Republic of the Philippines

REGIONAL TRIAL COURT

National Capital Judicial Region
Branch 35, Manila

CARLOS B. LEOBRERA,
Plaintiff,

- versus -
Civil Case No. 35-1123

BANK OF THE
PHILIPPINE ISLANDS,
Defendant.
x----------------------------------x

MEMORANDUM

Plaintiff, CARLOS B. LEOBRERA, by counsel, to this

Honorable Court, respectfully submits this Memorandum.

STATEMENT OF THE CASE

This case is an action for the annulment of foreclosure

sale with damages filed by plaintiff, Carlos B. Leobrera against
defendant, Bank of the Philippine Islands involving the
foreclosure of plaintiff’s real estate properties used as security
in his loan from said bank.

STATEMENT OF FACTS

1. Plaintiff who is engaged in shell manufacture, retail

and shell craft export has been a valued client of the
defendant and had export business transactions with the
latter for more than ten years.
2. On November 15, 1985, plaintiff obtained a loan of
Five Hundred Thousand Pesos (P500,000.00) from defendant
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Bank. The same is covered by a Promissory Note1 (PN017-

85/0224-0) to be paid within three (3) years from date of
execution, with a quarterly amortization of Forty One
Thousand Six Hundred Sixty Six Pesos and Sixty Six Centavos
(P41,666.66). As security, a real estate mortgage2 on certain
properties was executed by plaintiff in favor of defendant.
3. Sometime in January 1987, plaintiff, who was about
to leave for United States made repeated advices upon the
defendant that a remittance will be sent by Darlene Shells in
favor of the plaintiff in the amount of Eight Thousand Three
Hundred Fifty Dollars and Ninety Four Cents ($8,350.94).
4. Furthermore, plaintiff authorized3 the defendant to
debit his account for the payment of the amortization due on
February 9, 1987 believing that the account will have
sufficient funds in anticipation of the remittance.
5. Despite such fact, the defendant maliciously and in
bad faith, refused to accept said remittance and credit the
same to plaintiff’s account with the defendant, reasoning that
the name of the beneficiary in the remittance was not Carfel
Shell Export but Car Sales Shell Export. Nevertheless, the
defendant failed to verify from Darlene Shells the correct
beneficiary of the remittance.
6. Due to defendant’s malicious acts, plaintiff’s
business was adversely affected and prejudiced. Furthermore,
plaintiff was unduly deprived of receiving the remittance which
would answer for his amortization loan due on February 9,
1987.
7. Since there was insufficient funds in the account of
the plaintiff due to non-credit of remittance by the defendant,
the amortization was not paid on February 9, 1987.
8. It was only upon the arrival of the plaintiff from the
United States that he learned of the defendant’s refusal of the
remittance and the non-payment of the amortization due. In
that same day, he immediately deposited4 to BPI the amount
of Twenty Six Thousand Three Hundred Pesos (P26, 300.00)
which if added to Twenty Eight Thousand Pesos (P28, 000.00)
already in his account with said bank, would be sufficient to
cover his amortization.

1
Promissory Note dated November 15, 1985, Exhibit “A” of plaintiff’s evidence.
2
Real Estate Mortgage dated November 15, 1985, “B” of plaintiff’s evidence.
3
Special Power of Attorney dated January 10, 1987 is herein attached as Exhibit “C”
of plaintiff’s evidence.
4
BPI Deposit Slip dated February 11, 1987, Exhibit “D” of plaintiff’s evidence.
 3

9. Such fact notwithstanding, the defendant advised

plaintiff in a letter5 dated February 12, 1987 that the
amount deposited was no longer sufficient as defendant
decided to accelerate the maturity of the account and
requested the full payment of the balance in the amount of
Thirty Three Thousand Three Hundred Thirty Three Pesos
and Thirty Two Centavos (P33,333.32) including interest and
penalties to be paid on or before February 27, 1987.
10. Subsequently, defendant decided to foreclose the
two properties of the plaintiff under the Real Estate Mortgage
agreement which worked injustice to the plaintiff since there
was no delay on his part that will warrant the foreclosure.
11. In another incident, plaintiff who was doing
business with a foreign buyer, was unable to negotiate with
defendant (plaintiff was restricted to withdraw only from
defendant) the Letter or Credit in his favor (LC No.
5600053 C) in the amount of One Thousand Seven Hundred
Sixty Three US Dollars and Fifty Cents (US$1,763.50). This
occurred despite defendant’s collection from plaintiff of the
handling fee of Three Hundred Sixty Pesos (P360.00).

