REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

FIRST JUDICIAL REGION
BRANCH 63
BAGUIO CITY

JAMES BAND, represented by

James Band, Jr.,
Plaintiffs,

-versus- Civil Case No. 77-01234

For: SPECIFIC PERFORMANCE
And DAMAGES

WIDELAND REALTY
INCORPORATED
Defendants.
x------------------------------------x

MEMORANDUM
(FOR PLAINTIFF JAMES BAND)

Plaintiff JAMES BAND, represented by James Band, Jr.,

through the undersigned counsel, unto the Honorable Court,
submits this MEMORANDUM for its consideration with utmost
respect and humility.

I.
THE PARTIES

1. The plaintiff was a former manager of the Defendant

Corporation, of legal age, married and resident of 123
Mordung Road, Baguio City;

2. Defendant is a domestic corporation with principal

business address at No. 23, Mapukpukaw Street,
Dimasarakan City, Philippines;
 II.
STATEMENT OF THE CASE

1. Plaintiff, through his duly authorized representative,

instituted the civil action for Specific Performance and
Damages arising the failure of the defendant to transfer
the properties under the Board Resolution 02-0202 Series
of 2005 in the name of the plaintiff, the case was docketed
as Civil Case No. 77-01234;
2. After service of summons on defendant Wideland Realty
Incorporated duly received by Joyce Jones, President and
Chairman of the Board of Directors, it filed its Answer with
Affirmative Defenses and counterclaim;
3. Though the parties were open to hastily and peacefully
resolve the issues, they failed to settle their claims and
differences during the mediation and judicial dispute
resolution, thus, the case was set for pre-trial;
4. Pre-trial was conducted on April 21, 2016 and was
terminated on the same day;
5. Trial ensued thereafter and when the submission of the
formal offer of evidence was terminated, the parties were
ordered to submit their respective memoranda.

III.
STATEMENT OF THE FACTS

The basic facts of this case are virtually undisputed and

most were already admitted during the Pre-trial. The facts as
obtained from the evidence of the parties are as follows:

1. Plaintiff, James Band, is an American citizen, of legal age,

widower, with address in the Philippines at No. 123
Mordung Road, Baguio City;
2. Plaintiff is being represented by his son, James Band, Jr.
by virtue of a Special Power of Attorney attached as Annex
A of the Complaint. James Band, Jr. is a Filipino, of legal
age, married and a resident of No. 123 Mordung Road,
Baguio City;
3. Defendant, Wideland Realty Incorporated, is a juridical
entity duly registered with the Securities and Exchange
Commission with principal business address at No. 23
Mapukpukaw Street, Dimasarakan City, Philippines;
4. Plaintiff worked with the Defendant Corporation from
1995 until 2005. He managed the affairs of the corporation
to which his salaries and account receivables were never
paid by the Defendant Corporation. The accrued salaries
 and account receivables of the Plaintiff amounted to
P17,500,000.00.
5. On March 20, 2005, Board Resolution No. 02-0202 Series
of 2005 was passed by the Board of Directors of the
Defendant Corporation attached as Annex B in the
complaint;
6. The said Board Resolution was duly approved by the Board
of Directors for the settlement of all unpaid salaries and
payables due to plaintiff with a discounted amount of
P15,000,000.00. The following are the properties and its
respective values under the said Board Resolution:

Property Estimated Value

5 corporate shares of Pang-Ur
Golf and Country Club
Units 1, 2, 3, 4, and 5 of
Margaay Condominium
5 hectares agricultural land
located in Liblib, Suli covered
by TCT No. 02
Total value of properties to
be given as payment to
James Band
P5,000,000.00 computed at
P1,000,000.00 per share
P5,000,000.00 computed at
P1,000,000.00 per unit
P5,000,000.00
P15,000,000.00

7. After the lapse of almost 10 years, the Defendant

Corporation never caused the transfer of the
aforementioned properties in the name of the plaintiff.

IV.
STATEMENT OF ISSUES

The following are the main issues as laid down during the
Pre-trial:

1. Whether or not Board Resolution No. 02-0202 Series of

2005 is enforceable.
2. Whether or not Plaintiff is entitled to the 5 hectares
agricultural land located in Liblib, Suli covered by TCT No.
02;
3. Whether or not Plaintiff is entitled to Units 1, 2, 3, 4, and
5 of Margaay Condominium;
4. Whether or not Defendant should pay capital gains tax,
documentary stamp tax, local taxes and registration fee
with the Registry of Deeds; and
5. Who, between the parties in this case, should be entitled
to damages?
 IV.
ARGUMENTS / DISCUSSION

A. Board Resolution No. 02-0202 Series of 2005 is

enforceable.

