MEMORAND

UM
FOR THE PLAINTIFF
SUBMITTED BY: GROUP 6

TUBAÑA, STEPHEN CLIFFORD (Leader)

CRISOSTOMO, MA. RUBY MAE
EVANGELISTA, LEAH
RAMOS, PAUL REINALD
SANGALANG, ANGELO
TORINO, MARX EARVIN
TORRES, BRENT CHRISTIAN

PRACTICUM 1
 Republic of the Philippines
First Judicial Region
Regional Trial Court
Branch 3
Baguio City

JOHN CLIFFORD V.
EVANGELISTA
Plaintiff, CIVIL CASE NO. 3435690
FOR: RESCISSION OF
-versus- AGREEMENT AND ABSOLUTE
DEED OF SALE, DAMAGES AND
ION C. GUMABUN ATTORNEY’S FEES
Defendant.
x---------------------------------------x

MEMORANDUM
(for the plaintiff)

COMES NOW PLAINTIFF, JOHN CLIFFORD V. EVANGELISTA,

through counsel, unto this Honorable Court, most respectfully submit and present
this Memorandum in the above-titled case and aver that:

THE PARTIES

1. Plaintiff, John Clifford V. Evangelista, is a Filipino citizen, single, of legal

age, and residing at #66 Motorpool Compound, Brgy. Engineer’s Hill,
Baguio City where he may be served with summons, notices and other
processes of this Honorable Court.

2. Defendant, Ion C. Gumabun, is a Filipino citizen, single, of legal age, and

residing at #22 Morning Glory St., Saint Joseph Village, Baguio City where
he may be served with summons, notices, and other processes of this
Honorable Court.

I. STATEMENT OF THE CASE

Plaintiff, John Clifford V. Evangelista, filed this present case for Rescission
of Agreement and Absolute Deed of Sale, Damages and Attorney’s Fees against
herein defendant, Ion C. Gumabun. Plaintiff’s cause of action arises from the
failure of the defendant to transfer possession of the property involved covered
by TCT No. T-54321-A to the plaintiff. Plaintiff initially filed this action to demand
payment of the money advanced by him to the defendant as part of the purchase
price by virtue of the subject Agreement and Deed of Absolute Sale. Defendant
on the other hand claims that the delivery should come only after full payment of
the agreed price. Hence, the defendant maintains that what was entered by the
parties herein is one of contract to sell and the conditions mentioned therein shall
be fulfilled before transfer of possession may be had by the plaintiff.

II. PROCEDURAL BACKGROUND

On May 21, 2020, Plaintiff filed a Complaint for the Rescission of Contract.

On November 3, 2020, defendant received summons issued by the

Honorable Court to file an answer.
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 On November 13, 2020, defendant filed his answer against the plaintiff.

On December 3, 2020, Both the plaintiff and the defendant filed their Pre-
trial Brief.

Accordingly, after presentation of evidences, the Honorable Court ordered

the parties to submit their respective Memoranda fifteen (15) days from notice,
otherwise, the case is deemed submitted for decision.

Hence, the filing of the instant Memorandum.

III. FACTUAL BACKGROUND

1. On October 12, 2019, plaintiff and defendant entered into an agreement

for the sale and purchase of said parcel of land for a total contract price of
PhP 3,600,000.00.

2. On the same day, plaintiff made an initial payment in favor of the

defendant amounting to PhP 1,600,000.00 to be applied by the defendant
as follows:
(a) PhP 1,000,000.00 of said amount was for the redemption of subject
property which was mortgaged in PS Bank, Baguio Branch, Lower
Session Road, Baguio City to enable the plaintiff to get hold of the
title and register the sale; and
(b) PhP 600,000.00 was for redemption of the said land from a private
mortgage in favor of Terd D. Pearson to enable the plaintiff to
possess and cultivate the same.

3. The parties agreed that the possession of TCT No. T-54321-A shall be
transferred to the plaintiff upon redemption of the land and execution of
the Deed of Sale and that whatever balance left from the agreed purchase
price, after deducting the proceeds of the loan and PhP 1,600,000.00
already received by defendant shall be paid by the plaintiff not later than
July 12, 2020.

4. On November 12, 2019, defendant redeemed the said land from PS Bank
– Baguio and withdrew TCT No. T-54321-A.

5. On December 3, the parties executed the Deed of Sale. However, the

defendant failed to transfer possession of TCT No. T-54321-A to the
plaintiff, contrary to their agreement.

