REPUBLIC OF THE PHILIPPINES

7TH JUDICIAL REGION

REGIONAL TRIAL COURT
Branch 1, Tagbilaran City

WAKANDA VIBRANIUM COUNTRY, INC.,

Plaintiff,

-versus- Special Civil Case No. 01-002

For: Interpleader with Damages

BANK OF ASGARD,
STAN LEE and
RICARDO DALISAY,
Defendants,
x----------------------------------------------------x

MEMORANDUM
(WITH FORMAL ENTRY OF APPEARANCE)

The undersigned law firm most respectfully enters its appearance as counsel for the
Plaintiff WAKANDA VIBRANIUM COUNTRY, INC., (WVCI for brevity) in the above-entitled case.
Henceforth, it is most respectfully prayed that all notices and other legal processes be sent to
and furnished the undersigned at the address indicated herein below.

AND BY WAY OF MEMORANDUM –

Plaintiff WVCI, thru the undersigned counsel and unto this Honorable Court, respectfully
submits this MEMORANDUM in compliance with the 15 February 2018 Order of this Honorable
Court which was received by plaintiff on 20 February 2018, requiring the parties to file their
respective Memoranda within thirty (30) days from receipt or until 23 March 2018 as for
plaintiff.

THE PARTIES

Plaintiff Wakanda Vibranium Country Inc. (WVCI) is a domestic, non-profit corporation

with principal office at 0054 Road 3, Mabuhay Village, Dao District, Tagbilaran City. It operates
and maintains a country club and various sports facilities for the exclusive use of its members. It
may be served with notices and other legal processes of this Honorable Court through the
undersigned counsel in Unit 143, Marvel Professional Services Building, Banana Drive, Cogon
District, Tagbilaran City.

Defendant Bank of Asgard, is a national banking association organized and existing

under and by virtue of the laws of the United States of America, and duly licensed to do
business in the Philippines through its branch office at CAP Building, 10 th Floor, 123 Carlos P.
Garcia North Avenue, Tagbilaran City.

Defendant Stan Lee is of legal age, Filipino and a resident of 191-11 Carlos P. Garcia
North Avenue, Cogon District, Tagbilaran City.
 Defendant Ricardo Dalisay is of legal age, Filipino and a resident of 45 Calibre Street,
Camella Homes, Dampas District, Tagbilaran City.

STATEMENT OF THE CASE

This is a Special Civil Action for Interpleader with Damages under Rule 62 of the Rules of
Court. Said special civil action is proper whenever there are conflicting claims upon the same
subject matter against a person who claims no interest in the same, or an interest which in
whole or in part is not disputed by the claimants; such person may bring an action against the
conflicting claimants to compel them to interplead and litigate their claims among themselves.

On 13 December 2010, plaintiff WVCI filed a Complaint with Damages1 by reason of the
conflicting claims between defendant Bank of Asgard and defendants Stan Lee and Ricardo
Dalisay, as to the ownership of WVCI Share Nos. B-0843 and B-0844. Defendant Bank of Asgard
sustains the view that defendants Lee and Dalisay are not owners of the subject WVCI shares by
reason of the nullity of the levy and sale of the said shares. Whereas, defendants Lee and
Dalisay are of the view that they are entitled to the transfer of the subject shares in their names
as they are the legal owners of the subject shares by reason of the Sheriff’s Certificate of Sale
issued to them.

On 11 March 2011, defendant Bank of Asgard filed its Answer to the Complaint filed by
plaintiff WVCI. The bank contended that by reason of the nullity of the Order under which the
writ of execution in favor of Asgard Realty Corporation and directed against the bank was
issued, the said writ, as well as the levy and sale of the bank’s personal properties, including the
subject WVCI shares are also null and void since the judgment sought to be executed has
already been fully paid and satisfied. In fact, in a letter dated 25 September 2010 sent by Bank
of Asgard through its counsel addressed to WVCI, it was stated therein that by reason of the
Compromise Agreement and Satisfaction of Judgment executed by and between Asgard Realty
Corporation and Bank of Asgard and filed with the Supreme Court as well as the Regional Trial
Court of Tagbilaran City, Branch 3, Bank of Asgard requested WVCI not to record any transfer or
disposition of the subject WVCI shares in the corporate books until after the resolution of the
Motion to Quash the Writ of Execution.

