1.

CEAS VS CA
FACTS:
Q sometime in June 1908, one Forrest L. Cease common predecessor in interest of the parties together with five (5) other
American citizens organized the Tiaong Milling and Plantation Company and in the course of its corporate existence the
company acquired various properties but at the same time all the other original incorporators were bought out by Forrest L.
Cease together with his children namely Ernest, Cecilia, Teresita, Benjamin, Florence and one Bonifacia Tirante also considered a
member of the family; the charter of the company lapsed in June 1958; but whether there were steps to liquidate it, the record
is silent; on 13 August 1959, Forrest L. Cease died and by extrajudicial partition of his shares, among the children, this was
disposed of on 19 October 1959; it was here where the trouble among them came to arise because it would appear that
Benjamin and Florence wanted an actual division while the other children wanted reincorporation; and proceeding on that,
these other children Ernesto, Teresita and Cecilia and aforementioned other stockholder Bonifacia Tirante proceeded to
incorporate themselves into the F.L. Cease Plantation Company and registered it with the Securities and Exchange Commission
on 9 December, 1959; apparently in view of that, Benjamin and Florence for their part initiated a Special Proceeding No. 3893 of
the Court of First Instance of Tayabas for the settlement of the estate of Forest L. Cease on 21 April, 1960 and one month
afterwards on 19 May 1960 they filed Civil Case No. 6326 against Ernesto, Teresita and Cecilia Cease together with Bonifacia
Tirante asking that the Tiaong Milling and Plantation Corporation be declared Identical to F.L. Cease and that its properties be
divided among his children as his intestate heirs; this Civil Case was resisted by aforestated defendants and notwithstanding
efforts of the plaintiffs to have the properties placed under receivership, they were not able to succeed because defendants filed
a bond to remain as they have remained in possession; after that and already, during the pendency of Civil Case No. 6326
specifically on 21 May, 1961 apparently on the eve of the expiry of the three (3) year period provided by the law for the
liquidation of corporations, the board of liquidators of Tiaong Milling executed an assignment and conveyance of properties and
trust agreement in favor of F.L. Cease Plantation Co. Inc. as trustee of the Tiaong Milling and Plantation Co. so that upon motion
of the plaintiffs trial Judge ordered that this alleged trustee be also included as party defendant; now this being the situation, it
will be remembered that there were thus two (2) proceedings pending in the Court of First Instance of Quezon namely Civil Case
No. 6326 and Special Proceeding No. 3893 but both of these were assigned to the Honorable Respondent Judge Manolo L.
Maddela p. 43 and the case was finally heard and submitted upon stipulation of facts pp, 34-110, rollo; and trial Judge by
decision dated 27 December 1969 held for the plaintiffs Benjamin and Florence.
ISSUE:
Q Whether or not the properties of the Tiaong Milling and Plantation Company forms part of the estate of the deceased Forrest
L. Cease.
RULING:
Q Yes. The theory of “merger of Forrest L. Cease and The Tiaong Milling as one personality”, or that “the company is
only the business conduit and alter ego of the deceased Forrest L. Cease and the registered properties of Tiaong
Milling are actually properties of Forrest L. Cease and should be divided equally, share and share alike among his six
children, … “, the trial court did aptly apply the familiar exception to the general rule by disregarding the legal fiction
of distinct and separate corporate personality and regarding the corporation and the individual member one and the
same.
It must be remembered that when Tiaong Milling adduced its defense and raised the issue of ownership, its
corporate existence already terminated through the expiration of its charter. It is clear in Section 77 of Act No. 1459
(Corporation Law) that upon the expiration of the charter period, the corporation ceases to exist and is dissolved
ipso facto except for purposes connected with the winding up and liquidation. The provision allows a three year,
period from expiration of the charter within which the entity gradually settles and closes its affairs, disposes and
convey its property and to divide its capital stock, but not for the purpose of continuing the business for which it was
established. At this terminal stage of its existence, Tiaong Milling may no longer persist to maintain adverse title and
ownership of the corporate assets as against the prospective distributees when at this time it merely holds the
property in trust, its assertion of ownership is not only a legal contradiction, but more so, to allow it to maintain
adverse interest would certainly thwart the very purpose of liquidation and the final distribute loll of the assets to
the proper, parties.
While the records showed that originally its incorporators were aliens, friends or third-parties in relation of one to
another, in the course of its existence, it developed into a close family corporation. The Board of Directors and
stockholders belong to one family the head of which Forrest L. Cease always retained the majority stocks and hence
the control and management of its affairs. In fact, during the reconstruction of its records in 1947 before the Security
and Exchange Commission only 9 nominal shares out of 300 appears in the name of his 3 eldest children then and
another person close to them. It is likewise noteworthy to observe that as his children increase or perhaps become
of age, he continued distributing his shares among them adding Florence, Teresa and Marion until at the time of his
death only 190 were left to his name. Definitely, only the members of his family benefited from the Corporation. The
accounts of the corporation and therefore its operation, as well as that of the family appears to be indistinguishable
and apparently joined together. As admitted by the defendants corporation ‘never’ had any account with any
banking institution or if any account was carried in a bank on its behalf, it was in the name of Mr. Forrest L. Cease. In
brief, the operation of the Corporation is merged with those of the majority stockholders, the latter using the former
as his instrumentality and for the exclusive benefits of all his family. From the foregoing indication, therefore, there
is truth in plaintiff’s allegation that the corporation is only a business conduit of his father and an extension of his
personality, they are one and the same thing. Thus, the assets of the corporation are also the estate of Forrest L.
Cease, the father of the parties herein who are all legitimate children of full blood.
rich store of jurisprudence has established the rule known as the doctrine of disregarding or piercing the veil of
corporate fiction. Generally, a corporation is invested by law with a personality separate and distinct from that of the
persons composing it as well as from that of any other legal entity to which it may be related. By virtue of this
attribute, a corporation may not, generally, be made to answer for acts or liabilities of its stockholders or those of
the legal entities to which it may be connected, and vice versa. This separate and distinct personality is, however,
merely a fiction created by law for convenience and to promote the ends of justice. For this reason, it may not be
used or invoked for ends subversive of the policy and purpose behind its creation. This is particularly true where the
fiction is used to defeat public convenience, justify wrong, protect fraud, defend crime, confuse legitimate legal or
judicial issues , perpetrate deception or otherwise circumvent the law. This is likewise true where the corporate
entity is being used as an alter ego, adjunct, or business conduit for the sole benefit of the stockholders or of
another corporate entity.

