Republic of the Philippines

Second Judicial Region

REGIONAL TRIAL COURT
Branch 37
Bayombong, Nueva Vizcaya

MELCHOR J. DUQUE, ET AL.,

Plaintiffs-Appellees,

CIVIL CASE NO. 1166

versus -

FRANCISCO BIBAT, ET AL.,

Defendants-Appellants.

x- - - - - - - - - - - - - - - - - - - - - - - x

APPEAL MEMORANDUM

COME NOW, the Plaintiffs-Appellees, through the

undersigned counsel, and before the Honorable Court, formally state their
case and by way of justification on their rightful demand of reconveyance
and on their peaceful possession and ownership over a parcel of land where
their family home is constituted, covered by title number TCT No. T-71129
with an area of THREE HUNDRED SIXTY SEVEN (367) square-meters,
more or less, situated at Sitio Mapatang, San Fernando, Bambang, Nueva
Vizcaya, as follows:

BRIEF STATEMENT
OF FACTS AND THE CASE
 The subject Lot 5 is inherited by plaintiff from his parents and
is an actual occupant of the same. Melchor being the most impoverished
among the 7 siblings and has no money to finance the survey and titling, he
mortgaged the same lot to his brother Gaudencio in the sum of P4,500.00
as his share for the expenses.

When Melchor redeemed the lot, he noticed that it was already

quitclaimed by his brother Gaudencio to his son Wilferdo,Sr. Even then,
Gaudencio and Wilfredo acknowledges that plaintiff Melchor is the real
owner of the same.

On February 3, 1996, Melchor sold a portion of his lot, with

an area of 4,000 square meters to defendant Francisco Bibat as evidenced
by a Catulagan, with a remaining portion of 367 square-meters of full
ownership to Melchor, said portion is where his family home is erected.

Francisco immediately built a house to the purchased portion

but allegedly due to lack of capital to finance its construction, he borrowed
the title (TCT No. T-71129) from Melchor and have it mortgaged to
defendant Agribusiness Rural Bank (Sta. Fe), Inc., Bambang Branch with
the condition that Francisco shall redeem the property within one (1) year
and provided that the portion of 367 where his house is erected shall not be
affected, to which the bank also acceded. Upon securing a Special Power of
Attorney (SPA) from Wilfredo, Sr. (being the registered owner as appearing
in the title) Francisco obtained the loan of P50,000.00 and subsequently
restructured the same in the sum of P160,000.00. The said transactions
were duly annotated in the title.

To strengthen the same agreement, Melchor and Francisco

subsequently executed an Agreement on June 21, 2002, with the main
assertion that the subject of real estate mortgage executed by Francisco,
covered only the portion of 4,000 square meters which he bought, to the
exclusion of the remaining portion of 367 square meters owned by
Melchor.

However, Francisco and his family suddenly transferred

residence, to Isabela without redeeming the property, hence, defendant
bank foreclosed the same and in evident bad faith, selfishness, greediness
of the said bank, and in derogation of the rights of the plaintiffs, it
consolidated the entire property under TCT No. T-150832, with the
inclusion of the portion owned by Melchor of 367 square meters and
subsequently sold the entire property to defendant spouses Marvin Viado
and Claire Gapuz, to the damage and prejudice of the plaintiffs.
 Defendant spouses Marvin Viado and Claire Gapuz, are now
processing the issuance of title covering the entire lot and their laborers
constructing a concrete fence around the house of the plaintiffs, thereby,
making them suffer sleepless nights, loss of appetite, wounded feelings,
serious mental anguish and the like, with the idea that the defendant bank
bullied them and that their right of peaceful possession and full ownership
over the subject portion of lot was disrespected.

Plaintiffs then brought this case to protect their rights and

interests over the subject portion of land belonging to them, before the
Municipal Trial Court of Bambang, Nueva Vizcaya. The lower court
rendered its decision dated June 10, 2013 in favor of the plaintiff, based on
the allegations of the complaint defendants having not filed their answer
(except for the defendant bank who filed an answer, however, was patently
defective for not being verified).

The defendants appealed to this Honorable Court (RTC), and

although the defendants counsel failed to observe the prescribed rules and
procedures on appeal, this good court opined in its Order dated October 1,
2013, to wit:
While agreeing with the comment of Plaintiffs-
appellees that Rule 40 requiring the filing of memorandum on
appeal is mandatory, the court is of the opinion that the rule may
be relaxed due to the prima facie merits of the case. The
appellants may not lose property through a technicality due to
the gross negligence or incompetence of the counsel.

The court therefore reconsiders the order dismissing the

appeal.

The memorandum on appeal filed by the appellants is

admitted. Appellees are given fifteen days from receipt hereof to
file their memorandum on appeal.

SO ORDERED.

