Arturo Sarte Flores v. Spouses Enrico L. Lindo, Jr.

Summary

This case involves a loan dispute where Arturo Flores extended a P400,000 loan to Edna Lindo, secured by real estate mortgage over conjugal property. When Flores filed foreclosure proceedings, trial courts ruled the mortgage invalid due to lack of spousal consent, since the Special Power of Attorney was executed after the mortgage. Flores then filed a separate collection case, which the Court of Appeals dismissed for multiplicity of suits, ruling that a creditor must choose between foreclosure or collection, not both. The Supreme Court reversed, applying the Family Code's continuing offer provision and the Civil Code's unjust enrichment principle. The Court held that the subsequent SPA validated the mortgage, and that Edna should not be allowed to unjustly enrich herself by avoiding payment due to erroneous lower court decisions. The case establishes important precedent on spousal consent requirements for conjugal property encumbrance and the application of unjust enrichment principles in loan recovery cases.