Anda di halaman 1dari 10



cc petitioner,


j is petition for review on „  questions t e affirmance by t e Court of Appeals of t e

decision of t e Regional jrial Court of San Pablo City, Branc 30, dismissing t e complaint t at
prayed for t e nullification of a contract of sale of a 10- ectare property in janay, Rizal in
consideration of t e amount of P40,000.00 and a 2.5 carat emerald-cut diamond (Civil Case No. SP-
2455). j e lower court's decision disposed of t e case as follows:

WHEREFORE, premises considered, t e Court ereby renders judgment dismissing

t e complaint for lack of merit and ordering plaintiff to pay:

1. Defendant Dra. Ninevetc M. Cruz t e sum of P300,000.00 as and for moral

damages and t e sum of P100,000.00 as and for exemplary damages;

2. Defendant Atty. Juan Belarmino t e sum of P250,000.00 as and for moral

damages and t e sum of P150,000.00 as and for exemplary damages;

3. Defendant Dra. Cruz and Atty. Belarmino t e sum of P25,000.00 eac as and for
attorney's fees and litigation expenses; and

4. j e costs of suit.


As found by t e Court of Appeals and t e lower court, t e antecedent facts of t is case are as

Petitioner Gregorio Fule, a banker by profession and a jeweler at t e same time, acquired a 10-
ectare property in janay, Rizal ( ereinafter "janay property"), covered by jransfer Certificate of
jitle No. 320725 w ic used to be under t e name of Fr. Antonio Jacobe. j e latter ad mortgaged
it earlier to t e Rural Bank of Alaminos (t e Bank), Laguna, Inc. to secure a loan in t e amount of
P10,000.00, but t e mortgage was later foreclosed and t e property offered for public auction upon
is default.

In July 1984, petitioner, as corporate secretary of t e bank, asked Remelia Dic oso and Oliva
Mendoza to look for a buyer w o mig t be interested in t e janay property. j e two found one in
t e person of erein private respondent Dr. Ninevetc Cruz. It so appened t at at t e time,
petitioner ad s own interest in buying a pair of emerald-cut diamond earrings owned by Dr. Cruz
w ic e ad seen in January of t e same year w en is mot er examined and appraised t em as
genuine. Dr. Cruz, owever, declined petitioner's offer to buy t e jewelry for P100,000.00. Petitioner
t en made anot er bid to buy t em for US$6,000.00 at t e exc ange rate of $1.00 to P25.00. At t is
point, petitioner inspected said jewelry at t e lobby of t e Prudential Bank branc in San Pablo City
and t en made a sketc t ereof. Having sketc ed t e jewelry for twenty to t irty minutes, petitioner
gave t em back to Dr. Cruz w o again refused to sell t em since t e exc ange rate of t e peso at
t e time appreciated to P19.00 to a dollar.

Subsequently, owever, negotiations for t e barter of t e jewelry and t e janay property ensued.
Dr. Cruz requested erein private respondent Atty. Juan Belarmino to c eck t e property w o, in
turn, found out t at no sale or barter was feasible because t e one-year period for redemption of t e
said property ad not yet expired at t e time.

In an effort to cut t roug any legal impediment, petitioner executed on October 19, 1984, a deed of
redemption on be alf of Fr. Jacobe purportedly in t e amount of P15,987.78, and on even date, Fr.
Jacobe sold t e property to petitioner for P75,000.00. j e aste wit w ic t e two deeds were
executed is s own by t e fact t at t e deed of sale was notarized a ead of t e deed of redemption.
As Dr. Cruz ad already agreed to t e proposed barter, petitioner went to Prudential Bank once
again to take a look at t e jewelry.

In t e afternoon of October 23, 1984, petitioner met Atty. Belarmino at t e latter's residence to
prepare t e documents of sale.Dr. Cruz erself was not around but Atty. Belarmino was aware t at
s e and petitioner ad previously agreed to exc ange a pair of emerald-cut diamond earrings for t e
janay property. Atty. Belarmino accordingly caused t e preparation of a deed of absolute sale w ile
petitioner and Dr. Cruz attended to t e safekeeping of t e jewelry.

j e following day, petitioner, toget er wit Dic oso and Mendoza, arrived at t e residence of Atty.
Belarmino to finally execute a deed of absolute sale. Petitioner signed t e deed and gave Atty.
Belarmino t e amount of P13,700.00 for necessary expenses in t e transfer of title over t e janay
property. Petitioner also issued a certification to t e effect t at t e actual consideration of t e sale
was P200,000.00 and not P80,000.00 as indicated in t e deed of absolute sale. j e disparity
between t e actual contract price and t e one indicated on t e deed of absolute sale was
purportedly aimed at minimizing t e amount of t e capital gains tax t at petitioner would ave to
s oulder. Since t e jewelry was appraised only at P160,000.00, t e parties agreed t at t e balance
of P40,000.00 would just be paid later in cas .

