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TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011


Arguments

Lecture Notes

1.

Read carefully the instructions in the Supreme Court Guidelines on the Trial Memorandum and Legal Opinion Exam. (See Annex A) Budget your time wisely. Use the draft pad to maintain cleanliness in your answer pad. Memorize the format of the Trial Memoranda and Legal Opinion. Trial Memorandum Statement of the Case Statement of the Facts Statement of the Issues Arguments Prayer Legal Opinion (Note: There is no standard form for a legal opinion. The following is a recommended format for a legal opinion) Opening Statement Brief Statement of the Facts Issue/s Position Discussion Recommendation Closing Statement Statement of the Case This would refer to the relief or action that is being asked, which will depend on the facts given in the problem Example: Breach of Contract = Culpa Aquiliana = Annulment = 5. Specific Performance with Damages Action for Damages Declaration of Nullity of Marriage 4.

2. 3.

Cite only the relevant or applicable portions of the provisions of law and jurisprudence provided in the problem. Take note of the instructions given by the Supreme Court on the number of arguments allowed. Prayer Memorize the form of the prayer and how to state damages. Example: Wherefore, plaintiff respectfully prays that judgment be rendered in their favor declaring that the real estate mortgage constituted in over the subject property be declared null and void and ordering defendants to pay, jointly and severally the following: 1. 2. 3. (Amount) by way of moral damages; (Amount) by way of exemplary damages; and (Amount) by way of attorneys fees and costs of suit.

Plaintiff further prays for such and further relief as may be deemed just and equitable. In the given problem, mark the relevant facts, provisions of law and jurisprudence that will be useful in the construction of your trial memorandum and legal opinion. This way it will be easier for you to recall the relevant portions of the transcript and jurisprudence. Memorize standard opening statements for your trial memorandum and legal opinion. Examples: Trial Memorandum Statement of the Case The instant suit is based on plaintiffs/defendants _____________. This action seeks, among others, the _____________. LECTURER JUDGE ALBERTO SERRANO Legal Opinion Opening Statement I refer to your request for an opinion on whether under the terms of your existing Lease Agreement, you can file a criminal case, like theft or estafa, against your defaulting lessees who refuse or fail to

Statement of the Facts State only the relevant facts of the case. Statement of the Issues Always go straight to the point.

Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza

P a g e |1

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011


return the demand. leased property despite 8. PRACTICE. 1. This refers to your query concerning ________________ Facts As gathered from the information you have given during our interview/consultation Closing Statement I trust that we have sufficiently addressed your concerns. Thank you very much. I trust that I have sufficiently addressed your concerns. Should you have further queries regarding this matter, please feel free to contact the undersigned. Thank you very much. I hope that I have completely answered your query. Should you need further clarification on the matter, please feel free to call us. 2.

Lecture Notes

If you would like to argue for the plaintiff or defendant, practice writing a trial memorandum for either one only. (See Annex C for sample Trial Memorandum and Legal Opinion) Read Supreme Court decisions which are in the format of a memorandum, such as those penned by Justice Carpio, Tinga and Panganiban. They are essentially that of a trial memorandum the difference only lies in the point of view of the writer--that of the Supreme Court Justice. (See Annex D, available only in soft copy of this document) Observe how they present the statement of the case, facts, issues and arguments. Observe their use of transitions and terms in inserting their arguments or discussion.

Issues Based on the pleadings and evidence adduced by the parties, the following are the issues to be resolved in the instant case:

Note: This task is for you to merely observe the writing style (how they present the different parts of a memorandum, transitional terms in inserting arguments and their basis) of the Ponente in a memorandum form. Keep in mind that what is going to be asked in the exam is a Trial Memorandum and NOT a decision.

6.

For the legal opinion problem, you will be asked to write one legal document that may be used in connection with your recommended course of action. Study the basic legal forms. (See Annex B) E.g. Complaint, Petition, Special Power of Attorney

7.

The legal opinion is essentially in a letter format. Make sure that you disclose to your client his rights and obligations under the problem given. You will be speaking with a client so avoid using legalese, but maintain formal English. LECTURER JUDGE ALBERTO SERRANO
Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |2

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011 ANNEX A


INSTRUCTIONS FOR ESSAY EXAMS 4. in the case 3. Identifying the issue or issues presented -- 15%; and Constructing your arguments and persuading your reader to your point of view 15% 50%

Lecture Notes

You are presented with a hypothetical case plus research materials (provisions of law and jurisprudence) that you may want to use in your work. The laws and jurisprudence accompanying the problems are designed to provide sufficient basis for preparing an excellent trial memorandum or legal opinion. But you are free to include such laws, rules and principles not provided that you feel will enhance your work. Choose the side of the dispute that you want to uphold and defend and prepare a trial memorandum in support of your side. Omit the case caption. Do not write more than four arguments. You have been given, apart from this Test Question, a Draft Pad, and an Answer Pad. Use the Draft Pad for making a draft of your memorandum. This will permit you to freely edit and rewrite your work. Editing and rewriting are essential to sound legal writing. The bells will be rung one hour before the end of the exam to signal the need for you to begin transferring your work to your Answer Pad. You may, of course, prefer to skip the preparation of a draft and write your essay directly on your Answer Pad. That is allowed. Quality of writing, not length is desired. You are free to jot notes or place helpful markings like underlines on the test questions and the enclosed materials. Corrections even on your final essay on the Answer Pad are allowed and will not result in any deduction. Still, it is advised that you write clearly, legibly and in an orderly manner. When the bell rings a second time to signal the end of the exam, your test questions, Draft Pad, and Essay Pad will be collected whether you are finished or not. The time pressure is a part of the exam. You will not be graded for a technically right or wrong answer but for the quality of your legal advocacy.(Emphasis supplied) The test is intended to measure your skills in: 1. 2. Communicating in English Sorting out the conflicting claims and extracting those facts that are relevant to the issue or issues 20% 15%

PART 1 TRIAL MEMORANDUM: Consider the following direct testimonies given in a hypothetical case for annulment of contract. Assume that you are the lawyer for either one of the parties. Using the information given, choose one side and write a memorandum of arguments that the court may consider before deciding the case. PART 2 LEGAL OPINION: Below is an exchange between you and a hypothetical client. Based on the information given, write (1) a brief legal opinion/advice specifying the relevant facts of the case, the legal problems raised by your hypothetical client, your assessment of the issues involved, and the possible courses of action that may be taken under the law; and (2) one legal document that may be used in connection with your recommended course of action.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |3

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011 (Basic Legal Forms)
COMPLAINT

