G.R. No.

L-65295 March 10, 1987

PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners,

vs.
THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO, respondents.

FELICIANO, J:

In the early morning of 15 November 1975 at about 1:30 a.m. private respondent Leonardo
Dionisio was on his way home he lived in 1214-B Zamora Street, Bangkal, Makati from a
cocktails-and-dinner meeting with his boss, the general manager of a marketing corporation. During
the cocktails phase of the evening, Dionisio had taken "a shot or two" of liquor. Dionisio was driving
his Volkswagen car and had just crossed the intersection of General Lacuna and General Santos
Streets at Bangkal, Makati, not far from his home, and was proceeding down General Lacuna Street,
when his car headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and
thereupon he saw a Ford dump truck looming some 2-1/2 meters away from his car. The dump
truck, owned by and registered in the name of petitioner Phoenix Construction Inc. ("Phoenix"), was
parked on the right hand side of General Lacuna Street (i.e., on the right hand side of a person
facing in the same direction toward which Dionisio's car was proceeding), facing the oncoming
traffic. The dump truck was parked askew (not parallel to the street curb) in such a manner as to
stick out onto the street, partly blocking the way of oncoming traffic. There were no lights nor any so-
called "early warning" reflector devices set anywhere near the dump truck, front or rear. The dump
truck had earlier that evening been driven home by petitioner Armando U. Carbonel, its regular
driver, with the permission of his employer Phoenix, in view of work scheduled to be carried out early
the following morning, Dionisio claimed that he tried to avoid a collision by swerving his car to the left
but it was too late and his car smashed into the dump truck. As a result of the collision, Dionisio
suffered some physical injuries including some permanent facial scars, a "nervous breakdown" and
loss of two gold bridge dentures.

Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically
claiming that the legal and proximate cause of his injuries was the negligent manner in which
Carbonel had parked the dump truck entrusted to him by his employer Phoenix. Phoenix and
Carbonel, on the other hand, countered that the proximate cause of Dionisio's injuries was his own
recklessness in driving fast at the time of the accident, while under the influence of liquor, without his
headlights on and without a curfew pass. Phoenix also sought to establish that it had exercised due
rare in the selection and supervision of the dump truck driver.

The trial court rendered judgment in favor of Dionisio and against Phoenix and Carbonel and
ordered the latter:

(1) To pay plaintiff jointly and severally the sum of P 15,000.00 for hospital bills and
the replacement of the lost dentures of plaintiff;

(2) To pay plaintiff jointly and severally the sum of P 1,50,000.-00 as loss of expected
income for plaintiff brought about the accident in controversy and which is the result
of the negligence of the defendants;

(3) To pay the plaintiff jointly and severally the sum of P 10,000. as moral damages
for the unexpected and sudden withdrawal of plaintiff from his lifetime career as a
marketing man; mental anguish, wounded feeling, serious anxiety, social humiliation,
 besmirched reputation, feeling of economic insecurity, and the untold sorrows and
frustration in life experienced by plaintiff and his family since the accident in
controversy up to the present time;

(4) To pay plaintiff jointly and severally the sum of P 10,000.00 as damages for the
wanton disregard of defendants to settle amicably this case with the plaintiff before
the filing of this case in court for a smaller amount.

(5) To pay the plaintiff jointly and severally the sum of P 4,500.00 due as and for
attorney's fees; and

(6) The cost of suit. (Emphasis supplied)

Phoenix and Carbonel appealed to the Intermediate Appellate Court. That court in CA-G.R. No.
65476 affirmed the decision of the trial court but modified the award of damages to the following
extent:

1. The award of P15,000.00 as compensatory damages was reduced

to P6,460.71, the latter being the only amount that the appellate court
found the plaintiff to have proved as actually sustained by him;

2. The award of P150,000.00 as loss of expected income was

reduced to P100,000.00, basically because Dionisio had voluntarily
resigned his job such that, in the opinion of the appellate court, his
loss of income "was not solely attributable to the accident in
question;" and

3. The award of P100,000.00 as moral damages was held by the

appellate court as excessive and unconscionable and hence reduced
to P50,000.00.

The award of P10,000.00 as exemplary damages and P4,500.00 as

attorney's fees and costs remained untouched.

This decision of the Intermediate Appellate Court is now before us on a petition for review.

Both the trial court and the appellate court had made fairly explicit findings of fact relating to the
manner in which the dump truck was parked along General Lacuna Street on the basis of which both
courts drew the inference that there was negligence on the part of Carbonel, the dump truck driver,
and that this negligence was the proximate cause of the accident and Dionisio's injuries. We note,
however, that both courts failed to pass upon the defense raised by Carbonel and Phoenix that the
true legal and proximate cause of the accident was not the way in which the dump truck had been
parked but rather the reckless way in which Dionisio had driven his car that night when he smashed
into the dump truck. The Intermediate Appellate Court in its questioned decision casually conceded
that Dionisio was "in some way, negligent" but apparently failed to see the relevance of Dionisio's
negligence and made no further mention of it. We have examined the record both before the trial
court and the Intermediate Appellate Court and we find that both parties had placed into the record
sufficient evidence on the basis of which the trial court and the appellate court could have and
should have made findings of fact relating to the alleged reckless manner in which Dionisio drove his
car that night. The petitioners Phoenix and Carbonel contend that if there was negligence in the
manner in which the dump truck was parked, that negligence was merely a "passive and static
condition" and that private respondent Dionisio's recklessness constituted an intervening, efficient
cause determinative of the accident and the injuries he sustained. The need to administer
substantial justice as between the parties in this case, without having to remand it back to the trial
court after eleven years, compels us to address directly the contention put forward by the petitioners
and to examine for ourselves the record pertaining to Dionisio's alleged negligence which must bear
upon the liability, or extent of liability, of Phoenix and Carbonel.