As pre-arranged, petitioner left Atty. Belarmino's residence wit Dic oso and Mendoza and eaded
for t e bank, arriving t ere at past 5:00 p.m. Dr. Cruz also arrived s ortly t ereafter, but t e cas ier
w o kept t e ot er key to t e deposit box ad already left t e bank. Dr. Cruz and Dic oso, t erefore,
looked for said cas ier and found im aving a aircut. As soon as is aircut was finis ed, t e
cas ier returned to t e bank and arrived t ere at 5:48 p.m., a ead of Dr. Cruz and Dic oso w o
arrived at 5:55 p.m. Dr. Cruz and t e cas ier t en opened t e safety deposit box, t e former
retrieving a transparent plastic or cellop ane bag wit t e jewelry inside and anding over t e same
to petitioner. j e latter took t e jewelry from t e bag, went near t e electric lig t at t e bank's lobby,
eld t e jewelry against t e lig t and examined it for ten to fifteen minutes. After a w ile, Dr. Cruz
asked, "Ô  
" Petitioner expressed is satisfaction by nodding is ead.

For services rendered, petitioner paid t e agents, Dic oso and Mendoza, t e amount of US$300.00
and some pieces of jewelry. He did not, owever, give t em alf of t e pair of earrings in question
w ic e ad earlier promised.

Later, at about 8:00 o'clock in t e evening of t e same day, petitioner arrived at t e residence of
Atty. Belarmino complaining t at t e jewelry given to im was fake. He t en used a tester to prove
t e alleged fakery. Meanw ile, at 8:30 p.m., Dic oso and Mendoza went to t e residence of Dr. Cruz
to borrow er car so t at, wit Atty. Belarmino, t ey could register t e janay property. After Dr. Cruz
ad agreed to lend er car, Dic oso called up Atty. Belarmino. j e latter, owever, instructed
Dic oso to proceed immediately to is residence because petitioner was t ere. Believing t at
petitioner ad finally agreed to give t em alf of t e pair of earrings, Dic oso went post aste to t e
residence of Atty. Belarmino only to find petitioner already demonstrating wit a tester t at t e
earrings were fake. Petitioner t en accused Dic oso and Mendoza of deceiving im w ic t ey,
owever, denied. j ey countered t at petitioner could not ave been fooled because e ad vast
experience regarding jewelry. Petitioner nonet eless took back t e US$300.00 and jewelry e ad
given t em.

j ereafter, t e group decided to go to t e ouse of a certain Macario Dimayuga, a jeweler, to ave

t e earrings tested. Dimayuga, after taking one look at t e earrings, immediately declared t em
counterfeit. At around 9:30 p.m., petitioner went to one Atty. Reynaldo Alcantara residing at
Lakeside Subdivision in San Pablo City, complaining about t e fake jewelry. Upon being advised by
t e latter, petitioner reported t e matter to t e police station w ere Dic oso and Mendoza likewise
executed sworn statements.

On October 26, 1984, petitioner filed a complaint before t e Regional jrial Court of San Pablo City
against private respondents praying, among ot er t ings, t at t e contract of sale over t e janay
property be declared null and void on t e ground of fraud and deceit.

On October 30, 1984, t e lower court issued a temporary restraining order directing t e Register of
Deeds of Rizal to refrain from acting on t e pertinent documents involved in t e transaction. On
November 20, 1984, owever, t e same court lifted its previous order and denied t e prayer for a
writ of preliminary injunction.

