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G.R. No. 126297 January 31, 2007

PROFESSIONAL SERVICES, INC., Petitioner,vs.NATIVIDAD and ENRIQUE AGANA, Respondents.

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G.R. No. 126467 January 31, 2007

NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR., EMMAAGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE AGANA, Petitioners,vs.JUAN FUENTES, Respondent.

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G.R. No. 127590 January 31, 2007

MIGUEL AMPIL, Petitioner,vs.NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ,J .:

Hospitals, having undertaken one of mankinds most important and delicate endeavors, must assume the graveresponsibility 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 placedin the hospitals keeping.

1

Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals Decision2datedSeptember 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198 affirming with modification theDecision3dated 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, DrMiguel 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 staff4of the Medical City Hospital, performed an anteriorresection 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 Natividadshusband, Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No. 126467, to perform hysterectomyon her.
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After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation and closedthe 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 thedoctors 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 notremoved 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. Ampilproceeded 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. Ampils assurance did not come true. Instead, the pains intensified, prompting Natividad to seek treatmentat the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected the presence of anotherforeign 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 excretethrough 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 complaintfor damages against the Professional Services, Inc. (PSI), owner of the Medical City Hospital, Dr. Ampil, andDr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the latter are liable for negligence forleaving twopieces of gauze inside Natividads body and malpractice for concealing their acts of negligence.

Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an administrativecomplaint 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 toacquire 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 herabove-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:


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WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants PROFESSIONALSERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTES to pay to the plaintiffs, jointly andseverally, except in respect of the award for exemplary damages and the interest thereon which are the liabilitiesof 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 America;

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 attorneys 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 complaintuntil full payment; and

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 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 toindefinitely suspend any further execution of the RTC Decision. However, not long thereafter, the Aganas againfiled 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 theCourt of Appeals a petition for certiorari and prohibition, with prayer for preliminary injunction, docketed asCA-G.R. SP No. 32198. During its pendency, the Court of Appeals issued a Resolution5dated October 29, 1993

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 Decision6in Administrative CaseNo. 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 Natividads body; and that he concealed such factfrom Natividad.
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On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R. CV No. 42062and CA-G.R. SP No. 32198, thus:

WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan Fuentes is herebyDISMISSED, and with the pronouncement that defendant-appellant Dr. Miguel Ampil is liable to reimbursedefendant-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 judgedated September 21, 1993, as well as the alias writ of execution issued pursuant thereto are hereby NULLIFIEDand SET ASIDE. The bond posted by the petitioner in connection with the writ of preliminary injunction issuedby 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 Resolution7dated 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 estoppedfrom raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable with Dr. Ampil; and (3) it isnot entitled to its counterclaim against the Aganas. PSI contends that Dr. Ampil is not its employee, but a mereconsultant 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 notguilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They contend that thepieces 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 fornegligence and malpractice sans evidence that he left the two pieces of gauze in Natividads 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. Ampilliable for negligence and malpractice; second, whether the Court of Appeals erred in absolving Dr. Fuentes ofany 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 Courts attention to other possible causes of Natividadsdetriment. He argues that the Court should not discount either of the following possibilities: first, Dr. Fuentesleft the gauzes in Natividads 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 Natividads body.
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Dr. Ampils 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 inNatividads body.Neither did he submit evidence to rebut the correctness of the record of operation, particularly the number ofgauzes 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 patientduring the surgical operation.

Second, immediately after the operation, the nurses who assisted in the surgery noted in their report thatthe sponge count (was) lacking 2; that such anomaly was announced to surgeon and that a searchwas 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. Aganawhere the surgery was performed.

An operation requiring the placing of sponges in the incision is not complete until the sponges are properlyremoved, and it is settled that the leaving of sponges or other foreign substances in the wound after the incisionhas been closed is at least prima facie negligence by the operating surgeon .8To put it simply, such act isconsidered so inconsistent with due care as to raise an inference of negligence. There are even legions ofauthorities 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 patients l ife precludes asurgeon from further searching missing sponges or foreign objects left in the body. But this does not leave himfree from any obligation. Even if it has been shown that a surgeon was required by the urgent necessities of thecase to leave a sponge in his patients abdomen, because of the dangers attendant upon delay, still, it is his legalduty 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 hercondition might permit. The ruling in Smith v. Zeagler10is explicit, thus:

The removal of all sponges used is part of a surgical operation, and when a physician or surgeon fails to removea sponge he has placed in his patients 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 thenew condition to his patients 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 herthat 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 herbody. To our mind, what was initially an act of negligence by Dr. Ampil has ripened into a deliberate wrongfulact of deceiving his patient.

