Professional Services Inc. v.

Agana 2007 decision

Professional Services Inc. (PSI) v. Natividad and Enrique Agana
Natividad and Enrique Agana v. Juan Fuentes
Miguel Ampil v. Natividad and Enrique Agana

FACTS
Natividad Agana was rushed to Medical City because of difficulty of bowel movement and bloody anal
discharge. Dr. Ampil diagnosed her to be suffering from cancer of the sigmoid. Dr. Ampil performed
an anterior resection surgery on her, and finding that the malignancy spread on her left ovary, he
obtained the consent of her husband, Enrique, to permit Dr. Fuentes to perform hysterectomy on her.
After the hysterectomy, Dr. Fuentes showed his work to Dr. Ampil, who examined it and found it in order,
so he allowed Dr. Fuentes to leave the operating room. Dr. Ampil was about to complete the procedure
when the attending nurses made some remarks on the Record of Operation: “sponge count lacking 2;
announced to surgeon search done but to no avail continue for closure” (two pieces of gauze were
missing). A “diligent search” was conducted but they could not be found. Dr. Ampil then directed that the
incision be closed.
A couple of days after, she complained of pain in her anal region, but the doctors told her that it was
just a natural consequence of the surgery. Dr. Ampil recommended that she consult an oncologist to
examine the cancerous nodes which were not removed during the operation. After months of
consultations and examinations in the US, she was told that she was free of cancer. Weeks after coming
back, her daughter found a piece of gauze (1.5 in) protruding from her vagina, so Dr. Ampil manually
extracted this, assuring Natividad that the pains will go away. However, the pain worsened, so she sought
treatment at a hospital, where another 1.5 in piece of gauze was found in her vagina. She underwent
another surgery.

Sps. Agana filed a complaint for damages against PSI (owner of Medical City), Dr. Ampil, and Dr.
Fuentes, alleging that the latter are liable for negligence for leaving 2 pieces of gauze in Natividad’s body,
and malpractice for concealing their acts of negligence. Enrique Agana also filed an administrative
complaint for gross negligence and malpractice against the two doctors with the PRC (although only the
case against Dr. Fuentes was heard since Dr. Ampil was abroad). Pending the outcome of the
cases, Natividad died (now substituted by her children). RTC found PSI and the two doctors liable for
negligence and malpractice. PRC dismissed the case against Dr. Fuentes. CA dismissed only the case
against Fuentes.

ISSUE AND HOLDING

1. WON CA erred in holding Dr. Ampil liable for negligence and malpractice. NO; DR. AMPIL IS
GUILTY
2. WON CA erred in absolving Dr. Fuentes of any liability. NO
3. WON PSI may be held solidarily liable for Dr. Ampil’s negligence. YES
RATIO
DR. AMPIL IS LIABLE FOR NEGLIGENCE AND MALPRACTICE
His arguments are without basis [did not prove that the American doctors were the ones who put / left
the gauzes; did not submit evidence to rebut the correctness of the operation record (re: number of
gauzes used); re: Dr. Fuentes’ alleged negligence, Dr. Ampil examined his work and found it in order].

Leaving foreign substances in the wound after incision has been closed is at least prima
facie negligence by the operating surgeon. Even if it has been shown that a surgeon was required to leave
a sponge in his patient’s abdomen because of the dangers attendant upon delay, still, it is his legal duty
to inform his patient within a reasonable time by advising her of what he had been compelled to do, so
she can seek relief from the effects of the foreign object left in her body as her condition might permit.
What’s worse in this case is that he misled her by saying that the pain was an ordinary consequence of
her operation.

Medical negligence; standard of diligence

To successfully pursue this case of medical negligence, a patient must only prove that a health care
provider either failed to do something [or did something] which a reasonably prudent health care provider
would have done [or wouldn’t have done], and that the failure or action caused injury to the patient.

 Duty – to remove all foreign objects from the body before closure of the incision; if he fails to do
so, it was his duty to inform the patient about it

 Breach – failed to remove foreign objects; failed to inform patient

 Injury – suffered pain that necessitated examination and another surgery

 Proximate Causation – breach caused this injury; could be traced from his act of closing the
incision despite information given by the attendant nurses that 2 pieces of gauze were still
missing; what established causal link: gauze pieces later extracted from patient’s vagina

DR. FUENTES NOT LIABLE

The res ipsa loquitur [thing speaks for itself] argument of the Aganas’ does not convince the court. Mere
invocation and application of this doctrine does not dispense with the requirement of proof of negligence.

