Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 118972 April 3, 1998
HOME DEVELOPMENT MUTUAL FUND and MARILOU ADEA-PROTOR, petitioners,
vs.
COURT OF APPEALS and DR. CORA J. VIRATA, (CONVIR) and Associates, Inc., respondents.
PURISIMA, J.:
At bench is a petition for review on certiorari under Rule 45 of the Revised Rules of Court, to review and set aside the Decision of the Court of Appeals 1 dated June 30, 1994 in CA-GR No. 35240, affirming with modification the Decision dated March 22, 1991 in Civil Case No. 12715 of Branch 145, 2 Regional Trial Court of Makati City.
The antecedent facts that matter can be culled, as follows:
On January 1, 1985, CONVIR and Associates, Inc., represented by its President, Dra. Cora J. Virata, and the petitioner, Home Development Mutual Fund (HDMF), represented by its Senior Vice-President, Vicente Reventar III, entered into a CONSULTANCY AGREEMENT by virtue of which the former obligated itself to render medical services to the employees of HDMF. The said service contract stipulated, among others:
That this AGREEMENT takes effect on January 1, 1985 up to December 31, 1985, provided however, that either party who desires to terminate the contract may serve the other party a written notice at least thirty (30) days in advance.
On December 16, 1985, Dra. Cora J. Virata wrote petitioner Marilou O. Adea-Proctor, then Deputy Chief Executive Officer and Officer-in-Charge of HDMF, to inform that she (Dra. Cora J. Virata) was assuming from their (petitioners) silence that subject Agreement was renewed for the succeeding period, from January 1, 1986 to December 31, 1986. 3
In her Reply-letter, dated December 23, 1985, petitioner Adea-Proctor notified Dra. Cora J. Virata of the termination of the contract in question upon its expiration on December 31, 1985; informing Dra. Virata of the appointment by management of a full-time physician to the vacant plantilla position, such that her services would not be needed anymore. 4 But such letter-reply was formally and actually received by the private respondents only on January 9, 1986.
In the Complaint filed on January 15, 1986, private respondents averred that petitioners' sudden and unexpected termination of the Consultancy Agreement, which requires a written notice thirty (30) days in advance, did not conform therewith. Consequently, private respondents prayed for unrealized income of a least Five Hundred Thousand (P500,000.00) Pesos resulting from loss of business opportunities, Four Hundred Thousand (P400,000.00) Pesos, as exemplary damages, One Hundred Thousand (P100,000.00) Pesos, as litigation expenses, and 25% of the total amount, as attorney's fees.
In their Answers sent in on January 14, 1986, petitioners Adea-Proctor and HDMF sought the dismissal of the Complaint; contending inter alia that the Complaint states no cause of action arising from the termination of the contract, upon expiration of the agreed period. They argued that private respondents' insistence on the necessity of a notice of renewal of the contract is predicated on an erroneous interpretation of its terms, conditions and duration which are clear.
On March 22, 1991, the trial court of origin came out with a decision; disposing, as follows:
Wherefore, premises considered, judgment is hereby rendered, ordering defendant Home Development Mutual Fund, to pay plaintiff the sum of Fifty Thousand (P50,000.00) Pesos, in Philippine Currency, as compensatory damages; and Twenty Thousand (P20,000.00) Pesos, Philippine Currency, as and by way of attorney's fees, and costs.
Defendant's counterclaims are dismissed/denied for lack of merit.
SO ORDERED.