After trial, t e lower court rendered its decision on Marc 7, 1989. Confronting t e issue of w et er
or not t e genuine pair of earrings used as consideration for t e sale was delivered by Dr. Cruz to
petitioner, t e lower court said:

j e Court finds t at t e answer is definitely in t e affirmative. Indeed, Dra. Cruz delivered

(t e) subject jewelries (!„) into t e ands of plaintiff w o even raised t e same nearer to
t e lig ts of t e lobby of t e bank near t e door. W en asked by Dra. Cruz if everyt ing
was in order, plaintiff even nodded is satisfaction (Hearing of Feb. 24, 1988). At t at
instance, plaintiff did not protest, complain or beg for additional time to examine furt er
t e jewelries (!„). Being a professional banker and engaged in t e jewelry business
plaintiff is conversant and competent to detect a fake diamond from t e real t ing.
Plaintiff was accorded t e reasonable time and opportunity to ascertain and inspect t e
jewelries (!„) in accordance wit Article 1584 of t e Civil Code. Plaintiff took delivery of
t e subject jewelries (!„) before 6:00 p.m. of October 24, 1984. W en e went at 8:00
p.m. t at same day to t e residence of Atty. Belarmino already wit a tester complaining
about some fake jewelries (!„), t ere was already undue delay because of t e lapse of a
considerable lengt of time since e got old of subject jewelries (!„). j e lapse of two
(2) ours more or less before plaintiff complained is considered by t e Court as
unreasonable delay.!

j e lower court furt er ruled t at all t e elements of a valid contract under Article 1458 of t e Civil
Code were present, namely: (a) consent or meeting of t e minds; (b) determinate subject matter,
and (c) price certain in money or its equivalent. j e same elements, according to t e lower court,
were present despite t e fact t at t e agreement between petitioner and Dr. Cruz was principally a
barter contract. j e lower court explained t us:

. . . . Plaintiff's owners ip over t e janay property passed unto Dra. Cruz upon t e
constructive delivery t ereof by virtue of t e Deed of Absolute Sale (Ex . D). On t e
ot er and, t e owners ip of Dra. Cruz over t e subject jewelries (!„) transferred to
t e plaintiff upon er actual personal delivery to im at t e lobby of t e Prudential
Bank. It is expressly provided by law t at t e t ing sold s all be understood as
delivered, w en it is placed in t e control and possession of t e vendee (Art. 1497,
Civil Code; Kuenzle & Straff vs. Watson & Co. 13 P il. 26). j e owners ip and/or
title over t e jewelries (!„) was transmitted immediately before 6:00 p.m. of October
24, 1984. Plaintiff signified is approval by nodding is ead. Delivery or tradition, is
one of t e modes of acquiring owners ip (Art. 712, Civil Code).

Similarly, w en Ex ibit D was executed, it was equivalent to t e delivery of t e janay

property in favor of Dra. Cruz. j e execution of t e public instrument (Ex . D) operates
as a formal or symbolic delivery of t e janay property and aut orizes t e buyer, Dra.
Cruz to use t e document as proof of owners ip (Florendo v. Foz, 20 P il. 399). More so,
since Ex ibit D does not contain any proviso or stipulation to t e effect t at title to t e
property is reserved wit t e vendor until full payment of t e purc ase price, nor is t ere
a stipulation giving t e vendor t e rig t to unilaterally rescind t e contract t e moment t e
vendee fails to pay wit in a fixed period (jaguba v. Vda. De Leon, 132 SCRA 722; Luzon
Brokerage Co. Inc. vs. Maritime Building Co. Inc. 86 SCRA 305; Froilan v. Pan Oriental
S ipping Co. et al. 12 SCRA 276). 

Aside from concluding t at t e contract of barter or sale ad in fact been consummated w en

petitioner and Dr. Cruz parted ways at t e bank, t e trial court likewise dwelt on t e unexplained
delay wit w ic petitioner complained about t e alleged fakery. j us:

. . . . Verily, plaintiff is already estopped to come back after t e lapse of considerable

lengt of time to claim t at w at e got was fake. He is a Business Management
graduate of La Salle University, Class 1978-79, a professional banker as well as a
jeweler in is own rig t. jwo ours is more t an enoug time to make a switc of a
Russian diamond wit t e real diamond. It must be remembered t at in July 1984 plaintiff
made a sketc of t e subject jewelries (!„) at t e Prudential Bank. Plaintiff ad a tester
at 8:00 p.m. at t e residence of Atty. Belarmino. W y t en did e not bring it out w en e
was examining t e subject jewelries (!„) at about 6:00 p.m. in t e bank's lobby?
Obviously, e ad no need for it after being satisfied of t e genuineness of t e subject
jewelries (!„). W en Dra. Cruz and plaintiff left t e bank bot of t em ad fully performed
t eir respective prestations. Once a contract is s own to ave been consummated or fully
performed by t e parties t ereto, its existence and binding effect can no longer be
disputed. It is irrelevant and immaterial to dispute t e due execution of a contract if bot
of t em ave in fact performed t eir obligations t ereunder and t eir respective
signatures and t ose of t eir witnesses appear upon t e face of t e document (Weldon
Construction v. CA G.R. No. L-35721, Oct. 12, 1987)."

