G.R. No. 126297. January 31, 2007.

PROFESSIONAL SERVICES, INC., petitioner, vs. NATIVIDAD and ENRIQUE AGANA,

respondents.
G.R. No. 126467. January 31, 2007. *

NATIVIDAD and ENRIQUE AGANA, respondents. NATIVIDAD (Substituted by her children

MARCELINO AGANA III, ENRIQUE AGANA, JR., EMMA AGANA ANDAYA, JESUS
AGANA, and RAYMUND AGANA) and ENRIQUE AGANA, petitioners, vs. JUAN
FUENTES, respondent.
G.R. No. 127590. January 31, 2007. *

MIGUEL AMPIL, petitioner, vs. NATIVIDAD AGANA and ENRIQUE AGANA, respondents.

_______________

*
 FIRST DIVISION.

479
VOL. 513, JANUARY 479
31, 2007
Professional Services, Inc.
vs. Agana
Civil Law; Damages; Negligence; The leaving of sponges or other foreign substances in the wound
after the incision has been closed is at least prima facie negligence by the operating surgeon.— An
operation requiring the placing of sponges in the incision is not complete until the sponges are properly
removed, and it is settled that the leaving of sponges or other foreign substances in the wound after the
incision has been closed is at least prima facie negligence by the operating surgeon. To put it simply, such
act is considered so inconsistent with due care as to raise an inference of negligence. There are even
legions of authorities to the effect that such act is negligence per se.
Same; Same; Same; To the mind of the Court, what was initially an act of negligence by Dr. Ampil
has ripened into a deliberate wrongful act of deceiving his patient.—Here, Dr. Ampil did not inform
Natividad about the missing two pieces of gauze. Worse, he even misled her that the pain she was
experiencing was the ordinary consequence of her operation. Had he been more candid, Natividad could
have taken the immediate and appropriate medical remedy to remove the gauzes from her body. To our
mind, what was initially an act of negligence by Dr. Ampil has ripened into a deliberate wrongful act of
deceiving his patient.
Same; Same; Same; Doctrine of Res Ipsa Loquitur; Requisites for the Applicability of the Doctrine.
—Literally, res ipsa loquitur means “the thing speaks for itself.” It is the rule that the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a
presumption of negligence, or make out a plaintiff’s prima facie case, and present a question of fact for
defendant to meet with an explanation. Stated differently, where the thing which caused the injury,
without the fault of the injured, is under the exclusive control of the defendant and the injury is such that
it should not have occurred if he, having such control used proper care,  it affords reasonable evidence, in
the absence of explanation that the injury arose from the defendant’s want of care, and the burden of
proof is shifted to him to establish that he has observed due care and diligence. From the foregoing
statements of the rule, the requisites for the applicability of the doctrine of res ipsa loquitur are: (1) the
occurrence of an injury; (2) the thing which caused the injury was under the control and management of
the defendant; (3) the occurrence was such that in the ordinary course of things, would
480
 48 SUPREME
0 COURT REPORTS
ANNOTATED
Professional Services,
Inc. vs. Agana
not have happened if those who had control or management used proper care; and (4) the absence of
explanation by the defendant. Of the foregoing requisites, the most instrumental is the “ control and
management of the thing which caused the injury.”
Same; Same; Same; Same; Res ipsa loquitur is not a rule of substantive law, hence, does not per se
create or constitute an independent or separate ground of liability, being a mere evidentiary rule.—In
this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se create or
constitute an independent or separate ground of liability, being a mere evidentiary rule. In other words,
mere invocation and application of the doctrine does not dispense with the requirement of proof of
negligence. Here, the negligence was proven to have been committed by Dr. Ampil and not by Dr.
Fuentes.
Same; Same; Same; Professionals are considered personally liable for the fault or negligence they
commit in the discharge of their duties and their employer cannot be held liable for such fault or
negligence.—A prominent civilist commented that professionals engaged by an employer, such as
physicians, dentists, and pharmacists, are not “employees” under this article because the manner in which
they perform their work is not within the control of the latter (employer). In other words, professionals
are considered personally liable for the fault or negligence they commit in the discharge of their duties,
and their employer cannot be held liable for such fault or negligence. In the context of the present case,
“a hospital cannot be held liable for the fault or negligence of a physician or surgeon in the treatment or
operation of patients.”
Same; Same; Same; In this jurisdiction, the nature of the relationship between the hospital and the
physicians is rendered inconsequential in view of the pronouncement in Ramos vs. Court of Appeals, 321
SCRA 584 (1999), that for purposes of apportioning responsibility in medical negligence cases, an
employer-employee relationship in effect exists between hospitals and their attending and visiting
physicians.—In our shores, the nature of the relationship between the hospital and the physicians is
rendered inconsequential in view of our categorical pronouncement in Ramos v. Court of Appeals, 321
SCRA 584 (1999), that for purposes of apportioning responsibility in
481

