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COURSE OUTLINE IN CIVIL LAW REVIEW 1
(ATTY. ELMER T. RABUYA)
Week 1: Arts. 1-44, NCC
Add’l Readings & Cases:
Sec. 31, Chapter VIII, Book 1, 1987 AdministrativeCode
Section 31. Legal Periods. - "Year" shall be
understood to be twelve calendar months; "month" of
thirty days, unless it refers to a specific calendar month
in which case it shall be computed according to the
number of days the specific month contains; "day," to
a day of twenty-four hours; and "night," from sunset to
sunrise.
CIR vs. Primetown Property Group, Inc. 531 SCRA
436 (2007)G.R. No. 162155, August 28, 2007
Facts:
Gilbert Yap, vice chair of respondent Primetown
Property Group, Inc., applied for the refund or credit of
income tax respondent paid in 1997. He claimed that
because explained because respondent suffered losses,
it was not liable for income taxes. Nevertheless,
respondent paid its quarterly corporate income tax and
remitted creditable withholding tax from real estate
sales to the BIR in the total amount of P26,318,398.32.
Therefore, respondent was entitled to tax refund or tax
credit.
Revenue officer required respondent to submit
additional documents to support its claim. Respondent
complied but its claim was not acted upon. It filed a
petition for review in the CTA. However, the CTA the
petition as it was filed beyond the two-year prescriptive
period for filing a judicial claim for tax refund or tax
credit as provided in Sec. 229 of the NIRC. In addition,
the tax court applied Article 13 of the Civil Code which
states:
Art. 13. When the law speaks of years, months,
days or nights, it shall be understood that years are
of three hundred sixty five days each…
Thus, according to the CTA, the two-year prescriptive
period under Section 229 of the NIRC for the filing of
judicial claims was equivalent to 730 days. Because the
year 2000 was a leap year, respondent’s petition, which
was filed 731 days after respondent filed its final
adjusted return, was filed beyond the reglementary
period. Respondent moved for reconsideration but it
was denied. Hence, it filed an appeal in the CA and the
CA reversed the decision of the CTA. Petitioners moved
for reconsideration but it was denied. Thus, this
appeal.
Issue:
Whether or not Art. 13 of the Civil Code should be
applicable in computing the legal periods or Sec. 31 of
the Administrative Code of 1987.
Ruling:
E.O. 292 should be applied in computing the legal
period being the more recent law, governs the
computation of legal periods. Lex posteriori derogat
priori.
Both Article 13 of the Civil Code and Section 31,
Chapter VIII, Book I of the Administrative Code of 1987
deal with the same subject matter - the computation of
legal periods. Under the Civil Code, a year is equivalent
to 365 days whether it be a regular year or a leap year.
Under the Administrative Code of 1987, however, a
year is composed of 12 calendar months. Needless to
state, under the Administrative Code of 1987, the
number of days is irrelevant. We therefore hold that
respondent’s petition (filed on April 14, 2000) was filed
on the last day of the 24th calendar month from the day
respondent filed its final adjusted return. Hence, it was
filed within the reglementary period.
CIR vs. Aichi Forging Company of Asia, Inc.,
632SCRA 422 (2010)
Topic: Article 13 of the Civil Code as Amended by the
Administrative Code
DOCTRINE: Article 13 of the Civil Code is deemed
superseded by Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, which thus means a year
is equivalent to 12 calendar months.
FACTS:
On September 30, 2004, Respondent Aichi Forging
Company filed a claim for refund/credit of input VAT
for the period July 1, 2002 to September 30, 2002 in
the total amount of P3,891,123.82 with the petitioner
CIR. The refund is based on zero-rated sales made by
respondent, for which the NIRC allows a VAT entity
(such as Aichi) to claim a refund credit. In denying the
application, petitioner argued that the claim was filed
beyond the 2-year prescription period provided by law.
It posited that pursuant to Article 13 of the Civil Code,
since the year 2004 was a leap year (364 days instead
of 365), the filing of the claim for tax refund/credit on
September 30, 2004 was beyond the two-year period,
which expired on September 29, 2004.
