PERSONS PRELIM Cases
petitioners for P12,361.02 allegedly representing unpaid obligations on
ARTICLE 22 – 23: Unjust Enrichment
VILLALVA vs. RCBC
G.R. No. 165661 August 28, 2006
In June 1993, petitioner spouses issued forty-eight (48) checks totaling
P547,392.00 to cover installment payments due on promissory notes
executed in favor of Toyota, Quezon Avenue (TQA) for the purchase of
a ’93 Toyota Corolla. The promissory notes were secured by a Chattel
Mortgage executed by the petitioner spouses on the vehicle in favor of
TQA. Under the Deed of Chattel Mortgage, petitioner spouses were to
insure the vehicle against loss or damage by accident, theft and fire,
and endorse and deliver the policies to the mortgagor.
On June 22, 1993, the promissory notes and chattel mortgage were
assigned to Rizal Commercial Banking Corporation (RCBC). They were
later assigned by RCBC to RCBC Savings Bank. 5 In time, all forty-eight
(48) checks issued by the petitioner spouses were encashed by
respondent RCBC Savings Bank.
The evidence shows that the petitioner spouses faithfully complied
with the obligation to insure the mortgaged vehicle from 1993 until
1996. For the period of August 14, 1996 to August 14, 1997, petitioner
spouses procured the necessary insurance but did not deliver the same
to the respondent until January 17, 1997. As a consequence,
respondent had the mortgaged vehicle insured for the period of
October 21, 1996 to October 21, 1997 and paid a P14,523.36 insurance
premium. The insurance policy obtained by respondent was later
cancelled due to the insurance policy secured by petitioner spouses
over the mortgaged vehicle, and respondent bank was reimbursed
P10,939.86 by Malayan Insurance Company. The premium paid by
respondent bank exceeded the reimbursed amount paid by Malayan
Insurance Company by P3,583.50.
On February 10, 1999, respondent sent a letter of demand to the
the promissory notes and mortgage as of January 31, 1999. In lieu
thereof, respondent demanded that petitioner spouses surrender the
mortgaged vehicle within five days from notice. The petitioner spouses
ignored the demand letter.
On April 5, 1999, respondent, in order to get the ’93 Toyota Corolla,
filed a complaint for Recovery of Possession with Replevin with the
Metropolitan Trial Court of Pasay City, which was raffled to Branch 45
thereof. Two weeks later, or on April 19, 1999, the respondent caused
the enforcement of a writ of replevin and recovered possession of the
mortgaged vehicle. 14 On June 18, 1999, petitioner spouses filed their
Answer with Compulsory Counterclaim for moral damages, exemplary
damages and attorney’s fees. Petitioners asserted that they insured
the mortgaged vehicle in compliance with the Deed of Chattel
Mortgage.
On June 28, 2002, the Metropolitan Trial Court rendered a decision in
favor of petitioners and ordered respondent to pay petitioner spouses
P100,000.00 in moral damages, P50,000.00 in exemplary damages,
P25,000.00 in attorney’s fees, and the costs and expenses of litigation.
16 Respondent’s Motion for Reconsideration was denied on September
16, 2002. Respondent appealed the decision to the Regional Trial Court
of Pasay City on October 3, 2002. The case was raffled to Branch 114.
On March 21, 2003, the Regional Trial Court affirmed the judgment of
the Metropolitan Trial Court in toto. The respondent filed a petition for
review with the Court of Appeals which reversed the decision of the
Regional Trial Court. It ordered petitioner spouses to pay respondent
P3,583.50 within thirty days of finality of the decision, and issued a writ
of replevin as regards the mortgaged vehicle.
The petitioners alleged that in ruling against them, the Court of Appeals
erred when it failed to consider two pieces of evidence: (1) an
Acknowledgment Receipt dated January 17, 1997, which shows that the
premium for the second insurance policy had been refunded to the
respondent bank; and (2) an Endorsement by the Malayan Insurance
Company dated June 11, 1997, which shows that petitioners handed
the required insurance policy to the respondent. The petitioners also
point out that the respondent was furnished a copy of the insurance
policy on January 17, 1997.
RULING: Petition has merit.
The respondent further contends that its payment of the insurance
premiums on behalf of the petitioners unjustly enriched the latter.
Respondent adverts to the provisions on quasi-contractual obligations
in the New Civil Code. Enrichment consists of every patrimonial,
physical or moral advantage, so long as it is appreciable in money. It
may also take the form of avoidance of expenses and other
indispensable reductions in the patrimony of a person. It may also
include the prevention of a loss or injury. In the case at bar, petitioner
spouses were not enriched when respondent obtained insurance
coverage for the mortgaged vehicle as the petitioner spouses had
already obtained the required insurance coverage for the vehicle from
August 14, 1996 to August 14, 1997.
