SECOND DIVISION

[G.R. No. 130547. October 3, 2000]

LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD and KRISTINE, all surnamed REYES, represented by their mother, LEAH ALESNA
REYES, petitioners, vs. SISTERS OF MERCY HOSPITAL, SISTER ROSE PALACIO, DR. MARVIE BLANES, and DR. MARLYN RICO,respondents.

DECISION

MENDOZA, J.:

This is a petition for review of the decision[1] of the Court of Appeals in CA-G.R. CV No. 36551 affirming the decision of the Regional Trial
Court, Branch IX, Cebu City which dismissed a complaint for damages filed by petitioners against respondents.

The facts are as follows:

Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. The other petitioners, namely, Rose Nahdja, Johnny, Lloyd, and Kristine, all
surnamed Reyes, were their children. Five days before his death on January 8, 1987, Jorge had been suffering from a recurring fever with
chills. After he failed to get relief from some home medication he was taking, which consisted of analgesic, antipyretic, and antibiotics, he decided
to see the doctor.

On January 8, 1987, he was taken to the Mercy Community Clinic by his wife. He was attended to by respondent Dr. Marlyn Rico, resident
physician and admitting physician on duty, who gave Jorge a physical examination and took his medical history. She noted that at the time of his
admission, Jorge was conscious, ambulatory, oriented, coherent, and with respiratory distress.[2] Typhoid fever was then prevalent in the locality,
as the clinic had been getting from 15 to 20 cases of typhoid per month.[3] Suspecting that Jorge could be suffering from this disease, Dr. Rico
ordered a Widal Test, a standard test for typhoid fever, to be performed on Jorge. Blood count, routine urinalysis, stool examination, and malarial
smear were also made.[4] After about an hour, the medical technician submitted the results of the test from which Dr. Rico concluded that Jorge
was positive for typhoid fever. As her shift was only up to 5:00 p.m., Dr. Rico indorsed Jorge to respondent Dr. Marvie Blanes.

Dr. Marvie Blanes attended to Jorge at around six in the evening. She also took Jorges history and gave him a physical examination. Like Dr.
Rico, her impression was that Jorge had typhoid fever. Antibiotics being the accepted treatment for typhoid fever, she ordered that a compatibility
test with the antibiotic chloromycetin be done on Jorge. Said test was administered by nurse Josephine Pagente who also gave the patient a dose
of triglobe. As she did not observe any adverse reaction by the patient to chloromycetin, Dr. Blanes ordered the first five hundred milligrams of said
antibiotic to be administered on Jorge at around 9:00 p.m. A second dose was administered on Jorge about three hours later just before midnight.

At around 1:00 a.m. of January 9, 1987, Dr. Blanes was called as Jorges temperature rose to 41C. The patient also experienced chills and
exhibited respiratory distress, nausea, vomiting, and convulsions. Dr. Blanes put him under oxygen, used a suction machine, and administered
hydrocortisone, temporarily easing the patients convulsions. When he regained consciousness, the patient was asked by Dr. Blanes whether he had
a previous heart ailment or had suffered from chest pains in the past. Jorge replied he did not.[5] After about 15 minutes, however, Jorge again
started to vomit, showed restlessness, and his convulsions returned. Dr. Blanes re-applied the emergency measures taken before and, in addition,
valium was administered. Jorge, however, did not respond to the treatment and slipped into cyanosis, a bluish or purplish discoloration of the skin
or mucous membrane due to deficient oxygenation of the blood. At around 2:00 a.m., Jorge died. He was forty years old. The cause of his death
was Ventricular Arrythemia Secondary to Hyperpyrexia and typhoid fever.

On June 3, 1987, petitioners filed before the Regional Trial Court of Cebu City a complaint[6]for damages against respondents Sisters of Mercy,
Sister Rose Palacio, Dr. Marvie Blanes, Dr. Marlyn Rico, and nurse Josephine Pagente. On September 24, 1987, petitioners amended their complaint
to implead respondent Mercy Community Clinic as additional defendant and to drop the name of Josephine Pagente as defendant since she was no
longer connected with respondent hospital. Their principal contention was that Jorge did not die of typhoid fever. [7]Instead, his death was due to
the wrongful administration of chloromycetin. They contended that had respondent doctors exercised due care and diligence, they would not have
recommended and rushed the performance of the Widal Test, hastily concluded that Jorge was suffering from typhoid fever, and administered
chloromycetin without first conducting sufficient tests on the patients compatibility with said drug. They charged respondent clinic and its
directress, Sister Rose Palacio, with negligence in failing to provide adequate facilities and in hiring negligent doctors and nurses.[8]

Respondents denied the charges. During the pre-trial conference, the parties agreed to limit the issues on the following: (1) whether the
death of Jorge Reyes was due to or caused by the negligence, carelessness, imprudence, and lack of skill or foresight on the part of defendants; (2)
whether respondent Mercy Community Clinic was negligent in the hiring of its employees; and (3) whether either party was entitled to
damages. The case was then heard by the trial court during which, in addition to the testimonies of the parties, the testimonies of doctors as expert
witnesses were presented.

Petitioners offered the testimony of Dr. Apolinar Vacalares, Chief Pathologist at the Northern Mindanao Training Hospital, Cagayan de Oro
City. On January 9, 1987, Dr. Vacalares performed an autopsy on Jorge Reyes to determine the cause of his death. However, he did not open the
skull to examine the brain. His findings[9] showed that the gastro-intestinal tract was normal and without any ulceration or enlargement of the
nodules. Dr. Vacalares testified that Jorge did not die of typhoid fever. He also stated that he had not seen a patient die of typhoid fever within five
days from the onset of the disease.

For their part, respondents offered the testimonies of Dr. Peter Gotiong and Dr. Ibarra Panopio. Dr. Gotiong is a diplomate in internal
medicine whose expertise is microbiology and infectious diseases. He is also a consultant at the Cebu City Medical Center and an associate
professor of medicine at the South Western University College of Medicine in Cebu City. He had treated over a thousand cases of typhoid
patients. According to Dr. Gotiong, the patients history and positive Widal Test results ratio of 1:320 would make him suspect that the patient had
typhoid fever. As to Dr. Vacalares observation regarding the absence of ulceration in Jorges gastro-intestinal tract, Dr. Gotiong said that such
hyperplasia in the intestines of a typhoid victim may be microscopic. He noted that since the toxic effect of typhoid fever may lead to meningitis,
Dr. Vacalares autopsy should have included an examination of the brain.[10]

The other doctor presented was Dr. Ibarra Panopio, a member of the American Board of Pathology, examiner of the Philippine Board of
Pathology from 1978 to 1991, fellow of the Philippine Society of Pathologist, associate professor of the Cebu Institute of Medicine, and chief
pathologist of the Andres Soriano Jr. Memorial Hospital in Toledo City. Dr. Panopio stated that although he was partial to the use of the culture test
for its greater reliability in the diagnosis of typhoid fever, the Widal Test may also be used. Like Dr. Gotiong, he agreed that the 1:320 ratio in Jorges
case was already the maximum by which a conclusion of typhoid fever may be made. No additional information may be deduced from a higher
dilution.[11] He said that Dr. Vacalares autopsy on Jorge was incomplete and thus inconclusive.

On September 12, 1991, the trial court rendered its decision absolving respondents from the charges of negligence and dismissing petitioners
action for damages. The trial court likewise dismissed respondents counterclaim, holding that, in seeking damages from respondents, petitioners
were impelled by the honest belief that Jorges death was due to the latters negligence.

Petitioners brought the matter to the Court of Appeals. On July 31, 1997, the Court of Appeals affirmed the decision of the trial court.

Hence this petition.

Petitioners raise the following assignment of errors:

I. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT THE DOCTRINE OF RES IPSA
LOQUITUR IS NOT APPLICABLE IN THE INSTANT CASE.

II. THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT MADE AN UNFOUNDED ASSUMPTION THAT THE
LEVEL OF MEDICAL PRACTICE IS LOWER IN ILIGAN CITY.

III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED FOR A LESSER STANDARD OF CARE AND DEGREE OF
DILIGENCE FOR MEDICAL PRACTICE IN ILIGAN CITY WHEN IT APPRECIATE[D] NO DOCTORS NEGLIGENCE IN THE TREATMENT OF
JORGE REYES.

Petitioners action is for medical malpractice. This is a particular form of negligence which consists in the failure of a physician or surgeon to
apply to his practice of medicine that degree of care and skill which is ordinarily employed by the profession generally, under similar conditions,
and in like surrounding circumstances.[12] In order to successfully pursue such a claim, a patient must prove that the physician or surgeon either
failed to do something which a reasonably prudent physician or surgeon would have done, or that he or she did something that a reasonably
prudent physician or surgeon would not have done, and that the failure or action caused injury to the patient. [13] There are thus four elements
involved in medical negligence cases, namely: duty, breach, injury, and proximate causation.

In the present case, there is no doubt that a physician-patient relationship existed between respondent doctors and Jorge
Reyes. Respondents were thus duty-bound to use at least the same level of care that any reasonably competent doctor would use to treat a
condition under the same circumstances. It is breach of this duty which constitutes actionable malpractice.[14]As to this aspect of medical
malpractice, the determination of the reasonable level of care and the breach thereof, expert testimony is essential. Inasmuch as the causes of the
injuries involved in malpractice actions are determinable only in the light of scientific knowledge, it has been recognized that expert testimony is
usually necessary to support the conclusion as to causation.[15]

Res Ipsa Loquitur

There is a case when expert testimony may be dispensed with, and that is under the doctrine of res ipsa loquitur. As held in Ramos v. Court of
Appeals:[16]

Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a negligent act or that he has
deviated from the standard medical procedure, when the doctrine of res ipsa loquitor is availed by the plaintiff, the need for expert medical
testimony is dispensed with because the injury itself provides the proof of negligence. The reason is that the general rule on the necessity of expert
testimony applies only to such matters clearly within the domain of medical science, and not to matters that are within the common knowledge of
mankind which may be testified to by anyone familiar with the facts. Ordinarily, only physicians and surgeons of skill and experience are competent
to testify as to whether a patient has been treated or operated upon with a reasonable degree of skill and care. However, testimony as to the
statements and acts of physicians and surgeons, external appearances, and manifest conditions which are observable by any one may be given by
non-expert witnesses. Hence, in cases where the res ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper
proof of injury to the patient, without the aid of expert testimony, where the court from its fund of common knowledge can determine the proper
standard of care. Where common knowledge and experience teach that a resulting injury would not have occurred to the patient if due care had
been exercised, an inference of negligence may be drawn giving rise to an application of the doctrine of res ipsa loquitur without medical evidence,
which is ordinarily required to show not only what occurred but how and why it occurred. When the doctrine is appropriate, all that the patient
must do is prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and management
of the defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa loquitor is allowed because
there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by him.

