Albenson Enterprises v.
Court of Appeals
G.R. No. 88694, 11 January 1993
FACTS:
Petitioner Albenson Enterprises Corporation delivered to Guaranteed Industries, Inc. at Baltao Building mild steel
plates which the latter ordered and as part of the payment, a bouncing check was issued by one “Eugenio Baltao”.
Petitioner, in a sincere attempt to collect the sum of money due them, filed a criminal complaint against private
respondent Eugenio S. Baltao after the latter refused to make good the amount of the bouncing check despite
demand. However, there was a mistake of identity as there were two “Eugenio Baltaos” conducting business in the
same building – Eugenio S. Baltao and his son, Eugenio Baltao III.
It was found that the signature of the check was not of Eugenio S. Baltao and because of the alleged unjust filing of
a criminal case against him, respondent Baltao filed a complaint for damages anchored on Articles 19, 20, and 21
of the Civil Code against petitioners.
ISSUE:
Whether or not the principle of abuse of rights (Article 19) has been violated, resulting in damages under Articles
20 and 21 or other applicable provision of law.
RULING:
No, petitioners could not be said to have violated the principle of abuse of rights. What prompted petitioners to file
the case for violation of Batas Pambansa Bilang 22 against private respondent was their failure to collect the
amount of P2,575.00 due on a bounced check which they honestly believed was issued to them by private
respondent. Petitioners had conducted inquiries regarding the origin of the check. Private respondent, however, did
nothing to clarify the case of mistaken identity at first hand. Instead, private respondent waited in ambush and
thereafter pounced on the hapless petitioners at a time he thought was propitious by filing an action for damages.
The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Article 20 speaks of the general
sanction for all other provisions of law which do not especially provide for their own sanction. Thus, anyone who,
whether willfully or negligently, in the exercise of his legal right or duty, causes damage to another, shall indemnify
his victim for injuries suffered thereby. Article 21 deals with acts contra bonus mores, and has the following
elements: 1) There is an act which is legal; 2) but which is contrary to morals, good custom, public order, or public
policy; 3) and it is done with intent to injure.
There is no proof or showing that petitioners acted maliciously or in bad faith in the filing of the case against private
respondent. Consequently, in the absence of proof of fraud and bad faith committed by petitioners, they cannot be
held liable for damages.
* Case digest by Gretchen Rina A. Lim, LLB-1, Andres Bonifacio Law School, SY 2017-2018
PANTALEON VS AMERICAN EXPRESS
Posted by kaye lee on 11:30 PM
G.R. No. 174269, May 8 2009 [Credit Transaction]
FACTS:
After the Amsterdam incident that happened involving the delay of American Express Card to approve his credit
card purchases worth US$13,826.00 at the Coster store, Pantaleon commenced a complaint for moral and
exemplary damages before the RTC against American Express. He said that he and his family experienced
inconvenience and humiliation due to the delays in credit authorization. RTC rendered a decision in favor of
Pantaleon. CA reversed the award of damages in favor of Pantaleon, holding that AmEx had not breached its
obligations to Pantaleon, as the purchase at Coster deviated from Pantaleon's established charge purchase
pattern.
ISSUE:
1. Whether or not AmEx had committed a breach of its obligations to Pantaleon.
2. Whether or not AmEx is liable for damages.
RULING:
1. Yes. The popular notion that credit card purchases are approved “within seconds,” there really is no strict, legally
determinative point of demarcation on how long must it take for a credit card company to approve or disapprove a
customer’s purchase, much less one specifically contracted upon by the parties. One hour appears to be patently
unreasonable length of time to approve or disapprove a credit card purchase.
The culpable failure of AmEx herein is not the failure to timely approve petitioner’s purchase, but the more
elemental failure to timely act on the same, whether favorably or unfavorably. Even assuming that AmEx’s credit
authorizers did not have sufficient basis on hand to make a judgment, we see no reason why it could not have
promptly informed Pantaleon the reason for the delay, and duly advised him that resolving the same could take
some time.
2. Yes. The reason why Pantaleon is entitled to damages is not simply because AmEx incurred delay, but because
the delay, for which culpability lies under Article 1170, led to the particular injuries under Article 2217 of the Civil
Code for which moral damages are remunerative. The somewhat unusual attending circumstances to the purchase
at Coster – that there was a deadline for the completion of that purchase by petitioner before any delay would
redound to the injury of his several traveling companions – gave rise to the moral shock, mental anguish, serious
anxiety, wounded feelings and social humiliation sustained by Pantaleon, as concluded by the RTC.

