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350 Phil. 349
THIRD DIVISION
[ G.R. No. 112212, March 02, 1998 ]
GREGORIO FULE, PETITIONER,
VS. COURT OF APPEALS, NINEVETCH
CRUZ AND JUAN BELARMINO, RESPONDENTS.
D E C I S I O N
ROMERO, J.:
This petition
for review on certiorari questions the affirmance by the Court of
Appeals of the decision[1] of the Regional Trial Court of San
Pablo City, Branch 30, dismissing the complaint that prayed for the
nullification of a contract of sale of a 10-hectare property in Tanay, Rizal in
consideration of the amount of P40,000.00 and a 2.5 carat emerald-cut
diamond (Civil Case No. SP-2455). The
lower court’s decision disposed of the case as follows:
“WHEREFORE, premises considered, the Court hereby renders judgment dismissing the complaint for lack of merit and ordering plaintiff to pay:
1. Defendant
Dra. Ninevetch M. Cruz the sum of P300,000.00 as and for moral damages
and the sum of P100,000.00 as and for exemplary damages;
2. Defendant
Atty. Juan Belarmino the sum of P250,000.00 as and for moral damages and
the sum of P150,000.00 as and for exemplary damages;
3. Defendant
Dra. Cruz and Atty. Belarmino the sum of P25,000.00 each as and for
attorney’s fees and litigation expenses; and
4. The
costs of suit.
SO ORDERED.”
As found by the
Court of Appeals and the lower court, the antecedent facts of this case are as
follows:
Petitioner Gregorio Fule, a banker by profession and a jeweler at the same time, acquired a 10-hectare property in Tanay, Rizal (hereinafter “Tanay property”), covered by Transfer Certificate of Title No. 320725 which used to be under the name of Fr. Antonio Jacobe. The latter had mortgaged it earlier to the Rural Bank of Alaminos (the Bank), Laguna, Inc. to secure a loan in the amount ofP10,000.00, but the mortgage was later foreclosed and the property offered for public auction upon his default.
In July 1984,
petitioner, as corporate secretary of the bank, asked Remelia Dichoso and Oliva
Mendoza to look for a buyer who might be interested in the Tanay property. The two found one in the person of herein
private respondent Dr. Ninevetch Cruz. It so happened that at the time, petitioner had shown interest in buying
a pair of emerald-cut diamond earrings owned by Dr. Cruz which he had seen in
January of the same year when his mother examined and appraised them as genuine. Dr. Cruz, however, declined petitioner’s
offer to buy the jewelry for P100,000.00. Petitioner then made another bid to buy them for US$6,000.00 at
the exchange rate of $1.00 to P25.00. At this point, petitioner inspected said jewelry at the lobby of the
Prudential Bank branch in San Pablo City and then made a sketch thereof. Having sketched the jewelry for twenty to
thirty minutes, petitioner gave them back to Dr. Cruz who again refused to sell
them since the exchange rate of the peso at the time appreciated to P19.00
to a dollar.
Subsequently,
however, negotiations for the barter of the jewelry and the Tanay property
ensued. Dr. Cruz requested herein
private respondent Atty. Juan Belarmino to check the property who, in turn,
found out that no sale or barter was feasible because the one-year period for
redemption of the said property had not yet expired at the time.
In an effort to
cut through any legal impediment, petitioner executed on October 19, 1984, a
deed of redemption on behalf of Fr. Jacobe purportedly in the amount of P15,987.78,
and on even date, Fr. Jacobe sold the property to petitioner for P75,000.00. The haste with which the two deeds were
executed is shown by the fact that the deed of sale was notarized ahead of the
deed of redemption. As Dr. Cruz had
already agreed to the proposed barter, petitioner went to Prudential Bank once
again to take a look at the jewelry.
In the afternoon
of October 23, 1984, petitioner met Atty. Belarmino at the latter’s residence
to prepare the documents of sale.[2] Dr. Cruz herself was not around but
Atty. Belarmino was aware that she and petitioner had previously agreed to
exchange a pair of emerald-cut diamond earrings for the Tanay property. Atty. Belarmino accordingly caused the
preparation of a deed of absolute sale
while petitioner and Dr. Cruz attended to the safekeeping of the jewelry.
The following
day, petitioner, together with Dichoso and Mendoza, arrived at the residence of
Atty. Belarmino to finally execute a deed of absolute sale. Petitioner signed
the deed and gave Atty. Belarmino the amount of P13,700.00 for necessary
expenses in the transfer of title over the Tanay property. Petitioner also
issued a certification to the effect that the actual consideration of the sale
was P200,000.00 and not P80,000.00 as indicated in the deed of
absolute sale. The disparity between the actual contract price and the one
indicated on the deed of absolute sale was purportedly aimed at minimizing the
amount of the capital gains tax that petitioner would have to shoulder. Since the jewelry was appraised only at P160,000.00,
the parties agreed that the balance of P40,000.00 would just be paid
later in cash.