The Board Resolution is in

the nature of a perfected
contract, hence, enforceable

Board Resolution No. 02-0202 Series of 2005 (Board

Resolution) to which its validity, due execution and genuineness
were never controverted by the Defendant obliges the latter to
transfer the properties included therein in the name of the
Plaintiff. It is in the nature of a perfected contract by virtue of
an offer by the Members of the Board of Directors of the
Defendant Corporation and acceptance of James Band as
reflected in the Board Resolution.

The cause of action of the Plaintiff is anchored under

Article 1315 of the Civil Code which states that:

Contracts are perfected by mere consent, and from

that moment, the parties are bound not only to the
fulfillment of what has been expressly stipulated but also
to all the consequences which, according to their nature,
may be in keeping with good faith, usage and law.

Thus, by the mere consent of the parties, which is the most

important element for a contract to be valid, the contract is
perfected. Upon perfection of the contract, the parties may
reciprocally demand performance.1

Article 1319 of the Civil Code states that, consent is

manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract.

In this case, there was already meeting of the minds

between James Band and Wideland Realty Incorporated
wherein the latter offered that in lieu of cash, it will pay the
salaries and other receivables of James Band with the
properties listed in the Board Resolution. James Band accepted
the same. In the said Board Resolution, it is stated that:

James Band, after much negotiation, and taking into

account the liquidity of the corporation, has agreed to be paid a
1
Ace Foods, Inc. vs. Micro Pacific Technologies Co., Ltd. G.R. No. 200602. December 11, 2013.
discounted amount of P15,000,000.00 and to receive properties
in lieu of cash as full and final settlement of his aforesaid claims
against the corporation.

It is also stated in the same Board Resolution that the

members of the Board of Directors of the Corporation signed the
same to indicate their conformity and James Band signed the
same to indicate his acceptance of the agreed terms thereof.

The Board Members of the Defendant Corporation in their

respective Judicial Affidavits, acknowledged that the Board
Resolution is valid and the Defendant Corporation is obliged to
fulfill the obligations indicated therein.

Since, contracts are perfected by mere consent of the

parties and the consent of the Plaintiff and the Defendant
Corporation which are parties to the contract represented by
the Board Resolution, the same is enforceable against the
Defendant Corporation having the obligation to cause the
transfer of the properties in the same Board Resolution in the
name of James Band.

The transfer of the properties

present in the Board
Resolution does not involve
Substantially All of the
Corporate Assets or Property

Defendant Corporation, though admitting the genuineness

and due execution of the Board Resolution, avers that to be
binding, it must be authorized by the vote of the stockholders
representing at least two-thirds (2/3) of the outstanding capital
stock in a stockholders or meeting duly called for such purpose
under Section 40 of Batas Pambansa Bilang 68 (Corporation
Code of the Philippines) since according to it, disposition of the
properties under the said Board Resolution involves
Substantially All of the Corporate Assets or Property,
otherwise, it shall be considered as an unenforceable contract.

However, law and jurisprudence do not prescribe an exact

figure signifying substantial disposition of assets. According to
Villanueva (2013), The test on whether a sale, disposition, or
encumbrance is substantial is a qualitative, rather than a
quantitative test (Emphasis Supplied).2 Thus, under Section 40
of the Corporation Code of the Philippines, A sale or other
2
Villanueva, C. L., & Villanueva-Tiansay, T. S. (2013). Philippine Corporate Law. Makati City, Philippines:
REX Book Store. p. 253-254.
disposition shall be deemed to cover substantially all the
corporate property and assets if thereby the corporation would
be rendered incapable of: (a) Continuing the business; or (b)
Accomplishing the purpose for which it was incorporated.3

To determine what substantial disposition of assets or

property is, Defendant Corporation presented its corporate
secretary, Angelina Jolie. In her Judicial Affidavit, she
proclaimed that to be considered as substantial disposition, at
least 60% of the assets are disposed. Such statement lacks
legal grounds. Law and jurisprudence do not provide that 60%
represents substantial disposition of assets because as stated
in the preceding paragraph, the test is not quantitative, but
rather, qualitative. Hence, the testimony of Angelina Jolie on
what substantial disposition of all corporate assets or property
cannot be relied on for not having any legal basis.