2. BASECO VS PCG ET AL
FACTS:
Q Challenged in this special civil action of certiorari and prohibition by a private corporation known as the Bataan
Shipyard and Engineering Co., Inc. are: (1) Executive Orders Numbered 1 and 2, promulgated by President Corazon C.
Aquino on February 28, 1986 and March 12, 1986, respectively, and (2) the sequestration, takeover, and other
orders issued, and acts done, in accordance with said executive orders by the Presidential Commission on Good
Government and/or its Commissioners and agents, affecting said corporation.

The sequestration order which, in the view of the petitioner corporation, initiated all its misery was issued on April
14, 1986 by Commissioner Mary Concepcion Bautista.

On the strength of the above sequestration order, Mr. Jose M. Balde, acting for the PCGG, addressed a letter dated
April 18, 1986 to the President and other officers of petitioner firm, reiterating an earlier request for the production
of certain documents such as Stock Transfer Book and other Legal documents (Articles of Incorporation, By-Laws,
etc.)

Orders were also issued in connection with the sequestration and takeover, such as termination of Contract for
Security Services and abortion of contract for Improvement of Wharf at Engineer Island; Change of Mode of Payment
of Entry Charges; Operation of Sesiman Rock Quarry, Mariveles, Bataa; disposal of scrap, etc.; and the provisional
takeover by the PCGG of BASECO, “the Philippine Dockyard Corporation and all their affiliated companies.”