There are four factual issues that need to be looked into: (a) whether or not private respondent
Dionisio had a curfew pass valid and effective for that eventful night; (b) whether Dionisio was
driving fast or speeding just before the collision with the dump truck; (c) whether Dionisio had
purposely turned off his car's headlights before contact with the dump truck or whether those
headlights accidentally malfunctioned moments before the collision; and (d) whether Dionisio was
intoxicated at the time of the accident.

As to the first issue relating to the curfew pass, it is clear that no curfew pass was found on the
person of Dionisio immediately after the accident nor was any found in his car. Phoenix's evidence
here consisted of the testimony of Patrolman Cuyno who had taken Dionisio, unconscious, to the
Makati Medical Center for emergency treatment immediately after the accident. At the Makati
Medical Center, a nurse took off Dionisio's clothes and examined them along with the contents of
pockets together with Patrolman Cuyno. 1 Private respondent Dionisio was not able to produce any curfew pass during the
trial. Instead, he offered the explanation that his family may have misplaced his curfew pass. He also offered a certification (dated two years
after the accident) issued by one Major Benjamin N. Libarnes of the Zone Integrated Police Intelligence Unit of Camp Olivas, San Fernando,
Pampanga, which was said to have authority to issue curfew passes for Pampanga and Metro Manila. This certification was to the effect that
private respondent Dionisio had a valid curfew pass. This certification did not, however, specify any pass serial number or date or period of
effectivity of the supposed curfew pass. We find that private respondent Dionisio was unable to prove possession of a valid curfew pass
during the night of the accident and that the preponderance of evidence shows that he did not have such a pass during that night. The
relevance of possession or non-possession of a curfew pass that night lies in the light it tends to shed on the other related issues: whether
Dionisio was speeding home and whether he had indeed purposely put out his headlights before the accident, in order to avoid detection and
possibly arrest by the police in the nearby police station for travelling after the onset of curfew without a valid curfew pass.

On the second issue whether or not Dionisio was speeding home that night both the trial court
and the appellate court were completely silent.

The defendants in the trial court introduced the testimony of Patrolman Cuyno who was at the scene
of the accident almost immediately after it occurred, the police station where he was based being
barely 200 meters away. Patrolman Cuyno testified that people who had gathered at the scene of
the accident told him that Dionisio's car was "moving fast" and did not have its headlights
on. 2 Dionisio, on the other hand, claimed that he was travelling at a moderate speed at 30
kilometers per hour and had just crossed the intersection of General Santos and General Lacuna
Streets and had started to accelerate when his headlights failed just before the collision took place. 3

Private respondent Dionisio asserts that Patrolman Cuyno's testimony was hearsay and did not fag
within any of the recognized exceptions to the hearsay rule since the facts he testified to were not
acquired by him through official information and had not been given by the informants pursuant to
any duty to do so. Private respondent's objection fails to take account of the fact that the testimony
of Patrolman Cuyno is admissible not under the official records exception to the hearsay rule 4 but
rather as part of the res gestae. 5 Testimonial evidence under this exception to the hearsay rule
consists of excited utterances made on the occasion of an occurrence or event sufficiently startling
in nature so as to render inoperative the normal reflective thought processes of the observer and
hence made as a spontaneous reaction to the occurrence or event, and not the result of reflective
thought. 6

We think that an automobile speeding down a street and suddenly smashing into a stationary object
in the dead of night is a sufficiently startling event as to evoke spontaneous, rather than reflective,
reactions from observers who happened to be around at that time. The testimony of Patrolman
Cuyno was therefore admissible as part of the res gestae and should have been considered by the
trial court. Clearly, substantial weight should have been ascribed to such testimony, even though it
did not, as it could not, have purported to describe quantitatively the precise velocity at winch
Dionisio was travelling just before impact with the Phoenix dump truck.

A third related issue is whether Dionisio purposely turned off his headlights, or whether his
headlights accidentally malfunctioned, just moments before the accident. The Intermediate Appellate
Court expressly found that the headlights of Dionisio's car went off as he crossed the intersection but
was non-committal as to why they did so. It is the petitioners' contention that Dionisio purposely shut
off his headlights even before he reached the intersection so as not to be detected by the police in
the police precinct which he (being a resident in the area) knew was not far away from the
intersection. We believe that the petitioners' theory is a more credible explanation than that offered
by private respondent Dionisio i.e., that he had his headlights on but that, at the crucial moment,
these had in some mysterious if convenient way malfunctioned and gone off, although he succeeded
in switching his lights on again at "bright" split seconds before contact with the dump truck.

