yrasuegui vs. phil airlines, g.r. no. 168081, oct. 17, 2008

8/10/2019 Yrasuegui vs. Phil Airlines, G.R. No. 168081, Oct. 17, 2008

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Yrasuegui vs. Phil Airlines, G.R. No. 168081, Oct. 17, 2008

Facts:

Armando G. Yrasuegui was a former international flight steward of Philippine Airlines,Inc. (PAL). He stands five feet and eight inches (58) with a large body frame. Theproper weight for a man of his height and body structure is from 147 to 166 pounds,the ideal weight being 166 pounds, as mandated by the Cabin and Crew

Administration Manual of PAL. His weight problem dates back to 1984 when PALadvised him to go on an extended vacation leave from December 29, 1984 to March4, 1985 to address his weight concerns. For failure to meet the weight standardsanother leave without pay from March 5, 1985 to November 1985 was imposed. Hemet the required weight and was allowed to work but his weight problem recurred,thus another leave without pay from October 17, 1988 to February 1989. From 1989to 1992 his weight fluctuated from 209lb, 215lb, 217lb, 212lb, and 205. During thatperiod he was requested to lose weight and to report for weight checks which heconstantly failed to do. In the meantime his status was off-duty.Finally in 1993,petitioner was formally informed by PAL that due to his inability to attain his idealweight, and considering the utmost leniencyextended to him which spanned aperiod covering a total of almost five (5) years, his services were consideredterminated effective immediately.He then filed a complaint for illegal dismissalagainst PAL. The Labor Arbiter ruled that he was illegally dismissed and entitles toreinstatement, backwages and attorneys fees. The NLRC affirmed the LA. The CAreversed the NLRC.

Issue: Whether or not petitioner was illegally dismissed.

Ruling:The obesity of petitioner is a ground for dismissal under Article 282(e) of the

Labor Code. The weight standards of PAL constitute a continuing qualification of an

employee in order to keep the job. Tersely put, an employee may be dismissed themoment he is unable to comply with his ideal weight as prescribed by the weight

standards. The dismissal would fall under Article 282(e) of the Labor Code. As

explained by the CA:

x x x [T]he standards violated in this case were not mere ordersof the employer;they were the prescribed weights that a cabin crew must maintain in order toqualify for and keep his or her position in the company. In other words, they werestandards that establish continuingqualifications for an employees position. The failure to meet the employersqualifying standards is in fact a ground that does not squarely fall under grounds (a)

to (d) and is therefore one that falls under Article 282(e) the other causesanalogous to the foregoing.

By its nature, these qualifying standardsare norms that apply prior to and after anemployee is hired. x x xWe hold that the obesity of petitioner, when placed in the context of his work as flightattendant, becomes an analogous cause under Article 282(e) of the Labor Code thatjustifies his dismissal f rom the service. His obesity may not be unintended, but isnonetheless voluntary.

II. The dismissal of petitioner can be predicated on the bona fide occupationalqualification defense. Employment in particular jobs may not be limited to persons ofa particular sex, religion, or national origin unless the employer can show that sex,religion, or national origin is an actual qualification for performing the job. Thequalification is called a bona fide occupational qualification (BFOQ). A commoncarrier, from the nature of its business and for reasons of public policy, is bound toobserve extraordinary diligence for the safety of the passengers it transports. Thus, itis only logical to hold that the weight standards of PAL show its effort to comply withthe exacting obligations imposed upon it by law by virtue of being a common carrier.The primary objective of PAL in the imposition of the weight standards for cabin crewis flight safety. The task of a cabin crew or flight attendant is not limited to servingmeals or attending to the whims and caprices of the passengers. The most importantactivity of the cabin crew is to care for the safety of passengers and the evacuation ofthe aircraft when an emergency occurs. Passenger safety goes to the core of the jobof a cabin attendant. Truly, airlines need cabin attendants who have the necessarystrength to open emergency doors, the agility to attend to passengers in crampedworking conditions, and the stamina to withstand grueling flight schedules. On boardan aircraft, the body weight and size of a cabin attendant are important factors toconsider in case of emergency. Aircrafts have constricted cabin space, and narrowaisles and exit doors. Thus, the arguments of respondent that [w]hether theairlines flight attendants are overweight or not has no direct relation to its mission oftransporting passengers to their destination; and that the weight standards hasnothing to do with airworthiness of respondents airlines, must fail. The job of a cabinattendant during emergencies is to speedily get the passengers out of the aircraftsafely. Being overweight necessarily impedes mobility. Indeed, in an emergencysituation, seconds are what cabin attendants are dealing with, not minutes. Three lostseconds can translate into three lost lives. Evacuation might slow down just becausea wide-bodied cabin attendant is blocking the narrow aisles. Petitioner is entitled toseparation pay. Normally, a legally dismissed employee is not entitled to separationpay. This may be deduced from the language of Article 279 of the Labor Code that[a]n employee who is unjustly dismissed from work shall be entitled toreinstatement without loss of seniority rights and other privileges and to his fullbackwages, inclusive of allowances, and to his other benefits or their monetaryequivalent computed from the time his compensation was withheld from him up to thetime of his actual reinstatement. Luckily for petitioner, this is not an ironclad rule.


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Exceptionally, separation pay is granted to a legally dismissed employee as an actsocial justice, or based on equity. In both instances, it is required that thedismissal (1) was not for serious misconduct; and (2) does not reflect on the moralcharacter of the employee. Here, We grant petitioner separation pay equivalent toone-half (1/2) months pay for every year of service. It should include regularallowances which he might have been receiving.