While BASECO concedes that “sequestration without resorting to judicial action, might be made within the context
of Executive Orders Nos. 1 and 2 before March 25, 1986 when the Freedom Constitution was promulgated, under
the principle that the law promulgated by the ruler under a revolutionary regime is the law of the land, it ceased to
be acceptable when the same ruler opted to promulgate the Freedom Constitution on March 25, 1986 wherein
under Section I of the same,y Article IV (Bill of Rights) of the 1973 Constitution was adopted providing, among
others, that “No person shall be deprived of life, liberty and property without due process of law.” (Const., Art. I V,
Sec. 1).”

It declares that its objection to the constitutionality of the Executive Orders “as well as the Sequestration Order * *
and Takeover Order * * issued purportedly under the authority of said Executive Orders, rests on four fundamental
considerations: First, no notice and hearing was accorded * * (it) before its properties and business were taken over;
Second, the PCGG is not a court, but a purely investigative agency and therefore not competent to act as prosecutor
and judge in the same cause; Third, there is nothing in the issuances which envisions any proceeding, process or
remedy by which petitioner may expeditiously challenge the validity of the takeover after the same has been
effected; and Fourthly, being directed against specified persons, and in disregard of the constitutional presumption
of innocence and general rules and procedures, they constitute a Bill of Attainder.”
It argues that the order to produce corporate records from 1973 to 1986, which it has apparently already complied
with, was issued without court authority and infringed its constitutional right against self-incrimination, and
unreasonable search and seizure. 14
BASECO further contends that the PCGG had unduly interfered with its right of dominion and management of its
business affairs.
ISSUE:
Q Whether or not the sequestration order dated April 14, 1986, and all other orders subsequently issued and acts
done on the basis thereof, inclusive of the takeover order of July 14, 1986 and the termination of the services of the
BASECO executives are valid;
RULING:
Q Yes. The petition cannot succeed. The writs of certiorari and prohibition prayed for will not be issued. Other
evidence submitted to the Court by the Solicitor General proves that President Marcos not only exercised control
over BASECO, but also that he actually owns well nigh one hundred percent of its outstanding stock.

Executive Orders Not a Bill of Attainder – In the first place, nothing in the executive orders can be reasonably
construed as a determination or declaration of guilt. On the contrary, the executive orders, inclusive of Executive
Order No. 14, make it perfectly clear that any judgment of guilt in the amassing or acquisition of “ill-gotten wealth”
is to be handed down by a judicial tribunal, in this case, the Sandiganbayan, upon complaint filed and prosecuted by
the PCGG. In the second place, no punishment is inflicted by the executive orders, as the merest glance at their
provisions will immediately make apparent. In no sense, therefore, may the executive orders be regarded as a bill of
attainder.

No Violation of Right against Self-Incrimination and Unreasonable Searches and Seizures – It is elementary that the
right against self-incrimination has no application to juridical persons. While an individual may lawfully refuse to
answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation,
vested with special privileges and franchises, may refuse to show its hand when charged with an abuse
ofsuchprivileges * *

Scope and Extent of Powers of the PCGG – PCGG cannot exercise acts of dominion over property sequestered, frozen
or provisionally taken over. AS already earlier stressed with no little insistence, the act of sequestration; freezing or
provisional takeover of property does not import or bring about a divestment of title over said property; does not
make the PCGG the owner thereof.

The PCGG may thus exercise only powers of administration over the property or business sequestered or
provisionally taken over, much like a court-appointed receiver, such as to bring and defend actions in its own name;
receive rents; collect debts due; pay outstanding debts; and generally do such other acts and things as may be
necessary to fulfill its mission as conservator and administrator.

