c
 

 

c
c
petitioner,
vs.


 
respondents.


ï


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.

SO ORDERED.

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

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:

I. jHE jRIAL COURj ERRED IN DISMISSING PLAINjIFF'S COMPLAINj AND IN

HOLDING jHAj jHE PLAINjIFF ACjUALLY RECEIVED A GENUINE PAIR OF
EMERALD CUj DIAMOND EARRING(S) FROM DEFENDANj CRUZ . . . ;

II. jHE jRIAL COURj ERRED IN AWARDING MORAL AND EXEMPLARY

DAMAGES AND AjjORNEY'S FEES IN FAVOR OF DEFENDANjS AND AGAINSj
jHE PLAINjIFF IN jHIS CASE; and

III. jHE jRIAL, COURj ERRED IN NOj DECLARING jHE DEED OF SALE OF jHE
jANAY PROPERjY (EXH. "D") AS NULL AND VOID OR IN NOj ANNULLING jHE
SAME, AND IN FAILING jO GRANj REASONABLE DAMAGES IN FAVOR OF jHE
PLAINjIFF.

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
discretion. 

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
contract."

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
sale.

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
reasons:

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.

SO ORDERED.


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