A fourth and final issue relates to whether Dionisio was intoxicated at the time of the accident. The
evidence here consisted of the testimony of Patrolman Cuyno to the effect that private respondent
Dionisio smelled of liquor at the time he was taken from his smashed car and brought to the Makati
Medical Center in an unconscious condition. 7This testimony has to be taken in conjunction with the
admission of Dionisio that he had taken "a shot or two" of liquor before dinner with his boss that
night. We do not believe that this evidence is sufficient to show that Dionisio was so heavily under
the influence of liquor as to constitute his driving a motor vehicle per se an act of reckless
imprudence. 8 There simply is not enough evidence to show how much liquor he had in fact taken
and the effects of that upon his physical faculties or upon his judgment or mental alertness. We are
also aware that "one shot or two" of hard liquor may affect different people differently.

The conclusion we draw from the factual circumstances outlined above is that private respondent
Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster
than he should have been. Worse, he extinguished his headlights at or near the intersection of
General Lacuna and General Santos Streets and thus did not see the dump truck that was parked
askew and sticking out onto the road lane.

Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the
legal and proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent
manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel.
That there was a reasonable relationship between petitioner Carbonel's negligence on the one hand
and the accident and respondent's injuries on the other hand, is quite clear. Put in a slightly different
manner, the collision of Dionisio's car with the dump truck was a natural and foreseeable
consequence of the truck driver's negligence.

The petitioners, however, urge that the truck driver's negligence was merely a "passive and static
condition" and that private respondent Dionisio's negligence was an "efficient intervening cause and
that consequently Dionisio's negligence must be regarded as the legal and proximate cause of the
accident rather than the earlier negligence of Carbonel. We note that the petitioners' arguments are
drawn from a reading of some of the older cases in various jurisdictions in the United States but we
are unable to persuade ourselves that these arguments have any validity for our jurisdiction. We
note, firstly, that even in the United States, the distinctions between "cause" and "condition" which
the 'petitioners would have us adopt have already been "almost entirely discredited." Professors and
Keeton make this quite clear:

Cause and condition. Many courts have sought to distinguish between the active
"cause" of the harm and the existing "conditions" upon which that cause operated. If
 the defendant has created only a passive static condition which made the damage
possible, the defendant is said not to be liable. But so far as the fact of causation is
concerned, in the sense of necessary antecedents which have played an important
part in producing the result it is quite impossible to distinguish between active forces
and passive situations, particularly since, as is invariably the case, the latter are the
result of other active forces which have gone before. The defendant who spills
gasoline about the premises creates a "condition," but the act may be culpable
because of the danger of fire. When a spark ignites the gasoline, the condition has
done quite as much to bring about the fire as the spark; and since that is the very risk
which the defendant has created, the defendant will not escape responsibility. Even
the lapse of a considerable time during which the "condition" remains static will not
necessarily affect liability; one who digs a trench in the highway may still be liable to
another who fans into it a month afterward. "Cause" and "condition" still find
occasional mention in the decisions; but the distinction is now almost entirely
discredited. So far as it has any validity at all, it must refer to the type of case where
the forces set in operation by the defendant have come to rest in a position of
apparent safety, and some new force intervenes. But even in such cases, it is not the
distinction between "cause" and "condition" which is important but the nature of the
risk and the character of the intervening cause. 9

We believe, secondly, that the truck driver's negligence far from being a "passive and static
condition" was rather an indispensable and efficient cause. The collision between the dump truck
and the private respondent's car would in an probability not have occurred had the dump truck not
been parked askew without any warning lights or reflector devices. The improper parking of the
dump truck created an unreasonable risk of injury for anyone driving down General Lacuna Street
and for having so created this risk, the truck driver must be held responsible. In our view, Dionisio's
negligence, although later in point of time than the truck driver's negligence and therefore closer to
the accident, was not an efficient intervening or independent cause. What the Petitioners describe as
an "intervening cause" was no more than a foreseeable consequent manner which the truck driver
had parked the dump truck. In other words, the petitioner truck driver owed a duty to private
respondent Dionisio and others similarly situated not to impose upon them the very risk the truck
driver had created. Dionisio's negligence was not of an independent and overpowering nature as to
cut, as it were, the chain of causation in fact between the improper parking of the dump truck and the
accident, nor to sever the juris vinculum of liability. It is helpful to quote once more from Professor
and Keeton:

Foreseeable Intervening Causes. If the intervening cause is one which in ordinary

human experience is reasonably to be anticipated or one which the defendant has
reason to anticipate under the particular circumstances, the defendant may be
negligence among other reasons, because of failure to guard against it; or the
defendant may be negligent only for that reason. Thus one who sets a fire may be
required to foresee that an ordinary, usual and customary wind arising later wig
spread it beyond the defendant's own property, and therefore to take precautions to
prevent that event. The person who leaves the combustible or explosive material
exposed in a public place may foresee the risk of fire from some independent source.
... In all of these cases there is an intervening cause combining with the defendant's
conduct to produce the result and in each case the defendant's negligence consists
in failure to protect the plaintiff against that very risk.

Obviously the defendant cannot be relieved from liability by the fact that the risk or a
substantial and important part of the risk, to which the defendant has subjected the
plaintiff has indeed come to pass. Foreseeable intervening forces are within the
scope original risk, and hence of the defendant's negligence. The courts are quite
 generally agreed that intervening causes which fall fairly in this category will not
supersede the defendant's responsibility.

Thus it has been held that a defendant will be required to anticipate the usual
weather of the vicinity, including all ordinary forces of nature such as usual wind or
rain, or snow or frost or fog or even lightning; that one who leaves an obstruction on
the road or a railroad track should foresee that a vehicle or a train will run into it; ...

