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epublic of the Philippines



G.R. No. 126297 January 31, 2007




G.R. No. 126467 January 31, 2007

AGANA, Petitioners,
JUAN FUENTES, Respondent.

x- - - - - - - - - - - - - - - - - - - -- - - - x

G.R. No. 127590 January 31, 2007

MIGUEL AMPIL, Petitioner,




Hospitals, having undertaken one of mankind’s most important and delicate endeavors, must assume
the grave responsibility of pursuing it with appropriate care. The care and service dispensed through
this high trust, however technical, complex and esoteric its character may be, must meet standards of
responsibility commensurate with the undertaking to preserve and protect the health, and indeed, the
very lives of those placed in the hospital’s keeping.1

Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals’
Decision2 dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198 affirming
with modification the Decision3dated March 17, 1993 of the Regional Trial Court (RTC), Branch 96,
Quezon City in Civil Case No. Q-43322 and nullifying its Order dated September 21, 1993.

The facts, as culled from the records, are:

On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital (Medical City
Hospital) because of difficulty of bowel movement and bloody anal discharge. After a series of
medical examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590, diagnosed her to be suffering
from "cancer of the sigmoid."

On April 11, 1984, Dr. Ampil, assisted by the medical staff 4 of the Medical City Hospital, performed an
anterior resection surgery on Natividad. He found that the malignancy in her sigmoid area had spread
on her left ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the
consent of Natividad’s husband, Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No.
126467, to perform hysterectomy on her.

After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation and
closed the incision.
However, the operation appeared to be flawed. In the corresponding Record of Operation dated April
11, 1984, the attending nurses entered these remarks:

"sponge count lacking 2

"announced to surgeon searched (sic) done but to no avail continue for closure."

On April 24, 1984, Natividad was released from the hospital. Her hospital and medical bills, including
the doctors’ fees, amounted to P60,000.00.

After a couple of days, Natividad complained of excruciating pain in her anal region. She consulted
both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural 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.

On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two weeks
thereafter, her daughter found a piece of gauze protruding from her vagina. Upon being informed
about it, Dr. Ampil proceeded to her house where he managed to extract by hand a piece of gauze
measuring 1.5 inches in width. He then assured her that the pains would soon vanish.

Dr. Ampil’s assurance did not come true. Instead, the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected the
presence of another foreign object in her vagina -- a foul-smelling gauze measuring 1.5 inches in
width which badly infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive
organs which forced stool to excrete through the vagina. Another surgical operation was needed to
remedy the damage. Thus, in October 1984, Natividad underwent another surgery.

On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon City a
complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical City
Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the
latter are liable for negligence for leaving two pieces of gauze inside Natividad’s body and malpractice
for concealing their acts of negligence.

Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr. Fuentes,
docketed as Administrative Case No. 1690. The PRC Board of Medicine heard the case only with
respect to Dr. Fuentes because it failed to acquire jurisdiction over Dr. Ampil who was then in the
United States.

On February 16, 1986, pending the outcome of the above cases, Natividad died and was duly
substituted by her above-named children (the Aganas).

On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil and
Dr. Fuentes liable for negligence and malpractice, the decretal part of which reads:

WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants
plaintiffs, jointly and severally, except in respect of the award for exemplary damages and the interest
thereon which are the liabilities of defendants Dr. Ampil and Dr. Fuentes only, as follows:

1. As actual damages, the following amounts:

a. The equivalent in Philippine Currency of the total of US$19,900.00 at the rate of

P21.60-US$1.00, as reimbursement of actual expenses incurred in the United States of

b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician daughter;
c. The total sum of P45,802.50, representing the cost of hospitalization at Polymedic
Hospital, medical fees, and cost of the saline solution;

2. As moral damages, the sum of P2,000,000.00;

3. As exemplary damages, the sum of P300,000.00;

4. As attorney’s fees, the sum of P250,000.00;

5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of the
complaint until full payment; and

6. Costs of suit.


Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals, docketed as
CA-G.R. CV No. 42062.

Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial execution of its
Decision, which was granted in an Order dated May 11, 1993. Thereafter, the sheriff levied upon
certain properties of Dr. Ampil and sold them for P451,275.00 and delivered the amount to the

Following their receipt of the money, the Aganas entered into an agreement with PSI and Dr. Fuentes
to indefinitely suspend any further execution of the RTC Decision. However, not long thereafter, the
Aganas again filed a motion for an alias writ of execution against the properties of PSI and Dr.
Fuentes. On September 21, 1993, the RTC granted the motion and issued the corresponding writ,
prompting Dr. Fuentes to file with the Court of Appeals a petition for certiorari and prohibition, with
prayer for preliminary injunction, docketed as CA-G.R. SP No. 32198. During its pendency, the Court
of Appeals issued a Resolution5 dated October 29, 1993 granting Dr. Fuentes’ prayer for injunctive

On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.

Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision6 in Administrative
Case No. 1690 dismissing the case against Dr. Fuentes. The Board held that the prosecution failed to
show that Dr. Fuentes was the one who left the two pieces of gauze inside Natividad’s body; and that
he concealed such fact from Natividad.

On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R. CV
No. 42062 and CA-G.R. SP No. 32198, thus:

WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan
Fuentes is hereby DISMISSED, and with the pronouncement that defendant-appellant Dr. Miguel
Ampil is liable to reimburse defendant-appellant Professional Services, Inc., whatever amount the
latter will pay or had paid to the plaintiffs-appellees, the decision appealed from is hereby AFFIRMED
and the instant appeal DISMISSED.

Concomitant with the above, the petition for certiorari and prohibition filed by herein defendant-
appellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and the challenged order
of the respondent judge dated September 21, 1993, as well as the alias writ of execution issued
pursuant thereto are hereby NULLIFIED and SET ASIDE. The bond posted by the petitioner in
connection with the writ of preliminary injunction issued by this Court on November 29, 1993 is
hereby cancelled.

Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.


Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution 7 dated December
19, 1996.
Hence, the instant consolidated petitions.

In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals erred in holding that: (1) it is
estopped from raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable with Dr.
Ampil; and (3) it is not entitled to its counterclaim against the Aganas. PSI contends that Dr. Ampil is
not its employee, but a mere consultant or independent contractor. As such, he alone should answer
for his negligence.

In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that Dr. Fuentes is
not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They
contend that the pieces of gauze are prima facie proofs that the operating surgeons have been

Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding him liable for
negligence and malpractice sans evidence that he left the two pieces of gauze in Natividad’s vagina.
He pointed to other probable causes, such as: (1) it was Dr. Fuentes who used gauzes in performing
the hysterectomy; (2) the attending nurses’ failure to properly count the gauzes used during surgery;
and (3) the medical intervention of the American doctors who examined Natividad in the United
States of America.

For our resolution are these three vital issues: first, whether the Court of Appeals erred in holding Dr.
Ampil liable for negligence and malpractice; second, whether the Court of Appeals erred in absolving
Dr. Fuentes of any liability; and third, whether PSI may be held solidarily liable for the negligence of
Dr. Ampil.

I - G.R. No. 127590

Whether the Court of Appeals Erred in Holding Dr. Ampil

Liable for Negligence and Malpractice.

Dr. Ampil, in an attempt to absolve himself, gears the Court’s attention to other possible causes of
Natividad’s detriment. He argues that the Court should not discount either of the following
possibilities: first, Dr. Fuentes left the gauzes in Natividad’s body after performing hysterectomy;
second, the attending nurses erred in counting the gauzes; and third, the American doctors were the
ones who placed the gauzes in Natividad’s body.

Dr. Ampil’s arguments are purely conjectural and without basis. Records show that he did not present
any evidence to prove that the American doctors were the ones who put or left the gauzes in
Natividad’s body. Neither did he submit evidence to rebut the correctness of the record of operation,
particularly the number of gauzes used. As to the alleged negligence of Dr. Fuentes, we are mindful
that Dr. Ampil examined his (Dr. Fuentes’) work and found it in order.

The glaring truth is that all the major circumstances, taken together, as specified by the Court of
Appeals, directly point to Dr. Ampil as the negligent party, thus:

First, it is not disputed that the surgeons used gauzes as sponges to control the bleeding of the
patient during the surgical operation.

Second, immediately after the operation, the nurses who assisted in the surgery noted in their
report that the ‘sponge count (was) lacking 2’; that such anomaly was ‘announced to surgeon’
and that a ‘search was done but to no avail’ prompting Dr. Ampil to ‘continue for closure’ x 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.8 To put it simply, such act is considered so inconsistent with due care as to raise an
inference of negligence. There are even legions of authorities to the effect that such act is negligence
per se.9
Of course, the Court is not blind to the reality that there are times when danger to a patient’s life
precludes a surgeon from further searching missing sponges or foreign objects left in the body. But
this does not leave him free from any obligation. Even if it has been shown that a surgeon was
required by the urgent necessities of the case to leave a sponge in his patient’s abdomen, because of
the dangers attendant upon delay, still, it is his legal duty to so inform his patient within a reasonable
time thereafter by advising her of what he had been compelled to do. This is in order that she might
seek relief from the effects of the foreign object left in her body as her condition might permit. The
ruling in Smith v. Zeagler10 is explicit, thus:

The removal of all sponges used is part of a surgical operation, and when a physician or surgeon fails
to remove a sponge he has placed in his patient’s body that should be removed as part of the
operation, he thereby leaves his operation uncompleted and creates a new condition which imposes
upon him the legal duty of calling the new condition to his patient’s attention, and endeavoring with
the means he has at hand to minimize and avoid untoward results likely to ensue therefrom.

Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he even
misled her that the pain she was experiencing was the ordinary consequence of her operation. Had
he been more candid, Natividad could have taken the immediate and appropriate medical remedy to
remove the gauzes from her body. To our mind, what was initially an act of negligence by Dr. Ampil
has ripened into a deliberate wrongful act of deceiving his patient.

This is a clear case of medical malpractice or more appropriately, medical negligence. To

successfully pursue this kind of case, a patient must only prove that a health care provider either
failed to do something which a reasonably prudent health care provider would have done, or that he
did something that a reasonably prudent provider would not have done; and that failure or action
caused injury to the patient.11 Simply put, the elements are duty, breach, injury and proximate
causation. Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects, such as gauzes,
from Natividad’s body before closure of the incision. When he failed to do so, it was his duty to inform
Natividad about it. Dr. Ampil breached both duties. Such breach caused injury to Natividad,
necessitating her further examination by American doctors and another surgery. That Dr. Ampil’s
negligence is the proximate cause12 of Natividad’s injury could be traced from his act of closing the
incision despite the information given by the attending nurses that two pieces of gauze were still
missing. That they were later on extracted from Natividad’s vagina established the causal link
between Dr. Ampil’s negligence and the injury. And what further aggravated such injury was his
deliberate concealment of the missing gauzes from the knowledge of Natividad and her family.

II - G.R. No. 126467

Whether the Court of Appeals Erred in Absolving

Dr. Fuentes of any Liability

The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the ground
that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the two pieces of
gauze were left inside Natividad’s body is a prima facie evidence of Dr. Fuentes’ negligence.

We are not convinced.

Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a
presumption of negligence, or make out a plaintiff’s prima facie case, and present a question of fact
for defendant to meet with an explanation.13 Stated differently, where the thing which caused the
injury, without the fault of the injured, is under the exclusive control of the defendant and the injury is
such that it should not have occurred if he, having such control used proper care, it affords
reasonable evidence, in the absence of explanation that the injury arose from the defendant’s want of
care, and the burden of proof is shifted to him to establish that he has observed due care and

From the foregoing statements of the rule, the requisites for the applicability of the doctrine of res ipsa
loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury was under the
control and management of the defendant; (3) the occurrence was such that in the ordinary course of
things, would not have happened if those who had control or management used proper care; and (4)
the absence of explanation by the defendant. Of the foregoing requisites, the most instrumental is the
"control and management of the thing which caused the injury." 15

We find the element of "control and management of the thing which caused the injury" to be wanting.
Hence, the doctrine of res ipsa loquitur will not lie.

It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil) found that
the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes performed the surgery
and thereafter reported and showed his work to Dr. Ampil. The latter examined it and finding
everything to be in order, allowed Dr. Fuentes to leave the operating room. Dr. Ampil then resumed
operating on Natividad. He was about to finish the procedure when the attending nurses informed him
that two pieces of gauze were missing. A "diligent search" was conducted, but the misplaced gauzes
were not found. Dr. Ampil then directed that the incision be closed. During this entire period, Dr.
Fuentes was no longer in the operating room and had, in fact, left the hospital.

Under the "Captain of the Ship" rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation. Their duty is to obey his orders. 16 As
stated before, Dr. Ampil was the lead surgeon. In other words, he was the "Captain of the Ship." That
he discharged such role is evident from his following conduct: (1) calling Dr. Fuentes to perform a
hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order; (3) granting Dr. Fuentes’
permission to leave; and (4) ordering the closure of the incision. To our mind, it was this act of
ordering the closure of the incision notwithstanding that two pieces of gauze remained unaccounted
for, that caused injury to Natividad’s body. Clearly, the control and management of the thing which
caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.