The GIS was not properly

offered as evidence during
trial

Section 36 of Rule 130 of the Rules of Court provides for

the rule on hearsay evidence, it states that:

Testimony generally confined to personal

knowledge; hearsay excluded. - A witness can testify only
to those facts which he knows of his personal knowledge;
that is, which are derived from his own perception, except
as otherwise provided in these rules.

Under the above rule, any evidence whether oral or

documentary is hearsay if its probative value is not based on
the personal knowledge of the witness, but on that of some other
person who is not on the witness stand.4 Hearsay evidence
whether objected to or not cannot be given credence for having
no probative value.5

In proving their contention that the disposition involves

substantially all assets or properties of the corporation, it
presented its General Information Sheet (GIS) for the year 2005
attached as Annex C in the Answer of the Defendant
Corporation. However, no witness presented by the Defendant
Corporation testified as to his or her personal knowledge of the
same. Documentary Evidence cannot speak for itself; a person

3
Supra.
4
Bayani vs. People, G.R. No. 155619, August 14, 2007.
5
Heirs of Ureta, et al. vs. Heirs of Ureta Sr., G.R. No. 165930, September 14, 2011.
who has personal knowledge as to its contents should be testify
as to the contents of the same, otherwise, it is hearsay.
Therefore, the GIS presented has no probative value.

The GIS presented by the

Defendant Corporation
cannot be relied on

Assuming without admitting that the GIS was validly

offered in evidence in this case, the same cannot be relied on by
the Defendant Corporation. A careful examination of the GIS
they have submitted reveals that: (1) it was not properly dated,
(2) only page 4 of the GIS has been submitted to which other
significant data are not presented, and (3) the disposition of its
assets to satisfy the obligation of the Defendant Corporation is
not disposition of substantial amount of assets by the
Defendant Corporation because the GIS is not reflective of all
the assets of the corporation.

The GIS that the Defendant Corporation presented cannot

be relied on because only page 4 thereof was attached by the
respondent to which relevant data are kept by the Defendant
Corporation. It merely showed the amount of the paid up
capital of the Defendant Corporation.

In the paragraph 23 of the Answer of the Defendant

Corporation, it alleged that it is still a relevantly new
corporation being in existence for only ten years since its
incorporation in 1995. In the GIS they presented attached as
Annex B of their Answer, they showed that the paid-up capital
of the Corporation is P23,000,000.00. However, it is in our view
that it is impossible for the Defendant Corporation to have only
the paid-up capital as its assets 10 years after its incorporation.
A span of 10 years is long enough to accumulate more assets
for the company. Another thing is that the 2005 GIS they
presented showed that it still has the P23,000,000.00 paid-up
capital from its incorporation. Thus, if they did not use their
paid-up capital, how come they were able to acquire ownership
of several properties such as 5 corporate share of Pang-Ur Golf
and Country Club, Units 1, 2, 3, 4, and 5 of Margaay
Condominium, 5 hectares agricultural land located in Liblib,
Suli covered by TCT No. 02 with a total value of P15,000,000.00
in 2005. It is impossible that the paid-up capital of the
corporation was not diminished from its incorporation until the
passing of the Board Resolution in 2005. They should have
subtracted P15,000,000.00 from P23,000,000.00 which will
result in P8,000,000.00. The Defendant Corporation should
have reflected that it only had P8,000,000.00 as assets of the
corporation to show that the disposition involves substantially
all of the assets or properties of the corporation which they fail
to do so.

Theoretically speaking, the assets of the corporation

should amount to P38,000,000.00 as of 2005 reflecting its paid-
up capital which was untouched and the other assets and/or
properties of the corporation. Assuming without admitting that
60% of the assets show that disposition of such involves the
substantial assets of the corporation, P15,000,000.00 is merely
39.47% of the total assets of the corporation. Thus, disposition
of which does not involve substantially all the assets of the
corporation.

However, that should not be the parameter because the

test in determining whether or not the disposition involves
substantially all the corporate assets or properties is whether
or not corporation would be rendered incapable of: (a)
Continuing the business; or (b) Accomplishing the purpose for
which it was incorporated. In this case, the disposition of
P15,000,000.00 assets of the Defendant Corporation will not
render the company incapable of continuing the business
because it still has P23,000,000.00 as assets to work with. It
will not also render the corporation incapable of accomplishing
the purpose for which it was incorporated.