On 22 May 2011, defendant Lee filed his Answer with Counterclaim and Crossclaim
against defendant Bank of Asgard. He contended that an interpleader is an improper remedy to
resist the transfer of the share of stock in his favor. He further contended that an interpleader
is improper as the validity of the auction and Sheriff’s Certificate of Sale was never assailed or
invalidated. According to him, the continued refusal of the Corporate Secretary to effect the
transfer of one of the subject WVCI shares in his favor are clear indications of bad faith of WVCI
considering the fact that the Board of Directors of WVCI was strongly influenced by its then
Chairman, Atty. Tony Stark – father of one of the handling lawyers of the defendant Bank of
Asgard.

On 17 June 2011, defendant Bank of Asgard filed its Reply and Answer to defendant
Lee’s Crossclaim reiterating its claim that the sale and levy of the WVCI share to defendant Lee
was null and void.

_______________________________
1A copy of the Plaintiff WVCI’s Complaint is attached hereto as Annex “A”
 On 14 July 2013, defendant Bank of Asgard filed its Manifestation and Urgent Motion to
Suspend Proceedings holding that the validity of the Compromise Agreement be first resolved
before the present action for interpleader may proceed. However, the said motion was denied
on the ground that the appellate court has no jurisdiction over this case as defendants Lee and
Dalisay are not privy to the proceedings before the appellate court.

On 12 November 2016, plaintiff WVCI filed its Memorandum reaffirming its previous
argument that the present special civil action in interpleader is proper as any decision as to who
between the defendants is entitled to the subject WVCI shares is best left to the sound
discretion of the court.

On 03 December 2016, defendant Lee likewise filed his Memorandum reiterating his
claim that there is no reason for plaintiff WVCI to withhold the transfer of the subject share in
his name as he is an innocent purchaser for value of the same.

STATEMENT OF THE FACTS

As culled from the Plaintiff’s WVCI’s Complaint dated 13 December 2010, the following
are the factual antecedents of the case:

WVCI is engaged in the operation and maintenance of a country club for exclusive use of
its members and their guests. Its stocks are divided into Two Thousand Five Hundred shares
(2,500) consisting of nine (9) Founder’s shares and Two Thousand Four Hundred Ninety One
(2,491) common shares, which is further divided into One Thousand Seven Hundred Forty One
(1,741) class “A” and Seven Hundred Fifty (750) class “B” shares, namely Share Nos. B-0843 and
B-0844 acquired for the amount of One Million Sixty Seven Thousand Pesos (Php 1,067,000.00),
were allegedly owned by the Defendant Bank of Asgard.

On 24 August 2010, WVCI received a Notice of Garnishment 2 dated 21 August 2010

issued by the Sheriff of the Regional Trial Court, Branch 3, Tagbilaran City in relation with the
Writ of Execution3 dated 23 April 2010 issued by the said court in Civil Case No. 62883 entitled,
“Asgard Realty Corporation vs. Bank of Asgard”. Said Notice of Garnishment advised WVCI not
to deliver, transfer or otherwise dispose of the WVCI shares of stocks which are under its
control and possession belonging to the Bank of Asgard. By the said Notice of Garnishment, the
said WVCI shares of stocks in the name of Bank of Asgard were garnished in order to satisfy the
judgment award against the latter in favor of Asgard Realty Corporation. The Notice of
Garnishment and the Writ of Execution were both annotated in the books of WVCI.

On 07 September 2010, WVCI received a Notice of Sheriff’s Sale4 dated 05 September

2010 notifying ACCI that the defendant Bank of Asgard’s two (2) WVCI Class B shares with
Certificate Nos. B-0843 and B-0844 will be sold at a public auction. By way of Certificate of Sale 5
dated 14 September 2010, WVCI was informed that WVCI Share Nos. B-0843 and B-0844 were
sold to defendants Lee and Dalisay, respectively. Following the sale, WVCI was requested by Lee

_______________________________
2 A copy of the Notice of Garnishment is attached hereto as Annex “B”

3 A copy of the Writ of Execution is attached hereto as Annex “C”

4 A copy of the Notice of Sheriff’s Sale is attached hereto as Annex “D”

5 Copies of the Certificate of Sale are attached hereto as Annexes “E-1” and “E-2”
in his letter dated 28 September 2010 to make necessary arrangements for the transfer of
WVCI Share No. B-0843 in his name as soon as possible. Likewise, a similar request to effect the
transfer of Share No. B-0844 in Dalisay’s name was made by him.