As pre-arranged,
petitioner left Atty. Belarmino’s residence with Dichoso and Mendoza and headed
for the bank, arriving there at past 5:00 p.m. Dr. Cruz also arrived shortly thereafter, but the cashier who
kept the other key to the deposit box had already left the bank. Dr. Cruz and Dichoso, therefore, looked for
said cashier and found him having a haircut. As soon as his haircut was finished, the cashier returned to the bank
and arrived there at 5:48 p.m., ahead of Dr. Cruz and Dichoso who arrived at
5:55 p.m. Dr. Cruz and the cashier then
opened the safety deposit box, the former retrieving a transparent plastic or
cellophane bag with the jewelry inside and handing over the same to
petitioner. The latter took the jewelry
from the bag, went near the electric light at the bank’s lobby, held the
jewelry against the light and examined it for ten to fifteen minutes. After a while, Dr. Cruz asked, “Okay na ba iyan?” Petitioner expressed his satisfaction by
nodding his head.
For services
rendered, petitioner paid the agents, Dichoso and Mendoza, the amount of
US$300.00 and some pieces of jewelry. He did not, however, give them half of the pair of earrings in question
which he had earlier promised.
Later, at about
8:00 o’clock in the evening of the same day, petitioner arrived at the
residence of Atty. Belarmino complaining that the jewelry given to him was fake. He then used a tester to prove the alleged
fakery. Meanwhile, at 8:30 p.m.,
Dichoso and Mendoza went to the residence of Dr. Cruz to borrow her car so
that, with Atty. Belarmino, they could register the Tanay property. After Dr. Cruz had agreed to lend her car,
Dichoso called up Atty. Belarmino. The
latter, however, instructed Dichoso to proceed immediately to his residence
because petitioner was there. Believing that petitioner had finally agreed to
give them half of the pair of earrings, Dichoso went posthaste to the residence
of Atty. Belarmino only to find petitioner already demonstrating with a tester
that the earrings were fake. Petitioner
then accused Dichoso and Mendoza of deceiving him which they, however,
denied. They countered that petitioner
could not have been fooled because he had vast experience regarding
jewelry. Petitioner nonetheless took
back the US$300.00 and jewelry he had given them.
Thereafter, the
group decided to go to the house of a certain Macario Dimayuga, a jeweler, to
have the earrings tested. Dimayuga,
after taking one look at the earrings, immediately declared them
counterfeit. At around 9:30 p.m.,
petitioner went to one Atty. Reynaldo Alcantara residing at Lakeside
Subdivision in San Pablo City, complaining about the fake jewelry. Upon being advised by the latter, petitioner
reported the matter to the police station where Dichoso and Mendoza likewise
executed sworn statements.
On October 26,
1984, petitioner filed a complaint before the Regional Trial Court of San Pablo
City against private respondents praying, among other things, that the contract
of sale over the Tanay property be declared null and void on the ground of
fraud and deceit.
On October 30,
1984, the lower court issued a temporary restraining order directing the
Register of Deeds of Rizal to refrain from acting on the pertinent documents
involved in the transaction. On
November 20, 1984, however, the same court lifted its previous order and denied
the prayer for a writ of preliminary injunction.
After trial, the
lower court rendered its decision on March 7, 1989. Confronting the issue of
whether or not the genuine pair of earrings used as consideration for the sale
was delivered by Dr. Cruz to petitioner, the lower court said:
“The Court finds that the answer is definitely in the affirmative. Indeed, Dra. Cruz delivered (the) subject jewelries (sic) into the hands of plaintiff who even raised the same nearer to the lights of the lobby of the bank near the door. When asked by Dra. Cruz if everything was in order, plaintiff even nodded his satisfaction (Hearing of Feb. 24, 1988). At that instance, plaintiff did not protest, complain or beg for additional time to examine further the jewelries (sic). Being a professional banker and engaged in the jewelry business plaintiff is conversant and competent to detect a fake diamond from the real thing. Plaintiff was accorded the reasonable time and opportunity to ascertain and inspect the jewelries (sic) in accordance with Article 1584 of the Civil Code. Plaintiff took delivery of the subject jewelries (sic) before 6:00 p.m. of October 24, 1984. When he went at 8:00 p.m. that same day to the residence of Atty. Belarmino already with a tester complaining about some fake jewelries (sic), there was already undue delay because of the lapse of a considerable length of time since he got hold of subject jewelries (sic). The lapse of two (2) hours more or less before plaintiff complained is considered by the Court as unreasonable delay.”[3]
The lower court
further ruled that all the elements of a valid contract under Article 1458 of
the Civil Code were present, namely: (a) consent or meeting of the minds; (b)
determinate subject matter, and (c) price certain in money or its equivalent.