VOL. 513, 481

JANUARY 31,
2007
Professional Services,
Inc. vs. Agana
medical negligence cases, an employer-employee relationship in effect exists between hospitals and
their attending and visiting physicians.
Same;Same; Same; PSI’s liability is also anchored upon the agency principle of apparent authority
or agency by estoppel and the doctrine of corporate negligence.—But the Ramos pronouncement is not
our only basis in sustaining PSI’s liability. Its liability is also anchored upon the agency principle
of apparent authority or agency by estoppel and the doctrine of corporate negligence which have gained
acceptance in the determination of a hospital’s liability for negligent acts of health professionals. The
present case serves as a perfect platform to test the applicability of these doctrines, thus, enriching our
jurisprudence. Apparent authority, or what is sometimes referred to as the “holding out” theory, or
doctrine of ostensible agency or agency by estoppel, has its origin from the law of agency. It imposes
liability, not as the result of the reality of a contractual relationship, but rather because of the actions of a
principal or an employer in somehow misleading the public into believing that the relationship or the
authority exists. The concept is essentially one of estoppel and has been explained in this manner: “The
principal is bound by the acts of his agent with the apparent authority which he knowingly permits the
agent to assume, or which he holds the agent out to the public as possessing. The question in every case is
whether the principal has by his voluntary act placed the agent in such a situation that a person of
ordinary prudence, conversant with business usages and the nature of the particular business, is justified
in presuming that such agent has authority to perform the particular act in question.
Same; Same; Same; In cases where it can be shown that a hospital, by its actions, has held out a
particular physician as its agent and/or employee and that a patient has accepted treatment from that
physician in the reasonable belief that it is being rendered in behalf of the hospital, then the hospital will
be liable for the physician’s negligence.—The applicability of apparent authority in the field of hospital
liability was upheld long time ago in Irving v. Doctor Hospital of Lake Worth, Inc., 415 So. 2d 55 (1982).
There, it was explicitly stated that “there does not appear to be any rational basis for excluding the
concept of apparent authority from the field of hospital liability.” Thus, in cases where it can be shown
that a hospital, by its actions, has held out a particular physician as its agent and/or employee and
482

48 SUPREME
2 COURT REPORTS
ANNOTATED
Professional Services,
Inc. vs. Agana
that a patient has accepted treatment from that physician in the reasonable belief that it is being
rendered in behalf of the hospital, then the hospital will be liable for the physician’s negligence.
Same; Same; Same; By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their
qualifications, the hospital created the impression that they were its agents, authorized to perform
medical or surgical services for its patients.—In this case, PSI publicly displays in the lobby of the
Medical City Hospital the names and specializations of the physicians associated or accredited by it,
including those of Dr. Ampil and Dr. Fuentes. We concur with the Court of Appeals’ conclusion that it
“is now estopped from passing all the blame to the physicians whose names it proudly paraded in the
public directory leading the public to believe that it vouched for their skill and competence.” Indeed,
PSI’s act is tantamount to holding out to the public that Medical City Hospital, through its accredited
physicians, offers quality health care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly
advertising their qualifications, the hospital created the impression that they were its agents, authorized to
perform medical or surgical services for its patients. As expected, these patients, Natividad being one of
them, accepted the services on the reasonable belief that such were being rendered by the hospital or its
employees, agents, or servants.
PETITION for review on certiorari of the decisions of the Court of Appeals.
The facts are stated in the opinion of the Court.
     Bengzon, Narciso, Cudala, Pecson, Bengzon & Jimenez for petitioner Professional
Services, Inc.
     Enrique Agana & Associates for petitioners Natividad and Enrique Agana.
     The Law Firm of Raymundo M. Armovit for petitioner Miguel Ampil.
     Agcaoili Law Offices collaborating counsel for Heirs of Natividad Agana.
     Benjamin M. Tongol for Juan Fuentes.
483
 VOL. 513, JANUARY 483
31, 2007
Professional Services, Inc.
vs. Agana

SANDOVAL-GUTIERREZ, J.:

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

Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals’
Decision  dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No.
2

32198 affirming with modification the Decision  dated March 17, 1993 of the Regional Trial
3

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.”
_______________

 Beeck v. Tucson General Hospital, 500 P. 2d 1153 (1972), citing Darling v. Charleston Community Memorial
1

Hospital, 33 Ill. 2d 326, 211 N.E. 2d 253.

 Penned by Associate Justice Cancio C. Garcia (now a member of the Supreme Court) and concurred in by Associate
2

Justices Eugenio S. Labitoria and Artemio G. Tuquero (both retired), Rollo, G.R. No. 126297, pp. 36-51; 126467, pp. 27-
42; 127590, pp. 23-38.
 Penned by Judge Lucas P. Bersamin (now Justice of the Court of Appeals), Rollo, G.R. No. 126647, pp. 69-83.
3

484
48 SUPREME COURT
4 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
On April 11, 1984, Dr. Ampil, assisted by the medical staff  of the Medical City Hospital,
4

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.
_______________

 The medical staff was composed of physicians, both residents and interns, as well as nurses.
4