ISSUES

I.
WHETHER OR NOT THE DEFENDANT BANK OF THE
PHILIPPINE ISLANDS IS GUILTY OF BAD FAITH IN
REFUSING TO ACCEPT THE REMITTANCES FROM
PLAINTIFF’S CLIENT?

II.
WHETHER OR NOT DEFENDANT MALICIOUSLY
FORECLOSED PLAINTIFF’S PROPERTIES COVERED BY
THE REAL ESTATE MORTGAGE?

III.
WHETHER OR NOT PLAINTIFF CAN BE CONSIDERED IN
LEGAL DELAY FOR THE AMOUNT OF AMORTIZATION
THAT FELL DUE ON FEBRUARY 9, 1987?

5
BPI’s letter dated February 12, 1987 addressed to plaintiff Leobrera,
Annex “E” of plaintiff’s evidence.
 4

IV.
WHETHER OR NOT THE FORECLOSURE SALE OF
PLAINTIFF’S PROPERTIES SHOULD BE ANNULLED?

V.
WHETHER OR NOT PLAINTIFF IS ENTITLED TO AN
AWARD OF DAMAGES FOR THE PREVIOUS ACTUATIONS
OF BANK OF THE PHILIPPINE ISLANDS?

DISCUSSION

I. BPI is guilty of
bad faith in refusing
to accept the
remittances from
plaintiff’s client.

Plaintiff testified6 in open court that he has long

transacted with defendant, Bank of the Philippine Islands
(BPI), and undoubtedly be considered as a preferred client.
The minor inconsistency as to the name of the beneficiary,
which is supposedly Carfel Shell Export, but Car Sales Shell
Export appeared on the remittance, could have easily been
verified from plaintiff or the sender Darlene Shells, had BPI
really acted in good faith and in accordance with its ordinary
banking practices.

The Supreme Court has consistently ruled in long of cases

that “the diligence required of banks is more than that of a
Roman pater familias or a good father of a family. The highest
degree of diligence is expected.” 7

In the case of PNB v. Sps. Chong8 that has a factual milieu

similar to this case, the Supreme Court enunciated that:
“PNB miserably failed to do its duty of exercising
extraordinary diligence and reasonable business prudence. The
disregard of its own banking policy amounts to gross negligence,
which the law defines as negligence characterized by the want of
even slight care, acting or omitting to act in a situation where
there is duty to act, not inadvertently but wilfully and

6
Judicial Affidavit of Carlos B. Leobrera dated February 13, 2018, Exhibit “F” of plaintiff’s
evidence; TSN dated April 17, 2018.
7
PNB vs. Sps. Chong, G.R. No. 170865, April 25, 2012.
8
Id.
 5

intentionally with a conscious indifference to consequences in so

far as other persons may be affected.”

Clearly, BPI has the duty to observe extraordinary

diligence in its conduct not only towards its customers, in
general, and more importantly, to its valued clients like Mr.
Leobrera. More so, BPI miserably failed to establish the
ordinary bank practice undertaken by their company with
respect to the discrepancy of information in
accepting/refusing remittance.

In the same vein, it is worthy to note that BPI presented

during trial series of documents pertaining to plaintiff’s
personal information that are not only questionable but also
can be concluded as falsified, on account of the glaring
discrepancies to the signature of the

Thus, BPI’s unjustified refusal in accepting the

remittance sent by Darlene Shells in favor of the plaintiff
amounted to bad faith and gross negligence.

II. BPI acted

maliciously when it
foreclosed plaintiff’s
properties.