Requisites for the applicability of res ipsa loquitur

1. Occurrence of injury

2. Thing which caused injury was under the control and management of the defendant [DR.
FUENTES] — LACKING SINCE CTRL+MGT WAS WITH DR. AMPIL

3. Occurrence was such that in the ordinary course of things, would not have happened if those who
had control or management used proper care

4. Absence of explanation by defendant

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. That Dr. Ampil discharged such role is evident from
the following:

 He called Dr. Fuentes to perform a hysterectomy

 He examined Dr. Fuentes’ work and found it in order

 He granted Dr. Fuentes permission to leave

  He ordered the closure of the incision

HOSPITAL OWNER PSI SOLIDARILY LIABLE WITH DR. AMPIL [NCC 2180], AND DIRECTLY LIABLE TO SPS.
AGANAS [NCC 2176]

Previously, employers cannot be held liable for the fault or negligence of its professionals. However, this
doctrine has weakened since courts came to realize that modern hospitals are taking a more active role
in supplying and regulating medical care to its patients, by employing staff of physicians, among others.
Hence, there is no reason to exempt hospitals from the universal rule of respondeat superior. Here are
the Court’s bases for sustaining PSI’s liability:

 Ramos v. CA doctrine on E-E relationship

o For purposes of apportioning responsibility in medical negligence cases, an employer-

employee relationship in effect exists between hospitals and their attending and visiting
physicians. [LABOR LESSON: power to hire, fire, power of control]

 Agency principle of apparent authority / agency by estoppel

o Imposes liability because of the actions of a principal or employer in somehow misleading

the public into believing that the relationship or the authority exists [see NCC 1869]

o PSI publicly displays in the Medical City lobby the names and specializations of their
physicians. Hence, PSI 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.

 If doctors do well, hospital profits financially, so when negligence mars the quality
of its services, the hospital should not be allowed to escape liability for its agents’
acts.

 Doctrine of corporate negligence / corporate responsibility

o This is 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.

o This provides for the duties expected [from hospitals]. In this case, PSI failed to perform
the duty of exercising reasonable care to protect from harm all patients admitted into its
facility for medical treatment. PSI failed to conduct an investigation of the matter
reported in the note of the count nurse, and this established PSI’s part in the dark
conspiracy of silence and concealment about the gauzes.

 PSI has actual / constructive knowledge of the matter, through the report of the
attending nurses + the fact that the operation was carried on with the assistance
of various hospital staff

o It also breached its duties to oversee or supervise all persons who practice medicine
within its walls and take an active step in fixing the negligence committed

 PSI also liable under NCC 2180

 o It failed to adduce evidence to show that it exercised the diligence of a good father of the
family in the accreditation and supervision of Dr. Ampil

Read below the 2008 press release of the Supreme Court on the same case: (motion for recon)

Hospital, doctor liable for medical negligence

THE SUPREME COURT has upheld the solidary liability of the owners of the Medical City General Hospital
and Dr. Miguel Ampil, a member of its surgical staff, amounting to over Php3 million for medical
negligence for leaving behind two pieces of gauze inside a cancer patient’s body during surgery in 1984.

In a decision penned by Justice Angelina Sandoval-Gutierrez, the Court’s First Division affirmed the Court
of Appeals’ September 6, 1996 decision affirming with modification the March 17, 1993 decision of the
Quezon City Regional Trial Court, Branch 96 and nullifying the RTC’s order dated September 21, 1993. The
Court held both the Professional Services, Inc. (PSI), owner of the Medical City Hospital, and Dr. Ampil
liable for the injury sustained by Natividad Agana.

The Court said Dr. Ampil’s negligence was the proximate cause of Natividad’s injury, which could be traced
from his act of closing the incision despite the information given by the attending nurses that two pieces
of gauze were still missing. It found that Dr. Ampil did not inform Natividad about the two missing pieces
of gauze. Worse, he even misled her that the pain she experienced after the procedure was the ordinary
consequence of her operation. Natividad died in 1986. “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,” the Court said.

Citing Ramos v. CA, the Court said that PSI was liable since an employer-employee relationship exists
between PSI and Dr. Ampil. By accrediting Dr. Ampil and publicly advertising his qualifications, the hospital
created the impression that Dr. Ampil was its agent, authorized to perform medical or surgical services
for its patients, it added.

PROFESSIONAL SERVICES, INC. vs. Court of Appeals 2010 decision

Medical tort

In the very fresh resolution of the Philippine Supreme Court in a medical tort/malpractice case
entitled PROFESSIONAL SERVICES, INC. vs. Court of Appeals, et.al., En Banc, GR No. 126297, February 2,
2010; NATIVIDAD and ENRIQUE AGANA vs. CA, et. al., En Banc, GR NO. 126467, February 2, 2010; MIGUEL
AMPIL vs. Natividad and Enrique Roque, En Banc, G.R. No. 127590, February 2, 2010, the Court, while
affirming the existing doctrine that hospitals as a general rule are not civilly liable for the tortuous acts of
their medical consultants in view of the absence of an employer-employee relationship between,
nonetheless made the following pro hac vice doctrinal pronouncements on the liability of the respondent
hospital based on the doctrines of “ostensible agency” and “corporate negligence”, thus:
1. After gathering its thoughts on the issues, this Court holds that PSI is liable to the Aganas, not under
the principle of respondeat superior for lack of evidence of an employment relationship with Dr. Ampil
but under the principle of ostensible agency for the negligence of Dr. Ampil and, pro hac vice, under the
principle of corporate negligence for its failure to perform its duties as a hospital.