This is a clear case of medical malpractice or more appropriately, medical negligence. To successfully pursuethis kind of case, a patient must only prove that a health care provider either failed to do something which areasonably prudent health care provider would have done, or that he did something that a reasonably prudentprovider would not have done; and that failure or action caused injury to the patient.11Simply put, the elementsare duty, breach, injury and proximate causation. Dr, Ampil, as the lead surgeon, had the duty to remove allforeign objects, such as gauzes, from Natividads body before closure of the incision. When he failed to do so, itwas his duty to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused injury to
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Natividad, necessitating her further examination by American doctors and another surgery. That Dr. Ampils

negligence is the proximate cause12of Natividads injury could be traced from his act of closing the incisiondespite the information given by the attending nurses that two pieces of gauze were still missing. That they werelater on extracted from Natividads vagina established the causal link between Dr. Ampils negligence and the

injury. And what further aggravated such injury was his deliberate concealment of the missing gauzes from theknowledge 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 iscontrary to the doctrine of res ipsa loquitur. According to them, the fact that the two pieces of gauze were leftinside Natividads 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 aninjury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence,or make out a plaintiffs prima facie case, and present a question of fact for defendant to meet with anexplanation.13Stated differently, where the thing which caused the injury, without the fault of the injured, isunder the exclusive control of the defendant and the injury is such that it should not have occurred if he, havingsuch control used proper care, it affords reasonable evidence, in the absence of explanation that the injury arosefrom the defendants want of care, and the burden of proof is shifted to him to establish that he has observeddue care and diligence.14

From the foregoing statements of the rule, the requisites for the applicability of the doctrine of res ipsa loquiturare: (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 havehappened if those who had control or management used proper care; and (4) the absence of explanation by thedefendant. Of the foregoing requisites, the most instrumental is the "control and management of the thing whichcaused 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 theassistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil) found that the malignancy in hersigmoid 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 finishthe procedure when the attending nurses informed him that two pieces of gauze were missing. A "diligentsearch" was conducted, but the misplaced gauzes were not found. Dr. Ampil then directed that the incision beclosed. During this entire period, Dr. Fuentes was no longer in the operating room and had, in fact, left thehospital.

Under the "Captain of the Ship" rule, the operating surgeon is the person in complete charge of the surgeryroom and all personnel connected with the operation. Their duty is to obey his orders.16As stated before, Dr.Ampil was the lead surgeon. In other words, he was the "Captain of the Ship." That he discharged such role isevident from his following conduct: (1) calling Dr. Fuentes to perform a hysterectomy; (2) examining the work
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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 twopieces of gauze remained unaccounted for, that caused injury to Natividads body. Clearly, the control andmanagement 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 constitutean independent or separate ground of liability, being a mere evidentiary rule.17In other words, mere invocationand 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 theoriesconcerning their liability for the negligence of physicians.

Until the mid-nineteenth century, hospitals were generally charitable institutions, providing medical services tothe lowest classes of society, without regard for a patients ability to pay.

18Those who could afford medical

treatment were usually treated at home by their doctors.19However, the days of house calls and philanthropichealth care are over. The modern health care industry continues to distance itself from its charitable past and hasexperienced 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 hospitalindustry. One important legal change is an increase in hospital liability for medical malpractice. Many courtsnow 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, whichreads:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged topay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between theparties, 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 ofrespondeat superior, thus:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones 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 bytheir employees in the service of the branches in which the latter are employed or on the occasion of theirfunctions.

Employers shall be liable for the damages caused by their employees and household helpers acting within thescope of their assigned tasks even though the former are not engaged in any business or industry.

x x x x

x x


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The responsibility treated of in this article shall cease when the persons herein mentioned prove that theyobserved 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, andpharmacists, are not "employees" under this article because the manner in which they perform their work is notwithin the control of the latter (employer). In other words, professionals are considered personally liable for thefault or negligence they commit in the discharge of their duties, and their employer cannot be held liable forsuch 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 thephysicians calling preclude him from being classed as an agent or employee of a hospital, whenever he acts ina professional capacity.22It has been said that medical practice strictly involves highly developed andspecialized knowledge,23such that physicians are generally free to exercise their own skill and judgment inrendering medical services sans interference.24Hence, 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 areof his own responsibility.25

The case of Schloendorff v. Society of New York Hospital26was then considered an authority for this view. The