The risk created by the defendant may include the intervention of the foreseeable
negligence of others. ... [The standard of reasonable conduct may require the
defendant to protect the plaintiff against 'that occasional negligence which is one of
the ordinary incidents of human life, and therefore to be anticipated.' Thus, a
defendant who blocks the sidewalk and forces the plaintiff to walk in a street where
the plaintiff will be exposed to the risks of heavy traffic becomes liable when the
plaintiff is run down by a car, even though the car is negligently driven; and one who
parks an automobile on the highway without lights at night is not relieved of
responsibility when another negligently drives into it. --- 10

We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate
and proximate cause" of the injury remained the truck driver's "lack of due care" and that
consequently respondent Dionisio may recover damages though such damages are subject to
mitigation by the courts (Article 2179, Civil Code of the Philippines).

Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The theory
here of petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio
had the "last clear chance" of avoiding the accident and hence his injuries, and that Dionisio having
failed to take that "last clear chance" must bear his own injuries alone. The last clear chance doctrine
of the common law was imported into our jurisdiction by Picart vs. Smith 11 but it is a matter for debate whether,
or to what extent, it has found its way into the Civil Code of the Philippines. The historical function of that doctrine in the common law was to
mitigate the harshness of another common law doctrine or rule that of contributory negligence. 12 The common law rule of contributory
negligence prevented any recovery at all by a plaintiff who was also negligent, even if the plaintiff's negligence was relatively minor as
compared with the wrongful act or omission of the defendant. 13 The common law notion of last clear chance permitted courts to grant
recovery to a plaintiff who had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to
do so. 14 Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction where the
common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in
Article 2179 of the Civil Code of the Philippines. 15

Is there perhaps a general concept of "last clear chance" that may be extracted from its common law
matrix and utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do
not believe so. Under Article 2179, the task of a court, in technical terms, is to determine whose
negligence the plaintiff's or the defendant's was the legal or proximate cause of the injury. That
task is not simply or even primarily an exercise in chronology or physics, as the petitioners seem to
imply by the use of terms like "last" or "intervening" or "immediate." The relative location in the
continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is only one of the
relevant factors that may be taken into account. Of more fundamental importance are the nature of
the negligent act or omission of each party and the character and gravity of the risks created by such
act or omission for the rest of the community. The petitioners urge that the truck driver (and therefore
his employer) should be absolved from responsibility for his own prior negligence because the
unfortunate plaintiff failed to act with that increased diligence which had become necessary to avoid
the peril precisely created by the truck driver's own wrongful act or omission. To accept this
proposition is to come too close to wiping out the fundamental principle of law that a man must
respond for the forseeable consequences of his own negligent act or omission. Our law on quasi-
delicts seeks to reduce the risks and burdens of living in society and to allocate them among the
members of society. To accept the petitioners' pro-position must tend to weaken the very bonds of
society.
Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his
employer Phoenix 16in supervising its employees properly and adequately. The respondent appellate court in effect found, correctly
in our opinion, that Phoenix was not able to overcome this presumption of negligence. The circumstance that Phoenix had allowed its truck
driver to bring the dump truck to his home whenever there was work to be done early the following morning, when coupled with the failure to
show any effort on the part of Phoenix to supervise the manner in which the dump truck is parked when away from company premises, is an
affirmative showing of culpa in vigilando on the part of Phoenix.

Turning to the award of damages and taking into account the comparative negligence of private
respondent Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, 17 we
believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages
awarded by the respondent appellate court, except the award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and
costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who
shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs shall be borne exclusively by
the petitioners. Phoenix is of course entitled to reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the reduced
award of damages made by the respondent appellate court.

WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate
amount of compensatory damages, loss of expected income and moral damages private respondent
Dionisio is entitled to by 20% of such amount. Costs against the petitioners.

SO ORDERED.

G.R. No. 126297 January 31, 2007

PROFESSIONAL SERVICES, INC., Petitioner,

vs.
NATIVIDAD and ENRIQUE AGANA, Respondents.

x-----------------------x

G.R. No. 126467 January 31, 2007

NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR.,
EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE
AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent.

x- - - - - - - - - - - - - - - - - - - -- - - - x

G.R. No. 127590 January 31, 2007

MIGUEL AMPIL, Petitioner,

vs.
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

Hospitals, having undertaken one of mankinds most important and delicate endeavors, must
assume the grave responsibility of pursuing it with appropriate care. The care and service dispensed
through this high trust, however technical, complex and esoteric its character may be, must meet
standards of responsibility commensurate with the undertaking to preserve and protect the health,
and indeed, the very lives of those placed in the hospitals keeping.1

Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals
Decision2 dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198 affirming
with modification the Decision3dated March 17, 1993 of the Regional Trial Court (RTC), Branch 96,
Quezon City in Civil Case No. Q-43322 and nullifying its Order dated September 21, 1993.

The facts, as culled from the records, are:

On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital (Medical City
Hospital) because of difficulty of bowel movement and bloody anal discharge. After a series of
medical examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590, diagnosed her to be suffering
from "cancer of the sigmoid."

On April 11, 1984, Dr. Ampil, assisted by the medical staff4 of the Medical City Hospital, performed
an anterior resection surgery on Natividad. He found that the malignancy in her sigmoid area had
spread on her left ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained
the consent of Natividads husband, Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R.
No. 126467, to perform hysterectomy on her.