Powers over Business Enterprises Taken Over by Marcos or Entities or Persons Close to him; Limitations Thereon –
Now, in the special instance of a business enterprise shown by evidence to have been “taken over by the
government of the Marcos Administration or by entities or persons close to former President Marcos,” the PCGG is
given power and authority, as already adverted to, to “provisionally take (it) over in the public interest or to prevent
* * (its) disposal or dissipation;” and since the term is obviously employed in reference to going concerns, or
business enterprises in operation, something more than mere physical custody is connoted; the PCGG may in this
case exercise some measure of control in the operation, running, or management of the business itself. But even in
this special situation, the intrusion into management should be restricted to the minimum degree necessary to
accomplish the legislative will, which is “to prevent the disposal or dissipation” of the business enterprise.

Voting of Sequestered Stock; Conditions Therefor – So, too, it is within the parameters of these conditions and
circumstances that the PCGG may properly exercise the prerogative to vote sequestered stock of corporations,
granted to it by the President of the Philippines through a Memorandum dated June 26, 1986. In the case at bar,
there was adequate justification to vote the incumbent directors out of office and elect others in their stead because
the evidence showed prima facie that the former were just tools of President Marcos and were no longer owners of
any stock in the firm, if they ever were at all.

No Sufficient Showing of Other Irregularities -As to the other irregularities complained of by BASECO, i.e., the
cancellation or revision, and the execution of certain contracts, inclusive of the termination of the employment of
some of its executives, this Court cannot, in the present state of the evidence on record, pass upon them. It is not
necessary to do so. The issues arising therefrom may and will be left for initial determination in the appropriate
action.WHEREFORE, the petition is dismissed. The temporary restraining order issued on October 14, 1986 is lifted.
 3. RUIZ VS TUASON
FACTS:
Manuel B. Ruiz brought an action before the Court of Instance of Manila praying (a) that J. M. Tuason & Co., Inc. and
the sheriff of Quezon City be enjoined from executing the writ of execution issued in Civil Case No. Q-3492 against
Sixto M. Cacho but which is being enforced against him by ejecting him from the property in question and
demolishing the house erected thereon, and (b) that J.M. Tuason & Co., Inc., be ordered to execute a final deed of
sale in his favor of a parcel of land with an area of 420 sq. m. upon payment by him of the purchase price at the rate
of P7.00 per sq. m. and to consider the sum of P855.00 already paid by him to defendant Florencio Deudor as partial
payment thereof.
Florencio Deudor, one of the defendants, filed a motion to dismiss on the grounds that (1) the venue of action is
improperly laid, (2) plaintiff has no cause of action against said defendant; and (3) plaintiff's cause of action, if any,
has prescribed. Defendant J. M. Tuason & Co., lnc., in turn filed a motion for bill of particulars.
Disregarding plaintiff's opposition to the motion to dismiss and while the motion for bill of particulars was pending
consideration, the court a quo, on March 11, 1961, issued an order dismissing the case on the ground that, the
property in question being situated in Quezon City, and the action being one affecting real property or involving title
thereto, the venue of action is improperly laid. His motion for reconsideration having been denied, plaintiff
interposed the present appeal.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this
Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this
stipulation of facts. 1äwphï1.ñët
The case having been dismissed on the basis of a mere motion to dismiss, the only facts that may be considered for
the purpose of this appeal are those alleged in the complaint. The pertinent facts may be stated as follows:
That ... defendant Florencio Deudor was ... the absolute owner and possessor of a piece of land situated in Barrio
Tatalon, Quezon City, Philippines, containing an area of ... 210,000 square meters, covered by a possessory
information title in the name of his deceased father, Telesforo Deudor, ....
That ... said Florencio Deudor, in consideration of the sum of ... P4,800.00, ... by way of absolute sale, sold,
transferred and conveyed unto Severino G. Navarro, Jose Dinglasan and Teofilo P. Bantug, ... a portion of the parcel
of land referred to in the next preceding paragraph, which portion is more particularly described as follows, to wit:
A parcel of land known as Lot No. 72 on Subdivision Plan, Psu — situated in the Barrio of Tatalon, Quezon City;
Bounded on the North by Lot No. 74; on the East by Lot No. 73; on the South by Quezon Blvd.; and on the West by
Road; — Hunters ROTC Ave.; ....'
That ... after the sale aforestated ... said vendee, Jose Dinglasan, took possession of his portion of the land sold
containing an area of 420 square meters, and built two houses of strong materials thereon declared for purposes of
taxation in his name, under Tax No. 11876 and Tax No. 11935, both of Quezon City, ....
That sometime in ... 1950, Jose Dingsalan tried to make payments on the balance of the purchase price of the land
aforestated, but ... Florencio Deudor refused to accept said payment because there was then pending an action (Civil
Case No. Q-135) before the Court of First Instance of Rizal, Quezon City Branch, involving the ownership of the parcel
of land referred to above, and of which the lot bought by Jose Dinglasan is a part, ....
That in Civil Case No. Q-135 above referred to, together with Civil Case Nos. Q-139, 174, 177 and 186 of the same
Court, ... after a ... joint trial the parties thereto, ... on March 16, 1953, entered into a 'Compromise Agreement', ...
paragraph 7 of which provides:
SEVENTH. That the sales of the property rights claimed by the DEUDORS, are described in the lists submitted by
them to the OWNERS which are attached hereto marked Annexes "B" and "C" and made a part hereof. Whatever
amounts may have been collected by the DEUDORS on account thereof, shall be deducted from the total sum of
P1,201,063.00 to be paid to them. It shall be the joint and solidary obligation of the DEUDORS to make the buyers of
the lots purportedly sold by them to recognize the title of the OWNERS over the property purportedly bought by
them, and to make them sign, whenever possible, new contracts of purchase for said property at the current prices
and terms specified by the OWNERS in their sales of lots to their subdivision known as "Sta. Mesa Heights
Subdivision." The DEUDORS hereby advise the OWNERS that the buyers listed in Annex "B" herein with the
annotation "continue" shall buy the lots respectively occupied by them and shall sign new contracts, but the sums
