1.

DOCTRINE: Article 21. Any person who willfully causes loss or injury
to another in a manner that is contrary to morals, good customs, or
public policy shall compensate the latter for the damage.

The elements of abuse of rights are: (a) there is a legal right or duty;
(b) exercised in bad faith; and (c) for the sole intent of prejudicing or
injuring another.

CASE TITLE: Spouses Godfrey and Gerardina Serfino vs. Far East Bank,
GR. No. 171845; October 10, 2012

FACTS: The case emanated from an action for collection of sums of money
instituted by the spouses Godfrey and Gerardina Serfino against the
spouses Domingo and Magdalena Cortez. By way of settlement, the
spouses Serfino and the spouses Cortez executed a compromise
agreement in which the spouses Cortez acknowledged their indebtedness
to the spouses Serfino in the amount of P 108,245.71.To satisfy the debt,
Magdalena bound herself "to pay in full the judgment debt out of her
retirement benefits. In case of default, the debt may be executed against
any of the properties of the spouses Cortez that is subject to execution,
upon motion of the spouses Serfino. After finding that the compromise
agreement was not contrary to law, morals, good custom, public order or
public policy, the RTC approved the entirety of the parties agreement and
issued a compromise judgment based thereon. The debt was later reduced
to P 155,000.00 from P197,000.00 (including interest), with the promise
that the spouses Cortez would pay in full the judgment debt not later
than April 23, 1996.No payment was made as promised. Instead, Godfrey
discovered that Magdalena deposited her retirement benefits in the savings
account of her daughter-in-law, Grace Cortez, with the respondent, Far
East Bank and Trust Company, Inc.. As of April 23, 1996, Grace's savings
account with FEBTC amounted to P 245,830.37, the entire deposit coming
from Magdalenas retirement benefits. That same day, the spouses Serfinos
counsel sent two letters to FEBTC informing the bank that the deposit in
Grace's name was owned by the spouses Serfino by virtue of an
assignment made in their favor by the spouses Cortez. The letter requested
FEBTCto prevent the delivery of the deposit to either Grace or the spouses
Cortez until its actual ownership has been resolved in court. On February
23, 2006, the RTC issued the assailed decision (a) finding the spouses
Cortez, Grace and Dante liable for fraudulently diverting the amount due
the spouses Serfino, but (b)absolving FEBTC from any liability for allowing
Grace to withdraw the deposit.

ISSUE/S: Whether or not FEBTC has the obligation to a third party who
claims rights over a bank deposit in the name of another.

HELD: The Supreme Court ruled that Far East Bank and Trust Company,
Inc. (FEBTC) did not abuse its right when it allowed the withdrawal of the
deposit owned by the spouses Serfino by virtue of an assignment made in
their favor by the spouses Cortez. The Court held that FEBTC acted in
good faith and without malice, and that it had no obligation to investigate
the ownership of the deposit since it was not a party to the compromise
agreement between the spouses Serfino and the spouses Cortez. The
Court also noted that the spouses Serfino failed to present any evidence
that FEBTC had knowledge of the assignment or that it conspired with the
spouses Cortez to defraud them. Therefore, FEBTC was not liable for
damages to the spouses Serfino.

WHEREFORE, in view of the foregoing, the petition for review

on certiorari is DENIED, and the decision dated February 23, 2006 of the
Regional Trial Court of Bacolod City, Branch 41, in Civil Case No. 95-9344
is AFFIRMED. Costs against the petitioners.

SO ORDERED.

2.

DOCTRINE: Under the abuse of right principle found in Article 19 of

the Civil Code, a person must, in the exercise of his legal right or
duty, act in good faith. He would be liable if he instead acts in bad
faith, with intent to prejudice another. Complementing this principle
are Articles 20 and 21 of the Civil Code which grant the latter
indemnity for the injury he suffers because of such abuse of right or
duty.

CASE TITLE: Titus B. Villanueva vs. Emma M. Rosqueta; GR. No. 180764;
January 19, 2010

FACTS: This case is about the right to recover damages for alleged abuse
of right committed by a superior public officer in preventing a subordinate
from doing her assigned task and being officially recognized for it.

Respondent Emma M. Rosqueta (Rosqueta), formerly Deputy

Commissioner of the Revenue Collection and Monitoring Group of the
Bureau of Customs (the Bureau), tendered her courtesy resignation from
that post. But five months later, she withdrew her resignation, claiming that
she enjoyed security of tenure and that she had resigned against her will
on orders of her superior.

Meantime, President Arroyo appointed Gil Valera (Valera) to respondent

Rosqueta's position. Challenging such appointment, Rosqueta filed a
petition for prohibition, quo warranto, and injunction against petitioner Titus
B. Villanueva (Villanueva), then Commissioner of Customs, the Secretary
of Finance, and Valera with the Regional Trial Court. The RTC issued a writ
of preliminary injunction.

While the preliminary injunction in the quo warranto case was again in
force, petitioner Villanueva issued Customs Memorandum Order...
authorizing Valera to exercise the powers and functions of the Deputy
Commissioner.

During the Bureau's celebration of its centennial anniversary. Its special

Panorama magazine edition featured all the customs deputy
commissioners, except respondent Rosqueta.

The souvenir program, authorized by the Bureau's Steering Committee

headed by petitioner Villanueva to be issued on the occasion, had a space
where Rosqueta's picture was supposed to be but it instead stated that her
position was "under litigation." Meanwhile, the commemorative billboard
displayed at the Bureau's main gate included Valera's picture but not
Rosqueta's.

Respondent Rosqueta filed a complaint for damages against petitioner

Villanueva alleging that the latter maliciously excluded her from the
centennial anniversary memorabilia.
Further, she claimed that he prevented her from performing her duties as
Deputy Commissioner, withheld her salaries, and refused to act on her
leave applications.

But the RTC dismissed respondent Rosqueta's complaint, stating that

petitioner Villanueva committed no wrong and incurred no omission that
entitled her to damages. The RTC found that Villanueva had validly and
legally replaced her as Deputy Commissioner seven months before the
Bureau's centennial anniversary. But the CA reversed the RTC's decision
holding instead that petitioner Villanueva's refusal to comply with the
preliminary injunction order issued in the quo warranto case earned for
Rosqueta the right to recover moral damages from him.

ISSUE/S: Whether or not the CA erred in holding petitioner Villanueva

liable in damages to respondent Rosqueta for ignoring the preliminary
injunction order... thus denying... her of the right to do her job as Deputy
Commissioner of the Bureau and to be officially recognized as such public
officer.

HELD: Under the abuse of right principle found in Article 19 of the Civil
Code, a person must, in the exercise of his legal right or duty, act in good
faith. He would be liable if he instead acts in bad faith, with intent to
prejudice another. Complementing this principle are Articles 20 and 21 of
the Civil Code which grant the latter indemnity for the injury he suffers
because of such abuse of right or duty.

That petitioner Villanueva ignored the injunction shows bad faith and intent
to spite Rosqueta who remained in the eyes of the law the Deputy
Commissioner. His exclusion of her from the centennial anniversary
memorabilia was not an honest mistake by any reckoning. Indeed, he
withheld her salary and prevented her from assuming the duties of the
position.

WHEREFORE, the Court DENIES the petition and AFFIRMS the decision
of the Court of Appeals dated April 30, 2007 in CA-G.R. CV 85931 with
MODIFICATION in that petitioner Titus B. Villanueva is ORDERED to pay
respondent Emma M. Rosqueta the sum of ₱200,000.00 in moral
damages, ₱50,000.00 in exemplary damages, and ₱50,000.00 in attorney’s
fees and litigation expenses.

SO ORDERED.

3.

DOCTRINE: Article 21. Any person who willfully causes loss or injury
to another in manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.

CASE TITLE: Gashem Shookat Baksh vs. Court of Appeals; GR. No.
97336; February 19, 1993

FACTS: Gashem Shookat Baksh, an Iranian exchange student taking a

medical course at the Lyceum Northwestern Colleges in Dagupan, courted
and proposed marriage to Marilou T. Gonzales, a 22-year old single Filipino
and a pretty lass of good moral character and reputation duly respected in
her community. Marilou accepted the marriage proposal.

Subsequently, Gashem forced her to live with him. Marilou, who was a
virgin before she began living with Gashe, became pregnant. She was later
provided some medicine for abortion by Gashem.

Marilou was subjected to threats and maltreatment by Gashem, who later

on repudiated their marriage agreement, saying that he is already married
to someone living in Bacolod City.

Marilou sought damages against Gashem for the alleged violation of their
agreement to get married. The trial Court ruled in her favor and awarded
her moral damages in the sum of P20,0000, attorney's fees in the sum of
P3,000, and litigation expenses in the sum of P2,000.

In his appeal, Gashem argued that Article 21 of the Civil Code does not
apply in this case because of the following: (1) he claims to have not
committed any moral wrong or injury or violated any good custom or public
policy; (2) he has not professed love or proposed marriage to Marilou; (3)
he never maltreated her; (4) the trial court liberally invoked Filipino
customs, traditions and culture, to his prejudice; (5) his actions were
tolerable under his Muslim upbringing; and (6) the mere breach of promise
to marry is not actionable.

ISSUE/S: W/N damages may be recovered for a breach of promise to

marry on the basis of Article 21 of the Civil Code of the Philippines

HELD: The Court held that the breach of promise to marry per se is not an
actionable wrong. However, the Court rules that no foreigner should make
a mockery of our laws. It was evident from the facts presented to the Court
that Gashem Baksh had not intention to marry Marilou Gonzales on the
account of her “ignoble birth, inferior educational background, poverty and,
as perceived by him, dishonorable employment.”
In the case presented, Gashem Baksh was not motivated by good faith and
honest motive when he proposed his love and promised to marry Marilou
Gonzales. He was merely motivated by lust and “clearly violated the
Filipino’s concept of morality and brazenly defied the traditional respect
Filipinos have for their women.”

Consent to sexual intercourse obtained through a promise to marry (by a

subtle scheme or deceptive device, when he actually had no intention to
marry) may justify an award of damages pursuant to Article 21 not because
of such promise to marry but because of the fraud and deceit behind it and
the willful injury to her honor and reputation which followed thereafter.

Article 21 is designed to expand the concept of torts or quasidelict in this

jurisdiction by granting adequate legal remedy for the untold number of
moral wrongs which is impossible for human foresight to specifically
enumerate and punish in the statute books.

It is essential, however, that such injury should have been committed in a

manner contrary to morals, good customs or public policy.

In the instant case it was Gashem's fraudulent and deceptive protestations

of love for and promise to marry Marilou that made her surrender her virtue
and womanhood to him and to live with him on the honest and sincere
belief that he would keep said promise, and it was also what made
Marilou's parents agree to their daughter's living in with him preparatory to
their supposed marriage.
The Court affirmed the Decisions of the lower court and the Court of
Appeals pursuant to Aticle 21 of the New Civil Code, not because of the
breach of promise to marry, but due the fraud and deceit employed by
herein petitioner that wilfully caused injury to the honor and reputation of
the herein private respondent, which committed contrary to the morals,
good customs or public policy.

WHEREFORE, finding no reversible error in the challenged decision, the

instant petition is hereby DENIED, with costs against the petitioner.

SO ORDERED.

4.

DOCTRINE: Unjust enrichment exists "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." There is unjust enrichment under
Art.22 of the Civil Code when (1) a person is unjustly benefited, and
(2) such benefit is derived at the expense of or with damages to
another.

CASE TITLE: Landbank of the Philippines vs. Alfredo Ong; GR No.

190755; November 24, 2010 (Unjust Enrichment/Action in rem verso)

FACTS: Spouses Sy obtained a 16 Million php loan from Land Bank

secured by three (3) residential lots, five (5) cargo trucks, and a
warehouse. Under the loan agreement, PhP 6 million of the loan would be
short-term and would mature on February 28, 1997, while the balance of
PhP 10 million would be payable in seven (7) years. The Notice of Loan
Approval dated February 22, 1996 contained an acceleration clause
wherein any default in payment of amortizations or other charges would
accelerate the maturity of the loan.

They failed to pay, and they sold the three parcels of land to Alfredo Ong.
When Ong paid the remaining amount, the application for assumption of
mortgage was not approved by Land Bank. The bank learned from its credit
investigation report that the Ongs had a real estate mortgage in the amount
of PhP 18,300,000 with another bank that was past due. Thus, the bank
foreclosed the properties. Ong filed an action for recovery of the money
that he paid, and won in the RTC. On appeal to the CA, it likewise affirmed
the RTC decision. Thus, Land Bank appeals to the Supreme Court.

ISSUE/S: Is Land Bank liable to Ong?

HELD: The Supreme Court ruled that Alfredo Ong was entitled to recover
the amount he paid to Land Bank plus interest and damages, as he was
unjustly enriched by the bank.
Unjust enrichment exists "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." There is unjust enrichment under Art.22 of the Civil Code
when (1) a person is unjustly benefited, and (2) such benefit is derived at
the expense of or with damages to another.

Land Bank made Alfredo believe that with the payment of PhP 750,000, he
would be able to assume the mortgage of the Spouses Sy. The act of
receiving payment without returning it when demanded is contrary to the
adage of giving someone what is due to him. The outcome of the
application would have been different had Land Bank first conducted the
credit investigation before accepting Alfredo's payment. He would have
been notified that his assumption of mortgage had been disapproved; and
he would not have taken the futile action of paying PhP 750,000. The
procedure Land Bank took in acting on Alfredo's application cannot be said
to have been fair and proper.
WHEREFORE, the appeal is DENIED. The CA Decision in CA-G.R. CR-CV
No. 84445 is AFFIRMED with MODIFICATION in that the amount of PhP
750,000 will earn interest at 6% per annum reckoned from December 12,
1997, and the total aggregate monetary awards will in turn earn 12% per
annum from the finality of this Decision until fully paid.

SO ORDERED.

5.

DOCTRINE: Article 28 of the Civil Code provides that "unfair

competition in agricultural, commercial or industrial enterprises or in
labor through the use of force, intimidation, deceit, machination or
any other unjust, oppressive or high-handed method shall give rise to
a right of action by the person who thereby suffers damage."

CASE TITLE: Willaware Products Corporation vs. Jesichris Manufacturing

Corp. GR. No. 195549; September 3, 2014

FACTS: Jesichris Manufacturing Company the respondent filed this present

complaint for damages for unfair competition with prayer for permanent
injunction to enjoin Willaware Products Corporation the petitioner from
manufacturing and distributing plastic-made automotive parts similar to
Jesichris Manufacturing Company. The respondent alleged that it is a duly
registered partnership engaged in the manufacture and distribution of
plastic and metal products, with principal office at No. 100 Mithi Street,
Sampalukan, Caloocan City. Since its registration in 1992, Jesichris
Manufacturing Company has been manufacturing in its Caloocan plant
and distributing throughout the Philippines plastic-made automotive
parts. Willaware Products Corporation, on the other hand, which is
engaged in the manufacture and distribution of kitchenware items made of
plastic and metal has its office near that of the Jesichris Manufacturing
Company. Respondent further alleged that in view of the physical proximity
of petitioner’s office to respondent’s office, and in view of the fact that some
of the respondent’s employees had transferred to petitioner, petitioner had
developed familiarity with respondent’s products, especially its plastic-
made automotive parts.

That sometime in November 2000, [respondent] discovered that [petitioner]

had been manufacturing and distributing the same automotive parts with
exactly similar design, same material and colors but was selling these
products at a lower price as [respondent’s] plastic-made automotive parts
and to the same customers.

Respondent alleged that it had originated the use of plastic in place of

rubber in the manufacture of automotive under chassis parts such as spring
eye bushing, stabilizer bushing, shock absorber bushing, center bearing
cushions, among others. [Petitioner’s] manufacture of the same automotive
parts with plastic material was taken from respondent’s idea of using plastic
for automotive parts. Also, [petitioner] deliberately copied [respondent’s]
products all of which acts constitute unfair competition, is and are contrary
to law, morals, good customs and public policy and have caused
[respondent] damages in terms of lost and unrealized profits in the amount
of 2,000,000 as of the date of respondent’s complaint.

ISSUE/S: Whether or not petitioner committed acts amounting to unfair

competition under Article 28 of the Civil Code.

HELD: The Supreme Court of the Philippines affirmed the decision of the
lower courts that Willaware Products Corporation committed acts of unfair
competition against Jesichris Manufacturing Corporation and ordered it to
pay damages, attorney’s fees and exemplary damages.

Article 28 of the Civil Code provides that "unfair competition in agricultural,

commercial or industrial enterprises or in labor through the use of force,
intimidation, deceit, machination or any other unjust, oppressive or high-
handed method shall give rise to a right of action by the person who
thereby suffers damage."

From the foregoing, it is clear that what is being sought to be prevented is

not competition per se but the use of unjust, oppressive or high handed
methods which may deprive others of a fair chance to engage in business
or to earn a living. Plainly,what the law prohibits is unfair competition and
not competition where the means use dare fair and legitimate.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil

Code.

WHEREFORE, the instant petition is DENIED. The Decision dated

November 24, 2010 and Resolution dated February 10, 2011 of the Court
of Appeals in CA-G.R. CV No. 86744 are hereby AFFIRMED with
MODIFICATION that the award of attorney's fees be lowered to Fifty
Thousand Pesos (₱50,000.00).

SO ORDERED.

6.

DOCTRINE: Article 22 provides that “every person who through an

act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.

CASE TITLE: Spouses Alejandro Manzanilla and Remedios Velasco vs.

Waterfields Industries Corporation; GR. No. 177484; July 18, 2014

FACTS: Spouse Manzanilla are the owner of 25,000 square meter parcel of
land in Batangas which it leased 6,000 sq. meters to Respondent
Waterfields. Petitioner received the deposit from the respondent however
the latter failed to pay its monthly rentals starting April 1997. The terms of
the lease contract however states that the deposit shall be used exclusively
for the payment of unpaid utilities and applied upon termination of the
lease. Petitioner filed an ejectment case against Respondents for
nonpayment of rentals. The MTC ruled that the Respondent violated the
terms of the lease and ordered to vacate the premises. This decision was
affirmed by RTC however the CA reversed the decision of both lower
courts.

ISSUE/S: Whether or not there is an unjust enrichment on the part of the

Petitioner
HELD: No. there is no unjust enrichment.

The Supreme Court ruled that the principle of unjust enrichment requires
two conditions (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at the expense of another.

This does not apply in the case since any benefit that the spouses
Manzanilla may obtain from the subject premises cannot be said to be
without any valid basis or justification. Respondent violated the contract of
lease and that they failed to vacate the premises on demand. Spouses
Manzanilla are justified in recovering physical possession thereof and in
making use of the property. In violation the lease by failing to pay the rent,
Waterfields took the risk of losing the improvements it introduced thereon in
favor of the Spouse Manzanilla.

WHEREFORE, the Petition is GRANTED. The Decision dated September

15, 2006 and Resolution dated April 12, 2007 of the Court of Appeals in
CA-G.R. SP No. 60010 are REVERSED and SET ASIDE. The Decision
dated July 14, 2000 of the Regional Trial Court of Manila, Branch 42 in Civil
Case No. 00-96228, which affirmed the Decision dated May 7, 1999 of the
Metropolitan Trial Court of Manila, Branch 4 in Civil Case No. 160443-CV
granting the Complaint, is REINSTATED and AFFIRMED.

SO ORDERED.

7.

DOCTRINE: Article 19 of the Civil Code sets the standards to be

served in the exercise of one’s rights and in the performance of one’s
duties, namely: (a) to act with justice; (b) to give everyone his due;
and (c) to observe honesty and good faith.

CASE TITLE: Raul Sesbreno vs. Court of Appeals; GR. No. 160689; March
26, 2014

FACTS: This case concerns the claim for damages of petitioner Raul H.
Sesbreño founded on abuse of rights. Sesbreño accused the violation of
contract (VOC) inspection team dispatched by the Visayan Electric
Company (VECO) to check his electric meter with conducting an
unreasonable search in his residential premises. Their team found out
illegal connections, meter tampering, seals, conduit pipes, jumpers, wiring
connections, and meter installations. With Chuchie Garcia, Peter Sesbreño
and one of the maids present, they removed said meter and replaced it with
a new one. At that time, plaintiff appellant Sesbreño was in his office and no
one called to inform him of the inspection. They forced a visitor to sign two
documents, making her appear to be his representative or agent.
Afterwards, he found that some of his personal effects were missing,
apparently stolen by the VOC Team when they searched the house. RTC
rendered a judgment dismissing the claim and the CA has affirmed the
dismissal.

ISSUE/S: Whether or not the Petitioner is entitled to recover damages for

abuse of rights

HELD: No. Petitioner is not entitled to recover damages.

The Supreme Court ruled that Article 19 of the Civil Code sets the
standards to be served in the exercise of one’s rights and in the
performance of one’s duties, namely: (a) to act with justice; (b) to give
everyone his due; and (c) to observe honesty and good faith. The law
thereby recognizes the primordial limitation on all rights – that in the
exercise of the rights, the standards under Article 19 must be observed.
Liability for damages may arise should there be an abuse of rights, like
when the act is performed without prudence or in bad faith. In order that
liability may attach under the concept of abuse of rights, the following
elements must be present to wit: (a) the existence of a legal right or duty,
(b) which is exercised in bad faith, and (c) for the sole intent of prejudicing
or injuring another.

In the case at bar, Petitioner asserts that he did not authorize Baledio or
Chuchi Garcia to let anyone enter his residence in his absence. This is
implausible as the trial court observed inconsistencies on material points in
the witness’ testimonies. Neither the petitioner was denied due process by
the refusal of the trial judge to inhibit from the case. Although the trial judge
had issued an order for his voluntary inhibition, he still rendered the
judgment in the end in compliance with the instruction of the Executive
Judge, whose exercise of her administrative authority on the matter of the
inhibition should be respected.

WHEREFORE, the Court DENIES the pet1t1on for review on certiorari;

AFFIRMS the decision promulgated on March 10, 2003; and DIRECTS the
petitioner to pay the costs of suit.

SO ORDERED.

8.
DOCTRINE: Art. 22 provides that “every person who through an act of
performance by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just or
legal ground, shall return the same to him.”

CASE TITLE: Carlos A. Loria vs. Ludolfo P. Muñoz; GR. No. 187240,
October 15, 2014

FACTS: Ludolfo P. Muñoz, Jr. (Muñoz) filed a complaint for sum of money
and damages with an application for issuance of a writ of preliminary
attachment against Carlos A. Loria (Loria) with the Regional Trial Court of
Legazpi City.

In his complaint, Muñoz alleged that he has been engaged in construction

under the name, "Ludolfo P. Muñoz, Jr. Construction." In August 2000,
Loria visited Muñoz in his office in Doña Maria Subdivision in Daraga,
Albay. He invited Muñoz to advance P2,000,000.00 for a subcontract of a
P50,000,000.00 river-dredging project in Guinobatan.

Loria represented that he would make arrangements such that Elizaldy Co,
owner of Sunwest Construction and Development Corporation, would turn
out to be the lowest bidder for the project. Elizaldy Co would pay
P8,000,000.00 to ensure the project's award to Sunwest. After the award to
Sunwest, Sunwest would subcontract 20% or P10,000,000.00 worth of the
project to Muñoz.

The project to dredge the Masarawag and San Francisco Rivers in

Guinobatan was subjected to public bidding. The project was awarded to
the lowest bidder, Sunwest Construction and Development Corporation.
Sunwest allegedly finished dredging the Masarawag and San Francisco
Rivers without subcontracting Muñoz. With the project allegedly finished,
Muñoz demanded Loria to return his P2,000,000.00. Loria, however, did
not return the money.

Muñoz first charged Loria and Elizaldy Co with estafa. This criminal case
was dismissed by the Municipal Trial Court of Daraga, Albay for lack of
probable cause. Muñoz then filed the complaint for sum of money.

As the trial and appellate courts found, Muñoz paid Loria P2,000,000.00 for
a subcontract of a government... project. The parties' agreement,
therefore, was void for being contrary to law, specifically, the Anti-Graft and
Corrupt Practices Act, the Revised Penal Code, and Section 6 of
Presidential Decree No. 1594. The agreement was likewise contrary to the
public policy of public or open competitive bidding of government contracts.

Since the parties' agreement was void, Loria argues that the parties were in
pari delicto, and Muñoz should not be allowed to recover the money he
gave under the contract.

ISSUE/S: Whether or not must return Respondent’s P2,000,000.00 under

the principle of unjust enrichment.

HELD: Yes. Petitioner must return to the Respondent the amount of

P2,000,000.00.

The Supreme Court ruled that Article 22 of the Civil Code speaks of unjust
enrichment. “every person who through an act of performance by another,
or any other means, acquires or comes into possession of something at the
expense of the latter without just or legal ground, shall return the same to
him.” There is unjust enrichment “when a person unjustly retains a benefit
to the loss of another, or when a person retains a money or property of
another against the fundamental principles of justice, equity and good
conscience.”

In the given case, Loria received P2,000,000.00 from Munoz for a

subcontract of a government project to dredge the Masarawag and San
Francisco Rivers in Guinobatan, Albay. However, contrary to the parties’
agreement, Munoz was not subcontracted for the project. Nevertheless,
Loria retained the P2,000,000.00.

9.

DOCTRINE: Article 22 provides that “every person who through an

act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.”

CASE TITLE: University of the Philippines vs. Philab Industries Inc.; GR.
No. 152411; September 29, 2004

FACTS: This case is a petition for review on certiorari of the Decision of the
Court of Appeals.

In 1979, the University of the Philippines (UP) decided to construct an

integrated system of research organization known as the Research
Complex. As part of the project, laboratory equipment and furniture were
purchased for the National Institute of Biotechnology and Applied
Microbiology (BIOTECH) at the UP Los Baños. Providentially, the
Ferdinand E. Marcos Foundation (FEMF) came forward and agreed to fund
the acquisition of the laboratory furniture, including the fabrication thereof.
Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to
BIOTECH to contact a corporation to accomplish the project. On July 23,
1982, Dr. William Padolina, the Executive Deputy Director of BIOTECH,
arranged for Philippine Laboratory Industries, Inc. (PHILAB), to fabricate
the laboratory furniture and deliver the same to BIOTECH for the BIOTECH
Building Project, for the account of the FEMF.

On July 13, 1982, Padolina wrote Lirio and requested for the issuance of
the purchase order and downpayment for the office and laboratory furniture
for the project, thus: 1) Supply and Installation of Laboratory furniture for
the BIOTECH Building Project, and 2) Fabrication and Supply of office
furniture for the BIOTECH Building Project, and paying the downpayment
of 50% or P286,687.50.

Ten days after, Padolina informed Hector Navasero, the President of

PHILAB, to proceed with the fabrication of the laboratory furniture, per the
directive of FEMF Executive Assistant Lirio. Subsequently, PHILAB made
partial deliveries of office and laboratory furniture to BIOTECH after having
been duly inspected by their representatives and FEMF Executive Assistant
Lirio.

On August 24, 1982, FEMF remitted P600,000 to PHILAB as downpayment

for the laboratory furniture for the BIOTECH project, for which PHILAB
issued Official Receipt No. 253 to FEMF. On October 22, 1982, FEMF
made another partial payment of P800,000 to PHILAB, for which the latter
issued Official Receipt No. 256 to FEMF. The remittances were in the form
of checks drawn by FEMF and delivered to PHILAB, through Padolina.
On October 16, 1982, UP, through Emil Q. Javier, the Chancellor of UP Los
Baños and FEMF, represented by its Executive Officer, Rolando Gapud,
executed a Memorandum of Agreement (MOA) in which FEMF agreed to
grant financial support and donate sums of money to UP for the
construction of buildings, installation of laboratory and other capitalization
for the project, not to exceed P29,000,000.00.

The Board of Regents of the UP approved the MOA with Philab on

November 25, 1982. Later, President Marcos was ousted from office during
the February 1986 EDSA Revolution. On April 22, 1986, PHILAB wrote
President Corazon C. Aquino asking her help to secure the payment of the
amount due from the FEMF. In the meantime, the PCGG wrote UP
requesting for a copy of the relevant contract and the MOA for its perusal.

PHILAB filed a complaint for sum of money and damages against UP. In
the complaint, PHILAB prayed that it be paid the following: (1) P702,939.40
plus an additional amount (as shall be determined during the hearing) to
cover the actual cost of money which at the time of transaction the value of
the peso was eleven to a dollar (P11.00:$1) and twenty seven (27%)
percent interest on the total amount from August 1982 until fully paid; (2)
P50,000.00 as and for attorney’s fees; and (3) Cost of suit.

In its answer, UP denied liability and alleged that PHILAB had no cause of
action against it because it was merely the donee/beneficiary of the
laboratory furniture in the BIOTECH; and that the FEMF, which funded the
project, was liable to the PHILAB for the purchase price of the laboratory
furniture. UP specifically denied obliging itself to pay for the laboratory
furniture supplied by PHILAB.
ISSUE/S: Whether or not the Court of Appeals erred in applying the legal
principle of unjust enrichment when it held that UP and not FEMF, is liable
to Philab?

HELD: There is no dispute that the respondent is not privy to the MOA
executed by the petitioner and FEMF, hence, it is not bound by the said
agreement. Contracts take effect only between the parties and their
assigns. A contract cannot be binding upon and cannot be enforced against
one who is not a party to it, even if he is aware of such contract and has
acted with knowledge thereof. Likewise admitted by the parties, is the fact
that there was no written contract executed by the petitioner, the
respondent and FEMF relating to the fabrication and delivery of office and
laboratory furniture to the BIOTECH. Even the CA failed to specifically
declare that the petitioner and the respondent entered into a contract of
sale over the said laboratory furniture.

The Court of Appeals agreed with the petitioner that, based on the records,
an implied-in-fact contract of sale was entered into between the Philab and
FEMF.

Unjust enrichment is a term used to depict result or effect of failure to make

remuneration of or for property or benefits received under circumstances
that give rise to legal or equitable obligation to account for them; to be
entitled to remuneration, one must confer benefit by mistake, fraud,
coercion, or request. Unjust enrichment is not itself a theory of reconvey.
Rather, it is a prerequisite for the enforcement of the doctrine of restitution.

The essential requisites for the application of Article 22 of the New Civil
Code do not obtain in this case. The respondent had a remedy against the
FEMF via an action based on an implied-in-fact contract with the FEMF for
the payment of its claim. The petitioner legally acquired the laboratory
furniture under the MOA with FEMF; hence, it is entitled to keep the
laboratory furniture.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The

assailed Decision of the Court of Appeals is REVERSED AND SET ASIDE.
The Decision of the Regional Trial Court, Makati City, Branch 150,
is REINSTATED. No costs.

10.

DOCTRINE: The elements of a prejudicial question are: (a) the

previously instituted civil action involves an issue similar or
intimately related to the issue raised in the subsequent criminal
action, and (b) the resolution of such issue determines whether or not
the criminal action may proceed.

The prejudicial question must be determinative of the case before the

court, but the jurisdiction to try and resolve the question must be
lodged in another court or tribunal. It is a question based on a fact
distinct and separate from the crime, but so intimately connected with
it that its ascertainment determines the guilt or innocence of the
accused. For it to suspend the criminal action, it must appear not only
that the civil case involves facts intimately related to those upon
which the criminal prosecution would be based, but also that in the
resolution of the issue or issues raised in the civil case, the guilt or
innocence of the accused would necessarily be determined.
CASE TITLE: Imelda Marbella-Bobis vs. Isagani D. Bobis; GR No. 138509;
July 31, 2000 (Prejudicial Question)

FACTS: October 21, 1985, first marriage with one Maria Dulce B. Javier.
Not annulled, nullified or terminated.

January 25, 1996, second marriage with petitioner Imelda Marbella-Bobis.

Third marriage with a certain Julia Sally Hernandez.

February 25, 1998, Imelda Bobis filed bigamy. Sometime thereafter, the
respondent initiated a civil action for the judicial declaration of absolute
nullity of his first marriage on the ground that it was celebrated without a
marriage license.

The petitioner argues that the respondent should have first obtained a
judicial declaration of nullity of his first marriage before entering into the
second marriage. After the petitioner sued for bigamy, it was just when the
respondent filed a declaration of absolute nullity.

ISSUE/S: Whether the subsequent filing of a civil action for declaration of

nullity of a previous marriage constitutes a prejudicial question to a criminal
case for bigamy.

Is ignorance of Article 40 of the Family Code a valid defense for contracting

second marriage?

HELD: No. He who contracts a second marriage before the judicial

declaration of nullity of the first marriage assumes the risk of being
prosecuted for bigamy, and in such a case the criminal case may not be
suspended on the ground of the pendency of a civil case for declaration of
nullity. In a recent case for concubinage, we held that the pendency of a
civil case for declaration of nullity of marriage is not a prejudicial
question. This ruling applies here by analogy since both crimes presuppose
the subsistence of a marriage.

No. Ignorance of the existence of Article 40 of the Family Code cannot

even be successfully invoked as an excuse. The contracting of a marriage
knowing that the requirements of the law have not been complied with or
that the marriage is in disregard of a legal impediment is an act penalized
by the Revised Penal Code. The legality of a marriage is a matter of law
and every person is presumed to know the law.

Thus, as ruled in Landicho v. Relova, he who contracts a second marriage

before the judicial declaration of nullity of the first marriage assumes the
risk of being prosecuted for bigamy, and in such a case the criminal case
may not be suspended on the ground of the pendency of a civil case for
declaration of nullity.

WHEREFORE, the petition is GRANTED. The order dated December 29,

1998 of the Regional Trial Court, Branch 226 of Quezon City is
REVERSED and SET ASIDE and the trial court is ordered to
IMMEDIATELY proceed with Criminal Case No. Q98-75611.

SO ORDERED.

1.

Doctrine: Article 40 of the Civil Code expressly limits the provisional

personality by imposing the condition that the child should be
subsequently born alive: “provided it be born later with the
condition specified in the following article.

CASE TITLE: Antonio Geluz vs. Court of Appeals, GR. No. L-16439; July
20, 1961

FACTS: In 1950, before Nita Villanueva and Oscar Lazo were married,
Villanueva became pregnant. To conceal her pregnancy from her parents
and upon her aunt’s advice, she had an abortion by Antonio Geluz, a
physician. After Villanueva and Lazo got married, she became pregnant
for the second time. As she was an employee of the Commission on
Elections and found it inconvenient, she had her second abortion by
Geluz in October 1953. In less than two years, she again became
pregnant. On 21 February 1955, Villanueva went to the clinic of Geluz in
Manila accompanied by her sister and her niece. Unknown to Lazo and
without his consent, his wife had an abortion for the third time, an
abortion of a two-month old fetus. Villanueva paid Geluz fifty pesos. At
that time, Lazo was in Cagayan campaigning for his election to the
provincial board.

On the basis of the last abortion, Lazo instituted an action in the Court of
First Instance of Manila against Geluz. The trial court ordered Geluz to
pay Lazo damages, attorney’s fees and costs of the suit. On appeal, the
Court of Appeals sustained the decision of the trial court.

ISSUE/S: Did the unborn child acquire civil personality?

HELD: No, the unborn child did not acquire civil personality.
Article 40 of the Civil Code expressly limits the provisional personality by
imposing the condition that the child should be subsequently born alive:
“provided it be born later with the condition specified in the following
article.” In this case, there is no dispute that the child was dead when
separated from its mother’s womb.

Since an action for pecuniary damages on account of personal injury of

death pertains primarily to the one injured, it is easy to see that if no
action for such damages could be instituted on behalf of the unborn child
on account of the injuries it received, no such right of action could
derivatively accrue to its parents or heirs. In fact, even if a cause of action
did accrue on behalf of the unborn child, the same was extinguished by
its pre-natal death since no transmission to anyone can take place from
on that lacked juridical personality (or juridical capacity as distinguished
from capacity to act).

This is not to say that the parents are not entitled to collect any damages
at all. But such damages must be those inflicted directly upon them, as
distinguished from the injury or violation of the rights of the deceased
child, his right to life and physical integrity. Because the parents cannot
expect either help, support or services from an unborn child, they would
normally be limited to moral damages for the illegal arrest of the normal
development of the spes hominis that was the foetus, i.e., on account of
distress and anguish attendant to its loss, and the disappointment of their
parental expectations as well as to exemplary damages, if the
circumstances should warrant them.

In this case, however, both the trial court and the Court of Appeals have
not found any basis for an award of moral damages, evidently because
the appellee’s indifference to the previous abortions of his wife, also
caused by the appellant herein, clearly indicates that he was
unconcerned with the frustration of his parental hopes and affections.
Even after learning of the third abortion, the appellee does not seem to
have taken interest in the administrative and criminal cases against the
appellant. His only concern appears to have been directed at obtaining
from the doctor a large money payment.

The decision appealed from is reversed, and the complaint ordered

dismissed. Without costs.

2.

DOCTRINE: A conceived child, although as yet unborn, is given by

law a provisional personality of its own for all purposes favorable to
it, as explicitly provided in Article 40 of the Civil Code of the
Philippines.

CASE TITLE: Carmen Quimiguing vs. Felix Icao, GR. No. 26795; July 31,
1970

FACTS: Carmen Quimiguing’s family and Felix Icao were neighbors and
had close and confidential relations. Despite being married, Icao
succeeded in having carnal intercourse with Carmen several times by
force and intimidation, and without her consent. Despite efforts and drugs
supplied by Isao, Carmen became pregnant and had to stop studying.
Hence, she filed for support at P120.00 per month, damages and
attorney’s fees.

