SPS. GODFREY v. FAR EAST BANK, GR No.

171845, 2012-10-10

DOCTRINE:

Under Article 2219 of the Civil Code, moral damages are recoverable for acts referred to in
Article 21 of the Civil Code.21 Article 21 of the Civil Code, in conjunction with Article 19 of the
Civil Code, is part of the cause of action known in this jurisdiction as "abuse of rights." 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.

Facts:

Compromise judgment dated October 24, 1995[3] of the RTC of Bacolod City, Branch 47, in Civil
Case No. 95-9880. Civil Case No. 95-9880 was an action for collection of sum of money instituted
by the... petitioner spouses Godfrey and Gerardina Serfino (collectively, spouses Serfino) against
the spouses Domingo and Magdalena Cortez

By way of settlement, the spouses Serfino and the spouses Cortez executed a compromise
agreement... spouses Cortez acknowledged their indebtedness to the spouses Serfino in the
amount of P108,245.71. To satisfy the debt, Magdalena bound herself "to pay in full the judgment
debt out of her retirement benefits... made one (1) week after Magdalena has received her
retirement benefits from the Government Service Insurance System (GSIS)

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.[5] 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

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. (FEBTC).

That same day, the spouses Serfino's 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... spouses Serfino instituted Civil Case No. 95-9344 against the spouses
Cortez, Grace and her husband, Dante Cortez, and FEBTC for the recovery of money on deposit
and the payment of damages, with a prayer for preliminary attachment.
Grace withdrew P150,000.00 from her savings account... spouses Cortez manifested that they
were turning over the balance of the deposit in FEBTC (amounting to P54,534.00) to the spouses
Serfino as partial payment

RTC... issued an order dated July 30, 1997, authorizing FEBTC to turn over the balance of the
deposit to the spouses Serfino.

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.

Issues:

FEBTC was thus not chargeable with notice of the parties' agreement, as there was no valid court
order or processes requiring it to withhold payment of the deposit. Given the... nature of bank
deposits, FEBTC was primarily bound by its contract of loan with Grace. There was, therefore,
no legal justification for the bank to refuse payment of the account, notwithstanding the claim of
the spouses Serfino as stated in their three letters.

Ruling:

We find the petition unmeritorious and see no reason to reverse the RTC's ruling.

spouses Serfino invoke American common law that imposes a duty upon a bank receiving a notice
of adverse claim to the fund in a depositor's account to freeze the account for a reasonable length
of time, sufficient to allow the adverse claimant to institute legal... proceedings to enforce his right
to the fund.[22] In other words, the bank has a duty not to release the deposits unreasonably
early after a third party makes known his adverse claim to the bank deposit. Acknowledging that
no such duty is... imposed by law in this jurisdiction, the spouses Serfino ask the Court to adopt
this foreign rule.

To adopt the foreign rule, however, goes beyond the power of this Court to promulgate rules
governing pleading, practice and procedure in all courts.[24] The rule reflects a matter of policy
that is better addressed by the other branches of... government, particularly, the Bangko Sentral
ng Pilipinas, which is the agency that supervises the operations and activities of banks, and which
has the power to issue "rules of conduct or the establishment of standards of operation for uniform
application to all... institutions or functions covered
Recognizing that the rule imposing duty on banks to freeze the deposit... upon notice of adverse
claim adopts a policy adverse to the bank and its functions, and opens it to liability to both the
depositor and the adverse claimant,[26] many American states have since adopted adverse claim
statutes that shifted or, at least,... equalized the burden. Essentially, these statutes do not impose
a duty on banks to freeze the deposit upon a mere notice of adverse claim; they first require either
a court order or an indemnity bond.

rejects the adoption of a judicially-imposed rule giving third parties with unverified claims against
the... deposit of another a better right over the deposit. As current laws provide, the bank's
contractual relations are with its depositor, not with the third party;[28] "a bank is under obligation
to treat the accounts of its depositors with meticulous... care and always to have in mind the
fiduciary nature of its relationship with them."[29] In the absence of any positive duty of the bank
to an adverse claimant, there could be no breach that entitles the latter to moral damages.

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.
TITUS B. VILLANUEVA v. EMMA M. ROSQUETA, GR No. 180764, 2010-01-19

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.

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.

Issues:

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.

Ruling:

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[10] and
21[11] 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.

The Court DENIES the petition and AFFIRMS the decision of the Court of Appeals

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.
Baksh v. CA (G.R. No. 97336) February 19, 1993

DOCTRINE:

Art. 23. Any person who wilfully 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.
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:

Whether Marilou may recover damages from Gashem on the basis of Article 21. -- YES.
HELD:

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 livingin with him preparatory to their
supposed marriage.

WHEREFORE, finding no reversible error in the challenged decision, the instant petition is hereby
DENIED, with costs against the petitioner.
LAND BANK OF THE PHILIPPINES, Petitioner v. ALFREDO ONG, Respondent. (G.R. No.
190755; November 24, 2010).

DOCTRINE:

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.

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: Is Land Bank liable to Ong?

HELD: 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.

Petition is DISMISSED, but the interest is at 6%.

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.
G.R. No. 195549 September 3, 2014

WILLAWARE PRODUCTS CORPORATION, Petitioner,

vs. JESICHRIS MANUFACTURING CORPORATION, Respondent.

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."

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:

1. Whether or not there is unfair competition under human relations when the parties are not
competitors and there is actually no damage on the part of Jesichris?

2. Consequently, if there is no unfair competition, should there be moral damages and attorney’s
fees?

3. Whether or not the addition of nominal damages is proper although no rights have been
established?

Held:

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.

However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (P50,000.00).

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 (P50,000.00).
G.R. No. 177484, July 18, 2014 - SPOUSES ALEJANDRO MANZANILLA AND REMEDIOS
VELASCO, Petitioners, v. WATERFIELDS INDUSTRIES CORPORATION, REPRESENTED BY
ITS PRESIDENT, ALIZA MA, Respondent.

DOCTRINE:

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.

Facts: The spouses Manzanilla are the owners of a 25,000-square meter parcel of land in
Barangay San Miguel, Sto. Tomas, Batangas. On May 24, 1994, they leased a 6,000-square
meter portion to Waterfields. The parties executed on June 6, 1994 an Amendment to the Contract
of Lease. Beginning April 1997, however, Waterfields failed to pay the monthly rental. Hence, Ma
sent the spouses Manzanilla a letter promising to pay the unpaid rentals, due to lessees failure to
comply with their obligation, spouses Manzanilla filed before the MTC a Complaint for Ejectment
against Waterfields. MTC declared that Waterfields violated the lease agreement due to non-
payment of rentals. The case was elevated to the RTC where the latter affirmed the decision
made by the MTC, however the CA reversed the decision that the contract of lease was already
terminated because of the stipulation contained in their amended contract of lease which
provides; The deposit stipulated in our lease contract shall be used exclusively for the payment
of unpaid utilities, if any, and other incidental expenses only and applied at the termination of the
lease, hence this petition for review on certiorari

Issue: Whether or not the CA was correct in dismissing the action for unlawful detainer

Held: No, the court enunciated that for the purpose of bringing an unlawful detainer suit, two
requisites must concur: (1) there must be failure to pay rent or comply with the conditions of
the lease, and (2) there must be demand both to pay or to comply and vacate. The first
requisite refers to the existence of the cause of action for unlawful detainer, while the second
refers to the jurisdictional requirement of demand in order that said cause of action may be
pursued. Implied in the first requisite, which is needed to establish the cause of action of the
plaintiff in an unlawful detainer suit, is the presentation of the contract of lease entered into by the
plaintiff and the defendant, the same being needed to establish the lease conditions alleged to
have been violated. Thus, in Bachrach Corporation v. Court of Appeals, the Court held that the
evidence needed to establish the cause of action in an unlawful detainer case is (1) a lease
contract and (2) the violation of that lease by the defendant. Here, there is no issue with
respect to demand. What is in question is the presence of a cause of action. As mentioned above,
courts, in order to ascertain whether there is cause of action for unlawful detainer, must inquire
into (a) the existence of the lease contract and, (b) the violation of that lease by the lessee.
Since in this case the existence of a lease contract between the parties is undisputed, the focus
is on the supposed violation of the lease, that is, Waterfields’ alleged non-payment of rent which
amounts to the violation of the contract of lease. Thus, the decision of the MTC is reinstated and
affirmed.

WHEREFORE, the Petition is GRANTED. The Decision dated September 15,2006 and
Resolution dated April 12, 2007 ofthe 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.
RAUL H. SESBREÑO v. CA, GR No. 160689, 2014-03-26

DOCTRINE

Article 19 of the Civil Code sets the standards to be observed 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.

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. But the Regional Trial Court (RTC), Branch 13, in Cebu City
rendered judgment on August 19, 1994 dismissing the claim;[1] and the Court of Appeals (CA)
affirmed the dismissal on March 10, 2003. VECO engaged in the sale and distribution of electricity
within Metropolitan Cebu. Sesbreño was one of VECO's customers under the metered service...
contract they had entered into on March 2, 1982.[

Respondent Vicente E. Garcia was VECO's President, General Manager and Chairman of its
Board of Directors. Respondent Jose E. Garcia was VECO's Vice-President, Treasurer and a
Member of its Board of

Directors. Respondent Angelita Lhuillier was another Member of VECO's Board of Directors.
Respondent Juan Coromina was VECO's Assistant Treasurer, while respondent Norberto
Abellana was the Head of VECO's Billing Section whose main function was to compute back
billings of... customers found to have violated their contracts.

To ensure that its electric meters were properly functioning, and that none of it meters had been
tampered with, VECO employed respondents Engr. Felipe Constantino and Ronald Arcilla as
violation of contract (VOC) inspectors.[4] Respondent Sgt. Demetrio

Balicha, who belonged to the 341st Constabulary Company, Cebu Metropolitan Command, Camp
Sotero Cabahug, Cebu City, accompanied and escorted the VOC inspectors during their
inspection of the households of its customers on May 11, 1989 pursuant to a mission order issued
to... him.[5]
It all has to do with an incident that occurred at around 4:00 o'clock in the afternoon of May 11,
1989. On that... day, the Violation of Contracts (VOC) Team of defendants-appellees Constantino
and Arcilla and their PC escort, Balicha, conducted a routine inspection of the houses at La
Paloma Village, Labangon, Cebu City, including that of plaintiff-appellant Sesbreño, for illegal...
connections, meter tampering, seals, conduit pipes, jumpers, wiring connections, and meter
installations. After Bebe Baledio, plaintiff-appellant Sesbreño's maid, unlocked the gate, they
inspected the electric meter and found that it had been turned upside down.

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.

The VOC Team then asked for and received Chuchie Garcia's permission to enter the house itself
to examine the kind and number of appliances and light fixtures in the household and determine
its electrical load. Afterwards, Chuchie Garcia signed... the Inspection Division Report, which
showed the condition of the electric meter on May 11, 1989 when the VOC Team inspected it,
with notice that it would be subjected to a laboratory test. She also signed a Load Survey Sheet
that showed the electrical load of... plaintiff-appellant Sesbreño.

But according to plaintiff-appellant Sesbreño there was nothing routine or proper at all with what
the VOC Team did on May 11, 1989 in his house. Their entry to his house and the surrounding
premises was effected without his permission and over the objections of his maids.

They... threatened, forced or coerced their way into his house. They unscrewed the electric meter,
turned it upside down and took photographs thereof. They then replaced it with a new electric
meter. They searched the house and its rooms without his permission or a search warrant.

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.

Judgment of the RTC

On August 19, 1994, the RTC rendered judgment dismissing the complaint. It did not accord
credence to the testimonies of Sesbreño's witnesses, Bebe Baledio, his housemaid, and Roberto
Lopez, a part-time salesman, due to inconsistencies on material points... in their respective
testimonies.
It observed that Baledio could not make up her mind as to whether Sesbreño's children were in
the house when the VOC inspection team detached and replaced the electric meter. Likewise, it
considered unbelievable that Lopez should hear the... exchanges between Constantino, Arcilla
and Balicha, on one hand, and Baledio, on the other, considering that Lopez could not even hear
the conversation between two persons six feet away from where he was seated during the
simulation done in court, the same distance he supposedly... had from the gate of Sesbreño's
house during the incident.

It concluded that for Lopez to do nothing at all upon seeing a person being threatened by another
in the manner he described was simply contrary to human... experience.

the RTC believed the evidence of the respondents showing that the VOC inspection team had
found the electric meter in Sesbreño's residence turned upside down to prevent the accurate
registering of the electricity consumption of the household, causing them to detach... and replace
the meter

It held as unbelievable that the team forcibly entered the house through threats and intimidation;

Decision of the CA

Sesbreño appealed, but the CA affirmed the RTC on March 10, 2003,[... x x x. plaintiff-appellant
Sesbreño's account is simply too implausible or far-fetched to be believed.

the inspection on his household was just one of many others that the VOC Team had conducted
in that subdivision. Yet, none but plaintiff-appellant

Sesbreño complained of the alleged acts of the VOC Team.

There is no evidence that the VOC Team harbored any evil motive or grudge against plaintiff-
appellant Sesbreño, who is a total stranger to them.

It becomes all the more apparent that the charges stemming from the May 11, 1989 incident were
fabricated when taken together with the lower court's evaluation of the alleged theft of plaintiff-
appellant Sesbreño's personal effects

It stated that on August 8, 1989,... plaintiff-appellant Sesbreño wrote the barangay captain of
Punta Princesa and accused Chuchie Garcia and Victoria Villarta alias Victoria Rocamora of theft
of some of his things that earlier he claimed had been stolen by members of the VOC Team.
All in all, the allegations against defendants-appellees appear to be nothing more than a put-on
to save face. For the simple truth is that the inspection exposed plaintiff-appellant Sesbreño as a
likely cheat and thief.

Issues:

Was Sesbreño entitled to recover damages for abuse of rights?

Ruling:

The appeal has no merit.

Sesbreño's main contention is that the inspection of his residence by the VOC team was an
unreasonable search for being carried out without a warrant and for being allegedly done with
malice or bad faith.

Before... we have to note that two distinct portions of Sesbreño's residence were inspected by the
VOS team the garage where the electric meter was installed, and the main premises where the
four bedrooms, living rooms, dining room and kitchen were... located

The authority emanated from paragraph 9 of the metered service contract entered into between
VECO and each of its consumers, which provided as follows:

9. The CONSUMER agrees to allow properly authorized employees or representatives of the

COMPANY to enter his premises at all reasonable hours without being liable to trespass
to dwelling for the purpose of inspecting, installing, reading, removing, testing, replacing...
or otherwise disposing of its property, and/or removing the COMPANY'S property in the
event of the termination of the contract for any cause.

Sesbreño contends, however, that paragraph 9 did not give Constantino, Arcilla and Balicha the
blanket authority to enter at will because the only property VECO owned in his premises was the
meter

We do not accept Sesbreño's conclusion. Paragraph 9 clothed the entire VOC team with
unquestioned authority to enter the garage to inspect the meter. The members of the team
obviously met the conditions imposed by paragraph 9 for an authorized entry.

On the other hand, the CA correctly observed that the inspection did not zero in on Sesbreño's
residence because the other houses within the area were similarly subjected to the routine
inspection.[20] This, we think, eliminated any notion of... malice or bad faith.
Moreover, according to a commentator, [22] "the... exercise of right ends when the right
disappears, and it disappears when it is abused, especially to the prejudice of others[;] [i]t cannot
be said that a person exercises a right when he unnecessarily prejudices another." Article 19 of
the Civil Code[23]... sets the standards to be observed 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.[24]

Although the act is not illegal, 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.[25] There is no hard and fast rule that can be applied to ascertain
whether or not the principle of... abuse of rights is to be invoked. The resolution of the issue
depends on the circumstances of each case. Sesbreño asserts that he did not authorize Baledio
or Chuchie Garcia to let anyone enter his residence in his absence; and that Baledio herself
confirmed that the members of the VOC team had intimidated her into letting them in.

The assertion of Sesbreño is improper for consideration in this appeal. The RTC and the CA
unanimously found the testimonies of Sesbreño's witnesses implausible because of
inconsistencies on material points; and even declared that the non-presentation of Garcia as a
witness was... odd if not suspect. Considering that such findings related to the credibility of the
witnesses and their testimonies, the Court cannot review and undo them now because it is not a
trier of facts, and is not also tasked to analyze or weigh evidence all over again.

Nor should the Court hold that Sesbreño was denied due process by the refusal of the trial judge
to inhibit from the case.

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision
promulgated on March 10, 2003; and DIRECTS the petitioner to pay the costs of suit.
CARLOS A. LORIA v. LUDOLFO P. MUÑOZ, GR No. 187240, 2014-10-15

DOCTRINE:

Under Article 22 of the Civil Code of the Philippines, "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."

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.[13] With the project allegedly finished, Muñoz demanded Loria to return
his P2,000,000.00. Loria, however, did not return the... money.[14]

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.[15]

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.

Issues:

whether Loria is liable to Muñoz for P2,000,000.00

The issues for our resolution are the following:

IWhether Loria initially obtained P3,000,000.00 from a certain Grace delos Santos

Whether Loria is liable for P2,000,000.00 to Muñoz

We rule for Muñoz and deny Loria's petition for review on certiorari.

Ruling:

Loria must return Munoz's P2,000,000.00... under the principle of unjust enrichment

Under Article 22 of the Civil Code of the Philippines, "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 money or property of another against the fundamental principles of justice,
equity and good conscience.

In this case, Loria received P2,000,000.00 from Muñoz for a subcontract of a government project
to dredge the Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to
the parties' agreement, Muñoz was not subcontracted for the project. Nevertheless,... Loria
retained the P2,000,000.00.

"the application of the doctrine of in pari delicto is not always rigid."[70] An exception to the
doctrine is "when its application... contravenes well-established public policy."[71] In Gonzalo,
this court ruled that "the prevention of unjust enrichment is a recognized public policy of the
State."[72] It is, therefore, an exception to the... application of the in pari delicto doctrine. This
court explained:... public policy has been defined as "that principle of the law... which holds that
no subject or citizen can lawfully do that which has a tendency to be injurious to the public or
against the public good."

In this case, both the trial and appellate courts found that Loria received P2,000,000.00 from
Muñoz for a subcontract of the river-dredging project. Loria never denied that he failed to fulfill
his agreement with Muñoz. Throughout the case's proceedings, Loria... failed to justify why he
has the right to retain Muñoz's P2,000,000.00. As the Court of Appeals ruled, "it was not shown
that [Muñoz] benefited from the delivery of the amount of P2,000,000.00 to [Loria].

WHEREFORE, the petition for review on certiorari is DENIED. The Court of Appeals’ decision
and resolution in CA-G.R. CV No. 81882 are AFFIRMED with MODIFICATION as to interest rate.
Petitioner Carlos A. Loria shall pay respondent Ludolfo P. Muñoz, Jr. P2,000,000.00 in actual
damages, with interest of 12% interest per annum from the filing of the complaint until June 30,
2013, and 6% interest per annum from July 1, 2013 until full payment.
University of the Philippines vs Philab Industries, Inc.
G.R. No. 152411
September 29, 2004

DOCTRINE:

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.

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:
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.
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 with no costs.

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.
IMELDA MARBELLA-BOBIS, petitioner

vs. ISAGANI D. BOBIS, respondent

Doctrine:

Ignorance of the law excuses no one from compliance therewith.

Facts:

On October 21, 1985 the respondent and Maria Dulce Javier got married. This was the first
marriage of the respondent which was not judicially declared as nullified before the second
marriage contracted by the respondent with the petitioner which was celebrated on January 25,
1996. It was also alleged that there is a third marriage contracted by the respondent with some
Julia Hernandez.

On February 25, 1998, the petitioner filed bigamy, a criminal case, against his husband
respondent. Thereafter, the respondent initiated a civil action for the judicial declaration of
absolute nullity of his first marriage on the grounds that this was celebrated without a marriage
license which is a formal requisite for a valid marriage. The respondent also contends of his
ignorance of the requirement of judicial declaration of nullity of marriage before contracting in a
new marriage. Thus, the Regional Trial Court (RTC) suspended the proceedings of the criminal
case pending the decision of the civil case.

Advertisement

The petitioner then files this case for review on certiorari.

Issue:

Whether or not the respondent can invoke his ignorance of the requirement under Article 40 of
the Family Code.

Held:

No, the respondent cannot invoke his ignorance of the requirement for the judicial declaration of
nullity of marriage before contracting a new marriage.

Article 3 of the Civil Code states that, ignorance of the law excuses no one from compliance
therewith. Thus, the respondent is presumed to have a conclusive knowledge of the requisites of
a valid marriage since the Family Code is already in effect and force during the celebration of his
second marriage with the petitioner.
Hence, the decision of the RTC in suspending the criminal case pending the civil case was
reversed because it is wrong to invoke ignorance of a law which is already in effect and force like
the Family Code.

WHEREFORE, the petition is GRANTED. The order dated December 29, 1998 of the Regional
Trial Court, Branch 226 of Quezon City is REVERSEDand SETASIDE and the trial court is ordered
to IMMEDIATELYproceed with Criminal Case No. Q98-75611.