Lecture Notes

ANNEX B

3. That on June 10, 2007, plaintiff leased the said apartment to the defendant for the next three (3) years at a monthly rental of P10,000.00, payable within the first five days of each month, and that the lease contract thereon is hereto attached as Annex A; 4. That since June 11, 2010, the lease contract had already expired and, despite repeated demands, defendant had refused to vacate the premises and continues to occupy the same. 5. That written demand (Annex B hereof) to vacate and pay rentals in arrears was sent to and received by defendant but despite said demand, he failed to vacate the same or pay said rentals. WHEREFORE, it is respectfully prayed that judgment be rendered against the defendant ordering her: 1. To vacate the premises; 2. To pay the monthly sum of P10,000.00 beginning on June 11, 2010, with interest thereon at the legal rate until fully paid, until the defendant vacates said premises; 3. To pay the sum of P2,000.00 as litigation expenses and attorneys fees. Quezon City, July 7, 2010. JUAN TAMAD Attorney for the Plaintiff ABC Tower, Quezon City IBP No. 12345 ; 1/2/1998 Quezon City PTR No. 12345; 2/3/1998 Quezon City Roll no. 24681 1/2/1998 MCLE Compliance No. 36912 4/5/2010 VERIFICATION CERTIFICATION OF NON-FORUM SHOPPING JURAT PETITION REPUBLIC OF THE PHILIPPINES NATIONAL CAPITAL JUDICIAL REGION REGIONAL TRIAL COURT Branch 1, Quezon City IN RE: PETITION FOR ADOPTION OF SOPHIA DELGADO SP No. 888888 LEO FONACIER and ANNA MANALASTAS FONACIER, Petitioners x ------------------------------------------ x

Contents of a Complaint Caption Parties Ultimate Facts and Material Allegations Arguments and applicable provisions of law & jurisprudence Prayer Signature of Counsel Verification and Certification of Non-Forum shopping Example: REPUBLIC OF THE PHILIPPINES NATIONAL CAPITAL JUDICIAL REGION METROPOLITAN TRIAL COURT Branch III, Quezon City JUAN DELA CRUZ, Plaintiff, - versus ANNA MANALASTAS, Defendant. x ----------------------------------x COMPLAINT COMES NOW, the Plaintiff in the above-entitled case, through counsel, and to this Honorable Court alleges: 1. That plaintiff is of age, married and residing at No. 9 Bagong Daan Street, Quezon City, while defendant is likewise of age, married and residing at No. 10 Bagong Daan Street, Quezon City, where he may be served with summons; 2. That plaintiff is the owner of an apartment located at No. 10 Bagong Daan Street, Quezon City; Civil Case No. 1234 For: Ejectment

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |4

TRIAL MEMORANDUM & LEGAL OPINION PETITION

San Beda College Alabang Academic Bar Operations 2011


SPECIAL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS:

Lecture Notes

PETITIONERS, through counsel, respectfully state that: 1. Petitioners are husband and wife, both of legal age, and residents of No. 100 St. Peters s treet, Ayala Heights, Quezon City. 2. They have no legitimate children of their own and desire to jointly adopt a minor named SOPHIA DELGADO, 7 years old, the legitimate child of ANDRES DELGADO and ROSELIA DELGADO. 3. The parents of the minor are not insane, intemperate and are in full possession of civil capacity; they have not abandoned the minor child. With full knowledge of petitioners intention, they have expressly given their written consent to the adoption, as shown by their statement, a copy of which is attached as ANNEX A. 4. Petitioners are qualified to adopt the minor and are financially capable of supporting the minor; they are also morally qualified to bring up and educate the said minor. WHEREFORE, it is respectfully prayed that judgment be rendered in petitioners favor adjudging the minor child SOPHIA DELGADO freed from all legal obligations of obedience and maintenance with respect to his/her natural parents and that he/she be declared to all legal intents and purposes, the child of herein petitioners and that his/her surname be changed to that of petitioners. Quezon City; 11 July 2011. JUAN TAMAD Attorney for the Plaintiff ABC Tower, Quezon City IBP No. 12345 ; 1/2/1998 Quezon City PTR No. 12345; 2/3/1998 Quezon City Roll no. 24681 1/2/1998 MCLE Compliance No. 36912 4/5/2010 Verification Certification against Forum Shopping Jurat WE, (Insert Name of Principal) single/married (insert name of spouse if married), of legal age, with residence and postal address at (Address) do hereby APPOINT (Insert name of Agent /Attorney-In-Fact) single/married (insert name of spouse if married), likewise of legal age, with postal address at (Address) as our true and legal representative to act for and in our name and stead and to perform the following acts: 1 . (e.g. To sell, offer for sale, and come to an agreement as to the purchase price and thereafter to sign for us and in our name and receive payment from the sale of our property more particularly described as follows: (Insert Description of Property) ) HEREBY GRANTING unto our representative full power and authority to execute and perform every act necessary to render effective the power to sell the foregoing properties, as though we ourselves, have so performed it, and HEREBY APPROVING ALL that he may do by virtue hereof with full right of substitution of his person and revocation of this instrument. IN WITNESS WHEREOF, WE HAVE HEREUNTO SET OUR HANDS THIS ____ DAY OF _______________ 20__, AT (Insert Place of execution of this Instrument).

_______________________________ (Name of Principal) Republic of the Philippines ) _____________________ ) S.S.

____________________________ (Name of Agent /Attorney-In-Fact)

BEFORE ME, personally appeared: Name Valid Government Issued I.D. No.

Date/Place Issued

Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free and voluntary act and deed. WITNESS MY HAND AND SEAL, on the date and place first above written. Notary Public Doc. No.______; Page No. ______; Book No.______; Series of 20___.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |5

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011 ANNEX C


SAMPLE TRIAL MEMORANDUM
9.

Lecture Notes

On 11 March 2010, this Honorable Court issued an Order dismissing the instant petition due to improper venue, citing Section 4 of A.M. No. 02-11-10-SC which provides that Sec. 4. Venue The petition shall be filed in the Family Court of the province or city where the petitioner or the respondent has been residing for at least six (6) months prior to the date of the filing.

COMES NOW, Petitioner DOMINADOR MADLANGTUTA through undersigned counsel and unto this Honorable Court most respectfully submits this Memorandum and states that: PREFATORY STATEMENT 1. The present petition is for the declaration of absolute nullity of a void marriage under Article 36 of the Family Code. Petitioner invokes as a ground for this petition the psychological incapacity of respondent which renders the latter incapable of complying with her essential marital obligations. STATEMENT OF THE FACTS 2. On 9 September 2009, Petitioner filed a petition for the declaration of absolute nullity of a void marriage based on the provision of Article 36 of the Family Code. On 7 December 2009, Petitioner filed an Ex-parte Motion for Issuance of Alias Summons stating the fact that the summons was not served on respondent or her representative at No. 9418, Don Manalo Blvd., Alabang Hills, Muntinlupa and requested that an alias summons be issued by the Court on respondent at her representative at her present residential address at No.13 A. Molave Street, Batungbacal Executive Village, Payatas, Quezon City. On 6 January 2010, the Court Process Server certified that on 5 January 2010, a copy of the Alias summons together with the Petition and its annexes were personally served to respondent at her present address. On 19 January 2010, Petitioner filed a Manifestation and Motion due to the failure of the respondent to file an answer within the reglementary period provided by law from service of summons and in order to expedite the proceedings, moved that an Order be issued by this Honorable Court directing the public prosecutor to investigate whether or not collusion exists between the parties. In its Order dated 29 January 2010, the Regional Trial Court ordered the City Prosecutor to conduct an investigation to determine whether or not there was such collusion. In the same order, the Court Social Worker was directed by the court to conduct a social case study report. A Subpoena was issued by the Office of City Prosecution on 18 February 2010, directing the petitioner to appear and testify under oath before the investigating prosecutor. On 13 March 2010, the assistant City Prosecutor submitted a Manifestation to the Court stating that that no collusion exists between the parties and that the evidence was neither fabricated nor suppressed.

