Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 112212 March 2, 1998
GREGORIO FULE, petitioner,
vs.
COURT OF APPEALS, NINEVETCH CRUZ an !UAN "ELARMINO, respondents.

ROMERO, J.:
This petition for revie on certiorari !uestions the affir"ance b# the $ourt of %ppeals of
the decision
1
of the Re&ional Trial $ourt of San Pablo $it#, 'ranch (), dis"issin& the
co"plaint that pra#ed for the nullification of a contract of sale of a *)+hectare propert#
in Tana#, Ri,al in consideration of the a"ount of P-),))).)) and a ../ carat e"erald+
cut dia"ond 0$ivil $ase No. SP+.-//1. The loer court2s decision disposed of the case
as follos3
4H5R56OR5, pre"ises considered, the $ourt hereb# renders 7ud&"ent dis"issin&
the co"plaint for lac8 of "erit and orderin& plaintiff to pa#3
*. Defendant Dra. Ninevetch M. $ru, the su" of P()),))).)) as and for "oral
da"a&es and the su" of P*)),))).)) as and for e9e"plar# da"a&es:
.. Defendant %tt#. ;uan 'elar"ino the su" of P./),))).)) as and for "oral da"a&es
and the su" of P*/),))).)) as and for e9e"plar# da"a&es:
(. Defendant Dra. $ru, and %tt#. 'elar"ino the su" of P./,))).)) each as and for
attorne#2s fees and liti&ation e9penses: and
-. The costs of suit.
SO ORD5R5D.
%s found b# the $ourt of %ppeals and the loer court, the antecedent facts of this case
are as follos3
Petitioner <re&orio 6ule, a ban8er b# profession and a 7eeler at the sa"e ti"e,
ac!uired a *)+hectare propert# in Tana#, Ri,al 0hereinafter =Tana# propert#=1, covered
b# Transfer $ertificate of Title No. (.)>./ hich used to be under the na"e of 6r.
%ntonio ;acobe. The latter had "ort&a&ed it earlier to the Rural 'an8 of %la"inos 0the
'an81, ?a&una, Inc. to secure a loan in the a"ount of P*),))).)), but the "ort&a&e
as later foreclosed and the propert# offered for public auction upon his default.
In ;ul# *@A-, petitioner, as corporate secretar# of the ban8, as8ed Re"elia Dichoso
and Oliva Mendo,a to loo8 for a bu#er ho "i&ht be interested in the Tana# propert#.
The to found one in the person of herein private respondent Dr. Ninevetch $ru,. It so
happened that at the ti"e, petitioner had shon interest in bu#in& a pair of e"erald+cut
dia"ond earrin&s oned b# Dr. $ru, hich he had seen in ;anuar# of the sa"e #ear
hen his "other e9a"ined and appraised the" as &enuine. Dr. $ru,, hoever,
declined petitioner2s offer to bu# the 7eelr# for P*)),))).)). Petitioner then "ade
another bid to bu# the" for BSCD,))).)) at the e9chan&e rate of C*.)) to P./.)). %t
this point, petitioner inspected said 7eelr# at the lobb# of the Prudential 'an8 branch in
San Pablo $it# and then "ade a s8etch thereof. Havin& s8etched the 7eelr# for tent#
to thirt# "inutes, petitioner &ave the" bac8 to Dr. $ru, ho a&ain refused to sell the"
since the e9chan&e rate of the peso at the ti"e appreciated to P*@.)) to a dollar.
Subse!uentl#, hoever, ne&otiations for the barter of the 7eelr# and the Tana#
propert# ensued. Dr. $ru, re!uested herein private respondent %tt#. ;uan 'elar"ino to
chec8 the propert# ho, in turn, found out that no sale or barter as feasible because
the one+#ear period for rede"ption of the said propert# had not #et e9pired at the ti"e.
In an effort to cut throu&h an# le&al i"pedi"ent, petitioner e9ecuted on October *@,
*@A-, a deed of rede"ption on behalf of 6r. ;acobe purportedl# in the a"ount of
P*/,@A>.>A, and on even date, 6r. ;acobe sold the propert# to petitioner for
P>/,))).)). The haste ith hich the to deeds ere e9ecuted is shon b# the fact
that the deed of sale as notari,ed ahead of the deed of rede"ption. %s Dr. $ru, had
alread# a&reed to the proposed barter, petitioner ent to Prudential 'an8 once a&ain to
ta8e a loo8 at the 7eelr#.
In the afternoon of October .(, *@A-, petitioner "et %tt#. 'elar"ino at the latter2s
residence to prepare the docu"ents of sale.
2
Dr. $ru, herself as not around but %tt#.
'elar"ino as aare that she and petitioner had previousl# a&reed to e9chan&e a pair
of e"erald+cut dia"ond earrin&s for the Tana# propert#. %tt#. 'elar"ino accordin&l#
caused the preparation of a deed of absolute sale hile petitioner and Dr. $ru,
attended to the safe8eepin& of the 7eelr#.