Corporate Law Case Digest:Professional Services, Inc V. CA (2010)

FACTS:

Enrique Agana told his wife Natividad Agana to go look for their neighbor, Dr. Ampil,a surgeon staff member of Medical City, a prominent and known hospitalNatividad suffered from injury due to 2 gauges left inside her body so theysued Professional Inc. (PSI) Despite, the report of 2 missing gauzes after theoperation PSI did NOT initiate an investigation

ISSUE:W/N PSI should be liable for tort.

HELD:YES. 15M + 12% int. until full satisfaction.While PSI had no power to control the means/method by which Dr. Ampil conductedthe surgery on Natividad, they had the power to review or cause the review PSI hadthe duty to tread on as captain of the ship for the purpose of ensuing the safety ofthepatients availing themselves of its services and facilities PSI defined its standardsof corporate conduct:Even after her operation to ensure her safety as a patient NOT limited to record the 2missing gauzes Extended to determining Dr. Ampils role in it, bringing the matter tohis attention and correcting his negligence

Admission bars itself from arguing that its corp. resp. is NOT yet in existence at thetime Natividad underwent treatment Dr. Ampil - medial negligencePSI - Corporate NegligenceNOTE:Liability unique to this case because of implied agency and admitted corporate duty26 years already and Dr. Ampil's status could no longer be ascertained

ZEL T. ZAFRA and EDWIN B. ECARMA, petitioners, vs. HON. COURT OFAPPEALS, PHILIPPINE LONG DISTANCE TELEPHONE CO., INC.,AUGUSTO COTELO, and ERIBERTO MELLIZA, respondents.

For review on certiorari is the decision[1]of the Court of Appeals datedDecember 22, 1998, in CA-G.R. SP. No. 48578, reversing that of the voluntary

arbitrator which ordered respondent Philippine Long Distance Telephone Co. (PLDT)to reinstate petitioners. Also impugned is the resolution dated May 24, 1999, denyingpetitioners motion for reconsideration.

The undisputed facts, as set forth in the decision of the Court of Appeals, are asfollows:

Petitioner Zel T. Zafra was hired by PLDT on October 1, 1984 as OperationsAnalyst II with a monthly salary of P14,382 while co-petitioner Edwin B. Ecarma washired as Junior Operations Analyst I on September 16, 1987 at a monthly rate ofP12,032. Both were regular rank-and-file employees assigned at the RegionalOperations and Maintenance Control Center (ROMCC) of PLDTs Cebu ProvincialDivision. They were tasked to maintain the operations and maintenance of thetelephone exchanges in the Visayas and Mindanao areas.[2]

In March 1995, petitioners were chosen for the OMC Specialist and SystemSoftware Acceptance Training Program in Germany in preparation for ALCATEL1000 S12, a World Bank-financed PLDT project in line with its Zero BacklogProgram. ALCATEL, the foreign supplier, shouldered the cost of their training andtravel expenses. Petitioners left for Germany on April 10, 1995 and stayed there until

July 21, 1995.[3]

On July 12, 1995, while petitioners were in Germany, a certain Mr. R. Relucio,SwitchNet Division Manager, requested advice, through an inter-office memorandum,from the Cebu and Davao Provincial Managers if any of the training participants wereinterested to transfer to the Sampaloc ROMCC to address the operationalrequirements therein. The transfer was to be made before the ALCATEL exchangesand operations and maintenance center in Sampaloc would become operational.

Upon petitioners return from Germany, a certain Mr. W.P. Acantillado, SeniorManager of the PLDT Cebu Plant, informed them about the memorandum. Theybalked at the idea, but PLDT, through an inter-office memorandum dated December

21, 1995, proceeded to transfer petitioners to the Sampaloc ROMCC effectiveJanuary 3, 1996.[4]

Petitioners left Cebu for Manila on December 27, 1995 to air their grievance toPLDT and to seek assistance from their union head office in Mandaluyong. PLDTordered petitioners to report for work on January 16, 1996, but they asked for adeferment to February 1, 1996. Petitioners reported for work at the Sampaloc officeon January 29, 1996. Meanwhile PLDT moved the effectivity date of their transfer toMarch 1, 1996. On March 13, 1996, petitioners again appealed to PLDT to noavail. And, because all their appeals fell on deaf ears, petitioners, while in Manila,tendered their resignation letters on March 21, 1996. Consequently, the expenses for

their training in Germany were deducted from petitioners final pay.
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On September 11, 1996, petitioners filed a complaint with the National LaborRelations Commission Regional Arbitration Branch No. 7 for alleged constructivedismissal and non-payment of benefits under the Collective BargainingAgreement.[5]In an order dated November 10, 1996, the presiding labor arbiterreferred the complaint to the National Conciliation and Mediation Board, Cebu City,for appropriate action.[6]On January 17, 1997, the parties agreed to designate lawyerRolando M. Lim as their voluntary arbitrator.[7]

In their complaint, petitioners prayed that their dismissal from employment bedeclared illegal. They also asked for reinstatement with full backwages, refund ofunauthorized deductions from their final pay, including damages, costs of litigation,and attorneys fees.[8]

Respondent PLDT, for its part, averred that petitioners agreed to accept anyassignment within PLDT in their application for employment[9]and also in theundertaking[10]they executed prior to their training in Germany. It prayed thatpetitioners complaint be dismissed.