Hence, this appeal memorandum.

THE ISSUES

1.) Whether or not the defendant Bank in foreclosing and subsequently

selling the entire lot is tainted with bad faith;

2.) Whether or not the plaintiffs are entitled to the reconveyance of the
subject portion of 367 square meters;
 3.) Whether or not plaintiffs are entitled to moral and exemplary
damages;

DISCUSSIONS

As to the first ISSUE:

WHETHER OR NOT THE DEFENDANT BANK IN

FORECLOSING AND SUBSEQUENTLY SELLING THE
ENTIRE LOT IS TAINTED WITH BAD FAITH

From the beginning, defendant Agribusiness Rural Bank (Sta.

Fe), Inc. Bambang Branch was aware that the only area which Francisco
was mortgaging was 4,000 square meters as they had agreed upon the
matter during the survey being conducted by them. Before defendant bank
approved the application for loan of Francisco, the bank personnel made
an ocular and actual inspection on the proposed collateral land and/or
applied for real property mortgage. It had noticed therefore of the
occurrence of a claim over a portion to which the plaintiff occupies. It is
but a natural reaction then from a bank to further inquire on the apparent
third party claim over the property for its assurance that there be no other
existing claims over it, otherwise, the purpose of having it be subject to
collateral will be defeated.

It is very obvious then that upon grant of the loan, the bank
knew and acceded to the agreement that the subject portion shall not be
covered by the real property mortgage executed by defendant Francisco
over the portion of 4,000 square meters that he bought from Plaintiff
Melchor.

The defendant bank knew from the beginning of the existing

right of the plaintiffs, having occupied a portion therein, it is not therefore a
simple bad judgment on their part in foreclosing and subsequently selling
the whole lot to defendant spouses Marvin Viado and Claire Gapuz, but
rather a conscious doing of a wrong due to dishonest purpose of moral
obliquity, infected with the intent to gain and to take advantage over the
inferiority of the plaintiffs having mere paupers and less privileged in life.

Consolidating therefore upon the foreclosure of the whole Lot

5, is tainted with malice on the part of the defendant bank and took
advantage over the unwritten agreement with the plaintiff in order to enrich
itself from such subject portion which was NEVER included in the subject
mortgage.
 The term bad faith connotes a serious willingness and
deliberate intent on the part of the erring party to do wrong or to cause
damage to another. (Cajucom v. Philippine Commercial and Industrial
Bank, 62316-R, November 23, 1979)

As to the second ISSUE:

WHETHER OR NOT THE PLAINTIFFS ARE ENTITLED TO

THE RECONVEYANCE OF THE SUBJECT PORTION OF 367
SQUARE METERS

As evidenced by the Agreement executed by defendant

Francisco and plaintiff Melchor with the main affirmation that the subject
of real estate mortgage executed by Francisco, shall cover only the portion
of 4,000 square meters which he bought, to the exclusion of the remaining
portion of 367 square meters owned by Melchor.

It is crystal clear, the area that was sold by the Melchor to

Francisco is only 4,000 square meters Francisco therefore have no
right whatsoever to alienate the other portion of 367 square meters
belonging to the plaintiffs for the very simple reason that he is not an
owner to such part.

By virtue of ownership, a thing pertaining to one person is

completely subjected to his will in everything not prohibited by public law
or the concurrence with the rights of another. (Garcia v. Ramos, CV-05709,
March 13, 1986)

Ownership encompasses a broader spectrum and includes at

least the following five attributes: jus utendi, jus fruendi, jus abutendi, jus
disponendi, and jus vindicandi. (Yacapin v. Chavaria, 53127-R, September
15, 1981)

The rights included in ownership are: 1) jus utendi right to

use; 2) jus fruendi right to enjoy or receive the fruits; 3) jus disponendi
right to dispose; 4) jus vindicandi right to vindicate or recover; 5)
jus abutendi right to abuse, 6) right to exclude (Art. 429, Civil Code);
and 7) right to enclose (Art 430, Civil Code). Kian v. Canlas, 24771-R,
August 24, 1961. (emphasis and underscoring ours)

Defendants in their Brief attempts to shield their acts

detrimental to the right of the plaintiffs the Statute of Frauds under the
Civil Code, to wit:
 Art. 1403. The following contracts are unenforceable,
unless they are ratified:

(1) . . .

(2) Those that do not comply with the Statute of Frauds as set
forth in this number. In the following cases an agreement
hereafter made shall be unenforceable by action, unless the
same, or some note or memorandum thereof, be in writing, and
subscribed by the party charged, or by his agent; evidence,
therefore, of the agreement cannot be received without the
writing, or a secondary evidence of its contents:

xxx xxx xxx

(e) An agreement for the leasing for a longer period than one
year, or for the sale of real property or of an interest therein.

xxx xxx x x x (underscoring ours)

Careful scrutiny of above-cited provision CANNOT be

applied in the case at bar. The agreement at the outset was that:

Francisco shall redeem the property within one (1) year and provided
further that the portion of 367 where his house is erected shall not be
affected, to which the bank also acceded.