1
The folloin& da#, petitioner, to&ether ith Dichoso and Mendo,a, arrived at the
residence of %tt#. 'elar"ino to finall# e9ecute a deed of absolute sale. Petitioner si&ned
the deed and &ave %tt#. 'elar"ino the a"ount of P*(,>)).)) for necessar# e9penses
in the transfer of title over the Tana# propert#. Petitioner also issued a certification to
the effect that the actual consideration of the sale as P.)),))).)) and not
PA),))).)) as indicated in the deed of absolute sale. The disparit# beteen the actual
contract price and the one indicated on the deed of absolute sale as purportedl#
ai"ed at "ini"i,in& the a"ount of the capital &ains ta9 that petitioner ould have to
shoulder. Since the 7eelr# as appraised onl# at P*D),))).)), the parties a&reed that
the balance of P-),))).)) ould 7ust be paid later in cash.
%s pre+arran&ed, petitioner left %tt#. 'elar"ino2s residence ith Dichoso and Mendo,a
and headed for the ban8, arrivin& there at past /3)) p.". Dr. $ru, also arrived shortl#
thereafter, but the cashier ho 8ept the other 8e# to the deposit bo9 had alread# left the
ban8. Dr. $ru, and Dichoso, therefore, loo8ed for said cashier and found hi" havin& a
haircut. %s soon as his haircut as finished, the cashier returned to the ban8 and
arrived there at /3-A p."., ahead of Dr. $ru, and Dichoso ho arrived at /3// p.". Dr.
$ru, and the cashier then opened the safet# deposit bo9, the for"er retrievin& a
transparent plastic or cellophane ba& ith the 7eelr# inside and handin& over the
sa"e to petitioner. The latter too8 the 7eelr# fro" the ba&, ent near the electric li&ht
at the ban82s lobb#, held the 7eelr# a&ainst the li&ht and e9a"ined it for ten to fifteen
"inutes. %fter a hile, Dr. $ru, as8ed, =Okay na ba iyan?= Petitioner e9pressed his
satisfaction b# noddin& his head.
6or services rendered, petitioner paid the a&ents, Dichoso and Mendo,a, the a"ount of
BSC()).)) and so"e pieces of 7eelr#. He did not, hoever, &ive the" half of the pair
of earrin&s in !uestion hich he had earlier pro"ised.
?ater, at about A3)) o2cloc8 in the evenin& of the sa"e da#, petitioner arrived at the
residence of %tt#. 'elar"ino co"plainin& that the 7eelr# &iven to hi" as fa8e. He
then used a tester to prove the alle&ed fa8er#. Meanhile, at A3() p."., Dichoso and
Mendo,a ent to the residence of Dr. $ru, to borro her car so that, ith %tt#.
'elar"ino, the# could re&ister the Tana# propert#. %fter Dr. $ru, had a&reed to lend her
car, Dichoso called up %tt#. 'elar"ino. The latter, hoever, instructed Dichoso to
proceed i""ediatel# to his residence because petitioner as there. 'elievin& that
petitioner had finall# a&reed to &ive the" half of the pair of earrin&s, Dichoso ent
posthaste to the residence of %tt#. 'elar"ino onl# to find petitioner alread#
de"onstratin& ith a tester that the earrin&s ere fa8e. Petitioner then accused
Dichoso and Mendo,a of deceivin& hi" hich the#, hoever, denied. The# countered
that petitioner could not have been fooled because he had vast e9perience re&ardin&
7eelr#. Petitioner nonetheless too8 bac8 the BSC()).)) and 7eelr# he had &iven
the".
Thereafter, the &roup decided to &o to the house of a certain Macario Di"a#u&a, a
7eeler, to have the earrin&s tested. Di"a#u&a, after ta8in& one loo8 at the earrin&s,
i""ediatel# declared the" counterfeit. %t around @3() p."., petitioner ent to one %tt#.
Re#naldo %lcantara residin& at ?a8eside Subdivision in San Pablo $it#, co"plainin&
about the fa8e 7eelr#. Bpon bein& advised b# the latter, petitioner reported the "atter
to the police station here Dichoso and Mendo,a li8eise e9ecuted sorn state"ents.
On October .D, *@A-, petitioner filed a co"plaint before the Re&ional Trial $ourt of San
Pablo $it# a&ainst private respondents pra#in&, a"on& other thin&s, that the contract of
sale over the Tana# propert# be declared null and void on the &round of fraud and
deceit.
On October (), *@A-, the loer court issued a te"porar# restrainin& order directin& the
Re&ister of Deeds of Ri,al to refrain fro" actin& on the pertinent docu"ents involved in
the transaction. On Nove"ber .), *@A-, hoever, the sa"e court lifted its previous
order and denied the pra#er for a rit of preli"inar# in7unction.
%fter trial, the loer court rendered its decision on March >, *@A@. $onfrontin& the issue
of hether or not the &enuine pair of earrin&s used as consideration for the sale as
delivered b# Dr. $ru, to petitioner, the loer court said3
The $ourt finds that the anser is definitel# in the affir"ative. Indeed, Dra. $ru,
delivered 0the1 sub7ect 7eelries 0sic1 into the hands of plaintiff ho even raised the
sa"e nearer to the li&hts of the lobb# of the ban8 near the door. 4hen as8ed b# Dra.
$ru, if ever#thin& as in order, plaintiff even nodded his satisfaction 0Hearin& of 6eb.
