Facts:

This case involves Jaime P. Adriano and Legaspi Towers 300, Inc. (LT300) as petitioners against Alberto Lasala and Lourdes Lasala, the respondents. The events leading to this case began on September 25, 1992, when LT300 entered into a security service contract with the respondents, who were acting on behalf of Thunder Security and Investigation Agency. The contract was set for one year, concluding on September 25, 1993, with the purpose of securing the premises against various illegal acts. However, issues arose shortly after the contract was signed. On October 18, 1992, Adriano, the building administrator, sent a letter to the respondents highlighting their non-compliance with the contract, specifically regarding the qualifications of the security personnel and the provision of a service vehicle. The respondents attempted to address these concerns by replacing unqualified personnel and providing a vehicle, albeit parked at a distance due to lack of space.

Despite these eff...

Facts:

Background and Contract Formation

• On September 25, 1992, Legaspi Towers 300, Inc. (LT300) entered into a security service contract with Alberto and Lourdes Lasala, acting in the name of Thunder Security and Investigation Agency, to secure its premises for one year, ending on September 25, 1993.
• The contract was intended to protect against theft, pilferage, arson, robbery, vandalism, and other illegal acts directed at unit owners, officers, and personnel.

Allegations of Non-Compliance and Initial Dispute

• On October 18, 1992, a letter from LT300—signed by building administrator Jaime P. Adriano—accused respondents of non-compliance with the contract.
• Specific allegations included:
• Failure to assign security guards meeting the minimum height and educational requirements.

ii. Failure to provide the agreed-upon service vehicle.

Further Negotiations and Additional Claims

• In a scheduled meeting following repeated correspondences, Adriano proposed that cooperation could resolve the issues and requested a payment of P18,000.00 as a “bridge” to settle the dispute.
• The payment was to be divided among LT300 officials, including a portion to petitioner Emmanuel Santos and another to Adriano.
• In a further meeting held in November, petitioners demanded an additional equivalent amount, intensifying the dispute.
• LT300 continued to send letters alleging further breaches, including a claim for non-payment of minimum wage.
• Respondents attempted to explain and settle issues by seeking an audience with the LT300 Board, but no opportunity was granted.

Contract Termination and Subsequent Litigation

• Without allowing respondents to be heard, the LT300 Board terminated the security service contract in a meeting held on January 28, 1993.
• On February 8, 1993, respondents filed a complaint for damages alleging the illegal termination of their services.
• On March 9, 2001, the Regional Trial Court (RTC) ruled in favor of respondents, holding:
• The September 25, 1992, agreement could only be terminated for a valid cause, which was not present.
• Respondents suffered due process violations as they were not given the right to be heard.
• Respondents were entitled to damages, including shortages in salary, additional benefits, moral damages, exemplary damages, and attorney’s fees.
• The Court of Appeals (CA) affirmed the RTC decision with modifications in the amount of damages awarded, categorizing petitioners’ allegations as baseless and flimsy.
• The modified award included temperate damages, reduced moral damages, exemplary damages, and reaffirmation of attorney’s fees.

Grounds for the Petition for Certiorari

• Petitioners sought a reversal of the CA ruling, presenting three primary errors:
• That respondents did not commit any breach warranting the pre-termination of the security service contract.
• That the award of temperate damages was improper due to the absence of any proven pecuniary loss.
• That there was no basis for awarding moral damages, exemplary damages, and attorney’s fees as the circumstances prescribed by law were not present.
• In their advocacy, LT300 argued:
• The failure to provide the service vehicle was not a mere allegation, and the respondents’ excuse regarding parking limitations was not credible.
• The alleged non-payment of minimum wage constituted a substantial violation of the agreement.
• There was no evidence of bad faith on the part of the respondents.
• Respondents had ample opportunity to rectify the issues, which they neglected.

Respondents’ Position

• Respondents contended that:
• The hiring of unqualified personnel occurred at the direction and recommendation of Adriano, under the board’s instructions.
• The parked Ford Fiera, although not within the premises, was acceptable given the lack of parking space.
• The allegation of non-payment of minimum wage was unsubstantiated, as no formal complaint was filed.
• They supported the CA’s ruling and the determination of damages as proper and justified.

Issue:

• Whether the Court of Appeals erred in holding that LT300 and its officials were liable for the illegal pre-termination of the security service contract.
• Whether the Court of Appeals erred in awarding temperate damages, moral damages, exemplary damages, and attorney’s fees to the respondents.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)