Meanwhile, WVCI received a letter from defendant Bank of Asgard’s counsel dates 25
September 2010 requesting WVCI not to record any transfer pertaining to WVCI Share Nos. B-
0843 and B-0844 until after the Motion to Quash the Writ of Execution 6 dated 20 August 2010
was resolved with finality by the trial court. It is provided for in said letter that Asgard Realty
Corporation itself caused the filing of the Motion to Quash the Writ of Execution, thereby
signifying its lack of interest to pursue any execution or garnishment proceedings against Bank
of Asgard in view of the full and final settlement of Bank of Asgard’s monetary obligation by
virtue of the Compromise Agreement7 dated 20 November 2009 entered into by and between
Bank of Asgard and Asgard Realty Corporation, as corroborated by the Satisfaction of
Judgment8 dated 21 November 2009 and approved by the Supreme Court on 31 January 2010.

In another letter dated 03 October 2010, counsel for Bank of Asgard reiterated its
request to hold in abeyance the recordation of the transfer of the abovementioned WVCI
Shares to defendants Lee and Dalisay by virtue of the Amended Decision 9 dated 02 October
2010 rendered by the Court of Appeals in CA-GR SP Nos. 6419 and 6449 entitled, “Asgard
Realty Corporation and Bank of Asgard vs. Hon. Thor Ragnarok, Presiding Judge Br.3, RTC, 7th
Judicial Region, Tagbilaran City, et. al.,” the dispositive portion of which reads as follows:

“WHEREFORE, the Motion for Reconsideration is hereby

GRANTED. The Decision of this Court promulgated on August 7,
2010 is SET ASIDE. Respondent Court or any of its agents is
enjoined from enforcing and implementing the Writ of Execution
until it shall have determined the validity and efficacy of the
compromise agreement.”

In light of the said Amended Decision of the Court of Appeals, WVCI informed
defendants Lee and Dalisay in separate letters both dated 02 November 2010 that it will be
holding in abeyance the recordation of the transfer of above WVCI Shares in their names.

However, in a letter dated 05 November 2010, defendant Lee reiterated his demand for
the recordation of the transfer of WVCI Share No. B-0843 in his favor, arguing that the above-
stated Amended Decision of the Court of Appeals did not invalidate the sale of the said share of
stock in his favor. A similar demand was made by defendant Dalisay arguing that the injunctive
writ issued by the Court of Appeals in its Amended Decision did not affect his purchase of WVCI
Share No. B-0844 as the same was already fait accompli.

In view of the foregoing, WVCI cannot effectively determine who, as among the
defendants herein are entitled to be registered as owners of WVCI Share Nos. B-0843 and B-
0844. Hence, WVCI was constrained to bring this Special Civil Action for Interpleader with
Damages to compel defendants Lee and Dalisay on one hand and defendant Bank of Asgard on
the other hand, to interplead and litigate their conflicting claims among themselves, pursuant
to Rule 62 of the 1997 Rules of Civil Procedure.
_______________________________
6 A copy of the Motion to Quash the Writ of Execution is attached hereto as Annex “F”

7 A copy of the Compromise Agreement is attached hereto as Annex “G”

8 A copy of the Satisfaction of Judgment is attached hereto as Annex “H”

9 A copy of the Amended Decision is attached hereto as Annex “I”

 STATEMENT OF THE ISSUES

INTERPLEADER IS THE PROPER REMEDY AS THERE ARE CONFLICTING CLAIMS AS TO THE

OWNERSHIP OF THE SUBJECT WVCI SHARES.

II

A CORPORATION CANNOT BE COMPELLED TO EFFECT TRANSFER OF SHARES WHEN THE

TRANSFEREE’S TITLE TO SAID SHARES HAS NO PRIMA FACIE VALIDITY OR IS UNCERTAIN.

III

PLAINTIFF WVCI CANNOT BE HELD LIABLE FOR MORAL AND EXEMPLARY DAMAGES, AS WELL AS
ATTORNEY’S FEES.

IV

PLAINTIFF WVCI IS ENTITLED TO RECOVER ATTORNEY’S FEES AND LITIGATION COSTS AS A

RESULT OF THE FILING OF THE INSTANT CASE.