Cebu Country Club, Inc. (CCCI) et al., v. Elizagaque, G.R. No. 160273, January
18, 2008.
11MAY
[SANDOVAL-GUTIERREZ, J.]
(Long Version Digest)
FACTS
Cebu Country Club, Inc. (CCCI), petitioner, is a domestic corporation operating as a non-profit and non-stock
private membership club, having its principal place of business in Banilad, Cebu City. Petitioners herein are
members of its Board of Directors. In 1996, respondent filed with CCCI an application for proprietary membership.
The application was indorsed by CCCI’s two (2) proprietary members, namely: Edmundo T. Misa and Silvano
Ludo. As the price of a proprietary share was around the P5 million range, Benito Unchuan, then president of
CCCI, offered to sell respondent a share for only P3.5 million. Respondent, however, purchased the share of a
certain Dr. Butalid for only P3 million. Consequently, on September 6, 1996, CCCI issued Proprietary Ownership
Certificate No. 1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of the CCCI Board of Directors, action on respondent’s
application for proprietary membership was deferred. In another Board meeting held on July 30, 1997,
respondent’s application was voted upon. As shown by the records, the Board adopted a secret balloting known as
the “black ball system” of voting wherein each member will drop a ball in the ballot box. A white ball represents
conformity to the admission of an applicant, while a black ball means disapproval. Pursuant to Section 3(c), as
amended, cited above, a unanimous vote of the directors is required. When respondent’s application for proprietary
membership was voted upon during the Board meeting on July 30, 1997, the ballot box contained one (1) black
ball. Thus, for lack of unanimity, his application was disapproved.
On August 6, 1997, Edmundo T. Misa, on behalf of respondent, wrote CCCI a letter of reconsideration. As CCCI
did not answer, respondent, on October 7, 1997, wrote another letter of reconsideration. Still, CCCI kept silent. On
November 5, 1997, respondent again sent CCCI a letter inquiring whether any member of the Board objected to
his application. Again, CCCI did not reply. Consequently, on December 23, 1998, respondent filed with the
Regional Trial Court (RTC), Branch 71, Pasig City a complaint for damages against petitioners
ISSUE
Whether in disapproving respondent’s application for proprietary membership with CCCI, petitioners are liable to
respondent for damages, and if so, whether their liability is joint and several.
RULING
YES.
In rejecting respondent’s application for proprietary membership, we find that petitioners violated the rules
governing human relations, the basic principles to be observed for the rightful relationship between human beings
and for the stability of social order. The trial court and the Court of Appeals aptly held that petitioners committed
fraud and evident bad faith in disapproving respondent’s applications. This is contrary to morals, good custom or
public policy. Hence, petitioners are liable for damages pursuant to Article 19 in relation to Article 21 of the same
Code.
It bears stressing that the amendment to Section 3(c) of CCCI’s Amended By-Laws requiring the unanimous vote
of the directors present at a special or regular meeting was not printed on the application form respondent filled
and submitted to CCCI. What was printed thereon was the original provision of Section 3(c) which was silent on the
required number of votes needed for admission of an applicant as a proprietary member.
Petitioners explained that the amendment was not printed on the application form due to economic reasons. We
find this excuse flimsy and unconvincing. Such amendment, aside from being extremely significant, was introduced
way back in 1978 or almost twenty (20) years before respondent filed his application. We cannot fathom why such
a prestigious and exclusive golf country club, like the CCCI, whose members are all affluent, did not have enough
money to cause the printing of an updated application form.
It is thus clear that respondent was left groping in the dark wondering why his application was disapproved. He was
not even informed that a unanimous vote of the Board members was required. When he sent a letter for
reconsideration and an inquiry whether there was an objection to his application, petitioners apparently ignored
him. Certainly, respondent did not deserve this kind of treatment. Having been designated by San Miguel
Corporation as a special non-proprietary member of CCCI, he should have been treated by petitioners with
courtesy and civility. At the very least, they should have informed him why his application was disapproved.
The exercise of a right, though legal by itself, must nonetheless be in accordance with the proper norm. When the
right is exercised arbitrarily, unjustly or excessively and results in damage to another, a legal wrong is committed
for which the wrongdoer must be held responsible.
Section 31 of the Corporation Code provides:
SEC. 31. Liability of directors, trustees or officers. — Directors or trustees who willfully and knowingly vote for or
assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the
affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors,
or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons. (Emphasis ours)
The challenged Decision and Resolution of the Court of Appeals are AFFIRMED with modification in the sense that
(a) the award of moral damages is reduced fromP2,000,000.00 to P50,000.00; (b) the award of exemplary
damages is reduced from P1,000,000.00 toP25,000.00; and (c) the award of attorney’s fees and litigation
expenses is reduced from P500,000.00 andP50,000.00 to P50,000.00 and P25,000.00, respectively.
GASHEEM SHOOKAT BAKSH, petitioner, vs. HON. COURT OF APPEALSand
MARILOU T. GONZALES, respondents
G. R. No. 97336. February 19, 1993
FACTS:
Petitioner was a medicine student at Lyceum Northwestern Colleges at Dagupan City. He was
an Iranian exchange student and was 29 years old. Respondent was a former waitress on a luncheonette, and was
22 years old. Petitioner was allegedly the lover of the respondent, and was said to promise marriage to the latter,
which convinced her to live with him in his apartment. It was even alleged that the petitioner went to the house of
the respondent to inform her family about the marriage on the end of the semester. However, the marriage did not
materialize, with several beatings and maltreatment experienced by the respondent from the petitioner.
The case was filed in the RTC of Pangasinan, and the decision was held in favor of the respondent. However, the
petitioner claimed that the judgment of the RTC was an error, for the claims of the respondent are not true, and
that he did not know about the custom of the Filipinos; his acts were in accordance of his custom. The decision of
the RTC was affirmed in toto by the Court of Appeals. Hence, the petitioner filed an appeal to the Supreme Court.
ISSUE:
Whether or not the respondent could claim payment for the damages incurred by the petitioner.
RULING:
Mere breach of marriage is not punishable by law. However, since the respondent was proved to have a good
moral character, and that she had just let her virginity be taken away by the petitioner since the latter offered a
promise of marriage, then she could ask for payment for damages. Furthermore, since she let her lover, the
petitioner, “deflowered” her since she believed that his promise to marry was true, and not due to her carnal desire,
then she could have her claims against the petitioner. Moreover, the father of the respondent had already looked
for pigs and chicken for the marriage reception and the sponsors for the marriage, and then damages were caused
by the petitioner against the respondents, which qualified the claims of the respondent against the petitioner.
Nikko Hotel Manila Garden and Ruby Lim, plaintiff Thus, the petition filed by Ruby Lim and Nikko Hotel Manila Garden is granted. The Decision of the Court of
Appeals is reserved and set aside.
vs. Roberto Reyes, defendant
452 SCRA 532

