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Memorandum Specific Performance

Exercise 11

Republic of the Philippines

11th Judicial Region
REGIONAL TRIAL COURT
Branch 21
Bansalan, Davao del Sur

JANI DEP, RYAN REENOLDS

Plaintiffs,

Civil Case No. 002

For: SPECIFIC PERFORMANCE
FOR ACCOUNTING AND
LIQUIDATION, DAMAGES and
ATTORNEY’S FEES WITH PRAYER
FOR TEMPORARY RESTRAINING
ORDER (TRO), PRELIMINARY
AND PERMANENT INJUNCTION
-versus –

WAYNE RAIDER,
Defendant.
x------------------------------------- /

MEMORANDUM FOR PLAINTIFF

Plaintiffs, by counsel, respectfully states that:

STATEMENT OF THE CASE

Plaintiffs Jani Dep and Ryan Reenolds filed the present action for
specific performance for accounting and liquidation, damages and
attorney’s fees with prayer for Temporary Restraining Order (TRO),
Preliminary and Permanent Injunction against Defendant Wayne
Raider. The plaintiffs alleged that they voluntarily associated
themselves together (with defendant) for the purpose of recognizing
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and affirming an existing business partnership or joint venture

“Haliwood Marketing Services” which the latter committed a breach of
Articles XIII and XIV of the said Memorandum of Agreement.
Defendant maintains as defense the New Civil Code, Article 1813 and
that no breach of contract committed.

STATEMENT OF THE FACTS

1. On 20 January 2016, plaintiffs voluntarily associated themselves

together for the purpose of recognizing and affirming an existing
business partnership or joint venture;

2. The conditions and terms of their voluntary association for the

purpose of acknowledging an existing business partnership or joint
venture are set forth in a Memorandum of Agreement appearing in the
notarial registry of Atty. Dominic E. Embodo, a notary public for and in
the province of Davao del Sur as Doc. No. 96, Page No. 19, Book No.
09, Series of 2016;

3. Plaintiffs and defendant, through the Memorandum of Agreement,

affirmed the formation and existence of “Haliwood Marketing
Services”. Albeit the said business is registered in the name of
defendant, as the sole proprietor, plaintiffs have equal contribution in
the resources and capital consisting of PHP 100,000 each, inorder to
materialize the said business, which in reality is a joint venture of
plaintiffs and defendant; (Copy of the Memorandum of Agreement is
attached as ANNEX “A”);

4. After the Memorandum of Agreement was forged affirming the

existing joint venture agreement or business partnership between and
among plaintiffs and the defendant, the latter committed breach of the
said agreement;
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5. Defendant, without a formal turnover, information upon the

plaintiffs, or a tender of his resignation, ceased being the manager of
“Haliwood Marketing Services” the joint venture business. He
abandoned his post as manager of and set up another business
competition of the said existing business partnership;

6. On 07 April 2017, defendant opened a store for furnitures, located

at Ramon delos Cientos Street, Bansalan, Davao del Sur;

7. Plaintiffs were surprised to learn that defendant left his post without
informing them, or providing them an accounting or liquidation of the
assets and liabilities of the business.

ISSUES

Given the foregoing facts and circumstances, the following issues are
presented for discussion:

I. Wayne Raider committed a breach of contract under Article XIII

and XIV rendering him liable for honoring the existing agreement;

II. Whether or not Wayner Raider may be held liable for damages;

III. Whether or not a Temporary Restraining Order (TRO),

Preliminary and Permanent Injunction should issue against Wayne
Raider.

ARGUMENTS

I. Wayne Raider committed a breach of contract under Article

XIII and XIV rendering him liable for honoring the existing
agreement.

1. The acts of defendant constitute breach of the Memorandum of

Agreement, in particular Articles XIII and XIV of the said
Memorandum of Agreement, to wit:
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XIII.
That no partner shall engage in, or invest or deal
in the securities of any business that in any way
competes with that of this firm, nor shall he give any
time or attention to any outside business, except with
the written consent of his co-partners.