ARGUMENTS / DISCUSSIONS

INTERPLEADER IS THE PROPER REMEDY AS THERE ARE CONFLICTING CLAIMS AS TO THE

OWNERSHIP OF THE SUBJECT WVCI SHARES.
______________________________

The action of interpleader is a remedy whereby a person who has property whether
personal or real, in his possession, or an obligation to render wholly or partially, without
claiming any right in both, or claims an interest which in whole or in part is not disputed by the
conflicting claimants, comes to court and asks that the persons who claim the said property or
who consider themselves entitled to demand compliance with the obligation, be required to
litigate among themselves, in order to determine finally who is entitled to one or the other
thing. The remedy is afforded not to protect a person against a double liability but to protect
him against double vexation in respect of one liability. When the court orders that the
claimants litigate among themselves, there arises in reality a new action and the former are
styled interpleaders, and in such a case the pleading which initiates the action is called a
complaint of interpleader and not a cross-complaint.10

Section 1 of Rule 62 of the Rules of Court provides:

“Whenever conflicting claims upon the same subject matter are

or may be made against a person who claims no interest
whatever in the subject matter, or an interest which in whole or in
part is not disputed by the claimants, he may bring an action
against the conflicting claimants to compel them to interplead
and litigate their several claims among themselves.”

_________________________________
10 Praxedes Alvarez, et. al. vs. The Commonwealth of the Philippines, et. al., 65 Phil 302
 Consequently, for an action in interpleader to prosper, the following requirements must
be present: 1) The plaintiff claims no interest in the subject matter or his claim thereto is not
disputed; 2) There must be at least two or more conflicting claimants; 3) The parties to be
interpleaded must make effective claims; 4) The subject matter must be one and the same.11

In the present case, plaintiff WVCI claims no interest in the WVCI shares subject of the
conflicting claims of defendants Lee and Dalisay and defendant Bank of Asgard. Plaintiff WVCI is
merely engaged in the operation and maintenance of the country club in order to serve its
members and their guests. It claims no interest on the subject WVCI shares except as to the
resolution who between the defendants properly owns the said shares so that it can make the
proper registration in its corporate books.

As earlier mentioned, there are two conflicting claimants in this case, to wit: Lee and
Dalisay; and the Bank of Asgard, each of which is claiming as owner of the subject WVCI Share
Nos. B-0843 and B-0844. Defendants Lee and Dalisay are establishing their right to the subject
WVCI Shares by virtue of the levy and sale of the said shares and the consequent issuance of
the Certificaes of Sheriff’s Sale in their favor. Defendant Bank of Asgard on the other hand, is
claiming its right to the subject WVCI shares by virtue of the Compromise Agreement and the
Satisfaction of Judgment executed by and between the bank and Asgard Realty Corporation and
later approved by the Supreme Court.

In the case of Syquia vs. Sheriff,12 an action for interpleader was justified as there were
conflicting claims to the subject property seized by the Sheriff. Similarly, under the present
circumstances, the WVCI shares levied and sold during the auction sale to defendants Lee and
Dalisay are the same shares being claimed by defendant Bank of Asgard. It bears repeating that
plaintiff WVCI was requested by defendant Bank of Asgard not to make any transfer of the
subject WVCIshares as it claims that the levy and sale of the same was null and void.

Hence, elements established, defendant Lee cannot gainsay that the present
interpleader action is improper. Defendant Lee’s claim that if the present case really calls for
an interpleader action, then plaintiff WVCI should impose the condition that neither of the
parties to this dispute should enjoy the use of the shares until their ownership is declared by
the Court is erroneous as the same is not one of the requisites in order that an interpleader
action may prosper. Neither can it be argued that the present interpleader action is improper
as the validity of the auction sale, as well as the sheriff’s certificate of sale, has never been
assailed or invalidated. It must be noted that plaintiff WVCI is not privy to the other
proceedings pending between the defendants. Except for the notices sent by the sheriff of
Branch 3 of RTC Tagbilaran City, plaintiff WVCI does not receive orders, resolutions, motions or
pleadings from any of the parties or courts where the cases are pending. Accordingly, plaintiff
WVCI has no idea as to the status or condition of any of the cases pending between the
defendants. However, it is imperative to determine who between the defendants is the valid
and legal owner of the subject WVCI shares in order to protect itself from any unnecessary
litigation that may arise from recording or non-recording the transfer of the subject WVCI
shares. Interpleader is a rule founded on justice and equity: “that the plaintiff may not continue
to benefit from the property or funds in litigation during the pendency of the suit at the
expense of whoever will ultimately be decided as entitled thereto.”13 Hence, the present

________________________________
11 Remedial Law Volume III by Herrera [1999]

12 46 Phil 400

13 Eternal Gardens Memorial Parks Corp. vs IAC, 165 SCRA 439

interpleader action is proper for reasons above-stated, as well as to apprise plaintiff WVCI who
its actual stockholders are so that it can ascertain the persons entitled to the rights and those
subject to the liabilities of a stockholder.