6. Despite plaintiff’s repeated oral and written demands for the delivery of the
title, the defendant failed to deliver the title to the plaintiff.

7. Consequently, plaintiff has not and could not physically, actually, and
materially possess and cultivate the subject property because the area is
not yet fully cleared from encumbrances and the private mortgage and/or
present possessor refuse to vacate the same.

8. Because of defendant’s indifference to the demands of the plaintiff, the

latter was constrained to notify the former through a notarial act of his
desire and intention to rescind the said contract of sale.

9. As a result of the defendant’s refusal to comply with the contract, plaintiff

suffered actual damages of PhP 1,600,000.00 representing the latter’s
initial payment handed to the defendant as early as October 12, 2019.

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 10. Plaintiff also suffered moral damages for the serious anxiety, mental
anguish and sleepless night at having parted with his hard-earned money
for a promise that remains unfulfilled up to the present.

11. Moreover, defendant’s indifference to plaintiff’s demands pursuant to the

provisions of the contract evidenced his bad faith. He acted in a wanton,
fraudulent, reckless, oppressive and malevolent manner justifying the
award of exemplary damages.

12. Furthermore, plaintiff is constrained to file this suit and to engage the
services of counsel with an acceptance fee of PhP 20,000.00 plus PhP
2,000.00 per court appearance.

IV. ISSUES OF THE CASE

1. WHETHER OR NOT THE AGREEMENT FOR THE SALE AND

PURCHASE OF SAID PARCEL OF LAND COVERED BY TCT NO. T-
54321-A MAY BE RESCINDED.

a. Whether or not there is a valid deed of sale of a parcel of land

covered by TCT No. T-54321-A as described herein, between
the plaintiff and the defendant.
b. Whether or not the defendant has the obligation to deliver the
TCT No. T-54321-A to the plaintiff.

2. WHETHER OR NOT THE DEFENDANT MAY BE ORDERED TO

RETURN THE INITIAL PAYMENT OF ONE MILLION SIX HUNDRED
THOUSAND PESOS (PHP1, 600,000.00) WITH INTERESTS TO THE
PLAINTIFF.

3. WHETHER OR NOT THE PLAINTIFF IS ENTITLED TO THE AWARD OF

ACTUAL DAMAGES, MORAL DAMAGES, LITIGATION EXPENSES
AND ATTORNEY’S FEES.

V. ARGUMENTS

1. A. There is a valid deed of sale of a parcel of land covered by TCT

No. T-54321-A as described herein between the plaintiff and the
defendant.

B. The defendant has the obligation to deliver the TCT covering the
subject land to the plaintiff.

2. The Defendant may be ordered to return the initial payment of ONE

MILLION SIX HUNDRED THOUSAND PESOS (PhP1, 600,000.00) with
interests to the plaintiff.

3. The Plaintiff is entitled to the award of actual damages, moral

damages, litigation expenses and attorney’s fees.

VI. DISCUSSIONS

I. A. There is a valid deed of

sale of parcel of land covered
by TCT No. T-54321-A as

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described herein between the
plaintiff and the defendant.

Under Article 1458 of the New Civil Code, by the contract of sale one of
the contracting parties obligates himself to transfer the ownership and to deliver a
determinate thing, and the other to pay therefor a price certain in money or its
equivalent.

One of the essential requisite of Contract of Sale is consent. Consent

refers to seller’s consent to transfer ownership of, and deliver, a determinate
thing, and to buyer’s consent to pay the price certain.

Being a consensual contract, the contract of sale is perfected at the

moment there is a “meeting of the minds” upon the thing which is the object
of the contract and upon the price.

Article 1475, New Civil Code.

The contract of sale is perfected at the moment there is a

meeting of minds upon the thing which is the object of
the contract and upon the price. From that moment, the
parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.

The essence of consent is the conformity of the parties on the terms of the
contract, the acceptance by one of the offer made by the other. The contract to
sell is a bilateral contract. Where there is merely an offer by one party without the
acceptance of the other, there is no consent.

