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e. Human Relations; Abuse of Rights; Unjust Enrichment; MaliciousProsecution; Independent Civil Action; Arts. 1724; 2142; 2154; 2164;2176, NCC

1. Loria v Muñoz, Jr

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

1. G.R. No. 187240 October 15, 2014

CARLOS A. LORIA, Petitioner,vs.LUDOLFO P. MUÑOZ, JR. Respondent.

D E C I S I O N

LEONEN, J.:

No person should unjustly enrich himself or herself at the expense of another.

This is a petition for review on certiorari1 to set aside the Court of Appeals'decision2 and resolution3 in CA-G.R. CV No. 81882. The Court of Appealsordered petitioner Carlos A. Loria to pay respondent Ludolfo P. Muñoz,Jr.P2,000,000.00 in actual damages with 12% interest per year from the filing

of the complaint until full payment.4

The facts of this case are as follows:

Ludolfo P. Muñoz, Jr. (Muñoz) filed a complaint for sum of money and damageswith an application for issuance of a writ of preliminary attachment againstCarlos A. Loria (Loria) with the Regional Trial Court of Legazpi City .5

In his complaint, Muñoz alleged that he has been engaged in construction underthe name, "Ludolfo P. Muñoz, Jr. Construction." In August 2000, Loria visitedMuñoz in his office in Doña Maria Subdivision in Daraga, Albay. He invitedMuñoz to advance P2,000,000.00 for a subcontract of a P50,000,000.00 river-

dredging project in Guinobatan.6

Loria represented that he would makearrangements such that Elizaldy Co,owner of Sunwest Construction and Development Corporation, would turn out to

be the lowest bidder for the project. Elizaldy Co would payP8,000,000.00 to

ensure the project’s award to Sunwest. After the award to Sunwest, Sunwestwould subcontract 20% or P10,000,000.00 worth of the project to Muñoz.7

Since Muñoz had known Loria for five years, Muñoz accepted Loria’s proposal.8

On October 2, 2000, Muñoz requested Allied Bank to release P3,000,000.00

from his joint account withhis business partner, Christopher Co, to a certainGrace delos Santos (delos Santos). Loria then obtained the money from delos

Santos.9

Four days later, P1,800,000.00 of the P3,000,000.00 was returned to Muñoz.10

On January 10, 2001, Loria collectedMuñoz’s P800,000.00 balance. After

deducting Loria’s personal loans from Muñoz, Muñoz issued a check to Loriafor P481,800.00. Loria acknowledged receiving this amount from Muñoz.11

The project to dredge the Masarawag and San Francisco Rivers in Guinobatanwas subjected to public bidding. The project was awarded to the lowest bidder,Sunwest Construction and Development Corporation.12

Sunwest allegedly finished dredging the Masarawag and San Francisco Riverswithout subcontracting Muñoz.13With the project allegedly finished,Muñozdemanded Loria to return his P2,000,000.00. Loria, however, did not

return the money.14

Muñoz first charged Loria and Elizaldy Co with estafa. This criminal case wasdismissed by the Municipal Trial Court of Daraga, Albay for lack of probablecause.15

Muñoz then filed the complaint for sum of money. The case was raffled toBranch 6 and presidedby Judge Vladimir B. Brusola.16

Loria answered Muñoz’s complaint. He admitted receiving P481,800.00 from

Muñoz but argued that the complaint did not state a cause of action againsthim. According to Loria, he followed up the project’s approval with the Cen tralOffice of the Department of Public Works and Highways as the parties agreedupon. He was, therefore, entitled to his representation expenses.17

Loria also argued that Muñoz was guilty of forum shopping. Muñoz first filed acriminal complaint for estafa against him and Elizaldy Co, which complaint theMunicipal Trial Court of Daraga, Albay dismissed. The subsequently filedcomplaint for sum of money, allegedly a complaint to recover the civil aspect ofthe estafa case, must, therefore, be dismissed as argued by Loria.18

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During pre-trial, the parties agreed to litigate the sole issue of whether Loria isliable to Muñoz forP2,000,000.00.19

According to the trial court, Muñoz established with preponderant evidence thatLoria received P2,000,000.00 from Muñoz for a subcontract of the river-

dredging project. Since no part of the project was subcontracted to Muñoz, Loriamust return the P2,000,000.00 he received, or he would be "unduly enriching

himself at the expense of [Muñoz]."20

On the claim of forum shopping, the trial court ruled that Loria’s obligation toreturn the 2,000,000.00 did not arise from criminal liability. Muñoz may,therefore, file a civil action to recover his P2,000,000.00.21

As to the prayer for issuance of a writ of preliminary attachment, the trial courtdenied the prayer for lack of sufficient basis.22

Thus, in the decision23 dated January 30, 2004, the trial court ordered Loria toreturn the P2,000,000.00 toMuñoz as actual damages with 12% interest from

the filing of the complaint until the amount’s full payment. The trial courtlikewise ordered Loria to pay Muñoz P100,000.00 in at torney’s fees, P25,000.00

in litigation expenses, andP25,000.00 in exemplary damages with costs against

Loria.24

Loria appealed to the Court of Appeals, arguing that Muñoz failed to establishhis receipt of the P2,000,000.00. Specifically, Muñoz failed to establish that he

obtained P3,000,000.00from a certain Grace delos Santos. Loria also appealed

the award of attorney’s fees, litigation expenses, and exemplary damages forhaving no basis in fact and in law.25

The Court of Appeals sustained the trial court’s factual findings. In ruling thatLoria received the net amount ofP2,000,000.00 from Muñoz, the Court of

Appeals referred to Muñoz’s testimony that he ordered Allied Bank torelease P3,000,000.00 from his joint account with Christopher Co to a certain

Grace delos Santos.26 Loria then obtained the money from delos Santos andconfirmed with Muñoz his receipt of the money.27 This testimony, according to

the appellate court, was supported by Exhibit "C," a check voucher the trialcourt admitted inevidence. Loria signed this check voucher and acknowledgedreceiving P1,200,000.00 on October 2, 2000 andP800,000.00 on January 10,

2001, ora total of P2,000,000.00.28

Considering that Muñoz did not benefit from paying Loria P2,000,000.00, the

appellate court ruled that Loria must return the money to Muñoz under theprinciple of unjust enrichment.29

The appellate court, however, ruled that Muñoz failed to show his right toexemplary damages and attorney’s fees.30

Thus, in the decision31 dated October 23, 2008, the Court of Appeals affirmedthe trial court’s decision but deleted the award of exemplary damages andattorney’s fees.32 The appellate court likewise denied Loria’s motion forreconsideration in the resolution33 dated March 12, 2009.