ARTICLE 19 – 21: Abuse of Rights Doctrine
UYPITCHING vs QUIAMCO
G.R. No. 146322 December 6, 2006
Honeste vivere, non alterum laedere et jus suum cuique tribuere. To
live virtuously, not to injure others and to give everyone his due. These
supreme norms of justice are the underlying principles of law and order
in society.
In 1982, respondent Ernesto C. Quiamco was approached by Juan
Davalan, Josefino Gabutero and Raul Generoso to amicably settle the
civil aspect of a criminal case for robbery filed by Quiamco against
them. They surrendered to him a red Honda XL-100 motorcycle and a
photocopy of its certificate of registration. Respondent asked for the
original certificate of registration but the three accused never came to
see him again. Meanwhile, the motorcycle was parked in an open space
inside respondent’s business establishment, Avesco-AVNE Enterprises,
where it was visible and accessible to the public.
It turned out that, in October 1981, the motorcycle had been sold on
installment basis to Gabutero by petitioner Ramas Uypitching Sons,
Inc., a family-owned corporation managed by petitioner Atty. Ernesto
Ramas Uypitching. To secure its payment, the motorcycle was
mortgaged to petitioner corporation. When Gabutero could no longer
pay the installments, Davalan assumed the obligation and continued
the payments. In September 1982, however, Davalan stopped paying
the remaining installments and told petitioner corporation’s collector,
Wilfredo Veraño, that the motorcycle had allegedly been "taken by
respondent’s men."
Nine years later, on January 26, 1991, petitioner Uypitching,
accompanied by policemen, went to Avesco-AVNE Enterprises to
recover the motorcycle. The leader of the police team, P/Lt. Arturo
Vendiola, talked to the clerk in charge and asked for respondent. While
P/Lt. Vendiola and the clerk were talking, petitioner Uypitching paced
back and forth inside the establishment uttering "Quiamco is a thief of
a motorcycle."
On learning that respondent was not in Avesco-AVNE Enterprises, the
policemen left to look for respondent in his residence while petitioner
Uypitching stayed in the establishment to take photographs of the
motorcycle. Unable to find respondent, the policemen went back to
Avesco-AVNE Enterprises and, on petitioner Uypitching’s instruction
and over the clerk’s objection, took the motorcycle.
On February 18, 1991, petitioner Uypitching filed a criminal complaint
for qualified theft and/or violation of the Anti-Fencing Law against
respondent in the Office of the City Prosecutor of Dumaguete City.
Respondent moved for dismissal because the complaint did not charge
an offense as he had neither stolen nor bought the motorcycle. The
Office of the City Prosecutor dismissed the complaint and denied
petitioner Uypitching’s subsequent motion for reconsideration.
Respondent filed an action for damages against petitioners in the RTC
of Dumaguete City, Negros Oriental, Branch 37. He sought to hold the
petitioners liable for the following: (1) unlawful taking of the
motorcycle; (2) utterance of a defamatory remark (that respondent was
a thief) and (3) precipitate filing of a baseless and malicious complaint.
These acts humiliated and embarrassed the respondent and injured his
reputation and integrity.
On July 30, 1994, the trial court rendered a decision finding that
petitioner Uypitching was motivated with malice and ill will when he
called respondent a thief, took the motorcycle in an abusive manner
and filed a baseless complaint for qualified theft and/or violation of the
Anti-Fencing Law. Petitioners’ acts were found to be contrary to Articles
1911 and 2012 of the Civil Code. Hence, the trial court held petitioners
liable to respondent for P500,000 moral damages, P200,000 exemplary
damages and P50,000 attorney’s fees plus costs. Petitioners appealed
the RTC decision but the CA affirmed the trial court’s decision.
RULING: Petition is without merit
Petitioner were held liable for damages not only for instituting a
groundless complaint against respondent but also for making a
slanderous remark and for taking the motorcycle from respondent’s
establishment in an abusive manner.
A mortgagee (Uypitching) may take steps to recover the mortgaged
property to enable it to enforce or protect its foreclosure right thereon.
There is, however, a well-defined procedure for the recovery of
possession of mortgaged property: if a mortgagee is unable to obtain
possession of a mortgaged property for its sale on foreclosure, he must
bring a civil action either to recover such possession as a preliminary
step to the sale, or to obtain judicial foreclosure.1
Petitioner corporation failed to bring the proper civil action necessary
to acquire legal possession of the motorcycle. Instead, petitioner
Uypitching descended on respondent’s establishment with his
policemen and ordered the seizure of the motorcycle without a search
warrant or court order. Worse, in the course of the illegal seizure of the
motorcycle, petitioner Uypitching even mouthed a slanderous
statement.
No doubt, petitioner corporation, acting through its co-petitioner
Uypitching, blatantly disregarded the lawful procedure for the
enforcement of its right, to the prejudice of respondent. Petitioners’
acts violated the law as well as public morals and transgressed the
proper norms of human relations.
