REPUBLIC OF THE PHILIPPINES

NATIONAL CAPITAL JUDICIAL REGION

REGIONAL TRIAL COURT
MAKATI CITY, BRANCH I

ROLANDO PASCUAL,
Plaintiff,

- versus - CIVIL CASE NO. 321-2015

For: Collection of a Sum of Money
in the amount of P3,300,000.00.

A&B COMPANY, ERNESTO

SANTOS, and MARGARET
CASAS,
Defendants.
_____________________________________________________________

PLAINTIFFS TRIAL MEMORANDUM

Plaintiff ROLANDO PASCUAL, by counsel, respectfully submits

the instant memorandum:

STATEMENT OF FACTS AND OF THE CASE

1 Plaintiff ROLANDO PASCUAL (Pascual) instituted this case for the

collection of the balance of TWO UNPAID LOANS, as well as for interests
and damages. He is a Filipino, of legal age, and a resident of 50 Regalado
Ave., North Fairview, Quezon City.

2 Defendant A&B REALTY COMPANY (Company) is a corporation duly

organized under the laws of the Republic of the Philippines, and is engaged
in the real estate business with principal office at 19th Floor Unit 2-D
Goldengate Center, Tower 2, Makati City.

3 Defendant ERNESTO SANTOS (Santos) is the General Manager of

A&B REALTY COMPANY, residing at Room 5D, A&B Building, Fermin
cor. Alfonso Sts., Brgy. Poblacion, Makati City.

4 Defendant MARGARET CASAS (Casas) is an employee of A&B

REALTY COMPANY, residing at 123 J.D. Villena St., Bry. Poblacion,
Makati City.
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5 During trial, Pascual testified that sometime in early January of 2010, the
Company, through Casas, asked him for a loan to expand its business
operations. With Casas was a Board Resolution (Exhibit A) which
authorizes her to contract a loan on behalf of the Company.

6 Accordingly, Pascual agreed to lend One Million Pesos (P1,000,000.00) to

the Company, provided that the same shall be covered by a promissory note,
which is to be payable on demand and with interests.

7 On January 30, 2010, Pascual went to the Companys office and delivered a
check in the Companys favor in the amount of One Million Pesos
(P1,000,000.00).

8 On the same date, Pascual was handed over a Promissory Note, signed by
Santos, General Manager of the Company, (Exhibit B) evidencing this
FIRST LOAN of One Million Pesos (P1,000,000.00). The Promissory Note
indicated that this first loan was payable on demand, with a mutually-agreed
interest rate of 6% per month.

9 Sometime in December of 2010, the Company, again through Casas, asked

Pascual for a SECOND LOAN in the same amount, payable in one (1) year
with an agreed interest of P 600,000.00 per annum.

10 Similarly, Pascual agreed and issued a check in favor of the Company in the
amount of One Million Pesos (P1,000,000.00).

11 Regina Ruiz and Olivia Reyes, branch manager and teller of Banco de Oro -
Valero Branch, respectively, testified that the checks were honored and
deposited in the account of the Company with that bank.

12 Accordingly, from February 2010 to August 2012, the Company, has been
paying Pascual in the form of monthly checks in the amount of Fifty
Thousand Pesos (P50,000.00) each.

13 All these monthly checks in favor of Pascual were drawn from the corporate
account of the Company and signed by the Companys Corporate Secretary,
George Berdugo (Exhibits D-1 to D-36). This fact was undisputed by
defendant Company.

14 Beginning September 2012, however, the Company stopped making

any further payments on the two loans. Indeed, Pascuals Bank Account
Statements shows that the last deposit by the Company was made in August
2012 (Exhibits E-1 to E-3).

15 Thereafter, Pascual sent separate demand letters to the Company and Santos,
respectively, for the payment of the balance of the two loans (Exhibits F

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and G).

16 Alice Sara, clerk of the Company and an undisputed fact, testified that she
personally received the demand letter to the Company, as was her job, and
also personally handed that demand letter to the Board of Directors of the
Company.

17 At the time the Company stopped paying in August 2012, around P 2.9
Million Pesos remains unpaid by the Company to Pascual.