.-, *@AA1. %t that instance, plaintiff did not protest, co"plain or be& for additional ti"e
to e9a"ine further the 7eelries 0sic1. 'ein& a professional ban8er and en&a&ed in the
7eelr# business plaintiff is conversant and co"petent to detect a fa8e dia"ond fro"
the real thin&. Plaintiff as accorded the reasonable ti"e and opportunit# to ascertain
and inspect the 7eelries 0sic1 in accordance ith %rticle */A- of the $ivil $ode. Plaintiff
too8 deliver# of the sub7ect 7eelries 0sic1 before D3)) p.". of October .-, *@A-. 4hen
he ent at A3)) p.". that sa"e da# to the residence of %tt#. 'elar"ino alread# ith a
tester co"plainin& about so"e fa8e 7eelries 0sic1, there as alread# undue dela#
because of the lapse of a considerable len&th of ti"e since he &ot hold of sub7ect
7eelries 0sic1. The lapse of to 0.1 hours "ore or less before plaintiff co"plained is
considered b# the $ourt as unreasonable dela#.
#
The loer court further ruled that all the ele"ents of a valid contract under %rticle *-/A
of the $ivil $ode ere present, na"el#3 0a1 consent or "eetin& of the "inds: 0b1
deter"inate sub7ect "atter, and 0c1 price certain in "one# or its e!uivalent. The sa"e
ele"ents, accordin& to the loer court, ere present despite the fact that the
a&ree"ent beteen petitioner and Dr. $ru, as principall# a barter contract. The loer
court e9plained thus3
2
. . . . Plaintiff2s onership over the Tana# propert# passed unto Dra. $ru, upon the
constructive deliver# thereof b# virtue of the Deed of %bsolute Sale 059h. D1. On the
other hand, the onership of Dra. $ru, over the sub7ect 7eelries 0sic1 transferred to
the plaintiff upon her actual personal deliver# to hi" at the lobb# of the Prudential 'an8.
It is e9pressl# provided b# la that the thin& sold shall be understood as delivered,
hen it is placed in the control and possession of the vendee 0%rt. *-@>, $ivil $ode:
Euen,le F Straff vs. 4atson F $o. *( Phil. .D1. The onership andGor title over the
7eelries 0sic1 as trans"itted i""ediatel# before D3)) p.". of October .-, *@A-.
Plaintiff si&nified his approval b# noddin& his head. Deliver# or tradition, is one of the
"odes of ac!uirin& onership 0%rt. >*., $ivil $ode1.
Si"ilarl#, hen 59hibit D as e9ecuted, it as e!uivalent to the deliver# of the Tana#
propert# in favor of Dra. $ru,. The e9ecution of the public instru"ent 059h. D1 operates
as a for"al or s#"bolic deliver# of the Tana# propert# and authori,es the bu#er, Dra.
$ru, to use the docu"ent as proof of onership 06lorendo v. 6o,, .) Phil. (@@1. More
so, since 59hibit D does not contain an# proviso or stipulation to the effect that title to
the propert# is reserved ith the vendor until full pa#"ent of the purchase price, nor is
there a stipulation &ivin& the vendor the ri&ht to unilaterall# rescind the contract the
"o"ent the vendee fails to pa# ithin a fi9ed period 0Ta&uba v. Vda. De ?eon, *(.
S$R% >..: ?u,on 'ro8era&e $o. Inc. vs. Mariti"e 'uildin& $o. Inc. AD S$R% ()/:
6roilan v. Pan Oriental Shippin& $o. et al. *. S$R% .>D1.
$
%side fro" concludin& that the contract of barter or sale had in fact been consu""ated
hen petitioner and Dr. $ru, parted a#s at the ban8, the trial court li8eise delt on
the une9plained dela# ith hich petitioner co"plained about the alle&ed fa8er#. Thus3
. . . . Veril#, plaintiff is alread# estopped to co"e bac8 after the lapse of considerable
len&th of ti"e to clai" that hat he &ot as fa8e. He is a 'usiness Mana&e"ent
&raduate of ?a Salle Bniversit#, $lass *@>A+>@, a professional ban8er as ell as a
7eeler in his on ri&ht. To hours is "ore than enou&h ti"e to "a8e a sitch of a
Russian dia"ond ith the real dia"ond. It "ust be re"e"bered that in ;ul# *@A-
plaintiff "ade a s8etch of the sub7ect 7eelries 0sic1 at the Prudential 'an8. Plaintiff had
a tester at A3)) p.". at the residence of %tt#. 'elar"ino. 4h# then did he not brin& it out
hen he as e9a"inin& the sub7ect 7eelries 0sic1 at about D3)) p.". in the ban82s
lobb#H Obviousl#, he had no need for it after bein& satisfied of the &enuineness of the
sub7ect 7eelries 0sic1. 4hen Dra. $ru, and plaintiff left the ban8 both of the" had full#
perfor"ed their respective prestations. Once a contract is shon to have been
consu""ated or full# perfor"ed b# the parties thereto, its e9istence and bindin& effect
can no lon&er be disputed. It is irrelevant and i""aterial to dispute the due e9ecution
of a contract if both of the" have in fact perfor"ed their obli&ations thereunder and
their respective si&natures and those of their itnesses appear upon the face of the
docu"ent 04eldon $onstruction v. $% <.R. No. ?+(/>.*, Oct. *., *@A>1.