485
VOL. 513, JANUARY 485
31, 2007
Professional Services, Inc.
vs. Agana
On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two
weeks thereafter, her daughter found a piece of gauze protruding from her vagina. Upon being
informed about it, Dr. Ampil proceeded to her house where he managed to extract by hand a
piece of gauze measuring 1.5 inches in width. He then assured her that the pains would soon
vanish.
Dr. Ampil’s assurance did not come true. Instead, the pains intensified, prompting Natividad
to seek treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez
detected the presence of another foreign object in her vagina—a foul-smelling gauze measuring
1.5 inches in width which badly infected her vaginal vault. A recto-vaginal fistula had formed in
her reproductive organs which forced stool to excrete through the vagina. Another surgical
operation was needed to remedy the damage. Thus, in October 1984, Natividad underwent
another surgery.
On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon
City a complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical
City Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged
that the latter are liable for negligence for leaving two pieces of gauze inside Natividad’s body
and malpractice for concealing their acts of negligence.
Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr.
Fuentes, docketed as Administrative Case No. 1690. The PRC Board of Medicine heard the case
only with respect to Dr. Fuentes because it failed to acquire jurisdiction over Dr. Ampil who was
then in the United States.
On February 16, 1986, pending the outcome of the above cases, Natividad died and was duly
substituted by her abovenamed children (the Aganas).
486
48 SUPREME COURT
6 REPORTS
ANNOTATED
Professional Services, Inc.
 vs. Agana
On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr.
Ampil and Dr. Fuentes liable for negligence and malpractice, the decretal part of which reads:
“WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the
defendants PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN
FUENTES to pay to the plaintiffs, jointly and severally, except in respect of the award for exemplary
damages and the interest thereon which are the liabilities of defendants Dr. Ampil and Dr. Fuentes only,
as follows:

1. 1.As actual damages, the following amounts:

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

P21.60-US$1.00, as reimbursement of actual expenses incurred in the United States of
America;
2. b.The sum of P4,800.00 as travel taxes of plaintiffs and their physician daughter;
3. c.The total sum of P45,802.50, representing the cost of hospitalization at Polymedic
Hospital, medical fees, and cost of the saline solution;

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

2. 3.As exemplary damages, the sum of P300,000.00;
3. 4.As attorney’s fees, the sum of P250,000.00;
4. 5.Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of
the complaint until full payment; and
5. 6.Costs of suit.

SO ORDERED.”
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals,
docketed as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial execution
of its Decision, which was granted in an Order dated May 11, 1993. Thereafter, the sheriff levied
upon certain properties of Dr. Ampil and sold
487
VOL. 513, JANUARY 487
31, 2007
Professional Services, Inc.
vs. Agana
them for P451,275.00 and delivered the amount to the Aganas.
Following their receipt of the money, the Aganas entered into an agreement with PSI and Dr.
Fuentes to indefinitely suspend any further execution of the RTC Decision. However, not long
thereafter, the Aganas again filed a motion for an alias writ of execution against the properties of
PSI and Dr. Fuentes. On September 21, 1993, the RTC granted the motion and issued the
corresponding writ, prompting Dr. Fuentes to file with the Court of Appeals a petition for
certiorari and prohibition, with prayer for preliminary injunction, docketed as CA-G.R. SP No.
32198. During its pendency, the Court of Appeals issued a Resolution  dated October 29, 1993
5

granting Dr. Fuentes’ prayer for injunctive relief.

On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.
 Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision  in 6

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.
_______________

 The dispositive portion reads:

5

“WHEREFORE, let a writ of preliminary injunction be issued upon petitioner’s posting of bond in the amount of P20,000.00,
ENJOINING public respondents from implementing the questioned order dated September 21, 1993 and from further taking any action
in Civil Case No. Q-43322 entitled ‘Natividad G. Agana, et al., plaintiffs, versus Professional Services, Inc., et al., defendants’ pending
resolution of the instant petition.
SO ORDERED.” See Rollo, G.R. No. 126297, p. 42.

 Rollo of G.R. No. 126467, pp. 84-89.

6

488
48 SUPREME COURT
8 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R.
CV No. 42062 and CA-G.R. SP No. 32198, thus:
“WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan Fuentes
is hereby DISMISSED, and with the pronouncement that defendant-appellant Dr. Miguel Ampil is liable
to reimburse defendant-appellant Professional Services, Inc., whatever amount the latter will pay or had
paid to the plaintiffs-appellees, the decision appealed from is hereby AFFIRMED and the instant
appeal DISMISSED.
Concomitant with the above, the petition for certiorari and prohibition filed by herein defendant-
appellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and the challenged order of
the respondent judge dated September 21, 1993, as well as the alias writ of execution issued pursuant
thereto are hereby NULLIFIED and SET ASIDE. The bond posted by the petitioner in connection with
the writ of preliminary injunction issued by this Court on November 29, 1993 is hereby cancelled.
Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.
SO ORDERED.”
Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution  dated 7

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.
_______________

 Rollo of G.R. No. 127590, p. 40.