Finally, in awarding damages to t e defendants, t e lower court remarked:

j e Court finds t at plaintiff acted in wanton bad fait . Ex ibit 2-Belarmino purports to
s ow t at t e janay property is wort P25,000.00. However, also on t at same day it
was executed, t e property's wort was magnified at P75,000.00 (Ex . 3-Belarmino).
How could in less t an a day (Oct. 19, 1984) t e value would (!„) triple under normal
circumstances? Plaintiff, wit t e assistance of is agents, was able to exc ange t e
janay property w ic is bank valued only at P25,000.00 in exc ange for a genuine pair
of emerald cut diamond wort P200,000.00 belonging to Dra. Cruz. He also retrieved t e
US$300.00 and jewelries (!„) from is agents. But e was not satisfied in being able to
get subject jewelries for a song. He ad to file a malicious and unfounded case against
Dra. Cruz and Atty. Belarmino w o are well known, respected and eld in ig esteem in
San Pablo City w ere everybody practically knows everybody. Plaintiff came to Court
wit unclean ands dragging t e defendants and soiling t eir clean and good name in t e
process. Bot of t em are near t e twilig t of t eir lives after maintaining and nurturing
t eir good reputation in t e community only to be stunned wit a court case. Since t e
filing of t is case on October 26, 1984 up to t e present t ey were living under a pall of
doubt. Surely, t is affected not only t eir earning capacity in t eir practice of t eir
respective professions, but also t ey suffered besmirc ed reputations. Dra. Cruz runs er
own ospital and defendant Belarmino is a well respected legal practitioner. j e lengt of
time t is case dragged on during w ic period t eir reputation were (!„) tarnis ed and
t eir names maligned by t e pendency of t e case, t e Court is of t e belief t at some of
t e damages t ey prayed for in t eir answers to t e complaint are reasonably
proportionate to t e sufferings t ey underwent (Art. 2219, New Civil Code). Moreover,
because of t e falsity, malice and baseless nature of t e complaint defendants were
compelled to litigate. Hence, t e award of attorney's fees is warranted under t e
circumstances (Art. 2208, New Civil Code).#

From t e trial court's adverse decision, petitioner elevated t e matter to t e Court of Appeals. On
October 20, 1992, t e Court of Appeals, owever, rendered a decision $affirming   t e lower
court's decision. His motion for reconsideration aving been denied on October 19, 1993, petitioner
now files t e instant petition alleging t at:






As to t e first allegation, t e Court observes t at petitioner is essentially raising a factual issue as it

invites us to examine and weig anew t e facts regarding t e genuineness of t e earrings bartered
in exc ange for t e janay property. j is, of course, we cannot do wit out unduly transcending t e
limits of our review power in petitions of t is nature w ic are confined merely to pure questions of
law. We accord, as a general rule, conclusiveness to a lower court's findings of fact unless it is
s own,    , t at: (1) t e conclusion is a finding grounded on speculations, surmises or
conjectures; (2) t e inference is manifestly mistaken, absurd and impossible; (3) w en t ere is a
grave abuse of discretion; (4) w en t e judgment is based on a misappre ension of facts; (5) w en
t e findings of fact are conflicting; and (6) w en t e Court of Appeals, in making its findings, went
beyond t e issues of t e case and t e same is contrary to t e admission of bot parties. We find
not ing, owever, t at warrants t e application of any of t ese exceptions.

Consequently, t is Court up olds t e appellate court's findings of fact especially because t ese
concur wit t ose of t e trial court w ic , upon a t oroug scrutiny of t e records, are firmly
grounded on evidence presented at t e trial. % jo reiterate, t is Court's jurisdiction is only limited to
reviewing errors of law in t e absence of any s owing t at t e findings complained of are totally
devoid of support in t e record or t at t ey are glaringly erroneous as to constitute serious abuse of

Nonet eless, t is Court as to closely delve into petitioner's allegation t at t e lower court's decision
of Marc 7, 1989 is a "ready-made" one because it was anded down a day after t e last date of t e
trial of t e case. Petitioner, in t is regard, finds it incredible t at Judge J. Ausberto Jaramillo was
able to write a 12-page single-spaced decision, type it and release it on Marc 7, 1989, less t an a
day after t e last earing on Marc 6, 1989. He stressed t at Judge Jaramillo replaced Judge
Salvador de Guzman and eard only is rebuttal testimony.