Thus, courts of other jurisdictions have applied the doctrine in the following situations: leaving of a foreign object in the body of the patient after
an operation, injuries sustained on a healthy part of the body which was not under, or in the area, of treatment, removal of the wrong part of the
body when another part was intended, knocking out a tooth while a patients jaw was under anesthetic for the removal of his tonsils, and loss of an
eye while the patient was under the influence of anesthetic, during or following an operation for appendicitis, among others.[17]

Petitioners asserted in the Court of Appeals that the doctrine of res ipsa loquitur applies to the present case because Jorge Reyes was merely
experiencing fever and chills for five days and was fully conscious, coherent, and ambulant when he went to the hospital. Yet, he died after only ten
hours from the time of his admission.

This contention was rejected by the appellate court.

Petitioners now contend that all requisites for the application of res ipsa loquitur were present, namely: (1) the accident was of a kind which
does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of
the person in charge; and (3) the injury suffered must not have been due to any voluntary action or contribution of the person injured.[18]

The contention is without merit. We agree with the ruling of the Court of Appeals. In the Ramos case, the question was whether a surgeon,
an anesthesiologist, and a hospital should be made liable for the comatose condition of a patient scheduled for cholecystectomy.[19] In that case,
the patient was given anesthesia prior to her operation. Noting that the patient was neurologically sound at the time of her operation, the Court
applied the doctrine of res ipsa loquitur as mental brain damage does not normally occur in a gallblader operation in the absence of negligence of
the anesthesiologist. Taking judicial notice that anesthesia procedures had become so common that even an ordinary person could tell if it was
administered properly, we allowed the testimony of a witness who was not an expert. In this case, while it is true that the patient died just a few
hours after professional medical assistance was rendered, there is really nothing unusual or extraordinary about his death. Prior to his admission,
the patient already had recurring fevers and chills for five days unrelieved by the analgesic, antipyretic, and antibiotics given him by his wife. This
shows that he had been suffering from a serious illness and professional medical help came too late for him.

Respondents alleged failure to observe due care was not immediately apparent to a layman so as to justify application of res ipsa
loquitur. The question required expert opinion on the alleged breach by respondents of the standard of care required by the
circumstances. Furthermore, on the issue of the correctness of her diagnosis, no presumption of negligence can be applied to Dr. Marlyn Rico. As
held in Ramos:

. . . . Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the
circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is able to say, as a matter of common
knowledge and observation, that the consequences of professional care were not as such as would ordinarily have followed if due care had been
exercised. A distinction must be made between the failure to secure results, and the occurrence of something more unusual and not ordinarily
found if the service or treatment rendered followed the usual procedure of those skilled in that particular practice. It must be conceded that the
doctrine of res ipsa loquitur can have no application in a suit against a physician or a surgeon which involves the merits of a diagnosis or of a
scientific treatment. The physician or surgeon is not required at his peril to explain why any particular diagnosis was not correct, or why any
particular scientific treatment did not produce the desired result.[20]

Specific Acts of Negligence

We turn to the question whether petitioners have established specific acts of negligence allegedly committed by respondent doctors.

Petitioners contend that: (1) Dr. Marlyn Rico hastily and erroneously relied upon the Widal test, diagnosed Jorges illness as typhoid fever, and
immediately prescribed the administration of the antibiotic chloromycetin;[21] and (2) Dr. Marvie Blanes erred in ordering the administration of the
second dose of 500 milligrams of chloromycetin barely three hours after the first was given. [22] Petitioners presented the testimony of Dr. Apolinar
Vacalares, Chief Pathologist of the Northern Mindanao Training Hospital, Cagayan de Oro City, who performed an autopsy on the body of
Jorge Reyes. Dr. Vacalares testified that, based on his findings during the autopsy, Jorge Reyes did not die of typhoid fever but of shock
undetermined, which could be due to allergic reaction or chloromycetin overdose. We are not persuaded.

First. While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be so as he is not a specialist on
infectious diseases like typhoid fever.Furthermore, although he may have had extensive experience in performing autopsies, he admitted that he
had yet to do one on the body of a typhoid victim at the time he conducted the postmortem on Jorge Reyes. It is also plain from his testimony that
he has treated only about three cases of typhoid fever. Thus, he testified that:[23]

ATTY. PASCUAL:
 Q Why? Have you not testified earlier that you have never seen a patient who died of typhoid fever?

A In autopsy. But, that was when I was a resident physician yet.

Q But you have not performed an autopsy of a patient who died of typhoid fever?

A I have not seen one.

Q And you testified that you have never seen a patient who died of typhoid fever within five days?

A I have not seen one.

Q How many typhoid fever cases had you seen while you were in the general practice of medicine?

A In our case we had no widal test that time so we cannot consider that the typhoid fever is like this and like that. And the widal test does not
specify the time of the typhoid fever.

Q The question is: how many typhoid fever cases had you seen in your general practice regardless of the cases now you practice?

A I had only seen three cases.

Q And that was way back in 1964?

A Way back after my training in UP.

Q Clinically?

A Way back before my training.

He is thus not qualified to prove that Dr. Marlyn Rico erred in her diagnosis. Both lower courts were therefore correct in discarding his testimony,
which is really inadmissible.

In Ramos, the defendants presented the testimony of a pulmonologist to prove that brain injury was due to oxygen deprivation after the
patient had bronchospasms[24] triggered by her allergic response to a drug,[25] and not due to faulty intubation by the anesthesiologist. As the issue
was whether the intubation was properly performed by an anesthesiologist, we rejected the opinion of the pulmonologist on the ground that he
was not: (1) an anesthesiologist who could enlighten the court about anesthesia practice, procedure, and their complications; nor (2) an
allergologist who could properly advance expert opinion on allergic mediated processes; nor (3) a pharmacologist who could explain the
pharmacologic and toxic effects of the drug allegedly responsible for the bronchospasms.

Second. On the other hand, the two doctors presented by respondents clearly were experts on the subject. They vouched for the correctness
of Dr. Marlyn Ricos diagnosis. Dr. Peter Gotiong, a diplomate whose specialization is infectious diseases and microbiology and an associate
professor at the Southwestern University College of Medicine and the Gullas College of Medicine, testified that he has already treated over a
thousand cases of typhoid fever.[26] According to him, when a case of typhoid fever is suspected, the Widal test is normally used, [27]and if the 1:320
results of the Widal test on Jorge Reyes had been presented to him along with the patients history, his impression would also be that the patient
was suffering from typhoid fever.[28] As to the treatment of the disease, he stated that chloromycetin was the drug of choice. [29] He also explained
that despite the measures taken by respondent doctors and the intravenous administration of two doses of chloromycetin, complications of the
disease could not be discounted. His testimony is as follows:[30]

ATTY. PASCUAL:

Q If with that count with the test of positive for 1 is to 320, what treatment if any would be given?

A If those are the findings that would be presented to me, the first thing I would consider would be typhoid fever.

Q And presently what are the treatments commonly used?

A Drug of choice of chloramphenical.

Q Doctor, if given the same patient and after you have administered chloramphenical about 3 1/2 hours later, the patient associated with chills,
temperature - 41oC, what could possibly come to your mind?

A Well, when it is change in the clinical finding, you have to think of complication.

Q And what will you consider on the complication of typhoid?

A One must first understand that typhoid fever is toximia. The problem is complications are caused by toxins produced by the bacteria . . .
whether you have suffered complications to think of -- heart toxic myocardities; then you can consider a toxic meningitis and other
complications and perforations and bleeding in the ilium.

Q Even that 40-year old married patient who received medication of chloromycetin of 500 milligrams intravenous, after the skin test, and
received a second dose of chloromycetin of 500 miligrams, 3 hours later, the patient developed chills . . . rise in temperature to 41oC, and
then about 40 minutes later the temperature rose to 100oF, cardiac rate of 150 per minute who appeared to be coherent, restless,
nauseating, with seizures: what significance could you attach to these clinical changes?
 A I would then think of toxemia, which was toxic meningitis and probably a toxic meningitis because of the high cardiac rate.

Q Even if the same patient who, after having given intramuscular valium, became conscious and coherent about 20 minutes later, have seizure
and cyanosis and rolling of eyeballs and vomitting . . . and death: what significance would you attach to this development?

A We are probably dealing with typhoid to meningitis.

Q In such case, Doctor, what finding if any could you expect on the post-mortem examination?

A No, the finding would be more on the meninges or covering of the brain.

Q And in order to see those changes would it require opening the skull?

A Yes.

As regards Dr. Vacalares finding during the autopsy that the deceaseds gastro-intestinal tract was normal, Dr. Rico explained that, while
hyperplasia[31] in the payers patches or layers of the small intestines is present in typhoid fever, the same may not always be grossly visible and a
microscope was needed to see the texture of the cells.[32]

Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the Philippine and American Board of Pathology, an
examiner of the Philippine Board of Pathology, and chief pathologist at the MetroCebu Community Hospital, Perpetual Succor Hospital, and the
Andres Soriano Jr. Memorial Medical Center. He stated that, as a clinical pathologist, he recognized that the Widal test is used for typhoid patients,
although he did not encourage its use because a single test would only give a presumption necessitating that the test be repeated, becoming more
conclusive at the second and third weeks of the disease. [33] He corroborated Dr. Gotiongs testimony that the danger with typhoid fever is really the
possible complications which could develop like perforation, hemorrhage, as well as liver and cerebral complications. [34] As regards the 1:320
results of the Widal test on Jorge Reyes, Dr. Panopio stated that no additional information could be obtained from a higher ratio.[35] He also agreed
with Dr. Gotiong that hyperplasia in the payers patches may be microscopic.[36]

Indeed, the standard contemplated is not what is actually the average merit among all known practitioners from the best to the worst and
from the most to the least experienced, but the reasonable average merit among the ordinarily good physicians. [37] Here, Dr. Marlyn Rico did not
depart from the reasonable standard recommended by the experts as she in fact observed the due care required under the circumstances. Though
the Widal test is not conclusive, it remains a standard diagnostic test for typhoid fever and, in the present case, greater accuracy through repeated
testing was rendered unobtainable by the early death of the patient. The results of the Widal test and the patients history of fever with chills for
five days, taken with the fact that typhoid fever was then prevalent as indicated by the fact that the clinic had been getting about 15 to 20 typhoid
cases a month, were sufficient to give upon any doctor of reasonable skill the impression that Jorge Reyes had typhoid fever.

Dr. Rico was also justified in recommending the administration of the drug chloromycetin, the drug of choice for typhoid fever. The burden of
proving that Jorge Reyes was suffering from any other illness rested with the petitioners. As they failed to present expert opinion on this,
preponderant evidence to support their contention is clearly absent.

