DEF Complainant FINAL

Republic of the Philippines
REGIONAL TRIAL COURT

7th Judicial Region
Branch ___
Dumaguete City, Negros Oriental
DEF CIVIL CASE NO. ________

Plaintiff, FOR: Breach of Contract and
Claim for Damages with
-versus- Prayer for TRO and
Preliminary Injunction
ABC
Defendant,
X----------------------------------------------/
COMPLAINT
Plaintiff, through the undersigned counsel, unto this Honorable Court,

respectfully alleges that:
1. Allegations Common to All causes of Action:

1.1 The Plaintiff DEF is a corporation duly organized and existing under
and by virtue of the laws of the Republic of the Philippines.
1.2 The Defendant, ABC, Inc., owns a prime parcel of land in Calindagan,
Dumaguete City, where it may be served with summons and other
court processes;
1.3 DEF approaches the land owned by ABC and proposes a joint venture
to develop a planned community of condominiums, malls, and service
centers.
1.4 Under the terms of the joint venture, ABC’s exposure shall only be
limited to its contribution of the land. DEF, on the other hand, shall
finance the development exclusively from its own resources, without
utilizing the land as collateral for a loan.
1.5 To pursue the joint venture, the parties organize a new corporation,
Montecillo Arms Development Corporation, with ABC holding 30%
and DEF owning 70% of the equity.
1.6 Soon after the joint venture company is formed, DEF requires ABC to
assign its land to the joint venture company. ABC is reluctant at first,
because it would like DEF to first put in a substantial portion of capital
for the project as a counterpart. However, DEF is very persuasive, and
ABC assigns the property.
1.7 Because of the assignment, however, ABC acquires control of the
joint venture company pursuant to the tax-free provision in the
Internal Revenue Code which requires that the owner of an asset
exchanged for equity must retain at least majority control of the
corporation to which the property has been transferred.
1.8 In the meantime, DEF has not put in its capital, although it has
succeeded in interesting a few investors to acquire shares from the joint
venture company. The proceeds of these sales have been deposited in
the joint venture company’s bank account.
1.9 After more than a year, DEF still has not introduced improvements on
the property. ABC then ousts the DEF representatives in the joint
venture Board and takes control of the company. DEF, however, refuses
to surrender the company’s bank account.
2. Affirmative Allegations
2.1 ABC ousts the DEF representatives in the joint venture Board and
takes control of the company. This is a breach of contract on the part of
ABC. The following ground for liability in the performance of obligations:
Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages.
In the present case, violation of the terms of the obligation (violation) is the
act done by ABC.
Negligence are being classified. Article 1172 provides that:
Art. 1172. Responsibility arising from negligence in the performance of

every kind of obligation is also demandable, but such liability may be
regulated by the courts, according to the circumstances.
According to Paras (2016) there are three kinds of culpa classified

according to the source of the obligation, the following are:
a. Culpa contractual (contractual negligence – or that which results
in a breach of a contract).
b. Culpa aquiliana (civil negligence or tort or quasi-delict)
c. Culpa criminal (criminal negligence – or that which results in the
commission of a crime or a delict)
The first kind of negligence is the act committed by ABC.
2.2 Under the terms of the joint venture, ABC’s exposure shall only be
limited to its contribution of the land, hence, there is no valid ground that
ABC may take control over the said joint venture. The taking of the joint
venture’s control by ABC is a form of rescinding their agreement,
however, the contract made by the two entities is not to be considered as a
rescissible contract.
Art. 1385 provides that:
Rescission creates the obligation to return the things which were the object
of the contract, together with their fruits, and the price with its interest;
consequently, it can be carried out only when he who demands rescission
can return whatever he may be obliged to restore.
Neither shall rescission take place when the things which are the object of
the contract are legally in the possession of third persons who did not act
in bad faith.
In second paragraph of Article 1385, rescission cannot take place because