Icao moved to dismiss for lack of cause of action since the complaint did
not allege that the child had been born. The trial judge sustained Icao’s
motion and dismissed the complaint. Thereafter, Carmen moved to
amend the complaint to allege that as a result of the intercourse, she had
later given birth to a baby girl. However, the court ruled that no
amendment was allowable since the original complaint averred no cause
of action. Wherefore, the plaintiff appealed directly to this Court.

ISSUE/S: May an action for support be filed for an unborn child?

HELD: YES. A conceived child, although as yet unborn, is given by law a

provisional personality of its own for all purposes favorable to it, as
explicitly provided in Article 40 of the Civil Code of the Philippines. The
unborn child, therefore, has a right to support from its progenitors,
particularly of Ilao(whose paternity is deemed admitted for the purpose of
the motion to dismiss), even if the said child is only “en ventre de sa
mere;;” just as a conceived child, even if as yet unborn, may receive
donations as prescribed by Article 742 of the same Code, and its being
ignored by the parent in his testament may result in preterition of a forced
heir that annuls the institution of the testamentary heir, even if such child
should be born after the death of the testator (Article 854, Civil Code).

The lower court’s theory that Article 291 of the Civil Code declaring that
support is an obligation of parents and illegitimate children “does not
contemplate support to children as yet unborn,” violates Article 40
aforesaid, besides imposing a condition that nowhere appears in the text
of Article 291. It is true that Article 40 prescribing that “the conceived child
shall be considered born for all purposes that are favorable to it” adds
further “provided it be born later with the conditions specified in the
following article” (i.e., that the foetus be alive at the time it is completely
delivered from the mother’s womb). This proviso, however, is not a
condition precedent to the right of the conceived child;; for if it were, the
first part of Article 40 would become entirely useless and ineffective.

A second reason for reversing the orders appealed from is that for a
married man to force a woman not his wife to yield to his lust (as averred
in the original complaint in this case) constitutes a clear violation of the
rights of his victim that entitles her to claim compensation for the damage
caused. Thus, independently of the right to Support of the child she was
carrying, plaintiff herself had a cause of action for damages under the
terms of the complaint;; and the order dismissing it for failure to state a
cause of action was doubly in error.

WHEREFORE, the orders under appeal are reversed and set aside. Let
the case be remanded to the court of origin for further proceedings
conformable to this decision. Costs against appellee Felix Icao. So
ordered.

3.

DOCTRINE:The unborn already has life, then the cessation thereof

even prior to the child being delivered, qualifies as death.
CASE TITLE: Continental Steel vs. Montaño, GR. No. 182836; October
13, 2009

FACTS:
Hortillano’s wife had a premature delivery while she was in the 38th week
of pregnancy but unfortunately the fetus died. Continental Steel immediat
ely granted Hortillano’s claim for parental leave but denied his claims for
bereavement leave and other benefits, consisting of the death and accide
nt insurance. Continental Steel posited that the express provision of the C
BA did not contemplate the death of an unborn child, a fetus, without lega
l personality. The appointed Voluntary Arbitrator , Atty. Montano, ruled in f
avor of Hortillano and that the 3 elements for the entitlement of bereavem
ent leave(death,dependent, legitimate) and 4 elements for the death and
accident insurance(death, dependent, legitimate, legal document) are pre
sent. However, the Continental Steel persistently argued that the CBA is c
lear and unambiguous, so the literal meaning of death should be applied.

ISSUE/S:
Whether or not the employee should be granted of bereavement leave an
d other benefits consisting of death and accident insurance considering hi
s child died withoutjuridical personality and the CBA did not specifically m
ention this qualification to be entitled with such?

HELD:
Yes, Hortillano is entitled to those benefits. The SC said that in this case,
the issue of civil personality is not relevant. It is not a question before us
whether the unbornchild acquired any rights or incurred any obligations pr
ior to his/her death that were passed on to or assumed by the child’s
parents. The rights to bereavement leave and other death benefits in the
instant case pertain directly to the parents of the unborn child upon the lat
ter’s death. Also, life is not synonymous with civil personality. If the unbor
n already has life, then the cessation thereof even prior to the child being
delivered, qualifies as death.

The CBA did not provide a qualification for the child dependent, such that
the child must have been born or must have acquired civil personality, as
Continental Steelavers. Without such qualification, then child shall be un
derstood in its more general sense, which includes the unborn fetus in the
mother’s womb.

Being for the benefit of the employee, CBA provisions on bereavement le

ave and other death benefits should be interpreted liberally to give life to t
he intentions thereof. Time and again, the Labor Code is specific in enun
ciating that in case of doubt in the interpretation of any law or provision af
fecting labor, such should be interpreted in favor of labor. In the same way
, the CBA and CBA provisions should be interpreted in favor of labor.

N VIEW WHEREOF, the Petition is DENIED. The Decision dated 27

February 2008 and Resolution dated 9 May 2008 of the Court of Appeals
in CA-G.R. SP No. 101697, affirming the Resolution dated 20 November
2007 of Accredited Voluntary Arbitrator Atty. Allan S. Montaño, which
granted to Rolando P. Hortillano bereavement leave pay and other death
benefits in the amounts of Four Thousand Nine Hundred Thirty-Nine
Pesos (₱4,939.00) and Eleven Thousand Five Hundred Fifty Pesos
(₱11,550.00), respectively, grounded on the death of his unborn child,
are AFFIRMED. Costs against Continental Steel Manufacturing
Corporation.
SO ORDERED.