j is allegation is obviously no more t an a desperate effort on t e part of petitioner to disparage t e

lower court's findings of fact in order to convince t is Court to review t e same. It is notewort y t at
Atty. Belarmino clarified t at Judge Jaramillo ad issued t e first order in t e case as early as Marc
9, 1987 or two years before t e rendition of t e decision. In fact, Atty. Belarmino terminated
presentation of evidence on October 13, 1987, w ile Dr. Cruz finis ed ers on February 4, 1989, or
more t an a mont prior to t e rendition of t e judgment. j e Marc 6, 1989 earing was conducted
solely for t e presentation of petitioner's rebuttal testimony. ! In ot er words, Judge Jaramillo ad
ample time to study t e case and write t e decision because t e rebuttal evidence would only serve
to confirm or verify t e facts already presented by t e parties.

j e Court finds not ing anomalous in t e said situation. No proof as been adduced t at Judge
Jaramillo was motivated by a malicious or sinister intent in disposing of t e case wit dispatc .
Neit er is t ere proof t at someone else wrote t e decision for im. j e immediate rendition of t e
decision was no more t an Judge Jaramillo's compliance wit is duty as a judge to "dispose of t e
court's business promptly and decide cases wit in t e required periods." j e two-year period
wit in w ic Judge Jaramillo andled t e case provided im wit all t e time to study it and even
write down its facts as soon as t ese were presented to court. In fact, t is Court does not see
anyt ing wrong in t e practice of writing a decision days before t e sc eduled promulgation of
judgment and leaving t e dispositive portion for typing at a time close to t e date of promulgation,
provided t at no malice or any wrongful conduct attends its adoption. " j e practice serves t e dual
purposes of safeguarding t e confidentiality of draft decisions and rendering decisions wit
promptness. Neit er can Judge Jaramillo be made administratively answerable for t e immediate
rendition of t e decision. j e acts of a judge w ic pertain to is judicial functions are not subject to
disciplinary power unless t ey are committed wit fraud, dis onesty, corruption or bad
fait . #Hence, in t e absence of sufficient proof to t e contrary, Judge Jaramillo is presumed to
ave performed is job in accordance wit law and s ould instead be commended for is close
attention to duty.

Having disposed of petitioner's first contention, we now come to t e core issue of t is petition w ic
is w et er t e Court of Appeals erred in up olding t e validity of t e contract of barter or sale under
t e circumstances of t is case.

j e Civil Code provides t at contracts are perfected by mere consent. From t is moment, t e
parties are bound not only to t e fulfillment of w at as been expressly stipulated but also to all t e
consequences w ic , according to t eir nature, may be in keeping wit good fait , usage and
law. $A contract of sale is perfected at t e moment t ere is a meeting of t e minds upon t e t ing
w ic is t e object of t e contract and upon t e price. Being consensual, a contract of sale as t e
force of law between t e contracting parties and t ey are expected to abide in good fait by t eir
respective contractual commitments. Article 1358 of t e Civil Code w ic requires t e embodiment
of certain contracts in a public instrument, is only for convenience,  and registration of t e
instrument only adversely affects t ird parties. %Formal requirements are, t erefore, for t e benefit
of t ird parties. Non-compliance t erewit does not adversely affect t e validity of t e contract nor
t e contractual rig ts and obligations of t e parties t ereunder.

It is evident from t e facts of t e case t at t ere was a meeting of t e minds between petitioner and
Dr. Cruz. As suc , t ey are bound by t e contract unless t ere are reasons or circumstances t at
warrant its nullification. Hence, t e problem t at s ould be addressed in t is case is w et er or not
under t e facts duly establis ed erein, t e contract can be voided in accordance wit law so as to
compel t e parties to restore to eac ot er t e t ings t at ave been t e subject of t e contract wit
t eir fruits, and t e price wit interest.