18 Despite the demand of Pascual, and several attempts to settle the loan for the
past three years, no further payments have been made by the Company
towards the loan.

19 On 28 August 2015, Pascual instituted this complaint. Thereafter, the

Company filed its Answer on 31 August 2015. No answer was filed by
Santos and Casas.

20 On 1 September 2015, Pascual and the Company filed their Pre-Trial Briefs,
respectively. After which, Pascual and the Company proceeded to court-
annexed mediation. As there was no settlement, mediation and pre-trial was
thereafter declared terminated.

21 Trial thereafter ensued.

22 During trial, the Companys own witness, corporate secretary George

Berdugo, admitted that the signatures on the monthly checks in favor of
Pascual were genuine and authentic.

23 Juan Direktor, a director of the Company, also testified during trial that the
Board of Directors were informed about the loan, as it was admitted that
supervision of fiscal management is critical to the directors of the Company.
It was also admitted that a stop-payment order was, in fact, issued on August
2012, two (2) years and seven (7) months (!) after the loan was contracted
(Exhibit 5).

24 It was also not denied by any of Companys witnesses that Pascuals money
was indeed deposited in the corporate account of the Company, and that the
Company knew about this and even used the money to expand its
business operations.

25 On 10 November 2015, the Court directed the parties to file their

memoranda. Hence, the instant memorandum.

26 As these contracts of loan stand today, from January 2010 to November

2015, the Company is indebted to Pascual in the amount of P3,300,000.00,
more or less, including interests.

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ISSUES

I
WHETHER PLAINTIFF IS ENTITLED TO THE
TOTAL UNPAID BALANCE OF THE LOAN

II
WHETHER THE LOAN WAS BINDING ON THE
COMPANY

IV
WHETHER THE INTEREST AGREED UPON WAS
EXCESSIVE AND UNCONSCIONABLE
ARGUMENTS AND DISCUSSION
I
PASCUAL IS ENTITLED TO THE UNPAID BALANCE OF THE
LOAN

27 Two valid contracts of loan were perfected in good faith between the
Company, through Casas, and Pascual in this case.

28 The first loan was agreed to be payable on demand. Even if it be assumed

that no due date was agreed upon, it is settled by law that in such case the
obligation must be performed upon demand. In HSBC vs. Spouses
Broqueza,1 the Supreme Court affirmed the findings of the MeTC and RTC
that since the Promissory Notes involved do not contain a period, the
creditor has the right to demand immediate payment.

29 This first loan was evidenced by a notarized promissory note (Exhibit

B), signed by the Companys General Manager Santos and Casas, the
latter having been authorized by the Company to contract loans on its behalf
(Exhibit A).

30 As per the Rules of Court, when an agreement has been reduced in writing,
there can be no evidence of its terms other than what is contained therein.2

31 Moreover, a notarized document has in its favor the presumption of

regularity3 and, thus, serves as prima facie evidence of the facts stated
therein.4
1 .HSBC v. Spouses Broqueza, G.R. No. 178910, November 17, 2010.

2 .RULES OF EVIDENCE, rule 130, 9.

3 .De Jesus v. Court of Appeals, G.R. No. 127857, June 20, 2006.

4 .1989 RULES OF EVIDENCE, rule 132, 23.

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32 The second loan is valid as well as an oral contract of loan on 31 December

2010. This second loan has an agreed maturity date of one year, i.e., 31
December 2011, which clearly means that it is due and demandable as of the
filing of this Complaint on 28 August 2015.

33 To reiterate, the money subject of these loans were admitted by the

Companys witnesses to have been deposited in its corporate account. 5 As
per the Rules of Court, a party is vouches for its own witnesses and is not
allowed to impeach their credibility.6

34 By law, delay attaches from the time the obligee judicially or extra judicially
demands from the debtor the fulfillment of their obligation.7

35 Accordingly, Pascual sent demand letters not only to the Company but also
to its General Manager Santos (Exhibits F and G).

36 The demand-letter addressed to the Company was properly received by an

authorized employee of the company, Alice Sara.8 The Companys own
witness, Juan Direktor, also admitted that they knew about the loan and in
fact ordered to stop paying said loan.9

37 Most importantly, the fact that the company had already begun to pay
through monthly checks (ExhibitsD-1 to D-36) was a clear indication
that it acknowledged its obligation to plaintiff. It was even admitted by its
witnesses.10 cannot now be allowed to deny its liability.