"Schloendorff doctrine" regards a physician, even if employed by a hospital, as an independent contractorbecause of the skill he exercises and the lack of control exerted over his work. Under this doctrine, hospitals areexempt from the application of the respondeat superior principle for fault or negligence committed byphysicians in the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened with the significant developments in medicalcare. Courts came to realize that modern hospitals are increasingly taking active role in supplying andregulating medical care to patients. No longer were a hospitals functions limited to furnishing room, food,facilities for treatment and operation, and attendants for its patients. Thus, in Bing v. Thunig,27the New YorkCourt of Appeals deviated from the Schloendorff doctrine, noting that modern hospitals actually do far morethan 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 andtreatment, even collecting for such services through legal action, if necessary. The court then concluded thatthere 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 inconsequentialin view of our categorical pronouncement in Ramos v. Court of Appeals28that for purposes of apportioningresponsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitalsand their attending and visiting physicians. This Court held:

"We now discuss the responsibility of the hospital in this particular incident. The unique practice (amongprivate 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 malpracticecases. 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 conductof their work within the hospital premises. Doctors who apply for consultant slots, visiting or attending, arerequired to submit proof of completion of residency, their educational qualifications, generally, evidence ofaccreditation by the appropriate board (diplomate), evidence of fellowship in most cases, and references. Theserequirements are carefully scrutinized by members of the hospital administration or by a review committee setup by the hospital who either accept or reject the application. x x x.
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After a physician is accepted, either as a visiting or attending consultant, he is normally required to attendclinico-pathological conferences, conduct bedside rounds for clerks, interns and residents, moderate grandrounds and patient audits and perform other tasks and responsibilities, for the privilege of being able to maintaina clinic in the hospital, and/or for the privilege of admitting patients into the hospital. In addition to these, thephysicians performance as a specialist is generally evaluated by a peer review committee on the basis ofmortality and morbidity statistics, and feedback from patients, nurses, interns and residents. A consultant remissin his duties, or a consultant who regularly falls short of the minimum standards acceptable to the hospital or itspeer 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 toterminate consultants all fulfill the important hallmarks of an employer-employee relationship, with theexception of the payment of wages. In assessing whether such a relationship in fact exists, the control test isdetermining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibilityin medical negligence cases, an employer-employee relationship in effect exists between hospitals and theirattending and visiting physicians. "

But the Ramos pronouncement is not our only basis in sustaining PSIs liability. Its liability is also anchoredupon 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 hospitals liability for negligent acts of healthprofessionals. 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,29has its origin from the law of agency. Itimposes liability, not as the result of the reality of a contractual relationship, but rather because of the actions ofa principal or an employer in somehow misleading the public into believing that the relationship or the authorityexists.30The 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 theagent to assume, or which he holds the agent out to the public as possessing. The question in every case iswhether the principal has by his voluntary act placed the agent in such a situation that a person of ordinaryprudence, conversant with business usages and the nature of the particular business, is justified in presumingthat 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.32There, it was explicitly stated that "there does not appear to be anyrational basis for excluding the concept of apparent authority from the field of hospital liability." Thus, in caseswhere it can be shown that a hospital, by its actions, has held out a particular physician as its agent and/oremployee 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.

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

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 thephysicians associated or accredited by it, including those of Dr. Ampil and Dr. Fuentes. We concur with theCourt of Appeals conclusion that it "is now estopped from passing all the blame to the physicians whose names


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it proudly paraded in the public directory leading the public to believe that it vouched for their skill andcompetence." Indeed, PSIs act is tantamount to holding out to the public that Medical City Hospital, through itsaccredited physicians, offers quality health care services. By accrediting Dr. Ampil and Dr. Fuentes andpublicly advertising their qualifications, the hospital created the impression that they were its agents, authorizedto perform medical or surgical services for its patients. As expected, these patients, Natividad being one ofthem, accepted the services on the reasonable belief that such were being rendered by the hospital or itsemployees, 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 ofabsence of employer-employee relationship between the hospital and the independent physician whose nameand competence are certainly certified to the general public by the hospitals act of listing him and his specialtyin its lobby directory, as in the case herein. The high costs of todays medical and health care should at leastexact on the hospital greater, if not broader, legal responsibility for the conduct of treatment and surgery withinits 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 actingonly through other individuals, such as physicians. If these accredited physicians do their job well, the hospitalsucceeds in its mission of offering quality medical services and thus profits financially. Logically, wherenegligence 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 exercisediligent efforts in the supervision of Drs. Ampil and Fuentes and its nursing staff, resident doctors, and medicalinterns who assisted Drs. Ampil and Fuentes in the performance of their duties as surgeons."34Premised on thedoctrine 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 allocatinghospitals liability for the negligent acts of health practitioners, absent facts to support the application ofrespondeat superior or apparent authority. Its formulation proceeds from the judiciarys acknowledgment that in

these modern times, the duty of providing quality medical service is no longer the sole prerogative andresponsibility of the physician. The modern hospitals have changed structure. Hospitals now tend to organize ahighly professional medical staff whose competence and performance need to be monitored by the hospitalscommensurate with their inherent responsibility to provide quality medical care.35