XIV.
That the manager shall have the obligation to render an honest
accounting and liquidation of necessary expenses incurred in the
running of the partnership business;
That the commission of fraud by the manager in
the management or in the bookkeeping of the business
shall be sufficient cause for the expulsion from the
partnership without prejudice to the exercise of any and
all remedies in this case made and as provided for by
law. (Emphasis Ours)

Defendant’s acts of opening a competing business without the

knowledge and consent of plaintiffs, and defendant’s failure to
formally turnover the records of the business or render an
honest accounting and liquidation of the assets and liabilities of
the joint venture, clearly violate the Memorandum of
Agreement, in particular the above-quoted provisions.

2. In the case of Cathay Pacific Airways Ltd. v. Spouses

Vazquez, G.R. No. 150843, it is defined as the failure without
legal reason to comply with the terms of a contract. It is also
defined as the failure, without legal excuse, to perform any
promise which forms the whole or part of the contract.

3. The argument by the defendant that he already conveyed his

whole interest to the partnership to Brod Fit citing Article 1813
of the New Civil Code is erroneous. In the case of Josefina P.
Realbut vs. Prosencio D. Jaso and Eden G. Jaso, G.R. No.
178782, it is well settled that “(t)he transfer by a partner of
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his partnership interest does not make the assignee of such

interest a partner of the firm, nor entitle the assignee to
interfere in the management of the partnership business or to
receive anything except the assignees profits. The assignment
does not purport to transfer an interest in the partnership, but
only a future contingent right to a portion of the ultimate
residue as the assignor may become entitled to receive by virtue
of his proportionate interest in the capital.

4. Aside from conveying his whole interest in the partnership to

Brod Fit without plaintiff’s consent and knowledge, he also let
Brod Fit manage the partnership. As a rule, such assignee is not
considered as partner of the partnership as well as not entitled
to interfere in its management.

5. For said breach of the validly executed agreement, plaintiffs

demand from defendant specific performance of the stipulations
therein and to honor the existing agreement.

II. Wayne Raider liable for the payment of damages.

1. Art. 20 of the Civil Code provides that “every person who, contrary
to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.” The business of defendant was
opened recently for the purpose of directly competing with parties’
existing business. Since defendant has not yet relinquished his position
as manager and as partner, defendant is acting in conflict of interest
to the parties’ joint venture, to the prejudice of the plaintiffs. After the
opening of defendant’s business, the existing business of the parties
lost some of its accounts and clients to defendant’s newly opened
furniture store. Defendant failed to render a turnover, accounting and
liquidation of the income, profits, assets and liabilities of the parties’
business.
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2. Consequently, plaintiffs were compelled to shell out additional

money as revolving fund to continue running the partnership’s
business. Plaintiffs had to hire another manager to operate the
business, the loss of plaintiffs and the business is due to defendant’s
acts or omission amounting to at least One Hundred Thousand Pesos
(PHP 100,000);

3. In order to vindicate the rights of plaintiffs violated by defendant

and for breach of contract, plaintiff is entitled to Nominal Damages in
the amount of Fifty Thousand Pesos (PHP 50,000);

4. The afore-described malfeasances of defendant are cogently not

worth emulating by society. Plaintiffs are entitled to Exemplary
Damages in the amount of at least Fifty Thousand Pesos (PHP 50,000);

5. Likewise, defendant’s acts have caused plaintiffs’ business loss of

goodwill in the community, entitling plaintiffs Fifty Thousand Pesos
(PHP 50, 000) for Moral Damages;

6. To redress legitimate grievances and protect plaintiffs’ rights and

interests against defendant, plaintiffs were compelled to engage the
services of counsel. Plaintiffs are expected to incur litigation expenses.
Defendant should be ordered to pay plaintiffs attorney’s fees in the
amount of Fifty Thousand Pesos (PHP 50,000), plus litigation expenses
and cost of the suit;

III. A Temporary Restraining Order (TRO), Preliminary and

Permanent Injunction should issue against Wayne Raider.

