A1

THE 2017 LEGAL TECHNIQUE AND LOGIC

MOOT COURT COMPETITION

IN THE SUPREME COURT OF THE PHILIPPINES, PADRE FAURA STREET,

ERMITA, MANILA CITY, 1000, METRO MANILA

Case concerning The Breach of the Non-Disclosure Agreement

STRONG GROUP AND BILL SANTOS

APPLICANT

v.

NANCY JANE

RESPONDENT

2017

On Submission to the Supreme Court

MEMORIAL FOR THE APPLICANT, STRONG GROUP AND BILL SANTOS

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 TABLE OF CONTENTS

STATEMENT OF FACTS 3

CLAIMS .. 5

ARGUMENTS AND AUTHORITIES .... 6

I. NANCY JANE COMMITTED A BREACH OF CONTRACT FOR VIOLATING THE NON-

DISCLOSURE AGREEMENT 6

A. It is a well-established rule under Article 1305 of the Civil Code and Statutory

Construction that a contract is the meeting of minds between two persons and

must be interpreted in accordance with the intent of the parties .... 6

B. Nancy Jane is legally capacitated to enter the contract between Strong Group and

Bill Santos 7

C. The contention of Nancy Jane that the Agreement was a contract of adhesion

should not be entertained by the Reviewing Court ..... 8

II. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF

THE REGIONAL TRIAL COURT TO DISMISS THE CAUSE OF ACTION FOR

DEFAMATION INITIATED BY BILL SANTOS ON THE GROUND THAT AN

ADMISSION OF LIABILITY HAS ALREADY BEEN MADE IN THE SETTLEMENT AND

THEREFORE FALLS UNDER DAMNUM ABSQUE INJURIA . 9

A. Nancy Jane is liable to pay Strong Group and Bill Santos for damages for

the defamation committed .. 10

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CONCLUSION AND PRAYER FOR RELIEF ... 14

INDEX OF AUTHORITIES .. 16

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 STATEMENT OF FACTS

Strong Group is a multinational company registered in the Philippines and is engaged in

many businesses within and without the country. Bill Santos has been employed by Strong Group

for the past 16 years and is currently the Chief Finance Officer of the company.

Nancy Jane is a law graduate and a celebrity endorser of several companies which includes

Strong Group. In 2016, the Bureau of Internal Revenue discovered an unreported income of Nancy

Jane in the amount of Php. 15, 000, 000. 00 which she earned in 2014. A Notice of Informal

Conference was sent to her in the same year. Nancy Jane explained that she received the disputed

amount of Php. 15, 000, 000. 00 as an out-of-court settlement from a dispute and was not earned

from her profession as a model. And that she received the money from Strong Group by way of

settlement so she will not file any action for the sexual harassment she suffered in the hands of Bill

Santos. The response of Nancy Jane was leaked to the different organizations in the country.

Beacause of this, Strong Group and Bill Santos sued Nancy Jane for damages in the amount

of Php. 100, 000, 000. 00 for (1) breach of contract and (2) defamation. The Regional Trial Court

ruled that there was a breach of the Non-Disclosure clause but dismissed the cause of action for

defamation holding that an admission of liability has already been made in the settlement and

therefore falls under damnum absque injuria.

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 CLAIMS

I.

NANCY JANE COMMITTED A BREACH OF CONTRACT FOR VIOLATING THE NON-

DISCLOSURE AGREEMENT.

II.

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE

REGIONAL TRIAL COURT TO DISMISS THE CAUSE OF ACTION FOR DEFAMATION INITIATED

BY BILL SANTOS ON THE GROUND THAT AN ADMISSION OF LIABILITY HAS ALREADY BEEN

MADE IN THE SETTLEMENT AND THEREFORE FALLS UNDER DAMNUM ABSQUE INJURIA.

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 ARGUMENTS AND AUTHORITIES

I. NANCY JANE COMMITTED A BREACH OF CONTRACT FOR VIOLATING THE NON-

DISCLOSURE AGREEMENT.

A. It is a well-established rule under Article 1305 of the Civil Code and Statutory

Construction that a contract is the meeting of minds between two persons and must

be interpreted in accordance with the intent of the parties.