Third. Petitioners contend that respondent Dr. Marvie Blanes, who took over from Dr. Rico, was negligent in ordering the intravenous
administration of two doses of 500 milligrams of chloromycetin at an interval of less than three hours. Petitioners claim that Jorge Reyes died of
anaphylactic shock[38] or possibly from overdose as the second dose should have been administered five to six hours after the first, per instruction
of Dr. Marlyn Rico. As held by the Court of Appeals, however:

That chloromycetin was likewise a proper prescription is best established by medical authority. Wilson, et. al., in Harrisons Principle of Internal
Medicine, 12th ed. write that chlorampenicol (which is the generic of chloromycetin) is the drug of choice for typhoid fever and that no drug has
yet proven better in promoting a favorable clinical response. Chlorampenicol (Chloromycetin) is specifically indicated for bacterial meningitis,
typhoid fever, rickettsial infections, bacteriodes infections, etc. (PIMS Annual, 1994, p. 211) The dosage likewise including the first administration of
five hundred milligrams (500 mg.) at around nine oclock in the evening and the second dose at around 11:30 the same night was still within
medically acceptable limits, since the recommended dose of chloromycetin is one (1) gram every six (6) hours. (cf. Pediatric Drug Handbook, 1st Ed.,
Philippine Pediatric Society, Committee on Therapeutics and Toxicology, 1996). The intravenous route is likewise correct. (Mansser, ONick,
Pharmacology and Therapeutics) Even if the test was not administered by the physician-on-duty, the evidence introduced that it was Dra. Blanes
who interpreted the results remain uncontroverted. (Decision, pp. 16-17)Once more, this Court rejects any claim of professional negligence in this
regard.

....

As regards anaphylactic shock, the usual way of guarding against it prior to the administration of a drug, is the skin test of which, however, it has
been observed: Skin testing with haptenic drugs is generally not reliable. Certain drugs cause nonspecific histamine release, producing a weal-and-
flare reaction in normal individuals. Immunologic activation of mast cells requires a polyvalent allergen, so a negative skin test to a univalent
haptenic drug does not rule out anaphylactic sensitivity to that drug. (Terr, Anaphylaxis and Urticaria in Basic and Clinical Immunology, p. 349)
What all this means legally is that even if the deceased suffered from an anaphylactic shock, this, of itself, would not yet establish the negligence of
the appellee-physicians for all that the law requires of them is that they perform the standard tests and perform standard procedures. The law
cannot require them to predict every possible reaction to all drugs administered. The onus probandi was on the appellants to establish, before the
trial court, that the appellee-physicians ignored standard medical procedure, prescribed and administered medication with recklessness and
exhibited an absence of the competence and skills expected of general practitioners similarly situated.[39]
 Fourth. Petitioners correctly observe that the medical profession is one which, like the business of a common carrier, is affected with public
interest. Moreover, they assert that since the law imposes upon common carriers the duty of observing extraordinary diligence in the vigilance over
the goods and for the safety of the passengers,[40] physicians and surgeons should have the same duty toward their patients.[41] They also contend
that the Court of Appeals erred when it allegedly assumed that the level of medical practice is lower in Iligan City, thereby reducing the standard of
care and degree of diligence required from physicians and surgeons in Iligan City.

The standard of extraordinary diligence is peculiar to common carriers. The Civil Code provides:

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by them, according to the circumstances of each case. . . .

The practice of medicine is a profession engaged in only by qualified individuals. It is a right earned through years of education, training, and
by first obtaining a license from the state through professional board examinations. Such license may, at any time and for cause, be revoked by the
government. In addition to state regulation, the conduct of doctors is also strictly governed by the Hippocratic Oath, an ancient code of discipline
and ethical rules which doctors have imposed upon themselves in recognition and acceptance of their great responsibility to society. Given these
safeguards, there is no need to expressly require of doctors the observance of extraordinary diligence. As it is now, the practice of medicine is
already conditioned upon the highest degree of diligence. And, as we have already noted, the standard contemplated for doctors is simply the
reasonable average merit among ordinarily good physicians. That is reasonable diligence for doctors or, as the Court of Appeals called it, the
reasonable skill and competence . . . that a physician in the same or similar locality . . . should apply.

WHEREFORE, the instant petition is DENIED and the decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.

EN BANC

PROFESSIONAL SERVICES, G.R. No. 126297

INC.,
Petitioner, Present:
PUNO, C.J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
- v e r s u s - LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,*
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ and
MENDOZA, JJ.**
THE COURT OF APPEALS and NATIVIDAD and ENRIQUE
AGANA,
Respondents.

x-------------------x
NATIVIDAD [substituted by her G.R. No. 126467
children Marcelino Agana III,
Enrique Agana, Jr.,
Emma Agana-Andaya,
Jesus Agana and Raymund
Agana] and ENRIQUE AGANA,
Petitioners,

- versus-

THE COURT OF APPEALS and JUAN FUENTES,

Respondents.

x-------------------x
MIGUEL AMPIL, G.R. No. 127590
Petitioner,

-versus-

NATIVIDAD and ENRIQUE

AGANA,
Respondents.
Promulgated:
February 2, 2010
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION
CORONA, J.:

With prior leave of court,[1] petitioner Professional Services, Inc. (PSI) filed a second motion for reconsideration[2] urging referral thereof
to the Court en banc and seeking modification of the decision dated January 31, 2007 and resolution dated February 11, 2008 which affirmed its
vicarious and direct liability for damages to respondents Enrique Agana and the heirs of Natividad Agana (Aganas).
Manila Medical Services, Inc. (MMSI),[3] Asian Hospital, Inc. (AHI),[4] and Private Hospital Association of the Philippines (PHAP) [5] all sought to
intervene in these casesinvoking the common ground that, unless modified, the assailed decision and resolution will jeopardize the financial
viability of private hospitals and jack up the cost of health care.

The Special First Division of the Court granted the motions for intervention of MMSI, AHI and PHAP (hereafter intervenors), [6] and
referred en consulta to the Court en banc the motion for prior leave of court and the second motion for reconsideration of PSI. [7]

Due to paramount public interest, the Court en banc accepted the referral[8] and heard the parties on oral arguments on one particular issue:
whether a hospital may be held liable for the negligence of physicians-consultants allowed to practice in its premises.[9]

To recall the salient facts, PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded by Enrique
Agana and Natividad Agana (later substituted by her heirs), in a complaint[10] for damages filed in the Regional Trial Court (RTC) of Quezon City,
Branch 96, for the injuries suffered by Natividad whenDr. Ampil and Dr. Fuentes neglected to remove from her body two gauzes [11] which were
used in the surgery they performed on her on April 11, 1984 at the Medical City General Hospital. PSI was impleaded as owner, operator and
manager of the hospital.
In a decision[12] dated March 17, 1993, the RTC held PSI solidarily liable with Dr. Ampil and Dr. Fuentes for damages. [13] On appeal, the Court of
Appeals (CA), absolved Dr. Fuentes but affirmed the liability of Dr. Ampil and PSI, subject to the right of PSI to claim reimbursement from Dr.
Ampil.[14]

On petition for review, this Court, in its January 31, 2007 decision, affirmed the CA decision.[15] PSI filed a motion for reconsideration[16] but the
Court denied it in a resolution dated February 11, 2008.[17]

The Court premised the direct liability of PSI to the Aganas on the following facts and law:

First, there existed between PSI and Dr. Ampil an employer-employee relationship as contemplated in the December 29, 1999 decision in Ramos v.
Court of Appeals[18] that for purposes of allocating responsibility in medical negligence cases, an employer-employee relationship exists between
hospitals and their consultants.[19] Although the Court inRamos later issued a Resolution dated April 11, 2002 [20] reversing its earlier finding on the
existence of an employment relationship between hospital and doctor, a similar reversal was not warranted in the present case because the
defense raised by PSI consisted of a mere general denial of control or responsibility over the actions of Dr. Ampil.[21]

Second, by accrediting Dr. Ampil and advertising his qualifications, PSI created the public impression that he was its agent. [22] Enrique
testified that it was on account of Dr. Ampil's accreditation with PSI that he conferred with said doctor about his wife's (Natividad's)
condition.[23] After his meeting with Dr. Ampil, Enrique asked Natividad to personally consult Dr. Ampil.[24] In effect, when Enrigue and Natividad
engaged the services of Dr. Ampil, at the back of their minds was that the latter was a staff member of a prestigious hospital. Thus, under the
doctrine of apparent authority applied in Nogales, et al. v. Capitol Medical Center, et al.,[25] PSI was liable for the negligence of Dr. Ampil.

Finally, as owner and operator of Medical City General Hospital, PSI was bound by its duty to provide comprehensive medical services to
Natividad Agana, to exercise reasonable care to protect her from harm, [26] to oversee or supervise all persons who practiced medicine within its
walls, and to take active steps in fixing any form of negligence committed within its premises. [27] PSI committed a serious breach of its corporate
duty when it failed to conduct an immediate investigation into the reported missing gauzes.[28]

PSI is now asking this Court to reconsider the foregoing rulings for these reasons:
I

The declaration in the 31 January 2007 Decision vis-a-vis the 11 February 2009 Resolution that the ruling in Ramos vs. Court of
Appeals (G.R. No. 134354, December 29, 1999) that an employer-employee relations exists between hospital and their
consultants stays should be set aside for being inconsistent with or contrary to the import of the resolution granting the
hospital's motion for reconsideration in Ramos vs. Court of Appeals (G.R. No. 134354, April 11, 2002), which is applicable to PSI
since the Aganas failed to prove an employer-employee relationship between PSI and Dr. Ampil and PSI proved that it has no
control over Dr. Ampil. In fact, the trial court has found that there is no employer-employee relationship in this case and that the
doctor's are independent contractors.

II

Respondents Aganas engaged Dr. Miguel Ampil as their doctor and did not primarily and specifically look to the Medical City
Hospital (PSI) for medical care and support; otherwise stated, respondents Aganas did not select Medical City Hospital (PSI) to
provide medical care because of any apparent authority of Dr. Miguel Ampil as its agent since the latter was chosen primarily and
specifically based on his qualifications and being friend and neighbor.