7

489
VOL. 513, JANUARY 489
31, 2007
 Professional Services, Inc.
vs. Agana
In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that Dr.
Fuentes is not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa
loquitur. They contend that the pieces of gauze are prima facie proofs that the operating surgeons
have been negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding him
liable for negligence and malpractice sans evidence that he left the two pieces of gauze in
Natividad’s vagina. He pointed to other probable causes, such as: (1) it was Dr. Fuentes who
used gauzes in performing the hysterectomy; (2) the attending nurses’ failure to properly count
the gauzes used during surgery; and (3) the medical intervention of the American doctors who
examined Natividad in the United States of America.
For our resolution are these three vital issues: first, whether the Court of Appeals erred in
holding Dr. Ampil liable for negligence and malpractice; second, whether the Court of Appeals
erred in absolving Dr. Fuentes of any liability; and third, whether PSI may be held solidarily
liable for the negligence of Dr. Ampil.
I—G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil Liable for Negligence and
Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears the Court’s attention to other possible causes
of Natividad’s detriment. He argues that the Court should not discount either of the following
possibilities: first, Dr. Fuentes left the gauzes in Natividad’s body after performing
hysterectomy; second, the attending nurses erred in counting the gauzes; and third, the American
doctors were the ones who placed the gauzes in Natividad’s body.
Dr. Ampil’s arguments are purely conjectural and without basis. Records show that he did not
present any evidence to prove that the American doctors were the ones who put or left
490
49 SUPREME COURT
0 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
the gauzes in Natividad’s body. Neither did he submit evidence to rebut the correctness of the
record of operation, particularly the number of gauzes used. As to the alleged negligence of Dr.
Fuentes, we are mindful that Dr. Ampil examined his (Dr. Fuentes’) work and found it in order.
The glaring truth is that all the major circumstances, taken together, as specified by the Court
of Appeals, directly point to Dr. Ampil as the negligent party, thus:
First, it is not disputed that the surgeons used gauzes as sponges to control the bleeding of the patient
during the surgical operation.
Second, immediately after the operation, the nurses who assisted in the surgery noted in their report
that the ‘sponge count (was) lacking 2’; that such anomaly was ‘announced to surgeon’ and that a
‘search was done but to no avail’ prompting Dr. Ampil to ‘continue for closure’ x x x.
Third, after the operation, two (2) gauzes were extracted from the same spot of the body of Mrs.
Agana where the surgery was performed.
An operation requiring the placing of sponges in the incision is not complete until the sponges
are properly removed, and it is settled that the leaving of sponges or other foreign substances in
the wound after the incision has been closed is at least prima facie negligence by the operating
surgeon.  To put it simply, such act is considered so inconsistent with due care as to raise an
8

inference of negligence. There are even legions of authorities to the effect that such act
is negligence per se. 9

_______________

 Rule v. Cheeseman, 317 P. 2d 472 (1957), citing Russel v. Newman, 116 Kan. 268 P. 752; Bernsden v. Johnson, 174
8

Kan. 230, 255 P. 2d 1033.

 Smith v. Zeagler, 157 So. 328 Fla. (1934), citing Ruth v. Johnson, (C.C.A.) 172 F. 191; Reeves v. Lutz, 179 Mo. App.
9

61, 162 S.W. 280; Rayburn v. Day, 126 Or. 135, 68 P. 1002, 59 A.L.R. 1062; Wynne v. Harvey, 96 Wash. 379, 165 P.
67; Harris v. Fall (C.C.A.), 177 F. 79,

491
VOL. 513, JANUARY 491
31, 2007
Professional Services, Inc.
vs. Agana
Of course, the Court is not blind to the reality that there are times when danger to a patient’s life
precludes a surgeon from further searching missing sponges or foreign objects left in the
body. But this does not leave him free from any obligation. Even if it has been shown that a
surgeon was required by the urgent necessities of the case to leave a sponge in his patient’s
abdomen, because of the dangers attendant upon delay, still, it is his legal duty to so inform his
patient within a reasonable time thereafter by advising her of what he had been compelled to
do. This is in order that she might seek relief from the effects of the foreign object left in her
body as her condition might permit. The ruling in Smith v. Zeagler  is explicit, thus:
10

“The removal of all sponges used is part of a surgical operation, and when a physician or surgeon fails to
remove a sponge he has placed in his patient’s body that should be removed as part of the operation, he
thereby leaves his operation uncompleted and creates a new condition which imposes upon him the
legal duty of calling the new condition to his patient’s attention, and endeavoring with the means he
has at hand to minimize and avoid untoward results likely to ensue therefrom.”
Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he even
misled her that the pain she was experiencing was the ordinary consequence of her
operation. Had he been more candid, Natividad could have taken the immediate and appropriate
medical remedy to remove the gauzes from her body. To our mind, what was initially an act of
negligence by Dr. Ampil has ripened into a deliberate wrongful act of deceiving his patient.
This is a clear case of medical malpractice or more appropriately, medical negligence. To
successfully pursue this kind of case, a patient must only prove that a health care provider
_______________

27 L.R.A. (N.S.) 1174; Moore v. Ivey, (Tex. Civ. App.) 264 S.W. 283; 21 R.C. L. 388.
 157 So. 328 Fla. (1934)
10

492
49 SUPREME COURT
2 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
either failed to do something which a reasonably prudent health care provider would have done,
or that he did something that a reasonably prudent provider would not have done; and that failure
or action caused injury to the patient.  Simply put, the elements are duty, breach, injury and
11

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

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
_______________

 Garcia-Rueda v. Pascasio, G.R. No. 118141, September 5, 1997, 278 SCRA 769.