Loria filed a petition for review on certiorari34 with this court, arguing that the

principle of unjust enrichment does not apply in this case. As the trial andappellate courts found, Muñoz paid Loria P2,000,000.00 for a subcontract of a

government project. The parties’ agreement, therefore, was void for beingcontrary to law, specifically, the Anti-Graft and Corrupt Practices Act, theRevised Penal Code, and Section 6 of Presidential Decree No. 1594. Theagreement was likewise contrary to the public policy of public or opencompetitive bidding of government contracts.35

Since the parties’ agreement was void, Loria argues that the parties were in paridelicto, and Muñoz should not be allowed to recover the money he gave underthe contract.36

On the finding that he received a net amount of P2,000,000.00 from Muñoz,

Loria maintains that Muñoz failed to prove his receipt of P3,000,000.00 through

a certain Grace delos Santos.37

In the resolution38 dated June 3, 2009, thiscourt ordered Muñoz to comment onLoria’s petition.

In his comment,39 Muñoz argues that Loria’s petition raises questions of fact andlaw that the trial and appellate courts have already passed upon and resolved inhis favor. He prays that this court deny Loria’s petition for raising questions offact.

Loria replied40 to the comment, arguing thathe raised only questions of law inhis petition.41 Even assuming that he raised questions of fact, Loria argues that

this does not warrant the automatic dismissal of his petition since the trial andappellate courts allegedly erred inruling for Muñoz.42

On October 8, 2010, the parties filed their joint motion to render judgmentbased on the compromise agreement.43In their compromise agreement,44 theparties declared that thiscase "was a product of a mere misunderstanding."45Toamicably settle their dispute, the parties agreed to waive all their claims, rights,and interests against each other.46

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This court denied the joint motion for lack of merit in the resolution47 datedDecember 15, 2010.

The issues for our resolution are the following:

I. Whether Loria initially obtained P3,000,000.00 from a certain Grace

delos Santos

II. Whether Loria is liable for P2,000,000.00 to Muñoz

We rule for Muñoz and deny Loria’s petition for review on certiorari.

I

Whether Loria initially received 3,000,000.00 is a question of fact not proper ina petition for review on certiorari

We first address Loria’s contention that Muñoz failed to prove his initial receiptof P3,000,000.00. This is a question of fact the trial and appellate courts have

already resolved. In a Rule 45 petition, we do not address questions of fact,questions which require us to ruleon "the truth or falsehood of alleged

facts."48

Under Section 1, Rule 45 of the Rules of Court, we only entertainquestions of law — questions as to the applicable law given a set of facts49 — ina petition for review on certiorari:

Section 1. Filing of petition with Supreme Court.

A party desiring to appeal by certiorari from a judgment or final order orresolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Courtor other courts whenever authorized by law, may file withthe Supreme Court averified petition for review on certiorari. The petition shall raise only questionsof lawwhich must be distinctly set forth. (Emphasis supplied)50

We may review questions of fact in a Rule 45 petition:

. . . (1) when the findings are grounded entirely on speculations, surmises, orconjectures; (2) when the inference made is manifestly mistaken, absurd, orimpossible; (3) when there is a grave abuse of discretion; (4) when the

judgment is based on misappreciation of facts; (5) when the findings of fact areconflicting; (6) when in making its findings, the same are contrary to theadmissions of both appellant and appellee; (7) the findings are contrary to thoseof the trial court; (8) when the findings are conclusions without citation ofspecific evidence on which they are based; (9) the facts set forth in the petitionas well as in petitioner’s main and reply briefs are not disputed by respondent;

and (10) the findings of fact are premised on the supposed absence of evidenceand contradicted by the evidence on record.51 [Emphases omitted]

Loria failed to convince us why we should make an exception in this case.

During trial, Muñoz testified thathe ordered Allied Bank torelease P3,000,000.00 from his joint account withChristopher Co to a certain

Grace delos Santos.52 Loria then obtained the money from delos Santos andconfirmed with Muñoz his receipt of the amount.53 P1,800,000.00 was

subsequently returned to Muñoz, leaving aP1,200,000.00 balance with Loria.

This testimony was supported by Exhibit "C," the check voucher where Loriaacknowledged receiving P1,200,000.00 from Muñoz.54

We agree that these pieces ofevidence duly prove Loria’s initial receiptof P3,000,000.00. We will not disturb this finding.

II

Loria must return Munoz’s P2,000,000.00 under the principle of unjust

enrichment

Under Article 22 of the Civil Codeof the Philippines, "every person who throughan act of performance by another, or any other means, acquires or comes intopossession of something at the expense of the latter without just or legalground, shall return the same to him." There is unjust enrichment "when aperson unjustly retains a benefit to the loss of another, or when a personretains money orproperty of another against the fundamental principles of

justice, equity and good conscience."55

The principle of unjust enrichment has two conditions. First, a person must havebeen benefited without a real or valid basis or justification. Second, the benefitwas derived at another person’s expense or damage.56

In this case, Loria received P2,000,000.00 from Muñoz for a subcontract of a

government projectto dredge the Masarawag and San Francisco Rivers inGuinobatan, Albay. However, contrary to the parties’ agreement, Muñoz was notsubcontracted for the project. Nevertheless, Loria retained the P2,000,000.00.

Thus, Loria was unjustly enriched. He retained Muñoz’s money without validbasis or justification. Under Article 22 of the Civil Code of the Philippines, Loriamust return the P2,000,000.00 to Muñoz.

Contrary to Loria’s claim, Section 6 of the Presidential Decree No. 1594 does notprevent Muñoz from recovering his money.

