Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83713:57940&catid=1588&Itemid=566
Timestamp: 2019-04-21 04:25:58+00:00

Document:
G.R. No. 187240, October 15, 2014 - CARLOS A. LORIA, Petitioner, v. LUDOLFO P. MUÑOZ, JR., Respondent.
CARLOS A. LORIA, Petitioner, v. LUDOLFO P. MUÑOZ, JR., Respondent.
No person should unjustly enrich himself or herself at the expense of another.
Thus, in the decision31 dated October 23, 2008, the Court of Appeals affirmed the trial court’s decision but deleted the award of exemplary damages and attorney’s fees.32 The appellate court likewise denied Loria’s motion for reconsideration in the resolution33 dated March 12, 2009.
In the resolution38 dated June 3, 2009, this court ordered Muñoz to comment on Loria’s petition.
In his comment,39 Muñoz argues that Loria’s petition raises questions of fact and law that the trial and appellate courts have already passed upon and resolved in his favor. He prays that this court deny Loria’s petition for raising questions of fact.
This court denied the joint motion for lack of merit in the resolution47 dated December 15, 2010.
We rule for Muñoz and deny Loria’s petition for review on certiorari .
Section 1. Filing of petition with Supreme Court.
Loria failed to convince us why we should make an exception in this case.
We agree that these pieces of evidence duly prove Loria’s initial receipt of P3,000,000.00. We will not disturb this finding.
In this case, Loria received P2,000,000.00 from Muñoz for a subcontract of a government project to dredge the Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to the parties’ agreement, Muñoz was not subcontracted for the project. Nevertheless, Loria retained the P2,000,000.00.
Thus, Loria was unjustly enriched. He retained Muñoz’s money without valid basis or justification. Under Article 22 of the Civil Code of the Philippines, Loria must return the P2,000,000.00 to Muñoz.
Contrary to Loria’s claim, Section 6 of the Presidential Decree No. 1594 does not prevent Muñoz from recovering his money.
Section 6. Assignment and Contract. The contractor shall not assign, transfer, pledge, subcontract or make any other disposition of the contract or any part or interest therein except with the approval of the Minister of Public Works, Transportation and Communications, the Minister of Public Highways, or the Minister of Energy, as the case may be. Approval of the subcontract shall not relieve the main contractor from any liability or obligation under his contract with the Government nor shall it create any contractual relation between the subcontractor and the Government.
A subcontract, therefore, is void only if not approved by the department secretary.
In this case, it is premature to rule on the legality of the parties’ agreement precisely because the subcontract did not push through. No actual agreement was proven in evidence. The Secretary of Public Works and Highways could have approved the subcontract, which is allowed under Section 6 of the Presidential Decree No. 1594.
At any rate, even assuming that there was a subcontracting arrangement between Sunwest Construction and Development Corporation and Muñoz, this court has allowed recovery under a void subcontract as an exception to the in pari delicto doctrine.
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, he must return the P2,000,000.00 to Muñoz.
This court notes the possible irregularities in these transactions. At the very least, there appears to have been an attempt to circumvent our procurement laws. If petitioner indeed had the authority of Sunwest Construction and Development Corporation, it is strange that Loria could have guaranteed a bidding 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-earned money for nothing.
Let a copy of this decision be SERVED on the Office of the Ombudsman and the Department of Justice for their appropriate actions.
Carpio, (Chairperson), Mendoza, Reyes,*and Perlas-Bernabe,*JJ., concur.
* Designated Additional Member per Raffle dated October 13, 2014.
2 Id. at 34–45. This decision is dated October 23, 2009. Associate Justice Arcangelita M. Romilla-Lontok penned the decision with Associate Justices Mariano C. Del Castillo (now a Justice of this court) and Romeo F. Barza concurring.
6 Id. at 35 and 51.
14 Id. at 11 and 51.
16 Id. at 11 and 52.
48Century Iron Works, Inc. v. Bañas, G.R. No. 184116, June 19, 2013, 699 SCRA 157, 166 [Per J. Brion, Second Division].
50 Rules of Court, Rule 45, sec. 1.
51Macasero v. Southern Industrial Gases Philippines, 597 Phil. 494, 498–499 (2009) [Per J. Carpio Morales, Second Division], citing Uy v. Villanueva, 553 Phil. 69, 79 (2007) [Per J. Nachura, Third Division].
55 Locsin II v. Mekeni Food Corporation, G.R. No. 192105, December 9, 2013 < http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2013/december2013/192105.pdf> [Per J. Del Castillo, Second Division]; Elegir v. Philippine Airlines, Inc., G.R. No. 181995, July 16, 2012, 676 SCRA 463, 484 [Per J. Reyes, Second Division].
56Locsin II v. Mekeni Food Corporation, G.R. No. 192105, December 9, 2013 < http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2013/december2013/192105.pdf> [Per J. Del Castillo, Second Division]; Elegir v. Philippine Airlines, Inc., G.R. No. 181995, July 16, 2012, 676 SCRA 463, 484 [Per J. Reyes, Second Division]; Privatization and Management Office v. Legaspi Towers 300, Inc., 611 Phil. 16, 28 (2009) [Per J. Peralta, Third Division]; Tamio v. Ticson, 485 Phil. 434, 443 (2004) [Per J. Panganiban, Third Division]; H.L. Carlos Construction, Inc. v. Marina Properties Corp., 466 Phil. 182, 197 (2004) [Per J. Panganiban, First Division].
57 Pres. Decree No. 1594 (1978), Prescribing Policies, Guidelines, Rules and Regulations for Government Infrastructure Contracts.
58 G.R. No. 160600, January 15, 2014 [Per J. Bersamin, First Division].
69Gonzalo v. Tarnate, Jr., G.R. No. 160600, January 15, 2014, [Per J. Bersamin, First Division].
71 Id., citing Pajuyo v. Court of Appeals, G.R. No. 146364, June 3, 2004, 430 SCRA 492, 515 [Per J. Carpio, First Division].
76Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439, 456 [Per J. Peralta, En Banc].

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