38 As per the Rules of Court, it is presumed that money paid by one to another
was due to the latter; 11 that private transactions have been fair and
regular;12 that a person takes ordinary care of his concerns; 13 that the

5 . TSN, cross-examination of George Berdugo, Hearing of Oct. 27, 2015.

6 . RULES OF EVIDENCE, rule 132, 12.

7 .CIVIL CODE, art. 1169.

8 . TSN, cross-examination of Alice Sarah, Hearing of Nov. 3, 2015.

9 . TSN, cross-examination of Juan Direktor, Hearing of Nov. 10, 2015.

10 . Id.

11 . RULES OF EVIDENCE, rule 131, 3 (f).

12 . Id. rule 131, 3 (p).

13 . Id. rule 131, 3 (d).

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ordinary course of business has been followed;14 and that a negotiable

instrument was given or indorsed for a sufficient consideration.15

39 The Company wasnt able to present any proof to disprove the evidence
presented by Pascual as well as these presumptions provided by law. The
Company is, thus, without doubt liable for the amount of the loans to
Pascual.

II
THE LOAN WAS VALID AND BINDING ON THE COMPANY.

40 When Casas asked Pascual to lend money on behalf of the Company, she
presented a Board Resolution which showed her authority as agent to
contract the said loan (Exhibit A).

41 This Board Resolution was certified by the Corporate Secretary of the

Company, George Berdugo, and was duly notarized, thereby carrying with it
the presumption of regularity, authenticity, and due execution. 16 Thus,
Pascual could not be faulted for relying upon it in all good faith.17

42 By law, the Company must comply with all the obligations which its agent
Casas may have contracted within the scope of her authority.18

43 Accordingly, Pascual is entitled to the performance by Company of its

obligation to pay the loans, as agreed upon through its duly authorized
agent-employee Casas.

44 Even assuming arguendo that there had been no Board Resolution

presented, the Company still cannot deny its liability by arguing that Casas
had exceeded her authority.

45 By law, when an agent has exceeded his or her power, the principal is not
bound except when he or she ratifies it expressly or tacitly.19 Implied

14 . Id. rule 131, 3 (q).

15 . Id. rule 131, 3 (s).

16 . Heirs of Spouses Angel Liwagon and Francisca Dumalagan v. Heirs of Spouses Demetrio Liwagon
and Regina Liwagon, G.R. No. 193117, November 26, 2014.

17 . Sistoza v. Desierto, G.R. No. 144784, September 3, 2002.

18 . Article 1910, Civil Code.

19 . Article 1910 (b), Civil Code

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ratification may take diverse forms, such as by silence or acquiescence; by

acts showing approval or adoption of the contract; or by acceptance and
retention of benefits flowing therefrom.20

46 In this case, the Company has shown acts approving the conduct and has
received the benefits flowing from the loan contracted with Pascual.

47 The Company in fact has made payments of P50,000.00 per month for 2
years and 7 months. The payments were made by means of the companys
checks, signed by its Corporate Secretary and drawn against its corporate
account. Again, this fact has not been denied by the Company during trial. It
cannot be gainsaid that by paying the loan, the Company has recognized the
existence of the debt and assumed liability for such.

48 Otherwise, there can be no explanation for why the Company kept the
money in its account and used it for its own purposes other than plain and
blatant unjust enrichment to the detriment of Pascual.

49 During trial, the Company tried to explain the payments made to Pascual
was unintended because it was not strictly scrutinized by its Board of
Directors. This is a flimsy and self-serving excuse.

50 It cannot overcome the positive evidence of Pascual that money was placed
in the Companys account, that payments were made to Pascual, and that
payments were deliberately stopped to the injury of Pascual.

51 Granting for the sake of argument that the payments to Pascual were
unintended, then the Company has acted in a way as to lead Pascual to
believe that its transactions were being entered into regularly. Estoppel in
pais.21

III
THE INTEREST UPON THE LOAN IS REASONABLE UNDER THE
CIRCUMSTANCES OF THIS CASE.

