Case Summary (G.R. No. 187240)
Procedural History
Muñoz first filed a criminal estafa complaint, which was dismissed for lack of probable cause. He then sued for sum of money and damages. The Regional Trial Court ruled in his favor, ordering Loria to refund ₱2,000,000 with 12% interest, attorney’s fees, litigation expenses, and exemplary damages. Loria appealed; the Court of Appeals affirmed refund and interest but deleted attorney’s fees and exemplary damages. Loria elevated the case via Rule 45 petition for certiorari to the Supreme Court.
Issues Presented
- Whether Loria initially received ₱3,000,000 from Grace delos Santos.
- Whether Loria is liable to refund ₱2,000,000 to Muñoz under the principle of unjust enrichment.
- Impact of void contract doctrine (in pari delicto) and procurement laws on recovery.
Receipt of ₱3,000,000: Question of Fact
The Supreme Court held that whether Loria received ₱3,000,000 is a factual determination already settled by both trial and appellate courts. Under Rule 45, certiorari review is limited to questions of law. The evidence—Muñoz’s testimony and Loria’s signed check voucher—sufficiently established receipt; there was no basis for exception to factual finality.
Unjust Enrichment and Obligation to Refund
Under Civil Code Article 22, unjust enrichment occurs when one party acquires a benefit at another’s expense without legal justification. Loria retained ₱2,000,000 intended for a subcontract that never transpired. He offered no valid ground for retention. The Court applied the doctrine and ruled that Loria must return the amount plus interest.
Illegality, In Pari Delicto, and Public Policy
Loria contended that the subcontract agreement violated procurement laws (PD 1594 Sec. 6), Anti-Graft Act, and the Revised Penal Code, rendering the contract void and barring recovery under in pari delicto. The Court distinguished this case from pure illegality: no subcontract was executed, and actual approval by the Department Secretary
...continue readingCase Syllabus (G.R. No. 187240)
Procedural History
- Petition for review on certiorari filed by petitioner Carlos A. Loria under Rule 45 of the Rules of Court, seeking to set aside the Court of Appeals’ decision and resolution in CA-G.R. CV No. 81882.
- The Court of Appeals had affirmed the Regional Trial Court’s decision and ordered Loria to pay MuAoz ₱2,000,000.00 in actual damages with 12% interest per annum from complaint filing until full payment, but deleted awards of exemplary damages and attorney’s fees.
- Loria invoked questions of law regarding the applicability of the principle of unjust enrichment and the voidness of the parties’ agreement under procurement laws.
- Supreme Court denied the joint motion to compromise, called for comment, and ultimately resolved the petition.
Factual Background
- Respondent Ludolfo P. MuAoz, Jr. engaged in construction under his name since 1995.
- In August 2000, petitioner Carlos A. Loria proposed that MuAoz advance ₱2,000,000.00 for a 20% subcontract (₱10,000,000.00) of a ₱50,000,000.00 river-dredging project in Guinobatan, Albay, on condition that Sunwest Construction would win the public bidding.
- MuAoz ordered Allied Bank to release ₱3,000,000.00 from his joint account to Grace delos Santos; Loria retrieved the funds from delos Santos.
- Of this amount, ₱1,800,000.00 was returned; the remaining net ₱2,000,000.00 was collected by Loria (₱1,200,000.00 on October 2, 2000, and ₱800,000.00 on January 10, 2001).
- Sunwest won and completed the dredging project without subcontracting any portion to MuAoz.
- MuAoz demanded return of his ₱2,000,000.00; upon refusal, he filed (1) a criminal estafa complaint (dismissed for lac