II

A CORPORATION CANNOT BE COMPELLED TO EFFECT TRANSFER OF SHARES WHEN THE

TRANSFEREE’S TITLE TO SAID SHARES HAS NO PRIMA FACIE VALIDITY OR IS UNCERTAIN.
______________________________

Section 63 of the Corporation Code provides:

“The capital stock of stock corporations shall be divided into

shares for which certificates signed by the president or vice-
president, counter-signed by the secretary or assistant secretary,
and sealed with the seal of the corporation shall be issued in
accordance with the by-laws. Shares of stock so issued are
personal property and may be transferred by delivery of the
certificate or certificates indorsed by the owner or his attorney-in-
fact or other person legally authorized to make the transfer. No
transfer, however, shall be valid, except as between the parties,
until the transfer is recorded in the books of the corporation
showing the names of the parties to the transaction, the date of
the transfer, the number of the certificate or certificates and the
number of shares transferred.

No shares of stock against which the corporation holds any unpaid

claim shall be transferrable in the books of the corporation.”

Pursuant to the foregoing provision, a transfer of shares of stock not recorded in the
stock and transfer book of the corporation is non-existent as far as the corporation is
concerned.14 As between the corporation on the one hand, and its shareholders and third
persons on the other, the corporation looks only to its books for the purpose of determining
who its shareholder are.15 It is only when the transfer has been recorded in the stock and
transfer book that a corporation may rightfully regard the transferee as one of its stockholders.
From this time, the consequent obligation on the part of the corporation to recognize such
rights as it is mandated by law to recognize arises.16 Hence, without such recording, the
transferee may not be regarded by the corporation as one among its stockholders and the
corporation may legally refuse the issuance of stock certificates in the name of the transferee
even when there has been compliance with the requirements of Section 64 of the Corporation
Code.17

_______________________________
14 Garcia vs. Jomouad, 323 SCRA 424, 428

15 Hager vs. Bryan, 19 Phil 138, 140-141

16 Ponce vs. Alsons Cement Corp., et. al., GR No. 139802, 10 December 2002

17 Id.
 Section 63 of the Corporation Code expressly authorizes the transfer of the shares either
by indorsement of the stock certificate coupled with delivery thereof, or by a duly notarized
deed. Where no certificate has as yet been issued or where for some reason it is not in the
possession of the stockholder, fully (or partially) paid shares may be transferred by means of a
deed of assignment duly recorded in the books of the corporation. But if a stock certificate has
been issued, the transferee must present the indorsed stock certificate to the secretary of the
corporation who shall effect the transfer in the corporate books, issue a new stock certificate in
favor of the transferee, and cancel the former certificate. A corporation has no authority to
cancel a certificate which is not in its possession or to which it has no right. It will be liable to a
bona fide holder of the old certificate if, without demanding of said certificate, it issues a new
one.18

While it is true that the duty of the corporate secretary to record the transfer is
ministerial,19 however, he cannot be compelled to do so when the transferee’s title to said
shares has no prima facie validity or is uncertain.20 Mere indorsement of stock certificates
does not in itself give to the indorsee such a right to have a transfer of the shares of stock on
the books of the company as will entitle him to the writ of mandamus to compel the company
and its officers to make such transfer at his demand, because, under such circumstances, the
duty, the legal obligation, is not so clear and indisputable as to justify the issuance of the writ.
As a general rule and especially under the above-cited statute, as between the corporation on
one hand, and its shareholders and third persons on the other, the corporation looks only to its
books for the purpose of determining who its shareholders are, so that a mere indorsee of a
stock certificate, claiming to be the owner, will not necessarily be recognized as such by the
corporation and its officers, in the absence of express instructions of the registered owner to
make such transfer to the indorsee, or a power of attorney authorizing such transfer.21

