Case Summary (G.R. No. 152411)
Procedural History
PHILAB’s demands for the P 702,939.40 balance went unanswered through 1985–1986, prompting PHILAB to sue UP for sum of money, exemplary damages, attorney’s fees, and costs. The RTC dismissed the complaint without prejudice to PHILAB’s recourse against FEMF. PHILAB appealed; the Court of Appeals reversed, holding UP liable under unjust enrichment. UP sought review by certiorari.
Contractual Relationships and Implied-in-Fact Contract
UP contended that no contract bound it to PHILAB and that PHILAB contracted only with FEMF. The Supreme Court agreed that no written agreement existed between UP and PHILAB and that PHILAB was not a party to the UP–FEMF MOA. The payments of over P 2.2 million by FEMF, evidenced by receipts issued to FEMF, established an implied-in-fact contract exclusively between PHILAB and FEMF. Under Civil Code Article 1311 and related jurisprudence, PHILAB’s conduct and receipt of payment from FEMF demonstrated mutual intent to contract, excluding UP from any payment obligation.
Applicability of the Principle of Unjust Enrichment
The Court rejected the CA’s reliance on unjust enrichment (accion in rem verso) against UP. To succeed under Article 22, PHILAB needed to show (1) enrichment of UP, (2) PHILAB’s loss, (3) absence of legal ground for UP’s enrichment, and (4) lack of another remedy. PHILAB had a direct remedy against FEMF for breach of the implied contract. UP lawfully acquired the furniture under the MOA and retained no unjust benefit vis-à-vis PHILAB.
Supreme Court Ruling
Applying the 1987 Constitution and Civ
Case Syllabus (G.R. No. 152411)
Procedural History
- Philab Industries, Inc. filed a complaint for sum of money and damages against the University of the Philippines (UP) before the Regional Trial Court (RTC), Branch 150, Makati City.
- The RTC dismissed Philab’s complaint for lack of merit, allowing recourse against the Ferdinand E. Marcos Foundation (FEMF) for the unpaid balance.
- Philab appealed to the Court of Appeals (CA) in CA-G.R. CV No. 44209, which reversed the RTC, ruling UP liable under the doctrine of unjust enrichment.
- UP sought relief via petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA decision and its denial of reconsideration.
Facts of the Case
- In 1979 UP initiated the Research Complex project; FEMF agreed to fund laboratory furniture for BIOTECH at UP Los Baños.
- Dr. William Padolina (BIOTECH) was directed by Renato E. Lirio (FEMF) to engage Philab for fabrication and delivery of laboratory furniture, pending FEMF approval of a formal contract.
- Philab failed to forward a draft contract but began fabrication and made partial deliveries after inspections by BIOTECH and FEMF representatives.
- FEMF remitted three partial payments totaling ₱2,288,573.74 to Philab between August 1982 and August 1983; Philab issued corresponding official receipts.
- UP and FEMF executed a Memorandum of Agreement (MOA) on October 16, 1982, under which FEMF would donate up to ₱29 million for the Research Complex; UP was not a purchaser.
- Philab completed its work and submitted a final invoice of ₱702,939.40 in July 1984; repeated demands from 1985 onward went unanswered due to the EDSA Revolution and subsequent political changes.
- Philab exhausted remedies against the FEMF and PCGG, then sued UP for unpaid balance, interest, exemplary damages, attorney’s fees, and costs.
Issues
- Whether