After submission of their respective position papers and admission of facts, thecase was set for hearing. Petitioners presented their witnesses and made their

formal offer of documentary evidence. PLDT, however, requested for a re-setting ofthe hearing from October 9 and 10, 1997 to November 10 and 11, 1997 .[11]But onthose dates PLDT did not appear. Nor did it file any notice of postponement ormotion to cancel the hearings.[12]

Upon petitioners motion and pursuant to Article 262-A of the Labor Code,[13]thevoluntary arbitrator issued an order admitting all documentary exhibits offered inevidence by petitioners and submitting the case for resolution.[14]In said order, PLDTwas declared to have waived its right to present evidence on account of its unjustifiedfailure to appear in the November 10 to 11 hearings.

On December 1, 1997, the voluntary arbitrator issued a decision which reads:

IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, judgment is herebyrendered in the above case, in favor of complainants Zel Zafra and Edwin Ecarmaand against respondent PLDT, as follows:

1. Declaring that complainants were illegally dismissed by reason ofthe forced resignations or constructive discharge from theirrespective employment with PLDT;

2. Ordering the reinstatement of complainants without loss of seniorityrights and other privileges, and granting the award of full

backwages from April 22, 1996, inclusive of allowances granted inthe CBA or their monetary equivalent computed from the time

complainants compensation were withheld up to the time of theiractual reinstatement, or in lieu thereof, ordering the payment ofseparation pay with full backwages;

3. Ordering the refund of P35,721.81 to complainant Zafra andP24,186.67 to complainant Ecarma, which amounts constitute asunauthorized deductions from their final pay;

4. Ordering payment of P50,000.00 as moral damages; P20,000.00 asexemplary damages and P20,000.00 as refund for litigationexpenses;

5. Ordering payment of 10% Attorneys Fees computed on alladjudicated claims.

SO ORDERED.[15]

PLDTs motion for reconsideration of the above decision was denied on July 10,1998.[16]On August 7, 1998, PLDT initiated a special civil action for certiorari with theCourt of Appeals,[17]which was treated as a petition for review.[18]On December 22,

1998, the CA ruled in favor of PLDT and reversed the voluntary arbitrators decision,in this wise:

WHEREFORE, the instant petition is hereby given due course. Accordingly, theassailed Order is hereby REVERSED with the exception of the refund, which ishereby ordered, of the amount of P35,721.81 to respondent Zafra and P24,186.67 torespondent Ecarma representing unauthorized deductions from their final pay.

SO ORDERED.[19]

Zafra and Ecarma as respondents below moved for reconsideration of the CAdecision which, however, was denied on May 24, 1999.[20]

Petitioners now anchor their petition on the following grounds:

I. THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCEIN THE RESPONDENTS PETITION IN A WAY PROBABLY NOT INACCORD WITH THE LAW OR THE APPLICABLE DECISIONS OF THESUPREME COURT.

A. THE COURT A QUO, INSTEAD OF RESOLVING ERRORS OFJURISDICTION ALLEGED IN THE RESPONDENTS PETITION

ERRED IN RENDERING THE DECISION ON ITS MERITS, IN
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EFFECT NOT ACCORDING RESPECT AND SETTING ASIDE THEVOLUNTARY ARBITRATORS EVALUATION OF THE EVIDENCEAND FACTUAL FINDINGS BASED THEREON.

B. THE COURT A QUO, IN GIVING DUE COURSE TO THERESPONDENTS PETITION ERRED IN PROCEEDING TORESOLVE THE SAME ON THE MERITS, WITHOUT FIRSTREVIEWING THE ENTIRE RECORD OF THE PROCEEDINGS OFTHE VOLUNTARY ARBITRATOR.

II. THE COURT OF APPEALS HAS DEPARTED FROM THE ACCEPTED ANDUSUAL COURSE OF JUDICIAL PROCEEDINGS, AS TO CALL FOR ANEXERCISE OF THE HONORABLE SUPREME COURTS SUPERVISION.

A. THE COURT A QUO COMMITTED GRAVE ABUSE OF DISCRETIONIN RENDERING THE DECISION THROUGH ITS UTTERDISREGARD OF THE APPROPRIATE MODE OF APPEAL TO BETAKEN BY THE RESPONDENTS FROM THE JUDGMENT OF THE

VOLUNTARY ARBITRATOR.

B. THE COURT A QUO COMMITTED GRAVE ABUSE OF ITSDISCRETION IN TREATING JOINTLY THE RESPONDENTSPETITION EITHER AS AN APPEAL UNDER RULE 43, OR IN THEALTERNATIVE, A SPECIAL CIVIL ACTION FOR CERTIORARIUNDER RULE 65.

C. THE COURT A QUO COMMITTED GRAVE ABUSE OF ITSDISCRETION IN FAILING TO DISMISS THE RESPONDENTSPETITION FOR CERTIORARI OUTRIGHTLY FOR FAILURE TO

COMPLY WITH THE STRICT REQUIREMENTS IN THE FILINGTHEREOF.[21]

Briefly, the issues in this case may be restated as follows: (1) whether or not theCA erred in treating the special civil action for certiorari filed by respondent as apetition for review, and (2) whether or not the CA erred in its appreciation of facts andthe decision it rendered.