The allegation that there was no valid of contract of sale between the
plaintiff and the defendant due to the former’s failure to pay the full amount of the
obligation upon the execution of the deed of sale holds no water. In the 1984
case of Clarin v. Rulova [127 SCRA 512], the Supreme Court held that
acceptance by party of payment, whether in full or in part, is an indication
of his consent to a contract of sale, thereby precluding him from rejecting
its binding effect. By accepting from the plaintiff the Php1,600,000.00
representing the down payment for the sale of the subject land, the defendant
consented to be bound to transfer ownership of, and deliver the same which is
the object of the contract.

Assuming that the contract between the parties is merely a contract to sell
as what the defendant alleged in his answer, the execution of the parties of a
formal deed of conveyance such as a deed of absolute sale (ANNEX C)
obligates the defendant not to withhold the ownership of the subject parcel of
land and to deliver the same to the plaintiff. What is stipulated by the parties is
not deferment of the transfer of ownership but the full payment of amount
aforementioned, which simply means that although the purchase price had
not yet been completely paid, the defendant-vendor already has the
obligation to deliver the TCT covering the subject parcel of land.

I. B. The defendant has the

obligation to deliver the TCT
covering the subject land to
the Plaintiff.

One of the essential characteristics of a contract of sale is that it is a

bilateral contract – both the contracting parties are bound to fulfill correlative
obligations towards each other – the seller, to deliver and transfer ownership of
the thing sold and the buyer, to pay the price.

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 Article 1495. The vendor is bound to transfer the
ownership of and deliver, as well as warrant the thing
which is the object of the sale.

Plaintiff and defendant entered into an agreement for the sale and
purchase of a parcel of land for PhP3,600,000.00. With respect thereto, the
plaintiff made an initial payment of PhP1,600,000.00 in favor of the defendant.
The parties agreed that the possession of TCT No. T-54321-A shall be
transferred to the plaintiff upon redemption of the land and execution of the Deed
of Sale.

The execution of the Absolute Deed of Sale between the plaintiff and the
defendant, as evidenced by “ANNEX C”, presupposes the existence of an
absolute sale wherein there is no condition whatever and imposes upon the
vendor the obligation to deliver the subject matter of the agreement to the
vendee who upon the receipt of the property hands over and pays the purchase
price that has been previously agreed upon with the vendor.

From the said facts, there is clearly a reciprocal obligation between the
plaintiff and the defendant. The plaintiff has the obligation to pay while the
defendant has the obligation to transfer possession of the land through the
delivery of TCT No. T-54321-A to the plaintiff.

As held in the 2009 case of Asset Privatization Trust v. T.J. Enterprises

[587 SCRA 481], the execution of a public instrument only gives rise to a prima
facie presumption of delivery. The presumptive delivery via execution of a public
instrument is negated by the reality that the vendee actually failed to obtain
material possession of the land subject of the sale.

II. The Defendant may be

ordered to return the initial
payment of PhP1,600,000.00
with interests to the plaintiff

Under Article 1191 of the Civil Code, the right of rescission is predicated
on a breach of faith that violates the reciprocity between parties to the contract:

Art. 1191. The power to rescind obligations is implied in

reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.

The injured party may choose between the fulfillment and

the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter should
become impossible.

The court shall decree the rescission claimed, unless there be

just cause authorizing the fixing of a period.

This is understood to be without prejudice to the rights of third

persons who have acquired the thing, in accordance with
Articles 1385 and 1388 and the Mortgage Law.

Plaintiff and defendant entered into an agreement for the sale and
purchase of a parcel of land for PhP3,600,000.00. With respect thereto, the
plaintiff made an initial payment of PhP1,600,000.00 in favor of the defendant.
The parties agreed that the possession of TCT No. T-54321-A shall be
transferred to the plaintiff upon redemption of the land and execution of the Deed
of Sale.

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 From the said facts, there is clearly a reciprocal obligation between the
plaintiff and the defendant. The plaintiff has the obligation to pay while the
defendant has the obligation to transfer possession of the land through the
delivery of TCT No. T-54321-A to the plaintiff.

It must be noted that despite repeated demands from the plaintiff, the
defendant failed to deliver the title to the plaintiff. The defendant, therefore, failed
to fulfill his obligation to transfer possession to the plaintiff which entitles the
plaintiff to rescind the contract as a remedy.

It was ruled in the case of Tan v Court of Appeals, G.R. No. 80479, 28
July 1989 that:

“The power to rescind obligations is implied in reciprocal

ones in case one of the obligors should not comply with
what is incumbent upon him is clear from a reading of the
Civil Code provisions.”