In fact, the Plaintiff presented a complete set of the GIS of

the Defendant Corporation attached as Annex D in the
Judicial Affidavit of James Bond which shows that the
Defendant Corporation still has P25,000,000 as paid up capital
for the year 2005.

In sum, Defendant Corporation failed to prove its

allegations in their Answer that the disposition involves
substantially all of the assets or properties of the corporation in
which there must be an authorization by a vote of at least 2/3
of the outstanding capital stock in a stockholders meeting duly
called for such purpose. It failed to support its allegation the
disposition will render the company incapable of continuing its
business or accomplishing the purpose for which it was
incorporated.
Defendant Corporation
Failed to Present Evidence
Showing that the Disposition
Involves Substantially All of
its Assets or Properties

One of the most important tenets under the Rules of

Evidence is that "He who alleges a fact has the burden of
proving it and a mere allegation is not evidence."6

Though Defendant Corporation was able to allege in its

Answer that the disposition of the properties under the Board
Resolution involves substantially all of the assets of the
corporation, they failed to prove in evidence such claim. There
is also no evidence which shows that by virtue of the transfer of
the properties included in the Board Resolution, the
Corporation will suffer either

Conclusion

Considering all the matters aforementioned, the Board

Resolution is valid because the disposition does not involve
substantially all the assets or properties of the corporation
hence, authorization from the stockholders are not required.
Also, the Board Resolution is Enforceable because it partakes
the nature of a perfected contract by virtue of the conformity of
the Board of Directors and the acceptance of James Band in the
Board Resolution. Because of the fact that the Board Resolution
is valid and enforceable, James Band may compel Wideland
Realty Incorporated to comply with its obligations under the
said Board Resolution.

B. Plaintiff is entitled to the 5 hectares agricultural land

located in Liblib, Suli covered by TCT No. 02.

The 5 hectares of
Agricultural Land is not a
public agricultural land

Section 3 of the 1987 Constitution provides that:

Lands of the public domain are classified into

agricultural, forest or timber, mineral lands, and national
parks. Agricultural lands of the public domain may be
further classified by law according to the uses which they
may be devoted. Alienable lands of the public domain
6
Luxuria Homes Inc. vs. CA, 302 SCRA 315. January 28, 1999.
 shall be limited to agricultural lands. Private
corporations or associations may not hold such
alienable lands of the public domain except by lease,
for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and
not to exceed one thousand hectares in area. Citizens
of the Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares
thereof by purchase, homestead, or grant (Emphasis
Supplied).

Generally, the 1987 Constitution proscribes the ownership

of private corporations of agricultural lands of public domain;
they are only allowed to lease such lands. However, the
agricultural land in this case is not an agricultural land of
public domain, but rather, a private land.

It was stated in the case Pacifico Valiao vs. Republic of the

Philippines7 that All lands not appearing to be clearly within
private ownership are presumed to belong to the State. In this
case, the subject agricultural land cannot be presumed to
belong to the State because it was already covered by Transfer
Certificate of Title (TCT) No. 02. Hence, such agricultural land
cannot be considered as a public agricultural land, but rather,
a land within the purview of private ownership to which private
corporations may validly own.

Plaintiff has a vested right

over the agricultural land

The Defendant Corporation alleges that the agricultural

land cannot be transferred to the Plaintiff because the Plaintiff
is now a citizen of the United States of America. The plaintiff
argues that even though Plaintiff is not a citizen of the
Philippines anymore, he acquired a vested right over the said
property because he was able to obtain such property while he
was still a Filipino citizen.

The Supreme Court allowed the registration of lands to

Canadian citizens because they have vested rights over the
disputed lands since they were able to obtain it when they were
still Filipino citizens.8

In the present case, Plaintiff was able to acquire vested

rights over the 5 hectares agricultural land due to the issuance

7
G.R. No. 170757, November 28, 2011.
8
Republic vs. Court of Appeals, G.R. No. 108998, August 24, 1994.
of the Board Resolution which obligates the transfer of the said
agricultural land in the name of the Plaintiff while he was still
a Filipino citizen. Moreover, James Band took possession of the
same the following day after the passage of the Board
Resolution. He was able to introduce improvements thereon and
possess the same until this very day.