ISSUE:
Whether or not the claim for refund was filed beyond
the 2-year prescriptive period or not
HELD:
YES, because the claim prescribed in September 30,
2004 and not September 29, 2004. The Court
explained that both Article 13 of the Civil Code and
Section 31, Chapter VIII, Book I of the Administrative
Code of 1987 deal with the same subject matter – the
computation of legal periods. Under the Civil Code, a
year is equivalent to 365 days whether it be a regular
year or a leap year. Under the Administrative Code of
1987, however, a year is composed of 12 calendar
months. In the Administrative Code of 1987, the
number of days is irrelevant. The Court further
clarified that in this apparent inconsistency, the
Administrative Code must prevail, being the more
recent law, governs the computation of legal periods.

(The claim for refund was still denied. Respondent did
not observe the NIRC requirement of filing a judicial
appeal after 120 days from CIR decision or failure to
render a decision. Hence, aside from the 2-year
prescriptive period, the 120-day administrative appeal
period must also be observed. Not relevant to our
topic.)
Co vs. New Prosperity Plastic Products, 727
SCRA503 (2014)
Topic: Article 13 of the Civil Code as Amended by the
Administrative Code
DOCTRINE: Article 13 of the Civil Code is deemed
superseded by Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, which thus means a year
is equivalent to 12 calendar months.
FACTS:
Respondent New Prosperity Plastic Products,
represented by Elizabeth Uy filed a case against
petitioner for the violation of B.P. 22. In the absence of
Uy and the private counsel, the cases were
provisionally dismissed on June 9, 2003 in open court
pursuant to Section 8, Rule 117 of the Revised Rules of
Criminal Procedure.Uy received a copy of the June9,
2003 Order on July 2,
2003, while her counsel-of-record received a copy a
day after.On July 2, 2004, Uy, through counsel, filed a
Motion to Revive the Criminal Cases.The motion was
granted. After the case was reraffled (judge inhibited),
Co then filed a petition for certiorari and prohibition
with prayer for the issuance of a temporary restraining
order (TRO)/writ of preliminary injunction (WPI)
before the RTC of Caloocan City challenging the revival
of the criminal cases.
It was dismissed. MR and petition for reviewer on
certiorari under rule 45 was likewise dismissed.
However, before the cases were reraffled, a Motion for
Permanent Dismissal was filed by Co. Uy opposed the
Motion. The new judge granted the Motion. After Uy’s
MR was denied, she filed a Petition for Certiorari. The
petition was filed. Thus, the RTC ordered that the
proceeding in the lower court proceed. Co filed a
Petition for Certiorari with the CA. The CA dismissed
the petition. Hence, this petition for reviewer on
certiorari under Rule 45 with TPO/WPI.
DOCTRINE: Divorce between Filipinos is void and
ineffectual under the nationality rule adopted by
Philippine law. Hence, any settlement of property
between the parties of the first marriage involving
Filipinos submitted as an incident of a divorce obtained
in a foreign country lacks competent judicial approval,
and cannot be enforceable against the assets of the
husband who contracts a subsequent marriage.
Co claims that assuming that the dismissal on June 9,
2003 was provisional, it became permanent after 1 year
from its issuance (June 9) and not upon notice to
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offended part and because 2004 (?) was a leap year, the
total number of days is not 365 days. Hence, the
dismissal became permanent on June 8, 2004.
ISSUE:
Whether or not the total of number of days in a leap
year should be used in computing the 1-year period for
the provisional dismissal to be considered permanent
HELD:
NO. The fact that year 2004 was a leap year is
inconsequential to determine the timeliness of Uy’s
motion to revive the criminal cases. Granting for the
sake of argument that this Court should take into
account 2004 as a leap year and that the one-year
period to revive the case should be reckoned from the
date of receipt of the order of provisional dismissal by
Uy, the Court still held that the motion to revive the
criminal cases against Co was timely filed. A year is
equivalent to 365 days regardless of whether it is a
regular year or a leap year.3 Equally so, under the
Administrative Code of 1987, a year is composed of 12
calendar months. The number of days is irrelevant.
Lavadia vs. Heirs of Juan Luces Luna, 730 SCRA
376(2014).
TOPIC: Nationality Principle
DOCTRINE:
Divorce between Filipinos is void and ineffectual under
the nationality rule adopted by Philippine law. Hence,
any settlement of property between the parties of the
first marriage involving Filipinos submitted as an
incident of a divorce obtained in a foreign country lacks
competent judicial approval, and cannot be
enforceable against the assets of the husband who
contracts a subsequent marriage.