%
6inall#, in aardin& da"a&es to the defendants, the loer court re"ar8ed3
The $ourt finds that plaintiff acted in anton bad faith. 59hibit .+'elar"ino purports to
sho that the Tana# propert# is orth P./,))).)). Hoever, also on that sa"e da# it
as e9ecuted, the propert#2s orth as "a&nified at P>/,))).)) 059h. (+'elar"ino1.
Ho could in less than a da# 0Oct. *@, *@A-1 the value ould 0sic1 triple under nor"al
circu"stancesH Plaintiff, ith the assistance of his a&ents, as able to e9chan&e the
Tana# propert# hich his ban8 valued onl# at P./,))).)) in e9chan&e for a &enuine
pair of e"erald cut dia"ond orth P.)),))).)) belon&in& to Dra. $ru,. He also
retrieved the BSC()).)) and 7eelries 0sic1 fro" his a&ents. 'ut he as not satisfied in
bein& able to &et sub7ect 7eelries for a son&. He had to file a "alicious and unfounded
case a&ainst Dra. $ru, and %tt#. 'elar"ino ho are ell 8non, respected and held in
hi&h estee" in San Pablo $it# here ever#bod# practicall# 8nos ever#bod#. Plaintiff
ca"e to $ourt ith unclean hands dra&&in& the defendants and soilin& their clean and
&ood na"e in the process. 'oth of the" are near the tili&ht of their lives after
"aintainin& and nurturin& their &ood reputation in the co""unit# onl# to be stunned
ith a court case. Since the filin& of this case on October .D, *@A- up to the present
the# ere livin& under a pall of doubt. Surel#, this affected not onl# their earnin&
capacit# in their practice of their respective professions, but also the# suffered
bes"irched reputations. Dra. $ru, runs her on hospital and defendant 'elar"ino is a
ell respected le&al practitioner. The len&th of ti"e this case dra&&ed on durin& hich
period their reputation ere 0sic1 tarnished and their na"es "ali&ned b# the pendenc#
of the case, the $ourt is of the belief that so"e of the da"a&es the# pra#ed for in their
ansers to the co"plaint are reasonabl# proportionate to the sufferin&s the# underent
0%rt. ..*@, Ne $ivil $ode1. Moreover, because of the falsit#, "alice and baseless
nature of the co"plaint defendants ere co"pelled to liti&ate. Hence, the aard of
attorne#2s fees is arranted under the circu"stances 0%rt. ..)A, Ne $ivil $ode1.
&
6ro" the trial court2s adverse decision, petitioner elevated the "atter to the $ourt of
%ppeals. On October .), *@@., the $ourt of %ppeals, hoever, rendered a decision
'

affir"in& in toto the loer court2s decision. His "otion for reconsideration havin& been
denied on October *@, *@@(, petitioner no files the instant petition alle&in& that3
I. TH5 TRI%? $OBRT 5RR5D IN DISMISSIN< P?%INTI662S $OMP?%INT %ND IN
HO?DIN< TH%T TH5 P?%INTI66 %$TB%??I R5$5IV5D % <5NBIN5 P%IR O6
5M5R%?D $BT DI%MOND 5%RRIN<0S1 6ROM D565ND%NT $RBJ . . . :
II. TH5 TRI%? $OBRT 5RR5D IN %4%RDIN< MOR%? %ND 5K5MP?%RI D%M%<5S
%ND %TTORN5I2S 655S IN 6%VOR O6 D565ND%NTS %ND %<%INST TH5
P?%INTI66 IN THIS $%S5: and
III. TH5 TRI%?, $OBRT 5RR5D IN NOT D5$?%RIN< TH5 D55D O6 S%?5 O6 TH5
T%N%I PROP5RTI 05KH. =D=1 %S NB?? %ND VOID OR IN NOT %NNB??IN< TH5
3
S%M5, %ND IN 6%I?IN< TO <R%NT R5%SON%'?5 D%M%<5S IN 6%VOR O6 TH5
P?%INTI66.
8
%s to the first alle&ation, the $ourt observes that petitioner is essentiall# raisin& a
factual issue as it invites us to e9a"ine and ei&h ane the facts re&ardin& the
&enuineness of the earrin&s bartered in e9chan&e for the Tana# propert#. This, of
course, e cannot do ithout undul# transcendin& the li"its of our revie poer in
petitions of this nature hich are confined "erel# to pure !uestions of la. 4e accord,
as a &eneral rule, conclusiveness to a loer court2s findin&s of fact unless it is shon,
inter alia, that3 0*1 the conclusion is a findin& &rounded on speculations, sur"ises or
con7ectures: 0.1 the inference is "anifestl# "ista8en, absurd and i"possible: 0(1 hen
there is a &rave abuse of discretion: 0-1 hen the 7ud&"ent is based on a
"isapprehension of facts: 0/1 hen the findin&s of fact are conflictin&: and 0D1 hen the
$ourt of %ppeals, in "a8in& its findin&s, ent be#ond the issues of the case and the
sa"e is contrar# to the ad"ission of both parties.
9
4e find nothin&, hoever, that
arrants the application of an# of these e9ceptions.
$onse!uentl#, this $ourt upholds the appellate court2s findin&s of fact especiall#
because these concur ith those of the trial court hich, upon a thorou&h scrutin# of
the records, are fir"l# &rounded on evidence presented at the trial.
