LIRAG v. CA 4/14/1975 Facts: On May 1960, heren res!" es!"n#e n#ent nt A$ca A$cant ntar ara a %"r& %"r&e# e# n 'h$. Cha()er "* In#+stres )+t %as entce# )y heren !ett"ner Fe$ -. Lra %h" %as then a (e()er "* the O "* 'CI2 t" %"r& at Lra 3et$e 3et$e M$$s. A$cantara nta$$y re*+se# #+e t" the *act that the ") %as %as (er (ere$y e$y te(! te(!"r "rar ary, y, )+t )+t $ate $aterr chane# hs (n# #+e t" the "er )en )en chan chane e# # t" a !er !er(ane (anent nt !"s !"st t"n "n.. A$ca A$cant ntar ara as s ten+r en+re e "* 'for an e(!$ e(!$"y "y(e (ent nt %as t" )e 'fo indenite period, unless sooner terminated by reason of volu volunt ntar ary y resi resign gnat atio ion n or by virtue of a valid cause or causes'. On "ve()er "* the sa(e year, he %as !r"("te#. 8"%ever, "n +$y 1961, Lra 3et$es 3et$es %r"te A$cantara a $etter a#v a#vs sn n h( h( that that )ec )eca+se a+se the the suered some c"(!any 'has serious reverses, both in terms of pecuniary loss and in market opportunities,' the c"(!any %as ter(natn hs servces an# eectn hs se!arat"n "n A++st 1961. Iss+e: O, there %as a v"$at"n "* the %rtten c"ntract "* e(!$"y(ent eec+te# )y the !artes. R+$n +$n: : ;es. es. 'ett ett" "ne nerr c"nt c"nten en#s #s that that t c"(( c"((tte tte# # n" v"$at v"$at"n "n "n the )ass "* RA 17<7, %hch !r"v#es: =ec. 1. In case "* e(!$"y(ent %th"+t a #e>nte !er"#, n a c"((erca$, n#+stra$, "r arc+$t+ra$ esta)$ esta)$sh sh(e (ent nt "r ente enterr!r !rse, se, the the e(!$"yer ... (ay ter(n ter(nate ate at any t(e the e(!$"y(ent %th +st ca+se, "r
%th"+t +st ca+se ... "r n the case "* an e(!$"yer, )y servn s+ch n"tce t" the e(!$"yee at $east "ne ("nth n a#v a#vanc ance "r "ne "ne ha$* ("nth *"r every year "* servce "* the e(!$"yee, %hchever s $"ner, .... 8"%e 8"%eve ver, r, ths ths !r"v !r"vs s" "n n cann cann"t "t a!!$y n the case at )ar. 3he c"ntract "* e(!$"y(ent %as *"r an !er"# as t sha$$ INDEFINITE c"ntn+e %th"+t en#n, s+)ect t" a res"$ es"$+t +t" "ry !er !er"# ? na( na(e$y e$y ? v"$+ntary resnat"n "n the !art "* !rv !rvat ate e res!" es!"n#e n#ent nt A$ca A$cant ntar ara a "r ter(nat"n "* e(!$"y(ent at the "!t"n "!t"n "* !ett !ett"ne "nerr Lra Lra 3et$ et$e e M$$ $$s, )+t )+t *"r *"r a @va$ @va$# ca+se a+se "r ca+se a+ses s@. A @!er"#@ has )een #e>ne# @as a s!ace "* t(e %hch has an n+ence "n ")$at"n as a res+$t "* a +r#ca$ act, an# ether s+s!en#s ther #e(an#a)$eness "r !r"# !r"#+c +ces es the therr etn tn+ +s sh( h(en ent. t.@@ O)$at"ns %th a !er"# are th"se %h"se c"nseB+ences are s+)ecte# n "ne %ay "r an"ther t" the e!rat"n "* sa# !er"# "r ter(. . A #ay certan s +n#erst""# t" )e that %hch (+st necessar$y c"(e, a$th"+h t (ay n"t )e &n" &n"%n %hen@. Gven that A$cantara ## n"t resn, t s (!eratve t" #eter(n %hether there %as a va$# ca+se t" ter(nate hs e(!