Defendant BPI acted in posthaste to foreclose the

property of plaintiff without giving the latter the opportunity to
make good his obligation, if indeed he failed to settle the
amortization due, there be no formal demand of payment
given.
Plaintiff’s issuance of the Special Power of Attorney (SPA)
expressly authorizing defendant BPI to debit from plaintiff’s
account the amount of the amortization that will fall due on
February 9, 1987 is a glaring act that he has no real intention
to evade his obligation.
In fact, were it not for the unjustified refusal of BPI in
accepting the remittance from plaintiff’s Darlene Shells, the
amount of which is sufficient to settle the amortization, there
will be no need to foreclose the property subject of mortgage.

III. There is no legal

delay as
contemplated under
 6

the law in plaintiff’s

payment of the loan
amortization.
Article 1169 of the Civil Code explicitly provides:

“Art. 1169. Those obliged to deliver or to do something incur

in delay from the time the obligee judicially or extrajudicially
demands from them the fulfillment of their obligation. xxxx”

The requirement of prior demand may only be dispensed

with if the obligation falls under the instances where demand
would not be necessary, but this case does not fall squarely on
any of those excepted items enumerated under Art. 1169, 2 nd
paragraph. Hence, the need of prior demand is still the
prevailing rule herein.

Unfortunately, BPI failed to make any demand of

payment for the amortization that fell due on February 9,
1987. The letter9 dated February 12, 1987 sent by BPI to
plaintiff is only a notice informing that the amount deposited
was no longer sufficient as defendant decided to accelerate
the maturity of the account and requested the full payment of
the balance in the amount of Thirty Three Thousand Three
Hundred Thirty Three Pesos and Thirty Two Centavos
(P33,333.32) including interest and penalties to be paid on or
before February 27, 1987.

Nevertheless, prior to plaintiff’s receipt of said letter, he

already deposited with BPI the amount of Twenty Six
Thousand Three Hundred Pesos (P26, 300.00) which if added
to Twenty Eight Thousand Pesos (P28, 000.00) already in his
account with said bank to be debited, would be sufficient to
cover his amortization. Such fact was undisputed by
defendant during trial.

Hence, plaintiff not having been considered in legal delay

in payment of the loan amortization, the foreclosure of the real
estate mortgage is unnecessary.

IV. Foreclosure of
plaintiff’s property
should be annulled

9
BPI’s letter dated February 12, 1987 addressed to plaintiff Leobrera,
Annex “E” of plaintiff’s evidence.
 7

as it is devoid of any
basis in fact and in
law.

To reiterate, defendant BPI’ s act of foreclosing plaintiff’s

properties was made in bad faith considering that when the
obligation fell due on February 9, 1987, the latter was not yet
considered in delay as contemplated under the law. More so, it
should be emphasized that defendant failed to make a formal
demand for the said obligation.

The unilateral acceleration of BPI of the loan is

unfounded and unwarranted considering that a total of Fifty
Four Thousand Four Hundred Pesos (P54,300.00) was
deposited in plaintiff’s account and made available within
defendant’s reach, as early as February 11, 1987. Said
amount is more than sufficient to cover the loan amortization
of Forty One Thousand Six Hundred Sixty Six Pesos and Sixty
Six Centavos (P41,666.66).

Considering the sufficient amount of deposit in plaintiff’s

BPI account to cover the loan amortization, defendant’s
consequent foreclosure of mortgage amounted to unjust
enrichment.

In accordance with jurisprudence, there is unjust

enrichment when a person unjustly retains a benefit to the
loss of another, or when a person retains money or property of
another against the fundamental principles of justice, equity
and good conscience.10 Thus, in view of the foregoing, it
cannot be denied that defendant is guilty of unjust
enrichment.

V. Plaintiff is
entitled to receive
actual damages,
moral damages and
attorney’s fees on
account of BPI’s
malicious business
dealings.

10
Manila International Airport Authory vs. Avia Filipinas International, Inc., G.R. No. 180168,
February 27, 2012.
 8

By its malicious and negligent acts, defendant breached

its fiduciary duty towards its long-term client plaintiff
Leobrera, thereby causing grave injustice and irreparable
injury to the plaintiff and his business, which in turn, justifies
an award for damages, attorney’s fees and costs of suit.
Jurisprudence tells us that moral damages are awarded
to enable the injured party to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he
has undergone, by reason of the defendant's culpable action.11

The willful and malicious actions of the defendant in

depriving Leobrera of his real property without any valid legal
justification, caused latter suffered mental anguish, serious
anxiety, sleepless nights, physical suffering, fright, wounded
feelings, moral shock, social humiliation, and more
importantly, debased reputation caused by the willful and
malicious actions of defendant, which makes him entitled to
moral damages.