After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation
and closed the incision.

However, the operation appeared to be flawed. In the corresponding Record of Operation dated April
11, 1984, the attending nurses entered these remarks:

"sponge count lacking 2

"announced to surgeon searched (sic) done but to no avail continue for closure."

On April 24, 1984, Natividad was released from the hospital. Her hospital and medical bills, including
the doctors fees, amounted to P60,000.00.

After a couple of days, Natividad complained of excruciating pain in her anal region. She consulted
both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural consequence of
the surgery. Dr. Ampil then recommended that she consult an oncologist to examine the cancerous
nodes which were not removed during the operation.

On May 9, 1984, Natividad, accompanied by her husband, went to the United States to seek further
treatment. After four months of consultations and laboratory examinations, Natividad was told she
was free of cancer. Hence, she was advised to return to the Philippines.

On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two weeks
thereafter, her daughter found a piece of gauze protruding from her vagina. Upon being informed
about it, Dr. Ampil proceeded 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.

Dr. Ampils assurance did not come true. Instead, the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected
the presence of another foreign object in her vagina -- a foul-smelling gauze measuring 1.5 inches in
width which badly infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive
organs which forced stool to excrete through the vagina. Another surgical operation was needed to
remedy the damage. Thus, in October 1984, Natividad underwent another surgery.

On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon City a
complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical City
Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the
latter are liable for negligence for leaving two pieces of gauze inside Natividads body and
malpractice for concealing their acts of negligence.

Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr. Fuentes,
docketed as Administrative Case No. 1690. The 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.

On February 16, 1986, pending the outcome of the above cases, Natividad died and was duly
substituted by her above-named children (the Aganas).

On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil and
Dr. Fuentes liable for negligence and malpractice, the decretal part of which reads:

WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants
PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTES to pay to the
plaintiffs, jointly and severally, except in respect of the award for exemplary damages and the
interest thereon which are the liabilities of defendants Dr. Ampil and Dr. Fuentes only, as follows:

1. As actual damages, the following amounts:

a. The equivalent in Philippine Currency of the total of US$19,900.00 at the rate of

P21.60-US$1.00, as reimbursement of actual expenses incurred in the United States
of America;

b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician daughter;

c. The total sum of P45,802.50, representing the cost of hospitalization at Polymedic

Hospital, medical fees, and cost of the saline solution;

2. As moral damages, the sum of P2,000,000.00;

3. As exemplary damages, the sum of P300,000.00;

4. As attorneys fees, the sum of P250,000.00;

5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of the
complaint until full payment; and

6. Costs of suit.

SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals, docketed
as CA-G.R. CV No. 42062.

Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial execution of its
Decision, which was granted in an Order dated May 11, 1993. Thereafter, the sheriff levied upon
certain properties of Dr. Ampil and sold them for P451,275.00 and delivered the amount to the
Aganas.

Following their receipt of the money, the Aganas entered into an agreement with PSI and Dr.
Fuentes to indefinitely suspend any further execution of the RTC Decision. However, not long
thereafter, the Aganas again filed a motion for an alias writ of execution against the properties of PSI
and Dr. Fuentes. On September 21, 1993, the RTC granted the motion and issued the
corresponding writ, prompting Dr. Fuentes to file with the Court of Appeals a petition for certiorari
and prohibition, with prayer for preliminary injunction, docketed as CA-G.R. SP No. 32198. During its
pendency, the Court of Appeals issued a Resolution5 dated October 29, 1993 granting Dr. Fuentes
prayer for injunctive relief.

On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.

Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision6 in
Administrative Case No. 1690 dismissing the case against Dr. Fuentes. The Board held that the
prosecution failed to show that Dr. Fuentes was the one who left the two pieces of gauze inside
Natividads body; and that he concealed such fact from Natividad.

On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R. CV
No. 42062 and CA-G.R. SP No. 32198, thus:

WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan
Fuentes is hereby DISMISSED, and with the pronouncement that defendant-appellant Dr. Miguel
Ampil is liable to reimburse defendant-appellant Professional Services, Inc., whatever amount the
latter will pay or had paid to the plaintiffs-appellees, the decision appealed from is hereby
AFFIRMED and the instant appeal DISMISSED.

Concomitant with the above, the petition for certiorari and prohibition filed by herein defendant-
appellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and the challenged order
of the respondent judge dated September 21, 1993, as well as the alias writ of execution issued
pursuant thereto are hereby NULLIFIED and SET ASIDE. The bond posted by the petitioner in
connection with the writ of preliminary injunction issued by this Court on November 29, 1993 is
hereby cancelled.

Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.

SO ORDERED.

Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution7 dated December
19, 1996.

Hence, the instant consolidated petitions.

In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals erred in holding that: (1) it is
estopped from raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable with Dr.
Ampil; and (3) it is not entitled to its counterclaim against the Aganas. PSI contends that Dr. Ampil is
not its employee, but a mere consultant or independent contractor. As such, he alone should answer
for his negligence.

In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that Dr. Fuentes
is not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They
contend that the pieces of gauze are prima facie proofs that the operating surgeons have been
negligent.

Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding him liable for
negligence and malpractice sans evidence that he left the two pieces of gauze in Natividads vagina.
He pointed to other probable causes, such as: (1) it was Dr. Fuentes who used gauzes in performing
the hysterectomy; (2) the attending nurses failure to properly count the gauzes used during surgery;
and (3) the medical intervention of the American doctors who examined Natividad in the United
States of America.