III

PSI cannot be liable under doctrine of corporate negligence since the proximate cause of Mrs. Agana's injury was the negligence
of Dr. Ampil, which is an element of the principle of corporate negligence. [29]
 In their respective memoranda, intervenors raise parallel arguments that the Court's ruling on the existence of an employer-employee
relationship between private hospitals and consultants will force a drastic and complex alteration in the long-established and currently prevailing
relationships among patient, physician and hospital, with burdensome operational and financial consequences and adverse effects on all three
parties.[30]

The Aganas comment that the arguments of PSI need no longer be entertained for they have all been traversed in the assailed decision
and resolution.[31]

After gathering its thoughts on the issues, this Court holds that PSI is liable to the Aganas, not under the principle of respondeat superior for lack of
evidence of an employment relationship with Dr. Ampil but under the principle of ostensible agency for the negligence of Dr. Ampil and, pro hac
vice, under the principle of corporate negligence for its failure to perform its duties as a hospital.
While in theory a hospital as a juridical entity cannot practice medicine,[32] in reality it utilizes doctors, surgeons and medical practitioners
in the conduct of its business of facilitating medical and surgical treatment. [33] Within that reality, three legal relationships crisscross: (1) between
the hospital and the doctor practicing within its premises; (2) between the hospital and the patient being treated or examined within its premises
and (3) between the patient and the doctor. The exact nature of each relationship determines the basis and extent of the liability of the hospital for
the negligence of the doctor.

Where an employment relationship exists, the hospital may be held vicariously liable under Article 2176[34] in relation to Article
2180[35] of the Civil Code or the principle of respondeat superior. Even when no employment relationship exists but it is shown that the hospital
holds out to the patient that the doctor is its agent, the hospital may still be vicariously liable under Article 2176 in relation to Article 1431[36] and
Article 1869[37] of the Civil Code or the principle of apparent authority.[38] Moreover, regardless of its relationship with the doctor, the hospital may
be held directly liable to the patient for its own negligence or failure to follow established standard of conduct to which it should conform as a
corporation.[39]

This Court still employs the control test to determine the existence of an employer-employee relationship between hospital and doctor.
In Calamba Medical Center, Inc. v. National Labor Relations Commission, et al.[40] it held:

Under the "control test", an employment relationship exists between a physician and a hospital if the hospital controls both the
means and the details of the process by which the physician is to accomplish his task.

xx xx xx
As priorly stated, private respondents maintained specific work-schedules, as determined by petitioner through its medical
director, which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under
pain of administrative sanctions.

That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room,
the operating room, or any department or ward for that matter, respondents' work is monitored through its nursing
supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations
can be undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to wield the power. (emphasis supplied)

Even in its December 29, 1999 decision[41] and April 11, 2002 resolution[42] in Ramos, the Court found the control test decisive.

In the present case, it appears to have escaped the Court's attention that both the RTC and the CA found no employment relationship
between PSI and Dr. Ampil, and thatthe Aganas did not question such finding. In its March 17, 1993 decision, the RTC found that defendant
doctors were not employees of PSI in its hospital, they being merely consultants without any employer-employee relationship and in the capacity of
independent contractors.[43] The Aganas never questioned such finding.

PSI, Dr. Ampil and Dr. Fuentes appealed[44] from the RTC decision but only on the issues of negligence, agency and corporate liability. In
its September 6, 1996 decision, the CA mistakenly referred to PSI and Dr. Ampil as employer-employee, but it was clear in its discussion on the
matter that it viewed their relationship as one of mere apparent agency.[45]

The Aganas appealed from the CA decision, but only to question the exoneration of Dr. Fuentes.[46] PSI also appealed from the CA decision, and it
was then that the issue of employment, though long settled, was unwittingly resurrected.

In fine, as there was no dispute over the RTC finding that PSI and Dr. Ampil had no employer-employee relationship, such finding became
final and conclusive even to this Court.[47] There was no reason for PSI to have raised it as an issue in its petition. Thus, whatever discussion on the
matter that may have ensued was purely academic.

Nonetheless, to allay the anxiety of the intervenors, the Court holds that, in this particular instance, the concurrent finding of the RTC and the CA
that PSI was not the employer of Dr. Ampil is correct. Control as a determinative factor in testing the employer-employee relationship between
doctor and hospital under which the hospital could be held vicariously liable to a patient in medical negligence cases is a requisite fact to be
established by preponderance of evidence. Here, there was insufficient evidence that PSI exercised the power of control or wielded such power
over the means and the details of the specific process by which Dr. Ampil applied his skills in the treatment of Natividad.Consequently, PSI cannot
be held vicariously liable for the negligence of Dr. Ampil under the principle of respondeat superior.
There is, however, ample evidence that the hospital (PSI) held out to the patient (Natividad) [48] that the doctor (Dr. Ampil) was its agent.
Present are the two factors that determine apparent authority: first, the hospital's implied manifestation to the patient which led the latter to
conclude that the doctor was the hospital's agent; and second, the patients reliance upon the conduct of the hospital and the doctor, consistent
with ordinary care and prudence.[49]

Enrique testified that on April 2, 1984, he consulted Dr. Ampil regarding the condition of his wife; that after the meeting and as advised
by Dr. Ampil, he asked [his] wife to go to Medical City to be examined by [Dr. Ampil]; and that the next day, April 3, he told his daughter to take her
mother to Dr. Ampil.[50] This timeline indicates that it was Enrique who actually made the decision on whom Natividad should consult and where,
and that the latter merely acceded to it. It explains the testimony of Natividad that she consulted Dr. Ampil at the instigation of her daughter.[51]

Moreover, when asked what impelled him to choose Dr. Ampil, Enrique testified:
Atty. Agcaoili

On that particular occasion, April 2, 1984, what was your reason for choosing Dr. Ampil to contact with in connection with your
wife's illness?

A. First, before that, I have known him to be a specialist on that part of the body as a surgeon, second, I have known him to be
a staff member of the Medical City which is a prominent and known hospital. And third, because he is a neighbor, I expect more
than the usual medical service to be given to us, than his ordinary patients.[52] (emphasis supplied)

Clearly, the decision made by Enrique for Natividad to consult Dr. Ampil was significantly influenced by the impression that Dr. Ampil was
a staff member of MedicalCity General Hospital, and that said hospital was well known and prominent. Enrique looked upon Dr. Ampil not as
independent of but as integrally related to Medical City.

PSI's acts tended to confirm and reinforce, rather than negate, Enrique's view. It is of record that PSI required a consent for hospital care[53] to be
signed preparatory to the surgery of Natividad. The form reads:

Permission is hereby given to the medical, nursing and laboratory staff of the Medical City General Hospital to perform such
diagnostic procedures and to administer such medications and treatments as may be deemed necessary or advisable by
the physicians of this hospital for and during the confinement of xxx. (emphasis supplied)
By such statement, PSI virtually reinforced the public impression that Dr. Ampil was a physician of its hospital, rather than one independently
practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry
them out.

PSI pointed out in its memorandum that Dr. Ampil's hospital affiliation was not the exclusive basis of the Aganas decision to have
Natividad treated in Medical CityGeneral Hospital, meaning that, had Dr. Ampil been affiliated with another hospital, he would still have been
chosen by the Aganas as Natividad's surgeon.[54]

The Court cannot speculate on what could have been behind the Aganas decision but would rather adhere strictly to the fact that, under the
circumstances at that time, Enriquedecided to consult Dr. Ampil for he believed him to be a staff member of a prominent and known hospital. After
his meeting with Dr. Ampil, Enrique advised his wife Natividad to go to the Medical City General Hospital to be examined by said doctor, and the
hospital acted in a way that fortified Enrique's belief.

This Court must therefore maintain the ruling that PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent.

Moving on to the next issue, the Court notes that PSI made the following admission in its Motion for Reconsideration:

51. Clearly, not being an agent or employee of petitioner PSI, PSI [sic] is not liable for Dr. Ampil's acts during the operation.
Considering further that Dr. Ampil was personally engaged as a doctor by Mrs. Agana, it is incumbent upon Dr. Ampil, as Captain
of the Ship, and as the Agana's doctor to advise her on what to do with her situation vis-a-vis the two missing gauzes. In addition
to noting the missing gauzes, regular check-ups were made and no signs of complications were exhibited during her stay at the
hospital, which could have alerted petitioner PSI's hospital to render and provide post-operation services to and tread on Dr.
Ampil's role as the doctor of Mrs. Agana. The absence of negligence of PSI from the patient's admission up to her discharge is
borne by the finding of facts in this case. Likewise evident therefrom is the absence of any complaint from Mrs. Agana after
her discharge from the hospital which had she brought to the hospital's attention, could have alerted petitioner PSI to act
accordingly and bring the matter to Dr. Ampil's attention. But this was not the case. Ms. Agana complained ONLY to Drs.
Ampil and Fuentes, not the hospital. How then could PSI possibly do something to fix the negligence committed by Dr. Ampil
when it was not informed about it at all.[55] (emphasis supplied)
 PSI reiterated its admission when it stated that had Natividad Agana informed the hospital of her discomfort and pain, the hospital would
have been obliged to act on it.[56]

The significance of the foregoing statements is critical.

First, they constitute judicial admission by PSI that while it had no power to control the means or method by which Dr. Ampil conducted
the surgery on Natividad Agana, it had the power to review or cause the review of what may have irregularly transpired within its walls strictly for
the purpose of determining whether some form of negligence may have attended any procedure done inside its premises, with the ultimate end of
protecting its patients.

Second, it is a judicial admission that, by virtue of the nature of its business as well as its prominence [57] in the hospital industry, it
assumed a duty to tread on the captain of the ship role of any doctor rendering services within its premises for the purpose of ensuring the safety
of the patients availing themselves of its services and facilities.

Third, by such admission, PSI defined the standards of its corporate conduct under the circumstances of this case, specifically: (a) that it
had a corporate duty to Natividad even after her operation to ensure her safety as a patient; (b) that its corporate duty was not limited to having its
nursing staff note or record the two missing gauzes and (c) that its corporate duty extended to determining Dr. Ampil's role in it, bringing the
matter to his attention, and correcting his negligence.

And finally, by such admission, PSI barred itself from arguing in its second motion for reconsideration that the concept of corporate
responsibility was not yet in existence at the time Natividad underwent treatment; [58] and that if it had any corporate responsibility, the same was
limited to reporting the missing gauzes and did not include taking an active step in fixing the negligence committed. [59] An admission made in the
pleading cannot be controverted by the party making such admission and is conclusive as to him, and all proofs submitted by him contrary thereto
or inconsistent therewith should be ignored, whether or not objection is interposed by a party. [60]

Given the standard of conduct that PSI defined for itself, the next relevant inquiry is whether the hospital measured up to it.

PSI excuses itself from fulfilling its corporate duty on the ground that Dr. Ampil assumed the personal responsibility of informing Natividad about
the two missing gauzes.[61]Dr. Ricardo Jocson, who was part of the group of doctors that attended to Natividad, testified that toward the end of the
surgery, their group talked about the missing gauzes but Dr. Ampil assured them that he would personally notify the patient about
it.[62] Furthermore, PSI claimed that there was no reason for it to act on the report on the two missing gauzes because Natividad Agana showed no
signs of complications. She did not even inform the hospital about her discomfort.[63]

The excuses proffered by PSI are totally unacceptable.