1(
To reiterate, this
$ourt2s 7urisdiction is onl# li"ited to reviein& errors of la in the absence of an#
shoin& that the findin&s co"plained of are totall# devoid of support in the record or
that the# are &larin&l# erroneous as to constitute serious abuse of discretion.
11
Nonetheless, this $ourt has to closel# delve into petitioner2s alle&ation that the loer
court2s decision of March >, *@A@ is a =read#+"ade= one because it as handed don
a da# after the last date of the trial of the case.
12
Petitioner, in this re&ard, finds it
incredible that ;ud&e ;. %usberto ;ara"illo as able to rite a *.+pa&e sin&le+spaced
decision, t#pe it and release it on March >, *@A@, less than a da# after the last hearin&
on March D, *@A@. He stressed that ;ud&e ;ara"illo replaced ;ud&e Salvador de
<u,"an and heard onl# his rebuttal testi"on#.
This alle&ation is obviousl# no "ore than a desperate effort on the part of petitioner to
dispara&e the loer court2s findin&s of fact in order to convince this $ourt to revie the
sa"e. It is noteorth# that %tt#. 'elar"ino clarified that ;ud&e ;ara"illo had issued the
first order in the case as earl# as March @, *@A> or to #ears before the rendition of the
decision. In fact, %tt#. 'elar"ino ter"inated presentation of evidence on October *(,
*@A>, hile Dr. $ru, finished hers on 6ebruar# -, *@A@, or "ore than a "onth prior to
the rendition of the 7ud&"ent. The March D, *@A@ hearin& as conducted solel# for the
presentation of petitioner2s rebuttal testi"on#.
1#
In other ords, ;ud&e ;ara"illo had
a"ple ti"e to stud# the case and rite the decision because the rebuttal evidence
ould onl# serve to confir" or verif# the facts alread# presented b# the parties.
The $ourt finds nothin& ano"alous in the said situation. No proof has been adduced
that ;ud&e ;ara"illo as "otivated b# a "alicious or sinister intent in disposin& of the
case ith dispatch. Neither is there proof that so"eone else rote the decision for hi".
The i""ediate rendition of the decision as no "ore than ;ud&e ;ara"illo2s
co"pliance ith his dut# as a 7ud&e to =dispose of the court2s business pro"ptl# and
decide cases ithin the re!uired periods.=
1$
The to+#ear period ithin hich ;ud&e
;ara"illo handled the case provided hi" ith all the ti"e to stud# it and even rite
don its facts as soon as these ere presented to court. In fact, this $ourt does not
see an#thin& ron& in the practice of ritin& a decision da#s before the scheduled
pro"ul&ation of 7ud&"ent and leavin& the dispositive portion for t#pin& at a ti"e close
to the date of pro"ul&ation, provided that no "alice or an# ron&ful conduct attends its
adoption.
1%
The practice serves the dual purposes of safe&uardin& the confidentialit# of
draft decisions and renderin& decisions ith pro"ptness. Neither can ;ud&e ;ara"illo
be "ade ad"inistrativel# anserable for the i""ediate rendition of the decision. The
acts of a 7ud&e hich pertain to his 7udicial functions are not sub7ect to disciplinar#
poer unless the# are co""itted ith fraud, dishonest#, corruption or bad faith.
1&

Hence, in the absence of sufficient proof to the contrar#, ;ud&e ;ara"illo is presu"ed
to have perfor"ed his 7ob in accordance ith la and should instead be co""ended
for his close attention to dut#.
Havin& disposed of petitioner2s first contention, e no co"e to the core issue of this
petition hich is hether the $ourt of %ppeals erred in upholdin& the validit# of the
contract of barter or sale under the circu"stances of this case.
The $ivil $ode provides that contracts are perfected b# "ere consent. 6ro" this
"o"ent, the parties are bound not onl# to the fulfill"ent of hat has been e9pressl#
stipulated but also to all the conse!uences hich, accordin& to their nature, "a# be in
8eepin& ith &ood faith, usa&e and la.
1'
% contract of sale is perfected at the "o"ent
there is a "eetin& of the "inds upon the thin& hich is the ob7ect of the contract and
upon the price.
18
'ein& consensual, a contract of sale has the force of la beteen the
contractin& parties and the# are e9pected to abide in &ood faith b# their respective
contractual co""it"ents. %rticle *(/A of the $ivil $ode hich re!uires the e"bodi"ent
of certain contracts in a public instru"ent, is onl# for convenience,
19
and re&istration of
the instru"ent onl# adversel# affects third parties.
2(
6or"al re!uire"ents are,
therefore, for the benefit of third parties. Non+co"pliance thereith does not adversel#
affect the validit# of the contract nor the contractual ri&hts and obli&ations of the parties
thereunder.
It is evident fro" the facts of the case that there as a "eetin& of the "inds beteen
petitioner and Dr. $ru,. %s such, the# are bound b# the contract unless there are
reasons or circu"stances that arrant its nullification. Hence, the proble" that should
be addressed in this case is hether or not under the facts dul# established herein, the
contract can be voided in accordance ith la so as to co"pel the parties to restore to
4
each other the thin&s that have been the sub7ect of the contract ith their fruits, and the
price ith interest.