The same elements, according to the lower court, were present despite the fact
that the agreement between petitioner and Dr. Cruz was principally a barter
contract. The lower court explained
thus:
“x x x. Plaintiff’s ownership over the Tanay property passed unto Dra. Cruz upon the constructive delivery thereof by virtue of the Deed of Absolute Sale (Exh. D). On the other hand, the ownership of Dra. Cruz over the subject jewelries (sic) transferred to the plaintiff upon her actual personal delivery to him at the lobby of the Prudential Bank. It is expressly provided by law that the thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee (Art. 1497, Civil Code; Kuenzle & Straff vs. Watson & Co. 13 Phil. 26). The ownership and/or title over the jewelries (sic) was transmitted immediately before 6:00 p.m. of October 24, 1984. Plaintiff signified his approval by nodding his head. Delivery or tradition, is one of the modes of acquiring ownership (Art. 712, Civil Code).
Similarly, when
Exhibit D was executed, it was equivalent to the delivery of the Tanay property
in favor of Dra. Cruz. The execution of
the public instrument (Exh. D) operates as a formal or symbolic delivery of the
Tanay property and authorizes the buyer, Dra. Cruz to use the document as proof
of ownership (Florendo v. Foz, 20 Phil. 399). More so, since Exhibit D does not contain any proviso or stipulation to
the effect that title to the property is reserved with the vendor until full
payment of the purchase price, nor is there a stipulation giving the vendor the
right to unilaterally rescind the contract the moment the vendee fails to pay
within a fixed period (Taguba v. Vda. De Leon, 132 SCRA 722; Luzon Brokerage
Co. Inc. vs. Maritime Building Co. Inc. 86 SCRA 305; Froilan v. Pan Oriental
Shipping Co. et al. 12 SCRA 276).”[4]
Aside from
concluding that the contract of barter or sale had in fact been consummated
when petitioner and Dr. Cruz parted ways at the bank, the trial court likewise
dwelt on the unexplained delay with which petitioner complained about the
alleged fakery. Thus:
“x x x. Verily, plaintiff is already estopped to
come back after the lapse of considerable length of time to claim that what he
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 his own right. Two hours is more than enough
time to make a switch of a Russian diamond with the real diamond. It must be remembered that in July 1984
plaintiff made a sketch of the subject jewelries (sic) at the Prudential
Bank. Plaintiff had a tester at 8:00
p.m. at the residence of Atty. Belarmino. Why then did he not bring it out when
he was examining the subject jewelries (sic) at about 6:00 p.m. in the bank’s
lobby? Obviously, he had no need for it
after being satisfied of the genuineness of the subject jewelries (sic). When Dra. Cruz and plaintiff left the bank
both of them had fully performed their respective prestations. Once a contract is shown to have been
consummated or fully performed by the parties thereto, its existence and binding effect can no longer be
disputed. It is irrelevant and
immaterial to dispute the due execution of a contract if both of them have in
fact performed their obligations thereunder and their respective signatures and
those of their witnesses appear upon the face of the document (Weldon
Construction v. CA G.R. No. L-35721, Oct. 12, 1987).”[5]
Finally, in
awarding damages to the defendants, the lower court remarked:
“The Court finds that plaintiff acted in wanton bad faith. Exhibit 2-Belarmino purports to show that the Tanay property is worthP25,000.00. However, also on that same day it was executed, the property’s worth was magnified atP75,000.00 (Exh. 3-Belarmino). How could in less than a day (Oct. 19, 1984) the value would (sic) triple under normal circumstances? Plaintiff, with the assistance of his agents, was able to exchange the Tanay property which his bank valued only atP25,000.00 in exchange for a genuine pair of emerald cut diamond worthP200,000.00 belonging to Dra. Cruz. He also retrieved the US$300.00 and jewelries (sic) from his agents. But he was not satisfied in being able to get subject jewelries for a song. He had to file a malicious and unfounded case against Dra. Cruz and Atty. Belarmino who are well known, respected and held in high esteem in San Pablo City where everybody practically knows everybody. Plaintiff came to Court with unclean hands dragging the defendants and soiling their clean and good name in the process. Both of them are near the twilight of their lives after maintaining and nurturing their good reputation in the community only to be stunned with a court case. Since the filing of this case on October 26, 1984 up to the present they were living under a pall of doubt. Surely, this affected not only their earning capacity in their practice of their respective professions, but also they suffered besmirched reputations. Dra. Cruz runs her own hospital and defendant Belarmino is a well respected legal practitioner.