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Under Section 6 of the Presidential Decree No. 1594,57 a contractor shall notsubcontract a part or interestin a government infrastructure project without theapproval of the relevant department secretary:

Section 6. Assignment and Contract.The contractor shall not assign, transfer,pledge, subcontract ormake any other disposition of the contract or any part orinterest therein except with the approval of the Minister of Public Works,Transportation and Communications, the Minister of Public Highways, or theMinister of Energy, as the case may be. Approval of the subcontract shall not

relieve the main contractor from any liability or obligation under his contractwith the Government nor shall it create any contractual relation between thesubcontractor and the Government.

A subcontract, therefore, is void only if not approved by the departmentsecretary.

In this case, it is premature to rule on the legality of the parties’ agreementprecisely becausethe subcontract did not push through. No actual agreementwas proven in evidence.The Secretary of Public Works and Highways could haveapproved the subcontract, which is allowed under Section 6 of the PresidentialDecree No. 1594.

At any rate, even assuming that there was a subcontracting arrangementbetween Sunwest Construction and Development Corporation and Muñoz, thiscourt has allowed recovery under a void subcontract as an exception to the inpari delicto doctrine.

In Gonzalo v. Tarnate, Jr.,58 the Department of Public Works and Highways(DPWH) awarded the contractto Dominador Gonzalo to improve the Sadsadan-Maba-ay section of the Mountain Province Road. Gonzalo then subcontracted thesupply of materials and labor to John Tarnate, Jr. without the approval of theSecretary of Public Works and Highways. The parties agreed to a totalsubcontract fee of 12% of the project’s contract price.59

Tarnate, Jr. also rented equipment to Gonzalo. In a deed of assignment, the

parties agreed to a retention fee of 10% of Gonzalo’s total collection from theDepartment of Public Works and Highways, or 233,526.13, as rent for theequipment. They then submitted the deed of assignment to the Department forapproval.60

Subsequently, Tarnate, Jr. learned that Gonzalo filed with the Department ofPublic Works and Highways an affidavit to unilaterally cancel the deed ofassignment. Gonzalo also collected the retention fee from the Department.61

Tarnate, Jr. demanded payment for the rent of the equipment, but Gonzaloignored his demand. He thenfiled a complaint for sum of money and damageswith the Regional Trial Court of Mountain Province to collect on the 10%retention fee.62

In his defense, Gonzalo argued thatthe subcontract was void for being contraryto law, specifically, Section 6 of the Presidential Decree No. 1594. Since thedeed of assignment "was a mere product of the subcontract, "63 the deed ofassignment was likewise void. With Tarnate, Jr. "fully aware of the illegality and

ineffectuality of the deed of assignment,"

64

Gonzalo contended that Tarnate, Jr.could not collect on the retention fee under the principle of in pari delicto .65

This court ruled that the subcontract was void for being contrary to law. UnderSection 6 of the Presidential Decree No. 1594, a contractor shall not subcontractthe implementation of a government infrastructure project without the approvalof the relevant department secretary.66 Since Gonzalo subcontracted the projectto Tarnate, Jr. without the approvalof the Secretary of Public Works andHighways, the subcontract was void, including the deed of assignment, which"sprung from the subcontract."67

Generally, parties to an illegal contract may not recover what they gave underthe contract.68 Under the doctrine of in pari delicto, "no action arises, in equity

or at law, from anillegal contract[.] No suit can be maintained for its specificperformance, or to recover the property agreed to be sold or delivered, or themoney agreed to be paid, or damages for its violation[.]"69 Nevertheless, thiscourt allowed Tarnate, Jr. to recover 10% of the retention fee. According to thiscourt,"the application of the doctrine of in pari delictois not always rigid."70 Anexception to the doctrine is "when its application contravenes well-establishedpublic policy."71 In Gonzalo, this court ruled that "the prevention of unjustenrichment is a recognized public policy of the State."72 It is, therefore, anexception to the application of the in pari delicto doctrine. This court explained:

. . . the application of the doctrine of in pari delicto is not alwaysrigid.1âwphi1 An accepted exception arises when its application contraveneswellestablished public policy. In this jurisdiction, public policy has been definedas "that principle of the law which holds that no subject or citizen can lawfullydo that which has a tendency to be injurious to the public or against the publicgood."

Unjust enrichment exists, according to Hulst v. PR Builders, Inc., "when aperson unjustly retains a benefit at the loss of another, or when a personretains money or property of another against the fundamental principles of

justice, equity and good conscience." The prevention of unjust enrichment is arecognized public policy of the State, for Article 22 of the Civil Code explicitlyprovides that "[e]veryperson who through an act of performance by another, orany other means, acquires or comes into possession of something at the

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expense of the latter without just or legal ground, shall return the same to him."It is well to note that Article 22 "is part of the chapter of the Civil Code onHuman Relations, the provisions of which were formulated as basic principles tobe observed for the rightful relationship between human beings and for thestability of the social order; designed to indicate certain norms that spring fromthe fountain of good conscience;guides for human conduct that should run asgolden threads through society to the end that law may approach its supremeideal which is the sway and dominance of justice."73 (Citations omitted)

Given that Tarnate, Jr. performed his obligations under the subcontract and thedeed of assignment, this court ruled that he was entitled to the agreed fee.According to this court, Gonzalo "would be unjustly enriched at the expense ofTarnate if the latter was tobe barred from recovering because of the rigidapplication of the doctrine of in pari delicto."74

In this case, both the trial and appellate courts found that Loriareceived P2,000,000.00 from Muñoz for a subcontract of the river-dredging

project. Loria never denied that hefailed to fulfill his agreement with Muñoz.Throughout the case’s proceedings, Loria failed to justify why he has the right toretain Muñoz’s P2,000,000.00. As the Court of Appeals ruled, "it was not shown

that [Muñoz] benefited from the delivery of the amount ofP2,000,000.00 to

[Loria]."75

Loria, therefore, is retaining the P2,000,000.00 without just or legal ground.

This cannot be done. Under Article 22 of the Civil Code of the Philippines, hemust return the P2,000,000.00 to Muñoz.