11

 In the leading case of Vda. de Bataclan v. Medina, (102 Phil. 181 [1957]), this Court laid down the following
12

definition of proximate cause in this jurisdiction as follows:

[T]hat cause, which, in natural and continuous sequence unbroken by any efficient intervening cause, produces the injury and without
which the result would not have occurred. And more comprehensively, the proximate cause is that acting first and producing the injury,
either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close
causal connection with the immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable
result of the cause which first acted, under which circumstances that the person responsible for the first event should, as an ordinarily
prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might
probably result therefrom.

493
VOL. 513, JANUARY 493
31, 2007
Professional Services, Inc.
vs. Agana
his deliberate concealment of the missing gauzes from the knowledge of Natividad and her
family.
II—G.R. No. 126467
Whether the Court of Appeals Erred in Absolving Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the ground
that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the two
pieces of gauze were left inside Natividad’s body is a prima facie evidence of Dr. Fuentes’
negligence.
We are not convinced.
Literally, res ipsa loquitur means “the thing speaks for itself.” It is the rule that the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or
raise a presumption of negligence, or make out a plaintiff’s prima facie case, and present a
question of fact for defendant to meet with an explanation.  Stated differently, where the thing
13

which caused the injury, without the fault of the injured, is under the exclusive control of the
defendant and the injury is such that it should not have occurred if he, having such control used
proper care, it affords reasonable evidence, in the absence of explanation that the injury arose
from the defendant’s want of care, and the burden of proof is shifted to him to establish that he
has observed due care and diligence. 14
 From the foregoing statements of the rule, the requisites for the applicability of the doctrine
of res ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury was
under the control and management of the defen-
_______________

 Ramos v. Court of Appeals, G.R. No. 124354, December 29, 1999, 321 SCRA 584.
13

 Africa v. Caltex (Phils.) Inc., 123 Phil. 280; 16 SCRA 448 (1966).

14

494
49 SUPREME COURT
4 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
dant; (3) the occurrence was such that in the ordinary course of things, would not have happened
if those who had control or management used proper care; and (4) the absence of explanation by
the defendant. Of the foregoing requisites, the most instrumental is the “control and
management of the thing which caused the injury.” 15

We find the element of “control and management of the thing which caused the injury” to be
wanting. Hence, the doctrine of res ipsa loquitur will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the operation of
Natividad. He requested the assistance of Dr. Fuentes only to perform hysterectomy when he
(Dr. Ampil) found that the malignancy in her sigmoid area had spread to her left ovary. Dr.
Fuentes performed the surgery and thereafter reported and showed his work to Dr. Ampil. The
latter examined it and finding everything to be in order, allowed Dr. Fuentes to leave the
operating room. Dr. Ampil then resumed operating on Natividad. He was about to finish the
procedure when the attending nurses informed him that two pieces of gauze were missing. A
“diligent search” was conducted, but the misplaced gauzes were not found. Dr. Ampil then
directed that the incision be closed. During this entire period, Dr. Fuentes was no longer in the
operating room and had, in fact, left the hospital.
Under the “Captain of the Ship” rule, the operating surgeon is the person in complete charge
of the surgery room and all personnel connected with the operation. Their duty is to obey his
orders.  As stated before, Dr. Ampil was the lead surgeon. In other words, he was the “Captain of
16

the Ship.” That he discharged such role is evident from his following
_______________

 Ranos v. Court of Appeals, supra. In Ramos, the phrase used is “control of the instrumentality which caused the
15

damage,” citing St. John’s Hospital and School of Nursing v. Chapman, 434 P2d 160 (1967).
 Rural Educational Assn v. Bush, 42 Tenn. App. 34, 298 S.W. 2d 761 (1956).
16

495
VOL. 513, JANUARY 495
31, 2007
Professional Services, Inc.
vs. Agana
conduct: (1) calling Dr. Fuentes to perform a hysterectomy; (2) examining the work of Dr.
Fuentes and finding it in order; (3) granting Dr. Fuentes’ permission to leave; and (4) ordering
the closure of the incision. To our mind, it was this act of ordering the closure of the incision
notwithstanding that two pieces of gauze remained unaccounted for, that caused injury to
Natividad’s body. Clearly, the control and management of the thing which caused the injury was
in the hands of Dr. Ampil, not Dr. Fuentes.
In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per
se create or constitute an independent or separate ground of liability, being a mere evidentiary
rule.  In other words, mere invocation and application of the doctrine does not dispense with the
17

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.  Those who could afford medical treatment were usually treated at home by their
18

doctors.  However, the days of house calls and philanthropic health care are over. The modern
19

health care industry continues to distance itself from its

_______________

 Ramos v. Court of Appeals, supra at footnote 13.

