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Human Relations (Art. 19-36)

1. Spouses Godfrey and Gerardina Serfino vs. Far East Bank And Trust Company, Inc.,
now BPI; G.R. No. 171845; October 10, 2012

DOCTRINE

Article 21 in conjecture with Article 19 of the New Civil Code

 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:

By way of settlement approved by the RTC Bacolod, the Spouses Serfino and Spouses
Cortez executed a compromise agreement where the spouses Cortez, acknowledged their debt of
P 108,245.71, eventually reduced to P155,000 with the promise that they would pay in full the
judgment debt not later than April 23, 1996.To satisfy their debt, Magdalena Cortez bound
herself to pay the debt in full out of her retirement benefits from the GSIS. In case of default, the
debt may be executed against any of their properties.

No payment was made on that date, and Godfrey Serfino discovered that Magdalena
deposited her retirement benefits in the FEBTC savings account of her daughter in law, Grace
Cortez. That same day, spouses Serfino’s counsel sent 2 letters to FEBTC informing themthat the
deposit in Grace’s name was owned by the spouses by virtue of an assignment made in their
favor by the spouses Cortez. They asked that the bank prevent the deliver y of the said amount to
either Grace or the spouses Cortez until its actual ownership has been resolved in court.

An action to recover the money on deposit and payment for damages was filed by
Serfino, with a prayer for preliminary attachment, but the next day, Grace withdrew P150,000
from her account. RTC ruled that the spouses Cortez and Grace liable for fraudulently diverting
the amount due, but absolved FEBTC from any liability, declaring that the bank was not party to
the compromise judgement. The spouses Serfino contend this ruling, on the grounds of the
virtue of the assignment of credit, they claim ownership of the deposit, and that FEBTC was duty
bound to protect their right by preventing the withdrawal of the deposit since the bank had been
notified of the assignment and of their claim.

ISSUE:

Whether or not FEBTC is obligated to a third party who claims rights over a bank deposit
standing in the name of another person who is their depositor.

RULING:
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No. The terms of the compromise judgment between them did not convey an intent to
equate the assignment of Magdalena’s retirement benefits (the credit) as the equivalent of the
payment of the debt due the spouses Serfino (the obligation). There was actually no assignment
of credit as the compromise judgment merely identified the fund from which payment for the
judgment debt would be sourced. That the compromise agreement authorizes recourse in case of
default on other executable properties of the spouses Cortez, to satisfy the judgment debt, further
supports our conclusion that there was no assignment of Magdalena’s credit with the GSIS that
would have extinguished the obligation.

The Bank is also not liable for damages as there is no law or legal right abused by it.
Absent a law or a legal ruling of the Court, it has no option but to uphold the existing policy that
recognizes the fiduciary nature of banking. It likewise 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. 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.

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

DOCTRINE:

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.

FACTS:

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 on January 23, 2001, shortly after President Gloria
Macapagal-Arroyo assumed office. But five months later on June 5, 2001, 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, on July 13, 2001 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 (RTC) of Manila in Civil Case 01-101539. On August 27, 2001 the RTC issued a

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temporary restraining order (TRO), enjoining Villanueva and the Finance Secretary from
implementing Valera’s appointment. On August 28, 2001 the trial court superseded the TRO
with a writ of preliminary injunction.

On November 22, 2001 while the preliminary injunction in the quo warranto case was
again in force, petitioner Villanueva issued Customs Memorandum Order 40-2001, authorizing
Valera to exercise the powers and functions of the Deputy Commissioner.

During the Bureau’s celebration of its centennial anniversary in February 2002, 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.

On February 28, 2002 respondent Rosqueta filed a complaint for damages before the
RTC of Quezon City against petitioner Villanueva in Civil Case Q-02-46256, 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. Thus, she asked the RTC to award her
P1,000,000.00 in moral damages, P500,000.00 in exemplary damages, and P300,000.00 in
attorney’s fees and costs of suit.

RTC dismissed the case. CA reversed granting Villanueva to pay P500,000.00 in moral
damages, P200,000.00 in exemplary damages and P100,000.00 in attorney’s fees and litigation
expenses.

ISSUE:

Whether or not the CA erred in holding petitioner Villanueva liable in damages to

respondent Rosqueta for ignoring the preliminary injunction order that the RTC issued in the quo
warranto case, 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:

Yes. Petitioner Villanueva cannot seek shelter in the alleged advice that the OSG gave
him. Surely, a government official of his rank must know that a preliminary injunction order
issued by a court of law had to be obeyed, especially since the question of Valera’s right to
replace respondent Rosqueta had not yet been properly resolved.

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.

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The CA correctly awarded moral damages to respondent Rosqueta.

Here, respondent Rosqueta’s colleagues and friends testified that she suffered severe
anxiety on account of the speculation over her employment status. She had to endure being
referred to as a “squatter” in her workplace. She had to face inquiries from family and friends
about her exclusion from the Bureau’s centennial anniversary memorabilia. She did not have to
endure all these affronts and the angst and depression they produced had Villanueva abided in
good faith by the court’s order in her favor. Clearly, she is entitled to moral damages.

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.

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

DOCTRINE:

Civil Law – The New Civil Code – Human Relations

Article 21. Any person who wilfully 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

FACTS:

Petitioner Gashem Shookat Baksh was a medicine student at Lyceum Northwestern

Colleges at Dagupan City. He was an Iranian exchange student and was 29 years old.
Respondent Marilou T. Gonzales was a former waitress on a luncheonette, and was 22 years old.
Petitioner was allegedly the lover of the respondent, and promised marriage at the end of the
semester. Because of the said promise convinced respondent decided to live with him in his
apartment. Petitioner then went to the house of the respondent to inform her family about the
marriage on the end of the semester. However, the marriage did not materialize. Furthermore, the
respondent suffered several beatings and maltreatment from the petitioner while she was residing
with him.

The case was filed in the RTC of Pangasinan, and the decision was held in favor of the
respondent. However, the petitioner claimed that the judgment of the RTC was an error, for the
claims of the respondent are not true, and that he did not know about the custom of the Filipinos;
his acts were in accordance of his custom. The decision of the RTC was affirmed in toto by the
Court of Appeals. Hence, the petitioner filed an appeal to the Supreme Court.

ISSUE:

Whether or not the respondent could claim payment for the damages incurred by the
petitioner.

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RULING:

Yes.The Supreme Court ruled that although breach of promise to marry per se is not an
actionable wrong, the aggrieved party may still be recover damages from such beach. Here, it is
evident from the facts that petitioner Gashem Baksh had no intention to marry Marilou Gonzales
on the account of her “ignoble birth, inferior educational background, poverty and, as perceived
by him, dishonorable employment.” Petitioner, Gashem Baksh was not motivated by good faith
and honest motive when he proposed his love and promised to marry Marilou Gonzales rather 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.

Since the respondent was able to prove that she has a good moral character, and that she
had just let her virginity be taken away by the petitioner since the latter offered a promise of
marriage, then she deserves reparation as payment for damages. Moreover, the father of the
respondent had already looked for pigs and chicken for the marriage reception and the sponsors
for the marriage, and then damages were caused by the petitioner against the respondents, which
qualified the claims of the respondent against the petitioner. The Court in this case 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.

4. Landbank of the Philippines vs. Alfredo Ong; GR No. 190755; November 24, 2010

DOCTRINE:

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.

(Unjust Enrichment/Action in rem verso)

FACTS:

On March 18, 1996, spouses Johnson and Evangeline Sy obtained a 16 Million php loan
from Land Bank Legazpi City in the amount of PhP 16 million 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, which forced them to sell the three parcels of land to Alfredo
Ong.

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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.

ISSUE: 

Whether or not Land Bank liable to Ong?

HELD: 

Yes. 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.

Here, 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.

5. Willaware Products Corporation vs. Jesichris Manufacturing Corp. GR. No. 195549;
September 3, 2014

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:

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The respondent Jesichris Manufacturing Company, 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, it 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: 

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?

HELD:

Yes. 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."

In order to qualify the competition as "unfair," it must have two characteristics: (1) it
must involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or...
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or interest

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is a minor factor; the essence of the matter appears to be a private wrong perpetrated by...
unconscionable means.

Here, both characteristics are present.

First, both parties are competitors or trade rivals, both being engaged in the manufacture
of plastic-made automotive parts.

Second, the acts of the petitioner were clearly "contrary to good conscience" as petitioner
admitted having employed respondent's former... employees, deliberately copied respondent's
products and even went to the extent of selling these products to respondent's customers.

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.

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).

6. Spouses Alejandro Manzanilla and Remedios Velasco vs. Waterfields Industries

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

DOCTRINE:

Article 19 Civil Code

“Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.”

Spouses Alejandro Manzanilla and Remedios Velasco vs. Waterfields Industries Corporation
G.R. No. 177484
Del Castillo, J July 18, 2014
Facts:
The spouses Manzanilla are the owners of a parcel of land. They leased a portion to the
Waterfields.
They executed and amendment to the contract of lease. Starting April 1997, waterfields failed to
pay he
monthly rental. The spouses manzanilla filed before the MTC a complaint for
ejectment against
waterfields. They alleged that they entered into a contact of lease with waterfields on and that the
same

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was amended. The case was elevated to the RTC, however the CA reversed the decision that the
contract
of lease which says; be used exclusively for the payment of unpaid utilities, if any, and other
incidental
expenses only applied at the termination of the lease.
Issue:
Whether or not he CA is correct in saying that spouses has no cause of action in dismissing
the
action for unlawful detainer.
Held:
No. For 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 a 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 and the defendant, the same being needed to establish the lease conditions alleged to
have
been violated. Failure to pay the rent must precede termination of the contract due to non-
payment of
rent. It therefore follows that the cause of action for unlawful detainer in this case must
necessarily arise
before the termination of the contract and not the other way around as what the CA supposed.
Indeed,
in going beyond the termination of the contract, the CA went in a bit too far in its resolution of
this case
FACTS:

The spouses Manzanilla are the owners of a 25,000-square meter parcel of land located in
Barangay San Miguel, Sto. Tomas, Batangas. On May 24, 1994, they leased a portion thereof to
the Waterfields.  The parties executed on June 6, 1994 an Amendment to the Contract of
Lease. However, starting April 1997, Waterfields failed to pay the monthly rentals. The
spouses Manzanilla filed before the MTC a complaint for ejectment against
Waterfields. They alleged that Waterfields failed to honor their contract and pay the
aforementioned rents. The MTC ruled in favor of the spouses. The case was elevated to the RTC
which affirmed the decision of the lower court. On appeal, 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 that the deposit stipulated in their 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.
Spouses Alejandro Manzanilla and Remedios Velasco vs. Waterfields Industries Corporation
G.R. No. 177484

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Del Castillo, J July 18, 2014

Facts:
The spouses Manzanilla are the owners of a parcel of land. They leased a portion to the
Waterfields.
They executed and amendment to the contract of lease. Starting April 1997, waterfields failed to
pay he
monthly rental. The spouses manzanilla filed before the MTC a complaint for
ejectment against
waterfields. They alleged that they entered into a contact of lease with waterfields on and that the
same
was amended. The case was elevated to the RTC, however the CA reversed the decision that the
contract
of lease which says; be used exclusively for the payment of unpaid utilities, if any, and other
incidental
expenses only applied at the termination of the lease.
Issue:
Whether or not he CA is correct in saying that spouses has no cause of action in dismissing
the
action for unlawful detainer.
Held:
No. For 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 a 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 and the defendant, the same being needed to establish the lease conditions alleged to
have
been violated. Failure to pay the rent must precede termination of the contract due to non-
payment of
rent. It therefore follows that the cause of action for unlawful detainer in this case must
necessarily arise
before the termination of the contract and not the other way around as what the CA supposed.
Indeed,
in going beyond the termination of the contract, the CA went in a bit too far in its resolution of
this case

ISSUE:

Whether or not he CA is correct in saying that spouses has no cause of action in

dismissing the action for unlawful detainer.

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RULING:

No. For 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
a 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 and the defendant, the same being needed
to establish the lease conditions alleged to have been violated. Failure to pay the rent must
precede termination of the contract due to non-payment of rent. It therefore follows that the
cause of action for unlawful detainer in this case must necessarily arise before the termination of
the contract and not the other way around as what the CA supposed. Indeed, in going beyond the
termination of the contract, the CA went in a bit too far in its resolution of this case.

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 affinned 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.

7. Raul Sesbreno vs. Court of Appeals; GR. No. 160689; March 26, 2014

DOCTRINE:

Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the
exercise of legal right or duty, act in good faith. He would be liable if he instead acted in bad
faith, with intent to prejudice another

Article 32. Any public officer or employee, or any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and
liberties of another person shall be liable to the latter for damages:   x x x x   (9) The right to be
secured in one’s person, house, papers, and effects against unreasonable searches and seizures;  
x x x x.  

FACTS:

Petitioner Sesbreno is a consumer of herein respondent Visayan Electirc Company

otherwise known as VECO. On May 11, 1989 at around 04:00 pm, the violation contract team
(VOC) of VECO conducted a routine inspection of houses at La Paloma Village, Labanson,
Cebu City. The VOC searched for illegal connections, meter tampering, seals, conduit pipes,
jumpers, wiring connections and meter installations. The house of the petitioner was included in

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the search. The VOC was accompanied by a police escort Balicha who was merely there to
observe.

In the Course of their inspection of the house of petitioner, they found that the electric
meter of the petitioner had been turned upside down. The VOC requested permissions to ingress
the house of the petitioner to examine the kind and number of appliances and light fixtures in the
said household and determine its electrical load. This aggrieved the petitioner to file a complaint
against VECO and its team VOC on the ground that they had not search warrant to enter and
inspect his house which violated his constitutional rights against unlawful searches and seizures.
He also contended that VECO violated his right under Article 32.

Both the RTC and CA dismissed his claim

ISSUE:

Whether or not VECO through the VOC violated the rights of the petitioner.

RULING:

No. The constitutional guaranty against unlawful searches and seizures is intended as a
restraint against the Government and its agents tasked with law enforcement. It is to be invoked
only to ensure freedom from arbitrary and unreasonable exercise of State power. The Court has
made this clear in its pronouncements, including that made in People v. Marti,17 viz:

If the search is made upon the request of law enforcers, a warrant must generally be first secured
if it is to pass the test of constitutionality. However, if the search is made at the behest or
initiative of the proprietor of a private establishment for its own and private purposes, as in the
case at bar, and without the intervention of police authorities, the right against unreasonable
search and seizure cannot be invoked for only the act of private individual, not the law enforcers,
is involved. In sum, the protection against unreasonable searches and seizures cannot be
extended to acts committed by private individuals so as to bring it within the ambit of alleged
unlawful intrusion by the government. Here, although Balicha is a police officer, his presence
participation in the entry did not make the inspection a search by an agent of the State within the
ambit of the guaranty. As already mentioned, Balicha was part of the team by virtue of his
mission order authorizing him to assist and escort the team during its routine inspection.
Consequently, the entry into the main premises of the house by the VOC team did not constitute
a violation of the guaranty.

  As to the abuse of rights, VECO likewise did not violate this right since it was within the
purview of their function to inspect their lines. Since, petitioner Sesbreño did not establish that
his rights were abused it is therefore paramount that his claim for damages to be denied. To
stress, the concept of abuse of rights prescribes that a person should not use his right unjustly or
in bad faith; otherwise, he may be liable to another who suffers injury. The rationale for the

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concept is to present some basic principles to be followed for the rightful relationship between
human beings and the stability of social order. 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.
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.

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.

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

DOCTRINE:

Article 22 of the Civil Codeof 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
orproperty of another against the fundamental principles of justice, equity and good conscience.

Principle of Unjust Enrichment

FACTS:

Ludolfo P. Muñoz, Jr.  alleged that he has been engaged in construction under the name,
"Ludolfo P. Muñoz, Jr. Construction."  On August 2000, Loria visited Muñoz in his office in
Doña Maria Subdivision in Daraga, Albay.  He invited Muñoz to advance P2,000,000.00 fora
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 mone.
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.

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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:

Whether or not Loria is liable to Muñoz?

RULING:

Yes, 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.

Here, 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." An exception to the
doctrine is "when its application... contravenes well-established public policy." In Gonzalo, this
court ruled that "the prevention of unjust enrichment is a recognized public policy of the State."
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].

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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.

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

DOCTRINE:

Article 22 of the New Civil Code

“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 orproperty of another against the
fundamental principles of justice, equity and good conscience.”

FACTS:

Sometime 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.

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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?

RULING:

Yes. 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

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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. Imelda Marbella-Bobis vs. Isagani D. Bobis; GR No. 138509; July 31, 2000

DOCTRINE:

Prejudicial Question is one which arises in a case the resolution of which is a logical antecedent
of the issue involved therein.

Article 40 Family Code requires a prior judicial declaration of nullity of a previous marriage
before a party may remarry.

FACTS:

The respondent contracted a first marriage with one Maria Dulce B. Javier. Without said
marriage having been annulled, nullified or terminated, the same respondent contracted a second
marriage with petitioner Imelda Marbella-Bobis... and allegedly a third marriage with a certain
Julia Sally Hernandez. An information for bigamy was filed against respondent

Sometime thereafter, 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. Respondent then filed a motion to suspend the proceedings in... the criminal case for
bigamy invoking the pending civil case for nullity of the first marriage as a prejudicial question
to the criminal case.

The trial judge granted the motion to suspend the criminal case

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Petitioner subsequently filed a motion for reconsideration, but the same was denied.

ISSUES:

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.

RULING:

No. A prejudicial question is one which arises in a case the resolution of which is a
logical antecedent of the issue involved therein. It is a question based on a fact distinct and
separate from the crime but so intimately connected with it that it determines the guilt or
innocence of the accused. It must appear not only that the civil case involves facts upon which
the criminal action is based, but also that the resolution of the issues raised in the civil action
would necessarily be determinative of the criminal case. Consequently, the defense must involve
an issue similar or intimately related to the same issue raised in the criminal action and its
resolution determinative of whether or not the latter action may proceed.

Its two essential elements are: the civil action involves an issue similar or intimately
related to the issue raised in the criminal action; and the resolution of such issue determines
whether or not the criminal action may proceed. A party who raises a prejudicial question is
deemed... to have hypothetically admitted that all the essential elements of a crime have been
adequately alleged in the information, considering that the prosecution has not yet presented a
single evidence on the indictment or may not yet have rested its case. A challenge of the...
allegations in the information on the ground of prejudicial question is in effect a question on the
merits of the criminal charge through a non-criminal suit.

Article 40 of the Family Code requires a prior judicial declaration of nullity of a previous
marriage before a party may remarry. The clear implication of this is that it is not for the parties,
particularly the accused, to determine the validity or invalidity of the marriage. In the case at bar,
respondent's clear intent is to obtain a judicial declaration of nullity of his first marriage and
thereafter to invoke that very same judgment to prevent his prosecution for bigamy. He cannot
have his cake and eat it too. Otherwise, all that an adventurous... bigamist has to do is to
disregard Article 40 of the Family Code, contract a subsequent marriage and escape a bigamy
charge by simply claiming that the first marriage is void and that the subsequent marriage is
equally void for lack of a prior judicial declaration of nullity of the first. A party may even enter
into a marriage aware of the absence of a requisite - usually the marriage license - and thereafter
contract a subsequent marriage without obtaining a declaration of nullity of the first on the
assumption that the first marriage is void. Such... scenario would render nugatory the provisions
on bigamy.

Only when the nullity of the marriage is so declared can it be held as void and so long as
there is no such declaration the presumption is that the marriage exists. No matter how obvious,
manifest or patent the absence of an element is, the intervention of the courts must always be
resorted to. That is why Article 40 of the Family Code requires a "final judgment," which only

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the courts can render. 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.

The lower court, therefore, erred in suspending the criminal case for bigamy.

In the light of Article 40 of the Family Code, the respondent, without first having
obtained the judicial declaration of nullity of the first marriage, cannot be said to have validly
entered into the second marriage. A marriage although void still needs a judicial declaration of
such fact before any party can marry again; otherwise the second marriage will also be void. The
reason is that, without a judicial declaration of its nullity, the first marriage is presumed to be
subsisting. In the case at bar,... respondent was for all legal intents and purposes regarded as a
married man at the time he contracted his second marriage with petitioner.[... gainst this legal
backdrop, any decision in the civil action for nullity would not erase the fact that respondent...
entered into a second marriage during the subsistence of a first marriage. Thus, a decision in the
civil case is not essential to the determination of the criminal charge. It is, therefore, not a
prejudicial question.

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.

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

DOCTRINE:

Civil Personality of an unborn fetus

FACTS:

Oscar Lazo impregnated Nita Villanueva before they were legally married. Desiring to
conceal her pregnancy from her parents, she had herself aborted by petitioner Antonio Geluz.
After her marriage with Lazo, she again became pregnant. As she was then employed in the
COMELEC and her pregnancy proved to be inconvenient, she had herself aborted again by
Geluz. Less than 2 years later, Nita incurred a third abortion of a two-month old fetus, in
consideration of the sum of P50.00. Her husband did not know of, nor consented to the abortion.
Hence, Oscar Lazo, private respondent, sued petitioner for damages based on the third and last
abortion. The trial court rendered judgment ordering Antonio Geluz to pay P3,000.00 as
damages, P700.00 as attorney’s fee and the cost of the suit. Court of Appeals affirmed the
decision.

ISSUE:

Whether or not the parent/s of an unborn foetus can sue for damages on its behalf.

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RULING:

No. The minimum award for the death of a person, does not cover the case of an unborn
foetus that is not endowed with personality and incapable of having rights and obligations. Since
an action for pecuniary damages on account of personal injury or 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). It is no answer to invoke the provisional personality of a conceived child
(conceptus pro nato habetur) under Article 40 of the Civil Code, because that same article
expressly limits such 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 the present case, there is no dispute that the child was dead when separated from its
mother's womb. 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, his right to life and physical integrity.

The decision appealed from is reversed, and the complaint ordered dismissed. Without
costs.

12. Carmen Quimiguing vs. Felix Icao, GR. No. 26795; July 31, 1970

DOCTRINE:

Article 40 of the Civil Code pertaining on the right of a unborn/conceived child

Article 21 of the New Civil Code 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:

Carmen Quimiging, the petitioner, and Felix Icao, the defendant, were neighbors in
Dapitan City and had close and confidential relations. Despite the fact that Icao was married, he
succeeded to have carnal intercourse with the plaintiff under force and intimidation and without
her consent. As a result, she became pregnant and had to pay for hospitalization and stopped
studying. The latter claimed damages of Php 120 a month.

Duly summoned, defendant 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 defendant's
motion and dismissed the complaint. Plaintiff moved to amend the complaint to allege that as a
result of the intercourse, she had later given birth to a baby girl; but the court, sustaining
defendant's objection, ruled that no amendment was allowable, since the original complaint
averred no cause of action. The plaintiff appealed directly to this Court.

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ISSUE:

Is a conceived child entitled to support?

RULING:

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.

It is thus clear that 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 fetus be alive at the
time it is completely delivered from the mother's womb).

The Supreme Court further stated that the 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 constitutes a
clear violation of the rights of his victim that entitles her to claim compensation for the damage
caused. Article 21 of the Civil Code of the Philippines states: ART. 21. 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. The rule of Article 21 is supported by Article
2219 of the same Code: ART 2219. Moral damages may be recovered in the following and
analogous cases: (3) Seduction, abduction, rape or other lascivious acts.

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.

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