This court notes the possible irregularities in these transactions. At the veryleast, there appears to have been an attempt to circumvent our procurementlaws. If petitioner indeed had the authority of Sunwest Construction andDevelopment Corporation, it is strange that Loria could have guaranteed abidding result. If he did not have any true dealing with Sunwest Construction,then his is an elaborate scheme to cause financiers to lose their hard-earnedmoney for nothing. WHEREFORE, the petition for review on certiorari is DENIED.The Court of Appeals' decision and resolution in CA-GR. CV No. 81882 areAFFIRMED with MODIFICATION as to interest rate. Petitioner Carlos A. Loriashall pay respondent Ludolfo P. Mufioi, Jr. P2,000,000.00 in actual damages,

with interest of 12% interest per annum from the filing of the complaint untilJune 30, 2013, and 6% interest per annum from July 1, 2013 until fullpayment.76

Let a copy of this decision be SERVED on the Office of the Ombudsman and theDepartment of Justice for their appropriate actions.

SO ORDERED.

2. Rosete v. Briones


Manila

SECOND DIVISION

2. G.R. No. 176121 September 22, 2014

SPOUSES TEODORICO and PACITA ROSETE, Petitioners,vs.FELIX and/or MARIETTA BRIONES, SPOUSES JOSE and REMEDIOSROSETE, AND NEORIMSE and FELICITAS CORPUZ, Respondents.

D E C I S I O N

DEL CASTILLO, J.:

Assailed in this Petition for Review on Certiorari1 are the October 30, 2006Decision2 of the Court of Appeals (CA) which denied the Petition for Review inCA-G.R. SP No. 79400 and its December 22, 2006 Resolution3 denying theherein petitioners' Motion for Reconsideration.4

Factual Antecedents

The subject lot is a 152-square meter lot located at 1014 Estrada Street,Malate, Manila which is owned by the National Housing Authority (NHA).

On July 30, 1987, the NHA conducted a census survey of the subject lot, andthe following information was gathered:

Tag No. 674 Ricardo Dimalanta, Sr. - absentee structure ownerFelix Briones - lesseeNeorimse Corpuz - lessee

Tag No. 87-0675 Teodoro Rosete - residing ownerJose Rosete – lessee5

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The NHA awarded the subject lot topetitioner Teodorico P. Rosete(Teodorico).6 The herein respondents, Jose and Remedios Rosete(the Rosetes),Neorimse and Felicitas Corpuz (the Corpuzes), and Felix and Marietta Briones(the Brioneses) objected to the award, claiming that the award of the entire lotto Teodorico was erroneous.

In 1990, a Declaration of Real Property was filed and issued in Teodorico’sname.7 On March 21, 1991,he made full payment of the value of the subject lotin the amount of P43,472.00.8 He likewise paid the real property taxes thereon.9

In an August 5, 1994 Letter-Decision,10 the NHA informed Teodorico that afterconsideration of the objections raised by the Rosetes, the Corpuzes and theBrioneses, the original award of 152 square meters in his favor has beencancelled and instead, the subject lot will besubdivided and awarded as follows:

1. Teodorico – 62 square meters

2. The Brioneses – 40 square meters

3. The Rosetes – 25 square meters

4. The Corpuzes – 15 square meters

5. Easement for pathwalk – 10 square meters

In the same Letter-Decision, NHA likewise informed Teodorico that his paymentsshall be adjusted accordingly, but his excess payments will not be refunded;instead, they will be applied to his co-awardees’ amortizations. His coawardeesshall in turn pay him, under pain of cancellation of their respective awards. NHAalso informedTeodorico that the matters contained in the letter were final, andthat if he intended to appeal, he should do so with the Office of the Presidentwithin 30 days.

In an October 18, 1994 letter11 to the NHA, Teodorico protested and sought a

reconsideration of the decision to cancelthe award, claiming that it was unfairand confiscatory. He likewise requested that his co-awardees be required toreimburse his property tax payments and that the subject lot be assessed at itscurrent value.

Meanwhile, on October 24, 1994, the Rosetes and the Corpuzes appealed theNHA’s August 5, 1994 Letter-Decision tothe Office of the President (OP), whichcase was docketed as O.P. Case No. 5902.

On February 2, 1995, Teodorico filed an undated letter12 in O.P. Case No. 5902.In the said letter, he directed the OP’s attention to the Rosetes and theCorpuzes’ resolve not to question the 62-square meter allocation/award to him.At the same time, he manifested his assent to such allocation, thus:

Undersigned is satisfied with the 62 sq. m. lot awarded to him. However, in theadjudication of the above-mentioned case and in furtherance of justice, it isprayed that:

1. The period within which refund to the undersigned by the spousesJose and Remedios Rosete, Neorimseand Felicitas Corpuz, and Felix andMarietta Briones of the purchase price of the lots awarded to them befixed, with interest thereon from March 21, 1991 until fullreimbursement is made;

2. The foregoing awardees be ordered likewise to reimburse to theundersigned the real estate taxes paid on their respective lots from1980, plus interest thereon, until full reimbursement; and 3. Other reliefin favor of the undersigned be issued.13

On November 19, 1997, the OP issued its Decision14 in O.P. Case No. 5902,dismissing the appeal for being filed out of time.

On March 27, 1998, the OP issued a Resolution15 declaring that the aboveNovember 19, 1997 Decision in O.P. Case No. 5902 has become final andexecutory since no motion for reconsideration was filed, nor appeal taken, bythe parties.

In another July 28, 1999 letter16 to the NHA, Teodorico, the Rosetes, and theCorpuzes sought approval of their request to subdivide the subject lot on an "asis, where is" basis as per NHA policy, since it appeared that the parties’respective allocations/awards did not correspond to the actual areas occupied bythem and thus could result in unwanted demolition of their existinghomes/structures.

In a November 12, 1999 Letter-Reply,17 the NHA informed the parties that theoriginal awards/allocationswere being retained; it also advised them to hire asurveyor for the purpose of subdividing the subject lot in accordance with suchawards.

Through counsel, Teodorico wrote back. In his November 23, 1999 letter ,18 hereiterated his request tosubdivide the subject lot onan "as is, where is" basisand to be reimbursed by his co-awardees for his overpayments, with interest.This was followed by another March 29, 2001 letter19 by his counsel.