10. Petitioner then filed an Urgent Motion for Reconsideration dated 29 March 2010, stating that fact that the number of the residence stated in the petition was erroneously indicated therein as 412, rather than 421, which is the true and correct number of the residence of the petitioner. 11. This Honorable Court then issued an Order dated 5 April 2010, which granted the petitioners Urgent Motion for Reconsideration. The City Prosecutor was then ordered by the Court to conduct an investigation to determine whether or not collusion exists between the parties. 12. A Subpoena was issued by the Office of City Prosecutor on 27 April 2010, directing the petitioner to appear before the investigating prosecutor. 13. On 21 May 2010, the Assistant City Prosecutor, in its Manifestation, established that no collusion exists between the parties and that the evidence was neither fabricated nor suppressed.

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14. On 28 May, 2010, Patt Y. Gasan, a Social Welfare Officer, submitted to the Court her social case study report. In her report, the social welfare officer recommended that the present petition be granted for the reasons stated in said report. 15. On 16 June 2010, Plaintiff filed an Ex-Parte Motion to Set Case for Pre-Trial.

4.

16. On 3 August 2010, a preliminary conference was conducted before the court wherein Petitioner had his Documentary Exhibits pre-marked. The Court then set the pre-trial conference on 13 September 2010. 17. At the pre-trial conference on 13 September 2010, petitioner adopted the minutes of the preliminary conference as well as the pre-trial brief he earlier submitted. 18. On 11 October 2010, Petitioner and Atty. Jose Pakundo Alitaptap testified in open court. They were thereafter cross examined by the public prosecutor. 19. On 22 February 2011, petitioner presented as its third witness, clinical psychology Dr. Boy Aso III. After her testimony, petitioner manifested that he intends to present his fourth witness, the court social worker. Since the said witness will merely identify the case study report she prepared on the child of the petitioner, the Public Prosecutor agreed to just stipulate with petitioner on the existence and validity of the report. Thereafter, petitioner rested its case and asked for fifteen (15) days to submit his Formal Offer of Documentary Evidence. 20. On 25 February 2011, petitioner filed his written Formal Offer of Documentary Exhibits.

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LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |6

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

21. The court set the hearing for presentation of respondents evidence on 5 April 2011. On the said date, the public prosecutor manifested that, since respondent failed to participate in the proceedings, the state had no other option but to have the case submitted for Decision. 22. The Court, noting the manifestation of the public prosecutor, issued an Order submitting the case for Decision and directing the parties to file their respective memoranda on or before 20 April 2011. Hence, this memorandum of the petitioner.

26. The testimony of Atty. Jose Pakundo Alitaptap corroborates with the testimony by the petitioner: I have observed that, from the start of their marriage, petitioner and respondent would often quarrel, at times even in front of their child. The quarrels were mostly prompted by some act or statement made by respondent. Respondent has a very dominant personality, she always insists on what she wants, even if it would be inconvenient for petitioner to comply. She also is not as affectionate to petitioner who, on the other hand, is quite expressive with his feelings. These quarrels were the result of a clash between respondents stubborn, domineering and dispassionate or undemonstrative character and petitioners expressive, emotional nature and his yearning for a wifes warmth and affection. I have also noticed that when it comes to petitioners relatives respondent would make all sorts of excuses to prevent petitioner from visiting them or she would not join petitioner in these visits. However, when it came to respondents relatives, more particularly, her mother, respondent would be adamant in her demand that petitioner should join her in her visits. I noticed that this would likewise result in serious squabbles between them. Respondent would also have the same stubborn attitude vis--vis petitioner when it came to Friday nights. She expected petitioner to take her out to dine every Friday evening, regardless of the work schedule of petitioner or his state of health at that time. If petitioner fails to bring her out on a Friday night, respondent would throw a tantrum and there would be times when respondent would give petitioner the cold treatment for several weeks. Since the time they got married until the time they separated, petitioner and respondent have had serious quarrels. Their family life was not a happy or tranquil one; the fights were usually more mean or serious on special occasions like Christmas. Somehow, respondent would always find a way to dampen the mood of petitioner and their child during these occasions. 27. Furthermore, the Court Social Worker testified in her social case study report: The herein couple have settled to live separately accepting the stark reality of the incurability of ones problems or malady that could have made the petitioner the victim of the worsening consequences of his kind of marriage. This is a case of an estranged couple who have found peace in living separately; nevertheless, the petitioner remains obliged to provide financially for the respondent and their only child. However, the present situation must be properly addressed in order to clear their behaviour and decisions on their future relationships. 28. A perusal of the evidence presented by petitioner, both testimonial and documentary, would show that indeed respondent is psychologically incapacitated to fulfil her essential marital obligations. Respondent on the other hand, failed to present any evidence to refute the claim of Petitioner. 29. By the very nature of Article 36, courts, despite having the primary task and burden of decisionmaking, must not discount but, instead, must consider as decisive evidence the expert opinion

STATEMENT OF THE ISSUE 23. The only issue in this petition is whether or not the marriage between petitioner and respondent is NULL and VOID due to psychological incapacity of respondent to perform her essential marital obligations, pursuant to, and in accordance with, the provisions of Article 36 of the Family Code. THE ARGUMENT 24. The petition should be granted. 25. Firstly, the testimony of the petitioner shows to us a firsthand experience of the incapacity of the respondent to perform her essential marital obligations: On the night of their honeymoon, respondent wept profusely in one corner of the bedroom and repeatedly said that she missed her mother. Despite assurances from petitioner that they shall always be in touch with respondents mother, respondent refused to stop crying. Nevertheless, after a few minutes, respondent ceased crying and began gathering all their wedding gifts. When petitioner asked respondent for an explanation, respondent said she wanted to list down the price of each wedding gift so that she would know how much money each guest spent for his/her gift. During the course of their marriage, respondent made it a point to always be with her mother, whether during weekends, holidays or on special occasions. She would insist that petitioner and their daughter should always be with her on these visits. However, when it came to petitioners parents and relatives, respondents would make up all sorts of excuses to defer visiting them. It came to a point where petitioner and respondent would argue whenever petitioner would attempt to bring respondent and their daughter to his parents house. This exasperated petitioner who subsequently stoppe d trying to convince respondent to visit his relatives. Respondents conduct towards petitioner in public is markedly different from the way she treats petitioner at home. Respondent would portray the image of a loving, caring, and affectionate wife when she, petitioner and their daughter would go out or were with the company of friends. However, once she and petitioner were left alone or were at home, respondent would be cold and indifferent towards petitioner.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |7

