G.R. No. 126297 / G.R. No. 126467 / G.R. No. 127590. February 2, 2010.
PROFESSIONAL SERVICES, INC., Petitioner, vs. THE COURT OF APPEALS and 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, Petitioners, vs. THE COURT OF APPEALS and JUAN FUENTES, Respondents.
MIGUEL AMPIL, Petitioner, vs. NATIVIDAD and ENRIQUE AGANA, Respondents.

FACTS

Natividad Agana underwent surgery on April 11, 1984, at the Medical City General Hospital, owned and operated by Professional Services, Inc. (PSI). The surgery was performed by Dr. Miguel Ampil and Dr. Juan Fuentes. Two gauzes were allegedly left inside Natividad’s body. Enrique Agana and Natividad Agana (later substituted by her heirs) filed a complaint for damages against PSI, Dr. Ampil, and Dr. Fuentes. The Regional Trial Court (RTC) held PSI solidarily liable with the doctors. The Court of Appeals (CA) absolved Dr. Fuentes but affirmed the liability of Dr. Ampil and PSI, subject to PSI’s right to claim reimbursement from Dr. Ampil. This Court, in a January 31, 2007 decision, affirmed the CA. PSI filed a motion for reconsideration, which was denied on February 11, 2008. PSI then filed a second motion for reconsideration. Manila Medical Services, Inc. (MMSI), Asian Hospital, Inc. (AHI), and Private Hospital Association of the Philippines (PHAP) were allowed to intervene. The issue of whether a hospital may be held liable for the negligence of physicians-consultants practicing in its premises was referred to the Court en banc due to paramount public interest.

ISSUE

Whether a hospital (PSI) may be held liable for the negligence of a physician-consultant (Dr. Ampil) allowed to practice in its premises.

RULING

Yes, PSI is liable to the Aganas, but not under the principle of respondeat superior due to a lack of evidence of an employer-employee relationship with Dr. Ampil. Instead, PSI is liable 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.
The Court held that three legal relationships exist: (1) between the hospital and the doctor; (2) between the hospital and the patient; and (3) between the patient and the doctor. A hospital’s liability can arise from: (1) vicarious liability under respondeat superior if an employer-employee relationship exists; (2) vicarious liability under apparent authority if the hospital holds out the doctor as its agent; or (3) direct liability for its own corporate negligence.
The Court found no employer-employee relationship between PSI and Dr. Ampil, as both the RTC and CA had found them to be independent contractors, a finding not questioned by the Aganas and thus final.
However, PSI was liable under the doctrine of apparent authority. By accrediting Dr. Ampil and advertising his qualifications, PSI created the public impression that he was its agent. Enrique Agana testified that he consulted Dr. Ampil because of his accreditation with PSI, and when they engaged his services, they did so with the impression that he was a staff member of the prestigious hospital.
Furthermore, PSI was directly liable under the principle of corporate negligence. As the owner and operator of the hospital, PSI had a duty to provide comprehensive medical services, exercise reasonable care to protect patients from harm, oversee all persons practicing medicine within its walls, and take active steps to fix any negligence. PSI committed a serious breach of this duty when it failed to conduct an immediate investigation into the reported missing gauzes after the surgery.
Thus, the Court affirmed PSI’s liability to the Aganas based on ostensible agency and corporate negligence.