Since James Band was still a Filipino citizen when the

Board Resolution was passed, He has vested rights over such
property, therefore, he is entitled to own such property.

C. Plaintiff is entitled to Units 1, 2, 3, 4, and 5 of Margaay

Condominium.

Included to be transferred in the name of the Plaintiff

under the Board Resolution are Units 1, 2, 3, 4, and 5 of
Margaay Condominium owned by the Defendant Corporation.

Section 5 of Republic Act No. 4726, otherwise known as

The Condominium Act, states that:

Any transfer or conveyance of a unit or an

apartment, office or store or other space therein,
shall include the transfer or conveyance of the
undivided interest in the common areas or, in a
proper case, the membership or shareholdings in the
condominium corporation; Provided, however, That
where the common areas in the condominium
project are held by the owners of separate units
as co-owners thereof, no condominium unit
therein shall be conveyed or transferred to
persons other than Filipino citizens or
corporations at least 60% of the capital stock of
which belong to Filipino citizens, except in cases
of hereditary succession. Where the common
areas in a condominium project are held by a
corporation, no transfer or conveyance of a unit
shall be valid if the concomitant transfer of the
appurtenant membership or stockholding in the
corporation will cause the alien interest in such
corporation to exceed the limits imposed by
existing laws.

The law provides that no condominium unit can be sold

without at the same time selling the corresponding amount of
rights, shares or other interests in the condominium
management body, the Condominium Corporation if the
common areas are being held by such Condominium
Corporation. It expressly allows foreigners to acquire
condominium units and shares in condominium corporations
up to not more than 40% of the total and outstanding capital
stock of a Filipino-owned or controlled corporation for as long
as 60% of the members of this Condominium Corporation are
Filipino, the remaining members can be foreigners.9

In this case, the common areas of the Margaay

Condominium are being held by a Condominium Corporation
named Margaay Owners, Inc. Thus, ownership of a
condominium unit of Margaay Condominium comes with it
share in the interest in Margaay Owners, Inc. to which only up
to 40% can be owned by a foreign national.

If 5 units shall constitute more than 40% of the

outstanding capital stock of Margaay Owners, Inc., the
condominium only has 12 units or less. It is improbable and
impractical that a condominium building only has 12 units or
less.

A condominium building comprises of many condominium

units. It is highly improbable in this case that the transfer of
the said condominium units to the Plaintiff shall entitle him to
at least 40% of the outstanding capital stock of the
Condominium Corporation. For it was found out that Margaay
Condominium has 150 condominium units and they only allow
10 units to be given to aliens. Therefore, the citizenship of the
Plaintiff will not proscribe him from being the owner of the 5
condominium units.

Assuming that the transfer of the condominium units will

make the foreign-owned outstanding capital stock of the
Condominium Corporation more than 40% which is prohibited
under the law, Plaintiff has vested right over the property
because he was able to acquire such property while he was still
a Filipino citizen. Hence, he may still be entitled to the
condominium units in this case.

9
Jacobus Bernhard Hulst vs. PR Builders, Inc., G.R. No. 156364, September 25, 2008.
Plaintiff is entitled to the
rent paid by tenants in Units
4&5

Article 1164 of the Civil Code states that the creditor has
a right to the fruits of the thing from the time the obligation to
deliver it arises.

In the Judicial Affidavits of John J. Juan and Peter P.

Paero, Defendant Corporation notified them that the
condominium units shall be transferred in the name of James
Band after the lapse of 3 and 2 months, respectively. From then
on, after the lapse of the 3 and 2 months, Defendant
Corporation should have took possession of units 4 & 5 of
Margaay Condominium and delivered the same to Plaintiff.
However, Defendant Corporation failed to do so. After the
expiration of the extension given to the unit owners, the
obligation to deliver the said condominium units to the Plaintiff
arose. Thus, the rents accrued starting from July 2005 obtained
from John J. Juan and June 2005 obtained from Peter P.
Paero up to the present time should be delivered to James
Band.

D. Defendant Corporation shall pay for the capital gains

tax, documentary stamp tax, local transfer taxes, and
registration fee with the Registry of Deeds.

