PSI's duty to initiate the review was non-delegable.
While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing gauzes, PSI imposed upon itself the separate and independent responsibility of initiating the inquiry into the missing gauzes. The purpose of the first would have been to apprise Natividad of what transpired during her surgery, while the purpose of the second would have been to pinpoint any lapse in procedure that led to the gauze count discrepancy, so as to prevent a recurrence thereof and to determine corrective measures that would ensure the safety of Natividad. That Dr. Ampil negligently failed to notify Natividad did not release PSI from its self-imposed separate responsibility.
Corollary to its non-delegable undertaking to review potential incidents of negligence committed within its premises, PSI had the duty to take notice of medical records prepared by its own staff and submitted to its custody, especially when these bear earmarks of a surgery gone awry. Thus, the record taken during the operation of Natividad which reported a gauze count discrepancy should have given PSI sufficient reason to initiate a review. It should not have waited for Natividad to complain.
As it happened, PSI took no heed of the record of operation and consequently did not initiate a review of what transpired during Natividads operation. Rather, it shirked its responsibility and passed it on to others to Dr. Ampil whom it expected to inform Natividad, and to Natividad herself to complain before it took any meaningful step. By its inaction, therefore, PSI failed its own standard of hospital care. It committed corporate negligence.
It should be borne in mind that the corporate negligence ascribed to PSI is different from the medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those of the doctor-consultant practicing within its premises in relation to the patient; hence, the failure of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil.
All this notwithstanding, we make it clear that PSIs hospital liability based on ostensible agency and corporate negligence applies only to this case, pro hac vice. It is not intended to set a precedent and should not serve as a basis to hold hospitals liable for every form of negligence of their doctors-consultants under any and all circumstances. The ruling is unique to this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an admitted corporate duty to Natividad.
Other circumstances peculiar to this case warrant this ruling, not the least of which being that the agony wrought upon the Aganas has gone on for 26 long years, with Natividad coming to the end of her days racked in pain and agony. Such wretchedness could have been avoided had PSI simply done what was logical: heed the report of a guaze count discrepancy, initiate a review of what went wrong and take corrective measures to ensure the safety of Nativad. Rather, for 26 years, PSI hemmed and hawed at every turn, disowning any such responsibility to its patient. Meanwhile, the options left to the Aganas have all but dwindled, for the status of Dr. Ampil can no longer be ascertained.
taking all the equities of this case into consideration, this Court believes
million would be a fair and reasonable liability of PSI, subject to 12% p.a.
interest from the finality of this resolution to full satisfaction.
WHEREFORE, the second motion for reconsideration is DENIED and the motions for intervention are NOTED.
Professional Services, Inc. is ORDERED
pro hac vice to
pay Natividad (substituted by her children
Marcelino Agana III, Enrique Agana, Jr., Emma Agana-Andaya, Jesus Agana and
Raymund Agana) and Enrique Agana the total amount of
P15 million, subject to
12% p.a. interest from the finality of this resolution to full satisfaction.
No further pleadings by any party shall be entertained in this case.
Let the long-delayed entry of judgment be made in this case upon receipt by all concerned parties of this resolution.
RENATO C. CORONA
REYNATO S. PUNO
ANTONIO T. CARPIO
CONCHITA CARPIO MORALES
PRESBITERO J. VELASCO, JR.
ANTONIO EDUARDO B. NACHURA
TERESITA J. LEONARDO-DE CASTRO
ARTURO D. BRION
DIOSDADO M. PERALTA
LUCAS P. BERSAMIN
(On Official Leave)
ROBERTO A. ABAD
MARTIN S. VILLARAMA, JR. JOSE P. PEREZ
Associate Justice Associate Justice
JOSE C. MENDOZA
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.
REYNATO S. PUNO
* No part.
** On leave.
 Rollo (G.R. No. 126297), p. 468.
 Filed a motion for leave of court to intervene (by way of attached memorandum), id., p. 512.
 Filed a motion to intervene and for leave to file memorandum-in-intervention, id., p. 534. AHI did not file any memorandum.
 Filed a motion for intervention (by way of attached brief/memorandum), id., p. 602.
 Resolution dated
 Resolution dated
 Resolution dated
 As per Advisory dated
 Docketed as Civil Case No. Q-43322, record, p. 6.
 Also referred to in the records as sponges.
 Penned by then Presiding Judge and now Associate Justice of the Supreme Court Lucas Bersamin.
 RTC Decision, record, p. 133.
 CA decision dated September 6, 1996, penned by then Court of Appeals Associate Justice and later Supreme Court Associate Justice Cancio Garcia (Ret.); CA rollo, pp. 136-137.
 Rollo, p. 403.
 G.R. Nos. 126297/126467/127590,
 G.R. No. 124354,
 Supra at 15, p. 499.
 G.R. No. 124354,
 Supra at 17, p. 179.
 Supra at 15, p. 502.
 Supra at 17, p. 181,
 G.R. No. 142625,
 Supra at 15, p. 505.
 Supra at 17, p. 182.
 Rollo (G.R. No. 126297), pp. 489-490.
 Section 8, Republic Act No. 2382 (RA 2382) or The Medical Act of 1959.
 See Acebedo Optical Co. Inc. v. CA, G.R. No. 100152,
 Article 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.
 Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company.
The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.
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.
 Article 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.
 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.
 Nogales v. Capitol Medical Center, et al., supra at 25.
 Pedro Solis, Medical Jurisprudence (The Practice of Medicine and the
 G.R. No. 176484,
 Supra at 18.
 Supra at 20.
 Supra at 13, p. 126.
 Dr. Fuentes filed with the CA a petition for certiorari docketed as CA-G.R. SP No. 32198 (CA rollo, p. 1) while Dr. Ampil and PSI jointly filed an appeal docketed as CA-G.R. CV No. 42062 (CA rollo, pp. 40 and 152).
 Supra at 14, p. 135.
 Rollo (G.R. No. 126467), p. 8.
 Elsie Ang v. Dr. Erniefel
G.R. No. 166239,
 Through the patient's husband Enrique.
 Nogales v. Capitol Medical Center, et al., supra at 25.
 Second Motion for Reconsideration, rollo, pp. 495-496.
 Supra at 50, pp. 25-26.
 Exh. D-1, Exhibit Folder for Plaintiffs, p. 92.
 Petitioner's Memorandum with Compliance, pp. 57-58.
 Motion for Reconsideration, rollo, pp. 429-430.
 PSI has not denied its prominent place in the hospital industry but has
in fact asserted such role in its 1967 brochure
(Annex K to its Manifestation filed on
 Rollo, p. 505-506.
 Luciano Tan v. Rodil Enterprises, G. R. No. 168071, 18 December 2006, 511 SCRA 162; Heirs of Pedro Clemena Y Zurbano v. Heirs of Irene B. Bien, G.R. No. 155508, 11 September 2006, 501 SCRA 405.
 Second Motion for Reconsideration, rollo, pp. 502-503.
 Supra at 55.
 In Partido ng
Manggagawa (PM) and Butil Farmers Party (Butil) v. Comelec (G.R. No. 164702,
Sps. Chua v. Hon. Jacinto Ang, et al.,
G.R. No. 156164,
 His last pleading was filed on