Unjust enrichment (Article 22, Civil Code)

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. (Article 22, Civil Code)Article 2142 provides a corresponding and analogous substantive basis for Article 22. It says: "Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another."

Article 22 embodies the universal principle that injuring other people is not a good way to get rich. Nemo ex alterius incommode debet lecupletari; no man ought to be made rich out of another's injury. Basically, no person shall be unjustly enriched at the expense of another.

Under the Civil Code, whoever voluntarily takes charge of the agency or management of the business or property of another, without any power from the latter, is obliged to continue the same until the termination of the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a position to do so. Also, if something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. (Article 2144-2145) These are quasi-contracts, specially negotiorum gestio and solutio indebiti.

In Baje v. Court of Appeals (G.R. No. L-18783, May 25, 1964), a contract for the sale of land was declared null and void after the buyer had already paid the purchase price. The issue was whether said buyer can successfully recover the price paid from the successors-in-interest of the seller. According to the Supreme Court, yes, because if said successors could recover the land without being required to reimburse the buyer, they would be enriching themselves unjustly at the expense of the buyer.

The Supreme Court explains: "In short, the sale made by the deceased Marcelo Valdez to herein petitioners Generoso Baje and Saturnina Sacdalan is null and void ab initio, for which reason the respondents herein, as heirs and successors in interest of Marcelo Valdez are the owners of the lots aforementioned, and, hence, entitled to the possession thereof upon reimbursement to the Bajes of the sum of P3,734 paid by them to the deceased. Thereafter, Transfer Certificate of Title No. 2213, in the name of herein petitioners, shall be cancelled and another one issued in the name of respondents herein."

A question was raised in the case of Commissioner of Internal Revenue v. Fireman's Fund (G.R. No. L-30644, March 09, 1987) on whether or not the doctrine against unjust enrichment can be applied against the Government. The Supreme Court answered: "Enshrined in our basic legal principles is the time honored doctrine that no person shall unjustly enrich himself at the expense of another. It goes without saying that the government is not exempted from the application of this doctrine. Therefore, there is no justification for the government which has already realized the revenue which is the object of the imposition of subject stamp tax, to require the payment of the same tax for the same documents.

Popular Posts