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011


SAMPLE LEGAL OPINION September 22, 2011

Lecture Notes

on the psychological and mental temperaments of the parties . (Edward Kenneth Ngo Te Vs. Rowena Ong Gutierrez Yu-Te, et al., G.R. No. 161793, 13 February, 2009) 30. Verily, the evidence must show a link, medical or the like, between the acts that manifest psychological incapacity and the psychological disorder itself. (Edward Kenneth Ngo Te Vs. Rowena Ong Gutierrez Yu-Te, et al., G.R. No. 161793, 13 February, 2009) 31. It is respectfully submitted to this court that the petitioner has proven through the psychological evaluation report of Dr. Boy Aso III that indeed the respondent is psychologically incapable of complying with her essential marital obligations. The report shows that respondent is suffering from 301.81 Narcissistic Personality Disorder due to her grandiose sense of self-importance, sense of entitlement, interpersonal exploitativeness, arrogant and haughty behaviour, as well as lack of empathy. 32. The report further provides that since the psychological incapacity is rooted on a personality disorder, it is deemed to have been existent at the time of the celebration of the marriage and even prior thereto because a personality disorder is something that starts to develop from childhood or early adolescence into adulthood. 33. It is also in the expert opinion of Dr. Aso III that since respondents psychological incapacity is anchored on her Narcissistic Personality Disorder, the same is incurable. 34. Having proven that the personality disorder of respondent, is serious, incurable, directly linked to her marital obligations, and existing at the time of marriage it is respectfully submitted that the Court has no other option but grant this petition to have the marriage of the petitioner and the respondent declared null and void. 35. Moreover, the testimony of Atty. Jose Pakundo Alitaptap also corroborated the testimony of the petitioner and the clinical psychologist which likewise proves that indeed respondent is incapable of fulfilling her essential marital obligations. 36. Furthermore, the petition should be granted because of the manifestation of the Assistant City Prosecutor that indeed there was no collusion between the petitioner and respondent in the filing of the case and the social case study of the court social worker, which also recommended that the present petition be granted. PRAYER WHEREFORE, it is respectfully prayed that, judgment be rendered by this Honorable Court Declaring the marriage between petitioner and respondent NULL and VOID due to psychological incapacity of respondent to perform her essential marital obligations, pursuant to, and in accordance with, the provisions of Article 36 of the Family Code. Petitioner prays for such relief or remedy as this Honorable Court may deem just and equitable under the premises. Makati City, 11 April 2011.

JUDY ANN SANCHEZ 911 Bluewhale Street Palanan, Makati City Dear Ms. Sanchez: This refers to your query regarding the possibility of filing an action for damages against McbeeMetropark Branch due to the physical injuries you sustained from falling in their staircase. It is in my opinion that you may file an action for damages, more specifically under Article 2176 of the Civil Code, which states that Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict Negligence, as defined in Jarco Marketing Corporation v. Court of Appeals (321 SCRA 375), is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do. It is the failure to observe, for the protection of the interest of another person, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury." Undoubtedly, the person wearing the McBee costume was negligent. In Philippine National Construction Corporation v. Court of Appeals (467 SCRA 569), the Supreme Court pronounced. The test for determining whether a person is negligent in doing an act whereby injury or damage results to the person or property of another is this: could a prudent man, in the position of the person to whom negligence is attributed, foresee harm to the person injured as a reasonable consequence of the course actually pursued? If so, the law imposes a duty on the actor to refrain from that course or to take precautions to guard against its mischievous results, and the failure to do so c onstitutes negligence. xxx xxx. The McBee employee wearing the mascot was well aware of the size of his costume. Thus, he should have foreseen the harm he could cause by hurrying down the staircase, especially to those ascending from the opposite direction. McBee-Metrobanks management is also responsible for the injuries you sustained. This is supported by Article 2180 and 2202 of the Civil Code, which provides: Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xx xx xx The owners and managers of an establishment or enterprise are likewise responsible for

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |8

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. xx xx xx And this fact of responsibility cannot be denied by McBee, as the circumstances of your case fall squarely with the doctrine of Res Ipsa Loquitur (the thing speaks for itself). In Child Learning Center, Inc. v. Tagorio, (476 SCRA 236), the Supreme Court enunciated: xx xx xx The doctrine of res ipsa loquitor applies where (1) the accident was of such character as to warrant an inference that it would not have happened except for the defendant's negligence; (2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with the negligence complained of; and (3) the accident must not have been due to any voluntary action or contribution on the part of the person injured. xx xx xx First, the mishap would not have happened were it not for the negligence of the employee wearing the McBee costume. Second, the mascot was within the exclusive control and management of the employees of the McBee-Metro Bank Branch. Third, you did not contribute to your own injury as you just followed the advice of another employee that it is safe for you to proceed to the second floor because the party was almost over. Aside from actual damages, you may also seek moral damages as found in Article 2217 and 2219 of the Civil Code, which states: Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission (Emphasis Supplied). xx xx xx

Attached herewith is a draft of a complaint for damages. Please read it and we shall discuss the matter in further detail during our next meeting. I trust that I have sufficiently addressed your concerns. Should you have further queries regarding this matter, please feel free to contact the undersigned. Thank you very much.

Respectfully Yours,

ATTY. JUAN DELA CRUZ

Art. 2219. Moral damages may be recovered in the following and analogous cases: xx xx xx (2) Quasi-delicts causing physical injuries; xx xx xx

At the onset, you have sufficiently shown that you sustained physical injuries, which was also admitted by McBee in writing. Moreover, there are enough facts gathered from your daughters statement to establish the negligence of the McBee employees. Lastly, the negligence of McBee employees was the proximate cause of the injuries you sustained. Lastly, your case falls within the instances provided in Art. 2219 and 2220 that entitles an injured party to claim moral damages. Therefore, upon considering the foregoing applicable laws and jurisprudence, I am in the opinion that an action for damages against McBee Metropark Branch will prosper.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e |9

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011 ANNEX D

Lecture Notes

DECISIONS PENNED BY JUSTICE PANGANIBAN, JUSTICE CARPIO, JUSTICE TINGA Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 150487 July 10, 2003

GERARDO F. SAMSON JR., petitioner, vs. BANK OF THE PHILIPPINE ISLANDS, respondent. PANGANIBAN, J.: Gross negligence of a bank in the handling of its client's deposit amounts to bad faith that calls for an award of moral damages. Credit is very important to businessmen, and its loss or impairment needs to be recognized and compensated. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the March 30, 2001 Decision2 and the October 22, 2001 Resolution 3 of the Court of Appeals (CA) in CA-GR CV No. 54599. The dispositive portion of the assailed Decision reads as follows: "WHEREFORE, foregoing premises considered, the Decision appealed from is AFFIRMED WITH A MODIFICATION that the award of moral damages is reduced to P50,000.00."4 The assailed Resolution denied the Motions for Reconsideration filed by the parties. The Facts The CA summarized the antecedents of the case as follows: "Gerardo F. Samson, Jr. filed an action for damages against the Bank of the Philippine Islands.

