REPUBLIC OF THE PHILIPPINES REGIONAL TRIAL COURT OF MANDALUYONG CITY

MED SANTOS, INC. Plaintiff

vs.

DR. DONALD QUACK Defendant.

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CASE NO.: X X X X X

STATEMENT OF CLAIM

Now comes Med Santos, Inc., a Filipino corporation engaged in giving medical services, represented by the its stockholders, members of the Board of Directors and authorized representative Ms. Aiza Samson, claimants herein, by and through their undersigned attorney, Ana Frances G. Adolfo, hereby file this claim against the above named defendant and in support thereof states as follows: FACTS 1. That Med Santos Inc. (MSI) is a diagnostic clinic, a corporation engaged in giving medical services located at Level II, Robinson Galleria Ortigas. 2. That because there are lot of competitor clinics and the high operating cost, the MSI failed to meet its sell venture. The members Board of Directors (BOD) of MSI agreed to sell the clinic and its shares. 3. Ms. Aiza Samson, not a stockholder, officer or member of the BOD, was authorized by the latter to look for potential buyers. 4. Donald Quack manifested interest in furnishing the clinic and all the equipment.

5. On August 10, 2008, during the negotiation stage, Ms. Aiza Samson furnished Donald Quack through email the inventory (Exhibit A) of all the equipment in the clinic. 6. On August 20, 2008, Ms. Aiza Samson also furnished Donald Quack through email the Financial Statement of the clinic (Exhibit B). 7. On September 10, 2008, MSI, as represented by Ms. Aiza Samson, entered into a Memorandum of Agreement (MOA) with Dr. Donald Quack. 8. In the MOA, MSI, as represented by Ms. Aiza Samson, and Donald Quack agreed among others that the purchase price of the clinic including all the equipment listed in the inventory (Exhibit A) is three million pesos (PHP 3,000,000.00). Said purchase price must be paid in four equal instalments for a period of two (2) years and that upon signing of the final agreement, Dr. Donald Quack shall pay a down payment of five hundred thousand pesos (PHP 500,000.00) which form part of the three million pesos (PHP 3,000,000.00) purchase price. 9. It was further agreed in the said MOA that the management of the clinic shall be transferred to Dr. Donald Quack, however, the ownership of the shares of the clinic and all the equipment shall not be transferred until the purchase price is fully paid. In case of non-compliance, contract shall be null and void and the parties shall return to each other what they have received. Additional penalty of twenty five percent (25%) of the purchase price shall be imposed aside from the indemnity for damages. 10. On March 10, 2009, Dr. Donald Quack promptly paid the first instalment. He paid PHP 625,000.00. 11. On September 10, 2009, Dr. Donald Quack promptly paid the second instalment. He paid PHP 625,000.00. 12. On March 10, 2010, Dr. Donald Quack failed to pay the third instalment. 13. On March 12, 2010, MSI sent the first demand letter to Dr. Donald Quack (Exhibit C) but to no avail. 14. On March 15, 2010, MSI sent the second demand letter to Dr. Donald Quack (Exhibit D) but still to no avail. 15. On March 18, 2010, MSI sent the third demand letter to Dr. Donald Quack (Exhibit E) but still to no avail.
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16. On April 10, 2010, Ms. Aiza Samson, informed Dr. Donald Quack personally that the Lease Agreement between MSI and Robinson Galleria will terminate on October 9, 2010. That MSI is obliged to remove all the equipment and other utilities belonging to MSI. 17. On October 8, 2010, MSI removed all their equipment and utilities inside the clinic. After which, notice that such premise is available for lease was duly posted. I. THE NON-COMPLIANCE OF THE MEMORANDUM OF AGREEMENT BY DR. DONALD QUACK

18. Based on the foregoing, the contract between the parties herein is a contract to sell, the full payment of the purchase price is a positive suspensive condition, such that in the event of non-payment, the obligation of the seller to deliver and transfer ownership never arises. Ownership is not transferred upon delivery of property but upon full payment of the purchase price. 1The title simply remains in the seller if the buyer does not comply with the condition precedent of making payment at the time specified in the contract. 19. MSI validly cancelled and ignored the contract to sell because the obligation to sell did not arise when Dr. Donald Quack failed to pay the installments agreed upon by both the parties. 2 WHEREFORE: The Petitioner, Med Santos, Inc., represented by its stockholders, members of the Board of Directors and authorized representative Ms. Aiza Samson, files this claim to seek judicial declaration of such non-existent status of the Memorandum of Agreement aforementioned to relieve themselves of any liability and the indemnity for damages (moral, temperate, liquidated, exemplary or compensatory damages and attorneys fees plus trial costs) , and for any further relief that this Honorable Court determines appropriate. _____________________________
1 Visayan Sawmill Company, Inc., vs Court of Appeals, G.R. No. 83851. March 3, 1993

Heirs of Paulino Atienza vs Domingo P. Espidol, G.R. No. 180665, August 11, 2010

II.

