October 15, 2014

[Adressee]

Dear
Re:
We are acting as legal counsel to Mini Bar Inc. (MBI) in their petition against The
Royal Club Inc. (RCI) and Savior Security Agency Corporation for the termination
of their contract of lease to operate in the Pergola, a property of RCI which our
client has contended as they found the termination unfounded as the termination
was executed without basis and that RCI was not receptive in clearing the
accountability of MBI.
Based on the letter received on March 10, 2014, RCI was requesting MBI to
settle their accountability before March 15, 2014 amounting to P858,949.60. MBI
received the letter on March 18, 2014 and replied to immediately on a letter
dated March 19, 2014 that there was a discrepancy in the amount computed by
MBI to the given amount of RCI. MBI noted that their computed accountability
amounts to P689,683.29. MBI was ready to settle the accountability provided that
they discrepancy was cleared but on a letter dated March 26, 2014, the owner of
RCI, Mario M. May-ari has terminated the contract between RCI and MBI and
they were asked to vacate the Pergola within 30 days. On April 1, 2014, the
owner of MBI, Mr. Minnie Barreto wrote to Chairman May-Ari about the letter
dated 26 March 2014 stating among others that the termination is unfounded and
reiterated the settlement. No replied was made by Chairman May-Ari and the
business operations of MBI was stopped as their utilities were disconnected and
they were barred entry from the Pergola.
On behalf of our client, we are presenting the following issues based on the
actions of RCI. First and foremost, they did not honor the contract dated July 1,
2011 as their termination was illegal since it was bereft of basis and is

unfounded. Next, we would like to point out that RCI breached the contract
between RCI and MBI as page 5 of their contract states that termination before
the 5 year period of the contract an only be made based on mutual agreement.
Third, we would also like to point out that RCI may be guilty of unjust vexation
as they terminated the contract between them and MBI without any due process.
We will be basing our opinion on different provisions of the law and different
jurisprudences.
Regarding the breach of contract, page 5 of the contact between RCI and MBI
states that:
This agreement shall be for a period of five years starting on July 1, 2011 and
renewal by mutual agreement of the parties for another five years but may
be terminated based also on mutual agreement of the parties even before
the expiration of the agreed period, provided a thirty day notice is formally
executed by the terminating party
Based on the given provision of the contract, RCI has committed a breach of
their contract with MBI.
"Breach of contract is defined as the failure without legal reason to comply with
the terms of a contract. It is also defined as the failure, without legal excuse, to
perform any promise which forms the whole or part of the contract." (R.S. Tomas,
Inc. vs. Rizal Cement Company, Inc., G.R. No. 173155, 21 March 2012).
RCI also violated the mutuality principle of contracts as it is not only based on
their own will whether the contract should be terminated.
This mutuality principle was created to nullify a contract containing a condition
which makes its fulfillment or pre-termination dependent exclusively upon the
uncontrolled will of one of the contracting parties. (GF Equity, Inc. vs. Arturo
Valenzona, G. R. No. 156841. June 30, 2005).
We can also infer from the situation that RCI illegally terminated the contract
between them and MBI as they have violated Article 1308 of the New Civil Code
of the Philippines which states that:
"The contract must bind both contracting parties; its validity or compliance cannot
be left to the will of one of them."

RCI also violated Article 1519 of the New Civil Code as they did not employ the
force of the law and became the law in the present petition. Article 1519 states:
"Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith."
Lastly, RCI may also be guilty of unjust vexation. We have found that:
"Unjust vexation exists even without the element of restraint or compulsion for
the reason that the term is broad enough to include any human conduct which,
although not productive of some physical or material harm, would unjustly
annoy or irritate an innocent person The paramount question [in a
prosecution for unjust vexation] is whether the offender's act causes
annoyance, irritation, torment, distress, or disturbance to the mind of the
person to whom it is directed." (Renato Baleros, Jr. vs. People of the
Philippines, G.R. No. 138033, 30 January 2007)
We have also found that unjust vexation is present here based on the elements
below:
"The main purpose of the law penalizing coercion and unjust vexation is
precisely to enforce the principle that no person may take the law into his hands
and that our government is one of law, not of men. It is unlawful for any person
to take into his own hands the administration of justice." (Melchor G.
Maderazo vs. People of the Philippines, G.R. No. 165065, 26 September 2006)
Applying the different laws and jurisprudences, First, RCI can be guilty of illegal
termination as they have violated Article 1308 of the New Civil Code, without due
process and the aid of the judiciary, they terminated the contract between them
and MBI without hearing the side of MBI or giving them a chance to give a
response to the termination letter sent on April 1, 2014. Worse, they did not
respond to the earlier letters given to them regarding the ability to settle the
account so long as the discrepancy between the value they computed and the
value MBI computed on the accountability. Without properly hearing MBI's side,
they immediately terminated the contract, stopping the operation of MBI by
cutting off utilities and barring them which caused damage to not only the owners
of MBI but also to their employees as this has prevented them from doing their
jobs.
Based on the contract between them and MBI, it is provided that there must be
mutual agreement between the termination of their contract and by terminating

the contract between them and MBI without the consent of MBI has violated their
contract. Moreover, they cannot just terminate the contract by themselves. They
must employ the aid of the law if indeed MBI has also made their own violations.
Lastly, RCI can be guilty of unjust vexation as they have caused nuisance to MBI
and its employees for stopping their business, causing losses and damages by
committing acts which caused the halt of business of MBI without even
considering the contract between MBI and RCI.
In light of the of the following reasons, we are recommending that the contract
between RCI and MBI to be res-established and the rights of MBI to operate their
business to be returned. We are also recommending damages for the lost
business and clients of MBI and we would also like to recommend the contract of
MBI and RCI to be re-examined. Lastly, we also take notice of the unjust vexation
done by RCI that they earnestly pay for any damage they have caused due to
such actions to MBI.
Should there be more questions for our firm, please do not hesitate to approach
us and send us an inquiry as well.