"In his complaint, [petitioner] avers, inter alia that he is a client/depositor of [respondent] with Savings Account No. 3085-0125-75 through the [respondent's] Express Teller System[,] a 24-hour banking service; that on August 20, 1990, [petitioner] deposited to his BPI account a Prudential Bank Check No. 209116 in the amount of Three Thousand Five Hundred Pesos (P3,500.00); that as of said date, [petitioner's] account balance was Three Hundred Sixty-Seven and 38/100 Pesos (P367.38); that on August 24, 1990, [petitioner] instructed his daughter to withdraw P2,000.00 from the said account; that the withdrawal was declined twice as the Express Teller transaction record showed 'Sorry, Insufficient Funds'; that because of such eventuality, [petitioner] suffered embarrassment as he could not then and there produce the required cash with which to fulfill his commitment and monetary obligation towards a creditor who had waited at his residence; that on September 12, 1990, [petitioner] deposited to his aforesaid account through the Express Teller, the amount of Five Thousand Five Hundred Pesos (P5,500.00); that he discovered that his available total balance as of said date was only Three Hundred Forty-Two and 38/100 Pesos (P342.38) without his earlier check deposit of Three Thousand Five Hundred Pesos (P3,500.00) on August 20, 1990 but with a Twenty-Five Peso (P25.00) penalty/service charge; that [petitioner] complained to [respondent] about the discrepancy; that [respondent] confirmed the P3,500.00 check deposit but could not account the same; that investigation only ensued after [petitioner] informed [respondent] that his P3,500.00 Prudential Bank check was encashed by [respondent's] security guard named Nonilon E. Rondina; that per such investigation, it was discovered that one of the deposit envelopes was missing; that [respondent] did nothing to look for the missing check deposit or to inform [petitioner] about it; that despite [respondent's] knowledge of the irregularity and suspicious discrepancy in its records as early as of August 20, 1990, it did not even bother to conduct its own inquiry into said irregularity; that worse, despite being at fault, [respondent's] Manager, Nerissa M. Cayanga, displayed arrogance, indifference and discourtesy towards [petitioner]. "In its Answer, [respondent] Bank denied all the material allegations in the [C]omplaint and alleged among others, that the [C]omplaint fails to state a cause of action; that [petitioner] has violated the provisions of the covering contract of deposit which provides that representatives are not allowed to contract business on the account on behalf of the depositor; that [petitioner's] claim has been paid, waived and extinguished; that [petitioner] by his inaction in reporting the loss of his check deposit, is estopped from claiming damages from defendant. "After trial on the merits, the trial court rendered [a Decision in favor of petitioner]."5 Ruling of the Court of Appeals The CA affirmed the ruling of the trial court, but modified the amount of damages. It held that since the banking business was affected with public interest, Bank of the Philippine Islands (BPI) was required to exercise a high degree of care with respect to the accounts of its clients. Thus, the bank was rendered liable by its negligence resulting in damage to its depositor.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 10

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

Since it was undisputed that BPI had lost the check of petitioner, the appellate court reviewed the evidence and held that respondent bank was grossly negligent in its failure to observe the required degree of care. This gross negligence on the part of BPI amounted to bad faith that entitled petitioner to moral damages. The moral damages of P200,000 awarded by the trial court was, however, found to be excessive. It was therefore reduced to P50,000, because petitioner claimed only P3,500, which had already been credited back to his account. Hence, this Petition.6 Issues: In his Memorandum, petitioner submits the following issues for the Court's consideration: "I Whether the reduction of the award of moral damages to Php50,000.00, a mere one-fourth of the moral damages awarded by the trial court, was proper. "II Assuming that Respondent BPI is not precluded from raising this defense in this appeal, whether petitioner was negligent in demanding the return of his deposit, which was lost through the bank's gross negligence 7 and inaction." In sum, the main issue in this case is whether the CA erred in reducing the award of moral damages from P200,000 to only P50,000. The Court's Ruling The Petition is partly meritorious. Sole Issue: Amount of Moral Damages Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar 8 injuries unjustly caused. Although incapable of pecuniary estimation, the amount must somehow be 9 proportional to and in approximation of the suffering inflicted. Moral damages are not punitive in 10 nature and were never intended to enrich the claimant at the expense of the defendant. 11

There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral 12 damages, since each case must be governed by its own peculiar facts. Trial courts are given discretion in determining the amount, with the limitation that it "should not be palpably and scandalously 13 14 excessive." Indeed, it must be commensurate to the loss or injury suffered. In the present case, petitioner bases his claim on the failure of respondent to credit the sum of P3,500 to his account due to its gross negligence. As a result of such failure, he was unable to fulfill his obligation to a valued creditor, resulting in the severance of his credit line. He further alleges that he suffered humiliation and besmirched reputation.15 According to him, his suffering was exacerbated by his subjection to indifference, discourtesy and arrogance from respondents' officers. Moral damages are awarded to achieve a "spiritual status quo," thus: "Moral damages are awarded to enable the injured party to obtain means, diversions or amusements that will serve to alleviate the moral suffering he/she has undergone, by reason of the defendant's culpable action. Its award is aimed at restoration, as much as possible, of the spiritual status quo ante; thus, it must be proportionate to the suffering inflicted. Since each case must be governed by its own peculiar circumstances, there is no hard and fast rule in determining 16 the proper amount. . . .." The social standing of the aggrieved party is essential to the determination of the proper amount of the award. Otherwise, the goal of enabling him to obtain means, diversions, or amusements to restore him to the status quo ante would not be achieved. We believe that the award should be increased to P100,000, considering (1) that petitioner was a businessman and was the highest lay person in the United Methodist Church; (2) that he was regarded by respondent and its officers with arrogance and a condescending manner; and (3) that respondent successfully postponed compensating him for more than a decade. This amount is more than the P50,000 granted by the CA, but not as much as the P200,000 granted by the RTC. That petitioner reported the missing check deposit to respondent only after three weeks did not constitute contributory negligence. The injury resulted from the denial of his withdrawal due to insufficient funds, an injury he suffered before learning that his check deposit had been lost. Respondent, not he, immediately knew that a deposit envelop was missing, yet it did nothing to solve the problem. His alleged delay in reporting the matter did not at all contribute to his injury. Though the amount of P3,500 was already credited back to his account, this step was made only after his persistent prompting. Prior to this development, he suffered damages that could no longer be reversed by the belated restoration of the amount lost. It is for this suffering that moral damages are due.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 11

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

In Prudential Bank v. CA,17 Philippine National Bank v. CA18 and Metropolitan Bank v. Wong,19 the Court consistently awarded moral damages of P100,000 in consideration of the reputation and the social standing of the claimant, as well as the rulings in similar cases involving the negligence of banks with regard to the accounts of their depositors. WHEREFORE, the Petition is partly GRANTED and the assailed Decision MODIFIED. The award of moral damages is increased to P100,000. No pronouncement as to costs. SO ORDERED.