21
$ontracts that are voidable or annullable, even thou&h there "a# have been no
da"a&e to the contractin& parties are3 0*1 those here one of the parties is incapable
of &ivin& consent to a contract: and 0.1 those here the consent is vitiated b# "ista8e,
violence, inti"idation, undue influence or fraud.
22
%ccordin&l#, petitioner no stresses
before this $ourt that he entered into the contract in the belief that the pair of e"erald+
cut dia"ond earrin&s as &enuine. On the prete9t that those pieces of 7eelr# turned
out to be counterfeit, hoever, petitioner subse!uentl# sou&ht the nullification of said
contract on the &round that it as, in fact, =tainted ith fraud=
2#
such that his consent
as vitiated.
There is fraud hen, throu&h the insidious ords or "achinations of one of the
contractin& parties, the other is induced to enter into a contract hich, ithout the", he
ould not have a&reed to.
2$
The records, hoever, are bare of an# evidence
"anifestin& that private respondents e"plo#ed such insidious ords or "achinations to
entice petitioner into enterin& the contract of barter. Neither is there an# evidence
shoin& that Dr. $ru, induced petitioner to sell his Tana# propert# or that she ca7oled
hi" to ta8e the earrin&s in e9chan&e for said propert#. On the contrar#, Dr. $ru, did not
initiall# accede to petitioner2s proposal to bu# the said 7eelr#. Rather, it appears that it
as petitioner, throu&h his a&ents, ho led Dr. $ru, to believe that the Tana# propert#
as orth e9chan&in& for her 7eelr# as he represented that its value as P-)),))).))
or "ore than double that of the 7eelr# hich as valued onl# at P*D),))).)). If
indeed petitioner2s propert# as trul# orth that "uch, it as certainl# contrar# to the
nature of a business"an+ban8er li8e hi" to have parted ith his real estate for half its
price. In short, it as in fact petitioner ho resorted to "achinations to convince Dr.
$ru, to e9chan&e her 7eelr# for the Tana# propert#.
Moreover, petitioner did not clearl# alle&e "ista8e as a &round for nullification of the
contract of sale. 5ven assu"in& that he did, petitioner cannot successfull# invo8e the
sa"e. To invalidate a contract, "ista8e "ust =refer to the substance of the thin& that is
the ob7ect of the contract, or to those conditions hich have principall# "oved one or
both parties to enter into the contract.=
2%
%n e9a"ple of "ista8e as to the ob7ect of the
contract is the substitution of a specific thin& conte"plated b# the parties ith another.
2&
In his alle&ations in the co"plaint, petitioner insinuated that an inferior one or one
that had onl# Russian dia"onds as substituted for the 7eelr# he anted to e9chan&e
ith his *)+hectare land. He, hoever, failed to prove the fact that prior to the deliver#
of the 7eelr# to hi", private respondents endeavored to "a8e such substitution.
?i8eise, the facts as proven do not support the alle&ation that petitioner hi"self could
be e9cused for the ="ista8e.= On account of his or8 as a ban8er+7eeler, it can be
ri&htfull# assu"ed that he as an e9pert on "atters re&ardin& &e"s. He had the
intellectual capacit# and the business acu"en as a ban8er to ta8e precautionar#
"easures to avert such a "ista8e, considerin& the value of both the 7eelr# and his
land. The fact that he had seen the 7eelr# before October .-, *@A- should not have
precluded hi" fro" havin& its &enuineness tested in the presence of Dr. $ru,. Had he
done so, he could have avoided the present situation that he hi"self brou&ht about.
Indeed, the fin&er of suspicion of sitchin& the &enuine 7eelr# for a fa8e inevitabl#
points to hi". Such a "ista8e caused b# "anifest ne&li&ence cannot invalidate a
7uridical act.
2'
%s the $ivil $ode provides, =0t1here is no "ista8e if the part# alle&in& it
8ne the doubt, contin&enc# or ris8 affectin& the ob7ect of the contract.=
28
6urther"ore, petitioner as afforded the reasonable opportunit# re!uired in %rticle
*/A- of the $ivil $ode ithin hich to e9a"ine the 7eelr# as he in fact accepted the"
hen as8ed b# Dr. $ru, if he as satisfied ith the sa"e.
29
'# ta8in& the 7eelr#
outside the ban8, petitioner e9ecuted an act hich as "ore consistent ith his
e9ercise of onership over it. This &ains credence hen it is borne in "ind that he
hi"self had earlier delivered the Tana# propert# to Dr. $ru, b# affi9in& his si&nature to
the contract of sale. That after to hours he later clai"ed that the 7eelr# as not the
one he intended in e9chan&e for his Tana# propert#, could not sever the 7uridical tie that
no bound hi" and Dr. $ru,. The nature and value of the thin& he had ta8en preclude
its return after that supervenin& period ithin hich an#thin& could have happened, not
e9cludin& the alteration of the 7eelr# or its bein& sitched ith an inferior 8ind.
'oth the trial and appellate courts, therefore, correctl# ruled that there ere no le&al
bases for the nullification of the contract of sale. Onership over the parcel of land and
the pair of e"erald+cut dia"ond earrin&s had been transferred to Dr. $ru, and
petitioner, respectivel#, upon the actual and constructive deliver# thereof.
