G.R. No. 161818 ; August 20, 2008
NEW RURAL BANK OF GUIMBA (N.E.), INC., petitioner, vs. FERMINA S. ABAD and RAFAEL SUSAN, respondents.

FACTS

Respondent spouses obtained a loan from petitioner bank secured by a real estate mortgage over their land. After allegedly failing to pay, the bank extrajudicially foreclosed the mortgage in 1987, purchased the property at auction, and consolidated ownership, leading to the cancellation of the respondents’ title and the issuance of a new one in the bank’s name. The respondents filed a complaint in the Regional Trial Court (RTC), asserting they had fully paid the loan through two payments in August 1982, as evidenced by receipts, one of which bore the notation “full payment on the balance.” They sought the nullification of the foreclosure and related proceedings.
The bank contested the suit, maintaining the loan was unpaid and the foreclosure was valid. It argued the respondents’ payments were for separate obligations owed to other entities owned by the bank’s president. The RTC ruled in favor of the respondents, finding their evidence of full payment credible. It noted the significant lapse of time between the alleged payment in 1982 and the foreclosure in 1987, and considered the respondent wife’s limited education compared to the bank president’s sophistication. The Court of Appeals affirmed the RTC decision.

ISSUE

Whether the Supreme Court can review the factual findings of the lower courts regarding the validity of the loan payment and the foreclosure.

RULING

The Supreme Court denied the petition, affirming the lower courts’ decisions. The Court emphasized that a petition for review under Rule 45 raises only questions of law, not questions of fact. A question of law exists when the doubt concerns the correct application of law to admitted or established facts. In contrast, a question of fact exists when the doubt arises from the truth or falsehood of alleged facts, requiring an examination of the evidence’s probative value and the credibility of witnesses.
Here, the core controversy—whether the respondents fully paid their loan—is indisputably a question of fact. The trial court’s determination, based on its assessment of the evidence, including the receipts and the circumstances surrounding the transactions, was affirmed by the Court of Appeals. The Supreme Court found no compelling reason to deviate from this rule, as no significant question of law was presented. The petition essentially sought a re-evaluation of the evidence, which is beyond the scope of a Rule 45 review. Consequently, the factual findings of the lower courts, being final and conclusive, were upheld.