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HDMF vs. CA: Contract Termination Dispute

The document summarizes a dispute between HDMF and Dr. Cora J. Virata and Associates over the termination of a consultancy agreement. The agreement was in effect from January 1985 to December 1985, but allowed for termination with 30 days notice. HDMF sent a termination letter on December 23rd to take effect on December 31st, which was received on January 9th. The Court of Appeals ruled in favor of Dr. Virata, finding that HDMF did not provide the required 30 days notice to terminate the agreement per the contract terms when interpreted as a whole.

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158 views2 pages

HDMF vs. CA: Contract Termination Dispute

The document summarizes a dispute between HDMF and Dr. Cora J. Virata and Associates over the termination of a consultancy agreement. The agreement was in effect from January 1985 to December 1985, but allowed for termination with 30 days notice. HDMF sent a termination letter on December 23rd to take effect on December 31st, which was received on January 9th. The Court of Appeals ruled in favor of Dr. Virata, finding that HDMF did not provide the required 30 days notice to terminate the agreement per the contract terms when interpreted as a whole.

Uploaded by

RenzoSantos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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HDMF vs.

CA render medical services to the employees of


Topic: Article 1374; Interpreted Together HDMF.
Service contract includes this stipulation:
Petitioner: Home Development Mutual Fund and Marilou That this AGREEMENT takes effect
Adea-Protor on January 1, 1985 up to December 31, 1985,
Respondent: Court of Appeals and Dra. Cora J. Virata provided however, that either party who desires
and Associates, Inc. to terminate the contract may serve the other
party a written notice at least thirty (30) days in
SHORT ANSWERS: advance.
1. Where did the problem start: When petitioner On December 16, 1985, Dra. Cora J. Virata
sent a letter stating that they will no longer need wrote petitioner Marilou O. Adea-Proctor, to
the services of private respondent through a inform that she (Dra. Cora J. Virata) was
letter dated December 23, 1985 which is in assuming from their (petitioners) silence that
violation of the contract (termination must be subject Agreement was renewed for the
made 30 days in advance) succeeding period, from January 1, 1986 to
2. Who was chasing who: HDMF was chasing Dra. December 31, 1986.
Virata and Associates, Inc. In her Reply-letter, dated December 23, 1985,
3. What is the contract: Consultancy agreement petitioner Adea-Proctor notified Dra. Cora J.
Virata of the termination of the contract in
RELEVANT ARTICLE: question upon its expiration on December 31,
1985
Art. 1374. The various stipulations of a contract shall be But such letter-reply was formally and actually
interpreted together, attributing to the doubtful ones received by the private respondents only on
that sense which may result from all of them taken January 9, 1986.
jointly. (1285) In the Complaint filed on January 15, 1986,
private respondents averred that petitioners
FACTS: sudden and unexpected termination of the
CONVIR and Associates, Inc. and the petitioner, Consultancy Agreement, which requires a
Home Development Mutual Fund (HDMF) written notice thirty (30) days in advance, did not
Entered into a CONSULTANCY AGREEMENT by conform therewith.
virtue of which the former obligated itself to RTC ruled in favor of private respondent
CA affirmed the decision made by the RTC
Petitioners appeal and show their reliance on Conformably, to ascertain the true meaning
the first clause of the aforementioned stipulation or import of the controverted provision of
(That this AGREEMENT takes effect on January subject Consultancy Agreement,
1, 1985 up to December 31, 1985) claiming that its entirety must be considered; not merely
the CA erred in its decision. the first clause.
It is petitioners submission that the first clause Consequently, petitioners interpretation
referred to is independent, distinct and separate solely based on the first clause, and which
from the said proviso, such that upon the completely ignored the second clause under
expiration of the period stated in the first clause, scrutiny, cannot be upheld.
the Consultancy Agreement ceased to have
any binding effect between the contracting
parties even though they (petitioners) did not
give any written notice of termination at least
thirty (30) days in advance.

ISSUE: WON petitioners reliance on [only] the first


clause of the aforementioned agreement is correct

HELD:
No
Time-honored is the rule that in the
construction of an instrument where there
are several provisions or particulars, such a
construction is, if possible, to be adopted as
will give effect to all.
Article 1374 of the New Civil Code, on the
other hand, requires that The various
stipulations of a contract shall be
interpreted together, attributing to the
doubtful ones that sense which may result
from all of them taken jointly.

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