The Court reiterated in the case of TSPI Corporation v. TSPIC Employees1 that as a general rule,

in the interpretation of a contract, the intention of the parties is to be pursued. Littera necat spiritus

vivificat. An instrument must be interpreted according to the intention of the parties. It is the duty

of the courts to place a practical and realistic construction upon it, giving due consideration to the

context in which it is negotiated and the purpose which it is intended to serve.

In Norton Resources and Development Corporation v. All Asia Bank Corporation2 citing the case of

Bautista v. Court of Appeals, the rule is that where the language of a contract is plain and unambiguous,

its meaning should be determined without reference to extrinsic facts or aids. The intention of the

parties must be gathered from that language, and from that language alone. Courts cannot make for

the parties better or more equitable agreements than they themselves have been satisfied to make, or

rewrite contracts because they operate harshly or inequitably as to one of the parties, or alter them

for the benefit of one party and to the detriment of the other, or by construction, relieve one of the

parties from the terms which he voluntarily consented to, or impose on him those which he did not.

In the case at bar, the content of the contract entitled Settlement, Release, Covenant

Not to Sue, Waiver and Non-disclosure Agreement is clear and unambiguous. The wordings of the

said agreement between the parties should be given great weight. The content of the contract is very
1
TSPI Corporation v TSPIC Employees, G.R. No. 163419, February 13, 2008

2 Norton Resources and Development Corporation v. All Asia Bank Corporation, G.R No. 162523, November 29, 2009

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simple, it shows a confidential matter not subject to be disclosed to the public, since the parties

involved to the contract are Strong Group and Bill Santos and Nancy Jane only. The Bureau of

Internal Revenue on the other hand is never a party on the contract since Nancy Jane did not gave

her great efforts in asking the consent of Strong Group and Bill Santos in which it was clearly

stipulated in the Unauthorized Disclosure provision in their agreement that except upon a lawful

order of court or under subpoena, in which event, Jane shall use her best efforts to consult with

Strong Group prior to responding to any such order. Therefore, Jane gravely breached the said

contract with Strong Group and Bill Santos for Nancy Jane is bound by the contract being a party

thereof.

Strong Group intends to protect the reputation of the whole company not only the

reputation of Bill Santos. It is true that Nancy Jane is duty-bound to disclose the source of the

amount in question to the Bureau of Internal Revenue, however, she is also duty-bound not to

disclose the pertinent terms of the Agreement. It is evident that Nancy Jane went beyond the

allowed authorized disclosure as she failed to consult Strong Group and Bill Santos before

responding to the Notice of Informal Conference sent to her by the BIR. This shows her failure to

observe the proper diligence in performing her obligation which arose from the Agreement and

became prejudicial to the part of Strong Group and Bill Santos.

B. Nancy Jane is legally capacitated to enter the contract between Strong Group and

Bill Santos

An essential requisite of a contract is the consent of both parties. Under Article 1319 of the

Civil Code, Consent is manifested by the meeting of the offer and acceptance upon the thing and the cause which are

to constitute the contract.3 The offer must be certain and acceptance absolute, a qualified acceptance a

3 NCC, Art. 1319

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counter offer, in relation to Article 1327 of the Civil Code, an unemancipated minor, insane or demented

person, deaf-mutes who do not know how to write cannot give consent to a contract.4 In the present case, Nancy

Jane is presumed to be not one of those persons described under Article 1327 considering her

Bachelors Degree in Law which makes her fully capacitated to understand the terms and conditions

provided under the contract. In addition, she signed the contract upon advice of a counsel which

indicates that Nancy Jane had the opportunity to inquire about the terms of the contract..

Furthermore, the agreement was entered into by Jane and Strong Group knowingly and voluntarily.

The claim of Nancy Jane about the issue of contract of adhesion shall be heard in another

forum before a question of its validity shall be raised.

C. The contention of Nancy Jane that the Agreement was a contract of adhesion should

not be entertained by the Reviewing Court

The belated claim of Nancy Jane in her memorandum before the Court of Appeals

must not be entertained by the reviewing court for such claim was never raised by petitioner

before the lower courts. Settled is the rule that points of law, theories, issues, and arguments not

adequately brought to the attention of the trial court need not be, and ordinarily will not be,

considered by a reviewing court. They cannot be raised for the first time on appeal. To allow this

would be offensive to the basic rules of fair play, justice, and due process.5 It is even reiterated

by the Supreme Court the importance of an issue must be raised at the earliest possible

opportunity in a motion to dismiss or a similar pleading. The high court even warned that

4 NCC, Art. 1327

5 Eastern Assurance and Surety Corporation v. Con-Field Construction and Development Corporation, G.R. No. 159731, April 22,

2008, 552 SCRA 271, 279-280

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 "[i]nvoking it in the later stages of the proceedings or on appeal may result in the dismissal of

the action x x x.6

Even assuming arguendo, a contract of adhesion is defined as one in which one of the

parties imposes a ready-made form of contract, which the other party may accept or reject, but

which the latter cannot modify. One party prepares the stipulation in the contract, while the

other party merely affixes his signature or his "adhesion" thereto, giving no room for negotiation

and depriving the latter of the opportunity to bargain on equal footing.7 It must be borne in

mind, however, that contracts of adhesion are not invalid per se. Contracts of adhesion, where

one party imposes a ready-made form of contract on the other, are not entirely prohibited. The

one who adheres to the contract is, in reality, free to reject it entirely; if he adheres, he gives his

consent.8 Thus, upon signing by Nancy Jane the agreement prepared by the Strong Group and

Bill Santos, arguendo, a contract of adhesion, is considered adhered and consented by the same.

Hence, the contract or the agreement is already valid and binding.

II.

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE

REGIONAL TRIAL COURT TO DISMISS THE CAUSE OF ACTION FOR DEFAMATION INITIATED

BY BILL SANTOS ON THE GROUND THAT AN ADMISSION OF LIABILITY HAS ALREADY BEEN

MADE IN THE SETTLEMENT AND THEREFORE FALLS UNDER DAMNUM ABSQUE INJURIA.

The cause of action for defamation should not be dismissed as Bill Santos did not admit any

liability to any wrongdoing, breach of any contract, or any transgression of any law or statute. The
6 S.C. Megaworld Construction and Development Corporation v. Parada, G.R. No. 183804, September 11, 2013

7 Radio Communications of the Philippines, Inc. v. Verchez, G.R. No. 164349, January 31, 2006, 481 SCRA 384, 401, citing

Philippine Commercial International Bank v. Court of Appeals, 325 Phil. 588, 597 (1996).

8 Premiere Development Bank v. Central Surety & Insurance Company, Inc., G.R. No. 176246, February 13, 2009

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Honorable Court should have taken into consideration the force and effect of the No admission of

Liability provision9 in the agreement entered into by the parties for the agreement entered into by

the parties is valid. Aside from the expressed intent of the parties to repudiate any liability to any

wrongdoing, breach of any contract, commission of any tort or the violation of any statute or law, it

is also proper to consider that the main idea of no admission of liability clause is to negate the

agreement or anything contained herein from constituting or is to be construed as an admission by

the Company or its Affiliates or the Executive as evidence of any liability, wrongdoing or unlawful

conduct.10 Thus, there is no evidence or in any circumstance supports that the terms in the subject

agreement directs Bill Santos liability to any wrong doing, particularly to the alleged offense of

sexual harassment. Moreover, the absence of any evidence that could pertain to the admission made

by Bill Santos regarding such act would contradict the ruling of the Regional Trial Court that the

cause of action falls under the principle of damnum absque injuria.

A. Nancy Jane is liable to pay Strong Group and Bill Santos to damages for the

defamation committed.

Oral Defamation or Slander is libel committed by oral (spoken) means, instead of in writing.

It is defined as "the speaking of bias and defamatory words which tend to prejudice another in his

reputation, office, trade, business or means of livelihood." The elements of oral defamation are: (1)

there must be an imputation of a crime, or of a vice or defect, real or imaginary, or any act,

omission, status or circumstances; (2) made orally; (3) publicly; (4) and maliciously; (5) directed to a

natural or juridical person, or one who is dead; (6) which tends to cause dishonour, discredit or

9 No Admission of Liability. By entering into this Agreement, the parties do not admit to any liability, wrongdoing, breach of any

contract, commission of any tort or the violation of any statute or law alleged by the other to have been violated or otherwise

10 Law Insider: Contract Database and Search Engine, https://www.lawinsider.com/clause/non-admission-of-liability. Last seen

May, 2017

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contempt of the person defamed. Oral defamation may either be simple or grave. It becomes grave

when it is of a serious and insulting nature. An allegation is considered defamatory if it ascribes to a

person the commission of a crime, the possession of a vice or defect, real or imaginary or any act,

omission, condition, status or circumstance which tends to dishonor or discredit or put him in

contempt or which tends to blacken the memory of one who is dead. To determine whether a

statement is defamatory, the words used in the statement must be construed in their entirety and

should be taken in their plain, natural and ordinary meaning as they would naturally be understood

by persons reading them, unless it appears that they were used and understood in another sense. It

must be stressed that words which are merely insulting are not actionable as libel or slander per se,

and mere words of general abuse however opprobrious, ill-natured, or vexatious, whether written or

spoken, do not constitute a basis for an action for defamation in the absence of an allegation for

special damages. The fact that the language is offensive to the plaintiff does not make it actionable

by itself.11

Defamation, which includes libel and slander, means the offense of injuring a person's

character, fame or reputation through false and malicious statements. It is that which tends to injure

reputation or to diminish esteem, respect, goodwill or confidence in the plaintiff, or to excite

derogatory feelings or opinions about the plaintiff. It is the publication of anything that is injurious

to the good name or reputation of another or tends to bring him into disrepute. In determining

whether certain utterances are defamatory, the words used are to be construed in their entirety and

taken in their plain, natural and ordinary meaning, as they would naturally be understood by persons

hearing (or reading, as in libel) them, unless it appears that they were used and understood in

11 Enrique G. De Leon v. People of the Philippines and SPO3 Pedrito L. Leonardo, G.R. No. 212623, January 11, 2016

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another sense.12 xxx Malice connotes ill will or spite and speaks not in response to duty but merely

to injure the reputation of the person defamed, and implies an intention to do ulterior and

unjustifiable harm. It is present when it is shown that the author of the libelous remarks made such

remarks with knowledge that it was false or with reckless disregard as to the truth or falsity

thereof. Article 354 of the Revised Penal Code, which also enumerates exceptions thereto:

Requirement of publicity. - Every defamatory imputation is presumed to be malicious, even if it

be true, if no good intention and justifiable motive for making it is shown, except in the following

cases:

1. A private communication made by any person to another in the performance of

any legal, moral or social duty; and

2. A fair and true report, made in good faith, without any comments or remarks, of any

judicial, legislative or other official proceedings which are not of confidential nature, or of any

statement, report or speech delivered in said proceedings, or of any other act performed by public

officers in the exercise of their functions.

There is, thus, a presumption of malice in the case of every defamatory imputation, where

there is no showing of a good intention or justifiable motive for making such imputation.

In the instant case, the elements of defamation are satisfied by the acts of Nancy Jane. In

consideration of the foregoing circumstances, she disclosed the confidential information

surrounding the agreement with Bill and Strong Group because the allegation of Jane is intended to

prejudice the reputation of the Company not only of Bill Santos. According to the Revised Penal

Code, malice is presumed in every imputation where there is no showing of a good intention or

12
Alfonso t. Yuchengco v. The Manila Chronicle Publishing Corporation, Roberto Coyiuto, Jr., Noel Cabrera, Gerry Zaragoza, Donna

Gatdula, Rodney P. Diola, Raul Valino and Thelma San Juan, G.R. No. 184315

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justifiable motive in making such. In order to save herself from the allegations of BIR she

deliberately divulged the contents of the agreement with Strong Group and Bill Santos indicating

that such imputation does not present a good faith or intention on her part. The additional

statement is within the context of Article 354 of the Revised Penal Code, which is not necessary in

the BIR investigation. The BIR is not entitled to know in detailed the agreement between Strong

Group in order to discover the irregularities in her tax declaration.

There exist a privilege Communication with Nancy Jane, Bill Santos and Strong Group

which ascended from the contract. Thus, a contract that is confidential in nature is not intended to

be publicly known. Moreover, the disclosure of the confidential information relating to the contract

is made before the BIR which is not a magistrate, a quasi-judicial body or before a court, which is

not enough for her to defy her agreement with Strong Group.

An action can be drawn from Article 31 of the New Civil Code, which states that When the

civil action is based on an obligation not arising from the act or omission complained of as a felony,

such civil action may proceed independently of the criminal proceedings and regardless of the result

of the latter.13 In accordance with Article 33 of the same code which states that In cases of

defamation, fraud, and physical injuries a civil action for damages, entirely separate and distinct from

the criminal action, may be brought by the injured party. Such civil action shall proceed

independently of the criminal prosecution, and shall require only a preponderance of evidence. 14

Also invoking Article 1170 of the Civil Code which reads those who in the performance of their

13 NCC, Art. 31

14 NCC, Art. 33

13
obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the

tenor thereof, are liable for damages.15

Here, from the foregoing, the breach of contract and acts of defamation committed by

Nancy Jane an action for damages may be instituted by Strong Group. It is a relief granted for a

party prejudiced by another. The acts of Nancy Jane of disclosing the confidential matter of the

contract without obtaining the consent of Strong Group and Bill who is a party to the contract

tantamount to a breach in her obligation. Thus, Strong Group can institute an action for damages

arising from the alleged defamation committed by Nancy Jane. Thus it is a separate and distinct

proceeding that shall proceed independently regardless of the result of the criminal proceeding.

Also from the breach of obligation of Jane, by her unilateral act of disclosing the confidential

information without the consent of Strong Group arises another action civil acton for damages

under Article 1170 of the Civil Code through the contravention of term in the contract which she is

bound to.

CONCLUSION AND PRAYER FOR RELIEF

For the foregoing reasons, Strong Group and Bill Santos respectfully requests that this

Honorable Court, by way of judgment:

(1) Declare that Nancy Jane committed a breach of the non-disclosure contract between her

and Strong Group and Bill Santos, thus, the latter are entitled to damages amounting to

Php. 100, 000, 000. 00

15 NCC, Art. 1170

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(2) The claim of Nancy Jane as regards to the validity of the agreement in her memorandum

before the Court of Appeals should be dismissed as the same was not raised at the

earliest possible opportunity.

(3) The case for defamation initiated by Bill Santos should not be dismissed and be tried

based on the merits.

(4) Grant such other and futher relief as this Honorable Court may deem just and equitable

under the premises.

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 INDEX OF AUTHORITIES

LAW

Civil Code, Article 1305

Civil Code, Article 1327

Civil Code , Article 31

Civil Code, Article 33

Civil Code, Article 1170

Revised Penal Code, Article354

JURISPRUDENCE

Alfonso T. Yuchengco v. The Manila Chronicle Publishing Corporation, et al. Juan, G.R. No.

184315

Eastern Assurance and Surety Corporation v. Con-Field Construction and Development

Corporation, G.R. No. 159731, April 22, 2008

Enrique De Leon v. People of the Philippines and SPO3 Pedrito L. Leonardo, G.R. No. 212623,

January 11, 2016

Insular Life Assurance Company, LTD v. CA, G.R. 97654, November 19, 1994

Norton Resources and Development Corporation v. All Asia Bank Corporation G.R. 162523,

November 25, 2009

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Radio Communications of the Philippines, Inc. v. Verchez, G.R. No. 164349, January 31, citing

Philippine Commercial International Bank v. Court of Appeals, 325 Phil. 588, 597 (1996).

S.C. Megaworld Construction and Development Corporation v. Parada, G.R. No. 183804,

September 11, 2013

TSPI Corporation v TSPIC Employees, December 25, 2012

Premiere Development Bank v. Central Surety & Insurance Company, Inc., G.R. No. 176246,

February 13, 2009

INTERNET RESOURCES

Law Insider: Contract Database and Search Engine, https://www.lawinsider.com/clause/non-

admission-of-liability. Last seen May, 2017

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 By By
Aquipel, Jeric S. Dimalanta, Joseph M.

By By
Motilla, Alvin D. Bunquin, Ma. Angelica Z.

By
Sabaoan, Angela Louise T.

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