It bears stressing under the present circumstances that defendants Lee and Dalisay
merely requested the transfer of the subject WVCI shares in their names through their letters
addressed to the plaintiff WVCI. Aside from the proof of payment for the purchase of the
subject WVCI shares and the certificate of sale, they did not present any other document
showing that defendant Bank of Asgard, the registered owner of the subject WVCI shares, has
duly indorsed the stock certificates in their favor. Neither was there any proof showing that
defendant Bank of Asgard has assigned the subject WVCI shares in their names. In fact,
defendant Bank of Asgard itself ordered plaintiff WVCI not to make any transfer or disposition
of the subject WVCI shares. Hence, in the absence of any express instruction of the registered
owner (defendant bank of Asgard in this case) to effect the transfer of the shares in the
corporate books, no new stock certificate can be issued in favor of the supposed transferees
(defendants Lee and Dalisay in this case). Further, the plaintiff WVCI cannot be compelled to
effect the transfer of the subject WVCI shares primarily because the titles of defendants Lee
and Dalisay to the said shares are uncertain as the Regional Trial Court and all its agents which
effected the writ of execution under which the levy and sale of the subject WVCI shares lays its
basis, were enjoined from enforcing the writ.

_________________________________
18 The Corporation Code of the Philippines Annotated by Hector S. De Leon, 2002 ed., pp.556-

557

19 Rural Bank of Salinas vs. Court of Appeals, 210 SCRA 510

20 Tay vs. Court of Appeals, GR No. 126891, 5 August 1998

21 Id.
 There is no doubt that the requirement for the registration of transfers of shares in the
corporate books is intended principally for the benefit and protection of the corporation so that
it may know who are its stockholders to whom it must accord the right granted to them by law
and against whom it can enforce any liability that may arise from ownership of stock. However,
a corporation cannot inquire into the legality or propriety of a transfer of its shares from one
person to another. In case of conflicting claims, the corporation, for its protection, may demand
security or require all known claimants to interplead.22

III

PLAINTIFF WVCI CANNOT BE HELD LIABLE FOR MORAL AND EXEMPLARY DAMAGES, AS WELL
AS ATTORNEY’S FEES.
______________________________

Moral damages, though incapable of pecuniary estimation, are in the category of an

award designed to compensate the claimant for actual injury suffered and not to impose a
penalty on the wrongdoer.23 Under Article 2217 of the New Civil Code, moral damages include
physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury. Moral damages may be recovered if
they are the proximate result of the defendant’s wrongful act or omission. Conversely, moral
damages cannot be recovered from a person who has filed a complaint against another in
good faith, or without malice or bad faith.24 The requisites for award of moral damages are: 1)
there must be injury, whether physical, mental or psychological, clearly sustained by the
claimant; 2) there must be a culpable act or omission factually established; 3) the wrongful act
or omission of the defendant is the proximate cause of the injury sustained by the claimant;
and 4) the award of damages is predicated on any of the cases stated in Article 2219 of the
Civil Code.25

Defendant Lee in the present case claims that he is entitled to moral damages, as well as
exemplary damages and attorney’s fees. However, it is submitted that such claim is erroneous.
It cannot be gainsaid that an injury was sustained by defendant Lee as a result of the filing of
the present interpleader action by the plaintiff WVCI. Neither is the present case attendant of
any of the acts mentioned in Article 2219 of the New Civil Code that would justify the award of
moral damages in favor of defendant Lee. To repeat, the present the present action was
instituted merely to determine who between the defendants is lawfully entitled to be recorded
as the registered owner of the subject WVCI shares and consequently protect the plaintiff WVCI
from any future litigation that may arise as a direct result of the recording or non-recording of
the transfer of the subject WVCI shares. In fact, defendant Lee stands to benefit from the
decision of this Honorable Court as the issue on who is the legal and rightful owner of the
subject WVCI shares will be finally put to an end. Further, the worries and anxieties of a
defendant in a litigation that was not maliciously instituted are not the grounds for moral
damages as contemplated in the law.26 An award of moral damages is not warranted when

_______________________________
22 The Corporation Code of the Philippines Annotated by Hector S. De Leon, 2002 ed., p.569