For our resolution are these three vital issues: first, whether the Court of Appeals erred in holding Dr.
Ampil liable for negligence and malpractice; second, whether the Court of Appeals erred in absolving
Dr. Fuentes of any liability; and third, whether PSI may be held solidarily liable for the negligence of
Dr. Ampil.

I - G.R. No. 127590

Whether the Court of Appeals Erred in Holding Dr. Ampil

Liable for Negligence and Malpractice.

Dr. Ampil, in an attempt to absolve himself, gears the Courts attention to other possible causes of
Natividads detriment. He argues that the Court should not discount either of the following
possibilities: first, Dr. Fuentes left the gauzes in Natividads body after performing hysterectomy;
second, the attending nurses erred in counting the gauzes; and third, the American doctors were the
ones who placed the gauzes in Natividads body.

Dr. Ampils arguments are purely conjectural and without basis. Records show that he did not
present any evidence to prove that the American doctors were the ones who put or left the gauzes in
Natividads body. Neither did he submit evidence to rebut the correctness of the record of operation,
particularly the number of gauzes used. As to the alleged negligence of Dr. Fuentes, we are mindful
that Dr. Ampil examined his (Dr. Fuentes) work and found it in order.

The glaring truth is that all the major circumstances, taken together, as specified by the Court of
Appeals, directly point to Dr. Ampil as the negligent party, thus:

First, it is not disputed that the surgeons used gauzes as sponges to control the bleeding of
the patient during the surgical operation.

Second, immediately after the operation, the nurses who assisted in the surgery noted in
their report that the sponge count (was) lacking 2; that such anomaly was announced to
surgeon and that a search was done but to no avail prompting Dr. Ampil to continue for
closure x x x.
 Third, after the operation, two (2) gauzes were extracted from the same spot of the body of
Mrs. Agana where the surgery was performed.

An operation requiring the placing of sponges in the incision is not complete until the sponges are
properly removed, and it is settled that the leaving of sponges or other foreign substances in the
wound after the incision has been closed is at least prima facie negligence by the operating
surgeon.8 To put it simply, such act is considered so inconsistent with due care as to raise an
inference of negligence. There are even legions of authorities to the effect that such act is
negligence per se.9

Of course, the Court is not blind to the reality that there are times when danger to a patients life
precludes a surgeon from further searching missing sponges or foreign objects left in the body. But
this does not leave him free from any obligation. Even if it has been shown that a surgeon was
required by the urgent necessities of the case to leave a sponge in his patients abdomen, because
of the dangers attendant upon delay, still, it is his legal duty to so inform his patient within a
reasonable time thereafter by advising her of what he had been compelled to do. This is in order that
she might seek relief from the effects of the foreign object left in her body as her condition might
permit. The ruling in Smith v. Zeagler10 is explicit, thus:

The removal of all sponges used is part of a surgical operation, and when a physician or surgeon
fails to remove a sponge he has placed in his patients body that should be removed as part of the
operation, he thereby leaves his operation uncompleted and creates a new condition which imposes
upon him the legal duty of calling the new condition to his patients attention, and endeavoring with
the means he has at hand to minimize and avoid untoward results likely to ensue therefrom.

Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, 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. 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. To

successfully pursue this kind of 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.11 Simply put, the elements are duty, breach, injury and proximate
causation. Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects, such as
gauzes, from Natividads 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. Such breach caused injury to Natividad,
necessitating her further examination by American doctors and another surgery. That Dr. Ampils
negligence is the proximate cause12 of Natividads injury 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. That they were later on extracted from Natividads vagina established the causal link
between Dr. Ampils negligence and the injury. And what further aggravated such injury was his
deliberate concealment of the missing gauzes from the knowledge of Natividad and her family.

II - G.R. No. 126467

Whether the Court of Appeals Erred in Absolving

Dr. Fuentes of any Liability

The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the ground
that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the two pieces
of gauze were left inside Natividads body is a prima facie evidence of Dr. Fuentes negligence.

We are not convinced.

Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that 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 plaintiffs prima facie case, and present a question of
fact for defendant to meet with an explanation.13 Stated differently, where the thing which caused the
injury, without the fault of the injured, is under the exclusive control of the defendant and the injury is
such that it should not have occurred if he, having such control used proper care, it affords
reasonable evidence, in the absence of explanation that the injury arose from the defendants want
of care, and the burden of proof is shifted to him to establish that he has observed due care and
diligence.14

From the foregoing statements of the rule, the 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; (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. Of the foregoing requisites, the most instrumental
is the "control and management of the thing which caused the injury."15

We find the element of "control and management of the thing which caused the injury" to be wanting.
Hence, the doctrine of res ipsa loquitur will not lie.

It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil) found
that the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes performed the
surgery and thereafter reported and showed his work to Dr. Ampil. The latter examined it and finding
everything to be in order, allowed Dr. Fuentes to leave the operating room. Dr. Ampil then 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 then 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. Their duty is to obey his orders.16 As
stated before, Dr. Ampil was the lead surgeon. In other words, he was the "Captain of the Ship."
That he discharged such role is evident from his following conduct: (1) calling Dr. Fuentes to perform
a hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order; (3) granting Dr.
Fuentes permission to leave; and (4) ordering the closure of the incision. To our mind, it was this act
of ordering the closure of the incision notwithstanding that two pieces of gauze remained
unaccounted for, that caused injury to Natividads body. Clearly, the control and management of the
thing which caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.