2. While in theory a hospital as a juridical entity cannot practice medicine, in reality it utilizes doctors,
surgeons and medical practitioners in the conduct of its business of facilitating medical and surgical
treatment. Within that reality, three legal relationships crisscross: (1) between the hospital and the doctor
practicing within its premises; (2) between the hospital and the patient being treated or examined within
its premises and (3) between the patient and the doctor. The exact nature of each relationship determines
the basis and extent of the liability of the hospital for the negligence of the doctor.

3. Where an employment relationship exists, the hospital may be held vicariously liable under Article 2176
in relation to Article 2180 of the Civil Code or the principle of respondeat superior. Even when no
employment relationship exists but it is shown that the hospital holds out to the patient that the doctor
is its agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 1431 and
Article 1869 of the Civil Code or the principle of apparent authority. Moreover, regardless of its
relationship with the doctor, the hospital may be held directly liable to the patient for its own negligence
or failure to follow established standard of conduct to which it should conform as a corporation.

4. This Court still employs the “control test” to determine the existence of an employer-employee
relationship between hospital and doctor. In Calamba Medical Center, Inc. v. National Labor Relations
Commission, et al. it held:

Under the "control test", an employment relationship exists between a physician and a hospital if the
hospital controls both the means and the details of the process by which the physician is to accomplish
his task.

xx xx xx

As priorly stated, private respondents maintained specific work-schedules, as determined by petitioner

through its medical director, which consisted of 24-hour shifts totaling forty-eight hours each week and
which were strictly to be observed under pain of administrative sanctions.

That petitioner exercised control over respondents gains light from the undisputed fact that in the
emergency room, the operating room, or any department or ward for that matter, respondents' work is
monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent
of petitioner or its medical director, no operations can be undertaken in those areas. For control test to
apply, it is not essential for the employer to actually supervise the performance of duties of the employee,
it being enough that it has the right to wield the power. (emphasis supplied)

5. Nonetheless, to allay the anxiety of the intervenors, the Court holds that, in this particular instance, the
concurrent finding of the RTC and the CA that PSI was not the employer of Dr. Ampil is correct. Control as
a determinative factor in testing the employer-employee relationship between doctor and hospital under
which the hospital could be held vicariously liable to a patient in medical negligence cases is a requisite
fact to be established by preponderance of evidence. Here, there was insufficient evidence that PSI
exercised the power of control or wielded such power over the means and the details of the specific
process by which Dr. Ampil applied his skills in the treatment of Natividad. Consequently, PSI cannot be
held vicariously liable for the negligence of Dr. Ampil under the principle of respondeat superior.

6. There is, however, ample evidence that the hospital (PSI) held out to the patient (Natividad) that the
doctor (Dr. Ampil) was its agent. Present are the two factors that determine apparent authority: first, the
hospital's implied manifestation to the patient which led the latter to conclude that the doctor was the
hospital's agent; and second, the patient’s reliance upon the conduct of the hospital and the doctor,
consistent with ordinary care and prudence.

7. Clearly, the decision made by Enrique for Natividad to consult Dr. Ampil was significantly influenced by
the impression that Dr. Ampil was a staff member of Medical City General Hospital, and that said hospital
was well known and prominent. Enrique looked upon Dr. Ampil not as independent of but as integrally
related to Medical City.

8. The Court cannot speculate on what could have been behind the Aganas’ decision but would rather
adhere strictly to the fact that, under the circumstances at that time, Enrique decided to consult Dr. Ampil
for he believed him to be a staff member of a prominent and known hospital. After his meeting with Dr.
Ampil, Enrique advised his wife Natividad to go to the Medical City General Hospital to be examined by
said doctor, and the hospital acted in a way that fortified Enrique's belief. This Court must therefore
maintain the ruling that PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent.

9. PSI reiterated its admission when it stated that had Natividad Agana “informed the hospital of her
discomfort and pain, the hospital would have been obliged to act on it.” The significance of the foregoing
statements is critical.

First, they constitute judicial admission by PSI that while it had no power to control the means or method
by which Dr. Ampil conducted the surgery on Natividad Agana, it had the power to review or cause the
review of what may have irregularly transpired within its walls strictly for the purpose of determining
whether some form of negligence may have attended any procedure done inside its premises, with the
ultimate end of protecting its patients.