Pryce Gases, Inc. (PGI) is a corporation engaged in the business of producing, selling and trading in all kinds of liquids, gases, and other chemicals, including but not limited to oxygen, acetylene, hydrogen, nitrogen, argon, carbon dioxide, carbonex, nitrous oxide, compressed air, helium, and other allied or related products. PGI is a debtor of the International Finance Corporation (IFC), an international organization and an affiliate of the International Bank of Reconstruction and Development (World Bank), and the Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO), a Dutch development bank engaged in promoting the expansion of private enterprise in emerging markets. On 27 August 2002, IFC and FMO filed a Petition for Rehabilitation4 with the Regional Trial Court of Makati due to the failure of PGI to service its debts as well as the refusal of PGIs parent company, the Pryce Corporation, to provide financial support to PGI. The case was raffled to Branch 142 and was docketed as SP Proc. No. 02-1016. The petition for rehabilitation was meant to preserve PGIs workforce and ensure that its cash flow would not be diverted to ill-advised ventures but would instead be channeled back to its operating capital to generate profits to pay off and retire debts. IFC and FMO proposed a financial restructuring that called for the conversion of dollar-denominated loans to peso and the splitting of the whole debt instrument into two categories: (1) the sustainable debt which would be rescheduled as a senior loan and secured by PGIs assets; and (2) the unsustainable portion to be transformed into redeemable preferred shares with voting rights. Under the proposal, senior loans shall be paid in five years while the shares are forecast to be redeemed in ten years. Based on the proposed financial restructuring, PGIs loan from BPI Family Savings Bank, Inc. (BFB) shall be paid in ten years as it was a non-MTI5 creditor. Presiding Judge Estela Perlas-Bernabe of RTC, Branch 142, inhibited herself from further hearing the case. The case was re-raffled to RTC, Branch 138. The Ruling of the Trial Court In an Order6 dated 24 January 2003, the RTC, Branch 138, gave due course to the petition. The RTC, Branch 138, appointed Mr. Gener Mendoza (Mendoza) as Rehabilitation Receiver and directed him to submit his evaluation, study and recommendation on the proposed rehabilitation of PGI. In a Manifestation dated 29 May 2003, PGI informed RTC, Branch 138, that its parent company, Pryce Corporation, had offered to help through dacion en pago of its real estate assets to PGIs creditors, subject to certain terms and conditions. In a Compliance8 dated July 2003, Mendoza submitted his recommendation which, among others, states: 2. Creditors Secured with Non-Operating Assets. - Payment of principal and interest accrued as of August 31, 2002 by way of assets already mortgaged to them at dacion values pegged to the average of two appraisals to be undertaken by Bangko Sentral-accredited appraisal firms who are nominated by the creditors in a meeting called for that purpose.9
7

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 188365 June 29, 2011

BPI FAMILY SAVINGS BANK, INC., Petitioner, vs. PRYCE GASES, INC., INTERNATIONAL FINANCE CORPORATION, and NEDERLANDSE FINANCIERINGSMAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN N.V., Respondents. DECISION CARPIO, J.: The Case Before the Court is a petition for review1 assailing the Decision2 promulgated on 26 February 2008 and the Resolution3 promulgated on 11 June 2009 of the Court of Appeals in CA-G.R. SP No. 98626.

The Antecedent Facts

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 12

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

In its Comment10 to Mendozas Compliance, BFB objected to dacion en pago as a mode of payment. BFBs exposure to PGI was secured by assets that were considered non-operating and not critical to the rehabilitation plan recommended by Mendoza. PGI and Pryce Corporation submitted a Partial Opposition11 to the provision on income sharing of receivers recommended revised rehabilitation plan but manifested their conformity to the other provisions of the plan. In an Order12 dated 10 October 2003, the RTC, Branch 138, approved the rehabilitation plan. On 3 November 2003, BFB filed a notice of appeal.13 PGI filed a motion to dismiss the appeal on the ground that BFB failed to perfect the appeal because of failure to file the record on appeal within the required period. On 20 April 2006, before the RTC, Branch 138, could resolve PGIs motion to dismiss, BFB filed its Opposition (Re: Additional Argument in Support of Motion to Dismiss Appeal dated 27 July 2004) and Motion With Leave to Withdraw Notice of Appeal Dated 3 November 2003 and Instead Be Allowed to File a Petition for Review.141avvphi1 In an Order dated 9 May 2006, the RTC, Branch 138, dismissed BFBs appeal. The RTC, Branch 138, ruled that the law clearly states that in special proceedings, record on appeal is required to perfect the appeal. The dispositive portion of the Order reads: WHEREFORE, the Motion to Dismiss Appeal filed by respondent Pryce Gases, Inc. is granted and the appeal of BPI Family Savings Bank, Inc. is dismissed. Consequently, no action need to be taken by the Court on the Motion for Leave to Withdraw Notice of Appeal dated 3 November 2003 and Instead Be Allowed to File a Petition for Review filed by BPI Family Savings Bank, Inc. SO ORDERED.16 BFB filed a motion for reconsideration of the 9 May 2006 Order. In its Order dated 16 February 2007,17 the RTC, Branch 138, denied the motion on the ground that the Interim Rules of Procedure on Corporate Rehabilitation prohibit the filing of motions for reconsideration. On 19 April 2007, BFB filed a petition for certiorari18 before the Court of Appeals.
15

In its 26 February 2008 Decision, the Court of Appeals dismissed the petition. The Court of Appeals ruled that corporate rehabilitations are special proceedings and as such, appeals from the final order or decision therein should be by record on appeal in accordance with Section 2, Rule 41 of the 1997 Rules of Civil Procedure. The Court of Appeals ruled that when BFB filed the notice of appeal, the rule in force was the Interim Rules of Procedure on Corporate Rehabilitation which required the filing of a record on appeal. The Court of Appeals ruled that the mere filing of a notice of appeal would not suffice without the required record on appeal. The Court of Appeals further ruled that BFBs prayer that the petition be treated as filed under Rule 43 of the 1997 Rules of Civil Procedure lacked merit because it was filed out of time. The Court of Appeals ruled that due to the dismissal of BFBs appeal and the denial of its motion for reconsideration by the RTC, Branch 138, the 10 October 2003 Order had become final and executory. Finally, the Court of Appeals ruled that BFBs petition was grossly defective because the verification was signed by an employee of the Bank of the Philippine Islands, a completely different entity from BPI Family Savings Bank, Inc. BFB filed a motion for reconsideration. In its 11 June 2009 Resolution, the Court of Appeals denied the motion for lack of merit. Hence, the petition before this Court on the following grounds: 1. The Honorable Court of Appeals resolved an issue in a manner contrary to law and jurisprudence when it upheld the ruling of the lower court that dismissed the appeal of petitioner bank; and 2. The Honorable Court of Appeals resolved an issue in a manner contrary to law and jurisprudence when it upheld the ruling of the lower court which in effect forced and compelled petitioner bank to accept a dacion en pago arrangement against its consent.19 The Issue The issue in this case is whether the Court of Appeals committed a reversible error in sustaining the RTC, Branch 138, in dismissing BFBs appeal. The Ruling of this Court The petition has no merit. Section 5 of the Interim Rules on Corporate Rehabilitation provides that "(t)he review of any order or decision of the court or an appeal therefrom shall be in accordance with the Rules of Court x x x." Under A.M. No. 00-8-10-SC, a petition for corporate rehabilitation is considered a special proceeding. 20 Thus, the period of appeal provided in paragraph 19(b) of the Interim Rules Relative to the Implementation of Batas