In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se create or
constitute an independent or separate ground of liability, being a mere evidentiary rule.17 In other
words, mere invocation and application of the doctrine does not dispense with the requirement of
proof of negligence. Here, the negligence was proven to have been committed by Dr. Ampil and not
by Dr. Fuentes.
III - G.R. No. 126297

Whether PSI Is Liable for the Negligence of Dr. Ampil

The third issue necessitates a glimpse at the historical development of hospitals and the resulting
theories concerning their liability for the negligence of physicians.

Until the mid-nineteenth century, hospitals were generally charitable institutions, providing medical
services to the lowest classes of society, without regard for a patients ability to pay.18 Those who
could afford medical treatment were usually treated at home by their doctors.19 However, the days of
house calls and philanthropic health care are over. The modern health care industry continues to
distance itself from its charitable past and has experienced a significant conversion from a not-for-
profit health care to for-profit hospital businesses. Consequently, significant changes in health law
have accompanied the business-related changes in the hospital industry. One important legal
change is an increase in hospital liability for medical malpractice. Many courts now allow claims for
hospital vicarious liability under the theories of respondeat superior, apparent authority, ostensible
authority, or agency by estoppel. 20

In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the Civil Code,
which reads:

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.

A derivative of this provision is Article 2180, the rule governing vicarious liability under the doctrine of
respondeat superior, thus:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.

x x x x x x

The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.

Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks even though the former are not engaged in any business or
industry.

x x x x x x

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.

A prominent civilist commented that professionals engaged by an employer, such as physicians,

dentists, and pharmacists, are not "employees" under this article because the manner in which they
perform their work is not within the control of the latter (employer). In other words, professionals are
considered personally liable for the fault or negligence they commit in the discharge of their duties,
and their employer cannot be held liable for such fault or negligence. In the context of the present
case, "a hospital cannot be held liable for the fault or negligence of a physician or surgeon in the
treatment or operation of patients."21

The foregoing view is grounded on the traditional notion that the professional status and the very
nature of the physicians calling preclude him from being classed as an agent or employee of a
hospital, whenever he acts in a professional capacity.22 It has been said that medical practice strictly
involves highly developed and specialized knowledge,23 such that physicians are generally free to
exercise their own skill and judgment in rendering medical services sans interference.24 Hence, when
a doctor practices medicine in a hospital setting, the hospital and its employees are deemed to
subserve him in his ministrations to the patient and his actions are of his own responsibility.25

The case of Schloendorff v. Society of New York Hospital26 was then considered an authority for this
view. The "Schloendorff doctrine" regards a physician, even if employed by a hospital, as an
independent contractor because of the skill he exercises and the lack of control exerted over his
work. Under this doctrine, hospitals are exempt from the application of the respondeat superior
principle for fault or negligence committed by physicians in the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened with the significant developments in
medical care. Courts came to realize that modern hospitals are increasingly taking active role in
supplying and regulating medical care to patients. No longer were a hospitals functions limited to
furnishing room, food, facilities for treatment and operation, and attendants for its patients. Thus, in
Bing v. Thunig,27 the New York Court of Appeals deviated from the 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 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 Appeals28 that for
purposes of apportioning responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians. This Court
held:

"We now discuss the responsibility of the hospital in this particular incident. The unique practice
(among private hospitals) of filling up specialist staff with attending and visiting "consultants," who
are allegedly not hospital employees, presents problems in apportioning responsibility for negligence
in medical malpractice cases. However, the difficulty is more apparent than real.

In the first place, 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, visiting or
attending, are required to submit proof of completion of residency, their educational qualifications,
generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in
most cases, and references. These requirements are carefully scrutinized by members of the
hospital administration or by a review committee set up by the hospital who either accept or reject
the application. x x x.

After a physician is accepted, either as a visiting or attending consultant, he is normally required to

attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients
into the hospital. In addition to these, the physicians performance as a specialist is generally
evaluated by a peer review committee on the basis of mortality and morbidity statistics, and
feedback from patients, nurses, interns and residents. A consultant remiss in his duties, or a
consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer
review committee, is normally politely terminated.

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting
consultant staff. While consultants are not, technically employees, x x x, 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. In assessing whether such a
relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing,
we rule that for the purpose of allocating 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 sustaining PSIs liability. Its liability is also
anchored upon the agency principle of apparent authority or agency by estoppel and the doctrine of
corporate negligence which have gained acceptance in the determination of a hospitals liability for
negligent 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, or what is sometimes referred to as the "holding

out" theory, or doctrine of ostensible agency or agency by estoppel,29 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.30 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.31

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.32 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
hospital will be liable for the physicians 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, PSIs 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 hospitals
act of listing him and his specialty in its lobby directory, as in the case herein. The high costs of
todays 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.

We now proceed to the doctrine of corporate negligence or corporate responsibility.

One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is that PSI
as owner, operator and manager of 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."34 Premised on the doctrine of corporate negligence, the trial court held
that PSI is directly liable for such breach of duty.

We agree with the trial court.

