- Petitioner
- Domingo Gonzalo
- Respondent
- John Tarnate, Jr.
- Citation
- G.R. No. 160600
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Bersamin, J.
- Decided
- January 15, 2014
Summary
Gonzalo, a contractor, illegally subcontracted a DPWH road project to Tarnate without required approval, violating PD 1594. When Gonzalo assigned the 10% retention fee to Tarnate but later rescinded it and kept the money, Tarnate sued for recovery. Though both parties were equally guilty of entering an illegal contract (in pari delicto), the Supreme Court allowed Tarnate's recovery to prevent Gonzalo's unjust enrichment. The Court applied the exception to the in pari delicto doctrine based on public policy against unjust enrichment under Civil Code Article 22, since Tarnate had provided equipment and services for the project. The decision affirmed the P233,526.13 award but deleted damages, emphasizing that preventing unjust enrichment serves public policy even when contracts are void.