already paid by them to the DEUDORS amounting to P134,992.84 (subject to verification by the Court) shall be
credited to the buyers and shall be deducted from the sums to be paid to the DEUDORS by the OWNERS. The
DEUDORS also advise the OWNERS that the buyers listed in Annex "C" herein with the annotation "Refund" have
decided not to continue with their former contracts of purchase with the DEUDORS and the sums already paid by
them to the DEUDORS totalling P101,182.42 (subject to verification by the Court) shall be refunded to them by the
OWNERS and deducted from the sums that may be due the DEUDORS from the OWNERS.'
That in the list of purchasers ... the name of Jose Dinglasan appears in Number 13 thereof, who has paid the amount
of P865.00 ....
That our Honorable Supreme Court in the case of Lucina Evangelista vs. Deudor, et al., G.R. No. L-12826,
promulgated on September 10, 1959, ruled and held that, by the said Compromise Agreement, a sort of contractual
relation has existed between ... J.M. Tuason & Co., Inc. and the purchaser of the land from the 'Deudors' as regards
the sales of their respective lots, and that J.M. Tuason & Co., Inc. assumed certain obligations in favor of said
purchasers, among whom is Jose Dinglasan, ....
That ... Jose Dinglasan sold, transferred and conveyed unto the spouses Sixto M. Cacho and Julita de Jesus, all his
rights and interests over the portion of land of 420 square meters referred to above, including all the improvements
thereon, ... who in turn sold, transferred and conveyed unto appellant all their rights and interest in the portion of
land of 420 square meters .....
That immediately after said transfer, ... herein plaintiff took possession of said portion of land and the improvements
thereon, in the concept of an owner thereof, ....
That the subject property corresponds to a portion of Lot No. 10, Block No. 504 of the Subdivision plan of J. M.
Tuason & Co., Inc. ... located in Barrio Matalahib, Tatalon, Quezon City and covered by TCT No. 1267 of the Register
of Deeds of Quezon City....
That ... plaintiff made a demand upon J. M. Tuason & Co., Inc., through its agent and administrator Gregorio Araneta,
Inc., to execute a new contract in his favor of the subject property ... at P7.00 per square meter pursuant to
paragraph 7 of the Compromise Agreement but ... Tuason & Co., through its agent Gregorio Araneta, Inc., refused to
do so; ... that plaintiff was and is always ready and willing to pay ... the price of the lot in question ... at the rate of
P7.00 per square meter....
That ... Tuason & Co., on November 20, 1958, filed an action ... against Sixto M. Cacho in the Court of First Instance
of Rizal, Quezon City Branch IV, docketed as Civil Case No. Q-3492, wherein a judgment by default was rendered
against Sixto M. Cacho .....
That ... J. M. Tuason & Co. secured a writ of execution of the aforementioned judgment by default against said Sixto
M. Cacho in said Civil Case No. Q-3492, dated May 20, 1959, and armed with said writ, and with the aid of the
defendant Sheriff of Quezon City, now threatens, and is about, to eject herein plaintiff from the property in question
and demolish his houses therein, including the house where he is now living .....
That the execution of the judgment against Sixto M. Cacho in Civil Case No. Q-3492 will ... cause irreparable injury ...
and injustice to the plaintiff ....
Appellant contends that the present action is transitory because it is one for specific performance and its object is to
compel J. M. Tuason & Co., Inc. to execute a final deed of sale of the property in question in favor of appellant
founded upon compliance with the compromise agreement wherein said company recognized the sale made by
Florencio Deudor of said property in favor of Jose Dinglasan who, in the same agreement, was recognized by the
company as a purchaser who had already made partial payment of the purchase price of the land.
This contention has no merit. Although appellant's complaint is entitled to be one for specific performance, yet the
fact that he asked that a deed of sale of a parcel of land situated in Quezon City be issued in his favor and that a
transfer certificate of title covering said land be issued to him shows that the primary objective and nature of the
action is to recover the parcel of land itself because to execute in favor of appellant the conveyance requested there
is need to make a finding that he is the owner of the land which in the last analysis resolves itself into an issue of
ownership. Hence, the action must be commenced in the province where the property is situated pursuant to
Section 3, Rule 5, of the Rules of Court, which provides that actions affecting title to or recovery of possession of real
property shall be commenced and tried in the province where the property or any part thereof lies. This contention
finds support in the following authorities:
An action by which plaintiff seeks to have it adjudged that he is the owner of an undivided third of mining property,
and to have defendants directed to execute to him a conveyance thereof, is within Code Civ. Proc. Section 392,
providing that actions for recovery of real property or of an interest therein, or for the determination of such
interest, must be tried in the country in which the subject of the action is situated. (McFarland v. Martin, et al., 78 P.
239)
Suit by purchaser for ascertainment of amount due on contract and for vendors' execution of deed on payment
thereof held suit for specific performance, triable where land was situated. (Kopke v. Carlson. et al. 276 P. 606)
It should further be noted that among the reliefs prayed for in the complaint is the prayer that defendants J. M.
Tuason & Co., Inc. and the sheriff of Quezon City be enjoined from executing the writ of execution issued by court of
first instance of said city in Civil Case No. Q-3492 wherein said sheriff is allegedly trying to enforce against appellant
by ejecting him and demolishing the house he has on the land located in Quezon City, which claim necessarily
involves a determination of ownership and possession of said property as a preliminary step to determining the
validity of the writ of execution. The complaint having been filed in the Court of First Instance of Manila it is
apparent that venue is improperly laid. This is in accordance with the rule that if an action necessarily involves a
determination of an interest in land, the suit must be brought in the place where the land is situated. The fact that
an injunction is sought as an ancillary to the principal action does not make the case transitory or personal.
The primary object of a suit for injunction is determinative on the question of venue. If the suit necessarily involves a
determination of an interest in land, the suit must be brought in the country where the land lies.... The fact that an
injunction is sought as relief ancillary to the main suit does not make it transitory." (92 C.J.S., pp. 748-749)
WHEREFORE, the order appealed from is affirmed. No costs.