Recent years have seen the doctrine of corporate negligence as the judicial answer to the problem
of allocating hospitals liability for the negligent acts of health practitioners, absent facts to support
the application of respondeat superior or apparent authority. Its formulation proceeds from the
judiciarys acknowledgment that in these modern times, the duty of providing quality medical service
is no longer the sole prerogative and responsibility of the physician. The modern hospitals have
changed structure. Hospitals now tend to organize a highly professional medical staff whose
competence and performance need to be monitored by the hospitals commensurate with their
inherent responsibility to provide quality medical care.35

The doctrine has its genesis in Darling v. Charleston Community Hospital.36 There, the Supreme
Court of Illinois held that "the jury could have found a hospital negligent, inter alia, in failing to have a
sufficient number of trained nurses attending the patient; failing to require a consultation with or
examination by members of the hospital staff; and failing to review the treatment rendered to the
patient." On the basis of Darling, other jurisdictions held that a hospitals corporate negligence
extends to permitting a physician known to be incompetent to practice at the hospital.37 With the
passage of time, more duties were expected from hospitals, among them: (1) the use of reasonable
care in the maintenance of safe and adequate facilities and equipment; (2) the selection and
retention of competent physicians; (3) the overseeing or supervision of all persons who practice
medicine within its walls; and (4) the formulation, adoption and enforcement of adequate rules and
policies that ensure quality care for its patients.38 Thus, in Tucson Medical Center, Inc. v.
Misevich,39 it was held that a hospital, following the doctrine of corporate responsibility, has the duty
to see that it meets the standards of responsibilities for the care of patients. Such duty includes the
proper supervision of the members of its medical staff. And in Bost v. Riley,40 the court concluded
that a patient who enters a hospital does so with the reasonable expectation that it will attempt to
cure him. The hospital accordingly has the duty to make a reasonable effort to monitor and oversee
the treatment prescribed and administered by the physicians practicing in its premises.

In the present case, it was duly established that PSI operates the Medical City Hospital for the
purpose and under the concept of providing comprehensive medical services to the public.
Accordingly, it has the duty to exercise reasonable care to protect from harm all patients admitted
into its facility for medical treatment. Unfortunately, PSI failed to perform such duty. The findings of
the trial court are convincing, thus:

x x x PSIs 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 PSIs part in the dark conspiracy of silence
and concealment about the gauzes. Ethical considerations, if not also legal, dictated the holding of
an immediate inquiry into the events, if not for the benefit of the patient to whom the duty is primarily
owed, then in the interest of arriving at the truth. The Court cannot accept that the medical and the
healing professions, through their members like defendant surgeons, and their institutions like PSIs
hospital facility, can callously turn their backs on and disregard even a mere probability of mistake or
negligence by refusing or failing to investigate a report of such seriousness as the one in Natividads
case.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of the
Medical City Hospitals staff, composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that 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. In Fridena v. Evans,41 it was held that a corporation is bound by the
knowledge acquired by or notice given to its agents or officers within the scope of their authority and
in reference to a matter to which their authority extends. This means that the knowledge of any of
the staff of Medical City Hospital constitutes knowledge of PSI. Now, 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. This renders PSI, not only vicariously liable for the negligence of Dr. Ampil under Article
2180 of the Civil Code, but also directly liable for its own negligence under Article 2176. In Fridena,
the Supreme Court of Arizona held:

x x x In recent years, however, the duty of care owed to the patient by the hospital has expanded.
The emerging trend is to hold the hospital responsible where the hospital has failed to monitor and
review medical services being provided within its walls. See Kahn Hospital Malpractice Prevention,
27 De Paul . Rev. 23 (1977).

Among the cases indicative of the emerging trend is Purcell v. Zimbelman, 18 Ariz. App. 75,500 P.
2d 335 (1972). In Purcell, the hospital argued that it could not be held liable for the malpractice of a
medical practitioner because he was an independent contractor within the hospital. The Court of
Appeals pointed out that the hospital had created a professional staff whose competence and
performance was to be monitored and reviewed by the governing body of the hospital, and the court
held that a hospital would be negligent where it had knowledge or reason to believe that a doctor
using the facilities was employing a method of treatment or care which fell below the recognized
standard of care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of medical care furnished to patients within its walls
and it must meet the standards of responsibility commensurate with this undertaking. Beeck v.
Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court has confirmed the
rulings of the Court of Appeals that a hospital has the duty of supervising the competence of the
doctors on its staff. x x x.

x x x x x x

In the amended complaint, the plaintiffs did plead that the operation was performed at the hospital
with its knowledge, aid, and assistance, and that the negligence of the defendants was the
proximate cause of the patients injuries. We find that such general allegations of negligence, along
with the evidence produced at the trial of this case, are sufficient to support the hospitals liability
based on the theory of negligent supervision."

Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let it be
emphasized that PSI, apart from a general denial of its responsibility, failed to adduce evidence
showing that it exercised the diligence of a good father of a family in the accreditation and
supervision of the latter. In neglecting to offer such proof, PSI failed to discharge its burden under
the last paragraph of Article 2180 cited earlier, and, therefore, must be adjudged solidarily liable with
Dr. Ampil. Moreover, as we have discussed, PSI is also directly liable to the Aganas.

One final word. Once a physician undertakes the treatment and care of a patient, the law imposes
on him certain obligations. In order to escape liability, he must possess that reasonable degree of
learning, skill and experience required by his profession. At the same time, he must apply
reasonable care and diligence in the exercise of his skill and the application of his knowledge, and
exert his best judgment.

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.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

WE CONCUR: