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.
_____________________________________________________________

PLAINTIFF’S 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.

5. During trial, Pascual testified that sometime in early January of

 Rolando Pascual vs. A&B Realty Company, et al
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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 Company’s office and

delivered a check in the Company’s 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 Company’s
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, Pascual’s 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” and “G”).

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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 Company’s 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 Company’s witnesses that

Pascual’s 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 Company’s 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 Company’s 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
Company’s 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 (Exhibits“D-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 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 wasn’t 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.
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).
14
. Id. rule 131, § 3 (q).
15
. Id. rule 131, § 3 (s).

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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 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 company’s checks, signed by its Corporate Secretary and drawn against
its corporate account. Again, this fact has not been denied by the Company

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
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.

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

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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 lender’s 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.

Makati City for Makati City, 27 November 2015.

CONSIGNADO ASUNCION PALINES

PANGANIBAN & PIÑON
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
24
. Asian Cathay Finance and Leasing Corporation v. Spouses Cesario, G.R. No. 186550, July 5, 2010.
25
. Id.

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 Rolando Pascual vs. A&B Realty Company, et al
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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
MCLE Compliance III No. 0009483; 04-20-10

LOUISE JESSICA PIÑON

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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