To begin with, PSI could not simply wave off the problem and nonchalantly delegate to Dr. Ampil the duty to review what transpired
during the operation. The purpose of such review would have been to pinpoint when, how and by whom two surgical gauzes were mislaid so that
necessary remedial measures could be taken to avert any jeopardy to Natividads recovery. Certainly, PSI could not have expected that purpose to
be achieved by merely hoping that the person likely to have mislaid the gauzes might be able to retrace his own steps. By its own standard of
corporate conduct, PSI's duty to initiate the review was non-delegable.

While Dr. Ampil may have had the primary responsibility of notifying Natividad about the missing gauzes, PSI imposed upon itself the separate and
independent responsibility of initiating the inquiry into the missing gauzes. The purpose of the first would have been to apprise Natividad of what
transpired during her surgery, while the purpose of the second would have been to pinpoint any lapse in procedure that led to the gauze count
discrepancy, so as to prevent a recurrence thereof and to determine corrective measures that would ensure the safety of Natividad. That Dr. Ampil
negligently failed to notify Natividad did not release PSI from its self-imposed separate responsibility.

Corollary to its non-delegable undertaking to review potential incidents of negligence committed within its premises, PSI had the duty to
take notice of medical records prepared by its own staff and submitted to its custody, especially when these bear earmarks of a surgery gone awry.
Thus, the record taken during the operation of Natividad which reported a gauze count discrepancy should have given PSI sufficient reason to
initiate a review. It should not have waited for Natividad to complain.

As it happened, PSI took no heed of the record of operation and consequently did not initiate a review of what transpired during
Natividads operation. Rather, it shirked its responsibility and passed it on to others to Dr. Ampil whom it expected to inform Natividad, and to
Natividad herself to complain before it took any meaningful step. By its inaction, therefore, PSI failed its own standard of hospital care. It
committed corporate negligence.

It should be borne in mind that the corporate negligence ascribed to PSI is different from the medical negligence attributed to Dr. Ampil.
The duties of the hospital are distinct from those of the doctor-consultant practicing within its premises in relation to the patient; hence, the failure
of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil.

All this notwithstanding, we make it clear that PSIs hospital liability based on ostensible agency and corporate negligence applies only to
this case, pro hac vice. It is not intended to set a precedent and should not serve as a basis to hold hospitals liable for every form of negligence of
their doctors-consultants under any and all circumstances. The ruling is unique to this case, for the liability of PSI arose from an implied agency with
Dr. Ampil and an admitted corporate duty to Natividad.[64]
 Other circumstances peculiar to this case warrant this ruling,[65] not the least of which being that the agony wrought upon the Aganas has
gone on for 26 long years, with Natividad coming to the end of her days racked in pain and agony. Such wretchedness could have been avoided had
PSI simply done what was logical: heed the report of a guaze count discrepancy, initiate a review of what went wrong and take corrective measures
to ensure the safety of Nativad. Rather, for 26 years, PSI hemmed and hawed at every turn, disowning any such responsibility to its
patient. Meanwhile, the options left to the Aganas have all but dwindled, for the status of Dr. Ampil can no longer be ascertained. [66]

Therefore, taking all the equities of this case into consideration, this Court believes P15 million would be a fair and reasonable liability of
PSI, subject to 12% p.a. interest from the finality of this resolution to full satisfaction.

WHEREFORE, the second motion for reconsideration is DENIED and the motions for intervention are NOTED.

Professional Services, Inc. is ORDERED pro hac vice to pay Natividad (substituted by her children Marcelino Agana III, Enrique Agana, Jr., Emma
Agana-Andaya, Jesus Agana and Raymund Agana) and Enrique Agana the total amount of P15 million, subject to 12% p.a. interest from the finality
of this resolution to full satisfaction.

No further pleadings by any party shall be entertained in this case.

Let the long-delayed entry of judgment be made in this case upon receipt by all concerned parties of this resolution.
SO ORDERED.

RENATO C. CORONA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

ANTONIO T. CARPIO CONCHITA CARPIO MORALES

Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

Associate Justice Associate Justice

(No Part)
DIOSDADO M. PERALTA LUCAS P. BERSAMIN
Associate Justice Associate Justice

(On Official Leave)

MARIANO C. DEL CASTILLO ROBERTO A. ABAD
Associate Justice Associate Justice
* No part.
** On leave.
[1] Rollo (G.R. No. 126297), p. 468.
[2] Id., p. 489.
[3] Filed a motion for leave of court to intervene (by way of attached memorandum), id., p. 512.
[4] Filed a motion to intervene and for leave to file memorandum-in-intervention, id., p. 534. AHI did not file any memorandum.
[5] Filed a motion for intervention (by way of attached brief/memorandum), id., p. 602.
[6] Resolution dated June 16, 2008, id., p. 647.
[7] Resolution dated June 12, 2008, id., p. 645.
[8] Resolution dated August 12, 2008, id., p. 649.
[9] As per Advisory dated March 4, 2009. It should be borne in mind that the issues in G.R. No. 126467 on the exculpation of Dr. Juan Fuentes from

liability, and in G.R. No. 127590 on the culpability of Dr. Miguel Ampil for negligence and medical malpractice, are deemed finally
decided, no motion for reconsideration having been filed by the Heirs of Agana in G.R. No. 126467 nor by Dr. Miguel Ampil in G.R. No.
127467 from the January 31, 2007 Decision of the First Division of the Court.
[10] Docketed as Civil Case No. Q-43322, record, p. 6.
[11] Also referred to in the records as sponges.
[12] Penned by then Presiding Judge and now Associate Justice of the Supreme Court Lucas Bersamin.
[13] RTC Decision, record, p. 133.
[14] CA decision dated September 6, 1996, penned by then Court of Appeals Associate Justice and later Supreme Court Associate Justice Cancio

Garcia (Ret.); CA rollo, pp. 136-137.

[15] G.R. Nos. 126297/126467/127590, 31 January 2007, 513 SCRA 478.
[16] Rollo, p. 403.
[17] G.R. Nos. 126297/126467/127590, 11 February 2008, 544 SCRA 170.
[18] G.R. No. 124354, 29 December 1999, 321 SCRA 548.
[19] Supra at 15, p. 499.
[20] G.R. No. 124354, 11 April 2002, 380 SCRA 467.
[21] Supra at 17, p. 179.
[22] Supra at 15, p. 502.
[23] Supra at 17, p. 181, citing TSN, April 12, 1985, pp. 25-26.
[24] Id.
[25] G.R. No. 142625, 19 December 2006, 511 SCRA 204.
[26] Supra at 15, p. 505.
[27] Supra at 17, p. 182.
[28] Id.
[29] Rollo (G.R. No. 126297), pp. 489-490.
[30] Id., pp. 518-527, 605-613.
[31] Id., p. 659.
[32] Section 8, Republic Act No. 2382 (RA 2382) or The Medical Act of 1959.
[33] See Acebedo Optical Co. Inc. v. CA, G.R. No. 100152, 31 March 2000, 314 SCRA 315.
[34] Article 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.
[35] Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for

whom one is responsible.

The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their
company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company.
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.
The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to
whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long
as they remain in their custody.
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.
[36] Article 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or

disproved as against the person relying thereon.

[37] 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.
[38] Nogales v. Capitol Medical Center, et al., supra at 25.
[39] Pedro Solis, Medical Jurisprudence (The Practice of Medicine and the Law), Quezon City: R.P. Garcia Publishing Co., 1988, p. 321,

citing U.S. district and appellate cases. See also Darling v. Charleston Community Memorial Hospital, 14 A.L.R. 3D 860 (Ill. September 29,
1965).
[40] G.R. No. 176484, 25 November 2008, 571 SCRA 585.
[41] Supra at 18.
[42] Supra at 20.
[43] Supra at 13, p. 126.
[44] Dr. Fuentes filed with the CA a petition for certiorari docketed as CA-G.R. SP No. 32198 (CA rollo, p. 1) while Dr. Ampil and PSI jointly filed an

appeal docketed as CA-G.R. CV No. 42062 (CA rollo, pp. 40 and 152).
[45] Supra at 14, p. 135.
[46] Rollo (G.R. No. 126467), p. 8.
[47] Elsie Ang v. Dr. Erniefel Grageda, G.R. No. 166239, 8 June 2006, 490 SCRA 424.

[48] Through the patient's husband Enrique.

[49] Nogales v. Capitol Medical Center, et al., supra at 25.
.
[50] TSN, April 12, 1985, pp. 26-27.
[51] Second Motion for Reconsideration, rollo, pp. 495-496.
[52] Supra at 50, pp. 25-26.
[53] Exh. D-1, Exhibit Folder for Plaintiffs, p. 92.
[54] Petitioner's Memorandum with Compliance, pp. 57-58.

[55] Motion for Reconsideration, rollo, pp. 429-430.

[56] Id., p. 434.

[57] PSI has not denied its prominent place in the hospital industry but has in fact asserted such role in its 1967 brochure (Annex K to its
Manifestation filed on May 14, 2009).

[58] Rollo, p. 505-506.

[59] Id., pp. 506-507.
[60] Luciano Tan v. Rodil Enterprises, G. R. No. 168071, 18 December 2006, 511 SCRA 162; Heirs of Pedro Clemena Y Zurbano v. Heirs of Irene B. Bien,

G.R. No. 155508, 11 September 2006, 501 SCRA 405.

[61] Second Motion for Reconsideration, rollo, pp. 502-503.
[62] Id., p. 503, citing TSN, February 26, 1987, p. 36.
[63] Supra at 55.

[64] In Partido ng Manggagawa (PM) and Butil Farmers Party (Butil) v. Comelec (G.R. No. 164702, March 15, 2006, 484 SCRA 671), a ruling expressly
qualified as pro hac vice is limited in application to one particular case only; it cannot be relied upon as a precedent to govern other
cases.
[65] See Sps. Chua v. Hon. Jacinto Ang, et al., G.R. No. 156164, 4 September 2009.
[66] His last pleading was filed on May 13, 2001, rollo (G.R. No. 127590), p. 217.
 EN BANC

[A.C. No. 4431. June 19, 1997]

PRISCILLA CASTILLO VDA. DE MIJARES, complainant, vs. JUSTICE ONOFRE A. VILLALUZ (Retired), respondent.

DECISION

REGALADO, J.:

Doubly distressing as the subject of administrative recourse to this Court is the present case where the cause celebre is a star-crossed
marriage, and the unlikely protagonists are in incumbent and a retired member of the Judiciary.

In a sworn complaint for disbarment filed with this Court on June 6, 1995, complainant Judge Priscilla Castillo Vda. de Mijares charged
respondent Onofre A. Villaluz, a retired Justice of the Court of Appeals, with gross immorality and grave misconduct. [1]

After an answer[2] and a reply[3] were respectively filed by respondent and complainant, the Court, in its Resolution dated February 27, 1996,
resolved to refer the administrative case to Associate Justice Fidel P. Purisima of the Court of Appeals for investigation, report and
recommendation.