The Decision of the Court of Appeals

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 13

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

Pambansa Blg. 129 for special proceedings shall apply,21 that is, the period of appeal shall be 30 days since a record of appeal is required.22 Thus: 19. Period of Appeal. (a) x x x (b) In appeals in special proceedings in accordance with Rule 109 of the Rules of Court and other cases wherein multiple appeals are allowed, the period of appeal shall be thirty (30) days, a record of appeal being required. On 14 September 2004, this Court issued A.M. No. 04-9-07-SC providing that all decisions and final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealed to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court, to be filed within fifteen (15) days from notice of the decision or final order of the Regional Trial Court. 23 However, in this case, BFB filed a notice of appeal on 3 November 2003, before the effectivity of A.M. No. 04-9-07-SC. Hence, at the time of filing of BFBs appeal, the applicable mode of appeal is Section 2, Rule 41 of the 1997 Rules of Civil Procedure which provides: Sec. 2. Modes of Appeal. (a) Ordinary appeal. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such cases, the record on appeal shall be filed and served in like manner. Under Section 9, Rule 41 of the 1997 Rules of Civil Procedure, "(a) partys appe al by record on appeal is deemed perfected as to him with respect to the subject matter thereof upon approval of the record on appeal filed in due time." In this case, BFB did not perfect the appeal when it failed to file the record on appeal. 1avvphi1 The filing of the notice of appeal on 3 November 2003 was not sufficient because at the time of its filing, the Rules required the filing of the record on appeal and not merely a notice of appeal. The issuance by the Court of A.M. No. 04-9-07-SC providing that all decisions and final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealed to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court, to be filed within 15 days from notice of the decision or final order of the

Regional Trial Court, did not change the fact that BFBs appeal was not perfected. Further, BFB filed its Motion With Leave to Withdraw Notice of Appeal only on 20 April 2006 or almost two years after the issuance of A.M. No. 04-9-07-SC on 14 September 2004. Appeal is not a matter of right but a mere statutory privilege. 24 The party who seeks to exercise the right to appeal must comply with the requirements of the rules, failing in which the right to appeal is lost. 25 While the Court, in certain cases, applies the policy of liberal construction, it may be invoked only in situations where there is some excusable formal deficiency or error in a pleading, but not where its application subverts the essence of the proceeding or results in the utter disregard of the Rules of Court.26 In addition, BFB filed a motion for reconsideration of the 9 May 2006 Order of the RTC, Branch 138. Under Section 1, Rule 3 of the Interim Rules of Procedure on Corporate Rehabilitation, the proceedings shall be summary and non-adversarial in nature and a motion for new trial or reconsideration is a prohibited pleading. Hence, in view of the failure of BFB to perfect its appeal and its subsequent filing of a motion for reconsideration which is a prohibited pleading, the 10 October 2003 Order of the RTC, Branch 138, approving the rehabilitation plan had become final and executory. WHEREFORE, we DENY the petition. We AFFIRM the 26 February 2008 Decision and the 11 June 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 98626. SO ORDERED. ANTONIO T. CARPIO Associate Justice

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 14

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011


Republic of the Philippines SUPREME COURT Manila EN BANC

Lecture Notes

The dacion would constitute full payment of the entire obligation due to BPI because the balance was then to be considered waived, as per the Rehabilitation Plan.9 BPI opposed the Rehabilitation Plan and moved for the dismissal of the ASB Groups petition for rehabilitation.10 However, on 26 April 2001, the SEC hearing panel issued an order11 approving ASB Groups proposed rehabilitation plan and appointed Mr. Fortunato Cruz as rehabilitation receiver. BPI filed a petition for review12 of the 26 April 2001 order before the SEC en banc, imputing grave abuse of discretion on the part of the hearing panel. It argued that the Order constituted an arbitrary violation of BPIs freedom and right to contract since the Rehabilitation Plan compelled BPI to enter into a dacion en pagoagreement with the ASB Group.13 The SEC en banc denied the petition.14 BPI then filed a petition for review15 before the Court of Appeals (CA), claiming that the SEC en banc erred in affirming the approval of the Rehabilitation Plan despite being violative of BPIs contractual rights. BPI contended that the terms of the Rehabilitation Plan would impair its freedom to contract, and alleged that thedacion en pago was a mode of payment beneficial to the ASB Group only.16 The CA dismissed the petition for lack of merit. It held that considering that the dacion en pago transaction could proceed only proceed upon the mutual agreement of the parties, BPIs assertion that it is being coerced could not be sustained. At no point would the Rehabilitation Plan compel secured creditors such as BPI to agree to a settlement agreement against their will, the CA added. Moreover, BPI could refuse to accept any arrangement contemplated by the receiver and just assert its preferred right in the liquidation and distribution of the assets of the ASB Group. 17 BPI filed a motion for reconsideration, but the same was 18 denied for lack of merit. Before this Court, BPI asserts that the CA erred in ruling that the approval by the SEC of the ASB Groups Rehabilitation Plan did not violate BPIs rights as a creditor.19 It maintains its position that the dacion en pagois a form of coercion or compulsion, and violative of the rights of secured creditors. 20 It asserts that in order for the Rehabilitation Plan to be feasible and legally tenable, it must reflect the express and free consent of the parties; i.e, that the conditions should not be imposed but agreed upon by the parties. By approving the Rehabilitation Plan, the SEC hearing panel totally disregarded the efficacy of the mortgage agreements between the parties, and sanctioned a mode of payment which is solely for the unilateral benefit of the ASB Group.21 This is so because in the event that the secured creditors such as itself would not agree to dacion en pago, the ASB Groups obligations would be settled at the selling prices of the mortgaged properties to be dictated by the ASB Group,22 rendering BPIs status as a preferred creditor illusory.23 BPI further claims that despite its rejection of the Rehabilitation Plan, no effort was made to resolve the impasse on the valuation of the mortgaged properties. With no repayment scheme for secured creditors not accepting the Rehabilitation Plan, the same has become discriminatory.24 Moreover, any interference