In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se create or
constitute an independent or separate ground of liability, being a mere evidentiary rule. 17 In other
words, mere invocation and application of the doctrine does not dispense with the requirement of
proof of negligence. Here, the negligence was proven to have been committed by Dr. Ampil and not
by Dr. Fuentes.

III - G.R. No. 126297

Whether PSI Is Liable for the Negligence of Dr. Ampil

The third issue necessitates a glimpse at the historical development of hospitals and the resulting
theories concerning their liability for the negligence of physicians.

Until the mid-nineteenth century, hospitals were generally charitable institutions, providing medical
services to the lowest classes of society, without regard for a patient’s ability to pay. 18 Those who
could afford medical treatment were usually treated at home by their doctors.19 However, the days of
house calls and philanthropic health care are over. The modern health care industry continues to
distance itself from its charitable past and has experienced a significant conversion from a not-for-
profit health care to for-profit hospital businesses. Consequently, significant changes in health law
have accompanied the business-related changes in the hospital industry. One important legal change
is an increase in hospital liability for medical malpractice. Many courts now allow claims for hospital
vicarious liability under the theories of respondeat superior, apparent authority, ostensible authority,
or agency by estoppel. 20

In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the Civil Code,
which reads:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

A derivative of this provision is Article 2180, the rule governing vicarious liability under the doctrine of
respondeat superior, thus:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom one is responsible.
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

x x x x x x

The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage.

A prominent civilist commented that professionals engaged by an employer, such as physicians,

dentists, and pharmacists, are not "employees" under this article because the manner in which they
perform their work is not within the control of the latter (employer). In other words, professionals are
considered personally liable for the fault or negligence they commit in the discharge of their duties,
and their employer cannot be held liable for such fault or negligence. In the context of the present
case, "a hospital cannot be held liable for the fault or negligence of a physician or surgeon in the
treatment or operation of patients."21

The foregoing view is grounded on the traditional notion that the professional status and the very
nature of the physician’s calling preclude him from being classed as an agent or employee of a
hospital, whenever he acts in a professional capacity.22 It has been said that medical practice strictly
involves highly developed and specialized knowledge,23 such that physicians are generally free to
exercise their own skill and judgment in rendering medical services sans interference.24 Hence, when
a doctor practices medicine in a hospital setting, the hospital and its employees are deemed to
subserve him in his ministrations to the patient and his actions are of his own responsibility.25

The case of Schloendorff v. Society of New York Hospital26 was then considered an authority for this
view. The "Schloendorff doctrine" regards a physician, even if employed by a hospital, as an
independent contractor because of the skill he exercises and the lack of control exerted over his
work. Under this doctrine, hospitals are exempt from the application of the respondeat superior
principle for fault or negligence committed by physicians in the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened with the significant developments in
medical care. Courts came to realize that modern hospitals are increasingly taking active role in
supplying and regulating medical care to patients. No longer were a hospital’s functions limited to
furnishing room, food, facilities for treatment and operation, and attendants for its patients. Thus, in
Bing v. Thunig,27 the New York Court of Appeals deviated from the Schloendorff doctrine, noting that
modern hospitals actually do far more than provide facilities for treatment. Rather, they regularly
employ, on a salaried basis, a large staff of physicians, interns, nurses, administrative and manual
workers. They charge patients for medical care and treatment, even collecting for such services
through legal action, if necessary. The court then concluded that there is no reason to exempt
hospitals from the universal rule of respondeat superior.

In our shores, the nature of the relationship between the hospital and the physicians is rendered
inconsequential in view of our categorical pronouncement in Ramos v. Court of Appeals 28 that for
purposes of apportioning responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians. This Court

"We now discuss the responsibility of the hospital in this particular incident. The unique practice
(among private hospitals) of filling up specialist staff with attending and visiting "consultants," who are
allegedly not hospital employees, presents problems in apportioning responsibility for negligence in
medical malpractice cases. However, the difficulty is more apparent than real.

In the first place, hospitals exercise significant control in the hiring and firing of consultants and in the
conduct of their work within the hospital premises. Doctors who apply for ‘consultant’ slots, visiting or
attending, are required to submit proof of completion of residency, their educational qualifications,
generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in
most cases, and references. These requirements are carefully scrutinized by members of the hospital
administration or by a review committee set up by the hospital who either accept or reject the
application. x x x.

After a physician is accepted, either as a visiting or attending consultant, he is normally required to

attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients
into the hospital. In addition to these, the physician’s performance as a specialist is generally
evaluated by a peer review committee on the basis of mortality and morbidity statistics, and feedback
from patients, nurses, interns and residents. A consultant remiss in his duties, or a consultant who
regularly falls short of the minimum standards acceptable to the hospital or its peer review committee,
is normally politely terminated.