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Receiving no response from the NHA regarding the above November 23, 1999letter, Teodorico senta May 7, 2003 letter cummotion for reconsideration20 tothe OP, in which he sought a reconsideration of the November 19, 1997Decision in O.P. Case No. 5902. Heclaimed that the August 5, 1994LetterDecision of the NHA containing the award/allocation of the subject lot tothe parties is null and void as it violated the provisions of Presidential DecreeNo. 151721 (PD 1517) and PD 2016;22 that the award of 40 square meters to theBrioneses is null and void as they were mere "renters" (lessees); that becausethe August 5, 1994 Letter-Decision of the NHA is a nullity, it never became finaland executory. Thus, he prayed:

WHEREFORE, it is reiterated that the "as is, where is" policy of the NHA befollowed in the instant case and that Teodorico P. Rosete be reimbursed byMarietta Briones, et al. of the value of the lots adjudicated in their favor and thereal estate taxes he paid on the lots they occupy, plus interest thereon to bedetermined by the NHA. Wewill not demand the cancellation of the awards toMarietta Briones, et al. so as not to prejudice their respective families.23

In a September 8, 2003 Resolution,24 the OP denied Teodorico’s May 7, 2003letter cummotion for reconsideration, saying that –

Before this Office is the motion filed by Teodorico P. Rosete, requesting

reconsideration of the Decision of this Office dated November 19, 1997dismissing the appeal for having been filed out of time.

On March 27, 1998, this Office also declared the said Decision dated November19, 1997 as having become final and executory. Being so, this Office has nomore jurisdiction over the case. There is nothing left for the office a quo exceptto implement the letter-decision of the National Housing Authority (NHA) datedOctober 24, 1994.25

Besides, contrary to appellants’ motion, the said NHA letter-decision is inaccordance with NHA Circular No. 13 dated February 19, 1982, pertinentprovisions of which read:

"V. BENEFICIARIES SELECTION AND LOT ALLOCATION

1. The official ZIP censusand tagging shall be the primary basis fordetermining potential program beneficiaries and structures or dwellingunits in the area.

x x x x

4. Only those households included in the ZIP Census and who, inaddition, qualify under the provisions of the Code of Policies, are thebeneficiaries of the Zonal Improvement Program.

5. A qualified censused-household is entitled to only one residential lotwithin the ZIP Project area of Metro Manila."

Hence, the letter decision ofthe NHA is a valid judgment.

WHEREFORE, premises considered, the instant motion for reconsideration ishereby DENIED. Let the records of the case be remanded to the office-a-quo forimplementation.

SO ORDERED.26

Ruling of the Court of Appeals

Teodorico and his wife Pacita, the Rosetes, and the Corpuzes went up to the CAby Petition for Review,27docketed as CA-G.R. SP No. 79400. They essentiallyclaimed that pursuant to the "pertinent laws on Beneficiary Selection andDisposition of Homelots in Urban Bliss Projects,"28 the Rosetes, the Corpuzes,and the Brioneses are not entitled to own a portion of the subject lot since theywere mere "renters" or lessees therein; for thisreason, the NHA’s August 5,1994 Letter-Decision and November 19, 1997 Decision and September 8, 2003Resolution of the OP are null and void. The Petition contained a prayer for theCA to order the NHA to allocatethe subject lot on an "as is, where is" basis; thatthe assailed Decision and Resolution be stayed; and that the Rosetes, theCorpuzes and the Brioneses be ordered to reimburse Teodorico in such manneras originally prayed for byhim in the NHA and OP.

On October 30, 2006, the CA issued the questioned Decision, which held asfollows:

Clearly, the Office of the President, in issuing the assailed Resolution, mainlyanchored its denial ofPetitioner TEODORICO’s motion for reconsideration of theDecision dated 19 November 1997 on the finalityof said Decision, whichaccordingly, the said Office has no jurisdiction to disturb. We agree with theOffice of the President.

It bears emphasis that as early as 27 March 1998, the Office of the Presidenthad issued a Resolution which essentially states, thus:

Considering that appellants in the above-entitled case have received certifiedcopies ofthe decision of this Office, dated November 17, 1997, as shown byregistry return receipts attached to the records’ copy of said decision, and as of

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March 23, 1998, no motion for reconsideration thereof has been filed nor appealtaken to the proper court, this Office resolves to declare said decision, datedNovember 19, 1997, to have become FINAL and EXECUTORY.

Necessarily therefore, the subsequent filing by Petitioner TEODORICO of amotion for reconsideration of the Decision, supra. before the Office of thePresident did not produce any legal effect as to warrant a reversal of the saidDecision.

Generally, once a decision has become final and executory, it can no longer bemodified or otherwise disturbed. Thus, it is the ministerial duty of the proper judicial or quasi-judicial body to order its execution, except when, after thedecision has become final and executory, facts and circumstances wouldtranspire which render the execution impossible or unjust. On this regard, inorder to harmonize the disposition withthe prevailing circumstances, anyinterested party may ask a competent court to stay its execution or prevent itsenforcement.

However, the Petitioners failed to prove that the aforesaid exception is presentin the case at bar. Instead, they insist that Decisions/Resolutions of the NHAand of the Office of the President are wanting in validity because they allegedlyviolated certain statutes and jurisprudence.

Sadly, We cannot sustain Petitioners’ theory.

x x x x

Accordingly, the findings of the NHA and of the Office of the President areperforce no longer open for review.

x x x x

Withal, We find no legal as well as equitable reason for Us to discuss further theissue, supra, raised by the Petitionersin the instant petition.

WHEREFORE, premises considered, the instant Petition is DENIED. Thechallenged Resolution of the Office of the President is hereby AFFIRMED in toto.

SO ORDERED.29

Petitioners filed their Motion for Reconsideration,30 which the CA denied in itsassailed December 22, 2006 Resolution. Hence, the present Petition.

Issues

Petitioners raise the following issues:

5.00.1 The Court of Appeals erred in ruling that petitioner Teodorico Rosete didnot file an appeal from the decision of the National Housing Authority;

5.00.2 The Court of Appeals erred in ruling that the decision of the Office of thePresident against the appeal of Remedios Rosete and Felicitas Corpuz bindspetitioner Teodorico Rosete; 5.00.3 The Court of Appeals erred in failing to lookinto the merits of petitioner Teodorico Rosete’s claim over the subject lot.31

Petitioners’ Arguments

Praying that the assailed CA Decision and Resolution be set aside and that theNHA’s August 5, 1994 Letter-Decision be modified – soas to allow: 1) thesubdivision of the subject lot on an "as is, where is" basis; 2) reimbursement/refund by the respondents of Teodorico’s lot and tax overpayments; and 3) thecorresponding transfer of title to them – petitioners maintain in their Petitionand Consolidated Reply32 that Teodorico’s October 18, 1994 letter to the NHA – which he allegedly sent on September 24, 1994 – should have been treated as atimely appeal to the OP, the same having been filed with the NHA within the 30-day reglementary period prescribed by the latter in its August 5, 1994LetterDecision and pursuant to Section 1 of Administrative Order No. 18, series

of 198733

of the OP (OP AO 18; Prescribing Rules and Regulations GoverningAppeals to the Office of the President of the Philippines). Thus, the CA’spronouncement that Teodorico made no appeal to the OP or that it was nottimely filed is erroneous.

