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PROFESSIONAL SERVICES, INC. VS.

AGANA
January 31, 2007 February 11, 2008 February 2, 2010

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, 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 at the Medical City General Hospital. PSI was impleaded as owner, operator and manager of the hospital.

Issue
Whether

manager of Medical City General Hospital, liable for damages? YES.

or not PSI, owner, operator and

RTC Action A complaint for damages against PSI, Dr. Ampil, Dr. Fuentes

CA Appeal to the decision of RTC

Jan 31 2007 February 11, 2008 Review on Certiorari of the decision of CA Motion For reconsiderati on of a decision in SC

February 2, 2010 Second Motion For reconsiderati on of a decision in SC

Decision In favor of Agana

Respondeat Superior

Control Test Hospitals exercise significant control in the hiring and firing of consultants and in the conduct of their work within the hospital premises. 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.

RTC
Respondeat Superior (existence of employeremployee relationship) Art. 2180 NCC

CA

Jan 31 2007

February 11, 2008

February 2, 2010

of responsibility, maintaining that the evidenceexercise exercised over their that PSI real control consultants, like Dr. Ampil, are power of and visiting consultant attendingcontrol Defendant doctors were not "independent contractors," not staff. employees of hospital. employees of thePSI in its hospital, PSI cannot be held vicariously liable they being merely Dr. Ampil under for the negligence ofconsultants For the purpose of allocating Even assuming that Dr. Ampil is not the principle of respondeat superior. responsibility in medical The Agana never questionednegligence an employee of Medical City, but an cases, an employer-employee independent contractor, still on the matter such finding. in effect exists Whatever discussion the said relationship hospital ismay have ensued was purely that liable to the Aganas. academic.

RTC and the CA found no Made reference to RTC and CA employment relationship PSI merely offered a general denial findings. Here, there was insufficient and betweenPrivate hospitals, hire, fire PSI and Dr. Ampil

Ostensible 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. in cases where it can be shown that
1. 2.

3.

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 physicians negligence.

Jan 31 2007
Apparent Authority Ostensible Agency

February 11, 2008

February 2, 2010

Test: Applicable. PSI argues that the doctrine of Even when no employment apparent authority cannot apply to whether Present are the two factors that the principal has by his We concur but it is Court that because relationship existsestablish Agana failed to with the shownof Holding Out voluntary act placed the agent in determine apparent authority: the reliance. conclusion that it "is now Appeals proof of theirhospital holds out to the patient theory such a situation hospital's implied 1. the that a person of that the doctorfrom agent, the the blame estopped is its passing all ordinary prudence, conversant with manifestation to the patient Article 1869 NCC hospital may still The argumentto the merit.be vicariously liable lacks physicians. business usages and the nature to conclude which led the latter of under Article 2176 in relation to the particular business, is justified in hospital's that the doctor was the Article 1431 and testified By accrediting Dr. 1869 Atty. Agana categoricallyArticle Ampil and Dr. presuming that such agent has agent; Fuentes and publicly advertising their that one of the reasons why he authority2. the patientsparticularupon the to perform the reliance There is, however, ample evidence qualifications, knew chose Dr. Ampil was that he the hospital created act in question. conduct of the hospital and the that the hospital of Medical were its the impression that they him to be a staff member (PSI) held out to the doctor, consistent with ordinary patient (Natividad) that the doctor agents, known City, a prominent andauthorized to perform In these cases, the circumstances care and prudence. medical or surgical hospital. (Dr. Ampil) was its agent.services for its yield a positive answer to the patients. question.
Agency by Estoppel

Doctrine of Corporate Negligence


As

the judicial answer to the problem of allocating hospitals liability for the negligent acts of health practitioners, absent facts to support the application of respondeat superior or apparent authority.

Jan 31 2007

February 11, 2008

February 2, 2010

Doctrine of Corporate Negligence or Corporate duty of providing qualityPSI failed to perform such Unfortunately, medical The duty. PSI excuses itself service is no longer the solefrom fulfilling its Responsibilit corporate duty on of ground that prerogative and responsibilitythethe y Failure of PSI, Applicable. despite the failed That Dr. assumed the personal to physician. Dr. Ampil Ampil negligently attending nurses report, notify Natividad to investigate and inform did not release PSI responsibility of informing Natividad Natividad PSI operates the from the two missing gauzes about its self-imposed separate Dr. Jocson, a member of PSIs Medical City responsibility.operator of the hospital, has medical staff, Hospital for the purpose and under who as the PSI, testified on the concept of providing While Dr. Ampil may have whether the hospital conducted an had the of the actual or constructive knowledge comprehensive medicalthat the It was responsibility mind services primary evasive. procedures carried out investigation, should be borne inof notifying corporate negligence ascribed to PSI Natividad about the missing gauzes, Accordingly, it breach Not lack of the medical is imposed did PSIhas the separate Dr. JocsonPSI different fromconcern its duties to showedonly upon itselfthe duty to oversee or supervise exercise reasonable care to protect negligence attributed to Dr. Ampil and independent responsibility of for the patients. Such conduct is all persons who practice medicine within from the inquiry into of its walls, it also initiating harm all patients admitted reflective of the hospitals manner the missing into failed to take an active step in fixing the medical gauzes. supervision. its facility forcommittedtreatment. negligence

RTC Liability PSI solidarily liable with Dr. Ampil and Dr. Fuentes for damages

CA

Jan 31 2007

February 11, 2008 Court premised the direct liability of PSI to the Aganas.

February 2, 2010 Direct Liability of 15 million subject to 12% interest

absolved Dr. affirmed Fuentes but the CA affirmed the decision liability of Dr. Ampil and PSI, subject to the right of PSI to claim reimbursem ent from Dr. Ampil

Note: in 2010 decision

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 doctorsconsultants under any and all circumstances.

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