Capital Gains Tax

The sale or transfer of capital assets shall be taxed by

means of capital gains tax. Under Section 39(A) of the National
Internal Revenue Code, capital assets are properties held by the
taxpayer, whether or not connected with his trade or business,
but does not include: (1) stock in trade of the taxpayer or other
property of a kind which would properly be included in the
inventory of the taxpayer if on hand at the close of the taxable
year; or (2)Property held by the taxpayer primarily for sale to
customers in the ordinary course of his trade or business; or (3)
Property used in trade or business, of a character which is
subject to the allowance for depreciation; or (4) Real property
used in trade or business of the taxpayer.

Among the properties listed in the Board Resolution, only

the 5 shares of stock in Pang-Ur Golf and Country Club is
considered to be capital assets. Since Pang-Ur Golf and Country
Club is listed in the stock exchange, transfer thereof shall be
subject to of the 1% of the Gross Selling Price. Other
properties therein shall be subject to normal corporate income
tax for being ordinary assets. In the case of Republic vs. Arlene
Soriano10, the Supreme Court held that since capital gains is a
tax on passive income, it is the seller, not the buyer, who
generally would shoulder the tax.

In this case, the transferor is the Defendant Corporation.

Thus, as a general rule, it is the seller or the transferor who
should be liable for the payment of capital gains tax if there is
no stipulation as to who shall pay for it.

Documentary Stamp Tax

Section 173 of the National Internal Revenue Code stated

the person liable for the payment of Documentary Stamp Tax,
to wit:

Section 173. Stamp taxes upon documents,

instruments, and papers. Upon documents,
instruments, and papers, and upon acceptances,
assignments, sales, and transfers of the obligation, right,
or property incident thereto, there shall be levied,
collected and paid for, and in respect of the transaction
so had or accomplished, the corresponding documentary
stamp taxes prescribed in the following sections of this
Title, by the person making, signing, issuing, accepting,
or transferring the same, and at the same time such act
is done or transaction had: Provided, that wherever one
party to the taxable document enjoys exemption from the
tax herein imposed, the other party thereto who is not
exempt shall be the one directly liable for the tax.

In the case of Philacor Credit Corporation vs.

Commissioner of Internal Revenue11, the Supreme Court held
that the persons primarily liable for the payment of the DST
are the person (1) making; (2) signing; (3) issuing; (4) accepting;
or (5) transferring the taxable documents, instruments or
papers. Should these parties be exempted from paying tax, the
other party who is not exempt would then be liable. As a
general rule, therefore, any of the parties to a transaction shall
be liable for the full amount of the documentary stamp tax due,
unless they agree among themselves on who shall be liable for
the same.12

10
G.R. No. 211666, February 25, 2015.
11
G.R. No. 169899, February 6, 2013.
12
Republic vs. Arlene Soriano, G.R. No. 211666, February 25, 2015.
 In this case, there is no stipulation as to who shall pay the
documentary stamp tax. Since the transferor of taxable
documents, instruments or papers is Wideland Realty
Incorporated, it should be held liable for the payment of said
tax.

Local Transfer Taxes

Republic Act No. 7160, also known as the Local

Government Code of the Philippines, provided under Section
135 therein that:

Section 135. Tax on Transfer of Real Property Ownership.

(a) The province may impose a tax on the sale, donation,

barter, or on any other mode of transferring ownership or
title of real property at the rate of not more than fifty
percent (50%) of the one percent (1%) of the total
consideration involved in the acquisition of the property
or of the fair market value in case the monetary
consideration involved in the transfer is not substantial,
whichever is higher. The sale, transfer or other
disposition of real property pursuant to R.A. No. 6657
shall be exempt from this tax.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

It shall be the duty of the seller, donor, transferor,

executor or administrator to pay the tax herein
imposed within sixty (60) days from the date of the
execution of the deed or from the date of the
decedent's death. (Emphasis Supplied)

Section 135 of Republic Act No. 7160 is clear, it is the

seller, donor, transferor, executor or administrator who shall be
liable for the payment of the tax on transfer of real property
ownership.

Therefore, Defendant Corporation, being the transferor of

the real properties under the Board Resolution, shall be liable
for the payment of such tax.