The doctrine has its genesis in Darling v. Charleston Community Hospital.36There, the Supreme Court ofIllinois 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 thehospital staff; and failing to review the treatment rendered to the patient." On the basis of Darling, otherjurisdictions held that a hospitals corporate negligence extends to permitting a physician known to beincompetent to practice at the hospital.37With 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 whopractice medicine within its walls; and (4) the formulation, adoption and enforcement of adequate rules andpolicies that ensure quality care for its patients.38Thus, in Tucson Medical Center, Inc. v. Misevich,39it washeld that a hospital, following the doctrine of corporate responsibility, has the duty to see that it meets thestandards of responsibilities for the care of patients. Such duty includes the proper supervision of the membersof its medical staff. And in Bost v. Riley,40the court concluded that a patient who enters a hospital does so with
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the reasonable expectation that it will attempt to cure him. The hospital accordingly has the duty to make areasonable effort to monitor and oversee the treatment prescribed and administered by the physicians practicingin its premises.

In the present case, it was duly established that PSI operates the Medical City Hospital for the purpose andunder the concept of providing comprehensive medical services to the public. Accordingly, it has the duty toexercise 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 PSIs liability is traceable to its failure to conduct an investigation of the matter reported in the nota beneof the count nurse. Such failure established PSIs part in the dark conspiracy of silence and concealment aboutthe 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 thetruth. The Court cannot accept that the medical and the healing professions, through their members likedefendant surgeons, and their institutions like PSIs hospital facility, can callously turn their backs on anddisregard even a mere probability of mistake or negligence by refusing or failing to investigate a report of suchseriousness as the one in Natividads case.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of the Medical

City Hospitals staff, composed of resident doctors, nurses, and interns. As such, it is reasonable to concludethat 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,41it was held that a corporation is bound by the knowledge acquired by or notice given to its agents or officerswithin the scope of their authority and in reference to a matter to which their authority extends. This means thatthe knowledge of any of the staff of Medical City Hospital constitutes knowledge of PSI. Now, the failure ofPSI, 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 whopractice medicine within its walls, it also failed to take an active step in fixing the negligence committed. Thisrenders 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 emergingtrend is to hold the hospital responsible where the hospital has failed to monitor and review medical servicesbeing 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 medicalpractitioner because he was an independent contractor within the hospital. The Court of Appeals pointed outthat the hospital had created a professional staff whose competence and performance was to be monitored andreviewed 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 orcare which fell below the recognized standard of care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain inherentresponsibilities regarding the quality of medical care furnished to patients within its walls and it must meet thestandards 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 hospitalhas the duty of supervising the competence of the doctors on its staff. x x x.

x x x x x x
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In the amended complaint, the plaintiffs did plead that the operation was performed at the hospital with itsknowledge, aid, and assistance, and that the negligence of the defendants was the proximate cause of thepatients injuries. We find that such general allegations of negligence, along with the evidence produced at thetrial of this case, are sufficient to support the hospitals 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 emphasizedthat PSI, apart from a general denial of its responsibility, failed to adduce evidence showing that it exercised thediligence 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 alsodirectly liable to the Aganas.

One final word. Once a physician undertakes the treatment and care of a patient, the law imposes on him certainobligations. In order to escape liability, he must possess that reasonable degree of learning, skill and experiencerequired by his profession. At the same time, he must apply reasonable care and diligence in the exercise of hisskill 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 inCA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.

Costs against petitioners PSI and Dr. Miguel Ampil.

SO ORDERED.


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G.R. No. 142625 December 19, 2006

ROGELIO P. NOGALES, for himself and on behalf of the minors, ROGER ANTHONY, ANGELICA,

NANCY, and MICHAEL CHRISTOPHER, all surnamed NOGALES, petitioners,vs.

CAPITOL MEDICAL CENTER, DR. OSCAR ESTRADA, DR. ELY VILLAFLOR, DR. ROSA UY, DR.

JOEL ENRIQUEZ, DR. PERPETUA LACSON, DR. NOE ESPINOLA, and NURSE J. DUMLAO,respondents.