Petitioners invoke Luzon Development Bank vs. Association of LuzonDevelopment Bank Employees, et al.[22]and Rule 43 of the 1997 Rules of CivilProcedure[23]in arguing that an appeal and not a petition for certiorari should be theproper remedy to question the decision or award of the voluntary arbitrator. Evenassuming that Rule 65 applies, petitioners argue that PLDT, nevertheless, erred in

not including the voluntary arbitrator as one of the respondents in the petition and innot serving him a copy thereof.[24]These procedural flaws, they aver, merit theoutright dismissal by the CA of the petition.[25]

A perusal of the petition before the CA shows that the mode chosen by PLDTwas a petition for review under Rule 43 and not a special civil action for certiorariunder Rule 65. While it was captioned as a petition for certiorari, it is not the captionof the pleading but the allegations therein that determine the nature of the

action.[26]The appellate court was not precluded from granting relief as warranted byPLDTs allegations in the petition and the evidence it had presented to support thepetition.

A perusal of the petition before the CA discloses the following: First, under theheading Nature of the Action, the PLDT averred it was a petition for review oncertiorariof the Decision dated December 1, 1997 and Order dated July 10, 1998 ofVoluntary Arbitrator Atty. Rolando M. Lim.[27]Second, while the assigned errorsalleged that the voluntary arbitrator acted with grave abuse of discretion,nevertheless, the issue set forth was whether or not there existed sufficientevidence to show that complainants [herein petitioners] were constructivelydismissed, and whether they were entitled to reinstatement, back wages andother monetary awards.[28]Clearly, the issue was factual and not limited toquestions of jurisdiction and grave abuse of discretion. Third, the petition was filedwithin the 15-day period to perfect an appeal and did not implead the voluntaryarbitrator as a respondent. All of these indicate that the petition below was indeedone for review.

Moreover, contrary to petitioners contention that the voluntary arbitrator was notfurnished a copy of the petition, the records reveal otherwise. Attached to the petitionfiled before the appellate court was a registry receipt of the copy sent to the voluntaryarbitrator.[29]

Coming now to the substantive merits of the petition before us. Consideringthat the CAs findings of fact clash with those of the voluntary arbitrator, withcontradictory results, this Court is compelled to go over the records of the case aswell as the submissions of the parties. Having done so carefully, we are notconvinced that the voluntary arbitrator erred in his factual conclusions so as to justifyreversal thereof by the appellate court. We are persuaded to rule in favor of thecomplaining workers, herein petitioners, following the well-established doctrine inlabor-management relations that in case of doubt, labor should prevail.

The fact that petitioners, in their application for employment ,[30]agreed to betransferred or assigned to any branch[31]should not be taken in isolation, but rather inconjunction with the established company practice in PLDT.
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The standard operating procedure in PLDT is to inform personnel regarding thenature and location of their future assignments after training abroad. This prevailingcompany practice is evidenced by the inter-office memorandum[32]of a certainPLDTs First Vice President (Reyes), dated May 3, 1996 to PLDTs Chief OperatingOfficer (Perez), duly-acknowledged by private respondents:

x x x

To : Atty. E.D. Perez, SEVP & COOThru : J.P. de Jesus, EVP - Meet Demand GroupFrom : FVP - Program Planning & Engineering Sector

Subject: NON-ASSIGNABLE TRAINED PERSONNEL

=====================================================

During the Group Heads Meeting on 03 April 1996, Mr. R.R. Zarate reported on thecase of some provincial personnel who had foreign training for functions intended forManila Operations but refused to be relocated and assigned to Manila, and who

eventually resigned on account of the said transfer. In view of this situation, two (2)issues were raised as follows:

1. Network Services to be involved in the planning of facilities, specially whenthis involves trainees from Network.

2. Actual training to be undertaken only after the sites where such training willbe utilized have been determined.

x x x

A total of 53 slots (for the Exchange O&M, System Software/Acceptance Engineeringand OMC Specialist Courses) were allocated to Network Services by the SteeringCommittee composed of representatives from ProgPlan and TechTrain. The O&Mslots were equally distributed to Provincial Operations on the basis where Alcatelswitches will be geographically installed. With regards to NSC, since the contract hasdefined its location to be in Sampaloc and considering that its monitoring functionwould focus on provincial exchanges, slots were opened both for Provincial andMetro Manila Operations. Please note that all these relevant informations weredisseminated to concerned parties as inputs, to enable them to recommend theappropriate training participants.

The choice of trainees were made by Network and, therefore, it is incumbent uponthem to brief the participants or trainees they selected on the nature and assignmentof their employment after training.

To prevent similar instances in the future, we strongly recommend the following:

1. Prior to the training, all concerned groups should conform with the standard

practice of informing personnel regarding the nature and/or location of theirfuture assignments after the training.

2. The contractual obligation of the trainees should include a provision on theirwillingness and commitment to perform the related training functionalitiesrequired by the company.

x x x (Underscoring supplied.)

