15. Flores v. SPS. Lindo [G.R. No.

183984]
Jas de Guzman

Topic: Disposition and encumberance

Petitioner: Arturo Flores

Respondents: Enrico Lindo Jr. and Edna Lindo

Facts:
 Edna Lindo obtained a loan from Arturo Flores amounting to P400K. To secure said
loan, Edna executed a Deed of Real Estate Mortgage covering a property under her
name and her husband Enrico.
 Edna issued 3 checks as partial payments but these were dishonored due to
insufficiency of funds. This prompted Flores to file a complaint for Foreclosure of
Mortgage with damages against the respondents.
 The RTC ruled that the petitioner was not entitled to a judicial foreclosure of the
mortgage there being no valid mortgage that happened between Edna and Flores. They
found that the deed was executed by Edna without Enrico’s consent. The deed was
executed by Edna on October 31, 1995 while the Special Power of Attorney (SPA) was
executed by Enrico only on November 4, 1995.
 The RTC ruled however that Flores wasn’t precluded from recovering the loan as he
could file a personal action (collection suit) against Edna. Flores then filed a suit for
Collection of Sum of Money with damages against Edna and Enrico.
 The Lindo spouses prayed for the dismissal of the case on the grounds of res judicata
and forum shopping. They admitted the loan but stated that it only amounted to Php
340K and further alleged that Enrico was not a party to the loan since it was contracted
by Edna without his signature. This was dismissed by the RTC. The spouses then filed a
petition for certiorari before the CA.
 The CA set aside the decision of the RTC for having been issued with grave abuse of
discretion. They also ruled that Flores had only one cause of action against Edna for her
failure to pay her obligation which he could not split by separately filing: (1) a foreclosure
of mortgage and (2) a collection of sum of money.
 The creditor has a single cause of action against the debtor. Thus, Flores may institute 2
alternative remedies: collection or foreclosure BUT NOT BOTH.
 Flores filed a motion for reconsideration but the CA denied the same.

Issue: Whether the CA committed an error in dismissing the complaint for the collection of
sum of money on the ground of multiplicity of suits (usually no but in this case YES)

Ruling:
 While it is true that a mortgagee-creditor has a single cause of action against a
mortgagor-debtor, that is, to recover the debt and that he has the option of either filing a
personal action for collection of sum of money or instituting a real action to foreclose on
the mortgage security, the court, in this case, made a pro hac vice decision (applicable
only to this case; an exception to the rule) allowing Flores to recover via a personal
action despite his prior filing of a real action to recover the indebtedness applying the
principle that no person may unjustly enrich himself at the expense of another. (Ano ba
yung unjust enrichment??? The principle of unjust enrichment is provided under
Art. 22 of the NCC which ilalagay ko sa next bullet ok)
 Art. 22 NCC – 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.
o There is unjust enrichment when a person unjustly retains a benefit to the loss of
another, or when a person retains money or property against the fundamental
properties of justice, equity and good conscience.
 The principle of unjust enrichment is applicable in this case BECAUSE EDNA
ADMITTED THAT SHE OBTAINED A LOAN FROM FLORES AND HAS NOT BEEN
FULLY PAID. (Kahit ba sabi niya na P340K lang yung loan and hindi 400K, doesn’t
make a difference kasi hindi niya pa rin binabayaran)
 (Baka itanong lang) The decision of the RTC is erroneous when it ruled that the
mortgage between Edna and Flores is invalid. It is true that a disposition of a conjugal
property by one spouse without the consent of the other spouse is void. However, par. 2
of FC Art. 124 states:
o 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, 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 or authorization by the court before the offer is withdrawn by
either or both offerors.
 While the mortgage was void at the start when Edna signed the deed without her
husband’s consent, it became valid when it was ratified a month later when Enrico
executed a special power of attorney authorizing Edna to mortgage the subject property.