Facts:

On October 13, 1994, Roberto Reyes or “Amay Bisaya”, attended the celebration of the natal day of Hotel Nikko’s
manager, Mr. Masakazu Tsuruoka. He claimed that he was invited by Dr. Violeta Filart, an officially inivited guest in
the party. He lined-up at the buffet table and was about to eat when Ruby Lim, Hotel’s Executive Secretary for the
past twenty years, approached and told him that he could leave because he was not invited.
GLOBE-MACKAY CABLE & RADIO CORPORATION, petitioner vs. GEORGE G.
Reyes was embarrassed and claimed that the other guests have heard what Lim said. Mr. Reyes asked for One BARRIOS AND OLGA THERESA CRUZ-BARRIOS, respondents
Million Pesos actual damages, One Million Pesos moral and/or exemplary damages and Two Hundred Thousand No. L-60859. December 27, 1982
Pesos attorney’s fees.

On Lim’s defense, she said that after some notices by other guests (Ms. Zenaida Fruto and Captain Batung),
whom she asked favour to tell Reyes, Reyes lingered and did not leave. She only approached Reyes when he was
about to eat and told him he could leave after. Dr. Filart also added that she did not invite Reyes. Reyes
volunteered to help her carry the basket of fruits as gift for the celebrant. She also warned Mr. Reyes to go down
as he was not properly dressed and was not invited. All the while, she thought that Mr. Reyes already left the
place, but she later saw him at the bar talking to Col. Batung.
The trial court dismissed the complaint, giving more credence to the testimony of Ms. Lim that she was discreet in
asking Mr. Reyes to leave the party. The trial court likewise ruled that Mr. Reyes assumed the risk of being thrown
out of the party as he was uninvited.
However, the Court of Appeals reversed the ruling of the trial court as it found more commanding of belief the
testimony of Mr. Reyes that Ms. Lim ordered him to leave in a loud voice within hearing distance of several guests.
Facts:
Spouses George and Olga Theresa Barrios filed a complaint against Globe Mackay Cable and Radio Corporation
for failure to deliver to them a cablegram admitting Olga for a rotating internship in Mercy Hospital in New York, as
a consequence, she was unable to signify her acceptance and the position was given to someone else.
The failure caused the respondents loss of earnings, serious anxiety, and sleepless nights. RTC and CA held the
company liable and awarded damages to the respondents.
Issue:
Whether or not Globe Mackay should be held liable for the failure of the delivery of the cablegram.
Ruling:

Issue: Globe Mackay should be held liable, and should be corrected for public good since the company is a quasi-public
corporation with duties to the general public and is liable to any member of the public to whom it owes a duty for
Whether or not CA erred in reversing the decision of the trial court. damages proximately flowing from a violation of that duty.

Ruling: In the case at bar, the company was grossly negligent in their duty, particularly considering that another company
was able to send an identically addressed cablegram to them. The ruling of the CA is affirmed with modification of
the damages granted which the court found to be excessive, to wit:
In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and
shame, it is highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel
business for twenty years wherein being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes 1. From US $5, 417 to US $2,703 in Philippine currency computed at the exchangerate on July 31, 1973, the date
that she acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court was correct. of the filing of the complaint;
Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made 2. Moral damages from P50, 000.00 to P5,000;
such that they nearly kissed each other, the request was meant to be heard by him only and there could have been 3. Exemplary damages from P50,000.00 to P5,000.00;
no intention on her part to cause embarrassment to him. It was plaintiff’s reaction to the request that must have 4. Attorney’s fees from P10, 000. 00 to P8,000.00
made the other guests aware of what transpired between them.

Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be
