UP vs.

PHILAB Industries
Unjust Enrichment

Facts:
In 1979, 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 Banos Providentially, the
Ferdinand E. Marcos Foundation (FEMF) came forward and agreed to fund the
acquisition of the laboratory furniture, including the fabrication thereof. 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, to be paid by FEMF.
Padolina assured Lirio, Executive Assistant of FEMF, that the contract would
be prepared as soon as possible before the issuance of the purchase orders and the
downpayment for the goods, and would be transmitted to the FEMF as soon as
possible. Despite the absence of any sample contracts, PHILAB made partial
deliveries of office and laboratory furniture to BIOTECH after having been duly
inspected by their representatives and FEMF Executive Assistant Lirio. Moreover, in
1982, FEMF proceeded to remit various sums of money to PHILAB as part of the
downpayment, for which the latter issued official receipts.
Later in the year 1982, a Memorandum of Agreement between FEMF and UP
was executed which affirms FEMFs obligation to grant financial support and donate
sums of money to the Research Complex as may be necessary. A year later,
Navasero, the President of PHILAB, promised to submit the contract for the
installation of lab furniture to BIOTECH by January 12, 1983. PHILAB failed to do so.
In response to repeated requests for a sample contract, PHILAB just sent
accomplishment reports and asked for payment, to which FEMF obliged.
For the last installment payment, FEMF failed to remit the required sum of
money despite repeated demands from PHILAB. FEMF never responded to the
demands of PHILAB. As one of its remedies, PHILAB sought payment from BIOTECH,
even if the same was to be paid in installment basis.
As its final recourse, PHILAB filed a complaint for sum of money and damages
against UP. 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.

The CA ruled that UP is liable under the doctrine of unjust enrichment.

Issues:
1. Whether or not UP is liable to pay for the unpaid balance
2. Whether or not the CA erred in basing its judgment on the doctrine
of unjust enrichment

Held:
1. No. The Supreme Court explained that a contract implied in fact is one
implied from facts and circumstances showing a mutual intention to contract.
It arises where the intention of the parties is not expressed, but an
agreement in fact creating an obligation. It is a contract, the existence and
terms of which are manifested by conduct and not by direct or explicit words
between parties but is to be deduced from conduct of the parties, language
used, or things done by them, or other pertinent circumstances attending the
transaction. To create contracts implied in fact, circumstances must warrant
inference that one expected compensation and the other to pay. An impliedin-fact contract requires the parties intent to enter into a contract; it is a true
contract. The conduct of the parties is to be viewed as a reasonable man
would view it, to determine the existence or not of an implied-in-fact contract.
The totality of the acts/conducts of the parties must be considered to
determine their intention. An implied-in-fact contract will not arise unless the
meeting of minds is indicated by some intelligent conduct, act or sign.
In this case, PHILAB was aware, from the time Padolina contacted it for
the fabrication and supply of the laboratory furniture until the go-signal was
given to it to fabricate and deliver the furniture to BIOTECH as beneficiary
that the FEMF was to pay for the same. PHILAB knew that UP was merely the
donee-beneficiary of the laboratory furniture and not the buyer; nor was it
liable for the payment of the purchase price thereof. From the inception, the
FEMF paid for the bills and statement of accounts of the respondent, for
which the latter unconditionally issued receipts to and under the name of the
FEMF.
2. Yes. The Supreme Court rejected the ruling of the CA based on unjust
enrichment. In order that accion in rem verso (action based on unjust
enrichment) may prosper, the essential elements must be present: (1) that

the defendant has been enriched, (2) that the plaintiff has suffered a loss, (3)
that the enrichment of the defendant is without just or legal ground, and (4)
that the plaintiff has no other action based on contract, quasicontract, crime or quasi-delict.
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.
Ty vs. CA
Judicial Declaration
Code/Damages

of

Nullity

of

Void

Marriage/Retroactivity

of

Family

Facts:
In 1977, Reyes married Anna Maria Villanueva in a civil ceremony. They had a
church wedding in the same year as well. In 1980, the Juvenile and Domestic
Relations Court of QC declared their marriage as null and void; the civil one for lack
of marriage license and the subsequent church wedding due to the lack of consent
of the parties. In 1979, prior to the JDRC decision, Reyes married Ofelia. Then in
1991, Reyes filed for an action for declaration of nullity of his marriage with Ofelia.
He averred that they lack a marriage license at the time of the celebration and that
there was no judicial declaration yet as to the nullity of his previous marriage with
Anna. Ofelia presented evidence proving the existence of a valid marriage license
including the specific license number designated. The lower court however ruled
that Ofelias marriage with Reyes is null and void. The same was affirmed by the CA
applying the provisions of the Art 40 of the Family Code.

Issues:
1. Whether or not a judicial decree of nullity of marriage is required before
contracting a subsequent marriage in the case at bar
2. Whether or not the provisions of the Family Code may be given a
retroactive effect in this case
3. Whether or not the petitioner is entitled to damages

Held:
1. No. The Supreme Court explained that at the time the two marriages were
contracted (1977 and 1979), the Family Code had yet to take effect. At that

time, the Civil Code had no express provision requiring the issuance of a
judicial declaration of nullity of a void marriage for a subsequent marriage to
be valid. Jurisprudence at that time, however, had conflicting interpretations
of the law.
Timeline of Article 40 of the Family Code:
a. Originally, in People vs Mendoza (1954) and in People vs Aragon (1957),
no such declaration is required.
b. In Gomez vs. Lipana (1970) and Consuegra vs. Consuegra (1971), the
Court observed that although the second marriage can be presumed to be
void ab initio as it was celebrated while the first marriage was still
subsisting, still there was a need for judicial declaration of such nullity (of
the second marriage).
c. In Odayat vs. Amante (1977) and Tolentino vs. Paras (1983), the Court
adverted to Aragon and Mendoza as precedents. The Court held that no
judicial decree is necessary to establish the invalidity of void marriages.
d. In Wiegel vs. Sempio-Dy (1986), the court held the need of a judicial
declaration of nullity of a void marriage.
e. In Yap vs. CA (1986), however, the Court found the second marriage void
without need of judicial declaration, thus reverting to the Odayat,
Mendoza and Aragon rulings.
f. Finally, in 1988, rulings in Gomez, Consuegra, and Wiegel were eventually
embodied in Article 40 of the Family Code. Article 40 of said Code
expressly required a judicial declaration of nullity of marriage.
In the present case, the second marriage of private respondent was entered
into in 1979, before Wiegel. At that time, the prevailing rule was found in Odayat,
Mendoza and Aragon. The first marriage of private respondent being void for lack
of license and consent, there was no need for judicial declaration of its nullity before
he could contract a second marriage. In this case, therefore, we conclude that
private respondents second marriage to petitioner is valid.

2. The Supreme Court further held that the provisions of the Family Code cannot
be retroactively applied to the present case, for to do so would prejudice the
vested rights of petitioner and of her children. As enunciated in Jison vs. CA,
the Family Code has retroactive effect unless there be impairment of vested
rights.
3. On damages because of failure to comply with marital obligations, the
Supreme Court is also of the view that no damages should be awarded in the
present case, but for another reason. Petitioner wants her marriage to
private respondent held valid and subsisting. She is suing to maintain her
status as legitimate wife. In the same breath, she asks for damages from
her husband for filing a baseless complaint for annulment of their marriage

which caused her mental anguish, anxiety, besmirched reputation, social

humiliation and alienation from her parents.
Should the Court grant her
prayer, we would have a situation where the husband pays the wife damages
from conjugal or common funds. To do so, would make the application of the
law absurd. Moreover, our laws do not comprehend an action for damages
between husband and wife merely because of breach of a marital obligation.
According to the court, there are other remedies. (footnote: Among them
legal separation, or prosecution for adultery and concubinage)

Beumer vs. Amores

Unjust Enrichment
Facts:
Willem Beumer, a Dutch national, had his marriage with Avelina Amores, a
Filipina, annulled on the ground of psychological incapacity provided in Article 36 of
the Family Code. In the course of dissolving the conjugal partnership of gains, the
distribution of properties involving four lots of land was in dispute.
In the complaint of Beumer, he avers that while the four lots were registered
under the name of Amores, the lots were acquired through the money the former
received from the Dutch government as his Disability Benefit. Moreover, it was
registered under the name of Amores because he was aware of the Constitutional
prohibition on foreigners owning Philippine land. On the basis of equity and unjust
enrichment, he claims that he is entitled to reimbursement for the acquisition of the
land seeing as he is a foreign national and not eligible to own Philippine land. On the
other hand, Amores claims that the properties were acquired through her own
personal resources and two of the questioned lands were acquired through an
inheritance.
Issue:
1. Whether or not Beumer is entitled to reimbursement for the acquisition of
Philippine land on the basis of unjust enrichment
Held:

1. No. The Supreme Court ruled that it is undeniable that Beumer was wellaware of the constitutional prohibition on foreign ownership of land as in fact,
the same was reason of Beumer to register the land on the name of Amores.
In citing the case of In re: Muller, the Supreme Court reiterated that the timehonored principle that he who seeks equity must do equity, and he who
comes in with equity must come with clean hands. Clearly, Beumer cannot be
granted reimbursement based on equity.
On the basis of unjust enrichment, the Supreme Court relied on the ruling in
Frenzel vs Catito, which stated that the principle of unjust enrichment
embodied in Article 22 of the New Civil Code does not apply when the action
is proscribed by the Constitution or by the pari delicto doctrine.

PFIZER vs. Velasco

Unjust Enrichment
Facts:
Geraldine Velasco was employed in PFIZER as a Professional Health Care
Representative since August 1992. On June 23, 2003, PFIZER personally served a
show-cause notice to Velasco an investigation on her possible violations of company
work rules regarding "unauthorized deals and/or discounts in money or samples and
unauthorized withdrawal and/or pull-out of stocks" and instructing her to submit her
explanation on the matter within 48 hours from receipt of the same, the notice also
advised her that she was being placed under "preventive suspension" for 30 days or
from that day to 6 August 2003 and consequently ordered to surrender the following
"accountabilities;"
1)
Company
Car,
2)
Samples
and
Promats,
3)
CRF/ER/VEHICLE/SOA/POSAP/MPOA and other related Company Forms, 4) Cash Card,
5) Caltex Card, and 6) MPOA/TPOA Revolving Travel Fund. The following day,
petitioner Cortez together with one Efren Dariano retrieved the above-mentioned
"accountabilities" from Velascos residence.
After a second show-cause notice was served upon Velasco, she opted to file
for a case against PFIZER for illegally suspending her employment. After receiving
an invitation for a disciplinary hearing and a third show-cause notice, both of which
were unanswered, Velascos employment was terminated.

On 5 December 2003, the Labor Arbiter rendered its decision declaring the
dismissal of Velasco illegal, ordering her reinstatement with backwages and further
awarding moral and exemplary damages with attorneys fees. On appeal, the NLRC
affirmed the same but deleted the award of moral and exemplary damages.
PFIZER filed with the Court of Appeals a special civil action for the issuance of
a writ of certiorari under Rule 65 of the Rules of Court to annul and set aside the
aforementioned NLRC issuances which was granted. Velasco filed a Motion for
Reconsideration which the Court of Appeals resolved in the assailed Resolution
dated October 23, 2006 wherein it affirmed the validity of respondents dismissal
from employment but modified its earlier ruling by directing PFIZER to pay
respondent her wages from the date of the Labor Arbiters Decision dated
December 5, 2003 up to the Court of Appeals Decision dated November 23, 2005.
Hence, this case.
Issue:
1. Whether or not Velasco is entitled to payment of her wages from the date of
the Labor Arbiters decision ordering her reinstatement until November 23,
2005, when the Court of Appeals rendered its decision declaring Velascos
dismissal valid
Held:
1. Yes. In applying the doctrine in Garcia vs. PAL, the Supreme Court ruled that
even if the order of reinstatement of the Labor Arbiter is reversed on appeal,
it is obligatory on the part of the employer to reinstate and pay the wages of
the dismissed employee during the period of appeal until reversal by the
higher court. On the other hand, if the employee has been reinstated during
the appeal period and such reinstatement order is reversed with finality, the
employee is not required to reimburse whatever salary he received for he is
entitled to such, more so if he actually rendered services during the period.
The Court further reiterated their ruling that an order for reinstatement
entitles an employee to receive his accrued backwages from the moment the
reinstatement order was issued up to the date when the same was reversed
by a higher court without fear of refunding what he had received. It cannot be
denied that, under our statutory and jurisprudential framework, respondent is
entitled to payment of her wages for the period after December 5, 2003 until
the Court of Appeals Decision dated November 23, 2005, notwithstanding the
finding therein that her dismissal was legal and for just cause. Thus, the
payment of such wages cannot be deemed as unjust enrichment on
respondents part.

Ilusorio vs Bildner (2000)

Habaes Corpus
Facts:
Potenciano Ilusorio is an 86-year old lawyer who is separated from bed and
board with his wife, Erlinda Kalaw Ilusorio, for undisclosed reasons. In 1997, upon
returning from the United States, Potenciano stayed at the residence of Erlinda for 5
months. Their children alleged that at that time, Erlinda gave Potenciano an
overdose of anti-depressants which led to the deterioration of the health of their
father. In 1998, after a meeting in Baguio, Potenciano did not return to the
residence of Erlinda but instead opted to live in Makati.
On March 11, 1999, Erlinda filed with the Court of Appeals a petition for
habeas corpus to have the custody of lawyer Potenciano Ilusorio. She alleged that
respondents, their children, refused petitioners demands to see and visit her
husband and prohibited Potenciano from returning to Antipolo City.

Issue:
1. Whether or not a writ of habeas corpus should be issued as prayed for by
Erlinda Kalaw Ilusorio
Held:
1. No. The essential object and purpose of the writ of habeas corpus is to inquire
into all manner of involuntary restraint, and to relieve a person therefrom if
such restraint is illegal. After due hearing, the Court of Appeals concluded
that there was no unlawful restraint on his liberty.
The Court of Appeals also observed that lawyer Potenciano Ilusorio did not
request the administrator of the Cleveland Condominium not to allow his wife
and other children from seeing or visiting him. He made it clear that he did
not object to seeing them.
As to lawyer Potenciano Ilusorios mental state, the Court of Appeals
observed that he was of sound and alert mind, having answered all the
relevant questions to the satisfaction of the court. Being of sound mind, he is
thus possessed with the capacity to make choices. In this case, the crucial
choices revolve on his residence and the people he opts to see or live with.
The choices he made may not appeal to some of his family members but
these are choices which exclusively belong to Potenciano. He made it clear
before the Court of Appeals that he was not prevented from leaving his house
or seeing people.
In case the husband refuses to see his wife for private reasons, he is at liberty
to do so without threat of any penalty attached to the exercise of his right.

Ilusorio vs. Bildner (2001)

Facts:
Erlinda Kalaw Ilusorio filed her Motion for Reconsideration which essentially
relied on the same arguments she raised on her appeal. Erlinda further raises that
Article XII of the 1987 Constitution and Articles 68 and 69 of the Family Code
support her position that as spouses, they (Potenciano and Erlinda) are duty bound
to live together and care for each other, hence she should have custody over
Potenciano.

Issue:
1. Whether or not Potenciano may be forced to live with Erlinda under the
provisions of both the Constitution and the Family Code
Held:
1. No. The law provides that the husband and the wife are obliged to live
together, observe mutual love, respect and fidelity. The sanction therefor is
the "spontaneous, mutual affection between husband and wife and not any
legal mandate or court order" to enforce consortium. Obviously, there was
absence of empathy between spouses Erlinda and Potenciano, having
separated from bed and board since 1972. We defined empathy as a shared
feeling between husband and wife experienced not only by having
spontaneous sexual intimacy but a deep sense of spiritual communion.
Marital union is a two-way process.
Marriage is definitely for two loving adults who view the relationship with
"amor gignit amorem respect, sacrifice and a continuing commitment to
togetherness, conscious of its value as a sublime social institution.

Padalhin vs. Lavina

Human Relations/Right to Privacy under Art. 26 of New Civil Code
Facts:
Lavina and Nestor were both Filipiono diplomats assigned in Kenya as
Ambassador and Consul-General, respectively. During their stint in Kenya, the
formers home was raided twice on the suspicion of possessing ivory souvenirs.
Before raids happened, a person known as Pasturan delivered messages to Lavinas
Filipino household helpers to open the ambassadors residence and allow an office
to take photographs of the residence of Lavina for proof of such possession.

In 1997, now in the Philippines, Lavina filed a complaint against Padalhin and
his co-conspirators for violating his right to privacy and for the malice, bad faith,
and deceit employed by the same as a smear campaign against the former.
During trial, Nestor himself admitted of having caused to have photographs
taken from the former residence of Lavina without the latters consent and
knowledge. He claimed that he did so without bad faith or malice.
Issue:
1. Whether or not Nestor and his co-defendants are liable for abusing their
rights and infringing Lavinas right to privacy embodied in Article 26 of the
New Civil Code thus entitling Lavina to recover damages

Held:
1. Yes. The Supreme Court held that even if Nestors allegation were found to be
true, it does not change that Nestor violated the provisions of Articles 19 and
26 of the New Civil Code concerning abuse of rights and the privacy of ones
residence. He cannot hide behind the cloak of his supposed benevolent
intentions to justify the invasion.

Lim vs. Kau Co Ping aka Charlie Co

Independent Civil Actions/Rule on Forum shopping and/or res judicata
Facts:
FR Cement Corporation issued several withdrawal authorities for the account
of cement dealers and traders, Fil-Cement and Tigerbilt. Each withdrawal authority
contained provision that it is valid for six months from its date of issuance, unless
revoked by FRCC Marketing Department. Fil-Cement and Tigerbilt sold their
withdrawal authorities to Co.

On February Co, then sold these withdrawal authorities to Lim. Using the
withdrawal authorities Lim withdrew cement bags from FRCC on a staggered basis.
Sometime in April 1999, FRCC did not allow Lim to withdraw the remaining bags
covered by the withdrawal authorities. Lim clarified the matter with Co and
administrative manager of Fil-Cement, who explained that the plant implemented a
price increase and would only release the goods once Lim pays the price difference
or agrees to receive lesser quantity of cement.
Lim filed case of Estafa through Misappropriation or Conversion against Co
but the RTC subsequently acquitted the latter and imposed no civil liabilities. Lim
appealed the civil aspect of her case to the CA. As her other recourse, Lim filed a
complaint for specific performance and damages arising from the contract in the
RTC against Co.
In Cos motion to dismiss, he averred that the action raised the same issue as
that of his criminal case, hence should be dismissed on the ground of litis pendens
and res judicata.
Issue:
1. Whether or not forum shopping, litis pendens, and res judicata exists for a
private complainant to pursue a civil complaint for specific performance and
damages while appealing the judgment on the civil aspect of a criminal case
for estafa?
Held:
1. No. The Supreme Court explained that a single act or omission that cause
damage to an offended party may gave rise to two separate civil liabilities on
the part of the offender:
(a) Civil liability ex delicto, that is, civil liability arising from the criminal
offense under Article 100 of the Revised Penal Code and;
(b) Independent civil liability that may be pursued independently of the
criminal proceedings.
The independent civil liability may be based on an obligation not arising
from the act or omission complained of as felony. It may also be based on an
act or omission that may constitute felony but, nevertheless, treated
independently from the criminal action by specific provision of the Article 33
of the Civil Code. Because of the distinct and independent nature of the two
kinds of civil liabilities, jurisprudence holds that the offended party may
pursue two types of civil liabilities simultaneously or cumulatively, without
offending the rules on forum shopping, litis pendentia or res judicata. The
criminal cases of estafa are based on culpa criminal while the civil action for
collection is anchored on culpa contractual.