[KINDS OF AGENCY – AS TO MANNER OF CREATION]
02 PPROFESSIONAL SERVICES V. AGANA
January 31, 2007 | Sandoval Gutierrez, J. |
Petitioner/s: PROFESSIONAL SERVICES, INC.
Respondent/s: NATIVIDAD and ENRIQUE AGANA
Petitioner/s: 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
Respondent/s: JUAN FUENTES
Petitioner/s: MIGUEL AMPIL
Respondent/s: NATIVIDAD AGANA and ENRIQUE AGANA
Doctrine: Insert doctrine here
Facts:
● April 4, 1984 - Natividad Agana was rushed to the Medical City General Hospital
because of difficulty of bowel movement and bloody anal discharge. Diagnosed
with cancer of the sigmoid.
● April 11 - Dr. Ampil performed an anterior resection surgery on Natividad. The
malignancy in her sigmoid area had spread on her left ovary, necessitating the
removal of portions of it. Natividad’s husband, Enrique, consented to permit Dr.
Juan Fuentes to perform a hysterectomy on her.
● After the hysterectomy by Dr. Fuentes, Dr. Ampil took over, completed the
operation and closed the incision.
● However, in the Record of Operation, the nurses entered these remarks:
○ “sponge count lacking 2”
○ “announced to surgeon search done but to no avail continue for closure.”
● April 24 - Natividad was released from the hospital. Bill was P60,000
● After a couple of days, Natividad complained of excruciating pain in her anal
region. She consulted both Dr. Ampil and Dr. Fuentes who told her that the pain
was the 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.
● May 9 – Natividad and her husband, went to the United States to seek further
treatment. After four months, Natividad was told she was free of cancer.
● August 31 - Natividad flew back to the Philippines, still suffering from pains. After 2
weeks, her daughter found a piece of gauze protruding from her vagina. Dr. Ampil
went 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.
● The pains intensified, prompting Natividad to seek treatment at the Polymedic
General Hospital where Dr. Ramon Gutierrez detected the presence of a foul-
smelling gauze 1.5 inches in width which infected her vaginal vault. A recto-vaginal
fistula had formed in her reproductive organs which forced stool to excrete
through the vagina. So in October 1984, Natividad underwent another surgery.
● November 12 – Aganas filed with RTC QC for damages against the Professional
Services, Inc. (PSI), owner of the Medical City Hospital, Dr. Ampil, and Dr. Fuentes.
○ Liable for negligence for leaving 2 pieces of gauze inside Natividad’s body
and malpractice for concealing their negligent acts.
● Enrique Agana also filed with the PRC an administrative complaint for gross
negligence and malpractice against Dr. Ampil and Dr. Fuentes
○ 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.
● February 16, 1986 - Natividad died.
RTC: PSI, Dr. Ampil, and Dr. Fuentes are liable for negligence and malpractice. Pay actual
damages, moral damages, exemplary damages, attorney’s fees, and the costs of the suit.
● PRC Board of Medicine: acquitted Dr. Fuentes. No proof that he left the gauze
inside Natividad’s body and that he concealed such fact.
CA: ruled upon the consolidated cases. Case against Dr. Fuentes is dismissed. Dr. Ampil found
liable to reimburse PSI for what it has paid to the Aganas. Costs against Dr. Ampil and PSI.
 Dr. Ampil appealed. Contending that it was possible that:
o Dr. Fuentes left the gauzes in Natividad’s body after performing
hysterectomy;
o The attending nurses erred in counting the gauzes; and
o The American doctors were the ones who placed the gauzes in
Natividad’s body.
Issue/Held:
W/N Dr. Ampil is liable for negligence and malpractice – YES!
● Dr. Ampil did not present any evidence to prove that the American doctors were
the ones who left the gauzes in Natividad’s body nor evidence to rebut the
correctness of the number of gauzes used.
● As to the Dr. Fuentes, Dr. Ampil examined Dr. Fuentes’ work and found it in order.
● All the circumstances directly point to Dr. Ampil as the negligent party:
● Dr. Ampil did not inform Natividad about the missing two pieces of gauze. 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.
○ What was initially an act of negligence by Dr. Ampil has ripened into a
deliberate wrongful act of deceiving his patient.