The length of time this case dragged on during which period their
reputation were (sic) tarnished and their names maligned by the pendency of the
case, the Court is of the belief that some of the damages they prayed for in
their answers to the complaint are reasonably proportionate to the sufferings
they underwent (Art. 2219, New Civil Code). Moreover, because of the falsity, malice and baseless nature of the
complaint defendants were compelled to litigate. Hence, the award of attorney’s fees is warranted under the
circumstances (Art. 2208, New Civil Code).”[6]
From the trial
court’s adverse decision, petitioner elevated the matter to the Court of
Appeals. On October 20, 1992, the Court
of Appeals, however, rendered a decision[7]affirming in toto the lower
court’s decision. His motion for reconsideration having been denied on
October 19, 1993, petitioner now files the instant petition alleging that:
“I. THE TRIAL COURT ERRED IN DISMISSING PLAINTIFF’S COMPLAINT AND IN
HOLDING THAT THE PLAINTIFF ACTUALLY RECEIVED A GENUINE PAIR OF EMERALD CUT
DIAMOND EARRING(S) FROM DEFENDANT CRUZ x x x;
II. THE TRIAL COURT ERRED IN AWARDING MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY’S FEES IN FAVOR OF DEFENDANTS AND AGAINST THE PLAINTIFF IN THIS CASE;
and
III.THE TRIAL
COURT ERRED IN NOT DECLARING THE DEED OF SALE OF THE TANAY PROPERTY (EXH. `D’)
AS NULL AND VOID OR IN NOT ANNULLING THE SAME, AND IN FAILING TO GRANT
REASONABLE DAMAGES IN FAVOR OF THE PLAINTIFF.”[8]
As to the first
allegation, the Court observes that petitioner is essentially raising a factual
issue as it invites us to examine and weigh anew the facts regarding the
genuineness of the earrings bartered in exchange for the Tanay property. This, of course, we cannot do without unduly
transcending the limits of our review power in petitions of this nature which
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 shown, inter alia, that: (1) the conclusion is a finding grounded
on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd and impossible; (3) when there is a grave abuse of
discretion; (4) when the judgment is based on a misapprehension of facts; (5)
when the findings of fact are conflicting; and (6) when the Court of Appeals,
in making its findings, went beyond the issues of the case and the same is
contrary to the admission of both parties.[9] We find nothing, however, that
warrants the application of any of these exceptions.
Consequently,
this Court upholds the appellate court’s findings of fact especially because
these concur with those of the trial court which, upon a thorough scrutiny of
the records, are firmly grounded on evidence presented at the trial.[10] To reiterate, this Court’s
jurisdiction is only limited to reviewing errors of law in the absence of any
showing that the findings complained of are totally devoid of support in the
record or that they are glaringly erroneous as to constitute serious abuse of
discretion.[11]
Nonetheless,
this Court has to closely delve into petitioner’s allegation that the lower
court’s decision of March 7, 1989 is a “ready-made” one because it was handed
down a day after the last date of the trial of the case.[12] Petitioner, in this regard, finds it incredible that Judge J. Ausberto Jaramillo was able to write a 12-page single-spaced
decision, type it and release it on March 7, 1989, less than a day after the
last hearing on March 6, 1989. He
stressed that Judge Jaramillo replaced Judge Salvador de Guzman and heard only
his rebuttal testimony.
This allegation
is obviously no more than a desperate effort on the part of petitioner to
disparage the lower court’s findings of fact in order to convince this Court to
review the same. It is noteworthy that
Atty. Belarmino clarified that Judge Jaramillo had issued the first order in
the case as early as March 9, 1987 or two years before the rendition of the
decision. In fact, Atty. Belarmino
terminated presentation of evidence on October 13, 1987, while Dr. Cruz
finished hers on February 4, 1989, or more than a month prior to the rendition
of the judgment. The March 6, 1989 hearing was conducted solely for the
presentation of petitioner's rebuttal testimony.[13] In other words, Judge Jaramillo had
ample time to study the case and write the decision because the rebuttal
evidence would only serve to confirm or verify the facts already presented by
the parties.
The Court finds
nothing anomalous in the said situation. No proof has been adduced that Judge Jaramillo was motivated by a
malicious or sinister intent in disposing of the case with dispatch. Neither is there proof that someone else
wrote the decision for him. The immediate rendition of the decision was no more
than Judge Jaramillo’s compliance with his duty as a judge to “dispose of the
court’s business promptly and decide cases within the required periods.”[14] The two-year period within which
Judge Jaramillo handled the case provided him with all the time to study it and
even write down its facts as soon as these were presented to court. In fact, this Court does not see anything
wrong in the practice of writing a decision days before the scheduled
promulgation of judgment and leaving the dispositive portion for typing at a
time close to the date of promulgation, provided that no malice or any wrongful
conduct attends its adoption.[15] The practice serves the dual
purposes of safeguarding the confidentiality of draft decisions and rendering
decisions with promptness. Neither can
Judge Jaramillo be made administratively answerable for the immediate rendition
of the decision. The acts of a judge
which pertain to his judicial functions are not subject to disciplinary power
unless they are committed with fraud, dishonesty, corruption or bad faith.[16] Hence, in the absence of sufficient
proof to the contrary, Judge Jaramillo is presumed to have performed his job in
accordance with law and should instead be commended for his close attention to
duty.