Contracts t at are voidable or annullable, even t oug t ere may ave been no damage to t e
contracting parties are: (1) t ose w ere one of t e parties is incapable of giving consent to a
contract; and (2) t ose w ere t e consent is vitiated by mistake, violence, intimidation, undue
influence or fraud. Accordingly, petitioner now stresses before t is Court t at e entered into t e
contract in t e belief t at t e pair of emerald-cut diamond earrings was genuine. On t e pretext t at
t ose pieces of jewelry turned out to be counterfeit, owever, petitioner subsequently soug t t e
nullification of said contract on t e ground t at it was, in fact, "tainted wit fraud" !suc t at is
consent was vitiated.

j ere is fraud w en, t roug t e insidious words or mac inations of one of t e contracting parties,
t e ot er is induced to enter into a contract w ic , wit out t em, e would not ave agreed to. j e
records, owever, are bare of any evidence manifesting t at private respondents employed suc
insidious words or mac inations to entice petitioner into entering t e contract of barter. Neit er is
t ere any evidence s owing t at Dr. Cruz induced petitioner to sell is janay property or t at s e
cajoled im to take t e earrings in exc ange for said property. On t e contrary, Dr. Cruz did not
initially accede to petitioner's proposal to buy t e said jewelry. Rat er, it appears t at it was
petitioner, t roug is agents, w o led Dr. Cruz to believe t at t e janay property was wort
exc anging for er jewelry as e represented t at its value was P400,000.00 or more t an double
t at of t e jewelry w ic was valued only at P160,000.00. If indeed petitioner's property was truly
wort t at muc , it was certainly contrary to t e nature of a businessman-banker like im to ave
parted wit is real estate for alf its price. In s ort, it was in fact petitioner w o resorted to
mac inations to convince Dr. Cruz to exc ange er jewelry for t e janay property.

Moreover, petitioner did not clearly allege mistake as a ground for nullification of t e contract of sale.
Even assuming t at e did, petitioner cannot successfully invoke t e same. jo invalidate a contract,
mistake must "refer to t e substance of t e t ing t at is t e object of t e contract, or to t ose
conditions w ic ave principally moved one or bot parties to enter into t e contract." "An example
of mistake as to t e object of t e contract is t e substitution of a specific t ing contemplated by t e
parties wit anot er. #In is allegations in t e complaint, petitioner insinuated t at an inferior one or
one t at ad only Russian diamonds was substituted for t e jewelry e wanted to exc ange wit is
10- ectare land. He, owever, failed to prove t e fact t at prior to t e delivery of t e jewelry to im,
private respondents endeavored to make suc substitution.

Likewise, t e facts as proven do not support t e allegation t at petitioner imself could be excused
for t e "mistake." On account of is work as a banker-jeweler, it can be rig tfully assumed t at e
was an expert on matters regarding gems. He ad t e intellectual capacity and t e business acumen
as a banker to take precautionary measures to avert suc a mistake, considering t e value of bot
t e jewelry and is land. j e fact t at e ad seen t e jewelry before October 24, 1984 s ould not
ave precluded im from aving its genuineness tested in t e presence of Dr. Cruz. Had e done
so, e could ave avoided t e present situation t at e imself broug t about. Indeed, t e finger of
suspicion of switc ing t e genuine jewelry for a fake inevitably points to im. Suc a mistake caused
by manifest negligence cannot invalidate a juridical act. $As t e Civil Code provides, "(t) ere is no
mistake if t e party alleging it knew t e doubt, contingency or risk affecting t e object of t e

Furt ermore, petitioner was afforded t e reasonable opportunity required in Article 1584 of t e Civil
Code wit in w ic to examine t e jewelry as e in fact accepted t em w en asked by Dr. Cruz if e
was satisfied wit t e same. By taking t e jewelry outside t e bank, petitioner executed an act
w ic was more consistent wit is exercise of owners ip over it. j is gains credence w en it is
borne in mind t at e imself ad earlier delivered t e janay property to Dr. Cruz by affixing is
signature to t e contract of sale. j at after two ours e later claimed t at t e jewelry was not t e
one e intended in exc ange for is janay property, could not sever t e juridical tie t at now bound
im and Dr. Cruz. j e nature and value of t e t ing e ad taken preclude its return after t at
supervening period wit in w ic anyt ing could ave appened, not excluding t e alteration of t e
jewelry or its being switc ed wit an inferior kind.

Bot t e trial and appellate courts, t erefore, correctly ruled t at t ere were no legal bases for t e
nullification of t e contract of sale. Owners ip over t e parcel of land and t e pair of emerald-cut
diamond earrings ad been transferred to Dr. Cruz and petitioner, respectively, upon t e actual and
constructive delivery t ereof. !% Said contract of sale being absolute in nature, title passed to t e
vendee upon delivery of t e t ing sold since t ere was no stipulation in t e contract t at title to t e
property sold as been reserved in t e seller until full payment of t e price or t at t e vendor as t e
rig t to unilaterally resolve t e contract t e moment t e buyer fails to pay wit in a fixed
period. !Suc stipulations are not manifest in t e contract of sale.