made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer,
Hotel Nikko, be held liable as its liability springs from that of its employees. Not being liable for both actual and
moral damages, neither can petitioners Lim and Hotel Nikko be made answerable for exemplary damages
especially for the reason stated by the Court of Appeals.
TITLE: De Jesus v Syquia Magbanua vs. Intermediate Appellate Court
CITATION: 58 Phil 866
Facts:
FACTS: The plaintiffs filed a petition against the respondents all surenamed Perez alleging that they are shared
tenants of the defendants, and that the latter divert the flow of water from their farm lots which caused the drying
Antonia Loanco, a likely unmarried girl 20 years of age was a cashier in a barber shop owned by the defendant’s up of their landholdings and asked to vacate their areas for they could not plant palay due to lack of water. The trial
brother in law Vicente Mendoza. Cesar Syquia, the defendant, 23 years of age and an unmarried scion of a court rendered a decision in favor to the plaintiffs and ordered the defendants to pay moral and exemplary
prominent family in Manila was accustomed to have his haircut in the said barber shop. He got acquainted with damages to the plaintiffs. The defendants appealed to the IAC which the latter affirmed the appeal by deleting the
Antonio and had an amorous relationship. As a consequence, Antonia got pregnant and a baby boy was born on award of moral and exemplary damages to be awarded to the plaintiffs. Upon the reinstatement of the IAC, the trial
June 17, 1931. court did not agree to the appellate court in its decision because the former believe that as a shared tenants, they
are entitled to be maintained as agricultural lessees in peaceful cultivation in their respective landholdings.
In the early months of Antonia’s pregnancy, defendant was a constant visitor. On February 1931, he even wrote a
letter to a rev father confirming that the child is his and he wanted his name to be given to the child. Though he Issue:
was out of the country, he continuously wrote letters to Antonia reminding her to eat on time for her and “junior’s” W/N the tenants of defendants were entitled to moral and exemplary damages.
sake. The defendant ask his friend Dr. Talavera to attend at the birth and hospital arrangements at St. Joseph
Hospital in Manila. Held:
The petition is granted and the decision under review is modified and each of the plaintiffs is entitled to
After giving birth, Syquia brought Antonia and his child at a House in Camarines Street Manila where they lived receive award of moral and exemplary damages by the defendants .
together for about a year. When Antonia showed signs of second pregnancy, defendant suddenly departed and he
was married with another woman at this time. Rationale:
Under the law, the landowners has an obligation to keep the tenant in the peaceful and continuous cultivation
It should be noted that during the christening of the child, the defendant who was in charge of the arrangement of of his landholding. In this case, it shows that the petitioners were denied irrigation water for their farm lots in order
the ceremony caused the name Ismael Loanco to be given instead of Cesar Syquia Jr. that was first planned. to make them vacate their landholdings. The defendants violated the plaintiff's rights and caused prejudiced to the
latter by the diversion of water. Under Article 2219 (10), the Civil Code permits the award of moral damages for
ISSUES: acts mentioned in Article 21 of the same Code which provides, Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the
1. Whether the note to the padre in connection with the other letters written by defendant to Antonia during her damage. The defendants acted in an oppressive manner which is contrary to the morals of the petitioners and
pregnancy proves acknowledgement of paternity. therefore, they are liable for the compensation to the latter.
2. Whether trial court erred in holding that Ismael Loanco had been in the uninterrupted possession of the status
of a natural child, justified by the conduct of the father himself, and that as a consequence, the defendant in this
case should be compelled to acknowledge the said Ismael Loanco.

