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EN BANC G.R. No. 126297 : February 2, 2010 PROFESSIONAL SERVICES, INC., Petitioner, v. THE COURT OF APPEALS and NATIVIDAD and ENRIQUE AGANA, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 126467 NATIVIDAD [substituted by her children Marcelino Agana III, Enrique Agana, Jr., Emma Agana-Andaya, Jesus Agana and Raymund Agana] and ENRIQUE AGANA, Petitioners, v. THE COURT OF APPEALS and JUAN FUENTES, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 127590 MIGUEL AMPIL, Petitioner, v. NATIVIDAD and ENRIQUE AGANA, Respondents. R E S O L U T I O N CORONA, J.: With prior leave of court,1cralaw petitioner Professional Services, Inc. (PSI) filed a second motion for reconsideration2cralaw urging referral thereof to the Court en banc and seeking modification of the decision dated January 31, 2007 and resolution dated February 11, 2008 which affirmed its vicarious and direct liability for damages to respondents Enrique Agana and the heirs of Natividad Agana (Aganas). Manila Medical Services, Inc. (MMSI),3cralaw Asian Hospital, Inc. (AHI),4cralaw and Private Hospital Association of the Philippines (PHAP)5cralaw all sought to intervene in these cases invoking the common ground that, unless modified, the assailed decision and resolution will jeopardize the financial viability of private hospitals and jack up the cost of health care. The Special First Division of the Court granted the motions for intervention of MMSI, AHI and PHAP (hereafter intervenors),6cralaw and referred en consulta to the Court en banc the motion for prior leave of court and the second motion for reconsideration of PSI.7cralaw Due to paramount public interest, the Court en banc accepted the referral8cralaw and heard the parties on oral arguments on one particular issue: whether a hospital may be held liable for the negligence of physicians-consultants allowed to practice in its premises.9cralaw To recall the salient facts, PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in a complaint10cralaw for damages filed in the Regional Trial Court (RTC) of Quezon City, Branch 96, for the injuries suffered by Natividad when Dr. Ampil and Dr. Fuentes neglected to remove from her body two gauzes11cralaw which were used in the surgery they performed on her on April 11, 1984 at the Medical City General Hospital. PSI was impleaded as owner, operator and manager of the hospital. In a decision12cralaw dated March 17, 1993, the RTC held PSI solidarily liable with Dr. Ampil and Dr. Fuentes for damages.13cralaw On appeal, the Court of Appeals (CA), absolved Dr. Fuentes but affirmed the liability of Dr. Ampil and PSI, subject to the right of PSI to claim reimbursement from Dr. Ampil.14cralaw On petition for review, this Court, in its January 31, 2007 decision, affirmed the CA decision.15cralaw PSI filed a motion for reconsideration16cralaw but the Court denied it in a resolution dated February 11, 2008.17cralaw The Court premised the direct liability of PSI to the Aganas on the following facts and law:
PSI is now asking this Court to reconsider the foregoing rulings for these reasons:
In their respective memoranda, intervenors raise parallel arguments that the Court's ruling on the existence of an employer-employee relationship between private hospitals and consultants will force a drastic and complex alteration in the long-established and currently prevailing relationships among patient, physician and hospital, with burdensome operational and financial consequences and adverse effects on all three parties.30cralaw The Aganas comment that the arguments of PSI need no longer be entertained for they have all been traversed in the assailed decision and resolution.31cralaw 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. While in theory a hospital as a juridical entity cannot practice medicine,32cralaw in reality it utilizes doctors, surgeons and medical practitioners in the conduct of its business of facilitating medical and surgical treatment.33cralaw 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. Where an employment relationship exists, the hospital may be held vicariously liable under Article 217634cralaw in relation to Article 218035cralaw 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 143136cralaw and Article 186937cralaw of the Civil Code or the principle of apparent authority.38cralaw 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.39cralaw 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. 40cralaw it held:
Even in its December 29, 1999 decision41cralaw and April 11, 2002 resolution42cralaw in Ramos, the Court found the control test decisive. In the present case, it appears to have escaped the Court's attention that both the RTC and the CA found no employment relationship between PSI and Dr. Ampil, and that the Aganas did not question such finding. In its March 17, 1993 decision, the RTC found "that defendant doctors were not employees of PSI in its hospital, they being merely consultants without any employer-employee relationship and in the capacity of independent contractors."43cralaw The Aganas never questioned such finding. PSI, Dr. Ampil and Dr. Fuentes appealed44cralaw from the RTC decision but only on the issues of negligence, agency and corporate liability. In its September 6, 1996 decision, the CA mistakenly referred to PSI and Dr. Ampil as employer-employee, but it was clear in its discussion on the matter that it viewed their relationship as one of mere apparent agency.45cralaw The Aganas appealed from the CA decision, but only to question the exoneration of Dr. Fuentes.46cralaw PSI also appealed from the CA decision, and it was then that the issue of employment, though long settled, was unwittingly resurrected. In fine, as there was no dispute over the RTC finding that PSI and Dr. Ampil had no employer-employee relationship, such finding became final and conclusive even to this Court.47cralaw There was no reason for PSI to have raised it as an issue in its petition. Thus, whatever discussion on the matter that may have ensued was purely academic. 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. There is, however, ample evidence that the hospital (PSI) held out to the patient (Natividad)48cralaw 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.49cralaw Enrique testified that on April 2, 1984, he consulted Dr. Ampil regarding the condition of his wife; that after the meeting and as advised by Dr. Ampil, he " asked [his] wife to go to Medical City to be examined by [Dr. Ampil] "; and that the next day, April 3, he told his daughter to take her mother to Dr. Ampil.50cralaw This timeline indicates that it was Enrique who actually made the decision on whom Natividad should consult and where, and that the latter merely acceded to it. It explains the testimony of Natividad that she consulted Dr. Ampil at the instigation of her daughter.51cralaw Moreover, when asked what impelled him to choose Dr. Ampil, Enrique testified:
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. PSI's acts tended to confirm and reinforce, rather than negate, Enrique's view. It is of record that PSI required a "consent for hospital care"53cralaw to be signed preparatory to the surgery of Natividad. The form reads:
By such statement, PSI virtually reinforced the public impression that Dr. Ampil was a physician ofits hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out. PSI pointed out in its memorandum that Dr. Ampil's hospital affiliation was not the exclusive basis of the Aganas decision to have Natividad treated in Medical City General Hospital, meaning that, had Dr. Ampil been affiliated with another hospital, he would still have been chosen by the Aganas as Natividad's surgeon.54cralaw 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. Moving on to the next issue, the Court notes that PSI made the following admission in its Motion for Reconsideration:
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."56cralaw 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 reviewof 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 prominence57cralaw 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;58cralaw 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."59cralaw 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.60cralaw Given the standard of conduct that PSI defined for itself, the next relevant inquiry is whether the hospital measured up to it. 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.61cralaw 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.62cralaw 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.63cralaw The excuses proffered by PSI are totally unacceptable. 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. 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. 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. 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. 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 tothe Aganas distinct from that of Dr. Ampil. 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.64cralaw Other circumstances peculiar to this case warrant this ruling,65cralaw not the least of which being that the agony wrought upon the Aganas has gone on for 26 long years, with Natividad coming to the end of her days racked in pain and agony. Such wretchedness could have been avoided had PSI simply done what was logical: heed the report of a guaze count discrepancy, initiate a review of what went wrong and take corrective measures to ensure the safety of Nativad. Rather, for 26 years, PSI hemmed and hawed at every turn, disowning any such responsibility to its patient. Meanwhile, the options left to the Aganas have all but dwindled, for the status of Dr. Ampil can no longer be ascertained.66cralaw Therefore, taking all the equities of this case into consideration, this Court believes WHEREFORE, the second motion for reconsideration is DENIEDand 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 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. RENATO C. CORONA WE CONCUR: REYNATO S. PUNO
(On leave) C E R T I F I C A T I O N Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO
S. PUNO Endnotes:
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