Petitioners add that since Teodorico’s October 18, 1994letter to the NHA – whichshould be treated as an appeal to the OP – remains pending and unacted upon,then his case is still pending as far as the OP is concerned; that the dismissal ofthe appeal through the November 19, 1997 Decision in O.P. Case No. 5902affected only the appellants therein, or the Rosetes and the Corpuzes, but notTeodorico – whose appeal remained pending asa result of the OP’s failure to acton his October 18, 1994 letter cumappeal. They add thatTeodorico’s subsequentfiling of his May 7, 2003 letter with the OP seeking a reconsideration of the

November 19, 1997 Decision in O.P. CaseNo. 5902 should not have been takenagainst him by the CA, as it was prompted more by confusion engendered bythe OP’s failure to act on his October 18, 1994 letter cumappeal; the factremains that he was not a party appellant in said case, and thus could not bebound by the November 19, 1997judgment therein rendered.

Finally, petitioners argue that the NHA committed error insubdividing thesubject lot, as it failed to accurately survey the same before making the awards;that the NHA failed to review the sketch plans submitted by the NHA DistrictOffice which reflected clearly the existing position of the structures built by theawardees; that the NHA decision would result in the unwarranted destruction of

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such structures in order to conform to the respective allocations of theawardees; and that their overpayments should be returned to them by therespondents, lest unjust enrichment results.

Respondents’ Arguments

On the other hand, the Rosetes in their Comment34 argue that the NHA’s August5, 1994 Letter-Decision is erroneous and unjust, because only the Brionesesstand to unduly benefit therefrom since their existing lot area would be

increased while that of the others would be decreased, thus resulting in thedestruction of their existing homes and structures.

The Corpuzes in their Comment35 claim that Teodorico’s October 18, 1994 letterto the NHA cannot betreated as an appeal to the OP, and the NHA’s inaction orfailure to act on the said letter should be construed as an implied denial thereofwhich should have prompted Teodorico to takefurther legal steps to protect hisinterests. They object to being required to pay for interests on the purchaseprice and taxes advanced by Teodorico, claiming that this was unjust. Finally,they maintain that the NHA is correct in allocating the subject lot the way it didamong the parties; they should observe and yield to the law and policy of theNHA, even if it required the destruction of their homes and structures.

The Brioneses in their Comment36

plainly adopt the decisions of the NHA, the OPand the CA. They particularly stress thatthe OP’s disposition has long becomefinal and executory;that the courts cannot interfere with the NHA’s discretion inawarding the subject lot; that in the absence of grave abuse of discretion, thecourts cannot overturn the OP’s judgment; and that petitioners have not shownany valid ground to have the NHA and OP’s respective decisions reversed.

Our Ruling

The Court deniesthe Petition.

On August 5, 1994, the NHA rendered its Letter-Decision, which Teodoricoreceived on September 24, 1994. In an October 18, 1994 letter to the NHA,

Teodorico sought a reconsideration ofthe said decision. This was followed by aJuly 28, 1999 letter to the NHA, where Teodorico, the Rosetes, and theCorpuzes sought approval of their request to subdivide the subject lot on an "asis, where is" basis. In a November 12, 1999 Letter-Reply, the NHA informed theparties that the original awards/allocationswere being retained, and advisedthem to hire a surveyor for the purpose of subdividing the subject lot inaccordance with such awards. It can be said that the NHA’s November 12, 1999Letter-Reply constituted not only a written response tothe July 28, 1999 letterof Teodorico, the Rosetes, and the Corpuzes, buta denial as well of Teodorico’sOctober 18, 1994 letter cum motion for reconsideration ofthe agency’sAugust 5,

1994 Letter-Decision. As such, Teodorico should have thereafter filed anappealwith the OPwithin the prescribed period. However,instead of doing so, hesent another letter to the NHA dated November 23, 1999 reiterating his requestto subdivide the subject lot on an "as is, where is" basis and to bereimbursed byhis co-awardees for his overpayments, withinterest. He likewise filed in O.P.Case No. 5902 a May 7, 2003 letter, in which he sought a reconsideration of theNovember 19, 1997 Decision rendered in said case.

With his failure to timely appealthe NHA’s August 5, 1994 LetterDecision and itsNovember 12, 1999 Letter-Reply denying his motion for reconsideration, andinstead taking various erroneous courses of action which did not properly directhis grievances at the right forum and within the prescribed period, the NHA’sAugust 5,1994 Letter-Decision became final and executory as against Teodorico– and the petitioners for that matter. In contemplation of law, petitioners didnot at all file an appeal of the NHA’s August 5, 1994 Letter Decision.

Contrary to petitioners’ claim, the Court cannot consider Teodorico’s October 18,1994 letter to the NHA as his appeal to the OP; it is properly a motion forreconsideration of the agency’s August 5, 1994 Letter-Decision. Indeed, OP AO18 does not preclude the filing of a motion for reconsideration with the agencywhich rendered the questioned decision; in reference to such motions forreconsideration, OP AO 18 specifically states that "[t]he time during which amotion for reconsideration has been pending with the Ministry/agency

concerned shall be deducted from the period for appeal."

With regard to O.P. Case No. 5902, Teodorico could not have validly intervened.He had no personality to register his objections – through his undated letterwhich he filed on February 2, 1995 and his May 7,2003 letter in which he soughta reconsideration of the OP’s November 19, 1997 Decision; he was not a party – appellant or otherwise – in saidcase. Thus, "[h]e cannot impugn the correctnessof a judgment not appealed from by him. Hecannot assign such errors as aredesigned to have the judgment modified."37 This view is ineffect taken bypetitioners themselves, with their argument in the instant Petition that sinceTeodorico was not an appellant in O.P. Case No. 5902,then he should not bebound by the November 19, 1997 judgment therein dismissing the appeal. If hedid not intend to be bound by the judgment therein, then he had no business

intervening in the case.