HELD:

The letter written by Syquia to Rev. Father serves as admission of paternity and the other letters are sufficient to
connect the admission with the child carried by Antonia. The mere requirement is that the writing shall be
indubitable.

“The law fixes no period during which a child must be in the continuous possession of the status of a natural child;
and the period in this case was long enough to reveal the father's resolution to admit the status”.

Supreme Court held that they agree with the trial court in refusing to provide damages to Antonia Loanco for
supposed breach of promise to marry since action on this has no standing in civil law. Furthermore, there is no
proof upon which a judgment could be based requiring the defendant to recognize the second baby, Pacita
Loanco. Finally, SC found no necessity to modify the judgment as to the amount of maintenance allowed to Ismael
Loanco in the amount of P50 pesos per month. They likewise pointed out that it is only the trial court who has
jurisdiction to modify the order as to the amount of pension.
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO,
respondents.

Facts:
Plaintiff and defendant Bunag, Jr. were sweethearts, he invited her to take their merienda at the Aristocrat
Restaurant in Manila, to which plaintiff obliged. But instead to Aristocrat he brought plaintiff to a motel or hotel
where he raped her. Later that evening, defendant brought plaintiff to the house of his grandmother Juana de Leon
in Pamplona, Las Piñas, Metro Manila, where they lived together as husband and wife for 21 days.
Defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a marriage license with
the Office of the Local Civil Registrar of Bacoor, Cavite. October 1, 1973 Defendant-appellant Bunag, Jr. filed an
affidavit withdrawing his application for a marriage license.
Defendant Bunag, Jr. left and never returned, humiliating plaintiff and compelled her to go back to her parents.
Plaintiff was ashamed when she went home and could not sleep and eat because of the deception done against
her by defendants-appellants. Petitioner filed a complaint for damages for alleged breach of promise to marry.
The trial court ruled in favor of the plaintiff and against petitioner, but absolved his father.

Issue:
Whether or not the failure to comply with the promise of marriage of the defendant considered contrary to morals,
good custom or public policy.

Held:
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to marry
has no standing in the civil law, apart from the right to recover money or property advanced by the plaintiff upon the
faith of such promise. Generally, therefore, a breach of promise to marry per se is not actionable, except where the
plaintiff has actually incurred expenses for the wedding and the necessary incidents thereof.
UNIVERSITY OF THE EAST, petitioner, vs. ROMEO A. JADER, respondent. RULING:
G.R. No. 132344. February 17, 2000.
Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a time when he
had already commenced preparing for the bar exams, cannot be said to have acted in good faith.
FACTS:

Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the untold number of
Plaintiff was enrolled in the defendants’ College of Law from 1984 up to 1988. In the first semester of his last year
moral wrongs which is impossible for human foresight to provide specifically in statutory law. Schools and
(School year 1987-1988), he failed to take the regular final examination in Practice Court I for which he was given
professors cannot just take students for granted and be indifferent to them, for without the latter, the former are
an incomplete grade . He enrolled for the second semester as fourth year law student and on February 1, 1988 he
useless.
filed an application for the removal of the incomplete grade given him by Professor Carlos Ortega which was
approved by Dean Celedonio Tiongson after payment of the required fee. He took the examination on March 28,
1988. On May 30, 1988, Professor Carlos Ortega submitted his grade. It was a grade of five (5). Petitioner’s liability arose from its failure to promptly inform respondent of the result of an examination and in
misleading the latter into believing that he had satisfied all requirements for the course.
The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws was scheduled on the
16th of April 1988, and in the invitation for that occasion the name of the plaintiff appeared as one of the “It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been informed during
candidates. At the foot of the list of the names of the candidates there is an annotation stating that the same is a the deliberation that the professor in Practice Court I gave plaintiff-appellant a failing grade. Yet, defendant-
tentative list. appellee still did not inform plaintiff-appellant of his failure to complete the requirements for the degree nor did they
remove his name from the tentative list of candidates for graduation. Worse, defendant-appellee university, despite
the knowledge that plaintiff-appellant failed in Practice Court I, again included plaintiff-appellant’s name in the
The plaintiff attended the investiture ceremonies and he was thereafter handed by Dean Celedonio a rolled white
“tentative” list of candidates for graduation which was prepared after the deliberation and which became the basis
sheet of paper symbolical of the Law Diploma. He tendered a blow-out that evening which was attended by
for the commencement rites program. Dean Tiongson reasons out that plaintiff-appellant’s name was allowed to
neighbors, friends and relatives who wished him good luck in the forthcoming bar examination. He thereafter
remain in the tentative list of candidates for graduation in the hope that the latter would still be able to remedy the
prepared himself for the bar examination. He took a leave of absence without pay from his job from April 20, 1988
situation in the remaining few days before graduation day. Dean Tiongson, however, did not explain how plaintiff-
to September 30, 1988 and enrolled at the pre-bar review class in Far Eastern University . Having learned of the
appellant Jader could have done something to complete his deficiency if defendant-appellee university did not
deficiency he dropped his review class and was not able to take the bar examination.
exert any effort to inform plaintiff-appellant of his failing grade in Practice Court I.

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental anguish,
serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not able to take the
1988 bar examinations arising from the latter’s negligence. He prayed for an award of moral and exemplary
damages, unrealized income, attorney’s fees, and costs of suit.
RTC’s Decision:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and against the
defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY
PESOS (P35,470.00) with legal rate of interest from the filing of the complaint until fully paid, the amount of FIVE
THOUSAND PESOS (P5,000.00) as attorney’s fees and the cost of suit.
CA’s Decision:
WHEREFORE, in the light of the foregoing, the lower Court’s Decision is hereby AFFIRMED with the
MODIFICATION that defendant-appellee, in addition to the sum adjudged by the lower court in favor of plaintiff-
appellant, is also ORDERED to pay plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for
moral damages. Costs against defendant-appellee.
However, while petitioner was guilty of negligence and thus liable to respondent for the latter’s actual damages, we
hold that respondent should not have been awarded moral damages. We do not agree with the Court of Appeals’
findings that respondent suffered shock, trauma and pain when he was informed that he could not graduate and
will not be allowed to take the bar examinations. At the very least, it behooved on respondent to verify for himself
whether he has completed all necessary requirements to be eligible for the bar examinations. As a senior
law student, respondent should have been responsible enough to ensure that all his affairs, specifically those
pertaining to his academic achievement, are in order. Given these considerations, we fail to see how respondent
could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar review classes and
not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought
this upon himself by not verifying if he has satisfied all the requirements including his school records, before
preparing himself for the bar examination. Certainly, taking the bar examinations does not only entail a mental
preparation on the subjects thereof; there are also prerequisites of documentation and submission of requirements
which the prospective examinee must meet.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner is
ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy Pesos (P35,470.00), with
legal interest of 6% per annum computed from the date of filing of the complaint until fully paid; the amount of Five
Thousand Pesos (P5,000.00) as attorney’s fees; and the costs of the suit. The award of moral damages is
DELETED.