The provision therefore of the statute of frauds may not be

followed. If the term of the mortgage executed by defendant Francisco
went beyond the period of one (1) year, such fault cannot be imputed on the
plaintiff due to the noncompliance of defendant Francisco in not redeeming
the subject property as agreed upon by them. The bad faith on the part of
Francisco in not redeeming the property on time cannot be imputed on the
plaintiff, more so that his interest over the subject portion is at stake.
When defendant Francisco failed to redeem it on time, herein
plaintiff then made a move in order to have their agreement be put into
writing as evidenced by an Agreement executed between Francisco and
Melchor and in order that his right over the subject shall be secured.
Defendant Francisco affixed his signature voluntarily on the said
instrument thereby recognizing plaintiff Melchors right over the subject
portion. Their verbal agreement at the outset then was ratified by the
subsequent execution of an Agreement which deserves to be respected by
the defendant Bank.

As to the third ISSUE:

 Whether or not plaintiffs are entitled to moral and exemplary
the damages

The plaintiffs-appellees with the thought of losing an only

property and a family home, whose rightful possession and ownership was
disturbed and as a result they suffer sleepless nights, loss of appetite,
wounded feelings, serious mental anguish and the like, thereby making
them rightful to be entitled for moral damages and by way of example or
correction, the award of exemplary damages against the defendants-
appellants.

Damages imposed in order to suppress wanton acts.

Necessarily, its imposition presupposes the commission of some acts
designed to deliberately, willfully and intentionally cause harm, damage or
injury to the rights of others. (Cajucom v. Philippine Commercial and
Industrial Bank, 62316-R, November 23, 1979)

PRAYER

WHEREFORE, premises considered, it is most respectfully

prayed of this Honorable Court, after careful scrutiny of the issues and
arguments presented along with all the legal bases used thereon:

(1) To render a Decision in favor of herein plaintiffs-appellees and

against the defendants-appellants;

(2) To issue an Order that plaintiffs- appellees possession over the

property must be respected and maintained;

(3) To issue an Order for the reconveyance of the portion of 367

square meters to plaintiffs-appellees, and the subsequent
segregation of the same from the title TCT No. T-150832;

(4) Ordering the defendant spouses Marvin Viado and Claire Gapuz
to forever abstain from pestering and/or disturbing the peaceful
possession and ownership of the plaintiff-appellees over the
subject portion;

(5) Issue an order paying herein plaintiff-appellees moral and

exemplary damages;
 (6) Such other reliefs as are just and equitable under the premises are
likewise prayed for.

Bayombong, Nueva Vizcaya, October ___,2013

FIDEL G. SANTOS

Counsel for Plaintiff-Appellees

156 Bonfal West, Bayombong, Nueva Vizcaya

PTR No. 0038990, dated January 2, 2013

Bayombong, Nueva Vizcaya

IBP Fees OR No. 889095, dated January 2, 2013

MCLE Compliance No. IV-0010762

Roll No. 48362

VERIFICATION AND CERTIFICATION

We, the undersigned, after having been duly sworn to and oath
in accordance with law, hereby depose and state:

1. That we are the Appellees in the above entitled case;

2. That we have caused the preparation and filing of the foregoing

Appeal Memorandum;

3. That we have read and understood the contents hereof and the facts
alleged therein are true and correct of our knowledge, belief and of
available documents;
 4. That we have not commenced any action or proceeding involving the
same issues raised in the above-captioned case in the Supreme Court,
the Court of Appeals or different division thereof, or any other Court,
Tribunal or agency;

5. That to the best of our knowledge, no similar action or proceeding is

pending in the Supreme Court, the Court of Appeals, or different
divisions thereof, or any court, tribunal or agency;

6. That should it come to our knowledge that a similar action or

proceeding is pending before the Supreme Court, the Court of
Appeals, or different subdivision thereof, or any court, tribunal or
agency, we hereby undertake to notify the Court or Tribunal taking
cognizance of the above-entitled case of such fact within five (5)
days from receipt of such knowledge;

7. That we are executing this sworn statement in compliance with

Supreme Court Administrative Circular No. 04-94 and Section 3,
Rule 102 of the Revised Rules of Court.

MELCHOR J. DUQUE CLARITA A. DUQUE

Affiant Affiant

SUBSCRIBED AND SWORN to before me this _____day of

October , 2013 at Bayombong, Nueva Vizcaya.

Doc. No._______
Page No._______
Book No._______
Series of 2013