D E C I S I O N

CARPIO,J .:

The Case

This petition for review1assails the 6 February 1998 Decision2and 21 March 2000 Resolution3of the Court ofAppeals in CA-G.R. CV No. 45641. The Court of Appeals affirmed in toto the 22 November 1993 Decision4ofthe Regional Trial Court of Manila, Branch 33, finding Dr. Oscar Estrada solely liable for damages for the deathof his patient, Corazon Nogales, while absolving the remaining respondents of any liability. The Court ofAppeals denied petitioners' motion for reconsideration.

The Facts

Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was under theexclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy or asearly as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted an increase

in her blood pressure and development of leg edema5indicating preeclampsia,6which is a dangerouscomplication of pregnancy.7

Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting Corazon andRogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his home. After examining Corazon, Dr. Estradaadvised her immediate admission to the Capitol Medical Center ("CMC").

On 26 May 1976, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse noted the writtenadmission request8of Dr. Estrada. Upon Corazon's admission at the CMC, Rogelio Nogales ("Rogelio")executed and signed the "Consent on Admission and Agreement"9and "Admission Agreement."10Corazon wasthen brought to the labor room of the CMC.

Dr. Rosa Uy ("Dr. Uy"), who was then a resident physician of CMC, conducted an internal examination ofCorazon. Dr. Uy then called up Dr. Estrada to notify him of her findings.

Based on the Doctor's Order Sheet,11around 3:00 a.m., Dr. Estrada ordered for 10 mg. of valium to beadministered immediately by intramuscular injection. Dr. Estrada later ordered the start of intravenousadministration of syntocinon admixed with dextrose, 5%, in lactated Ringers' solution, at the rate of eight to tenmicro-drops per minute.
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According to the Nurse's Observation Notes,12Dr. Joel Enriquez ("Dr. Enriquez"), an anesthesiologist at CMC,was notified at 4:15 a.m. of Corazon's admission. Subsequently, when asked if he needed the services of ananesthesiologist, Dr. Estrada refused. Despite Dr. Estrada's refusal, Dr. Enriquez stayed to observe Corazon'scondition.

At 6:00 a.m., Corazon was transferred to Delivery Room No. 1 of the CMC. At 6:10 a.m., Corazon's bag ofwater ruptured spontaneously. At 6:12 a.m., Corazon's cervix was fully dilated. At 6:13 a.m., Corazon started toexperience convulsions.

At 6:15 a.m., Dr. Estrada ordered the injection of ten grams of magnesium sulfate. However, Dr. Ely Villaflor("Dr. Villaflor"), who was assisting Dr. Estrada, administered only 2.5 grams of magnesium sulfate.

At 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon's baby. In theprocess, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn. The baby came out in an apnic, cyanotic,weak and injured condition. Consequently, the baby had to be intubated and resuscitated by Dr. Enriquez andDr. Payumo.

At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which rapidly became profuse. Corazon'sblood pressure dropped from 130/80 to 60/40 within five minutes. There was continuous profuse vaginal

bleeding. The assisting nurse administered hemacel through a gauge 19 needle as a side drip to the ongoingintravenous injection of dextrose.

At 7:45 a.m., Dr. Estrada ordered blood typing and cross matching with bottled blood. It took approximately 30minutes for the CMC laboratory, headed by Dr. Perpetua Lacson ("Dr. Lacson"), to comply with Dr. Estrada'sorder and deliver the blood.

At 8:00 a.m., Dr. Noe Espinola ("Dr. Espinola"), head of the Obstetrics-Gynecology Department of the CMC,was apprised of Corazon's condition by telephone. Upon being informed that Corazon was bleeding profusely,Dr. Espinola ordered immediate hysterectomy. Rogelio was made to sign a "Consent to Operation."13

Due to the inclement weather then, Dr. Espinola, who was fetched from his residence by an ambulance, arrivedat the CMC about an hour later or at 9:00 a.m. He examined the patient and ordered some resuscitativemeasures to be administered. Despite Dr. Espinola's efforts, Corazon died at 9:15 a.m. The cause of death was"hemorrhage, post partum."14

On 14 May 1980, petitioners filed a complaint for damages15with the Regional Trial Court16of Manila againstCMC, Dr. Estrada, Dr. Villaflor, Dr. Uy, Dr. Enriquez, Dr. Lacson, Dr. Espinola, and a certain Nurse J. Dumlaofor the death of Corazon. Petitioners mainly contended that defendant physicians and CMC personnel werenegligent in the treatment and management of Corazon's condition. Petitioners charged CMC with negligence inthe selection and supervision of defendant physicians and hospital staff.