#(
Said
contract of sale bein& absolute in nature, title passed to the vendee upon deliver# of the
thin& sold since there as no stipulation in the contract that title to the propert# sold
has been reserved in the seller until full pa#"ent of the price or that the vendor has the
ri&ht to unilaterall# resolve the contract the "o"ent the bu#er fails to pa# ithin a fi9ed
period.
#1
Such stipulations are not "anifest in the contract of sale.
4hile it is true that the a"ount of P-),))).)) for"in& part of the consideration as still
pa#able to petitioner, its nonpa#"ent b# Dr. $ru, is not a sufficient cause to invalidate
the contract or bar the transfer of onership and possession of the thin&s e9chan&ed
considerin& the fact that their contract is silent as to hen it beco"es due and
de"andable.
#2
Neither "a# such failure to pa# the balance of the purchase price result in the pa#"ent
of interest thereon. %rticle */A@ of the $ivil $ode prescribes the pa#"ent of interest b#
the vendee =for the period beteen the deliver# of the thin& and the pa#"ent of the
price= in the folloin& cases3
5
0*1 Should it have been so stipulated:
0.1 Should the thin& sold and delivered produce fruits or inco"e:
0(1 Should he be in default, fro" the ti"e of 7udicial or e9tra7udicial de"and for the
pa#"ent of the price.
Not one of these cases obtains here. This case should, of course, be distin&uished
fro" De la Cruz v. Legaspi,
##
here the court held that failure to pa# the consideration
after the notari,ation of the contract as previousl# pro"ised resulted in the vendee2s
liabilit# for pa#"ent of interest. In the case at bar, there is no stipulation for the pa#"ent
of interest in the contract of sale nor proof that the Tana# propert# produced fruits or
inco"e. Neither did petitioner de"and pa#"ent of the price as in fact he filed an action
to nullif# the contract of sale.
%ll told, petitioner appears to have elevated this case to this $ourt for the principal
reason of "iti&atin& the a"ount of da"a&es aarded to both private respondents
hich petitioner considers as =e9orbitant.= He contends that private respondents do not
deserve at all the aard of da"a&es. In fact, he pleads for the total deletion of the
aard as re&ards private respondent 'elar"ino ho" he considers a "ere =no"inal
part#= because =no specific clai" for da"a&es a&ainst hi"= as alle&ed in the
co"plaint. 4hen he filed the case, all that petitioner anted as that %tt#. 'elar"ino
should return to hi" the oner2s duplicate cop# of T$T No. (.)>./, the deed of sale
e9ecuted b# 6r. %ntonio ;acobe, the deed of rede"ption and the chec8 alloted for
e9penses. Petitioner alle&es further that %tt#. 'elar"ino should not have delivered all
those docu"ents to Dr. $ru, because as the =la#er for both the seller and the bu#er in
the sale contract, he should have protected the ri&hts of both parties.= Moreover,
petitioner asserts that there as no fir" basis for da"a&es e9cept for %tt#. 'elar"ino2s
uncorroborated testi"on#.
#$
Moral and e9e"plar# da"a&es "a# be aarded ithout proof of pecuniar# loss. In
aardin& such da"a&es, the court shall ta8e into account the circu"stances obtainin&
in the case said assess da"a&es accordin& to its discretion.
#%
To arrant the aard of
da"a&es, it "ust be shon that the person to ho" these are aarded has sustained
in7ur#. He "ust li8eise establish sufficient data upon hich the court can properl#
base its esti"ate of the a"ount of da"a&es.
#&
State"ents of facts should establish
such data rather than "ere conclusions or opinions of itnesses.
#'
Thus3
. . . . 6or "oral da"a&es to be aarded, it is essential that the clai"ant "ust have
satisfactoril# proved durin& the trial the e9istence of the factual basis of the da"a&es
and its causal connection ith the adverse part#2s acts. If the court has no proof or
evidence upon hich the clai" for "oral da"a&es could be based, such inde"nit#
could not be outri&htl# aarded. The sa"e holds true ith respect to the aard of
e9e"plar# da"a&es here it "ust be shon that the part# acted in a anton,
oppressive or "alevolent "anner.
#8
In this re&ard, the loer court appeared to have aarded da"a&es on a &round
analo&ous to "alicious prosecution under %rticle ..*@ 0A1 of the $ivil $ode
#9
as shon
b# 0*1 petitioner2s =anton bad faith= in bloatin& the value of the Tana# propert# hich
he e9chan&ed for =a &enuine pair of e"erald+cut dia"ond orth P.)),)).)):= and 0.1
his filin& of a ="alicious and unfounded case= a&ainst private respondents ho ere
=ell 8non, respected and held in hi&h estee" in San Pablo $it# here ever#bod#
practicall# 8nos ever#bod#= and hose &ood na"es in the =tili&ht of their lives= ere
soiled b# petitioner2s co"in& to court ith =unclean hands,= thereb# affectin& their
earnin& capacit# in the e9ercise of their respective professions and bes"irchin& their
reputation.
6or its part, the $ourt of %ppeals affir"ed the aard of da"a&es to private respondents
for these reasons3
The "alice ith hich 6ule filed this case is apparent. Havin& ta8en possession of the
&enuine 7eelr# of Dra. $ru,, 6ule no ishes to return a fa8e 7eelr# to Dra. $ru,
and, "ore than that, &et bac8 the real propert#, hich his ban8 ons. 6ule has obtained
a &enuine 7eelr# hich he could sell an#ti"e, an#here and to an#bod#, ithout the
sa"e bein& traced to the ori&inal oner for practicall# nothin&. This is plain and si"ple,
un7ust enrich"ent.