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting
‘consultant’ staff. While ‘consultants’ are not, technically employees, x x x, the control exercised, the
hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-
employee relationship, with the exception of the payment of wages. In assessing whether such a
relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing,
we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals and their attending and visiting physicians. "

But the Ramos pronouncement is not our only basis in sustaining PSI’s liability. Its liability is also
anchored upon the agency principle of apparent authority or agency by estoppel and the doctrine of
corporate negligence which have gained acceptance in the determination of a hospital’s liability for
negligent acts of health professionals. The present case serves as a perfect platform to test the
applicability of these doctrines, thus, enriching our jurisprudence.

Apparent authority, or what is sometimes referred to as the "holding

out" theory, or doctrine of ostensible agency or agency by estoppel, 29 has its origin from the law of
agency. It imposes liability, not as the result of the reality of a contractual relationship, but rather
because of the actions of a principal or an employer in somehow misleading the public into believing
that the relationship or the authority exists.30 The concept is essentially one of estoppel and has been
explained in this manner:

"The principal is bound by the acts of his agent with the apparent authority which he knowingly
permits the agent to assume, or which he holds the agent out to the public as possessing. The
question in every case is whether the principal has by his voluntary act placed the agent in such a
situation that a person of ordinary prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has authority to perform the particular act
in question.31

The applicability of apparent authority in the field of hospital liability was upheld long time ago in Irving
v. Doctor Hospital of Lake Worth, Inc.32 There, it was explicitly stated that "there does not appear to
be any rational basis for excluding the concept of apparent authority from the field of hospital liability."
Thus, in cases where it can be shown that a hospital, by its actions, has held out a particular
physician as its agent and/or employee and that a patient has accepted treatment from that physician
in the reasonable belief that it is being rendered in behalf of the hospital, then the hospital will be
liable for the physician’s negligence.

Our jurisdiction recognizes the concept of an agency by implication or estoppel. Article 1869 of the
Civil Code reads:

ART. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack
of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf
without authority.

In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and
specializations of the physicians associated or accredited by it, including those of Dr. Ampil and Dr.
Fuentes. We concur with the Court of Appeals’ conclusion that it "is now estopped from passing all
the blame to the physicians whose names it proudly paraded in the public directory leading the public
to believe that it vouched for their skill and competence." Indeed, PSI’s act is tantamount to holding
out to the public that Medical City Hospital, through its accredited physicians, offers quality health
care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications,
the hospital created the impression that they were its agents, authorized to perform medical or
surgical services for its patients. As expected, these patients, Natividad being one of them, accepted
the services on the reasonable belief that such were being rendered by the hospital or its employees,
agents, or servants. The trial court correctly pointed out:

x x x regardless of the education and status in life of the patient, he ought not be burdened with the
defense of absence of employer-employee relationship between the hospital and the independent
physician whose name and competence are certainly certified to the general public by the hospital’s
act of listing him and his specialty in its lobby directory, as in the case herein. The high costs of
today’s medical and health care should at least exact on the hospital greater, if not broader, legal
responsibility for the conduct of treatment and surgery within its facility by its accredited physician or
surgeon, regardless of whether he is independent or employed." 33

The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are capable
of acting only through other individuals, such as physicians. If these accredited physicians do their job
well, the hospital succeeds in its mission of offering quality medical services and thus profits
financially. Logically, where negligence mars the quality of its services, the hospital should not be
allowed to escape liability for the acts of its ostensible agents.

We now proceed to the doctrine of corporate negligence or corporate responsibility.

One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is that PSI
as owner, operator and manager of Medical City Hospital, "did not perform the necessary supervision
nor exercise diligent efforts in the supervision of Drs. Ampil and Fuentes and its nursing staff, resident
doctors, and medical interns who assisted Drs. Ampil and Fuentes in the performance of their duties
as surgeons."34 Premised on the doctrine of corporate negligence, the trial court held that PSI is
directly liable for such breach of duty.

We agree with the trial court.