Likewise, in the case of ABS-CBN Broadcasting

Corporation v. Court of Appeals12 provides that in the absence
of stipulation, attorneys fees may be recovered as actual or
compensatory damages under any of the circumstances
provided for in Article 2208 of the Civil Code, to wit:

"Art. 2208. In the absence of stipulation, attorney's

fees and expenses of litigation, other than judicial costs,
cannot be recovered, except:
xxx

(2) When the defendant's act or omission has

compelled the plaintiff to litigate with third persons or
to incur expenses to protect his interest; x x x"13

The surrounding circumstances would show that due to

the deliberate, willful and malicious acts of the defendant BPI,
unjust enrichment, and unceremonious manner by which
Leobrera was deprived of his properties, had placed the latter
in no other recourse but to a hire a legal counsel in order to
protect his interest and be able to recover what is due to him.

11
Mendoza, et al. vs. Sps. Gomez, G.R. No. 160110, June 18, 2014.
12
361 Phil. 499, 528 (1999).
13
Supra note 13.
 9

Thus, it is but proper that the attorney's fees and cost of

litigation be awarded in favor of plaintiff.

Gauged by foregoing contentions, it is inevitable to

conclude that the scales of justice must tilt in favor of plaintiff,
as BPI clearly acted in bad faith, unjustly enriched Leobrera
and exhibited reprehensible conduct in its business dealings.

PRAYER

WHEREFORE, premises considered, plaintiff most

respectfully pray the judgment be rendered against BPI and
that the reliefs prayed for in his complaint be granted in his
favor.

Other just and equitable reliefs warranted under the

premises are likewise prayed for.

City of Manila, May 21, 2018.

SEGUERRA LAW FIRM

Counsel for Mr. Leobrera
Unit 301, 3rd Floor, Torre de Santo
Tomas, España Boulevard, 1015
Sampaloc, Manila

By:

JAMES CHRISTIAN S. BALLECER

Roll of Attorney No. 92924
IBP No. 10274656/2-4-16/Pasig
PTR No. 2469956/ 2-4-16/Manila
MCLE Compliance No. V-0021324
Cel. No. (+639) 0917-6829292
Email: jamesballecer@gmail.com

Copy Furnished:

Fernandez Law Firm

2nd, 3rd and 4th Floors, The Valero Street
1227 Salcedo Village, Makati City
 10

Republic of the Philippines )

City of Manila ) S. S.

AFFIDAVIT OF SERVICE

I, James Christian S. Ballecer, of legal age, with office address at

Unit 301, 3rd Floor, Torre de Santo Tomas España Boulevard, Sampaloc,
Manila, after being duly sworn in accordance with law, depose and state
that:

1. Pursuant to Sec. 12, Rule 13 of the 1997 Rules of Civil

Procedure, 21 May 2018, I personally filed and served through registered
mail the "Memorandum" filed by Seguerra Law Firm before the Regional
Trial Court of Manila in the case entitled, “Carlos B. Leobrera vs. Bank of
the Philippine Islands”, Civil Case No. 35-1123, to:

FERNANDEZ LAW FIRM

2nd, 3rd and 4th Floors, The
Valero Street, Salcedo R.R. No. DQRXN1234
Village, Makati City 1227

2. The subject pleading was delivered to the post office at

Manila as evidenced by Registry Receipt No. __DQRXN1234___, hereto
attached, with instruction to the Postmaster to return the same to sender
should addressee/s fail to acknowledge receipt thereof within ten (10)
days from notice.

Done at Quezon City, this 21st day of May 2018.

James Christian S. Ballecer

Affiant

SUBSCRIBED AND SWORN to before me this 21st day of May

2018, affiant exhibited to me his Unified Multi-Purpose I.D. with no.
CRN-0111-1364003-9 issued at Quezon City.

Doc. No. ____ ;

Page No. ____ ;
Book No.____ ;
Series of 2018.