17

 Levin, Hospital Vicarious Liability for Negligence by Independent Contractor Physicians: A New Rule for New
18

Times, October 17, 2005.

 Id.
19

496
49 SUPREME COURT
6 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
charitable past and has experienced a significant conversion from a not-for-profit health care to
for-profit hospital businesses. Consequently, significant changes in health law have accompanied
the business-related changes in the hospital industry. One important legal change is an increase
in hospital liability for medical malpractice. Many courts now allow claims for hospital vicarious
liability under the theories of respondeat superior, apparent authority, ostensible authority, or
agency by estoppel. 20

In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the
Civil Code, which reads:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
A derivative of this provision is Article 2180, the rule governing vicarious liability under the
doctrine of respondeat superior, thus:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom one is responsible.
x x x      x x x
 The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks even though the former are not engaged in any business or
industry.
x x x      x x x
_______________

 Id.
20

497
VOL. 513, JANUARY 497
31, 2007
Professional Services, Inc.
vs. Agana
The responsibility treated of in this article shall cease when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damage.
A prominent civilist commented that professionals engaged by an employer, such as physicians,
dentists, and pharmacists, are not “employees” under this article because the manner in which
they perform their work is not within the control of the latter (employer). In other words,
professionals are considered personally liable for the fault or negligence they commit in the
discharge of their duties, and their employer cannot be held liable for such fault or
negligence. In the context of the present case, “a hospital cannot be held liable for the fault or
negligence of a physician or surgeon in the treatment or operation of patients.” 21

The foregoing view is grounded on the traditional notion that the professional status and the
very nature of the physician’s calling preclude him from being classed as an agent or employee
of a hospital, whenever he acts in a professional capacity.  It has been said that medical practice
22

strictly involves highly developed and specialized knowledge,  such that physicians are
23

generally free to exercise their own skill

_______________

 Tolentino, The Civil Code of the Philippines, Volume V, 1992 Ed., p. 616.

21

 Arkansas M.R. Co. v. Pearson, 98 Ark. 442, 153 SW 595 (1911); Runyan v. Goodrum, 147 Ark. 281, 228 SW 397,
22

13 ALR 1403 (1921); Rosane v. Senger, 112 Colo. 363, 149 P. 2d 372 (superseded by statute on other grounds); Moon v.
Mercy Hosp., 150 Col. 430, 373 P. 2d 944 (1962); Austin v. Litvak, 682 P. 2d 41, 50 ALR 4th 225 (1984); Western Ins.
Co. v. Brochner, 682 P. 2d 1213 (1983); Rodriguez v. Denver, 702 P. 2d 1349 (1984).
 Arkansas M.R. Co. v. Pearson, Id.; Nieto v. State, 952 P. 2d 834 (1997). But see Beeck v. Tucson General Hosp., 18
23

Ariz. App. 165, 500 P. 2d 1153 (1972); Paintsville Hosp. Co., 683 SW 2d 255 (1985); Kelley v. Rossi, 395 Mass. 659, 481
NE 2d 1340 (1985) which held that a physician’s professional status does not prevent him or her from being a servant or
agent of the hospital.

498
49 SUPREME COURT
8 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
and judgment in rendering medical services sans interference.  Hence, when a doctor practices
24

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

The case of Schloendorff v. Society of New York Hospital  was then considered an authority
26

for this view. The “Schloendorff doctrine” regards a physician, even if employed by a hospital, as
an independent contractor because of the skill he exercises and the lack of control exerted over
his work. Under this doctrine, hospitals are exempt from the application of the respondeat
superior principle for fault or negligence committed by physicians in the discharge of their
profession.
However, the efficacy of the foregoing doctrine has weakened with the significant
developments in medical care. Courts came to realize that modern hospitals are increasingly
taking active role in supplying and regulating medical care to patients. No longer were a
hospital’s functions limited to furnishing room, food, facilities for treatment and operation, and
attendants for its patients. Thus, in Bing v. Thunig,  the New York Court of Appeals deviated
27

from the Schloendorff doctrine, noting that modern hospitals actually do far more than provide
facilities for treatment. Rather, they regularly
_______________

 Fridena v. Evans, 127 Ariz. 516, 522 P. 2d 463 (1980).

24

 Kitto v. Gilbert, 39 Colo App 374, 570 P. 2d 544 (1977).