ISSUE:

Whether or not UE has liability to Romeo Jader, considering that the proximate and immediate cause of the alleged
damages incurred by the latter arose out of his own negligence in not verifying from the professor concerned the
result of his removal exam.
FLORES V. LINDO
G.R. No. 183984, [April 13, 2011]
FACTS:
Respondent Edna Lindo obtained a loan from Petitioner Arturo Flores amounting to P400,000 and secured it with a
Deed of Real Estate Mortgage. The mortgage covered property in the name of Edna and her husband, co-
respondent Enrico Lindo, Jr. Edna likewise signed a Promissory Note and the Deed for herself and for Enrico as
his attorney-in-fact.
She issued three checks as partial loan payments, all of which were dishonored for insufficiency of funds. Flores
therefore filed a complaint for foreclosure of the mortgage with damages. The RTC ruled that petitioner was not
entitled to judicial foreclosure as the Deed was without consent and authority of Edna’s husband. The Deed was
executed on October 31, 1995, while the Special Power of Attorney was executed by Enrico only on November 4,
1995. Accordingly, the mortgage is void pursuant to Article 96 of the Family Code. The RTC, however, ruled that
petitioner may still recover the loan through a personal action against Edna, but that it had no jurisdiction over the
said personal action which should be filed where plaintiff or defendant resides.
Petitioner filed a complaint for sum of money and damages. The respondents alleged that Enrico was not a party to
the loan because it was contracted by Edna without Enrico’s signature. They also prayed for the dismissal of the
case on grounds of improper venue, res judicata and forum-shopping. The RTC ruled that res judicata will not
apply to rights, claims or demands which, though growing out of the same subject matter, constitute separate or
distinct causes of action.
The Court of Appeals set aside the RTC ruling. It noted that petitioner allowed the earlier decision of the RTC to
become final and executory without asking the courts for an alternative relief. The Court of Appeals stated that
petitioner merely relied on the declarations of these courts that he could file a separate personal action and thus
failed to observe the rules and settled jurisprudence on multiplicity of suits, closing petitioner’s avenue for recovery
of the loan.
ISSUES:
(1) Whether the promissory note and deed of mortgage are void
(2) Whether there remains an available remedy for petitioner
HELD:
(1) NO. Article 124 of the Family Code provides:
Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses
jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for
proper remedy, which must be availed of within five years from the date of contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of
the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include
disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence
of such authority or consent the disposition or encumbrance shall be void. However, thetransaction shall be
construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as
a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is
withdrawn by either or both offerors. (Emphasis supplied)
Article 124 of the Family Code of which applies to conjugal partnership property, is a reproduction of Article 96 of
the Family Code which applies to community property.
Both Article 96 and Article 127 of the Family Code provide that the powers do not include disposition or
encumbrance without the written consent of the other spouse. Any disposition or encumbrance without the written
consent shall be void. However, both provisions also state that “the transaction shall be construed as a continuing
offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon
the acceptance by the other spouse x x x beforethe offer is withdrawn by either or both offerors.”
In this case, the Promissory Note and the Deed of Real Estate Mortgage were executed on 31 October 1995. The
Special Power of Attorney was executed on 4 November
1995. The execution of the SPA is the acceptance by the other spouse that perfected the continuing offer as
a binding contract between the parties, making the Deed of Real Estate Mortgage a valid contract.
(2) YES. In Chieng v. Santos, this Court ruled that a mortgage-creditor may institute against the mortgage-debtor
either a personal action for debt or a real action to foreclose the mortgage. The Court ruled that the remedies
are alternative and not cumulative and held that the filing of a criminal action for violation of Batas Pambansa
Blg. 22 was in effect a collection suit or a suit for the recovery of the mortgage-debt. In that case, however, this
Court pro hac vice, ruled that respondents could still be held liable for the balance of the loan, applying the
principle that no person may unjustly enrich himself at the expense of another.
The principle of unjust enrichment is provided under Article 22 of the Civil Code which provides:
Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just or legal ground, shall return the same to him.
There is unjust enrichment “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.”
The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at the expense of another. The main objective of the principle
against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or
consideration. The principle is applicable in this case considering that Edna admitted obtaining a loan from
petitioners, and the same has not been fully paid without just cause. The Deed was declared void erroneously at
the instance of Edna, first when she raised it as a defense before the RTC, Branch 33 and second, when she filed
an action for declaratory relief before the RTC, Branch 93. Petitioner could not be expected to ask the RTC,
Branch 33 for an alternativeremedy, as what the Court of Appeals ruled that he should have done, because the
RTC, Branch 33 already stated that it had no jurisdiction over any personal action that petitioner might have
against Edna.
Edna should not be allowed to unjustly enrich herself because of the erroneous decisions of the two trial courts
when she questioned the validity of the Deed.