1. Therequirements for the issuance of a writ of preliminary injunction

or TRO are enumerated in Section 3, Rule 58 of the Rules of Court, to
wit:

Section 3. Grounds for issuance of preliminary injunction. - A

preliminary injunction may be granted when it is established:
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(a) That the applicant is entitled to the relief demanded,

and the whole or part of such relief consists in
restraining the commission or continuance of the act or
acts complained of, or in requiring the performance of an
act or acts, eitherfor a limited period or perpetually;

(b) That the commission, continuance or non-

performance of the act or acts complained of during the
litigation would probably work injustice to the applicant;
or

(c) That a party, court, agency or a person is doing,

threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to
render the judgment ineffectual.

2. Plaintiffs are entitled to the relief demanded in this Complaint, and

the whole or part of such reliefs consist in restraining perpetually
defendant from continuing with his illegal activities of operating a
competing business to that of the existing business of the partnership
or joint venture pursuant to the Memorandum of Agreement;

3. The continuation of the aforesaid activities or competing business

of defendant during the litigation would work injustice to the plaintiffs;

4. Unless a Temporary Restraining Order (TRO) be granted, great and

irreparable injury would result to plaintiffs before the matter can be
heard on notice;

5. Apart from the ongoing loss of income or loss of valued clients of

Haliwood Marketing Services to defendant’s competing business,
defendant is presumed to be continuously misappropriating for his own
benefit or for the competing business he has set up, the capital share
contribution of plaintiffs, the accruing profits, as well as the income of
the partnership;
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6. Unless defendant’s operation is halted and defendant is compelled

to render an honest accounting and liquidation of the joint venture’s
assets and liabilities, income and profits, plaintiffs would have to
endure the economic damage and prejudice defendant is causing them
by defendant’s illegal and competing business;

PRAYER

IN THE INTEREST OF JUSTICE, plaintiffs most respectfully

pray that a Temporary Restraining Order (TRO) be immediately issued
by this Honorable Court prohibiting defendant from continuing the
operation of his competing business with the existing business of the
partnership.

After due notice and hearing, a writ of Preliminary Mandatory

Injunction be issued affirming the TRO;

After the trial on the merits, judgment be rendered as

follows:
a. Making the TRO and/or Preliminary Mandatory Injunction
permanent;

b. Ordering the defendant to render an honest accounting

and liquidation of the assets, liabilities and necessary expenses of
the partnership or joint venture;

c. Holding the defendant accountable to the capital

contribution of the plaintiffs in the amount of PHP 100,000 each,
or a total of PHP 300,000, plus the income and profits accruing;

d. Ordering defendant to pay to plaintiffs Actual and

Compensatory Damages in the amount of at least One Hundred
Thousand Pesos (PHP 100,000);
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e. Ordering the defendant liable for Nominal Damages as a

consequence of his breach of the Memorandum of Agreement in
the amount of Fifty Thousand Pesos (PHP 50,000);

f. Ordering the defendant to pay plaintiffs Exemplary

Damages in the amount of at least Fifty Thousand Pesos (PHP
50,000);

g. Ordering defendant liable to plaintiffs for Moral Damages

in the amount of Fifty Thousand Pesos (PHP 50,000); and

h. Ordering the defendant to pay plaintiffs attorney’s fees in

the amount of Fifty Thousand Pesos (PHP 50,000), plus litigation
expenses and cost of the suit.

Plaintiffs likewise pray for other relief just and equitable under the
circumstances of this case.

RESPECTFULLY SUBMITTED, this 30th of May 2018, at

Bansalan, Davao del Sur, Philippines.

DOMINIC E. EMBODO,MBA
PTR No. 4569519; 01/02/2015
IBP No. 924910; 12/16/2015 (for 2016)
Davao del Sur Chapter
Roll of Attorneys No. 34567
TIN 2378-000-980
MCLE Compliance No. IV-0000367
Issued on 04 November 2015

Copy Furnished:
By Personal Service

ATTY. VANESSA R. MATURA

MATURA-LOVITOS LAW OFFICE
Counsel for the Defendant
143 Bakakon Street Bansalan, Davao del Sur