25

 211 N.Y. 125, 105 N.E. 92, 52 L.R.A., N.S., 505 (1914). The court in  Schloendorff opined that a hospital does not
26

act through physicians but merely procures them to act on their own initiative and responsibility. For subsequent
application of the doctrine, see for instance, Hendrickson v. Hodkin, 250 App. Div 649, 294 NYS 982, revd on other
grounds, 276 NY 252, 11 NE 2d 899 (1937); Necolayff v. Genesee Hosp., 270 App. Div. 648, 61 NYS 2d 832, affd 296
NY 936, 73 NE2d 117 (1946); Davie v. Lenox Hill Hosp., Inc., 81 NYS 2d 583 (1948); Roth v. Beth El Hosp., Inc., 279
App. Div 917, 110 NYS 2d 583 (1952); Rufino v. US, 126 F. Supp. 132 (1954); Mrachek v. Sunshine Biscuit, Inc., 308 NY
116, 123 N.E. 2d 801 (1954).
 2 NY 2d 656, 163 NYS 2d 3, 143 N.E. 2d 3 (1957).
27

499
VOL. 513, JANUARY 499
31, 2007
Professional Services, Inc.
vs. Agana
employ, on a salaried basis, a large staff of physicians, interns, nurses, administrative and manual
workers. They charge patients for medical care and treatment, even collecting for such services
through legal action, if necessary. The court then concluded that there is no reason to exempt
hospitals from the universal rule of respondeat superior.
In our shores, the nature of the relationship between the hospital and the physicians is
rendered inconsequential in view of our categorical pronouncement in Ramos v. Court of
Appeals  that for purposes of apportioning responsibility in medical negligence cases, an
28

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

 Supra at footnote 13.

28

500
50 SUPREME COURT
0 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting
patients into the hospital. In addition to these, the physician’s performance as a specialist is generally
evaluated by a peer review committee on the basis of mortality and morbidity statistics, and feedback
from patients, nurses, interns and residents. A consultant remiss in his duties, or a consultant who
regularly falls short of the minimum standards acceptable to the hospital or its peer review
committee, is normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over their attending and
visiting ‘consultant’ staff. While ‘consultants’ are not, technically employees, x x x, the control
exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an
employer-employee relationship, with the exception of the payment of wages. In assessing whether
such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the
foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an
employeremployee relationship in effect exists between hospitals and their attending and visiting
physicians.”
But the Ramos pronouncement is not our only basis in sustaining PSI’s liability. Its liability is
also anchored upon the agency principle of apparent authority or agency by estoppel and the
doctrine of corporate negligence which have gained acceptance in the determination of a
hospital’s liability for negligent acts of health professionals. The present case serves as a perfect
platform to test the applicability of these doctrines, thus, enriching our jurisprudence.
Apparent authority, or what is sometimes referred to as the “holding out” theory, or doctrine
of ostensible agency or agency by estoppel,  has its origin from the law of agency. It
29

_______________

 Black’s Law Dictionary (6th Ed. 1990) 1100. The terms “ostensible agency,” “agency by estoppel,” “apparent
29

authority,” and “holding out” tend to be used interchangeably by the courts to refer to this theory of liability. See for
instance, Baker v. Werner, 654 P2d 263 (1982) and Adamski v. Tacoma Gen. Hosp., 20 Wash App. 98,

501
VOL. 513, JANUARY 501
31, 2007
Professional Services, Inc.
 vs. Agana
imposes liability, not as the result of the reality of a contractual relationship, but rather because
of the actions of a principal or an employer in somehow misleading the public into believing that
the relationship or the authority exists.  The concept is essentially one of estoppel and has been
30

explained in this manner:

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

The applicability of apparent authority in the field of hospital liability was upheld long time ago
in Irving v. Doctor Hos-
_______________

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

575, 405 A. 2d 443 (1979).

 Id., citing Hudson v. C., Loan Assn., Inc. v. Horowytz, 116 N.J.L. 605, 608, 186 A 437 (Sup. Ct. 1936).
31

502
50 SUPREME COURT
2 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
pital of Lake Worth, Inc.  There, it was explicitly stated that “there does not appear to be any
32

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:
_______________

 Supra.
32

503
VOL. 513, JANUARY 503
31, 2007
Professional Services, Inc.
vs. Agana
“x x x regardless of the education and status in life of the patient, he ought not be burdened with the
defense of absence of employer-employee relationship between the hospital and the independent
physician whose name and competence are certainly certified to the general public by the hospital’s
act of listing him and his specialty in its lobby directory, as in the case herein. The high costs of
today’s medical and health care should at least exact on the hospital greater, if not broader, legal
responsibility for the conduct of treatment and surgery within its facility by its accredited physician
or surgeon, regardless of whether he is independent or employed.” 33

The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are
capable of acting only through other individuals, such as physicians. If these accredited
physicians do their job well, the hospital succeeds in its mission of offering quality medical
services and thus profits financially. Logically, where negligence mars the quality of its services,
the hospital should not be allowed to escape liability for the acts of its ostensible agents.
We now proceed to the doctrine of corporate negligence or corporate responsibility.
One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is
that PSI as owner, operator and manager of Medical City Hospital, “did not perform the
necessary supervision nor exercise diligent efforts in the supervision of Drs. Ampil and Fuentes
and its nursing staff, resident doctors, and medical interns who assisted Drs. Ampil and Fuentes
in the performance of their duties as surgeons.”  Premised on the doctrine of corporate
34

negligence, the trial court held that PSI is directly liable for such breach of duty.
We agree with the trial court.
_______________

 RTC Decision, p. 9, Rollo of G.R. No. 126467, p. 127.