52 The rule prevailing is that the rate of interest, including commissions,

premiums, fees and other charges, on a loan or forbearance of any money
regardless of maturity, is no longer subject to any ceiling under the Usury
Law, due to the issuance of Central Bank Circular no. 905 removing the
ceiling on such amounts. Thus, interest can now be as lender and borrower

20 . ECE Realty and Development, Inc. v. Mandap, G.R. No. 196182, September 1, 2014, citing Viloria v.
Continental Airlines, Inc., G.R. No. 188288, January 16, 2012.

21 . MIAA. v. Velayo, G.R. No. 161718, Dec. 14, 2011.

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may agree upon.22

53 Accordingly, what is unconscionable today is dependent upon the

circumstances of every case.23 In making this determination, the capabilities
of the obligor, the economic milieu of the obligation, the particulars of the
negotiation, the nature of the obligation, and other such factors must be
taken into consideration.

54 It cannot be denied in this case that: first, it was the Company, which offered
the interest rate now demanded by Pascual. In fact, Casas offered an initial
interest rate of 5% per month, but then the Company willingly increased
such rate to 6% per month in its promissory note that was duly signed by the
duly-authorized representatives of the Company and Pascual. This, at the
very least, suggests that the company was more than willing to pay the initial
rate, and could not have considered the same as beyond its means.

55 Second, even assuming that the interest was usurious, it is basic that the
nullity of the stipulation on the usurious interest does not, however, affect
the lenders right to recover the principal of the loan.24

56 Instead, the debt due is to be considered without the stipulation of the

excessive interest and the legal interest per annum will be added in place of
the excessive interest formerly imposed.25

57 Accordingly, regardless of the interest rate, the Company, Santos, and Casas
are solidarily liable for the debt due to plaintiff.

PRAYER

WHEREFORE, it is respectfully prayed that judgment be rendered:

1. ORDERING defendants A&B Realty Company, Santos, and

Casas solidarily liable to pay the unpaid balance of the loans,
including interests, which more or less amounts to
P3,300,000.00;

2. Other just and equitable reliefs are likewise prayed for.

22 . Spouses Zacarias Bacolo vs. Banco Filipino Savings and Mortgage Bank, G.R. No 148491, February
8, 2007.

23 . RGM Industries, Inc. v. United Pacific Capital Corporation, G.R. No. 194781, June 27, 2012.

24 . Asian Cathay Finance and Leasing Corporation v. Spouses Cesario, G.R. No. 186550, July 5, 2010.

25 . Id.

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Makati City for Makati City, 27 November 2015.

CONSIGNADO ASUNCION PALINES

PANGANIBAN & PION
Counsel for Plaintiff
12 and 14th Floors, Citibank Center
th

8741 Paseo de Roxas, Makati City

Tel. No. 810.1234; Fax No. 819.1423
Email Address: general@cappp-law.com

By:

RAMON VICENTE B. ASUNCION

PTR No. 9382512; 01-03-13; Makati City
IBP Lifetime No. 909523; 01-03-13; Manila IV
Roll No. 47578; 05-07-02
MCLE Compliance III No. 0009480; 04-20-10

PAOLO MIGUEL S. CONSIGNADO

PTR No. 3670460; 01-03-13; Makati City
IBP Lifetime No. 909509; 01-03-13; Laguna
Roll No. 32307; 02-05-12
MCLE Compliance III No. 0009481; 04-20-10

RONA FRANCIA L. PALINES

PTR No. 7392874; 01-03-13; Makati City
IBP Lifetime No. 213823; 01-03-13; Samar
Roll No. 39123; 05-07-02
MCLE Compliance III No. 0009484; 04-20-10

MARIE-CHELLE G. PANGANIBAN
PTR No. 1462874; 01-03-13; Makati City
IBP Lifetime No. 213725; 01-03-13; Batangas
Roll No. 39823; 05-14-02

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MCLE Compliance III No. 0009483; 04-20-10

LOUISE JESSICA PION

PTR No. 7317874; 01-03-13; Makati City
IBP Lifetime No. 219919; 01-03-13; Makati
City
Roll No. 55243; 05-07-02
MCLE Compliance III No. 0009488; 04-20-10

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