Having disposed
of petitioner’s first contention, we now come to the core issue of this
petition which is whether the Court of Appeals erred in upholding the validity
of the contract of barter or sale under the circumstances of this case.
The Civil Code
provides that contracts are perfected by mere consent. From this moment, the parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be in keeping with good
faith, usage and law.[17] A contract of sale is perfected at
the moment there is a meeting of the minds upon the thing which is the object
of the contract and upon the price.[18] Being consensual, a contract of
sale has the force of law between the contracting parties and they are expected
to abide in good faith by their respective contractual commitments. Article 1358 of the Civil Code which
requires the embodiment of certain contracts in a public instrument, is only
for convenience,[19] and registration of the instrument
only adversely affects third parties.[20] Formal requirements are, therefore,
for the benefit of third parties. Non-compliance therewith does not adversely
affect the validity of the contract nor the contractual rights and obligations
of the parties thereunder.
It is evident
from the facts of the case that there was a meeting of the minds between
petitioner and Dr. Cruz. As such, they
are bound by the contract unless there are reasons or circumstances that
warrant its nullification. Hence, the
problem that should be addressed in this case is whether or not under the facts
duly established herein, the contract can be voided in accordance with law so
as to compel the parties to restore to each other the things that have been the
subject of the contract with their fruits, and the price with interest.[21]
Contracts that
are voidable or annullable, even though there may have been no damage to the
contracting parties are: (1) those where one of the parties is incapable of
giving consent to a contract; and (2) those where the consent is vitiated by
mistake, violence, intimidation, undue influence or fraud.[22] Accordingly, petitioner now stresses before this Court
that he entered into the contract in the belief that the pair of emerald-cut
diamond earrings was genuine. On the pretext that those pieces of jewelry turned out to be counterfeit,
however, petitioner subsequently sought the nullification of said contract on
the ground that it was, in fact, “tainted with fraud”[23] such that his consent was vitiated.
There is fraud
when, through the insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which, without them, he
would not have agreed to.[24] The records, however, are bare of
any evidence manifesting that private respondents employed such insidious words
or machinations to entice petitioner into entering the contract of barter. Neither is there any evidence showing that
Dr. Cruz induced petitioner to sell his Tanay property or that she cajoled him
to take the earrings in exchange for said property. On the contrary, Dr. Cruz did not initially accede to
petitioner’s proposal to buy the said jewelry. Rather, it appears that it was petitioner,
through his agents, who led Dr. Cruz to believe that the Tanay property was
worth exchanging for her jewelry as he represented that its value was P400,000.00
or more than double that of the jewelry which was valued only at P160,000.00.
If indeed petitioner’s property was truly worth that much, it was certainly
contrary to the nature of a businessman-banker like him to have parted with his
real estate for half its price. In
short, it was in fact petitioner who resorted to machinations to convince Dr.
Cruz to exchange her jewelry for the Tanay property.
Moreover,
petitioner did not clearly allege mistake as a ground for nullification of the
contract of sale. Even assuming that he
did, petitioner cannot successfully invoke the same. To invalidate a contract, mistake must “refer to the substance of
the thing that is the object of the contract, or to those conditions which have
principally moved one or both parties to enter into the contract.”[25] An example of mistake as to the
object of the contract is the substitution of a specific thing contemplated by
the parties with another.[26] In his allegations in the
complaint, petitioner insinuated that an inferior one or one that had only
Russian diamonds was substituted for the jewelry he wanted to exchange with his
10-hectare land. He, however, failed to
prove the fact that prior to the delivery of the jewelry to him, private
respondents endeavored to make such substitution.