Since petitioners did not have the personality to intervene in O.P. Case No.5902, then Teodorico had no standing to file therein his May 7, 2003 letter cummotion for reconsideration. The OP was thus correct indenying the same; inturn, the CA correctly affirmed the OP.

Notably, there is very little that petitioners can benefit from in obtaining areversal of the assailed Decision of the CA.1âwphi1 For one, they do not disputethe award of 62 square meters in Teodorico’s favor; this has been made clear as

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early as in Teodorico’s undated letter to the OP which was filed on February 2,1995, where he indicated that he was "satisfied" with the award. For another,petitioners do not seek to question the allocations made in favor of their co-awardees; in fact, in the instant Petition, they openly declared that –

In closing and perhaps most important of all, petitioners would like torespectfully manifest to this Honorable Court that they have deliberately notquestioned the right of respondents to be potential beneficiaries of the ZIPCensus even if they had argued before the Court of Appeals that respondentswere mere renters. The reason for this is that, at the end of the day, the peaceof the community is paramount. x x x38

The petitioners' remaining point of contention is their claim for reimbursement.Sad to say, this Court cannot order a refund of Teodorico's overpayments. Firstof all, NHA - the recipient of the overpayment - cannot be ordered to make arefund, since Teodorico never prayed to recover from it; in all his submissions -from the NHA, the OP, the CA, and all the way up to this Court - he consistentlysought reimbursement only from his co-awardees, not the NHA. Secondly, thespecific amount of overpayment is not fixed or determinable from the record;this being the case, it cannot be determined how much exactly each ofTeodorico's co-awardees owes him. Thirdly, this Court is not a trier of facts; itcannot go out of its way to determine and analyze from the record what shouldbe returned to Teodorico, nor can it receive evidence on the matter. Suffice it to

state that petitioners are indeed entitled to be indemnified for paying for thevalue of the subject lot and the real property taxes thereon over and abovewhat was awarded to them, pursuant to Article 1236 of the Civil Code, whichstates that "[w]hoever pays for another may demand from the debtor what hehas paid, except that if he paid without the knowledge or against the will of thedebtor, he can recover only insofar as the payment has been beneficial to thedebtor." They may also recover from the NHA, applying the principle of solutioindebiti.39

WHEREFORE, the Petition is DENIED. The assailed October 30, 2006 Decisionand December 22, 2006 Resolution of the Court of Appeals in CA-G.R. SP No.79400 are AFFIRMED.

SO ORDERED.

3. Alano v. Magud-Logmao


Baguio City

THIRD DIVISION

3. G.R. No. 175540 April 7, 2014

DR. FILOTEO A. ALANO, Petitioner,vs.ZENAIDA MAGUD-LOGMAO, Respondent.

D E C I S I O N

PERALTA, J.:

This deals with the Petition for Review on Certiorari under Rule 45 of the Rulesof Court praying that the Decision1of the Court of Appeals (CA), dated March 31,2006, adjudging petitioner liable for damages, and the Resolution2datedNovember 22, 2006, denying petitioner's motion for reconsideration thereof, bereversed and set aside.

The CA's narration of facts is accurate, to wit:

Plaintiff-appellee Zenaida Magud-Logmao is the mother of deceased Arnelito

Logmao. Defendant-appellant Dr. Filoteo Alano is the Executive Director of theNational Kidney Institute (NKI).

At around 9:50 in the evening of March 1, 1988, Arnelito Logmao, then eighteen(18) years old, was brought to the East Avenue Medical Center (EAMC) inQuezon City by two sidewalk vendors, who allegedly saw the former fall fromthe overpass near the Farmers’ Market in Cubao, Quezon City. The patient’sdata sheet identified the patient as Angelito Lugmoso of Boni Avenue,Mandaluyong. However, the clinical abstract prepared by Dr. Paterno F.Cabrera, the surgical resident on-duty at the Emergency Room of EAMC, statedthat the patient is Angelito [Logmao].

Dr. Cabrera reported that [Logmao] was drowsy with alcoholic breath, was

conscious and coherent; that the skull x-ray showed no fracture; that at around4:00 o’clock in the morning of March 2, 1988, [Logmao] developed generalizedseizures and was managed by the neuro-surgery resident on-duty; that thecondition of [Logmao] progressively deteriorated and he was intubated andambu-bagging support was provided; that admission to the Intensive Care Unit(ICU) and mechanical ventilator support became necessary, but there was novacancy at the ICU and all the ventilator units were being used by otherpatients; that a resident physician of NKI, who was rotating at EAMC, suggestedthat [Logmao] be transferred to NKI; and that after arrangements were made,[Logmao] was transferred to NKI at 10:10 in the morning.

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At the NKI, the name Angelito [Logmao] was recorded as Angelito Lugmoso.Lugmoso was immediately attended to and given the necessary medicaltreatment. As Lugmoso had no relatives around, Jennifer B. Misa, TransplantCoordinator, was asked to locate his family by enlisting police and mediaassistance. Dr. Enrique T. Ona, Chairman of the Department of Surgery,observed that the severity of the brain injury of Lugmoso manifested symptomsof brain death. He requested the Laboratory Section to conduct a tissue typingand tissue cross-matching examination, so that should Lugmoso expire despitethe necessary medical care and management and he would be found to be asuitable organ donor and his family would consent to organ donation, the

organs thus donated could be detached and transplanted promptly to anycompatible beneficiary.

