PROFESSIONAL SERVICES, INC. vs NATIVIDAD AND ENRIQUE AGANA GR No. 126297, 31 January 2007 -------------NATIVIDAD (substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR., EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) AND ENRIQUE AGANA vs JUAN FUENTES GR No. 126467, 31 January 2007 -------------MIGUEL AMPIL vs NATIVIDAD AGANA AND ENRIQUE AGANA GR No. 127590, 31 January 2007 FACTS: On 14 April 1984, Natividad Agana was rushed to The Medical City General Hospital due to bowel movement difficulty and bloody anal discharge. She was diagnosed by Dr. Miguel Ampil to be suffering from fr om “cancer of the sigmoid.” Upon performing anterior anterior resection surgery on Natividad, Dr. Ampil found that cancer had spread on her left ovary. Dr. Ampil sought the consent of Enrique Agana (Natividad’s husband) to permit Dr. Juan Fuentes to perform hysterectomy on her. After Dr. Fuentes completed hysterectomy, Dr. Ampil took over to complete the operation and to close the incision. However, the operation appeared to be flawed. A couple of days days after her release, Natividad Natividad complained complained of excruciating excruciating pain in her her anal region. Her doctors told her that said pain was the consequence of her operation. Dr. Ampil recommended that she consult an oncologist to examine the cancerous node they were not able to remove. Natividad then went to the US for further treatment and was later found free from cancer. She then returned to the Philippines. Two weeks after Natividad’s arrival, her daughter found a piece of gauze protruding from her vagina. Dr. Ampil removed said piece, and assured her that the pains would vanish soon. Still suffering from pain, Natividad sought help from Polymedic General Hospital where it was found that another piece of gauze badly infected her vaginal vault. She took another surgery to remove the same. The spouses Agana then filed a complaint for damages against Professional Services, Inc (owner of The Medical City), Dr. Ampil and Dr. Fuentes. Enrique likewise filed administrative administrative cases against Dr. Ampil (who was unfortunately abroad at that time, so case did not proceed) and Dr. Fuentes. Pending said cases, Natividad died and was substituted by her children. RTC favored the spouses, but the administrative complaint against Dr. Fuentes was dismissed. CA affirmed that Dr. Ampil was liable for damages but exonerated Dr. Fuentes from liability. Hence, these three consolidated petitions for review on certiorari . ISSUE (As to GR No. 126297): Whether PSI should be liable for the negligence of Dr. Ampil. HOLDING: YES. Courts came to realize that modern hospitals are increasingly taking active role in supplying and regulating medical care to patients. No longer were a hospital’s functions limited to furnishing room, food, facilities for treatment and operation, and attendants for its patients. Thus, in Bing v. Thunig, the New York Court of Appeals deviated from the Schloendorff doctrine, Schloendorff doctrine, noting that modern hospitals actually do far more than 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 and treatment, even collecting for such services through legal action, if necessary. The court then concluded that there is no reason to exempt hospitals from the universal rule of respondeat of respondeat superior . In our shores, the nature of the relationship between the hospital and the physicians is rendered inconsequential in view of our categorical pronouncement in Ramos v. Court of Appealsthat Appealsthat for purposes of apportioning responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians. But the Ramos pronouncement is not our only basis in su staining PSI’s liability. Its liability is also anchored upon the agency principle of apparent of apparent authority or agency or agency by estoppel and the doctrine of corporate of corporate negligence which have gained acceptance in the determination of a hospital’s liability for negligent negligen t acts of health professionals. The present case serves as a perfect platform to test the applicability of these doctrines, thus, enriching our jurisprudence. Apparent authority, authority, or what is sometimes referred to as the “holding out” theory, or doctrine of ostensible of ostensible agency or agency or agency by estoppel, estoppel , has its origin from the law of agency. It imposes liability, not as the result of the reality of a contractual relationship, but rather because of the actions of a principal or an employer in somehow misleading the public into believing that
the relationship or the authority exists. The concept is essentially one of estoppel and has been explained in this manner: “The principal is bound by the acts of his agent with the apparent authority which he knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. The question in every case is whether the principal has by his voluntary act placed the agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform the particular act in question. 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. There, it was explicitly stated that “there does not appear to be any rational basis for excluding the concept of apparent authority from the field of hospital liability.” Thus, in cases where it can be shown that a hospital, by its actions, has held out a particular physician as its agent and/or employee and 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 hospit al will be liable for the physician’s negligence. Our jurisdiction recognizes the concept of an agency by implication or estoppel. Article 1869 of the Civil Code reads: ART. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and specializations of the physicians associated or accredited by it, including those of Dr. Ampil and Dr. Fuentes. We concur with the Court of Appeals’ conclusion that it “ is now estopped from passing all the blame to the physicians whose names it proudly paraded in the public directory leading the public to believe that it vouched for their skill and competence.” Indeed, PSI’s act is tantamount to holding out to the public that Medical City Hospital, through its accredited physicians, offers quality health care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications, the hospital created the impression that they were its agents, authorized to perform medical or surgical services for its patients. As expected, these patients, Natividad being one of them, accepted the services on the reasonable belief that such were being rendered by the hospital or its employees, agents, or servants. The trial court correctly pointed out: x x x regardless of the education and status in life of the patient, he ought not be burdened with the defense of absence of employer-employee relationship between the hospital and the independent physician whose name and competence are certainly certified to the general public by the hospital’s act of listing him and his specialty in its lobby directory, as in the case herein. The high costs of today’s medical and health care should at least exact on the hospital greater, if not broader, legal responsibility for the conduct of treatment and surgery within its facility by its accredited physician or surgeon, regardless of whether he is independent or employed.” [33] The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are capable of acting only through other individuals, such as physicians. If these accredited physicians do their job well, the hospital succeeds in its mission of offering quality medical services and thus profits financially. Logically, where negligence mars the quality of its services, the hospital should not be allowed to escape liability for the acts of its ostensible agents.