Likewise, the
facts as proven do not support the allegation that petitioner himself could be
excused for the “mistake.” On account
of his work as a banker-jeweler, it can be rightfully assumed that he was an
expert on matters regarding gems. He
had the intellectual capacity and the business acumen as a banker to take
precautionary measures to avert such a mistake, considering the value of both
the jewelry and his land. The fact that
he had seen the jewelry before October 24, 1984 should not have precluded him
from having its genuineness tested in the presence of Dr. Cruz. Had he done so, he could have avoided the
present situation that he himself brought about. Indeed, the finger of suspicion of switching the genuine jewelry
for a fake inevitably points to him. Such a mistake caused by manifest negligence cannot invalidate a
juridical act.[27] As the Civil Code provides, “(t)here
is no mistake if the party alleging it knew the doubt, contingency or risk
affecting the object of the contract.”[28]
Furthermore,
petitioner was afforded the reasonable opportunity required in Article 1584 of
the Civil Code within which to examine the jewelry as he in fact accepted them
when asked by Dr. Cruz if he was satisfied with the same.[29] By taking the jewelry outside the
bank, petitioner executed an act which was more consistent with his exercise of
ownership over it. This gains credence
when it is borne in mind that he himself had earlier delivered the Tanay
property to Dr. Cruz by affixing his signature to the contract of sale. That after two hours he later claimed that
the jewelry was not the one he intended in exchange for his Tanay property,
could not sever the juridical tie that now bound him and Dr. Cruz. The nature and value of the thing he had
taken preclude its return after that supervening period within which anything
could have happened, not excluding the alteration of the jewelry or its being
switched with an inferior kind.
Both the trial
and appellate courts, therefore, correctly ruled that there were no legal bases
for the nullification of the contract of sale. Ownership over the parcel of land and the pair of emerald-cut diamond earrings
had been transferred to Dr. Cruz and petitioner, respectively, upon the actual
and constructive delivery thereof.[30] Said contract of sale being
absolute in nature, title passed to the vendee upon delivery of the thing sold
since there was no stipulation in the contract that title to the property sold
has been reserved in the seller until full payment of the price or that the
vendor has the right to unilaterally resolve the contract the moment the buyer
fails to pay within a fixed period.[31] Such stipulations are not manifest
in the contract of sale.
While it is true
that the amount of P40,000.00 forming part of the consideration was still
payable to petitioner, its nonpayment by Dr. Cruz is not a sufficient cause to
invalidate the contract or bar the transfer of ownership and possession of the
things exchanged considering the fact that their contract is silent as to when
it becomes due and demandable.[32]
Neither may such
failure to pay the balance of the purchase price result in the payment of
interest thereon. Article 1589 of the
Civil Code prescribes the payment of interest by the vendee “for the period
between the delivery of the thing and the payment of the price” in the
following cases:
“(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the payment of the price.”
Not one of these cases obtains here. This case should, of course, be distinguished from De la Cruz v.
Legaspi,[33] where the court held that failure
to pay the consideration after the notarization of the contract as previously
promised resulted in the vendee’s liability for payment of interest. In the case at bar, there is no stipulation
for the payment of interest in the contract of sale nor proof that the Tanay
property produced fruits or income. Neither did petitioner demand payment of the price as in fact he filed
an action to nullify the contract of sale.
All told,
petitioner appears to have elevated this case to this Court for the principal
reason of mitigating the amount of damages awarded to both private respondents
which petitioner considers as “exorbitant.” He contends that private respondents do not deserve at all the award of
damages. In fact, he pleads for the
total deletion of the award as regards private respondent Belarmino whom he
considers a mere “nominal party” because “no specific claim for damages against
him” was alleged in the complaint. When
he filed the case, all that petitioner wanted was that Atty. Belarmino should
return to him the owner’s duplicate copy of TCT No. 320725, the deed of sale
executed by Fr. Antonio Jacobe, the deed of redemption and the check alloted
for expenses. Petitioner alleges
further that Atty. Belarmino should not have delivered all those documents to
Dr. Cruz because as the “lawyer for both the seller and the buyer in the sale
contract, he should have protected the rights of both parties.” Moreover, petitioner asserts that there was
no firm basis for damages except for Atty. Belarmino’s uncorroborated
testimony.[34]
Moral and
exemplary damages may be awarded without proof of pecuniary loss. In awarding such damages, the court shall
take into account the circumstances obtaining in the case and assess damages
according to its discretion.[35] To warrant the award of damages, it
must be shown that the person to whom these are awarded has sustained
injury. He must likewise establish
sufficient data upon which the court can properly base its estimate of the
amount of damages.[36] Statements of facts should
establish such data rather than mere conclusions or opinions of witnesses.[37] Thus:
“x x x. For moral damages to be awarded, it is essential that the claimant must have satisfactorily proved during the trial the existence of the factual basis of the damages and its causal connection with the adverse party’s acts. If the court has no proof or evidence upon which the claim for moral damages could be based, such indemnity could not be outrightly awarded. The same holds true with respect to the award of exemplary damages where it must be shown that the party acted in a wanton, oppressive or malevolent manner.”[38]
In this regard,
the lower court appeared to have awarded damages on a ground analogous to
malicious prosecution under Article 2219(8) of the Civil Code[39] as shown by (1) petitioner’s
“wanton bad faith” in bloating the value of the Tanay property which he
exchanged for “a genuine pair of emerald-cut diamond worth P200,000.00;”
and (2) his filing of a “malicious and unfounded case” against private
respondents who were “well known, respected and held in high esteem in San
Pablo City where everybody practically knows everybody” and whose good names in
the “twilight of their lives” were soiled by petitioner’s coming to court with
“unclean hands,” thereby affecting their earning capacity in the exercise of
their respective professions and besmirching their reputation.