For failing to file their answer to the complaint despite service of summons, the trial court declared Dr. Estrada,Dr. Enriquez, and Nurse Dumlao in default.17CMC, Dr. Villaflor, Dr. Uy, Dr. Espinola, and Dr. Lacson filedtheir respective answers denying and opposing the allegations in the complaint. Subsequently, trial ensued.

After more than 11 years of trial, the trial court rendered judgment on 22 November 1993 finding Dr. Estradasolely liable for damages. The trial court ruled as follows:

The victim was under his pre-natal care, apparently, his fault began from his incorrect and inadequatemanagement and lack of treatment of the pre-eclamptic condition of his patient. It is not disputed that hemisapplied the forceps in causing the delivery because it resulted in a large cervical tear which hadcaused the profuse bleeding which he also failed to control with the application of inadequate injection
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of magnesium sulfate by his assistant Dra. Ely Villaflor. Dr. Estrada even failed to notice the erroneousadministration by nurse Dumlao of hemacel by way of side drip, instead of direct intravenous injection,and his failure to consult a senior obstetrician at an early stage of the problem.

On the part however of Dra. Ely Villaflor, Dra. Rosa Uy, Dr. Joel Enriquez, Dr. Lacson, Dr. Espinola,nurse J. Dumlao and CMC, the Court finds no legal justification to find them civilly liable.

On the part of Dra. Ely Villaflor, she was only taking orders from Dr. Estrada, the principal physician of

Corazon Nogales. She can only make suggestions in the manner the patient maybe treated but shecannot impose her will as to do so would be to substitute her good judgment to that of Dr. Estrada. If shefailed to correctly diagnose the true cause of the bleeding which in this case appears to be a cervicallaceration, it cannot be safely concluded by the Court that Dra. Villaflor had the correct diagnosis andshe failed to inform Dr. Estrada. No evidence was introduced to show that indeed Dra. Villaflor haddiscovered that there was laceration at the cervical area of the patient's internal organ.

On the part of nurse Dumlao, there is no showing that when she administered the hemacel as a side drip,she did it on her own. If the correct procedure was directly thru the veins, it could only be because thiswas what was probably the orders of Dr. Estrada.

While the evidence of the plaintiffs shows that Dr. Noe Espinola, who was the Chief of the Departmentof Obstetrics and Gynecology who attended to the patient Mrs. Nogales, it was only at 9:00 a.m. That hewas able to reach the hospital because of typhoon Didang (Exhibit 2). While he was able to giveprescription in the manner Corazon Nogales may be treated, the prescription was based on theinformation given to him by phone and he acted on the basis of facts as presented to him, believing ingood faith that such is the correct remedy. He was not with Dr. Estrada when the patient was brought tothe hospital at 2:30 o'clock a.m. So, whatever errors that Dr. Estrada committed on the patient before9:00 o'clock a.m. are certainly the errors of Dr. Estrada and cannot be the mistake of Dr. Noe Espinola.His failure to come to the hospital on time was due to fortuitous event.

On the part of Dr. Joel Enriquez, while he was present in the delivery room, it is not incumbent upon

him to call the attention of Dr. Estrada, Dra. Villaflor and also of Nurse Dumlao on the alleged errorscommitted by them. Besides, as anesthesiologist, he has no authority to control the actuations of Dr.Estrada and Dra. Villaflor. For the Court to assume that there were errors being committed in thepresence of Dr. Enriquez would be to dwell on conjectures and speculations.

On the civil liability of Dr. Perpetua Lacson, [s]he is a hematologist and in-charge of the blood bank ofthe CMC. The Court cannot accept the theory of the plaintiffs that there was delay in delivering theblood needed by the patient. It was testified, that in order that this blood will be made available, alaboratory test has to be conducted to determine the type of blood, cross matching and other mattersconsistent with medical science so, the lapse of 30 minutes maybe considered a reasonable time to do allof these things, and not a delay as the plaintiffs would want the Court to believe.

Admittedly, Dra. Rosa Uy is a resident physician of the Capitol Medical Center. She was sued becauseof her alleged failure to notice the incompetence and negligence of Dr. Estrada. However, there is noevidence to support such theory. No evidence was adduced to show that Dra. Rosa Uy as a residentphysician of Capitol Medical Center, had knowledge of the mismanagement of the patient CorazonNogales, and that notwithstanding such knowledge, she tolerated the same to happen.