G.R. No. 164641

December 20, 2007

BANK OF THE PHILIPPINE ISLANDS, as successor of Far East Bank and Trust Company, petitioner, vs. SECURITIES AND EXCHANGE COMMISSION, REHABILITATION HOLDINGS, INC., VELASCO, JR., ASB DEVELOPMENT CORPORATION, ASB LAND, INC., ASB FINANCE, INC., MAKATI HOPE CHRISTIAN SCHOOL, INC., BEL-AIR HOLDINGS CORP., WINCHESTER TRADING, INC., VYL DEVELOPMENT CORP., GERRICK HOLDINGS CORP., NEIGHBORHOOD HOLDINGS, INC., and THE COURT OF APPEALS, respondents. DECISION TINGA, J.: For resolution is a petition seeking to nullify the 30 January 2004 Decision1 of the Court of Appeals in CAG.R. SP No. 773092 upholding the Securities and Exchange Commissions (SEC) approval of the rehabilitation of the ASB Group of Companies (ASB Group) in SEC En Banc Case No. EB-726.3 The antecedent facts are as follows: The Bank of the Philippine Islands (BPI), through its predecessor-in- interest, Far East Bank and Trust Company (FEBTC), extended credit accommodations to the ASB Group4 with an outstanding aggregate principal amount of P86,800,000.00, secured by a real estate mortgage over two (2) properties located in Greenhills, San Juan.5 On 2 May 2000, the ASB Group filed a petition for rehabilitation and suspension of payments before the SEC, docketed as SEC Case No. 05-00-6609.6 Thereafter, on 18 August 2000, the 7 interim receiver submitted its Proposed Rehabilitation Plan (Rehabilitation Plan) for the ASB Group. The Rehabilitation Plan provides, among others, a dacion en pago by the ASB Group to BPI of one of the properties mortgaged to the latter at the ASB Group as selling value of P84,000,000.00 against the total amount of the ASB Groups exposure to the bank. In turn, ASB Group would require the release of the other property mortgaged to BPI, to be thereafter placed in the asset pool. Specifically, the pertinent portion of the plan reads: "x x x ASB plans to invoke a dacion en pago for its #35 Eisenhower property at ASBs selling value of P84 million against the total amount of the ASBs exposure to the bank. In return, ASB requests the release of the #27 Annapolis property which will be placed in the ASB creditors asset pool." 8

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 15

TRIAL MEMORANDUM & LEGAL OPINION

San Beda College Alabang Academic Bar Operations 2011

Lecture Notes

on the rights of the secured creditors must not be so indefinite and open-ended as to effectively deprive secured creditors of their right to their security,25 BPI adds. In its Comment, the SEC, through the Office of the Solicitor General, claims that the terms and conditions of the Rehabilitation Plan do not violate BPIs right as a creditor because the dacion en pago transaction contemplated in the plan can only proceed upon mutual agreement of the parties. Moreover, being a secured creditor, BPI enjoys preference over unsecured creditors, thus there is no reason for BPI to fear the non-payment of the loan, or the inability to assert its preferred right over the mortgaged property. 27 On the other hand, private respondents maintain that the non-impairment clause of the Constitution relied on by BPI is a limit on the exercise of legislative power and not of judicial or quasi-judicial power. The SECs approval of the Rehabilitation Plan was an exercise of adjudicatory power by an administrative agency and thus the non-impairment clause does not apply.28 In addition, they stress that there is no coercion or compulsion that would be employed under the Rehabilitation Plan. If dacion en pago fails to materialize, the Rehabilitation Plan contemplates to settle the obligations to secured creditors with mortgaged properties at selling prices.29 Finally, they claim that BPI failed to submit any valuation of the mortgage properties to substantiate its objection to the Rehabilitation Plan, making its objection thereto totally unreasonable. 30 The petition must be denied. The very same issues confronted the Court in the case of Metropolitan Bank & Trust Company v. ASB Holdings, et al.31 In this case, Metropolitan Bank & Trust Company (MBTC) refused to enter into a dacion en pago arrangement contained in ASBs proposed Rehabilitation Plan. 32 MBTC argued, among others, that the forced transfer of properties and the diminution of its right to enforce its lien on the mortgaged properties violate its constitutional right against impairment of contracts and right to due process. The Court ruled that there is no impairment of contracts because the approval of the Rehabilitation Plan and the appointment of a rehabilitation receiver merely suspends the action for claims against the ASB Group, and MBTC may still enforce its preference when the assets of the ASB Group will be liquidated. But if the rehabilitation is found to be no longer feasible, then the claims against the distressed corporation would have to be settled eventually and the secured creditors shall enjoy preference over the unsecured ones. Moreover, the Court stated that there is no compulsion to enter into a dacion en pago agreement, nor to waive the interests, penalties and related charges, since these are merely proposals to creditors such as MBTC, such that in the event the secured creditors refuse the dacion, the Rehabilitation Plan proposes to settle the obligations to secured creditors with mortgaged properties at selling prices. Rehabilitation proceedings in our jurisdiction, much like the bankruptcy laws of the United States, have equitable and rehabilitative purposes. On the one hand, they attempt to provide for the efficient and equitable distribution of an insolvent debtors remaining assets to its creditors; and on the other, to provide debtors with a "fresh start" by relieving them of the weight of their outstanding debts and permitting them 33 to reorganize their affairs. The rationale of P.D. No. 902-A, as amended, is to "effect a feasible and viable
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rehabilitation,"34 by preserving a foundering business as going concern, because the assets of a business are often more valuable when so maintained than they would be when liquidated. 35 The Court reiterates that the SECs approval of the Rehabilitation Plan did not impair BPIs right to contract. As correctly contended by private respondents, the non-impairment clause is a limit on the exercise of legislative power and not of judicial or quasi-judicial power.36 The SEC, through the hearing panel that heard the petition for approval of the Rehabilitation Plan, was acting as a quasi-judicial body and thus, its order approving the plan cannot constitute an impairment of the right and the freedom to contract. Besides, the mere fact that the Rehabilitation Plan proposes a dacion en pago approach does not render it defective on the ground of impairment of the right to contract. Dacion en pago is a special mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt.37 The undertaking really partakes in a sense of the nature of sale, that is, the creditor is really buying the thing or property of the debtor, the payment for which is to be charged against the debtors debt. As such, the essential elements of a contract of sale, namely; consent, object certain, and cause or consideration must be present.38 Being a form of contract, the dacion en pago agreement cannot be perfected without the consent of the parties involved. We find no element of compulsion in the dacion en pago provision of the Rehabilitation Plan. It was not the only solution presented by the ASB to pay its creditors. In fact, it was stated in the Rehabilitation Plan that: x x x. If the dacion en pago herein contemplated does not materialize for failure of the secured creditors to agree thereto, the rehabilitation plan contemplates to settle the obligations (without interest, penalties and other related charges accruing after the date of the initial suspension order) to secured creditors with mortgaged properties at ASB selling prices for the general interest of the employees, creditors, unit buyers, government, general public and the economy.39 Thus, if BPI does not find the dacion en pago modality acceptable, the ASB Group can propose to settle its debts at such amount as is equivalent to the selling price of the mortgaged properties. If BPI still refuses this option, it can assert its rights in the liquidation and distribution of the ASB Groups assets. It wil l not lose its status as a secured creditor, retaining its preference over unsecured creditors when the assets of the corporation are finally liquidated.40 WHEREFORE, in view of the foregoing, the petition is DENIED and the Decision dated 30 January 2004 of the Court of Appeals in CA-G.R. SP No. 77309 is AFFIRMED. Costs against petitioner. SO ORDERED.

LECTURER JUDGE ALBERTO SERRANO


Subject Head: Karla Rosal Juan Miguel Talatala Cherry Joy Ycong Loralyn Lazaro Nadine Alessandra Gloria Over-All Chairman: Jan Raphael Salud | Vice-Chairperson for Academics: Jonalyn Porquez and Michael Quesada | Vice-Chairperson for Logistics: Cristina Elaine Mangrobang | Vice-Chairperson for Finance: Amerissa Base | Vice-Chairperson for Secretariat: Patricia David | Vice-Chairperson for Recruitment: Kathleen May Clareza P a g e | 16