4. CRYSTAL VS BPI
 5. PSI VS AGANA
FACTS:
Q On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital because of difficulty of bowel movement
and bloody anal discharge. After a series of medical examinations, Dr. Miguel Ampil diagnosed her to be suffering from Cancer
of the sigmoid. On April 11, 1984, Dr. Ampil assisted by the medical staff of the Medical City Hospital performed an Anterior
resection surgery on Natividad. He found that the malignancy on her sigmoid area had spread on her left ovary, necessitating
the removal of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband, Enrique Agana, to permit Dr.
Juan Fuentes to perform hysterectomy on her. After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over,
completed the operation and closed the incision after searching for the missing 2 gauzes as indicated by the assisting nurses but
failed to locate it. After a couple of days, Natividad complained of excruciating pains in her anal region but Dr. Ampil said it is a
natural consequence of the operation/surgery and recommended that she consult an oncologist to examine the cancerous
nodes which were not removed during the operation. Natividad and her husband went to the US to seek further treatment and
she was declared free from cancer. A piece of gauze portruding from Natividad’s vagina was found by her daughter which was
then removed by hand by Dr. Ampil and assured that the pains will vanished. However, it didn’t. The pains intensified prompting
Natividad to seek treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Guttierez detected the
presence of another foreign object in her vagina – a foul smelling gauze measuring 1.5 inches in width which badly infected her
vagina. A recto-vaginal fistula had forced stool to excrete through her vagina. Another surgical operation was needed to remedy
the damage.
ISSUE:
Q Whether or not Dr. Ampil and Fuentes are liable for medical malpractice and the PSI for damages due to the negligence of the
said doctors.
RULING:

Q Yes. No. Yes. An operation requiring the placing of sponges in the incision is not complete until the sponges are properly
removed and it is settled that the leaving of sponges or other foreign substances in the wound after the incision has been closed is
at least prima facie negligence by the operating surgeon. To put it simply, such act is considered so inconsistent with due care as
to raise inference of negligence. There are even legions of authorities to the effect that such act is negligence per se.

This is a clear case of medical malpractice or more appropriately, medical negligence. To successfully pursue this kind of case, a
patient must only prove that a health care provider either failed to do something which a reasonably prudent health care provider
would have done, or that he did something that a reasonably prudent provider would not have done; and that failure or action
caused injury to the patient. Simply puts the elements are duty, breach, injury, and proximate causation. Dr. Ampil, as the lead
surgeon, had the duty to remove all foreign objects, such as gauzes, from Natividad’s body before closure of the incision. When
he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused injury to
Natividad, necessitating her further examination by American doctors and another surgery. That Dr. Ampil’s negligence is the
proximate cause of Natividad’s injury could be traced from his act of closing the incision despite the information given by the
attending nurses that 2 pieces of gauze were still missing. That they were later on extracted from Natividad’s vagina established
the causal link between Dr. Ampil’s negligence and the injury. And what further aggravated such injury was his deliberate
concealment of this missing gauzes from the knowledge of Natividad and her family.

The requisites for the applicability of the doctrine of res ipsa liquitor are:

1. Occurrence of an injury;
2. The thing which caused the injury was under the control and management of the defendant;
3. The occurrence was such that in the ordinary course of things would not have happened if those who had control or
management used proper care, and;
4. The absence of explanation by the defendant

Of the foregoing, the most instrumental is the “Control and management of the thing which caused the injury.”

Under the “Captain of the ship” rule, the operating surgeon is the person in complete charge of the surgery room and all personnel
connected with the operation.

The knowledge of any of the staff of Medical City constitutes knowledge of PSI.

The doctrine of corporate responsibility, has the duty to see that it meets the standards of responsibilities for the care of patients.
Such duty includes the proper supervision of the members of its medical staff. The hospital accordingly has the duty to make a
reasonable effort to monitor and over see the treatment prescribed and administered by the physician practicing in its premises.