On March 4, 1997, Justice Purisima submitted his Report to this Court, with the following recommendation:

WHEREFORE, in light of the foregoing and without prejudice to the outcome of the aforesaid Criminal Case No. 142481 for Bigamy, it is respectfully
recommended that the respondent, former Justice Onofre A. Villaluz, be found guilty of gross misconduct, within the contemplation of Rule 138 of
the Revised Rules of Court on removal or suspension of attorneys, and therefor(e), he be suspended from the practice of law for a period of two (2)
years, commencing from the finality of the Decision in this case, with a warning that a repetition of the same or any other misconduct will be dealt
with more severely.

On the bases of the evidence adduced by the parties, Justice Purisima summarized the antecedent facts in his aforestated Report and which
we feel should be reproduced hereunder so that his disposition of this case may be duly appreciated:

Complainant is the Presiding Judge of Branch 108 of the Regional Trial Court, Pasay City, while respondent former Justice Onofre A. Villaluz is a
consultant at the Presidential Anti Crime Commission (PACC) headed by Vice-President Joseph E. Estrada.

Widowed by the death of her first husband, Primitivo Mijares, complainant commenced Special Proceeding No. 90-54650 and therein obtained a
decree declaring the said Primitivo Mijares presumptively dead, after an absence of sixteen (16) years.

Complainant narrated that on January 7, 1994, she got married to respondent in a civil wedding before Judge Myrna Lim Verano, then Presiding
Judge of the Municipal Circuit Trial Court of Carmona, Cavite and now Judge of the Metropolitan Trial Court of Mandaluyong City. Their marriage
was the culmination of a long engagement. They met sometime in 1977, when respondent, as Presiding Judge of the Criminal Circuit Court in Pasig,
Metro Manila, was trying a murder case involving the death of a son of Judge Mijares. Since then, respondent became a close family friend of
complainant ( TSN, p. 14; April 10, 1996 ). After the wedding, they received their guests at a German restaurant in Makati. With the reception over,
the newlywed(s) resumed their usual work and activities. At 6:00 oclock in the afternoon of the same day, respondent fetched complainant from
her house in Project 8, Quezon City, and reached the condominium unit of respondent two hours later at which time, she answered the phone. At
the other end of the line was a woman offending her with insulting remarks. Consternated, complainant confronted respondent on the identity of
such caller but respondent simply remarked it would have been just a call at the wrong number. What followed was a heated exchange of harsh
words, one word led to another, to a point when respondent called complainant a nagger, saying Ayaw ko nang ganyan! Ang gusto ko sa babae,
yong sumusunod sa bawat gusto ko. Get that marriage contract and have it burned. Such unbearable utterances of respondent left complainant no
choice but to leave in haste the place of their would-be honeymoon. Since then, the complainant and respondent have been living separately
because as complainant rationalized, contrary to her expectation respondent never got in touch with her and did not even bother to apologized for
what happened ( TSN, p. 13, April 10, 1996 ).

Several months after that fateful encounter of January 7, 1994, in a Bible Study session, the complainant learned from Manila RTC Judge Ramon
Makasiar, a member of the Bible Group, that he ( Judge Makasiar ) solemnized the marriage between former Justice Onofre A. Villaluz and a certain
Lydia Geraldez. Infuriated and impelled by the disheartening news, complainant lost no time in gathering evidence against respondent, such that,
on June 6, 1995 she filed the instant Complaint for Disbarment against him ( Exh. A ).
On August 7, 1995, when she discovered another incriminatory document against respondent, the complainant executed against respondent her
Supplemental Complaint Affidavit for Falsification ( Exhs. D and D-1 ).

Exhibit C, marriage contract of respondent and Lydia Geraldez, dated May 10, 1994, was offered by complainant to prove that respondent
immorally and bigamously entered into a marriage, and to show that the respondent distorted the truth by stating his civil status as SINGLE, when
he married Lydia Geraldez. This, the respondent did, to lead an immoral and indiscreet life. He resorted to falsification to distort the truth,
complainant lamented. Also presented for complainant were: Marriage Contract between her and respondent ( Exh. B ); Order declaring her first
husband, Primitivo Mijares, presumptively dead ( Exh. E ); and Affidavit of Judge Myrna Lim Verano, who solemnized the marriage between her
(complainant) and respondent (Exhs. F and F-1).

Respondent gave a different version. According to him, what he inked with the complainant on January 7, 1994 was merely but a sham
marriage. He explained that he agreed as, in fact, he voluntarily signed the Marriage Contract marked Exh. B, in an effort to help Judge Mijares in
the administrative case for immorality filed against her by her Legal Researcher, Atty. Joseph Gregorio Naval, Jr., sometime in 1993. Respondent
theorized that when his marriage with complainant took place before Judge Myrna Lim Verano, his marriage with Librada Pea, his first wife, was
subsisting because the Decision declaring the annulment of such marriage had not yet become final and executory, for the reason that said
Decision was not yet published as required by the Rules, the service of summons upon Librada Pea having been made by publication, and subject
Decision was not yet published. To this effect was the Certification by Mrs. Nelia B. Rosario, Acting Branch Clerk of Court of Branch 37 of the
Regional Trial Court of Manila ( Exh. 4 ).

After a thorough review of the records, the Court finds itself in full accord with the findings and recommendation of Justice Purisima. Herein
respondent is undeniably guilty of deceit and grossly immoral conduct. He has made a mockery of marriage which is a sacred institution demanding
respect and dignity.[4] He himself asserts that at the time of his marriage to herein complainant, the decision of the court annulling his marriage to
his first wife, Librada Pea, had not yet attained finality. Worse, four months after his marriage to petitioner, respondent married another woman,
Lydia Geraldez, in Cavite, after making a false statement in his application for marriage license that his previous marriage had been annulled.

Respondents subterfuge that his marriage to petitioner was just a sham marriage will not justify his actuations. Even if the said marriage was
just a caper of levity in bad taste, a defense which amazes and befuddles but does not convince, it does not speak well of respondents sense of
social propriety and moral values. This is aggravated by the fact that he is not a layman nor even just an ordinary lawyer, but a former Judge of the
Circuit Criminal Court and, thereafter, a Justice of the Court of Appeals who cannot but have been fully aware of the consequence of a marriage
celebrated with all the necessary legal requisites.[5]

On this score, we rely once again on the perceptive findings and discussion of Investigating Justice Purisima which we quote with approval:

That, on January 7, 1994 respondent knowingly and voluntarily entered into and signed a Marriage Contract with complainant before Judge Myrna
Lim Verano, then Presiding Judge of the Municipal Circuit Trial Court of Carmona, Cavite, competent under the law to solemnized a civil marriage, is
beyond cavil. As stated under oath by respondent himself, he could not be forced to do anything not of his liking (TSN, April 2, 1996, p. 15a).

That what complainant and respondent contracted was a valid marriage is borne out by law and the evidence. To be sure, all the essential and
formal requisites of a valid marriage under Articles 2 and 3 of the Family Code, i.e., legal capacity of the contracting parties, who must be a male
and a female; consent freely given in the presence of the solemnizing officer; authority of the solemnizing officer; a valid marriage license except in
the cases provided for in Chapter 2 of Title I on marriage, Family Code; and a marriage ceremony with the appearance of the contracting parties
before the solemnizing officer, and their personal declaration that they take each other as husband and wife, in the presence of not less than two
witnesses of legal age, were satisfied and complied with.

The theory of respondent that what (was) solemnized with complainant was nothing but a sham marriage is too incredible to deserve serious
consideration. According to respondent, he entered into subject marriage in an effort to save the complainant from the charge of immorality
against her. But, to repeat: regardless of the intention of respondent in saying I do with complainant before a competent authority, all ingredients
of a valid marriage were present. His consent thereto was freely given. Judge Myrna Lim Verano was authorized by law to solemnize the civil
marriage, and both contracting parties had the legal capacity to contract such marriage.

Without in anyway pre-empting whatever the Regional Trial Court of Manila will find in the criminal case for Bigamy against herein respondent, and
even assuming for the sake of argument that the judgment in Civil Case No. 93-67048 decreeing the annulment of the marriage between
respondent and Librada Pea had not attained complete finality due to non publication of said judgment in a newspaper of general circulation; that
circumstance, alone, only made subject marriage voidable and did not necessarily render the marriage between complainant and respondent void.

Besides, as stressed upon by complainant, respondent stated under oath that his marriage with Librada Pea had been annulled by a decree of
annulment, when he (respondent) took Lydia Geraldez as his wife by third marriage, and therefore, he is precluded, by the principle of estoppel,
from claiming that when he took herein complainant as his wife by second marriage, his first marriage with Librada Pea was subsisting and
unannulled.

But, anyway, as it is not proper to make here a definitive finding as to whether or not respondent can be adjudged guilty of bigamy under the
attendant facts and circumstances, a crucial issue pending determination in Criminal Case No. 142481 before Branch 12 of the Manila Regional Trial
Court, even assuming arguendo that what respondent contracted with complainant on January 7, 1994 was a sham marriage, as he terms it, the
ineluctible conclusion is that what respondent perpetrated was a gross misconduct on his part as a member of the Philippine Bar and as former
appellate Justice, at that. Even granting that the immorality charge against herein complainant in the administrative case instituted against her by
Atty. Joseph Gregorio Naval, Jr., is unfounded, respondent was not justified in resorting to a sham marriage to protect her (complainant) from said
immorality charge. Being a lawyer, the respondent is surely conversant with the legal maxim that a wrong cannot be righted by another wrong. If
he never had any immoral love affair with Judge Priscilla Castillo Vda. de Mijares and therefore, he felt duty bound to help her in ventilating the
whole truth and nothing but the truth, respondent could have testified in her favor in said administrative case, to assure all and sundry that what
Atty. Joseph Gregorio Naval, Jr. complained of in said administrative case was without any factual and legal basis.

In this only Christian country of the Far East, society cherishes and protects the sanctity of marriage and the family as a social
institution. Consequently, no one can make a mockery thereof and perform a sham marriage with impunity. To make fun of and take lightly the
sacredness of marriage is to court the wrath of the Creator and mankind. Therefore, the defense of respondent that what was entered into by him
and complainant on January 7, 1994 was nothing but a sham marriage is unavailing to shield or absolve him from liability for his gross misconduct,
nay sacrilege.