shares from the joint venture were acquired by investors, who are third
persons who did not act in bad faith.
Art. 1381 provides the following grounds make a contract rescissible:
(1) Those which are entered into by guardians whenever the wards whom
they represent suffer lesion by more than one-fourth of the value of the
things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter suffer

the lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in any
other manner collect the claims due them;
(4) Those which refer to things under litigation if they have been entered
into by the defendant without the knowledge and approval of the litigants
or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to

rescission.
None of the foregoing are applicable on this case which gives ABC no
right to oust the DEF Representatives.
2.3 The taking control of ABC over the company carries with it the
demand of the possession of the company’s bank account.
The sudden change in the leadership and takeover have caused DEF to
keep the records of the bank account from being shown. Section 73 of the
Revised Corporation Code provides:
That it shall be a defense to any action to look into the corporate records
of a company, if the person demanding to examine and copy excerpts from
the corporation’s records and minutes has improperly used any
information secured through any prior examination of the records or
minutes of such corporation or of any other corporation, or was not acting
in good faith or for a legitimate purpose in making the demand to examine
or reproduce corporate records, or is a competitor, director, officer,
controlling stockholder or otherwise represents the interests of a
competitor.
Not knowing whether the demand to look into the records of the bank
account could be a potential danger to the future of the corporation and due
to the sudden events that have occurred in the leadership, ABC has no right
to have the corporation’s bank account.
First Cause of Action:
3.1 The foregoing allegations are repleaded herein by reference.
3.2 Based on the foregoing, it is evident that the DEFENDANT ABC is liable
for damages arising from the bad faith in deliberately breaching its contract,
and depriving the representatives of DEF of their right of control over the
joint venture.
3.3. The damage suffered by DEF’s representatives is estimated at PHP
600,000.00 , Philippine currency, for which the DEFENDANT must be
made to pay.
Second Cause of Action:

4.2 As a consequence of the acts of the DEFENDANT ABC, which are contrary
to good customs and public morals, for it affected the interests of third
persons, DEFENDANT ABC must be made to pay Exemplary Damages of
PHP 5,000,000.00 , Philippine currency, to serve as an example for the
public good and prevent ABC, Inc. in performing such acts in the future.
Third Cause of Action:

5.2 By reason of DEFENDANT ABC’s actions, DEF was constrained to hire
the services of a lawyer for which the legal fees have been set at PHP
300,000.00, Philippine currency.
5.3 DEFENDANT ABC must be made to pay Legal Fees in the amount of PHP
300,000.00, Philippine currency.
Fourth Cause of Action:

6.1 Other relief as may be proper and just in the premises are likewise prayed
for.
PRAYER
WHEREFORE, PLAINTIFF respectfully prays for judgment to be rendered in

its favor, and further prays for an order directing DEFENDANT to pay to the
PLAINTIFF damages, as follows:
a. Actual damages in the amount of PHP 600,000.00, Philippine currency;
b. Exemplary damages in the amount of PHP
5,000,000.00 ,Philippine currency;
c. Attorney’s fees in the amount of PHP 300,000.00, Philippine currency;
d. Such other relief as may be just and proper in the premises.
RESPECTFULLY SUBMITTED.
Counsel for the Complainant

DEF Complainant FINAL

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Republic of the Philippines

REGIONAL TRIAL COURT

DEF CIVIL CASE NO. ________

Plaintiff, through the undersigned counsel, unto this Honorable Court,

1. Allegations Common to All causes of Action:

Negligence are being classified. Article 1172 provides that:

Art. 1172. Responsibility arising from negligence in the performance of

According to Paras (2016) there are three kinds of culpa classified

The first kind of negligence is the act committed by ABC.

Art. 1385 provides that:

In second paragraph of Article 1385, rescission cannot take place because

Art. 1381 provides the following grounds make a contract rescissible:

(2) Those agreed upon in representation of absentees, if the latter suffer

(5) All other contracts specially declared by law to be subject to

Second Cause of Action:

Third Cause of Action:

Fourth Cause of Action:

WHEREFORE, PLAINTIFF respectfully prays for judgment to be rendered in

Counsel for the Complainant

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