For its part,
the Court of Appeals affirmed the award of damages to private respondents for
these reasons:
“The malice with which Fule filed this case is apparent. Having taken possession of the genuine jewelry of Dra. Cruz, Fule now wishes to return a fake jewelry to Dra. Cruz and, more than that, get back the real property, which his bank owns. Fule has obtained a genuine jewelry which he could sell anytime, anywhere and to anybody, without the same being traced to the original owner for practically nothing. This is plain and simple, unjust enrichment.”[40]
While, as a
rule, moral damages cannot be recovered from a person who has filed a complaint
against another in good faith because it is not sound policy to place a penalty
on the right to litigate,[41] the same, however, cannot apply in
the case at bar. The factual findings of the courts a quo
to the effect that petitioner filed
this case because he was the victim of fraud; that he could not have been such
a victim because he should have examined the jewelry in question before
accepting delivery thereof, considering his exposure to the banking and jewelry
businesses; and that he filed the action for the nullification of the contract
of sale with unclean hands, all deserve full faith and credit to support the
conclusion that petitioner was motivated more by ill will than a sincere
attempt to protect his rights in commencing suit against respondents.
As pointed out
earlier, a closer scrutiny of the chain of events immediately prior to and on
October 24, 1984 itself would amply demonstrate that petitioner was not simply
negligent in failing to exercise due diligence to assure himself that what he
was taking in exchange for his property were genuine diamonds. He had rather placed himself in a situation
from which it preponderantly appears that his seeming ignorance was actually
just a ruse. Indeed, he had unnecessarily dragged respondents to face the
travails of litigation in speculating at the possible favorable outcome of his
complaint when he should have realized that his supposed predicament was his
own making. We, therefore, see here no
semblance of an honest and sincere belief on his part that he was swindled by
respondents which would entitle him to redress in court. It must be noted that before petitioner was
able to convince Dr. Cruz to exchange her jewelry for the Tanay property,
petitioner took pains to thoroughly examine said jewelry, even going to the
extent of sketching their appearance. Why at the precise moment when he was
about to take physical possession thereof he failed to exert extra efforts to
check their genuineness despite the large consideration involved has never been
explained at all by petitioner. His
acts thus failed to accord with what an ordinary prudent man would have done in
the same situation. Being an experienced banker and a businessman himself who
deliberately skirted a legal impediment in the sale of the Tanay property and
to minimize the capital gains tax for its exchange, it was actually gross
recklessness for him to have merely conducted a cursory examination of the
jewelry when every opportunity for doing so was not denied him. Apparently, he
carried on his person a tester which he later used to prove the alleged fakery
but which he did not use at the time when it was most needed. Furthermore, it
took him two more hours of unexplained delay before he complained that the
jewelry he received were counterfeit. Hence, we stated earlier that anything could have happened during all
the time that petitioner was in complete possession and control of the jewelry,
including the possibility of substituting them with fake ones, against which
respondents would have a great deal of difficulty defending themselves. The truth is that petitioner even failed to
successfully prove during trial that the jewelry he received from Dr. Cruz were
not genuine. Add to that the fact that
he had been shrewd enough to bloat the Tanay property’s price only a few days
after he purchased it at a much lower value. Thus, it is our considered view
that if this slew of circumstances were connected, like pieces of fabric sewn
into a quilt, they would sufficiently demonstrate that his acts were not merely
negligent but rather studied and deliberate.
We do not have
here, therefore, a situation where petitioner’s complaint was simply found
later to be based on an erroneous ground which, under settled jurisprudence,
would not have been a reason for awarding moral and exemplary damages.[42] Instead, the cause of action of the
instant case appears to have been contrived by petitioner himself. In other words, he was placed in a situation
where he could not honestly evaluate whether his cause of action has a
semblance of merit, such that it would require the expertise of the courts to
put it to a test. His insistent pursuit
of such case then coupled with circumstances showing that he himself was guilty
in bringing about the supposed wrongdoing on which he anchored his cause of
action would render him answerable for
all damages the defendant may suffer because of it. This is precisely what took place in the petition at bar and we
find no cogent reason to disturb the findings of the courts below that
respondents in this case suffered considerable damages due to petitioner’s
unwarranted action.