The want of notice of transfer to petitioners was the subject of another inter-office memorandum dated November 24, 1995, from one Mr. Relucio, SwitchNet

Division Manager, to a certain Mr. Albania, First Vice President-Regional & TollNetwork. It states:

As the cheaper option is to relocate personnel who have attended the trainingalready, we have solicited the desire of the Cebu and Davao-based provincialpersonnel to transfer to SwitchNet Sampaloc ROMCC which they declined, x x x Weshould note that these personnel were not made aware prior to start of training, thatthey will be transferred to Manila.[33]

A third inter-office memorandum dated November 29, 1995 confirmed thisprocedural flaw, thus:

Alternative 1: Require the four Jones and Davao ROMCC personnel to transfer [to]the Sampaloc ROMCC, as service requirement. This is the least cost alternative. x xx We should note however, that these personnel were not aware that they wouldrelocate after training.[34]

Under these circumstances, the need for the dissemination of notice of transferto employees before sending them abroad for training should be deemed necessaryand later to have ripened into a company practice or policy that could no longer beperemptorily withdrawn, discontinued, or eliminated by the employer. Fairness at theworkplace and settled expectations among employees require that we honor this

practice and commend this policy.
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discharge. After a series of medical examinations, Dr. Miguel Ampil, petitioner in G.R.No. 127590, diagnosed her to be suffering f rom "cancer of the sigmoid."

On April 11, 1984, Dr. Ampil, assisted by the medical staff4of the Medical CityHospital, performed an anterior resection surgery on Natividad. He found that themalignancy in her sigmoid area had spread on her left ovary, necessitating theremoval of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividadshusband, 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, completedthe operation and closed the incision.

However, the operation appeared to be flawed. In the corresponding Record ofOperation 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 medicalbills, 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 painwas the natural consequence of the surgery. Dr. Ampil then recommended that sheconsult an oncologist to examine the cancerous nodes which were not removedduring the operation.

On May 9, 1984, Natividad, accompanied by her husband, went to the United Statesto seek further treatment. After four months of consultations and laboratoryexaminations, Natividad was told she was free of cancer. Hence, she was advised toreturn 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 hervagina. Upon being informed about it, Dr. Ampil proceeded to her house where hemanaged to extract by hand a piece of gauze measuring 1.5 inches in width. He thenassured her that the pains would soon vanish.

Dr. Ampils assurance did not come true. Instead, the pains intensified, promptingNatividad 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 vaginalvault. A recto-vaginal fistula had formed in her reproductive organs which forced stoolto excrete through the vagina. Another surgical operation was needed to remedy thedamage. 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 CivilCase No. Q-43322. They alleged that the latter are liable for negligence for leavingtwo pieces of gauze inside Natividads body and malpractice for concealing their actsof 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 Boardof Medicine heard the case only with respect to Dr. Fuentes because it failed toacquire jurisdiction over Dr. Ampil who was then in the United States.

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

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

WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants

PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTESto pay to the plaintiffs, jointly and severally, except in respect of the award forexemplary damages and the interest thereon which are the liabilities of defendantsDr. Ampil and Dr. Fuentes only, as follows:

1. As actual damages, the following amounts:

a. The equivalent in Philippine Currency of the total ofUS$19,900.00 at the rate of P21.60-US$1.00, as reimbursement ofactual expenses incurred in the United States of America;
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b. The sum of P4,800.00 as travel taxes of plaintiffs and theirphysician daughter;

c. The total sum of P45,802.50, representing the cost ofhospitalization at Polymedic Hospital, medical fees, and cost of thesaline 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 dateof 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 ofAppeals, docketed as CA-G.R. CV No. 42062.

Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partialexecution 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 forP451,275.00 and delivered the amount to the Aganas.

Following their receipt of the money, the Aganas entered into an agreement with PSIand 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 ofexecution against the properties of PSI and Dr. Fuentes. On September 21, 1993, theRTC granted the motion and issued the corresponding writ, prompting Dr. Fuentes tofile with the Court of Appeals a petition for certiorari and prohibition, with prayer forpreliminary injunction, docketed as CA-G.R. SP No. 32198. During its pendency, theCourt of Appeals issued a Resolution5dated October 29, 1993 granting Dr. Fuentesprayer 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 itsDecision6in 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 wholeft the two pieces of gauze inside Natividads body; and that he concealed such factfrom Natividad.

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

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

Concomitant with the above, the petition for certiorari and prohibition filed by hereindefendant-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 wellas the alias writ of execution issued pursuant thereto are hereby NULLIFIED and SETASIDE. The bond posted by the petitioner in connection with the writ of preliminaryinjunction 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 aResolution7dated December 19, 1996.

Hence, the instant consolidated petitions.

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

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
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doctrine of res ipsa loquitur. They contend that the pieces of gauze are prima facieproofs that the operating surgeons have been negligent.

Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred infinding him liable for negligence and malpractice sans evidence that he left the twopieces 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) theattending nurses failure to properly count the gauzes used during surgery; and (3)the medical intervention of the American doctors who examined Natividad in theUnited States of America.

For our resolution are these three vital issues: first, whether the Court of Appealserred in holding Dr. Ampil liable for negligence and malpractice; second, whether theCourt of Appeals erred in absolving Dr. Fuentes of any liability; and third, whether PSImay 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 otherpossible causes of Natividads detriment. He argues that the Court should notdiscount either of the following possibilities: first, Dr. Fuentes left the gauzes inNatividads body after performing hysterectomy; second, the attending nurses erredin counting the gauzes; and third, the American doctors were the ones who placedthe gauzes in Natividads body.

Dr. Ampils arguments are purely conjectural and without basis. Records show that hedid not present any evidence to prove that the American doctors were the ones whoput or left the gauzes in Natividads body. Neither did he submit evidence to rebut thecorrectness of the record of operation, particularly the number of gauzes used. As tothe 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 bythe 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 thesurgery noted in their report that the sponge count (was) lacking 2; thatsuch anomaly was announced to surgeon and that a search was done butto no avail prompting Dr. Ampil to continue for closure x x x.