FACTS:
Atty. Luna, a lawyer in a big law firm, married Eugenia
on September 10, 1947. They begot 7 children. After
almost 2 decades of marriage, ATTY. LUNA and
EUGENIA eventually agreed to live apart from each
other in February 1966 and agreed to separation of
property, to which end, they entered into a written
agreement entitled "AGREEMENT FOR SEPARATION
AND PROPERTY SETTLEMENT" whereby they
agreed to live separately and to dissolve and liquidate
their conjugal partnership of property. ATTY. LUNA
likewise obtained a divorce decree in Dominican
Republic. On the same date, ATTY LUNA married
Soledad. They bought a condo unit in Makati which
they paid through installments. Upon full payment, the
CCT was issued in their name as husband and wife. Atty
Juan died. His son Gregorio took over his law books,
furniture and equipment found inside the condo unit.
This prompted Soledad to file a case against the heirs
of Atty Luna arguing that the properties in question
was obtained during the existence of their marriage.
The RTC ruled in favor of the heirs thereby ordering the
RD to change the CCT in favor of Eugenia - from
"JUAN LUCES LUNA married to Soledad L. Luna" to

"JUAN LUCES LUNA married to Eugenia Zaballero
Luna". The CA affirmed the RTC’s decision.
ISSUE:
Whether or not the Court should recognize should
recognize the divorce decree from Dominican
Republic.
HELD: No, because the Nationality Rule applies in the
case at bar. Our Family Code does not recognize
divorce. The only two types of defective marital unions
under our laws have been the void and the voidable
marriages. As such, the remedies against such defective
marriages have been limited to the declaration of
nullity of the marriage and the annulment of the
marriage. The non-recognition of absolute divorce in
the Philippines is a manifestation of the respect for the
sanctity of the marital union especially among Filipino
citizens. It affirms that the extinguishment of a valid
marriage must be grounded only upon the death of
either spouse, or upon a ground expressly provided
bylaw. For as long as this public policy on marriage
between Filipinos exists, no divorce decree dissolving
the marriage between them can ever be given legal or
judicial recognition and enforcement in this
jurisdiction. (The Court further ruled on the issue of
the validity of the Agreement for Separation and
Property Settlement and the property relations during
the cohabitation of Soledad and Atty Luna. But as this
case was assigned under Articles 1 to 44 of the Civil
Code, I did not include such ruling in this digest.)
Bayot vs. Court of Appeals, 570 SCRA 472 (2008).
TOPIC: Nationality Principle; Decree of divorce
obtained abroad
DOCTRINE: An absolute divorce secured by an
American married to a Filipino can be recognized in the
Philippines despite the former’s eventual recognition
as a Filipino citizen.
FACTS:
Rebecca (an American citizen born in Guam) and
Vicente were married on April 20, 1979. After having
their only child Alix, Rebecca initiated divorce
proceeding in Dominican Republic. The Dominican
Court ordered the dissolution of their marriage. After a
year, the same Dominican Court issued a decree
settling their property relations pursuant to an
Agreement they executed. Within less than a month
from the issuance of the divorce decree, Rebecca filed a
petition for the declaration of nullity of marriage. The
petition was however later withdrawn with the
approval of the court. Rebecca then executed an
Affidavit declaring that she is an American citizen, that
she and Vicente had been living separately, and that
she is carrying a child not of Vicente. She then filed a
petition for the declaration of absolute nullity of
marriage on the ground of Vicente’s psychological
incapacity. Aside from such petition, Vicente and
Rebecca filed various criminal cases against each other
(bigamy, perjury, concubinage). Vicente’s Motion to
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Dismiss and subsequent MR was denied by the RTC,
which thus forced Vicente to file a petition on certiorari
to the CA. The CA ruled in favor of Vicente, reversing
the RTC’s decision stating that Rebecca no longer had
the right to have her marriage declared void as she
already obtained a divorce decree as an American
citizen. It must be noted that Rebecca was eventually
recognized as Filipino citizen as evidenced by her
Philippine passport and ID Certificate issued by the
Bureau of Immigration.
ISSUE:
Whether or not the divorce decree obtained by an alien
spouse can be recognized in the Philippines.