33

 RTC Decision, p. 2, Rollo of G.R. No. 126467, p. 120.

34

504
50 SUPREME COURT
4 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
Recent years have seen the doctrine of corporate negligence as the judicial answer to the problem
of allocating hospital’s liability for the negligent acts of health practitioners, absent facts to
support the application of respondeat superior or apparent authority. Its formulation proceeds
from the judiciary’s acknowledgment that in these modern times, the duty of providing quality
medical service is no longer the sole prerogative and responsibility of the physician. The modern
hospitals have changed structure. Hospitals now tend to organize a highly professional medical
staff whose competence and performance need to be monitored by the hospitals commensurate
with their inherent responsibility to provide quality medical care. 35

The doctrine has its genesis in Darling v. Charleston Community Hospital.  There, the 36

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.  With the passage of time, more duties were expected from hospitals,
37

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
_______________

 Purcell v. Zimbelman, 18 Ariz. App. 75, 500 P2d 335 (1972).

35

 Supra at footnote 1.
36

 Corleto v. Hospital, 138 N.J. Super. 302, 350 A. 2d 534 (Super. Ct. Law Div.1975); Purcell v. Zimbelman, 18 Ariz.
37

App. 75,500 P. 2d 335 (1972); Hospital Authority v. Joiner, 229 Ga. 140,189 S.E. 2d 412 (1972).

505
VOL. 513, JANUARY 505
31, 2007
Professional Services, Inc.
vs. Agana
and policies that ensure quality care for its patients.  Thus, in Tucson Medical Center, Inc. v.
38

Misevich,  it was held that a hospital, following the doctrine of corporate responsibility, has the
39

duty to see that it meets the standards of responsibilities for the care of patients. Such duty
includes the proper supervision of the members of its medical staff. And in Bost v. Riley,  the 40

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 case.”
_______________

 Welsh v. Bulger, 548 Pa. 504, 698 A.2d 581 (1997).

38

 115 Ariz. 34, 545 P2d 958 (1976).

39

 262 S.E. 2d 391, cert denied 300 NC 194, 269 S.E. 2d 621 (1980).
40

506
50 SUPREME COURT
6 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of
the Medical City Hospital’s staff, composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator of the hospital,
has actual or constructive knowledge of the procedures carried out, particularly the report of the
attending nurses that the two pieces of gauze were missing. In Fridena v. Evans,  it was held that
41

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
_______________

 127 Ariz. 516, 622 P. 2d 463 (1980).

41

507
VOL. 513, JANUARY 507
31, 2007
Professional Services, Inc.
vs. Agana
and performance was to be monitored and reviewed by the governing body of the hospital, and the
court held that a hospital would be negligent where it had knowledge or reason to believe that a
doctor using the facilities was employing a method of treatment or care which fell below the
recognized standard of care.
Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of medical care furnished to patients within its walls
and it must meet the standards of responsibility commensurate with this undertaking. Beeck v.
Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court has confirmed the rulings
of the Court of Appeals that a hospital has the duty of supervising the competence of the doctors on its
staff. x x x.
x x x      x x x
In the amended complaint, the plaintiffs did plead that the operation was performed at the hospital
with its knowledge, aid, and assistance, and that the negligence of the defendants was the proximate cause
of the patient’s injuries. We find that such general allegations of negligence, along with the evidence
produced at the trial of this case, are sufficient to support the hospital’s liability based on the
theory of negligent supervision.”
Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let it be
emphasized that PSI, apart from a general denial of its responsibility, failed to adduce evidence
showing that it exercised the diligence of a good father of a family in the accreditation and
supervision of the latter. In neglecting to offer such proof, PSI failed to discharge its burden
under the last paragraph of Article 2180 cited earlier, and, therefore, must be adjudged solidarily
liable with Dr. Ampil. Moreover, as we have discussed, PSI is also directly liable to the Aganas.
One final word. Once a physician undertakes the treatment and care of a patient, the law
imposes on him certain obligations. In order to escape liability, he must possess that reasonable
degree of learning, skill and experience required by
508
50 SUPREME COURT
8 REPORTS
ANNOTATED
Professional Services, Inc.
vs. Agana
his profession. At the same time, he must apply reasonable care and diligence in the exercise of
his skill and the application of his knowledge, and exert his best judgment.
WHEREFORE, we DENY all the petitions and AFFIRM the challenged Decision of the
Court of Appeals in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.
Costs against petitioners PSI and Dr. Miguel Ampil.
SO ORDERED.
     Puno (C.J., Chairperson),  Corona and Azcuna, JJ., concur.
     Garcia, J., No part.
Petitions denied, challenged CA decision in CA-G.R. No. CV No. 42062 and CA-G.R. SP No.
32198 affirmed.
Note.—Under the Captain-of-the-Ship Doctrine, a surgeon is likened to a captain of the ship
in that it is his duty to control everything going on in the operating room. (Ramos vs. Court of
Appeals, 380 SCRA 467 [2002])