Third, after the operation, two (2) gauzes were extracted from the same spotof the body of Mrs. Agana where the surgery was performed.

An operation requiring the placing of sponges in the incision is not complete until thesponges are properly removed, and it is settled that the leaving of sponges or otherforeign substances in the wound after the incision has been closed is at least primafacie negligence by the operating surgeon.8To put it simply, such act is consideredso inconsistent with due care as to raise an inference of negligence. There are evenlegions 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 apatients life precludes a surgeon from further searching missing sponges or foreignobjects 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 toleave a sponge in his patients abdomen, because of the dangers attendant upondelay, still, it is his legal duty to so inform his patient within a reasonable timethereafter by advising her of what he had been compelled to do. This is in order thatshe might seek relief from the effects of the foreign object left in her body as hercondition might permit. The ruling in Smith v. Zeagler10is explicit, thus:

The removal of all sponges used is part of a surgical operation, and when a physicianor surgeon fails to remove a sponge he has placed in his patients body that shouldbe removed as part of the operation, he thereby leaves his operation uncompletedand 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 athand 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 ordinaryconsequence of her operation. Had he been more candid, Natividad could have takenthe 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 adeliberate 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 ahealth care provider either failed to do something which a reasonably prudent health
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care provider would have done, or that he did something that a reasonably prudentprovider would not have done; and that failure or action caused injury to thepatient.11Simply 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 asgauzes, 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. Suchbreach caused injury to Natividad, necessitating her further examination by Americandoctors and another surgery. That Dr. Ampils negligence is the proximate cause12of

Natividads injury could be traced from his act of closing the incision despite theinformation 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 linkbetween Dr. Ampils negligence and the injury. And what further aggravated suchinjury was his deliberate concealment of the missing gauzes from the knowledge ofNatividad 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. Fuenteson 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 facieevidence of Dr. Fuentes negligence.

We are not convinced.

Literally, res ipsa loquitur means "the thing speaks for itself." I t is the rule that the fact

of the occurrence of an injury, taken with the surrounding circumstances, may permitan inference or raise a presumption of negligence, or make out a plaintiffs primafacie case, and present a question of fact for defendant to meet with anexplanation.13Stated differently, where the thing which caused the injury, without thefault of the injured, is under the exclusive control of the defendant and the injury issuch that it should not have occurred if he, having such control used proper care, itaffords reasonable evidence, in the absence of explanation that the injury arose fromthe defendants want of care, and the burden of proof is shifted to him to establishthat 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 whichcaused 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 happenedif those who had control or management used proper care; and (4) the absence ofexplanation by the defendant. Of the foregoing requisites, the most instrumental isthe "control and management of the thing which caused the injury."15

We find the element of "control and management of the thing which caused theinjury" 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 ofNatividad. He requested the assistance of Dr. Fuentes only to perform hysterectomywhen he (Dr. Ampil) found that the malignancy in her sigmoid area had spread to herleft ovary. Dr. Fuentes performed the surgery and thereafter reported and showed hiswork 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 operatingon Natividad. He was about to finish the procedure when the attending nursesinformed him that two pieces of gauze were missing. A "diligent search" wasconducted, but the misplaced gauzes were not found. Dr. Ampil then directed that theincision be closed. During this entire period, Dr. Fuentes was no longer in theoperating room and had, in fact, left the hospital.

Under the "Captain of the Ship" rule, the operating surgeon is the person in completecharge of the surgery room and all personnel connected with the operation. Theirduty is to obey his orders.16As stated before, Dr. Ampil was the lead surgeon. Inother words, he was the "Captain of the Ship." That he discharged such role isevident 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. Fuentespermission to leave; and (4) ordering the closure of the incision. To our mind, it wasthis act of ordering the closure of the incision notwithstanding that two pieces ofgauze 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 notper se create or constitute an independent or separate ground of liability, being amere evidentiary rule.17In other words, mere invocation and application of thedoctrine does not dispense with the requirement of proof of negligence. Here, thenegligence 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
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The third issue necessitates a glimpse at the historical development of hospitals andthe 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 apatients ability to pay.18Those who could afford medical treatment were usuallytreated at home by their doctors.19However, the days of house calls andphilanthropic health care are over. The modern health care industry continues todistance itself from its charitable past and has experienced a significant conversionfrom a not-for-profit health care to for-profit hospital businesses. Consequently,significant changes in health law have accompanied the business-related changes inthe hospital industry. One important legal change is an increase in hospital liability formedical malpractice. Many courts now allow claims for hospital vicarious liabilityunder the theories of respondeat superior, apparent authority, ostensible authority, oragency by estoppel.20

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

Art. 2176. Whoever by act or omission causes damage to another, there being faultor negligence, is obliged to pay for the damage done. Such fault or negligence, ifthere 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 underthe doctrine of respondeat superior, thus:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for onesown 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 responsiblefor damages caused by their employees in the service of the branches in which thelatter are employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees and householdhelpers acting within the scope of their assigned tasks even though the former arenot engaged in any business or industry.

The responsibility treated of in this article shall cease when the persons hereinmentioned prove that they observed all the diligence of a good father of a family toprevent damage.