HELD:
Yes, a foreign divorce can be recognized here, provided
the divorce decree is proven as a fact and as valid under
the national law of the alien spouse. When the divorce
was granted, Rebecca was yet to be recognized as a
Filipino citizen. As an American citizen whose national
law recognizes divorce, she obtained the divorce
decree. The Supreme Court emphasized the existence
of the divorce decree has not been denied, but in fact
admitted by both parties. And neither did they impeach
the jurisdiction of the divorce court nor challenge the
validity of its proceedings on the ground of collusion,
fraud, or clear mistake of fact or law, albeit both
appeared to have the opportunity to do so. The same
holds true with respect to the decree of partition of
their conjugal property. The two elements in Article 26
were present in the case, and thus, there is no reason to
not recognize the divorce decree.
Orion Savings Bank vs. Suzuki, 740 SCRA 345
(2014)
Fact
Respondent Shigekane Suzuki, a Japanese national,
met with Ms. Helen Soneja to inquire about a
condominium unit and a parking slot at Cityland
P!ioneer, Mandaluyong City, allegedly owned by Yung
Sam Kang, a Korean national.
Soneja informed Suzuki that Unit No. 536 {covered by
Condominium Certificate of Title (CCT) No. 18186}
and Parking Slot No. 42 {covered by CCT No.9118}
were for sale. Soneja likewise assured Suzuki that the
titles to the unit and the parking slot were clean.
After payment of the price of the unit and parking slot,
Kang then executed a Deed of Absolute Sale. Suzuki
took possession of the condominium unit and parking
lot, and commenced the renovation of the interior of
the condominium unit.
Kang thereafter made several representations with
Suzuki to deliver the titles to the properties, which were
then allegedly in possession of Alexander Perez (Perez,
Orion’s Loan Officer) for safekeeping. Despite several
verbal demands, Kang failed to deliver the documents.

Suzuki later on learned that Kang had left the country,
prompting Suzuki to verify the status of the properties.
He learned that CCT No. 9118 representing the title to
the Parking Slot No. 42 contained no annotations
although it remained under the name of Cityland
Pioneer.Despite the cancellation o$ the mortgage to
Orion, the titles to the properties remained in
possession of Perez.
Suzuki then demanded the delivery of the titles. Orion,
through Perez, however, refused to surrender the titles,
and cited the need to consult Orion’s legal counsel as
its reason.
Issue:
Whether or not Korean Law should be applied in
conveying the conjugal property of spouses Kang?
Ruling:
In the present case, the Korean law should not be
applied. It is a universal principle that real or
immovable property is exclusively subject to the laws
of the country or state where it is located.xxxx (A)ll
matters concerning the title and disposition of real
property are determined by what is known as the lex
loci rei sitae, which can alone prescribe the mode by
which a title can pass from one person to another, or by
which an interest therein can be gained or lost.
On the other hand, property relations between spouses
are governed principally by the national law of the
spouses. However, the party invoking the application
of a foreign law has the burden of proving the foreign
law.
The foreign law is a question of fact to be properly
pleaded and proved as the judge cannot take judicial
notice of a foreign law. He is presumed to know only
domestic or the law of the forum.
To prove a foreign law, the party invoking it must
present a copy thereof and comply with Sections 24 and
25 of Rule 132 of the Revised Rules of Court.
In the present case, Orion, unfortunately failed to
prove the South Korean law on the conjugal ownership
of property. It merely attached a "Certification from the
Embassy of the Republic of Korea" to prove the
existence of Korean Law. This certification, does not
qualify as sufficient proof of the conjugal nature of the
property for there is no showing that it was properly
authenticated by the seal of his office, as required
under Section 24 of Rule 132.
Accordingly, the International Law doctrine of
presumed-identity approach or processual
presumption comes into play, i.e., where a foreign law
is not pleaded or, even if pleaded, is not proven, the
presumption is that foreign law is the same as
Philippine Law.
Under the Philippine law, the phrase Yung Sam Kang
married to Hyun Sook Jung is merely descriptive of of
civil status of Kang. In other words, the import from the
certificates of title is that Kang is the owner of the
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properties as they are registered in his name alone, and
that he is married to Hyun Sook Jung. There is no
reason to declare as invalid Kang’s conveyance in favor
of Suzuki for the supposed lack of spousal consent.
It is undisputed that notwithstanding the supposed
execution of the Dacion en Pago on February 2, 2003,
Kang remained in possession of the condominium unit.
In fact, nothing in the records shows that Orion even
bothered to take possession of the property even six (6)
months after the supposd date of execution of the
Dacion en Pago. Kang was even able to transfer
possession of the condominium unit to Suzuki, wh then
made immediate improvements thereon.