Recent years have seen the doctrine of corporate negligence as the judicial answer to the problem of
allocating hospital’s liability for the negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation proceeds from the judiciary’s
acknowledgment that in these modern times, the duty of providing quality medical service is no longer
the sole prerogative and responsibility of the physician. The modern hospitals have changed
structure. Hospitals now tend to organize a highly professional medical staff whose competence and
performance need to be monitored by the hospitals commensurate with their inherent responsibility to
provide quality medical care.35

The doctrine has its genesis in Darling v. Charleston Community Hospital.36 There, the Supreme
Court of Illinois held that "the jury could have found a hospital negligent, inter alia, in failing to have a
sufficient number of trained nurses attending the patient; failing to require a consultation with or
examination by members of the hospital staff; and failing to review the treatment rendered to the
patient." On the basis of Darling, other jurisdictions held that a hospital’s corporate negligence
extends to permitting a physician known to be incompetent to practice at the hospital. 37 With the
passage of time, more duties were expected from hospitals, among them: (1) the use of reasonable
care in the maintenance of safe and adequate facilities and equipment; (2) the selection and retention
of competent physicians; (3) the overseeing or supervision of all persons who practice medicine
within its walls; and (4) the formulation, adoption and enforcement of adequate rules and policies that
ensure quality care for its patients.38 Thus, in Tucson Medical Center, Inc. v. Misevich,39 it was held
that a hospital, following the doctrine of corporate responsibility, has the duty to see that it meets the
standards of responsibilities for the care of patients. Such duty includes the proper supervision of the
members of its medical staff. And in Bost v. Riley,40 the court concluded that a patient who enters a
hospital does so with the reasonable expectation that it will attempt to cure him. The hospital
accordingly has the duty to make a reasonable effort to monitor and oversee the treatment prescribed
and administered by the physicians practicing in its premises.
In the present case, it was duly established that PSI operates the Medical City Hospital for the
purpose and under the concept of providing comprehensive medical services to the public.
Accordingly, it has the duty to exercise reasonable care to protect from harm all patients admitted into
its facility for medical treatment. Unfortunately, PSI failed to perform such duty. The findings of the
trial court are convincing, thus:

x x x PSI’s liability is traceable to its failure to conduct an investigation of the matter reported in the
nota bene of the count nurse. Such failure established PSI’s part in the dark conspiracy of silence and
concealment about the gauzes. Ethical considerations, if not also legal, dictated the holding of an
immediate inquiry into the events, if not for the benefit of the patient to whom the duty is primarily
owed, then in the interest of arriving at the truth. The Court cannot accept that the medical and the
healing professions, through their members like defendant surgeons, and their institutions like PSI’s
hospital facility, can callously turn their backs on and disregard even a mere probability of mistake or
negligence by refusing or failing to investigate a report of such seriousness as the one in Natividad’s

It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of the
Medical City Hospital’s staff, composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator of the hospital, has actual or constructive knowledge
of the procedures carried out, particularly the report of the attending nurses that the two pieces of
gauze were missing. In Fridena v. Evans,41 it was held that a corporation is bound by the knowledge
acquired by or notice given to its agents or officers within the scope of their authority and in reference
to a matter to which their authority extends. This means that the knowledge of any of the staff of
Medical City Hospital constitutes knowledge of PSI. Now, the failure of PSI, despite the attending
nurses’ report, to investigate and inform Natividad regarding the missing gauzes amounts to callous
negligence. Not only did PSI breach its duties to oversee or supervise all persons who practice
medicine within its walls, it also failed to take an active step in fixing the negligence committed. This
renders PSI, not only vicariously liable for the negligence of Dr. Ampil under Article 2180 of the Civil
Code, but also directly liable for its own negligence under Article 2176. In Fridena, the Supreme Court
of Arizona held:

x x x In recent years, however, the duty of care owed to the patient by the hospital has expanded.
The emerging trend is to hold the hospital responsible where the hospital has failed to monitor and
review medical services being provided within its walls. See Kahn Hospital Malpractice Prevention, 27
De Paul . Rev. 23 (1977).

Among the cases indicative of the ‘emerging trend’ is Purcell v. Zimbelman, 18 Ariz. App. 75,500 P.
2d 335 (1972). In Purcell, the hospital argued that it could not be held liable for the malpractice of a
medical practitioner because he was an independent contractor within the hospital. The Court of
Appeals pointed out that the hospital had created a professional staff whose competence and
performance was to be monitored and reviewed by the governing body of the hospital, and the court
held that a hospital would be negligent where it had knowledge or reason to believe that a doctor
using the facilities was employing a method of treatment or care which fell below the recognized
standard of care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of medical care furnished to patients within its walls and
it must meet the standards of responsibility commensurate with this undertaking. Beeck v. Tucson
General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court has confirmed the rulings of
the Court of Appeals that a hospital has the duty of supervising the competence of the doctors on its
staff. x x x.

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 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

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.