From the foregoing, it is evident that respondent dismally fails to meet the standard of moral fitness for continued membership in the legal
profession. The nature of the office of an attorney at law requires that he shall be a person of good moral character. This qualification is not only a
condition precedent for admission to the practice of law; its continued possession is also essential for remaining in the practice of law.[6] Under
Rule 1.01 of the Code of Professional Responsibility, a lawyer shall not engage in unlawful, dishonest, immoral or deceitfulconduct. The commission
of grossly immoral conduct and deceit are grounds for suspension or disbarment of lawyers. [7]

However, considering that respondent is in the declining years of his life; that his impulsive conduct during some episodes of the
investigation reveal a degree of aberrant reactive behavior probably ascribable to advanced age; and the undeniable fact that he has rendered
some years of commendable service in the judiciary, the Court feels that disbarment would be too harsh a penalty in this peculiar case. Hence, a
suspension of two years, as recommended, would suffice as a punitive but compassionate disciplinary measure.

WHEREFORE, finding herein respondent, former Justice Onofre A. Villaluz, GUILTY of immoral conduct in violation of the Code of Professional
Responsibility, he is hereby SUSPENDED from the practice of law for a period of two (2) years effective upon notice hereof, with the specific
WARNING that a more severe penalty shall be imposed should he commit the same or a similar offense hereafter.

SO ORDERED.

Padilla, Davide, Jr., Romero, Melo, Puno, Vitug, Kapunan, Mendoza, Hermosisima, Jr., Panganiban, and Torres, Jr., JJ., concur.
Narvasa, C.J., no part due to close relation to party.
Bellosillo, and Francisco, JJ., on leave.

[1] Rollo, 1-2.

[2] Ibid., 15-16.
[3] Ibid., 19-20.
[4] Pangan v. Ramos, Adm. Case No. 1053, August 31, 1981, 107 SCRA 1.
[5] See Pomperada vs. Jochico, Bar Matter No. 68, November 21, 1984, 133 SCRA 309.
[6] People vs. Tuanda, Adm. Case No. 3360, January 30, 1990, 181 SCRA 682.
[7] Section 27, Rule 138, Rules of Court.
 3l\.epublic of tbe ~bilippines
~upreme Qeourt
:.fflantla

FIRST DIVISION

ZARSONA MEDICAL CLINIC, G.R. No. 191225

Petitioner
'

Present:

SERENO, C.J.,
Chairperson,
-versus- LEONARDO-DE CASTRO,
BERSAMIN,
PEREZ, and
PERLAS-BERNABE, J.J.

PHILIPPINE HEAL TH Promulgated:

INSURANCE CORPORATION, OCT 13 201't
x------------------------------~~~~~-n~-~~~:------------------------~
DECISION

PEREZ, J.:

Before the Court is a petition for review on certiorari under Ruic 45

of the Rules of Court, questioning the 28 January 2009 1 and 7 December
2009 2 Resolutions of the Court of Appeals in CA-G.R. SP No. 02489-MIN.

A complaint was filed against petitioner Zarsona Medical Clinic

(ZMC) for violation of Section 149 of the Revised Implementing Rules and
Regulations of Republic Act No. 7875 or the National Health Insurance /\ct

Penned by Associate Justice Associate .Justice Rodrigo F. Lim, .Ir. with Associate Justices Jane
Aurora C. Lantion, Michael P. Elbinias, and Elihu A. Ybanez, concurring. Associate .Justice
Ruben C. Ayson dissented. Rollo. pp. 29-3 I.
Penned by Associate Justice Rodrigo F. Lim, Jr. with Associate .Justices Elihu A. Ybanu,

~
Edgardo T. Lloren and Danton Q. Bueser, concurring. Associate .Justice Ruben C. Ayson
dissented. Id. at 23-25.
Decision 2 G.R. No. 191225

of 1995. Section 149 penalizes any health care provider that increases the
period of actual confinement of any patient with revocation of accreditation.

ZMC filed a claim with the Philippine Health Insurance Corporation

(Philhealth) on the confinement of National Health Insurance Program
(NHIP) member Lorna M. Alestre (Alestre) on 10-12 August 2003. Said
claim was denied on the ground of extended confinement. It was stated on
the claim form that Alestre was admitted to ZMC on 6 August 2003 and was
discharged on 12 August 2003. It was also revealed in her Salaysay 3 dated
12 January 2004 that Alestres actual confinement at ZMC was on 10-11
August 2003. Alestre, who is a teacher at Rizal Elementary School, was
found to have reported for work on 12 August 2003.

In defense of ZMC, Dr. Sylvia Bragat (Dr. Bragat), its Medical

Director, stated that ZMCs Midwife/Clerk Jennifer R. Acuram (Acuram)
committed an honest mistake when she wrote 6-12 August 2003 as the
confinement period in the claim form. Dr. Bragat asserted that the hospital
had in fact claimed only for two (2) days. Acuram acknowledged her
mistake in her Affidavit of Explanation.4

ZMC also presented an Affidavit of Explanation5 dated 21 January

2005 from Alestre recanting her previous Salaysay. Alestre explained that
the previous statement she gave does not reflect the truth because she was
protecting herself when she logged-in at the schools time record on 12
August 2003 when she was supposedly still confined at ZMC. Alestre
narrated that she and her son were admitted at ZMC on 10 August 2003 at
around 1:30 p.m. and was discharged on 12 August 2003. In the morning of
12 August 2003, after her attending physician went to check on her, she
managed to slip out of the hospital. She proceeded to the school, which was
a mere ten minute drive away from ZMC. She reported for work and came
back to the hospital at noon to take her medicines and look after her child.
Thereafter, she again went back to the school and at about 1:30 p.m., she
asked permission from the school principal that she needed to go back to the
hospital. She then went back to ZMC to attend to her child and process her
discharge papers. At around 2:00 p.m., she finally came back to the school.

Dr. Ariel dela Cruz, attending physician of Alestre, confirmed that he

ordered Alestres discharge in the morning of 12 August 2003.6

3
CA rollo, p. 176.
4
Id. at 178.
5
Id. at 218-219.
6
Id. at 220.
Decision 3 G.R. No. 191225

On 12 December 2007, ZMC was found liable for the charge of

Extending Period of Confinement in violation of Section 149 of the
Revised Rules and Regulations of Republic Act No. 7875 and was meted the
penalty of suspension from participating in the NHIP for a period of three
(3) months and a fine of P10,000.00.

While Health Insurance Arbiter Michael Troy Polintan considered the

admission date of 6 August 2003 reflected in Alestres clinical record as a
mere clerical error, he refused to believe Alestres claim that she was
discharged only on 12 August 2003 but on that day, she was travelling back
and forth from hospital to the school where she teaches. The Philhealth
Arbiter gave more evidentiary weight to the signature of Alestre in the
schools attendance logbook which established the fact that she reported for
work on 12 August 2003.

ZMC appealed but on 24 July 2008, the Philhealth Board of Directors

(the Board) issued Philhealth Board Resolution No. 1151, Series of 2008
dismissing the appeal and affirming the 12 December 2007 Decision of the
Philhealth Arbiter.

The Board ruled that the contents of the Affidavit of Explanation

dated 3 May 2005 executed by Alestre is too good to be true because in
the first place, she has stated in detail all her acts from 7:17 a.m. to 8:15
[a.m.], 9:30 [a.m.], 9:50 [a.m.], 12:00 [noon]; 12:55 p.m., 1:30 p.m., 1:50
p.m., 2:15 p.m. and 2:30 p.m. The recollection of all these times after 22
months is not only fantastic but likewise incredible.7 Moreover, the Board
also noted that Alestre could not possibly be in ZMC and in the school at the
same time on 12 August 2003 while her son was still confined at the
hospital.

ZMC filed a petition for review with the Court of Appeals putting in
the forefront of its arguments Alestres Affidavit of Explanation. ZMC
admitted to Alestres recantation but in its defense, ZMC emphasized that
the Affidavit, being notarized and executed under oath, should weigh more
than the Salaysay, which was not so. ZMC added that Alestres retraction
rang true because she was willing to incriminate herself in exchange for
telling the truth.

Acting on the petition, the Court of Appeals issued the 4 September

2008 Resolution, which reads:

7
Id. at 65.
Decision 4 G.R. No. 191225

In the greater interest of substantial justice, petitioner is directed to

RECTIFY within five (5) days from notice, the following deficiencies in
its petition: (1) failure to attach the Special Power of Attorney executed by
the petitioner Zarsona Medical Clinic in favor of Ma. Irene M. Hao,
authorizing the latter to execute the verification and certification of non-
forum shopping; (2) failure of the petitioner to attach the certified true
copy of the assailed decision of the Board of Directors of the Philippine
Health Insurance Corporation as required under Rule 43, Section 6(c) of
the Revised Rules of Court; (3) failure of the petitioners counsel, Atty.
John Tracy F. Cagas, to indicate the dates and places of issuance of his
IBP and PTR Receipts as well as his Roll of Attorneys Number.

Further action on the petition is held in abeyance pending the

petitioners compliance on these matters.8

On 30 October 2008, ZMC filed its Compliance, attaching thereto the

plain copies of the Official Receipts of Atty. John Tracy F. Cagas
Integrated Bar of the Philippines dues and Professional Tax Receipts
showing the dates and places of issuance thereof, his roll number, a certified
true copy of the assailed Decision dated 24 July 2008, and a Special Power
of Attorney (SPA) dated 5 February 2001 executed by Dr. Leandro Zarsona,
Jr. (Dr. Zarsona) in favor of Dr. Bragat and William Bragat.

On 28 January 2009, the Court of Appeals dismissed the petition for

failure on the part of ZMC to attach a valid SPA. The appellate court found
the SPA defective on the ground that it does not explicitly authorize Dr.
Bragat to sign and execute the required verification and certification of non-
forum shopping in this case. The appellate court noted that the powers
granted to Dr. Bragat pertain only to her administrative functions as Medical
Director of ZMC.

ZMC moved for reconsideration but it was denied for lack of merit on
7 December 2009. In his Dissent, Court of Appeals Associate Justice Ruben
Ayson believed that ZMC should be given the opportunity to rectify any
defect or infirmity in the petition pursuant to the preference on liberal
construction of the Rules of Court over strict construction.9

Hence, this petition for review with the following assignment of

errors:

8
Penned by Associate Justice Ruben C. Ayson with Associate Justices Rodrigo F. Lim, Jr., and
Michael P. Elbinias, concurring. Id. at 49-50.
9
Rollo, pp. 26-27.
Decision 5 G.R. No. 191225

1. THE COURT OF APPEALS ERRED IN RULING THAT THE

SPECIAL POWER OF ATTORNEY (SPA) EXECUTED IN FAVOR
OF DR. SYLVIA P. BRAGAT WAS INSUFFICIENT TO COVER
THE AUTHORITY GRANTED UPON HER TO SIGN THE
VERIFICATION AND CERTIFICATION OF NON-FORUM
SHOPPING OF THIS INSTANT CASE.