The basic principle of human relations, embodied in Article 19 of the
Civil Code, provides:
Art. 19. Every person must in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Article 19, also known as the "principle of abuse of right," prescribes
that a person should not use his right unjustly or contrary to honesty
and good faith, otherwise he opens himself to liability. It seeks to
preclude the use of, or the tendency to use, a legal right (or duty) as a
means to unjust ends.
There is an abuse of right when it is exercised solely to prejudice or
injure another. The exercise of a right must be in accordance with the
purpose for which it was established and must not be excessive or
unduly harsh; there must be no intention to harm another. Otherwise,
liability for damages to the injured party will attach.
In this case, the manner by which the motorcycle was taken at
petitioners’ instance was not only attended by bad faith but also
contrary to the procedure laid down by law. Considered in conjunction
with the defamatory statement, petitioners’ exercise of the right to
recover the mortgaged vehicle was utterly prejudicial and injurious to
respondent. On the other hand, the precipitate act of filing an
unfounded complaint could not in any way be considered to be in
accordance with the purpose for which the right to prosecute a crime
was established. Thus, the totality of petitioners’ actions showed a
calculated design to embarrass, humiliate and publicly ridicule
respondent. Petitioners acted in an excessively harsh fashion to the
prejudice of respondent. Contrary to law, petitioners willfully caused
damage to respondent. Hence, they should indemnify him.
DEVELOPMENT BANK OF THE PHILIPPINES vs CA
G.R. No. 137916 December 8, 2004
The Spouses Jacinto Gotangco and Charity Bantug were the owners of
seven parcels of land located in Palayan City, with a total area of 21,000
square meters, covered by Transfer Certificates of Title (TCT) Nos. NT-
166092 to NT-166098. The Spouses Gotangco were also the awardees
of a parcel of land, identified as Lot No. 168, NG-130 (Pls-378), located
in Canaderia, Palayan City, per Order of the Director of the Bureau of
Lands dated February 22, 1961. The Spouses Gotangco declared Lot No.
168 for taxation purposes under Tax Declaration (TD) No. 0502 in 1980.
On August 22, 1980, the Spouses Gotangco secured a loan for their
poultry project in Palayan City from the Development Bank of the
Philippines (DBP) in the amount of P121,400.00. They then executed a
real estate mortgage over the parcels of land.4 On December 16, 1981,
the Spouses Gotangco executed a Deed of Undertaking wherein they
obliged themselves to secure a sales patent in their favor from the
Bureau of Lands over Lot No. 168 covered by TD No. 0502 within two
(2) years from the execution thereof. They also undertook to deliver to
the DBP the owner's duplicate of the certificate of title over the
property for the annotation of the real estate mortgage in favor of DBP
at the dorsal portion thereof.
On July 17, 1982, the Spouses Gotangco, as vendors, executed in favor
of Elpidio O. Cucio a contract to sell over the seven parcels of land
mortgaged to DBP for P50,000.00, payable in two installments. The
parties agreed that the said amount shall be paid directly to DBP and
applied to the mortgage indebtedness of the Spouses Gotangco and
that, upon full payment of the purchase price, the Spouses shall
execute a deed of sale over the said parcels of land in favor of Cucio.
The contract to sell was known to DBP.
Thereafter, Cucio made the following remittances to DBP in payment of
the purchase price of the seven parcels of land: (a) P16,000.00 per
Official Receipt (OR) No. 2418258 dated January 13, 1983; and (b)
P5,000.00. The DBP considered the remittances as deposits and issued
OR No. 2792644 dated February 18, 1983 to Cucio for the total amount
of P21,000.00. The DBP informed Jacinto Gotangco, on February 18,
1983, of the said remittances made by Cucio. It also requested the
Spouses Gotangco to turn over the owner's copy of the title over the
property covered by TD No. 0502 so that it could effect the substitution
of the seven (7) parcels of land mortgaged by the Spouses Gotangco for
the said lot.
Subsequently, the Spouses Gotangco were able to secure a sales patent
over the parcel of land covered by TD No. 0502, on the basis of which
TCT No. NT-177647 was issued by the Register of Deeds on March 23,
1983. Conformably to the request of DBP, the Spouses Gotangco turned
over the owner's duplicate of TCT No. NT-177647, and the mortgage
executed in favor of DBP was duly annotated at the back of the said
title. DBP kept the owner's copies of TCT Nos. NT-166092 to NT-166098
and TCT No. NT-177647. On July 23, 1983, Jacinto Gotangco remitted
the total amount of P57,097.36 to DBP in partial payment of his loan
account for which DBP issued OR Nos. 324501 to 324504.9 In 1984,
Cucio paid the balance of the purchase price of the seven parcels of
land to DBP.