W ile it is true t at t e amount of P40,000.00 forming part of t e consideration was still payable to
petitioner, its nonpayment by Dr. Cruz is not a sufficient cause to invalidate t e contract or bar t e
transfer of owners ip and possession of t e t ings exc anged considering t e fact t at t eir contract
is silent as to w en it becomes due and demandable. !

Neit er may suc failure to pay t e balance of t e purc ase price result in t e payment of interest
t ereon. Article 1589 of t e Civil Code prescribes t e payment of interest by t e vendee "for t e
period between t e delivery of t e t ing and t e payment of t e price" in t e following cases:

(1) S ould it ave been so stipulated;

(2) S ould t e t ing sold and delivered produce fruits or income;

(3) S ould e be in default, from t e time of judicial or extrajudicial demand for t e

payment of t e price.

Not one of t ese cases obtains ere. j is case s ould, of course, be distinguis ed from Î 
   . ! , !!w ere t e court eld t at failure to pay t e consideration after t e
notarization of t e contract as previously promised resulted in t e vendee's liability for
payment of interest. In t e case at bar, t ere is no stipulation for t e payment of interest in
t e contract of sale nor proof t at t e janay property produced fruits or income. Neit er did
petitioner demand payment of t e price as in fact e filed an action to nullify t e contract of

All told, petitioner appears to ave elevated t is case to t is Court for t e principal reason of
mitigating t e amount of damages awarded to bot private respondents w ic petitioner considers
as "exorbitant." He contends t at private respondents do not deserve at all t e award of damages. In
fact, e pleads for t e total deletion of t e award as regards private respondent Belarmino w om e
considers a mere "nominal party" because "no specific claim for damages against im" was alleged
in t e complaint. W en e filed t e case, all t at petitioner wanted was t at Atty. Belarmino s ould
return to im t e owner's duplicate copy of jCj No. 320725, t e deed of sale executed by Fr.
Antonio Jacobe, t e deed of redemption and t e c eck alloted for expenses. Petitioner alleges
furt er t at Atty. Belarmino s ould not ave delivered all t ose documents to Dr. Cruz because as
t e "lawyer for bot t e seller and t e buyer in t e sale contract, e s ould ave protected t e rig ts
of bot parties." Moreover, petitioner asserts t at t ere was no firm basis for damages except for
Atty. Belarmino's uncorroborated testimony.!
Moral and exemplary damages may be awarded wit out proof of pecuniary loss. In awarding suc
damages, t e court s all take into account t e circumstances obtaining in t e case said assess
damages according to its discretion.!" jo warrant t e award of damages, it must be s own t at t e
person to w om t ese are awarded as sustained injury. He must likewise establis sufficient data
upon w ic t e court can properly base its estimate of t e amount of damages.!# Statements of
facts s ould establis suc data rat er t an mere conclusions or opinions of witnesses. !$j us:

. . . . For moral damages to be awarded, it is essential t at t e claimant must ave

satisfactorily proved during t e trial t e existence of t e factual basis of t e damages and
its causal connection wit t e adverse party's acts. If t e court as no proof or evidence
upon w ic t e claim for moral damages could be based, suc indemnity could not be
outrig tly awarded. j e same olds true wit respect to t e award of exemplary
damages w ere it must be s own t at t e party acted in a wanton, oppressive or
malevolent manner. !

In t is regard, t e lower court appeared to ave awarded damages on a ground analogous to

malicious prosecution under Article 2219 (8) of t e Civil Code ! as s own by (1) petitioner's "wanton
bad fait " in bloating t e value of t e janay property w ic e exc anged for "a genuine pair of
emerald-cut diamond wort P200,00.00;" and (2) is filing of a "malicious and unfounded case"
against private respondents w o were "well known, respected and eld in ig esteem in San Pablo
City w ere everybody practically knows everybody" and w ose good names in t e "twilig t of t eir
lives" were soiled by petitioner's coming to court wit "unclean ands," t ereby affecting t eir earning
capacity in t e exercise of t eir respective professions and besmirc ing t eir reputation.