Moreover, it was held in the case of PALAY, INC. And ALBERT

ONSTOTT v. Jacobo C. Clave, G.R. No. L-56076 September 21, 1983, that the
rights of the buyer must be protected as a matter of public policy. Thus, under
Article 1385 of the Civil Code, it was provided that:

Art. 1385. Rescission creates the obligation to return the

things which were the object of the contract, together with
their fruits, and the price with its interest; consequently, it can
be carried out only when he who demands rescission can
return whatever he may be obliged to restore.

xxxxx

Further, in the case of UNLAD RESOURCES DEVELOPMENT

CORPORATION, et al., v. Renato P. Dragon et al., G.R. NO. 149338, July 28,
2008, it was ruled that:

“Rescission has the effect of ‘unmaking a contract, or its

undoing from the beginning, and not merely its
termination.’ Hence, rescission creates the obligation to
return the object of the contract. It can be carried out only
when the one who demands rescission can return whatever
he may be obliged to restore. To rescind is to declare a
contract void at its inception and to put an end to it as though
it never was. It is not merely to terminate it and release the
parties from further obligations to each other, but to
abrogate it from the beginning and restore the parties to
their relative positions as if no contract has been made.”

The failure of the defendant to comply with his obligation constituting a

breach of faith violated the reciprocity between the parties. This gave rise to the
right of the plaintiff to rescind the contract. The rescission of the contract entails
mutual restitution between the parties.

Significantly, in the case of GOTESCO PROPERTIES, INC., et al., v.

Spouses Eugenio And Angelina Fajardo, G.R. No. 201167, February 27, 2013, it
was held that one of the effects of rescission is mutual restitution and that as a
consequence, “mutual restitution, which entails the return of the benefits
that each party may have received as a result of the contract, is thus
required.”

Therefore, the contract between the plaintiff and the defendant is deemed
extinguished through rescission under Article 1192 in relation with Article 1191 of

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the Civil Code. Defendant has the duty to return the PhP1,600,000.00 that the
plaintiff initially paid since rescission requires mutual restitution.

After rescission, the parties must go back to their original status before
they entered into the agreement. The Defendant may be ordered to return the
PhP1,600,000.00 as he cannot keep the plaintiff’s initial payment as this would
constitute unjust enrichment.

III. The Plaintiff is entitled

to the award of actual
damages, moral damages,
litigation expenses and
attorney’s fees.

Article 2199 of the New Civil Code provides that:

Art. 2199. Except as provided by law or by stipulation, one

is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved.
Such compensation is referred to as actual or
compensatory damages.

As previously established from the facts, plaintiff and defendant entered

into a Contract of Sale of the Defendant’s land with TCT No. T-54321-A for
PhP3,600,000. On the same day of the agreement, plaintiff made an initial
payment of PhP1,600,000.00. However, no Transfer Certificate of Title was
transferred to the possession of the plaintiff on the agreed day and even upon
repeated demands.

In the case of Mariano Mendoza vs. Leonora Gomez, G.R. No. 160110,
June 18, 2014, it was held that actual or compensatory damages are those
awarded in satisfaction of, or in recompense for, loss or injury sustained.
They simply make good or replace the loss caused by the wrong. 

The plaintiff in this case suffered such pecuniary loss when, upon initial
payment of PhP1,600,000.00, the defendant failed to transfer possession of TCT
No. T-54321-A and further resulting to the breach of the whole contract.

Under the New Civil Code, a person may recover moral damages under
the circumstances mentioned in Article 2217:

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.

Furthermore, under Article 2220 of the Civil Code, moral

damages may be awarded in cases of breach of contract provided that
there was fraud or bad faith, to wit:

Art. 2220. Willful injury to property may be a legal ground for

awarding moral damages if the court should find that, under
the circumstances, such damages are justly due. The same
rule applies to breaches of contract where the defendant
acted fraudulently or in bad faith.

The Supreme Court, in the case of Jaime Adriano and Legaspi Towers
300, Inc. vs. Alberto Lasala and Lourdes Lasala, G.R. No. 197842, October 9,

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2013, held that to recover moral damages in an action for breach of
contract, the breach must be palpably wanton, reckless and malicious, in
bad faith, oppressive, or abusive. Hence, the person claiming bad faith must
prove its existence by clear and convincing evidence for the law always
presumes good faith.