On appeal, the aforesaid judgment was affirmed with modification by the Court of Appeals, deleting the award of compensatory damages for want of sufficient evidence to support the same. With the denial of their motion for reconsideration, petitioners found their way to this Court via the present Petition; theorizing, that:
I. THE PUBLIC RESPONDENT ERRED WHEN IT RULED TO THE EFFECT THAT BECAUSE OF THE RENEWAL OF THE CONSULTANCY AGREEMENT SINCE 1981, THE 1985 CONSULTANCY AGREEMENT IS DEEMED RENEWED FOR ANOTHER TERM UNLESS ADVANCED NOTICE OF TERMINATION/NON-RENEWAL IS SERVED BY EITHER PARTY TO THE OTHER;
II. THE PUBLIC RESPONDENT ERRED WHEN IT RULED THAT THE MEDICAL SERVICES OF APPELLEE WAS UNREASONABLY TERMINATED/NOT RENEWED BECAUSE THE LETTER OF TERMINATION/NON-RENEWAL "WAS SERVED OR MAILED SO CLOSE TO THE END OF THE YEAR . . .;
III. THE PUBLIC RESPONDENT ERRED IN HOLDING PETITIONER LIABLE FOR ATTORNEY'S FEES TO THE APPELLEE UNDER ART. 19 OF THE NEW CIVIL CODE.
The petition is not impressed with merit.
Our pivot of inquiry is the correct construction or interpretation of subject Consultancy Agreement, particularly its provision:
That this agreement takes effect on January 1, 1985 to December 31, 1985; Provided, however, that either party who desires to terminate the contract may serve the other party a written notice at least thirty (30) days in advance.
The first clause of the aforecited stipulation, which is the bone of petitioners' stance, basically deals with the term of the contract; while the proviso, which is the core of private respondents' action, prescribes the manner the service contract in question could be terminated.
It is petitioners' submission that the first clause referred to is independent, distinct and separate from the said proviso, such that upon the expiration of the period stated in the first clause, 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.
We cannot fathom how contracting parties, who are sui juris, and knowledgeable of the purposes for which they solemnly put their Agreement into writing, could be so careless as to include inconsistent conditions in such a short and simple provision in their contract sued upon.
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." 5 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." Conformably, to ascertain the true meaning or import of the controverted provision of subject Consultancy Agreement, its entirety must be considered; not merely the first clause. 6 Consequently, petitioners' interpretation solely based on the first clause, and which completely ignored the second clause under scrutiny, cannot be upheld.
The law mandates that "Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith." 7
Did petitioners comply with their contractual obligation in good faith, when they served the requisite written notice to private respondents nine (9) days after the expiration of the Agreement? The answer to this crucial question is in the negative.
The second clause of the contractual provision in dispute is to the effect that written notice of termination should be served at least thirty (30) days in advance. As a rule, the method of terminating a contract is primarily determined by the stipulation of the parties. 8 Thus, the requirements of contracts as to notice — as to the time of giving, form, and manner of service thereof — must be strictly observed because "In an obligation where a period is designated, it is presumed to have been established for the benefit of both the contracting parties." 9 Thus, the unilateral termination of the contract in question by the herein petitioners is violative of the principle of mutuality of contracts ordained in Art. 1308 of the New Civil Code. 10
Petitioner Adea-Proctor contends that on December 26, 1985, she caused personal delivery of her letter-reply dated December 23, 1985, addressed to private respondent Dra. Cora Virata, informing the latter of the impending expiration of the contract which would not be renewed anymore because the petitioners planned to fill up the vacant plantilla position with a full-time physician, as approved by the Board of Trustees of HDMF. 11 However, petitioner Adea-Proctor claims that when the said letter was delivered by one Ramon Ortega, petitioners' messenger, to the Makati office of private respondents, the latter's representative, a certain Rose Sy, refused to receive it. So, petitioner Adea-Proctor had to send the said letter by registered mail, on the same day, and private respondents received it on January 9, 1986
We are not persuaded by petitioners' stance. From the evidence on hand, it can be unerringly gleaned that within the first week of January, 1986, respondent Dra. Cora J. Virata was allowed by petitioners to assume her duties as physician of petitioner's employees. As ratiocinated by the Court of Appeals:
For one thing, if it were true that appellant (petitioner HDMF) was decided in not renewing the consultancy agreement with appellee (private respondent Cora Virata), it should have instructed and informed all its employees not to avail anymore of appellee's medical services. As it was, appellant allowed its employees to still avail of appellee's medical services on the first week of January, 1986. 12
Granting ex gratia argumenti that petitioners caused personal delivery of their letter-reply on December 26, 1985, we believe that the same could not be deemed a substantial compliance with their contractual obligation because it was done just five (5) days prior to the expiration of the contract. To repeat, what is stipulated is thirty (30) days in advance. As the trial court stressed:
Necessarily, such notice of termination or non-renewal must be served within reasonable time, in fairness to the other party. Under the circumstances obtaining, however, the defendant's (petitioner herein) notice on plaintiff (private respondent herein) was unreasonable, particularly as it was served or mailed so close to the end of the year and at the height of the Christmas holidays, factors which were unduly disadvantageous to plaintiff as it leaves no sufficient opportunity to prepare for the closure of the business with other potential clients, to the detriment of said plaintiff. 13
Indeed, private respondents had every reason to assume that subject service contract was deemed renewed. As found by the Court of Appeals:
The evidence shows in this case that since 1981, appellee's (private respondent herein) consultancy agreement with appellant (petitioners herein) had been renewed, without renegotiation, so that appellee as a practice would continue her services to appellant even after expiry date of the contract.