● To succeed in a medical malpractice case, a patient must only prove that a health
care provider either failed to do something which a reasonably prudent health care
provider would have done, or that he did something that a reasonably prudent
provider would not have done; and that failure or action caused injury to the
patient.
○ The elements are duty, breach, injury and proximate causation.
● Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects 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 resulting in injury
to Natividad necessitating her further examination by American doctors and
another surgery.
● Dr. Ampil’s negligence is the proximate cause of Natividad’s injury 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.
W/N Dr. Fuentes is liable for negligence and malpractice – NO!
● Aganas contest the acquittal of Dr. Fuentes on the ground of res ipsa loquitur
● 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.
● 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 – MOST IMPORTANT; ABSENT WITH DR.
FUENTES!
○ (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.
● Dr. Ampil was the lead surgeon during the operation of Natividad. He requested
the assistance of Dr. Fuentes only to perform hysterectomy when he found that the
malignancy in her sigmoid area had spread to her left ovary.
● Dr. Fuentes performed the surgery and reported and showed his work to Dr. Ampil.
The latter examined it and allowed Dr. Fuentes to leave the operating room.
● Dr. Ampil 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 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. Dr. Ampil was the “Captain of the Ship.”
W/N PSI is liable for Dr. Ampil’s negligence – YES, it is solidarily liable with Dr. Ampil, and is
also liable for its own negligence.
● Many courts allow claims for hospital vicarious liability under the theories of
respondeat superior, apparent authority, ostensible authority, or agency by
estoppel.
● 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.
● 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.
○ 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.
● Ramos v. CA: For purposes of apportioning responsibility in medical negligence
cases, an employer-employee relationship in effect exists between hospitals and
their attending and visiting physicians.
○ 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 are required to submit proof of completion
of residency, their educational qualifications, generally, evidence of
accreditation by the appropriate board, evidence of fellowship, and
references.
○ The physician’s performance is also evaluated by a peer review
committee on the basis of mortality and morbidity statistics, and
feedback from patients, nurses, interns and residents.
○ Private hospitals hire, fire and exercise real control over their attending
and visiting consultants. While consultants are not, technically
employees, 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.
● PSI’s liability is also anchored upon the agency principle of apparent authority or
agency by estoppel and the doctrine of corporate negligence
● Apparent authority, or the “holding out” theory, or doctrine of ostensible agency
or agency by estoppel, originated 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 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.
● 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.
● 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.
● 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. Thus, it is 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.
● 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.
 ● Corporate entities 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. Where
negligence mars the quality of its services, the hospital should not be allowed to
escape liability for the acts of its ostensible agents.
● PSI also failed to discharge the burden of proving that it exercised the diligence of a
good father of a family in the accreditation and supervision of Dr. Ampil, required
by Art. 2180 to absolve him from liability.
● PSI is also liable under the doctrine of corporate negligence or corporate
responsibility.
○ 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.
○ 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 and legal considerations dictated the holding of
an immediate inquiry into the events.
● 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.
● The knowledge of any of the staff of Medical City Hospital constitutes knowledge
of PSI.
● 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.
Dispositive
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.
Notes
Ruling on the 1st MR:
 Even assuming that Dr. Ampil is not an employee of Medical City, but an independent
contractor, the hospital is still liable to the Aganas. In general, a hospital is not liable
for the negligence of an independent contractor-physician. An exception to this
principle is when the hospital may be liable if the physician is the “ostensible” agent of
the hospital. Two factors are involved:
o First factor focuses on the hospital’s manifestations. It is described as an
inquiry whether the hospital acted in a manner which would lead a reasonable
person to conclude that the individual who was alleged to be negligent was an
employee or agent of the hospital. In this regard, the hospital need not make
express representations to the patient that the treating physician is an
employee of the hospital; rather a representation may be general and
implied.
 This doctrine is a specie of the doctrine of estoppel. (See Art. 1431)
 Estoppel rests on this rule: “Whether a party has, by his own
declaration, act, or omission, intentionally and deliberately led
another to believe a particular thing true, and to act upon such
belief, he cannot, in any litigation arising out of such declaration, act
or omission, be permitted to falsify it.”
o Second factor focuses on the patient’s reliance. It is sometimes characterized
as an inquiry on whether the plaintiff acted in reliance upon the conduct of
the hospital or its agent, consistent with ordinary care and prudence.