In this case, plaintiff suffered mental anguish, serious anxiety and

sleepless nights. Considering the amount of money involved and the properties
needed to be delivered to him, plaintiff was not able to have peace of mind and
had sleepless nights.

Circumstances also show that the breach was palpably wanton, reckless
and malicious, in bad faith, oppressive, or abusive. There was obvious bad faith
on the part of the defendant when, even upon repetitive efforts and repeated
demands, no answer was made and there was a failure to fulfill the agreed
obligation.

Therefore, the award of moral damages in favor of the plaintiff in the

amount of TWO HUNDRED THOUSAND PESOS (PhP200,000.00) is well-
founded.

As to expenses of litigation and attorney’s fees, the New Civil Code states:

ART. 2208. In the absence of stipulation, attorney's fees and

expenses of litigation, other than judicial costs, cannot be
recovered, except:

xxxx

(2) When the defendant's act or omission has compelled

the plaintiff to litigate with third persons or to incur
expenses to protect his interest;

xxxx

In this case, the Plaintiff was unnecessarily dragged to institute the action
in court by the failure of the defendant to answer even upon prior repeated
demands. The defendant knew that there was an agreement for the sale of the
land and an obligation upon him to deliver the title but failed to do so. The
defendant chose to ignore the demands of the Plaintiff on the status of the sale
and the delivery of the title thus causing the plaintiff to seek recourse from the
Court and incurring expenses just to defend and protect his rights and interest.

Therefore, the grant of attorney’s fees of not less than TWENTY

THOUSAND PESOS (PhP20,000.00) plus TWO THOUSAND PESOS
(PhP2,000.00) per court appearance, and the amount of litigation expenses as
maybe proved is justifiable.

CONCLUSION

Considering all of the discussions of the pertinent laws above, plaintiff

through his counsel believes that the Agreement between the parties is existing
and valid. With such facts established, may it now be that the plaintiff’s cause
and prayer be upheld and granted. As a form of this conclusion, may it be
recognized that the plaintiff is also entitled to the reimbursement of the amount
he had paid in advance to the defendant in consideration of the property
involved.

PRAYER

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 WHEREFORE, premises considered, it is respectfully prayed before this
Honorable Court that Plaintiff’s prayer for the rescission of agreement and
absolute deed of sale be GRANTED constituting of the following acts to be
satisfied:

1. The Agreement and the Deed of Absolute Sale be rescinded.

2. The defendant be ordered to return the initial payment of ONE MILLION

SIX HUNDRED THOUSAND PESOS (PHP 1,600,000.00) with interest.

3. The defendant be held liable to:

a. Pay moral damages in favor of the plaintiff in the amount of TWO

HUNDRED THOUSAND PESOS (PHP 200,000.00)
b. Pay exemplary damages in favor of the plaintiff in the amount of FIFTY
THOUSAND PESOS (PHP 50,000.00)
c. Pay plaintiff’s claim for attorney’s fees in the amount of not less than
TWENTY THOUSAND PESOS (PHP 20,000.00) plus TWO
THOUSAND PESOS (PHP 2,000.00) per court appearance, and the
amount of litigation expenses as maybe proved during trial.

4. Such other reliefs based on law and equity be granted the plaintiff.

MOST RESPECTFULLY SUBMITTED.

December 16, 2020. Baguio City, Philippines.

ATTY. SHER LOCK

Counsel For The Plaintiff
Rm. 221B, Baker Street Building
Roll No. 917142-2009; Baguio City
IBP No. 72109-2/3/12
PTR No. 5290303- 2/13/12
MCLE Compliance III No. 09171420
Issued on May 4, 2020
Email Address: sherlockholmes@ gmail.com

Copy Furnished:

ATTY.SHELVIN ECHO G. FERNANDEZ

Counsel For The Defendant
RollNo.4002011; May 06,2000
PTRNo.111567; 05/14/2001; Baguio City
IBPNo.3211901 05/14/2001; Baguio City
MCLEComplianceNo.0004321;06/30/2019
FernandezLawOffice,449PortaVaga,
Upper Session Road, BaguioCity
(075)567-8900

ION C. GUMABUN
#22 Morning Glory St.,
10 of 11
Saint Joseph Village,
Baguio City, Philippines.

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