These implied renewals of the contract had been going on as a practice of both appellant and appellee since 1981, so that at the start of each year, appellee would just the same, perform her duties as appellant's physician, with contract to be signed in the first few months of the year. As this was the practice, appellee could not be blamed for performing her professional duties as appellant's physician even in the absence of a contract. (CA Decision, p. 5)
Premises studiedly considered, we are of the irresistible conclusion that the Court of Appeals erred not in adjudging as renewed the Consultancy Agreement litigated upon.
In the second assigned error, petitioners theorize that the Court of Appeals erred in ruling that the medical services of private respondents were unreasonably terminated because the December 26, 1985 letter of termination "was served or mailed so close to the end of the year. . ."
We discern nothing reversible in such conclusion arrived at by public respondent. Ordinarily, what is reasonable time under the circumstances of a particular case is a mixed question of law and of fact, for determination by the trier of facts. This Court is not a trier of facts. Furthermore, well settled is the doctrine that "the findings of fact by the trial court are accorded great respect by appellate courts and should not be disturbed on appeal unless the trial court has overlooked, ignored, or disregarded some fact or circumstances of sufficient weight or significance which, if considered, would alter the situation." 14 The facts of the case, as stated by the trial court, were adopted by the Court of Appeals. And a conscientious sifting of the records fails to bring to light any fact or circumstance militative against the correctness of the said findings of the trial court and the Court of Appeals.
We are likewise in agreement with the Court of Appeals' finding that petitioners acted in bad faith for refusing to comply with private respondents' valid demand. Therefore, it is just and equitable that attorney's fees be recovered, 15 in the reasonable amount fixed below.
WHEREFORE, the Decision of the Court of Appeals in C.A. — G.R. No. 35240 is hereby AFFIRMED in toto. No pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Romero and Kapunan, JJ., concur.
Footnotes
1 Seventeenth Division, composed of Associate Justices Lourdes Tayao-Jaguros (ponente), Jesus M. Elbinias (Chairman), and Bernardo Ll Salas.
2 Presided by Judge Job B. Madayag.
3 Annex "C" of the Complaint, p. 12, Record.
4 Annex "D" of the Complaint, p. 14, Record.
5 Section 11, Rule 130 of the Rules of Court.
6 See Rutz vs. Sheriff of Manila, 34 SCRA 203.
7 Article 1159, New Civil Code, Philam vs. Mutuc 61 SCRA 22.
8 Baluran vs. Navarro, 79 SCRA 309.
9 Article 1196, New Civil Code.
10 Spouse Mariano and Gilda Florendo vs. Court of Appeals, G.R. No. 101771, December 17, 1996.
11 Petition for Review, pp. 2-3.
12 CA Decision, p. 6.
13 RTC Decision, pp. 2-3.
14 People vs. Dizon, G.R. No. 120957, August 22, 1996, People vs. Gomez, 299 SCRA 138.
15 Article 2208, pr. 5 and 11, New Civil Code.
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