Second, it is a judicial admission that, by virtue of the nature of its business as well as its prominence in
the hospital industry, it assumed a duty to “tread on” the “captain of the ship” role of any doctor rendering
services within its premises for the purpose of ensuring the safety of the patients availing themselves of
its services and facilities.

Third, by such admission, PSI defined the standards of its corporate conduct under the circumstances of
this case, specifically: (a) that it had a corporate duty to Natividad even after her operation to ensure her
safety as a patient; (b) that its corporate duty was not limited to having its nursing staff note or record the
two missing gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it, bringing
the matter to his attention, and correcting his negligence.

And finally, by such admission, PSI barred itself from arguing in its second motion for reconsideration that
the concept of corporate responsibility was not yet in existence at the time Natividad underwent
treatment; and that if it had any corporate responsibility, the same was limited to reporting the missing
gauzes and did not include “taking an active step in fixing the negligence committed.” An admission made
in the pleading cannot be controverted by the party making such admission and is conclusive as to him,
and all proofs submitted by him contrary thereto or inconsistent therewith should be ignored, whether
or not objection is interposed by a party.

10. PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the personal
responsibility of informing Natividad about the two missing gauzes. Dr. Ricardo Jocson, who was part of
the group of doctors that attended to Natividad, testified that toward the end of the surgery, their group
talked about the missing gauzes but Dr. Ampil assured them that he would personally notify the patient
about it. Furthermore, PSI claimed that there was no reason for it to act on the report on the two missing
gauzes because Natividad Agana showed no signs of complications. She did not even inform the hospital
about her discomfort. The excuses proffered by PSI are totally unacceptable.

11. To begin with, PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil the
duty to review what transpired during the operation. The purpose of such review would have been to
pinpoint when, how and by whom two surgical gauzes were mislaid so that necessary remedial measures
could be taken to avert any jeopardy to Natividad’s recovery. Certainly, PSI could not have expected that
purpose to be achieved by merely hoping that the person likely to have mislaid the gauzes might be able
to retrace his own steps. By its own standard of corporate conduct, PSI's duty to initiate the review was
non-delegable.

12. While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing
gauzes, PSI imposed upon itself the separate and independent responsibility of initiating the inquiry into
the missing gauzes. The purpose of the first would have been to apprise Natividad of what transpired
during her surgery, while the purpose of the second would have been to pinpoint any lapse in procedure
that led to the gauze count discrepancy, so as to prevent a recurrence thereof and to determine corrective
measures that would ensure the safety of Natividad. That Dr. Ampil negligently failed to notify Natividad
did not release PSI from its self-imposed separate responsibility.

13. Corollary to its non-delegable undertaking to review potential incidents of negligence committed
within its premises, PSI had the duty to take notice of medical records prepared by its own staff and
submitted to its custody, especially when these bear earmarks of a surgery gone awry. Thus, the record
taken during the operation of Natividad which reported a gauze count discrepancy should have given PSI
sufficient reason to initiate a review. It should not have waited for Natividad to complain.
14. As it happened, PSI took no heed of the record of operation and consequently did not initiate a review
of what transpired during Natividad’s operation. Rather, it shirked its responsibility and passed it on to
others – to Dr. Ampil whom it expected to inform Natividad, and to Natividad herself to complain before
it took any meaningful step. By its inaction, therefore, PSI failed its own standard of hospital care. It
committed corporate negligence.

15. It should be borne in mind that the corporate negligence ascribed to PSI is different from the medical
negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those of the doctor-
consultant practicing within its premises in relation to the patient; hence, the failure of PSI to fulfill its
duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil.

16. All this notwithstanding, we make it clear that PSI’s hospital liability based on ostensible agency and
corporate negligence applies only to this case, pro hac vice. It is not intended to set a precedent and
should not serve as a basis to hold hospitals liable for every form of negligence of their doctors-consultants
under any and all circumstances. The ruling is unique to this case, for the liability of PSI arose from an
implied agency with Dr. Ampil and an admitted corporate duty to Natividad.

The Court thus made the following orders, to wit:

“WHEREFORE, the second motion for reconsideration is DENIED and the motions for intervention are
NOTED.

Professional Services, Inc. is ORDERED pro hac vice to pay Natividad (substituted by her children Marcelino
Agana III, Enrique Agana, Jr., Emma Agana-Andaya, Jesus Agana and Raymund Agana) and Enrique Agana
the total amount of P15 million, subject to 12% p.a. interest from the finality of this resolution to full
satisfaction.

No further pleadings by any party shall be entertained in this case.

Let the long-delayed entry of judgment be made in this case upon receipt by all concerned parties of this
resolution.

SO ORDERED.”