THE EFFECTS OF THE PENAL CLAUSE ATTACHED IN THE PRINCIPAL OBLIGATION OF DR. DONALD QUACK

20. Based from the foregoing facts, it was stipulated by the parties herein, that in case of non-compliance, additional penalty of twenty five percent (25%) of the purchase price shall be imposed aside from the indemnity for damages. The New Civil Code provides that: Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem appropriate provided only that they are not contrary to law, morals, good customs, public order or public policy. Art. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance, if there is no stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation. The penalty may be enforced only when it is demandable in accordance with the provisions of this Code. WHEREFORE: The Petitioner, Med Santos, Inc., represented by its stockholders, members of the Board of Directors and authorized representative Ms. Aiza Samson, files this claim to demand from Dr. Donald Quack the payment of the penalty stipulated in the Memorandum of Agreement and for any further relief that this Honorable Court determines appropriate.

Respectfully submitted, ___________________ Atty. Ana Frances G. Adolfo ABC and Associates Law Firm 567 X Building Ayala Avenue, Makati City (02) 553-6000 Attorney for Plaintiff
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EXHIBIT A MED SANTOS, INC. INVENTORY OF EQUIPMENT EQUIPMENT accuDEXA Comed KMC 950 STOCK NUMBER 1111CAD 1578BGY 9087MOL GE BrightSpeed Edge Select CT Scanner 0789XPK Burdick Atria 3100 Welch Allyn CardioPerfect Workstation 4782GHJ 2 1 QUANTITY 2 1 3

6523NCZ GE 2000DS XLTEK NeuroMax EMG 8906MVF

2 1

EasyOne Pro Burdick HeartStride

2154HDG

8765KPU

EXHIBIT B MED SANTOS, INC. FINANCIAL STATEMENT

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EXHIBIT C

March 12, 2010

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Dr. Donald Quack #134 San Antonio Street Pasig City, Metro Manila 1006

SIR: This is to inform you that you have failed to pay the third instalment of the purchase price of the clinic and all the equipment therein. This letter will serve as a formal notice that you are obliged to pay said amount to Med Santos, Inc. As agreed upon in the Memorandum of Agreement between you and Med Santos Inc., you are obliged to pay the corporation Php 625,000.00 due on March 10, 2010. Unless payment of the said amount is received by us in full within seven (7) days of the date of this letter, we will have no alternative but to exercise whatever rights and remedies we have under the law to enforce such payment, including but not limited to institution of legal proceedings against you to recover the above amount, together with accrued interest and legal expenses.

Yours truly, ____________________ Ms. Aiza Samson Authorized Representative Med Santos, Inc.

EXHIBIT D

March 15, 2010

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Dr. Donald Quack #134 San Antonio Street Pasig City, Metro Manila 1006

SIR: This is to inform you that you have failed to pay the third instalment of the purchase price of the clinic and all the equipment therein. This letter will serve as a formal notice that you are obliged to pay said amount to Med Santos, Inc. As agreed upon in the Memorandum of Agreement between you and Med Santos Inc., you are obliged to pay the corporation Php 625,000.00 due on March 10, 2010. Unless payment of the said amount is received by us in full within four (4) days of the date of this letter, we will have no alternative but to exercise whatever rights and remedies we have under the law to enforce such payment, including but not limited to institution of legal proceedings against you to recover the above amount, together with accrued interest and legal expenses.

Yours truly, ____________________ Ms. Aiza Samson Authorized Representative Med Santos, Inc. EXHIBIT E

March 18, 2010

Dr. Donald Quack #134 San Antonio Street Pasig City, Metro Manila 1006

SIR: This is to inform you that you have failed to pay the third instalment of the purchase price of the clinic and all the equipment therein. This letter will serve as a formal notice that you are obliged to pay said amount to Med Santos, Inc. As agreed upon in the Memorandum of Agreement between you and Med Santos Inc., you are obliged to pay the corporation Php 625,000.00 due on March 10, 2010. Unless payment of the said amount is received by us in full within one (1) day of the date of this letter, we will have no alternative but to exercise whatever rights and remedies we have under the law to enforce such payment, including but not limited to institution of legal proceedings against you to recover the above amount, together with accrued interest and legal expenses.

Yours truly, ____________________ Ms. Aiza Samson Authorized Representative Med Santos, Inc.