G.R. No. L-55372 - Hahn vs. Court of Appeals

Santos acknowledged receipt by signing separate receipts that clearly stated the rings were given on commission to be sold, with the understanding that they would be returned upon demand if unsold.

A civil case seeking either the return of the rings or their value.
A separate criminal case for estafa, in which Santos was eventually acquitted on grounds of reasonable doubt.

Santos contested the characterization of the transaction, claiming it was a sale rather than an agency (commission) arrangement.
The trial court ruled against Santos by ordering her either to return the rings or to pay their adjusted monetary value.
The court increased the original amount (P47,000) to P65,000 based on an alleged application of Article 1250 of the Civil Code, which provided for floating adjustments in the case of extraordinary inflation or deflation.
Additionally, the trial court awarded moral damages (P10,000), exemplary damages (P5,000), and attorney’s fees (P6,000) due to the respondent’s evident lack of scruples and consistent bad faith in her dealings.

Reversing the upward adjustment of the rings’ value, arguing Article 1250 was inapplicable because there had been no extraordinary inflation or deflation.
Disallowing the moral and exemplary damages on the grounds that Santos had not acted with malice or bad faith.

The petitioner (Hahn), in bringing the case before the Supreme Court, challenged:

The court’s refusal to allow an inflationary adjustment based on evidence such as Central Bank statistics.
The disallowance of moral and exemplary damages, arguing that Santos’ conduct—marked by inconsistent testimony and misrepresentation regarding installment payments—warranted such punitive measures.

Evidence presented at trial included further testimony and documentary receipts showing that:

Santos repeatedly altered her version of events concerning alleged installment payments.
There were incidents where Santos attempted to substitute one ring for the other.
The petitioner had consistently demanded full performance of the obligation, while evidence indicated that it was Santos who delayed and evaded her responsibilities.

Whether the trial court was correct in applying a floating rate adjustment to the original sum due under Article 1250.
Whether the figures presented by Hahn, showing an adjusted value based on Central Bank statistics, should have been admitted to justify increasing the amount claimed from P47,000 to a substantially higher value.

Whether the trial court’s awarding of P10,000 in moral damages and P5,000 in exemplary damages was justified based on the respondent’s deceptive behavior and inconsistent testimony.
Whether the Court of Appeals erred in disallowing these damages by concluding there was no clear evidence of malice or bad faith.

Whether the delay in fulfilling the obligation (i.e., the return or payment for the rings) was attributable to the respondent’s actions or to unreasonable conduct on the part of the petitioner.