$(
4hile, as a rule, "oral da"a&es cannot be recovered fro" a person ho has filed a
co"plaint a&ainst another in &ood faith because it is not sound polic# to place a penalt#
on the ri&ht to liti&ate,
$1
the sa"e, hoever, cannot appl# in the case at bar. The
factual findin&s of the courts a quo to the effect that petitioner filed this case because
he as the victi" of fraud: that he could not have been such a victi" because he
should have e9a"ined the 7eelr# in !uestion before acceptin& deliver# thereof,
considerin& his e9posure to the ban8in& and 7eelr# businesses: and that he filed the
action for the nullification of the contract of sale ith unclean hands, all deserve full
faith and credit to support the conclusion that petitioner as "otivated "ore b# ill ill
than a sincere atte"pt to protect his ri&hts in co""encin& suit a&ainst respondents.
%s pointed out earlier, a closer scrutin# of the chain of events i""ediatel# prior to and
on October .-, *@A- itself ould a"pl# de"onstrate that petitioner as not si"pl#
ne&li&ent in failin& to e9ercise due dili&ence to assure hi"self that hat he as ta8in&
in e9chan&e for his propert# ere &enuine dia"onds. He had rather placed hi"self in a
situation fro" hich it preponderantl# appears that his see"in& i&norance as actuall#
7ust a ruse. Indeed, he had unnecessaril# dra&&ed respondents to face the travails of
liti&ation in speculatin& at the possible favorable outco"e of his co"plaint hen he
should have reali,ed that his supposed predica"ent as his on "a8in&. 4e,
6
therefore, see here no se"blance of an honest and sincere belief on his part that he
as sindled b# respondents hich ould entitle hi" to redress in court. It "ust be
noted that before petitioner as able to convince Dr. $ru, to e9chan&e her 7eelr# for
the Tana# propert#, petitioner too8 pains to thorou&hl# e9a"ine said 7eelr#, even &oin&
to the e9tent of s8etchin& their appearance. 4h# at the precise "o"ent hen he as
about to ta8e ph#sical possession thereof he failed to e9ert e9tra efforts to chec8 their
&enuineness despite the lar&e consideration involved has never been e9plained at all
b# petitioner. His acts thus failed to accord ith hat an ordinar# prudent "an ould
have done in the sa"e situation. 'ein& an e9perienced ban8er and a business"an
hi"self ho deliberatel# s8irted a le&al i"pedi"ent in the sale of the Tana# propert#
and to "ini"i,e the capital &ains ta9 for its e9chan&e, it as actuall# &ross
rec8lessness for hi" to have "erel# conducted a cursor# e9a"ination of the 7eelr#
hen ever# opportunit# for doin& so as not denied hi". %pparentl#, he carried on his
person a tester hich he later used to prove the alle&ed fa8er# but hich he did not use
at the ti"e hen it as "ost needed. 6urther"ore, it too8 hi" to "ore hours of
une9plained dela# before he co"plained that the 7eelr# he received ere counterfeit.
Hence, e stated earlier that an#thin& could have happened durin& all the ti"e that
petitioner as in co"plete possession and control of the 7eelr#, includin& the
possibilit# of substitutin& the" ith fa8e ones, a&ainst hich respondents ould have a
&reat deal of difficult# defendin& the"selves. The truth is that petitioner even failed to
successfull# prove durin& trial that the 7eelr# he received fro" Dr. $ru, ere not
&enuine. %dd to that the fact that he had been shred enou&h to bloat the Tana#
propert#2s price onl# a fe da#s after he purchased it at a "uch loer value. Thus, it is
our considered vie that if this sle of circu"stances ere connected, li8e pieces of
fabric sen into a !uilt, the# ould sufficientl# de"onstrate that his acts ere not
"erel# ne&li&ent but rather studied and deliberate.
4e do not have here, therefore, a situation here petitioner2s co"plaint as si"pl#
found later to be based on an erroneous &round hich, under settled 7urisprudence,
ould not have been a reason for aardin& "oral and e9e"plar# da"a&es.
$2
Instead,
the cause of action of the instant case appears to have been contrived b# petitioner
hi"self. In other ords, he as placed in a situation here he could not honestl#
evaluate hether his cause of action has a se"blance of "erit, such that it ould
re!uire the e9pertise of the courts to put it to a test. His insistent pursuit of such case
then coupled ith circu"stances shoin& that he hi"self as &uilt# in brin&in& about
the supposed ron&doin& on hich he anchored his cause of action ould render hi"
anserable for all da"a&es the defendant "a# suffer because of it. This is precisel#
hat too8 place in the petition at bar and e find no co&ent reason to disturb the
findin&s of the courts belo that respondents in this case suffered considerable
da"a&es due to petitioner2s unarranted action.
4H5R56OR5, the decision of the $ourt of %ppeals dated October .), *@@. is hereb#
%66IRM5D in toto. Dr. $ru,, hoever, is ordered to pa# petitioner the balance of the
purchase price of P-),))).)) ithin ten 0*)1 da#s fro" the finalit# of this decision.
$osts a&ainst petitioner.
SO ORD5R5D.
7