23 Torts and Damages (Annotated) by Dean Ernesto L. Pineda, 2004 ed., p.180

24 Grapilon vs. Municipal Council, 2 SCRA 103

25 Industrial Insurance Co., Inc. vs. Bondoc, 330 SCRA 706

26 Ramos vs. Ramos, 61 SCRA 284

there is no proof of malice or bad faith in filing the action. 27 The present case was not
maliciously instituted by the plaintiff WVCI. The only purpose for filing the instant action for
interpleader is, again, to determine who is entitled to be recorded in the corporate books as the
club’s stockholder. Thus, defendant Lee’s claim that the filing of the instant suit has caused him
to suffer sleepless nights, embarrassment, mental anxiety and moral suffering for which both
plaintiff WVCI, its Board Members, including the Corporate Secretary and the defendant Bank
of Asgard should be liable for moral damages, he is likewise not entitled to any exemplary
damages, as well as attorney’s fees. While exemplary damages need not be proved, it must be
shown that the claimant is entitled to moral, temperate or compensatory damages before the
court may consider the question of whether or not exemplary damages should be awarded.28
As to the attorney’s fees, the same cannot be consolidated with moral damages for they are
different in nature and each must be separately determined.29

IV

PLAINTIFF WVCI IS ENTITLED TO RECOVER ATTORNEY’S FEES AND LITIGATION COSTS AS A

RESULT OF THE FILING OF THE INSTANT CASE.
______________________________

Article 2208 (2) of the New Civil Code precisely allows for the recovery of attorney’s fees
when the defendant’s act or omission has compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest.30 In Menzi and Co. vs. Bastida,31 it was ruled that
the costs, expenses and attorney’s fees incurred by the plaintiff in the action is recoverable
from the defendant who loses in the action and is found by the court to have caused the
unnecessary litigation.

The circumstances under the present case calls for the award of attorney’s fees and
litigation expenses as by reason of the conflicting claims on the subject WVCI shares of the
defendants Lee and Dalisay on one hand and the Bank of Asgard on the other hand, plaintiff
WVCI was constrained to file the instant legal action in order to protect its interest against any
future litigation that may arise from the recording or non-recording of the transfer of the
subject WVCI shares, as well as to ultimately determine who between the defendants is the
rightful stockholder of the club.

________________________________
27 Ricardo vs. Santos, 538 SCRA 1

28 Article 2234, New Civil Code

29 Philippine Veterans Bank vs. NLRC, 317 SCRA 510

30 Escaño vs. Ortigas, Jr., 526 SCRA 26

31 63 Phil 16
 PRAYER

WHEREFORE, premises considered, it is most respectfully prayed unto this Honorable

Court that an Order be issued resolving the conflicting claims of herein Defendants Stan Lee
and Ricardo Dalisay on one hand and Bank of Asgard on the other hand and that the losing
party be ordered to pay Plaintiff WVCI TWO HUNDRED FIFTY THOUSAND PESOS (Php
250,000.00) as Atorney’s fees and Litigation costs.

Other reliefs as may be deemed just and equitable under the premises are likewise
prayed for.

RESPECTFULLY SUBMITTED.

City of Tagbilaran, Bohol, Philippines, 02 March 2018.

MARVEL LAW OFFICE

Counsel for Plaintiff
Unit 143, Marvel Professional Services Building,
Banana Drive, Cogon District,
Tagbilaran City

By:

ATTY. NELSON P. LAURDEN

PTR No. 11061988
Roll No. 886011
IBP No. 198811
MCLE No. 4321

ATTY. STEPHEN A. CURRY

PTR No. 091834819
Roll No. 639290
IBP No. 123456
MCLE No. 5678

ATTY. KLAY B. THOMPSON

PTR No. 1234567
Roll No. 765432
IBP No. 987654
MCLE No. 3456

ATTY. KEVIN C. DURANT

PTR No. 3534363
Roll No. 345543
IBP No. 789123
MCLE No. 1479
Copy Furnished:

JUSTICE LEAGUE LAW OFFICE

Counsel for Defendant Bank of Asgard
5th Floor, CAP Building
123 Carlos P. Garcia North Avenue, Tagbilaran City

ATTY. LEBRON D. JAMES

Counsel for Defendant Stan Lee
Unit 102, NPL Towers
J.A. Clarin Street, Tagbilaran City

ATTY. DRAYMOND E. GREEN

Counsel for Defendant Ricardo Dalisay
Unit 103, NPL Towers
J.A. Clarin Street, Tagbilaran City