Osmena-Jalandoni V Encomienda GR No. 205578 (2017)

Osmena-Jalandoni v Encomienda GR No.
205578 (2017) – Simple Loan, Unjust Enrichment
Doctrine: A simple loan or mutuum exists when a person receives a loan of money or any other fungible thing
and acquires its ownership. He is bound to pay to the creditor the equal amount of the same kind and quality.
Jalandoni posits that the more logical reason behind the disbursements would be what Encomienda candidly
told the trial court, that her acts were plainly an “unselfish display of Christian help” and done out of “genuine
concern for Georgia’s children.” However, the “display of Christian help” is not inconsistent with the existence
of a loan. Encomienda immediately offered a helping hand when a friend asked for it. But this does not mean
that she had already waived her right to collect in the future. Indeed, when Encomienda felt that Jalandoni
was beginning to avoid her, that was when she realized that she had to protect her right to demand payment.
Facts: Encomienda and Jalandoni became close friends. On March 2, 1997, Jalandoni called Encomienda to
ask if she could borrow money for the search and rescue operation of her children in Manila, who were
allegedly taken by their father, Luis Jalandoni. Encomienda then went to Jalandoni’s house and handed
P100,000.00 in a sealed envelope to the latter’s security guard. While in Manila, Jalandoni again borrowed
money for the payment of errands.
On April 1, 1997, Jalandoni borrowed P1 Million from Encomienda and promised that she would pay the same
when her money in the bank matured. Thereafter, Encomienda went to Manila to attend the hearing of
Jalandoni’s habeas corpus case before the CA where P100,000.00 more was requested. On May 26, 1997, now
crying, Jalandoni asked if Encomienda could lend her an additional P900,000.00. Encomienda still acceded,
albeit already feeling annoyed. All in all, Encomienda spent around P3,245,836.02 and $6,638.20 for
Jalandoni.
When Jalandoni came back to Cebu on July 14, 1997, she never informed Encomienda. Encomienda then later
gave Jalandoni six (6) weeks to settle her debts. Despite several demands, no payment was made. Jalandoni
insisted that the amounts given were not in the form of loans.
Encomienda filed a complaint after the promise of payment was not fulfilled. She impleaded Luis as a
necessary party, being Georgia’s husband. RTC dismissed the case. CA granted the appeal and set aside the
decision of the trial court. Jalandoni was ordered to pay Php3,245,836.02 plus $6,638.20 plus legal interest
and attorney’s fees. Jalandoni filed for motion for reconsideration but was denied. Hence, the current appeal.
Jalandoni insists that she never borrowed any amount of money from Encomienda. During the entire time
that Encomienda was sending her money and paying her bills, there was not one reference to a loan.
Jalandoni also contends that the amounts she received from Encomienda were mostly provided and paid
without her prior knowledge and thus she could not have consented to any loan agreement.
Issue: Whether or not Encomienda is entitled to be reimbursed for the amounts she defrayed for Jalandoni.
Ruling: Yes, Encomienda is entitled to be reimbursed for the amount she defrayed for Jalandoni.
Surely, there can be a verbal loan. Contracts are binding between the parties, whether oral or written. The law
is explicit that contracts shall be obligatory in whatever form they may have been entered into, provided all
the essential requisites for their validity are present. A simple loan or mutuum exists when a person
receives a loan of money or any other fungible thing and acquires its ownership. He is bound to pay to
the creditor the equal amount of the same kind and quality.
Encomienda immediately offered a helping hand when a friend asked for it. But this does not mean that she
had already waived her right to collect in the future. Indeed, when Encomienda felt that Jalandoni was
beginning to avoid her, that was when she realized that she had to protect her right to demand payment. The
fact that Encomienda kept the receipts even for the smallest amounts she had advanced, repeatedly
sent demand letters, and immediately filed the instant case when Jalandoni stubbornly refused to
heed her demands sufficiently disproves the latter’s belief that all the sums of money she received
were merely given out of charity.
The principle of unjust enrichment finds application in this case. Unjust enrichment exists when a person
unfairly retains a benefit to the loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity, and good conscience. There is unjust enrichment under
Article 22 of the Civil Code when (1) a person is unjustly benefited, and (2) such benefit is derived at the
expense of or with damages to another. The principle of unjust enrichment essentially contemplates
payment when there is no duty to pay, and the person who receives the payment has no right to
receive it. The CA is then correct when it ruled that allowing Jalandoni to keep the amounts received from
Encomienda will certainly cause an unjust enrichment on Jalandoni’s part and to Encomienda’s damage and
prejudice.
Petition is dismissed and affirmed decision with modification as to the interest.

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Osmena-Jalandoni v Encomienda GR No.

205578 (2017) – Simple Loan, Unjust Enrichment

Petition is dismissed and affirmed decision with modification as to the interest.

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