For its part, t e Court of Appeals affirmed t e award of damages to private respondents for t ese

j e malice wit w ic Fule filed t is case is apparent. Having taken possession of t e

genuine jewelry of Dra. Cruz, Fule now wis es to return a fake jewelry to Dra. Cruz and,
more t an t at, get back t e real property, w ic is bank owns. Fule as obtained a
genuine jewelry w ic e could sell anytime, anyw ere and to anybody, wit out t e same
being traced to t e original owner for practically not ing. j is is plain and simple, unjust
enric ment.%

W ile, as a rule, moral damages cannot be recovered from a person w o as filed a complaint
against anot er in good fait because it is not sound policy to place a penalty on t e rig t to
litigate, t e same, owever, cannot apply in t e case at bar. j e factual findings of t e courts 
  to t e effect t at petitioner filed t is case because e was t e victim of fraud; t at e could not
ave been suc a victim because e s ould ave examined t e jewelry in question before accepting
delivery t ereof, considering is exposure to t e banking and jewelry businesses; and t at e filed
t e action for t e nullification of t e contract of sale wit unclean ands, all deserve full fait and
credit to support t e conclusion t at petitioner was motivated more by ill will t an a sincere attempt
to protect is rig ts in commencing suit against respondents.

As pointed out earlier, a closer scrutiny of t e c ain of events immediately prior to and on October
24, 1984 itself would amply demonstrate t at petitioner was not simply negligent in failing to exercise
due diligence to assure imself t at w at e was taking in exc ange for is property were genuine
diamonds. He ad rat er placed imself in a situation from w ic it preponderantly appears t at is
seeming ignorance was actually just a ruse. Indeed, e ad unnecessarily dragged respondents to
face t e travails of litigation in speculating at t e possible favorable outcome of is complaint w en
e s ould ave realized t at is supposed predicament was is own making. We, t erefore, see
ere no semblance of an onest and sincere belief on is part t at e was swindled by respondents
w ic would entitle im to redress in court. It must be noted t at before petitioner was able to
convince Dr. Cruz to exc ange er jewelry for t e janay property, petitioner took pains to t oroug ly
examine said jewelry, even going to t e extent of sketc ing t eir appearance. W y at t e precise
moment w en e was about to take p ysical possession t ereof e failed to exert extra efforts to
c eck t eir genuineness despite t e large consideration involved as never been explained at all by
petitioner. His acts t us failed to accord wit w at an ordinary prudent man would ave done in t e
same situation. Being an experienced banker and a businessman imself w o deliberately skirted a
legal impediment in t e sale of t e janay property and to minimize t e capital gains tax for its
exc ange, it was actually gross recklessness for im to ave merely conducted a cursory
examination of t e jewelry w en every opportunity for doing so was not denied im. Apparently, e
carried on is person a tester w ic e later used to prove t e alleged fakery but w ic e did not
use at t e time w en it was most needed. Furt ermore, it took im two more ours of unexplained
delay before e complained t at t e jewelry e received were counterfeit. Hence, we stated earlier
t at anyt ing could ave appened during all t e time t at petitioner was in complete possession
and control of t e jewelry, including t e possibility of substituting t em wit fake ones, against w ic
respondents would ave a great deal of difficulty defending t emselves. j e trut is t at petitioner
even failed to successfully prove during trial t at t e jewelry e received from Dr. Cruz were not
genuine. Add to t at t e fact t at e ad been s rewd enoug to bloat t e janay property's price
only a few days after e purc ased it at a muc lower value. j us, it is our considered view t at if
t is slew of circumstances were connected, like pieces of fabric sewn into a quilt, t ey would
sufficiently demonstrate t at is acts were not merely negligent but rat er studied and deliberate.

We do not ave ere, t erefore, a situation w ere petitioner's complaint was simply found later to be
based on an erroneous ground w ic , under settled jurisprudence, would not ave been a reason for
awarding moral and exemplary damages. Instead, t e cause of action of t e instant case appears
to ave been contrived by petitioner imself. In ot er words, e was placed in a situation w ere e
could not onestly evaluate w et er is cause of action as a semblance of merit, suc t at it would
require t e expertise of t e courts to put it to a test. His insistent pursuit of suc case t en coupled
wit circumstances s owing t at e imself was guilty in bringing about t e supposed wrongdoing
on w ic e anc ored is cause of action would render im answerable for all damages t e
defendant may suffer because of it. j is is precisely w at took place in t e petition at bar and we
find no cogent reason to disturb t e findings of t e courts below t at respondents in t is case
suffered considerable damages due to petitioner's unwarranted action.

WHEREFORE, t e decision of t e Court of Appeals dated October 20, 1992 is ereby AFFIRMED
in . Dr. Cruz, owever, is ordered to pay petitioner t e balance of t e purc ase price of
P40,000.00 wit in ten (10) days from t e finality of t is decision. Costs against petitioner.


!   !„„