Jennifer Misa verified on the same day, March 2, 1988, from EAMC the identityof Lugmoso and, upon her request, she was furnished by EAMC a copy of thepatient’s date sheet which bears the name Angelito Lugmoso, with address atBoni Avenue, Mandaluyong. She then contacted several radio and televisionstations to request for air time for the purpose of locating the family of AngelitoLugmoso of Boni Avenue, Mandaluyong, who was confined at NKI for severehead injury after allegedly falling from the Cubao overpass, as well as PoliceStation No. 5, Eastern Police District, whose area of jurisdiction includes BoniAvenue, Mandaluyong, for assistance in locating the relatives of AngelitoLugmoso. Certifications were issued by Channel 4, ABS-CBN and GMA attesting

that the request made by the NKI on March 2, 1988 to air its appeal to locatethe family and relatives of Angelito Lugmoso of Boni Avenue, Mandaluyong wasaccommodated. A Certification was likewise issued by Police Station No. 5,Eastern Police District, Mandaluyong attesting to the fact that on March 2, 1988,at about 6:00 p.m., Jennifer Misa requested for assistance to immediately locatethe family and relatives of Angelito Lugmoso and that she followed up herrequest until March 9, 1988.

On March 3, 1988, at about 7:00 o’clock in the morning, Dr. Ona was informedthat Lugmoso had been pronounced brain dead by Dr. Abdias V. Aquino, aneurologist, and by Dr. Antonio Rafael, a neurosurgeon and attending physicianof Lugmoso, and that a repeat electroencephalogram (EEG) was in progress toconfirm the diagnosis of brain death. Two hours later, Dr. Ona was informed

that the EEG recording exhibited a flat tracing, thereby confirming that Lugmosowas brain dead. Upon learning that Lugmoso was a suitable organ donor andthat some NKI patients awaiting organ donation had blood and tissue typescompatible with Lugmoso, Dr. Ona inquired from Jennifer Misa whether therelatives of Lugmoso had been located so that the necessary consent for organdonation could be obtained. As the extensive search for the relatives ofLugmoso yielded no positive result and time being of the essence in the successof organ transplantation, Dr. Ona requested Dr. Filoteo A. Alano, ExecutiveDirector of NKI, to authorize the removal of specific organs from the body ofLugmoso for transplantation purposes. Dr. Ona likewise instructed Dr. RoseMarie Rosete-Liquete to secure permission for the planned organ retrieval and

transplantation from the Medico-Legal Office of the National Bureau ofInvestigation (NBI), on the assumption that the incident which lead to the braininjury and death of Lugmoso was a medico legal case.

On March 3, 1988, Dr. Alano issued to Dr. Ona a Memorandum, which reads asfollows:

This is in connection with the use of the human organs or any portion orportions of the human body of the deceased patient, identified as a certain Mr.

Angelito Lugmoso who was brought to the National Kidney Institute on March 2,1988 from the East Avenue Medical Center.

As shown by the medical records, the said patient died on March 3, 1988 at9:10 in the morning due to craniocerebral injury. Please make certain that yourDepartment has exerted all reasonable efforts to locate the relatives or next ofkin of the said deceased patient such as appeal through the radios andtelevision as well as through police and other government agencies and that theNBI [Medico-Legal] Section has been notified and is aware of the case.

If all the above has been complied with, in accordance with the provisions ofRepublic Act No. 349 as amended and P.D. 856, permission and/or authority ishereby given to the Department of Surgery to retrieve and remove the kidneys,

pancreas, liver and heart of the said deceased patient and to transplant the saidorgans to any compatible patient who maybe in need of said organs to live andsurvive.

A Certification dated March 10, 1988 was issued by Dr. Maximo Reyes, Medico-Legal Officer of the NBI, stating that he received a telephone call from Dr.Liquete on March 3, 1988 at 9:15 a.m. regarding the case of Lugmoso, who wasdeclared brain dead; that despite efforts to locate the latter’s relatives, no oneresponded; that Dr. Liquete sought from him a second opinion for organretrieval for donation purposes even in the absence of consent from the familyof the deceased; and that he verbally agreed to organ retrieval.

At 3:45 in the afternoon of March 3, 1988, a medical team, composed of Dr.

Enrique Ona, as principal surgeon, Drs. Manuel Chua-Chiaco, Jr., Rose MarieRosete-Liquete, Aurea Ambrosio, Ludivino de Guzman, Mary Litonjua, JaimeVelasquez, Ricardo Fernando, and Myrna Mendoza, removed the heart, kidneys,pancreas, liver and spleen of Lugmoso. The medical team then transplanted akidney and the pancreas of Lugmoso to Lee Tan Hoc and the other kidney ofLugmoso to Alexis Ambustan. The transplant operation was completed at around11:00 o’clock in the evening of March 3, 1988.

On March 4, 1988, Dr. Antonio R. Paraiso, Head of the Cadaver Organ RetrievalEffort (CORE) program of NKI, made arrangements with La Funeraria Oro for

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the embalmment of the cadaver of Lugmoso good for a period of fifteen (15)days to afford NKI more time to continue searching for the relatives of thelatter. On the same day, Roberto Ortega, Funeral Consultant of La FunerariaOro, sent a request for autopsy to the NBI. The Autopsy Report and Certificationof Post-Mortem Examination issued by the NBI stated that the cause of death ofLugmoso was intracranial hemorrhage secondary to skull fracture.

On March 11, 1988, the NKI issued a press release announcing its successfuldouble organ transplantation. Aida Doromal, a cousin of plaintiff, heard thenews aired on television that the donor was an eighteen (18) year old boywhose remains were at La Funeraria Oro in Quezon City. As the name of thedonor sounded like Arnelito Logmao, Aida informed plaintiff of the news report.

It appears that on March 3, 1988, Arlen Logmao, a brother of Arnelito, who wasthen a resident of 17-C San Pedro Street, Mandaluyong, reported to PoliceStation No. 5, Eastern Police District, Mandaluyong that the latter did not returnhome after seeing a movie in Cubao, Quezon City, as evidenced by aCertification issued by said Station; and that the relatives of Arnelito werelikewise informed that the latter was missing. Upon receiving the news fromAida, plaintiff and her other children went to La Funeraria Oro, where they sawArnelito inside a cheap casket.

On April 29, 1988, plaintiff filed with the court a quo a complaint for damagesagainst Dr. Emmanuel Lenon, Taurean Protectors Agency, represented by itsProprietor, Celso Santiago, National Kidney Institute, represented by itsDirector, Dr. Filoteo A. Alano, Jennifer Misa, Dr. Maximo Reyes, Dr. Enrique T.Ona, Dr. Manuel Chua-Chiaco, Jr., Dr. Rose Marie O. Rosete-Liquete, Dr. A

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