 PSI argues that this doctrine cannot apply since Sps. Agana failed to establish proof of
their reliance on the representation of Medical City that Dr. Ampil is its employee.
o Atty. Agana testified that one of the reasons he chose Dr. Ampil was that he
knew him to be a staff member of Medical City, a prominent and known
hospital. Prior to that, he knew Dr. Ampil because he was a neighbor and the
professor of Agana’s daughter in UE School of Medicine. When her daughter
opted to establish a clinic, Dr. Ampil was one of the consultants on how to
establish one. He has also known Dr. Ampil as a specialist when it comes to
that part of the body as a surgeon.
 PSI is estopped from passing the blame solely to Dr. Ampil.
o It displayed his name in the public directory at the lobby which amounts to
holding out to the public that it offers quality medical service through the
listed physicians. This justifies Atty. Agana’s belief that Dr. Ampil was a
member of the staff.
o Under the doctrine of apparent authority, the question 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.
Ruling on the 2nd MR:
● If it is shown that the hospital holds out to the patient that the doctor is its agent,
if there be no ER-EE relationship, the hospital may still be vicariously liable under
Article 2176 in relation to Article 1431 and Article 1869 (principle of apparent
authority).
● 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.
● Both RTC and CA found that no ER-EE relationship existed between Dr. Ampil and
PSI which was not questioned by the Aganas. Such finding therefore became
conclusive upon the SC.
○ 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 ● By its own standard of corporate conduct, PSI’s duty to initiate the review was non-
so PSI cannot be held vicariously liable for the negligence of Dr. Ampil delegable.
under respondeat superior. ● While Dr. Ampil may have had the primary responsibility of notifying Natividad
● However, there is evidence that PSI held out to the patient, Natividad Agana, that about the missing gauzes, PSI imposed upon itself the separate and independent
Dr. Ampil was its agent. responsibility of initiating the inquiry into the missing gauzes.
● Apparent authority elements: ○ The fact that Dr. Ampil negligently failed to notify Natividad did not
○ first, the hospital’s implied manifestation to the patient which led the release PSI from its self-imposed separate responsibility.
latter to conclude that the doctor was the hospital’s agent; and ● PSI also had the duty to take notice of medical records prepared by its own staff
○ second, the patient’s reliance upon the conduct of the hospital and the and submitted to its custody.
doctor, consistent with ordinary care and prudence. ○ The record taken during the operation of Natividad which reported a
● Enrique Agana: he consulted Dr. Ampil regarding the condition of his wife. After the gauze count discrepancy should have given PSI sufficient reason to
meeting and as advised by Dr. Ampil, he asked his wife to go to Medical City to be initiate a review and not have waited for Natividad to complain
examined by Dr. Ampil. The next day, he told his daughter to take her mother to ● PSI’s corporate negligence is different from the medical negligence attributed to
Dr. Ampil. Dr. Ampil.
○ This indicates that it was Enrique who actually made the decision on ○ The failure of PSI to fulfill its duties as a hospital corporation gave rise to
whom Natividad should consult and where, and that the latter merely a direct liability to the Aganas distinct from that of Dr. Ampil.
acceded to it. ● PSI’s hospital liability based on ostensible agency and corporate negligence applies
○ He also testified that the reason he chose Dr. Ampil was because he knew only to this case. It is not intended to set a precedent and should not serve as a
him to be a staff member of Medical City which is a well-known and basis to hold hospitals liable for every form of negligence of their doctors-
prominent hospital. consultants under any and all circumstances.
● PSI’s acts which tend to prove its vicarious liability:
○ It required a “consent for hospital care” to be signed preparatory to the
surgery of Natividad which read:
■ “Permission is hereby given to the medical, nursing and
laboratory staff of the Medical City General Hospital to perform
such diagnostic procedures and to administer such medications
and treatments as may be deemed necessary or advisable by
the physicians of this hospital for and during the
confinement…”
○ PSI admitted that had Natividad Agana complained to the hospital
directly and not merely to Dr. Ampil, it would have acted on her woes.
■ It’s a judicial admission 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 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.
■ By such admission, PSI defined the standards of its corporate
conduct:
● (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.