2. THE COURT OF APPEALS ERRED IN DISMISSING THIS

INSTANT CASE BY DISREGARDING THE MERITS THEREOF.10

ZMC insists that the SPA provided that the Attorney-in-fact can
make, execute and sign any contract, documents or all other writing of
whatever kind and nature which are necessary to the power granted to it
which is to represent, process, follow-up, transact and facilitate claims in
Philhealth. This also covers the execution of verification and certification of
non-forum shopping. ZMC then asserts that it will not gain anything in
extending the period of confinement and reiterates that its clerk committed a
mistake in entering the exact period of confinement.

At the outset, the issues revolve on the sufficiency of the SPA

authorizing Dr. Bragat to sign the verification and certification of non-forum
shopping in the petition filed before the Court of Appeals.

Verification of a pleading is a formal, not jurisdictional, requirement

intended to secure the assurance that the matters alleged in a pleading are
true and correct. Thus, the court may simply order the correction of
unverified pleadings or act on them and waive strict compliance with the
rules. It is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or
petition signs the verification, and when matters alleged in the petition have
been made in good faith or are true and correct.11

As to certification against forum shopping, non-compliance therewith

or a defect therein, unlike in verification, is generally not curable by its
subsequent submission or correction thereof, unless there is a need to relax
the Rule on the ground of substantial compliance or presence of special
circumstances or compelling reasons.12 Rule 7, Section 5 of the Rules of
the Court, requires that the certification should be signed by the petitioner
or principal party himself. The rationale behind this is because only the

10
Id. at 12.
11
Bello v. Bonifacio Security Services, Inc., G.R. No. 188086, 3 August 2011, 655 SCRA 143, 147-
148.
12
Vda. de Formoso v. Philippine National Bank, G.R. No. 154704, 1 June 2011, 650 SCRA 35, 44.
Decision 6 G.R. No. 191225

petitioner himself has actual knowledge of whether or not he has initiated

similar actions or proceedings in different courts or agencies.13

In Lim v. The Court of Appeals, Mindanao Station,14 we reiterated that

the requirements of verification and certification against forum shopping are
not jurisdictional. Verification is required to secure an assurance that the
allegations in the petition have been made in good faith or are true and
correct, and not merely speculative. Non-compliance with the verification
requirement does not necessarily render the pleading fatally defective, and is
substantially complied with when signed by one who has ample knowledge
of the truth of the allegations in the complaint or petition, and when matters
alleged in the petition have been made in good faith or are true and correct.
On the other hand, the certification against forum shopping is required based
on the principle that a party-litigant should not be allowed to pursue
simultaneous remedies in different fora. While the certification requirement
is obligatory, non-compliance or a defect in the certificate could be cured by
its subsequent correction or submission under special circumstances or
compelling reasons, or on the ground of substantial compliance.15

In both cases, the submission of an SPA authorizing an attorney-in-

fact to sign the verification and certification against forum-shopping in
behalf of the principal party is considered as substantial compliance with the
Rules.

In this case, Philhealth found the SPA defective.

The SPA granted by Dr. Zarsona to his attorneys-in-fact, Dr. Bragat

and William Bragat, authorizes the latter to do the following:

A) To represent(,) process, follow up, transact and facilitate all claims,

benefits and privileges belonging to or owing to Zarsona Medical
Clinic in the Philippine Health Insurance Corporation, Department of
Health and in other agencies, may it be private or government;

B) To receive, withdraw, and encash any check or checks belonging to or

in the name of Zarsona Medical Clinic;

C) To make, execute, and sign any contract, documents or all other

writings of whatever kind and nature which are necessary to the
foregoing powers.16
13
Id. at 43.
14
G.R. No. 192615, 30 January 2013, 689 SCRA 705.
15
Id. at 713-714.
16
Rollo, p. 20.
Decision 7 G.R. No. 191225

Indeed, a reading of the SPA reveals that the powers conferred by Dr.
Zarsona to his attorneys-in-fact pertain to administrative matters. The
phrase claims, benefits and privileges belonging to or owing to Zarsona
Medical Clinic clearly does not include the filing of cases before the courts
or any quasi-judicial agencies. The term claims in particular refers to
those claims for payment of services rendered by the hospital during a
Philhealth members confinement. These claims are filed by the hospital
with Philhealth. Furthermore, the SPA makes no mention of any court,
judicial or quasi-judicial bodies. The enumeration of agencies in the first
paragraph of the SPA, such as Philhealth and Department of Health, refers to
those agencies which are health-related.

There is no explicit authorization for Dr. Bragat to sign and execute

the requirement verification and certification in this case. At the very least,
the SPA should have granted the attorneys-in-fact the power and authority to
institute civil and criminal actions which would necessarily include the
signing of the verification and certification against forum-shopping.

The defects in the SPA notwithstanding, we rule in favor of ZMC.

We agree with the Dissent registered by Associate Justice Ruben Ayson
when he suggested that ZMC should be given the opportunity to rectify the
defects in the petition. We are aware that the Court of Appeals in its
Resolution dated 28 January 2009 had directed ZMC to submit an SPA.
ZMC had in good faith complied by submitting an SPA which it thought
was sufficient and encompasses the filing of the instant suit. Time and
again, we had espoused the doctrine that provisions of the Rules of Court
should be liberally construed in order to promote their objective of securing
a just, speedy and inexpensive disposition of every action and proceeding.
Otherwise put, the rule requiring a certification of forum shopping to
accompany every initiatory pleading, or the verification for that matter
should not be interpreted with such absolute literalness as to subvert its
own ultimate and legitimate objective or the goal of all rules of procedure
which is to achieve substantial justice as expeditiously as possible.17 While
it is true that the rules of procedure are intended to promote rather than
frustrate the ends of justice, and the swift unclogging of court docket is a
laudable objective, it nevertheless must not be met at the expense of
substantial justice. This Court has time and again reiterated the doctrine that
the rules of procedure are mere tools aimed at facilitating the attainment of
justice, rather than its frustration. A strict and rigid application of the rules
must always be eschewed when it would subvert the primary objective of the
rules, that is, to enhance fair trials and expedite justice. Technicalities
should never be used to defeat the substantive rights of the other party.
17
Sps. Wee v. Galvez, 479 Phil. 737, 752 (2004).
Decision 8 G.R. No. 191225

Every party-litigant must be afforded the amplest opportunity for the proper
and just determination of his cause, free from the constraints of
technicalities.18

We choose to apply liberality because of the substantial merit of the

petition.

The petition was dismissed by the Court of Appeals purely on a

procedural ground. Ordinarily, procedure dictates that the Court of Appeals
should be tasked with properly disposing the petition, a second time around,
on the merits. However, when there is enough basis on which a proper
evaluation of the merits of petitioners case may be had, the Court may
dispense with the time-consuming procedure of remand in order to prevent
further delays in the disposition of the case. Clearly, a remand of the instant
case to the Court of Appeals would only unnecessarily prolong its resolution
which had been pending for a decade. It is already an accepted rule of
procedure for us to strive to settle the entire controversy in a single
proceeding, leaving no root or branch to bear the seeds of future litigation.
If, based on the records, the pleadings, and other evidence, the dispute can
be resolved by us, we will do so to serve the ends of justice instead of
remanding the case to the lower court for further proceedings.19

Thus, we find the petition meritorious.

ZMC was charged with extending the period of confinement

punishable under Section 149 of the Revised Implementing Rules and
Regulations of Republic Act No. 7875, which provides:

Section 149. Extending Period of Confinement. This is

committed by any health care provider who, for the purpose of claiming
payment from the NHIP, files a claim with extended period of
confinement by:

a. Increasing the actual confinement of any patient;

b. Continuously charting entries in the Doctor's Order, Nurse's Notes and

Observation despite actual discharge or absence of the patients;

c. Using such other machinations that would result in the unnecessary

extension of confinement.

18
Alcantara v. Philippine Commercial and International Bank, G.R. No. 151349, 20 October 2010,
634 SCRA 48, 60-61.
19
Id. at 61-62.
Decision 9 G.R. No. 191225

The foregoing offenses shall be penalized by revocation of

accreditation. In addition, a recommendation shall be submitted to the
DOH for cancellation of its license, or accreditation, or clearance to
operate, as appropriate.

The Philhealth Arbiter and the Board did not give weight to the
Affidavit of Explanation submitted by the patient herself recanting her
previous statement and categorically stating that she was discharged only on
12 August 2003.

It is an oft-repeated rule that findings of administrative agencies are

generally accorded not only respect but also finality when the decision and
order are not tainted with unfairness or arbitrariness that would amount to
abuse of discretion or lack of jurisdiction. The findings of facts must be
respected, so long as they are supported by substantial evidence even if not
overwhelming or preponderant.20

After an exhaustive review of the records, we find that this case

warrants a departure from said rule.

We are inclined to give more credence to Alestres Affidavit, which is

essentially a recantation of her previous Salaysay, for the following reasons:
First, Alestre has fully explained to our satisfaction why she initially
misdeclared her dates of confinement in ZMC. In her desire to report and be
compensated for one day of work, Alestre hied back and forth between
school and the hospital. It is difficult to believe that she would risk her
reputation as a public school teacher, as well as prosecution for violation of
civil service rules, to be an abettor of ZMC. Second, Alestre truly cannot be
in two places at the same time. But her narration clearly accounts for her
whereabouts on 12 August 2003. She travelled at least 3 times to and from
the hospital and school. She admitted that the school was a mere ten-minute
drive away from the hospital so she can easily traverse between the two
locations. Third, ZMC had in fact admitted to its error in indicating the
dates of Alestres confinement so there is no reason for ZMC to further
conceal the actual days of Alestres confinement. Fourth, the Salaysay is not
notarized. While recantation is frowned upon and hardly given much
weight in the determination of a case, the affidavit is still a notarized
document which carries in its favor the presumption of regularity with
respect to its due execution, and that there must be clear, convincing and
more than merely preponderant evidence to contradict the same.21

20
Cuerdo v. Commission on Audit, G.R. No. L-84592, 27 October 1988, 166 SCRA 657, 662.
21
Meneses v. Venturozo, G.R. No. 172196, 19 October 2011, 659 SCRA 577, 586.
Decision IO Ci.R. No. 19122.'i

Based on the foregoing, we reverse the finding of Philhealth and hold

that ZMC is not guilty of extending the period of confinement.

WHEREFORE, the petition is GRANTED. The Resolution of' the

Court or Appeals in CA-G.R. SP No. 02489-MIN dismissing the petition is
REVERSED and SET ASIDE. Philhcalth Board Resolution No. 1151,
Series or 2008 is SET ASIDE.

SO ORDERED.

JO

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chier Justice
Chairperson

~~~~
TE RESIT A J. LEONARDO-DE CASTRO
Associate Justice
Decision 1l G.R. No. 191225

i,.(l,~
ESTELA M.fl>)RLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's
Division.

MARJA LOURDES P.A. SERENO

Chief Justice