Del Soccoro vs. Van Wilsem, 744 SCRA 516 (2014)
Doctrine: OBLIGATION OF A FOREIGN NATIONAL
TO SUPPORT HIS MINOR CHILD UNDER
PHILIPPINE LAW
Facts:
Petitioner Norma and respondent Ernst Johan
contracted marriage in Holland. They were blessed
with a son named Roderigo, who at the time of the
filing of the instant petition was sixteen (16) years of
age.
Unfortunately, their marriage bond ended by virtue of
a Divorce Decree issued by the appropriate Court of
Holland. At that time, their son was only eighteen (18)
months old. Thereafter, petitioner and her son came
home to the Philippines.
According to petitioner, respondent made a promise to
provide monthly support to their son in the amount of
Two Hundred Fifty (250) Guildene (which is
equivalent to Php17,500.00 more or less). However,
since the arrival of petitioner and her son in the
Philippines, respondent never gave support to the son,
Roderigo.
Not long thereafter, respondent came to the
Philippines and remarried in Cebu City, and since then,
have been residing thereat. Petitioner, through her
counsel, sent a letter demanding for support from
respondent. However, respondent refused to receive
the letter.
Because of the foregoing circumstances, petitioner
filed a complaint affidavit with the Provincial
Prosecutor of Cebu City against respondent for
violation of Section 5, paragraph E(2) of R.A. No. 9262
for the latter’s unjust refusal to support his minor child
with petitioner. Thereafter, the Provincial Prosecutor
of Cebu City issued a Resolution recommending the
filing of an information for the crime charged against
herein respondent with the RTC-Cebu.
The RTC-Cebu issued the herein assailed Order,
dismissing the instant criminal case against
respondent on the ground that the facts charged in the
information do not constitute an offense with respect
to the respondent who is an alien,
Thereafter, petitioner filed her Motion for
Reconsideration thereto reiterating respondent’s
obligation to support their child under Article 195 of
the Family Code, thus, failure to do so makes him liable

under R.A. No. 9262 which "equally applies to all
persons in the Philippines who are obliged to support
their minor children regardless of the obligor’s
nationality."
The RTC-Cebu issued an Order denying petitioner’s
Motion for Reconsideration. Hence, the present
Petition for Review on Certiorari.
ISSUE:
Does a foreign national have an obligation to support
his minor child under our Philippine Law?
RULING:
A foreign national has an obligation to support his
minor child. Petitioner cannot rely on Article 195 of the
New Civil Code in demanding support from
respondent, who is a foreign citizen, since Article 15 of
the New Civil Code stresses the principle of nationality.
In other words, insofar as Philippine laws are
concerned, specifically the provisions of the Family
Code on support, the same only applies to Filipino
citizens. By analogy, the same principle applies to
foreigners such that they are governed by their national
law with respect to family rights and duties.
The obligation to give support to a child is a matter that
falls under family rights and duties. Since the
respondent is a citizen of Holland or the Netherlands
he is subject to the laws of his country, not to Philippine
law, as to whether he is obliged to give support to his
child, as well as the consequences of his failure to do so.
It cannot be gainsaid, therefore, that the respondent is
not obliged to support petitioner’s son under Article
195 of the Family Code as a consequence of the Divorce
Covenant obtained in Holland. This does not, however,
mean that respondent is not obliged to support
petitioner’s son altogether.
In international law, the party who wants to have a
foreign law applied to a dispute or case has the burden
of proving the foreign law. In the present case,
respondent hastily concludes that being a national of
the Netherlands, he is governed by such laws on the
matter of provision of and capacity to support. While
respondent pleaded the laws of the Netherlands in
advancing his position that he is not obliged to support
his son, he never proved the same.
It is incumbent upon respondent to plead and prove
that the national law of the Netherlands does not
impose upon the parents the obligation to support their
child (either before, during or after the issuance of a
divorce decree). In view of respondent’s failure to prove
the national law of the Netherlands in his favor, the
doctrine of processual presumption shall govern.
Under this doctrine, if the foreign law involved is not
properly pleaded and proved, our courts will presume
that the foreign law is the same as our local or domestic
or internal law. Thus, since the law of the Netherlands
as regards the obligation to support has not been
properly pleaded and proved in the instant case, it is
presumed to be the same with Philippine law, which
enforces the obligation of parents to support their
children and penalizing the non-compliance therewith.
