Cruz v.

Tuazon & Co
April 29, 1977 | J. Barredo

Facts:

1) As requested by the Deudors (the family of Telesforo Deudor who laid claim on the land in question
on the strength of an "informacion posesoria"), Cruz made permanent improvements on said land
having an area of more or less 20 quinones.

2) The improvements were valued at P30,400.00 and for which he incurred expenses amounting to
P7,781.74.

3) In 1952, Tuason & Co. availed of Cruz' services as an intermediary with the Deudors to work for the
amicable settlement of Civil Case No. Q-135. The said case involved 50 quinones of land, of which
the 20 quinones of land mentioned above formed part.

4) A compromise agreement between the Deudors and Tuason & Co. was entered into on 1963 and
was approved by the Court.

5) Cruz alleged that Tuason & Co. Promised to convey to him the 3,000 sq. meters of land occupied by
him (which was part of the 20 quinones of land) within ten years from the date of signing of the
compromise agreement between the Deudors and the latter as consideration for his services. Said
land was not conveyed to him by Tuason & Co.

6) Cruz further alleged that Tuason & Co. was unjustly enriched at his expense since they enjoyed the
benefits of the improvements he made on the land acquired by the latter.

7) The trial court dismissed the case on the ground that there was no cause of action. Hence this
appeal.

Issue:

1) Is Cruz’ theory on unjust enrichment tenable?

a. Was there a quasi-contract between Cruz and Tuason & Co.?

b. Is Tuason & Co. obliged to reimburse Cruz for the improvements on the land?

Held:

No, reliance on Article 2142 of the Civil Code is misplaced. Said article provides:

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.

On the quasi-contract:
• It is obvious that a presumed quasi-contract cannot emerge as against one party
when the subject mater thereof is already covered by an existing contract with another
party. Predicated on the principle that no one should be allowed to unjustly enrich himself at
the expense of another, Article 2124 creates the legal fiction of a quasi-contract precisely
because of the absence of any actual agreement between the parties concerned.
• It is essential that the act by which the defendant is benefited must have been
voluntary and unilateral on the part of the plaintiff.
• "The act is voluntary because the actor in quasi-contract is not bound by any pre-
existing obligation to act. It is unilateral because it arises from the sole will of the actor who
is not previously bound by any reciprocal or bilateral agreement. The reason why the law
creates a juridical relation and imposes a certain obligation is to prevent a situation where a
person is able to benefit or take advantage of such lawful, voluntary and unilateral acts at
the expense of said actor." (Padilla, Ambrosio)
• In this case, Cruz’ recourse is against the Deudors with whom he had entered into an
agreement regarding the improvements and expenditures made by him on the land of
appellees. it Cannot be said, in the sense contemplated in Article 2142, that appellees have
been enriched at the expense of appellant.