$"y(ent. va$+atn the ev#ence !resente#, the C"+rt *"+n# n" tr+th n"r )ass *"r !ett !ett"ne "nerr Lra Lra 3et$ et$e e M$$s M$$s c"ntent"n that the va$# ca+se *"r ter ter(nat (natn n !rv !rvat ate e res!"n es!"n#e #ent nt A$cant A$cantara aras s e(!$" e(!$"y( y(ent ent %as that the the *"r(e *"r(err @has @has s+ s+e erre# ser ser"+ "+s s reverses, )"th n ter(s "* !ec+nary ary $"ss an# n (ar&et "!!"rt+ntes. On the c"ntrary, the C"+r C"+rtt *"+n *"+n# # that hat 12 12 !et !ett t"ner "ner
Lra 3et$e M$$s, Inc.s "rna$ ca!ta$ "* >ve ($$"n !es"s %as, "n May 1961, "r +st t%" ("nths !r"r t" #e*en#ants sen#n the n"te "* se!arat"n ncrease# t" >*teen ($$"nD E2 that the sa$ary "* Mr. as$" Lra, !res#ent "* #e*en#ant Lra 3et$e M$$s, Inc. %as, eectve March 1961, "r +st *"+r ("nths )e*"re the n"tce "* se!arat"n, rase# *r"( 'E,500.00 t" '5,000.00 ("nth$y, %hereas that "* Mr. an$" Lacerna, c"r!"rate secretary "* #e*en#ant c"r!"rat"n %as, three ("nths !r"r t" n"tce "* se!arat"n, rase# *r"( '700.00 t" '1,000.00 ("nth$yD 2 that sh"rt$y )e*"re an#/"r a*ter !$ants se!arat"n *r"( the servce "* #e*en#ant c"r!"rat"n, the $atter t""& n an# e(!$"ye# ne% !ers"nne$ a("n %h"( %as a certan Mr. +#+$a %th a startn sa$ary "* '<00 ("nth$yD 42 that *r"( the >nanca$ state(ents an# the test("ny "* ther acc"+ntants, t a!!ears that a$th"+h n 1961 the c"r!"rat"n ## n"t rea$e as ) a !r">t as n the !rev"+s year, neverthe$ess, t rea$e# !r">ts n the a("+nt "* '1,17,09<.00 rather than s+stan $"ssesD 52 that reserves *"r ncentve )"n+ses %ere ncrease# t" 106,46.50 as c"(!are# t"
'90,744.E *"r 1960D an# 62 that >na$$y the #e*en#ant c"r!"rat"ns t"ta$ assets n 1961 %as '9,640,15.5 as c"(!are# t" 'E6,900,56E.6 *"r 1960, "r an ncrease "* a)"+t '1,000,000. In ve% there"*, t s c$ear that, )y ter(natn the e(!$"y(ent %th"+t a va$# ca+se, t c"((tte# a )reach "* the c"ntract "* e(!$"y(ent eec+te# )y an# )et%een the !artes. 3he (eas+re "* an e(!$"yers $a)$ty !r"v#e# *"r n Re!+)$c Act 105E, as a(en#e# )y R. A. 17<7, s s"$e$y nten#e# *"r c"ntracts "* e(!$"y(ent %th"+t a st!+$ate# !er"#. It cann"t !"ss)$y a!!$y as a $(tat"n t" an e(!$"yers $a)$ty n cases %here the e(!$"yer c"((ts a )reach "* c"ntract )y v"$atn an !er"# "* INDEFINITE e(!$"y(ent. A##t"na$$y, Art. 1170, t" %t: 3h"se %h" n the !er*"r(ance "* ther ")$at"ns are +$ty "* *ra+#, ne$ence, "r #e$ay, an# those who in any manner contravene the tenor thereof, are liable for damages. s a!!$ca)$e n the case at )ar.