Such obligation is still duly enforceable in the
Philippines because it would be of great injustice to the
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child to be denied of financial support when the latter
is entitled thereto.
Land Bank of the Philippines vs. Ong, 636 SCRA
266(2010).
TOPIC: Unjust enrichment; Accion in rem verso
DOCTRINE: The principle of unjust enrichment
essentially contemplates payment when there is no
duty to pay, and the person who receives the payment
has no right to receive it.
FACTS:
Spouses Johnson and Evangeline Sy secured a loan
from LBP Legazpi City in the amount of P16 million.
They failed to pay the loan. They executed a Deed of
Sale with Assumption of Mortgage in favor of
Evangeline’s mother. Evangeline’s father, petitioner
Alfredo Ong, later went to Land Bank to inform it about
the sale and assumption of mortgage. Alfredo was told
that there was nothing wrong with the agreement with
the Spouses Sy but he was provided with requirements
for the assumption of mortgage. He was also told that
Alfredo should pay part of the principal which was
computed at P750,000 and to update due or accrued
interests on the promissory notes so that LBP could
easily approve the assumption of mortgage. Alfredo
then issued a check for P750,000 and personally gave
it to Atty. Hingco (Branch Head). A receipt was issued
for his payment. He also submitted the other
documents required by Land Bank, such as financial
statements for 1994 and 1995. Atty. Hingco then
informed Alfredo that the certificate of title of the
Spouses Sy would be transferred in his name but this
never materialized. No notice of transfer was sent to
him.Alfredo later found out that his application for
assumption of mortgage was not approved by Land
Bank because of a credit investigation about them. LBP
then foreclosed the mortgage. Alfredo only learned of
the foreclosure when he saw the subject mortgage
properties included in a Notice of Foreclosure of
Mortgage and Auction Sale. He was
promised that the P750,000 would be returned to
them. As it was not returned, Alfredo initiated an
action for recovery of sum of money with damages
against LBP claiming that he was lured into believing
that his payment of P750,000 would cause Land Bank
to approve his assumption of the loan of the Spouses Sy
and the transfer of the mortgaged properties in his and
his wife’s name. In ruling in favor of the respondent,
the RTC explained that although the Assumption of
Mortgage was not perfected, under the principle of
equity and justice, the bank should return the amount
Alfredo had paid with interest at 12% per annum
computed from the filing of the complaint. The CA
affirmed the decision.
ISSUE: Whether or not the denial of the assumption
of mortgage amounted to unjust enrichment.
HELD:

Yes, Land Bank is still liable for the return of the
P750,000 based on the principle of unjust enrichment.
Land Bank is correct in arguing that it has no obligation
as creditor to recognize Alfredo as a person with
interest in the fulfillment of the obligation. But while
Land Bank is not bound to accept the substitution of
debtors in the subject real estate mortgage, it is
estopped by its action of accepting Alfredo’s payment
from arguing that it does not have to recognize Alfredo
as the new debtor. By accepting Alfredo’s payment and
keeping silent on the status of Alfredo’s application,
Land Bank misled Alfredo to believe that he had for all
intents and purposes stepped into the shoes of the
Spouses Sy. 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. Additionally, unjust enrichment has been
applied to actions called accion in rem verso. In order
that the accion in rem verso may prosper, the following
conditions must concur: (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, quasi-contract, crime, or
quasi-delict.
UP vs. Philab Industries, Inc., G.R. No. 152411,
Sep.29, 2004.
Doctrine: 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 BIOTECHÂ 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 FEMF’s obligation to grant financial support
and donate sums of money to the Research Complex as
may be necessary. A year later, Navasero, the President
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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 implied-in-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.Â
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,
quasi-contract, 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.
Willaware Products Corporation vs. Jesichris
Manufacturing Corp., 734 SCRA 238 (2014).
Doctrine: The Concept Of Unfair Competition Under
Article 28 Of The Civil Code
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
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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?
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.
Vinzons-Chato vs. Fortune Tobacco Corp., 575
SCRA 23 (2008)
FACTS:
This is a case for damages under Article 32 of the Civil
Code filed by Fortune against Liwayway as CIR.