WHEREFORE, the decision of the Court of
Appeals dated October 20, 1992 is hereby AFFIRMED in toto. Dr. Cruz, however, is ordered to pay
petitioner the balance of the purchase price of P40,000.00 within ten
(10) days from the finality of this decision. Costs against petitioner.
SO ORDERED.
[1] Penned by
Judge J. Ausberto D. Jaramillo, Jr.
[2] Note that
the parties seemed to have intended a barter although what they eventually
executed was a deed of absolute sale. See in this connection Article 1468 of the Civil Code which provides
that: “If the consideration of the contract consists partly in money, and
partly in another thing, the transaction shall be characterized by the manifest
intention of the parties. If such
intention does not clearly appear, it shall be considered a barter if the value
of the thing given as a part of the consideration exceeds the amount of the
money or its equivalent; otherwise, it is a sale”
[3] Rollo,
p. 35.
[4] Ibid.,
p. 36.
[5] Id.,
p. 37.
[6] Id.,
pp. 39-40.
[7] Penned by
Associate Justice Manuel C. Herrera and concurred in by Associate Justices
Justo P. Torres, Jr. and Angelina S. Gutierrez.
[8] Petition,
p. 5, Rollo, p. 11.
[9] Ibid.,
p. 3, citing Garcia v. Court of Appeals, 33 SCRA 622 (1970) and Roque v. Buan, 21 SCRA 642 (1967).
[10] Sandoval v.
Court of Appeals, 260 SCRA 283 (1996).
[11] B.A.
Finance Corporation v. Court of Appeals, 229 SCRA 566 (1994).
[12] Petition,
pp. 6-7; Rollo, pp. 12-13.
[13] Atty.
Belarmino’s Comment, pp. 2-3; Rollo, pp. 63-64.
[14] Rule
3.05, Code of Judicial Conduct.
[15] Castaños v.
Escaño, Jr., 251 SCRA 174 (1995).
[16] Manlavi v.
Gacott, Jr., 313 Phil. 738, citing Abiera v. Maceda, 233 SCRA 520
(1994).
[17] Art.
1315, Civil Code.
[18] Art.
1475, Civil Code; Romero v. Court of Appeals, 250 SCRA 223 (1995).
[19] Aspi v.
Court of Appeals, 236 SCRA 94 (1994).
[20] Olegario v.
Court of Appeals, 238 SCRA 96 (1994).
[21] Art.
1398, Civil Code; Ines v. Court of Appeals, 317 Phil. 373.
[22] Art.
1390, Civil Code.
[23]
Appellant’s Brief in the Court of Appeals, p. 5; CA Rollo, p. 32.
[24] Art.
1338, Civil Code.
[25] Art.
1331, Civil Code.
[26]
TOLENTINO, IV CIVIL CODE OF THE PHILIPPINES, 478 (1991) citing Borrel y
Soler, Nulidad, p. 221.
[27] Ibid.,
p. 487.
[28] Art.
1333, Civil Code.
[29] Art.
1585, Civil Code.
[30] Art.
1477, Civil Code.
[31] Adelfa
Properties, Inc. v. Court of Appeals, 240 SCRA 565 (1995).
[32] Ocampo v.
Court of Appeals, 233 SCRA 551 (1994) citing Filoil Marketing Corporation v.
Intermediate Appellate Court, 169 SCRA 293 (1989).
[33] 98 Phil.
43.
[34] Petition,
pp. 17-18, Rollo, pp. 23-24.
[35] Art.
2216, Civil Code.
[36] 25A
C.J.S. 70, citing Standard Acc. Ins. Co. v. U.S., 102 Ct.Cl. 770, 65
S.Ct. 1409, 325 U.S. 870, 89 L.Ed. 1989.
[37] Ibid.,
at p. 72, citing McCracken v. Stewart, 223 P.2d 963, 170 Kan. 129.
[38] Philippine Airlines, Inc. v. NLRC,
259 SCRA 459 (1996).
[39] Note that this is not exactly a case of
malicious prosecution. Article 2219,
however, in enumerating the specific instances when moral damages may be
recovered refers to “analogous cases” or that which resemble or correspond to
those enumerated. The circumstances in
this case closely resemble that of malicious prosecution.
[40] Rollo, p. 49.
[41]
Philippine National Bank v. Court of Appeals, 159 SCRA 433 (1988);
Lagman v. Intermediate Appellate Court, 166 SCRA 734 (1988).
[42] In R
& B Surety and Insurance v. Intermediate Appellate Court, 129 SCRA 736 (1984),
the Court said: “x x x the mere fact
that an action is later found to be based on an erroneous ground does not per
se make its initiator guilty of bad faith and liable for damages x x x. Sound principles of justice and public
policy demand that persons shall have free resort to courts of law for redress
of wrongs and vindication of their rights without fear of later on standing
trial for damages should their actions lose ground.”