In the pre-trial order, plaintiffs and CMC agreed that defendant CMC did not have any hand orparticipation in the selection or hiring of Dr. Estrada or his assistant Dra. Ely Villaflor as attendingphysician[s] of the deceased. In other words, the two (2) doctors were not employees of the hospital andtherefore the hospital did not have control over their professional conduct. When Mrs. Nogales was


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brought to the hospital, it was an emergency case and defendant CMC had no choice but to admit her.Such being the case, there is therefore no legal ground to apply the provisions of Article 2176 and 2180of the New Civil Code referring to the vicarious liability of an employer for the negligence of itsemployees. If ever in this case there is fault or negligence in the treatment of the deceased on the part ofthe attending physicians who were employed by the family of the deceased, such civil liability should beborne by the attending physicians under the principle of "respondeat superior".

WHEREFORE, premises considered, judgment is hereby rendered finding defendant Dr. Estrada of

Number 13 Pitimini St. San Francisco del Monte, Quezon City civilly liable to pay plaintiffs: 1) By wayof actual damages in the amount of P105,000.00; 2) By way of moral damages in the amount ofP700,000.00; 3) Attorney's fees in the amount of P100,000.00 and to pay the costs of suit.

For failure of the plaintiffs to adduce evidence to support its [sic] allegations against the otherdefendants, the complaint is hereby ordered dismissed. While the Court looks with disfavor the filing ofthe present complaint against the other defendants by the herein plaintiffs, as in a way it has caused thempersonal inconvenience and slight damage on their name and reputation, the Court cannot accepts [sic]however, the theory of the remaining defendants that plaintiffs were motivated in bad faith in the filingof this complaint. For this reason defendants' counterclaims are hereby ordered dismissed.

SO ORDERED.18

Petitioners appealed the trial court's decision. Petitioners claimed that aside from Dr. Estrada, the remainingrespondents should be held equally liable for negligence. Petitioners pointed out the extent of each respondent'salleged liability.

On 6 February 1998, the Court of Appeals affirmed the decision of the trial court.19Petitioners filed a motionfor reconsideration which the Court of Appeals denied in its Resolution of 21 March 2000.20

Hence, this petition.

Meanwhile, petitioners filed a Manifestation dated 12 April 200221

stating that respondents Dr. Estrada, Dr.Enriquez, Dr. Villaflor, and Nurse Dumlao "need no longer be notified of the petition because they areabsolutely not involved in the issue raised before the [Court], regarding the liability of [CMC]."22Petitionersstressed that the subject matter of this petition is the liability of CMC for the negligence of Dr. Estrada.23

The Court issued a Resolution dated 9 September 200224dispensing with the requirement to submit the correctand present addresses of respondents Dr. Estrada, Dr. Enriquez, Dr. Villaflor, and Nurse Dumlao. The Courtstated that with the filing of petitioners' Manifestation, it should be understood that they are claiming onlyagainst respondents CMC, Dr. Espinola, Dr. Lacson, and Dr. Uy who have filed their respective comments.Petitioners are foregoing further claims against respondents Dr. Estrada, Dr. Enriquez, Dr. Villaflor, and NurseDumlao.

The Court noted that Dr. Estrada did not appeal the decision of the Court of Appeals affirming the decision ofthe Regional Trial Court. Accordingly, the decision of the Court of Appeals, affirming the trial court'sjudgment, is already final as against Dr. Oscar Estrada.

Petitioners filed a motion for reconsideration25of the Court's 9 September 2002 Resolution claiming that Dr.Enriquez, Dr. Villaflor and Nurse Dumlao were notified of the petition at their counsels' last known addresses.Petitioners reiterated their imputation of negligence on these respondents. The Court denied petitioners' Motionfor Reconsideration in its 18 February 2004 Resolution.26

The Court of Appeals' Ruling
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In its Decision of 6 February 1998, the Court of Appeals upheld the trial court's ruling. The Court of Appealsrejected petitioners' view that the doctrine inDarling v. Charleston Community Memorial Hospital27applies tothis case. According to the Court of Appeals, the present case differs from theDarlingcase since Dr. Estrada isan independent contractor-physician whereas theDarlingcase involved a physician and a nurse who wereemployees of the hospital.

Citing other American cases, the Court of Appeals further held that the mere fact that a hospital permitted aphysician to practice medicine and use its facilities is not sufficient to render the hospital liable for the

physician's negligence.28A hospital is not responsible for the negligence of a physician who is an independentcontractor.29

The Court of Appeals found the cases ofDavidson v. Conole30and Campbell v. Emma Laing Stevens Hospital31

applicable to this case. Quoting Campbell,the Court of Appeals stated that where there is no proof thatdefendant physician was an employee of defendant hospital or that defendant hospital had reason to know thatany acts of malpractice would take place, defendant hospital could not be held liable for its failure to intervenein the relationship of physician-patient between defendant physician and plaintiff.