On June 10, 1993, the legislature enacted RA 7654,
which provided that locally manufactured cigarettes
which are currently classified and taxed at 55% shall be
charged an ad valorem tax of “55% provided that the
maximum tax shall not be less than Five Pesos per
pack.” Prior to effectivity of RA 7654, Liwayway issued
a rule, reclassifying “Champion,” “Hope,” and “More”
(all manufactured by Fortune) as locally manufactured
cigarettes bearing foreign brand subject to the 55% ad
valorem tax. Thus, when RA 7654 was passed, these
cigarette brands were already covered.
In a case filed against Liwayway with the RTC, Fortune
contended that the issuance of the rule violated its
constitutional right against deprivation of property
without due process of law and the right to equal
protection of the laws.

For her part, Liwayway contended in her motion to
dismiss that respondent has no cause of action against
her because she issued RMC 37-93 in the performance
of her official function and within the scope of her
authority. She claimed that she acted merely as an
agent of the Republic and therefore the latter is the one
responsible for her acts. She also contended that the
complaint states no cause of action for lack of
allegation of malice or bad faith.
The order denying the motion to dismiss was elevated
to the CA, who dismissed the case on the ground that
under Article 32, liability may arise even if the
defendant did not act with malice or bad faith. Hence
this appeal.
ISSUE:
Whether or not Article 32, NCC, should be applied
instead of Sec. 38, Book I, Administrative Code
HELD:
SC ruled that the decisive provision is Article 32, it
being a special law, which prevails over a general law
(the Administrative Code).
Article 32 was patterned after the “tort” in American
law. A tort is a wrong, a tortious act which has been
defined as the commission or omission of an act by one,
without right, whereby another receives some injury,
directly or indirectly, in person, property or reputation.
There are cases in which it has been stated that civil
liability in tort is determined by the conduct and not by
the mental state of the tortfeasor, and there are
circumstances under which the motive of the
defendant has been rendered immaterial. The reason
sometimes given for the rule is that otherwise, the
mental attitude of the alleged wrongdoer, and not the
act itself, would determine whether the act was
wrongful. Presence of good motive, or rather, the
absence of an evil motive, does not render lawful an act
which is otherwise an invasion of another’s legal right;
that is, liability in tort in not precluded by the fact that
defendant acted without evil intent.
Continental Steel Manufacturing Corp. vs.
Montaño,603 SCRA 621 (2009).
Doctrine: Civil Law – Civil Personality – When does
civil personality start – When does life begin
In January 2006, the wife of Rolando Hortillano had a
miscarriage which caused the death of their unborn
child. Hortillano, in accordance with the collective
bargaining agreement, then filed death benefits claim
from his employer, the Continental Steel
Manufacturing Corporation which denied the claim.
Eventually, the issue was submitted for arbitration and
both parties agreed to have Atty. Allan Montaño act as
the arbitrator. Montaño ruled that Hortillano is
entitled to his claims. The Court of Appeals affirmed
the decision of Montaño.
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On appeal, Continental Steel insisted that Hortillano is
not entitled because under the CBA, death benefits are
awarded if an employee’s legitimate dependent has
died; but that in this case, no “death” has occurred
because the fetus died inside the womb of the mother,
that a fetus has no juridical personality because it was
never born pursuant to Article 40 of the Civil Code
which provides a conceived child acquires personality
only when it is born; that the fetus was not born hence
it is not a legitimate dependent as contemplated by the
CBA nor did it suffer death as contemplated under civil
laws.
ISSUES:
1. Whether or not the fetus is a legitimate dependent?
2. Whether or not a person has to be born before it
could die?
HELD:
1. Yes. In the first place, the fact of marriage between
Hortillano and his wife was never put in question,
hence they are presumed to be married. Second,
children conceived or born during the marriage of the
parents are legitimate. Hence, the unborn child (fetus)
is already a legitimate dependent the moment it was
conceived (meeting of the sperm and egg cell).
2. No. Death is defined as “cessation of life”. Certainly,
a child in the womb has life. There is no need to discuss
whether or not the unborn child acquired juridical
personality – that is not the issue here. But
nevertheless, life should not be equated to civil
personality. Moreover, while the Civil Code expressly
provides that civil personality may be extinguished by
death, it does not explicitly state that only those who
have acquired juridical personality could die. In this
case, Hortillano’s fetus had had life inside the womb as
evidenced by the fact that it clung to life for 38 weeks
before the unfortunate miscarriage. Thus, death
occurred on a dependent hence Hortillano as an
employee is entitled to death benefit claims as provided
for in their CBA.