Case Summary (G.R. No. 205578)
Key Dates
• October 24, 1995 – Encomienda meets Jalandoni in Cebu.
• March 2, 1997 – First cash advance of ₱100,000.00.
• April 1, 1997 – Loan of ₱1,000,000.00.
• May 26, 1997 – Additional loan of ₱900,000.00.
• August 14, 1997 – Extrajudicial demand for repayment.
• January 9, 2006 – RTC, Branch 57, Cebu City dismisses Encomienda’s complaint.
• March 29, 2012 – Court of Appeals reverses RTC and awards sums advanced.
• March 1, 2017 – Supreme Court issues final decision under the 1987 Constitution.
Procedural History
Encomienda filed a complaint for sum of money in the RTC after barangay conciliation failed. The trial court dismissed her claim for lack of evidence of a loan agreement. On appeal, the Court of Appeals reversed and ordered Jalandoni to pay ₱3,245,836.02, US$6,638.20, interest at 12% per annum from August 14, 1997, and attorney’s fees of ₱100,000.00. Jalandoni’s motion for reconsideration was denied, prompting the instant petition for review.
Factual Background and Claims
Encomienda contends she delivered money and paid numerous bills—ranging from publication costs, reproduction of photos, plane fare, household salaries, to utility and communication bills—totaling approximately ₱3.245 million and US$6,638.20 between March and November 1997. She claims these disbursements were loans to Jalandoni, who promised reimbursement upon maturity of her bank deposits. Jalandoni denies any loan arrangement, characterizing the funds as gratuitous assistance; she further asserts many payments were made without her knowledge or against her will.
Legal Issue
Whether respondent Encomienda is entitled to reimbursement for the amounts she advanced to petitioner Jalandoni.
Applicable Law
• 1987 Philippine Constitution – governs judicial review.
• Civil Code (Republic Act No. 386)
– Article 1236: “Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.”
– Article 22 (Unjust Enrichment): A person unjustly benefits at another’s expense if he retains money or property in contravention of justice and good conscience.
• Jurisprudence on oral loans and unjust enrichment (Spouses Tan v. Villapaz, Spouses Publico v. Bautista, Filinvest Land, Inc. v. Backy).
• Bangko Sentral ng Pilipinas Circular No. 799, Series of 2013 – governs post-2013 interest adjustments.
Analysis on Existence of Loan
The Court confirmed that loans need not be in writing to be valid. Parties may enter into a verbal mutuum provided essential requisites—consent, object, and cause—are present. The absence of promissory notes or acknowledgment receipts is consistent with loans between friends. Jalandoni’s repeated acceptance and use of the funds (including personal and household expenses) belied her assertion of ignorance or objection. Her failure to protest or return benefits upon learning of the payments implied consent to a debt.
Application of Article 1236
Even if certain disbursements were made without express authorization, Article 1236 allows recovery of payments that inured to the benefit of the debtor. Jalandoni derived substantial benefit from Encomienda’s payments—fuel, utilities, security services, le
...continue readingCase Syllabus (G.R. No. 205578)
Facts
- On October 24, 1995, petitioner Georgia OsmeAa-Jalandoni, a real estate broker, met respondent Carmen A. Encomienda when the latter was purchasing a condominium in Cebu; they became friends thereafter.
- On March 2, 1997, Jalandoni requested a loan from Encomienda to fund a search-and-rescue operation in Manila for her allegedly abducted children; Encomienda delivered ₱100,000 in a sealed envelope to Jalandoni’s security guard.
- Between March and November 1997, Encomienda advanced funds totaling ₱3,245,836.02 and US$6,638.20 to Jalandoni for various expenses, including but not limited to:
- Publication in SunStar Daily of missing-children notices – ₱11,000.00
- Reproduction of children’s photographs (three separate transactions) – ₱720.00; ₱1,350.00; ₱2,500.00
- Airfare and travel-related allowances (secretary, helper, driver) – ₱3,196.00; ₱4,080.00; ₱2,000.00; ₱750.00; ₱3,250.00
- Courier and shipping charges (airbills, shipping of papers, pager cap) – ₱49.50; ₱49.50; ₱145.45; ₱145.45; ₱20.00
- Utility and service bills (cable TV, telephone, water, electricity, Bankard, Easycall, Globe cellular) – ranging from ₱380.00 to ₱14,169.21 per item
- Purchase of communication devices (cellphone, pager) – ₱10,260.00; ₱6,351.00
- Security guard services for multiple periods – ₱14,715.00; ₱4,905.00; ₱4,905.00
- Food allowances, gasoline, rice, miscellaneous supplies – ₱2,900.00; ₱1,270.00; ₱529.44; ₱150.00; ₱379.44
- Consultancy and professional fees – ₱7,000.00; ₱100,500.00 (case filing fee)
- Religious rites and blessings (ritual to drive away evil spirits, prayers, mass) – ₱17,500.00; ₱5,500.00; ₱500.00; ₱2,500.00
- Petty cash disbursements for Georgia’s enterprises – ₱250.00; ₱3,150.00
- Miscellaneous charges (penalties, service-charge adjustments) – ₱1,045.00; ₱660.00; ₱1,248.50
- On April 1, 1997, Jalandoni also borrowed ₱1,000,000, promising to repay upon maturity of her bank funds.
- On May 26, 1997, Jalandoni tearfully reque