On the liability of the other respondents, the Court of Appeals applied the "borrowed servant" doctrineconsidering that Dr. Estrada was an independent contractor who was merely exercising hospital privileges. This

doctrine provides that once the surgeon enters the operating room and takes charge of the proceedings, the actsor omissions of operating room personnel, and any negligence associated with such acts or omissions, areimputable to the surgeon.32While the assisting physicians and nurses may be employed by the hospital, orengaged by the patient, they normally become the temporary servants or agents of the surgeon in charge whilethe operation is in progress, and liability may be imposed upon the surgeon for their negligent acts under thedoctrine ofrespondeat superior.33

The Court of Appeals concluded that since Rogelio engaged Dr. Estrada as the attending physician of his wife,any liability for malpractice must be Dr. Estrada's sole responsibility.

While it found the amount of damages fair and reasonable, the Court of Appeals held that no interest could be

imposed on unliquidated claims or damages.

The Issue

Basically, the issue in this case is whether CMC is vicariously liable for the negligence of Dr. Estrada. Theresolution of this issue rests, on the other hand, on the ascertainment of the relationship between Dr. Estrada andCMC. The Court also believes that a determination of the extent of liability of the other respondents isinevitable to finally and completely dispose of the present controversy.

The Ruling of the Court

The petition is partly meritorious.

On the Liability of CMC

Dr. Estrada's negligence in handling the treatment and management of Corazon's condition which ultimatelyresulted in Corazon's death is no longer in issue. Dr. Estrada did not appeal the decision of the Court of Appealswhich affirmed the ruling of the trial court finding Dr. Estrada solely liable for damages. Accordingly, thefinding of the trial court on Dr. Estrada's negligence is already final.

Petitioners maintain that CMC is vicariously liable for Dr. Estrada's negligence based on Article 2180 inrelation to Article 2176 of the Civil Code. These provisions pertinently state:
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Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts oromissions, but also for those of persons for whom one is responsible.

x x x x

Employers shall be liable for the damages caused by their employees and household helpers actingwithin the scope of their assigned tasks, even though the former are not engaged in any business orindustry.

x x x x

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

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

Similarly, in the United States, a hospital which is the employer, master, or principal of a physician employee,

servant, or agent, may be held liable for the physician's negligence under the doctrine ofrespondeat superior.34

In the present case, petitioners maintain that CMC, in allowing Dr. Estrada to practice and admit patients atCMC, should be liable for Dr. Estrada's malpractice. Rogelio claims that he knew Dr. Estrada as an accreditedphysician of CMC, though he discovered later that Dr. Estrada was not a salaried employee of the CMC.35Rogelio further claims that he was dealing with CMC, whose primary concern was the treatment andmanagement of his wife's condition. Dr. Estrada just happened to be the specific person he talked torepresenting CMC.36Moreover, the fact that CMC made Rogelio sign a Consent on Admission and AdmissionAgreement37and a Consent to Operation printed on the letterhead of CMC indicates that CMC considered Dr.Estrada as a member of its medical staff.

On the other hand, CMC disclaims liability by asserting that Dr. Estrada was a mere visiting physician and thatit admitted Corazon because her physical condition then was classified an emergency obstetrics case.38

CMC alleges that Dr. Estrada is an independent contractor "for whose actuations CMC would be a totalstranger." CMC maintains that it had no control or supervision over Dr. Estrada in the exercise of his medicalprofession.

The Court had the occasion to determine the relationship between a hospital and a consultant or visitingphysician and the liability of such hospital for that physician's negligence inRamos v. Court of Appeals,39towit:

In the first place, hospitals exercise significant control in the hiring and firing of consultants and in theconduct of their work within the hospital premises. Doctors who apply for "consultant" slots, visiting orattending, are required to submit proof of completion of residency, their educational qualifications;generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship inmost cases, and references. These requirements are carefully scrutinized by members of the hospitaladministration or by a review committee set up by the hospital who either accept or reject theapplication. This is particularly true with respondent hospital.

After a physician is accepted, either as a visiting or attending consultant, he is normally required toattend 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
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of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients into thehospital. In addition to these, the physician's performance as a specialist is generally evaluated by a peerreview 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 theminimum standards acceptable to the hospital or its peer review committee, is normally politelyterminated.

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting

"consultant" staff. While "consultants" are not, technically employees, a point which respondenthospital asserts in denying all responsibility for the patient's condition, 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. This being the case, the question now arises as to whether or not respondent hospital issolidarily li

legmed cases fulltxt.docx

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