A prominent civilist commented that professionals engaged by an employer, such asphysicians, dentists, and pharmacists, are not "employees" under this article becausethe 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 faultor negligence they commit in the discharge of their duties, and their employer cannotbe held liable for such fault or negligence. In the context of the present case, "ahospital cannot be held liable for the fault or negligence of a physician or surgeon inthe treatment or operation of patients."21

The foregoing view is grounded on the traditional notion that the professional statusand the very nature of the physicians calling preclude him from being classed as anagent or employee of a hospital, whenever he acts in a professional capacity.22It hasbeen said that medical practice strictly involves highly developed and specializedknowledge,23such that physicians are generally free to exercise their own skill andjudgment in rendering medical services sans interference.24Hence, when a doctorpractices medicine in a hospital setting, the hospital and its employees are deemed tosubserve him in his ministrations to the patient and his actions are of his ownresponsibility.25

The case of Schloendorff v. Society of New York Hospita l26was then considered anauthority for this view. The "Schloendorff doctrine" regards a physician, even ifemployed by a hospital, as an independent contractor because of the skill heexercises and the lack of control exerted over his work. Under this doctrine, hospitalsare exempt from the application of the respondeat superior principle for fault ornegligence committed by physicians in the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened with the significantdevelopments in medical care. Courts came to realize that modern hospitals areincreasingly taking active role in supplying and regulating medical care to patients. Nolonger were a hospitals functions limited to furnishing room, food, facilities fortreatment and operation, and attendants for its patients. Thus, in Bing v. Thunig,27theNew York Court of Appeals deviated from the Schloendorff doctrine, noting thatmodern 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 andtreatment, even collecting for such services through legal action, if necessary. The

court then concluded that there is no reason to exempt hospitals from the universalrule of respondeat superior.
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In our shores, the nature of the relationship between the hospital and the physiciansis rendered inconsequential in view of our categorical pronouncement in Ramos v.Court of Appeals28that for purposes of apportioning responsibility in medicalnegligence cases, an employer-employee relationship in effect exists betweenhospitals and their attending and visiting physicians. This Court held:

"We now discuss the responsibility of the hospital in this particular incident. Theunique practice (among private hospitals) of filling up specialist staff with attendingand visiting "consultants," who are allegedly not hospital employees, presentsproblems 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 ofconsultants and in the conduct of their work within the hospital premises. Doctors whoapply for consultant slots, visiting or attending, are required to submit proof ofcompletion of residency, their educational qualifications, generally, evidence ofaccreditation by the appropriate board (diplomate), evidence of fellowship in mostcases, and references. These requirements are carefully scrutinized by members ofthe hospital administration or by a review committee set up by the hospital who eitheraccept or reject the application. x x x.

After a physician is accepted, either as a visiting or attending consultant, he isnormally required to attend clinico-pathological conferences, conduct bedside roundsfor clerks, interns and residents, moderate grand rounds and patient audits andperform other tasks and responsibilities, for the privilege of being able to maintain aclinic in the hospital, and/or for the privilege of admitting patients into the hospital. Inaddition to these, the physicians performance as a specialist is generally evaluatedby a peer review committee on the basis of mortality and morbidity statistics, andfeedback from patients, nurses, interns and residents. A consultant remiss in hisduties, or a consultant who regularly falls short of the minimum standards acceptableto the hospital or its peer review committee, is normally politely terminated.

In other words, private hospitals, hire, fire and exercise real control over theirattending and visiting consultant staff. While consultants are not, technicallyemployees, x x x, the control exercised, the hiring, and the right to terminateconsultants all fulfill the important hallmarks of an employer-employee relationship,with the exception of the payment of wages. In assessing whether such a relationshipin fact exists, the control test is determining. Accordingly, on the basis of theforegoing, we rule that for the purpose of allocating responsibility in medicalnegligence 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. Itsliability is also anchored upon the agency principle of apparent authority or agency byestoppel and the doctrine of corporate negligence which have gained acceptance inthe determination of a hospitals liability for negligent acts of health professionals. Thepresent 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,29has its originfrom the law of agency. It imposes liability, not as the result of the reality of acontractual relationship, but rather because of the actions of a principal or anemployer in somehow misleading the public into believing that the relationship or theauthority exists.30The concept is essentially one of estoppel and has been explainedin this manner:

"The principal is bound by the acts of his agent with the apparent authority which heknowingly 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 hisvoluntary 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 justifiedin 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 longtime ago in Irving v. Doctor Hospital of Lake Worth, Inc .32There, it was explicitlystated that "there does not appear to be any rational basis for excluding the conceptof apparent authority from the field of hospital liability." Thus, in cases where it can beshown that a hospital, by its actions, has held out a particular physician as its agentand/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 hospitalwill 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 hissilence or lack of action, or his failure to repudiate the agency, knowing that anotherperson 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 ofDr. Ampil and Dr. Fuentes. We concur with the Court of Appeals conclusion that it "is
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now estopped from passing all the blame to the physicians whose names it proudlyparaded in the public directory leading the public to believe that it vouched for theirskill and competence." Indeed, PSIs act is tantamount to holding out to the publicthat Medical City Hospital, through its accredited physicians, offers quality health careservices. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising theirqualifications, the hospital created the impression that they were its agents,authorized to perform medical or surgical services for its patients. As expected, thesepatients, 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 beburdened with the defense of absence of employer-employee relationship betweenthe hospital and the independent physician whose name and competence arecertainly certified to the general public by the hospitals act of listing him and hisspecialty in its lobby directory, as in the case herein. The high costs of todaysmedical 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 itsaccredited physician or surgeon, regardless of whether he is independent or

