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In this case, the manner by which the motorcycle was taken at the sellers instance was not only
attended by bad faith but also contrary to the procedure laid down by law. Considered in conjunction with
the defamatory statement, the sellers exercise of the right to recover the mortgaged vehicle was utterly
prejudicial and injurious to the buyer. On the other hand, the precipitate act of filing an unfounded
complaint could not in any way be considered to be in accordance with the purpose for which the right to
prosecute a crime was established. Thus, the totality of the buyers actions showed a calculated design to
embarrass, humiliate and publicly ridicule the buyer. The seller acted in an excessively harsh fashion to
the prejudice of the buyer. Contrary to law, the seller willfully caused damage to the buyer. Hence, they
should indemnify him.
Article 22; its application.
In Republic, et al. v. Lacap, G.R. No. 158253, March 2, 2007 the SC had the occasion to once
again say that Article 22, NCC was formulated as basic principles to be observed for the rightful
relationship between human beings and for the stability of the social order, x x x designed to indicate
certain norms that spring from the fountain of good conscience, x x x guides human conduct that should
run as golden threads through society to the end that law may approach its supreme ideal which is the
sway and dominance of justice. (Advance Foundation Construction Systems Corp. v. New World
Properties and Ventures, Inc., G.R. Nos. 143154 & 143177, June 21, 2006, 491 SCRA 557, 578; Security
Bank & Trust Co. v. Court of Appeals, 319 Phil. 312, 317 (1995)). The rules thereon apply equally well to
the Government. (Palma Development Corp. v. Municipality of Malangas, Zamboanga Del Sur, 459 Phil.
1042, 1050 (2003); Republic v. Court of Appeals, No. L-31303-04, May 31, 1978, 83 SCRA 453, 480).
Since respondent had rendered services to the full satisfaction and acceptance by petitioner, then the
former should be compensated for them. To allow petitioner to acquire the finished project at no cost
would undoubtedly constitute unjust enrichment for the petitioner to the prejudice of respondent. Such
unjust enrichment is not allowed by law.
In this case, the respondent undertook works for the government, made advances for the
purchase of materials and payment for labor costs. The State however refused to pay on the ground that
it had an expired license at the time of the execution of the contract. Despite the same, it is entitled to be
paid for completed projects.