Carlos A. Loria v. Ludolfo P. Muñoz, Jr.

Summary

This case involves the application of unjust enrichment principles under Article 22 of the Civil Code. Muñoz paid Loria P2,000,000.00 for a promised subcontract of a government river-dredging project that never materialized. Despite Loria's defense that their agreement was void under government procurement laws and the parties were in pari delicto, the Supreme Court ruled that Loria was unjustly enriched at Muñoz's expense. The Court applied the exception to the in pari delicto doctrine established in Gonzalo v. Tarnate, Jr., holding that prevention of unjust enrichment is a recognized public policy that overrides the rigid application of the doctrine. The decision affirmed the obligation to return money received without legal justification, emphasizing that no person should unjustly enrich himself at another's expense.