employed."33

The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, likePSI, are capable of acting only through other individuals, such as physicians. If theseaccredited physicians do their job well, the hospital succeeds in its mission of offeringquality medical services and thus profits financially. Logically, where negligence marsthe quality of its services, the hospital should not be allowed to escape liability for theacts 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 andmalpractice is that PSI as owner, operator and manager of Medical City Hospital, "didnot perform the necessary supervision nor exercise diligent efforts in the supervisionof Drs. Ampil and Fuentes and its nursing staff, resident doctors, and medical internswho assisted Drs. Ampil and Fuentes in the performance of their duties assurgeons."34Premised on the doctrine of corporate negligence, the trial court heldthat 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 answerto the problem of allocating hospitals liability for the negligent acts of health

practitioners, absent facts to support the application of respondeat superior orapparent authority. Its formulation proceeds from the judiciarys acknowledgment thatin these modern times, the duty of providing quality medical service is no longer thesole prerogative and responsibility of the physician. The modern hospitals havechanged structure. Hospitals now tend to organize a highly professional medical staffwhose competence and performance need to be monitored by the hospitalscommensurate with their inherent responsibility to provide quality medical care.35

The doctrine has its genesis in Darling v. Charleston Community Hospital.36There,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 aphysician known to be incompetent to practice at the hospital.37With the passage oftime, more duties were expected from hospitals, among them: (1) the use ofreasonable care in the maintenance of safe and adequate facilities and equipment;(2) the selection and retention of competent physicians; (3) the overseeing orsupervision of all persons who practice medicine within its walls; and (4) the

formulation, adoption and enforcement of adequate rules and policies that ensurequality care for its patients.38Thus, in Tucson Medical Center, Inc. v. Misevich,39itwas held that a hospital, following the doctrine of corporate responsibility, has theduty 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 inBost v. Riley,40the court concluded that a patient who enters a hospital does so withthe reasonable expectation that it will attempt to cure him. The hospital accordinglyhas the duty to make a reasonable effort to monitor and oversee the treatmentprescribed and administered by the physicians practicing in its premises.

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

x x x PSIs liability is traceable to its failure to conduct an investigation of the matterreported in the nota bene of the count nurse. Such failure established PSIs part inthe dark conspiracy of silence and concealment about the gauzes. Ethicalconsiderations, if not also legal, dictated the holding of an immediate inquiry into theevents, if not for the benefit of the patient to whom the duty is primarily owed, then inthe interest of arriving at the truth. The Court cannot accept that the medical and the
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healing professions, through their members like defendant surgeons, and theirinstitutions like PSIs hospital facility, can callously turn their backs on and disregardeven a mere probability of mistake or negligence by refusing or failing to investigate areport of such seriousness as the one in Natividads case.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with theassistance 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 thehospital, has actual or constructive knowledge of the procedures carried out,particularly the report of the attending nurses that the two pieces of gauze weremissing. In Fridena v. Evans,41it was held that a corporation is bound by theknowledge acquired by or notice given to its agents or officers within the scope oftheir authority and in reference to a matter to which their authority extends. Thismeans that the knowledge of any of the staff of Medical City Hospital constitutesknowledge of PSI. Now, the failure of PSI, despite the attending nurses report, toinvestigate and inform Natividad regarding the missing gauzes amounts to callousnegligence. Not only did PSI breach its duties to oversee or supervise all personswho practice medicine within its walls, it also failed to take an active step in fixing thenegligence 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 ownnegligence 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 hospitalhas expanded. The emerging trend is to hold the hospital responsible where thehospital has failed to monitor and review medical services being provided within itswalls. 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 heldliable for the malpractice of a medical practitioner because he was an independentcontractor within the hospital. The Court of Appeals pointed out that the hospital hadcreated a professional staff whose competence and performance was to bemonitored and reviewed by the governing body of the hospital, and the court held thata hospital would be negligent where it had knowledge or reason to believe that adoctor using the facilities was employing a method of treatment or care which fellbelow the recognized standard of care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospitalhas certain inherent responsibilities regarding the quality of medical care furnished topatients 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 onits staff. x x x.

In the amended complaint, the plaintiffs did plead that the operation was performed atthe hospital with its knowledge, aid, and assistance, and that the negligence of thedefendants was the proximate cause of the patients injuries. We find that suchgeneral allegations of negligence, along with the evidence produced at the trial of thiscase, 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 fordamages, let it be emphasized that PSI, apart from a general denial of itsresponsibility, failed to adduce evidence showing that it exercised the diligence of agood father of a family in the accreditation and supervision of the latter. In neglectingto offer such proof, PSI failed to discharge its burden under the last paragraph ofArticle 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, thelaw imposes on him certain obligations. In order to escape liability, he must possessthat reasonable degree of learning, skill and experience required by his profession. Atthe same time, he must apply reasonable care and diligence in the exercise of hisskill and the application of his knowledge, and exert his best judgment.

WHEREFORE, we DENY all the petitions and AFFIRM the challenged Decision ofthe 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.
http://www.lawphil.net/judjuris/juri2007/jan2007/gr_126297_2007.html#fnt41http://www.lawphil.net/judjuris/juri2007/jan2007/gr_126297_2007.html#fnt41http://www.lawphil.net/judjuris/juri2007/jan2007/gr_126297_2007.html#fnt41http://www.lawphil.net/judjuris/juri2007/jan2007/gr_126297_2007.html#fnt41

yrasuegui vs. phil airlines, g.r. no. 168081, oct. 17, 2008

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