Registration Fee with the Registry of Deeds

As a general rule, the transferor of the real property shall

likewise be liable for the payment of the registration fee absent
any stipulation between the parties.
 E. Actual and Moral Damages should be awarded to the
Plaintiff

Actual Damages

The rule is long and well settled that there must be

pleading and proof of actual damages suffered for the same to
be recovered.13 In addition to the fact that the amount of loss
must be capable of proof, it must also be actually proven with a
reasonable degree of certainty, premised upon competent proof
or the best evidence obtainable.14 The burden of proof of the
damage suffered is, consequently, imposed on the party
claiming the same15 who should adduce the best evidence
available in support thereof, like sales and delivery receipts,
cash and check vouchers and other pieces of documentary
evidence of the same nature.16

In this case, the sum total of the amount paid by the

Plaintiff is P1,000,000.00 which was properly alleged in the
complaint. Because of the failure of the Defendant Corporation
to transfer the said properties, Plaintiff was compelled to go
back in the Philippines and stay in a hotel to see to it that the
properties were already transferred in his name, to which he
only found out that the properties were never really transferred
by the Defendant Corporation.

In addition, due to his old age, his temper rose for the
failure of the Defendant Corporation to transfer the subject
properties hence, he secured home care services from a private
nurse. All the expenses paid by Plaintiff were evidenced by
receipt attached as Annex E of the Judicial Affidavit of James
Band. Therefore, Defendant Corporation should indemnify the
Plaintiff for all his expenses related with the institution of this
case.

13
Canada vs. All Commodities Marketing Corporation, G.R. No. 146141, 17 October 2008, 569 SCRA 321,
329.
14
Manila Electric Corporation vs. T.E.A.M. Electronics Corporation, G.R. No. 131723, 13 December 2007,
540 SCRA 62, 79.
15
Luxuria Homes, Inc. vs. Court of Appeals, 361 Phil. 989, 1001-1002, (1999).
16
Oceaneering Contractors (Phils.), Inc. vs. Barretto, G.R. No. 184215, February 9, 2011.
Moral Damages

Generally, 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.17

An award of moral damages calls for the presentation of 1)

evidence of besmirched reputation or physical, mental or
psychological suffering sustained by the claimant; 2) a culpable
act or omission factually established; 3) proof that the wrongful
act or omission of the defendant is the proximate cause of the
damages sustained by the claimant; and 4) the proof that the
act is predicated on any of the instances expressed or
envisioned by Article 2219 and Article 2220 of the Civil Code.18

Plaintiff seeks for the award of moral damages in the

amount of P1,000,000.00. Plaintiff was able to testify on the
besmirched reputation, mental and psychological suffering
sustained by the claimant due to the failure of the Defendant
Corporation to comply with its obligations under the subject
Board Resolution Judicial Affidavit. The proximate cause of the
suffering of the Plaintiff is due to the fact that even after the
lapse of almost 10 years, the Defendant Corporation was still
unable to cause the transfer of the properties in the name of the
Plaintiff. The act of Defendant Corporation when it refused to
comply with the valid Board Resolution falls within Article 2219.
There is bad faith on the part of the Defendant Corporation in
Refusing to comply with its lawful obligation which caused the
suffering of the Plaintiff in this case.

17
Article 2217 of Republic Act No. 386.
18
Regala vs. Carin, G.R. No. 188715, April 6, 2011.
 PRAYER

WHEREFORE, premises duly considered, it is most

respectfully prayed unto this Honorable Court to render
judgement in favor of plaintiff, specifically:

1. That Board Resolution No. 02-0202 Series of 2005 should

be enforced in favor of the Plaintiff;
2. That the agricultural lands be transferred to Plaintiffs
name;
3. That Units 4 and 5 of Margaay Condominium be
transferred to Plaintiff and the rentals be delivered to
same;
4. That defendant pay capital gains tax, documentary stamp
tax, transfer tax, and registration fee;
5. That defendant pay Php 1,000,000.00 as actual damages;
6. That defendant pay Php 1,000,000.00 as moral damages

All other reliefs which the Court may deem just and
equitable are likewise prayed for.

Submitted this 27th day of April, 2016 at Baguio City,

Philippines.

Atty. Joseph Harvey M. Vehemente

Counsel for Plaintiff
11 Kusit Building, Tulisan Avenue, Baguio City, 2600
Philippines
PTR No. 393383, / January 16, 2014/ Baguio City
IBP Lifetime Mem. No. 299382, Baguio-Benguet Chapter
S.C. Roll No. 18390, MCLE Compliance No. IV-0020916
harvey.vehehemente@gmail.com
Tel. No. (074) 443-2125

Copy furnished:

ATTY. ALFRED CAMPAANO

1701 Queendom Tower
No. 6 Moron Street, Mines View Park
Baguio City