G.R. No. 207176, June 18, 2014
SPOUSES VICTOR and EUNA BINUA, Petitioners, vs. LUCIA P. ONG, Respondent.

FACTS

Petitioners Spouses Victor and Edna Binua sought the declaration of nullity of real estate mortgages executed by petitioner Victor in favor of respondent Lucia P. Ong, alleging they were executed under fear, duress, and threat. The mortgages were executed on February 2, 2006, over Victor’s properties to secure a total amount of ₱7,000,000.00, following a Joint Decision dated January 10, 2006, by the RTC-Branch 2 which found Edna guilty of Estafa and ordered her to pay the respondent ₱2,285,000.00 with interest and damages. Edna subsequently filed a motion for new trial, which was granted. The RTC-Branch 2 then rendered a Decision on February 24, 2006, ruling that a promissory note dated March 4, 1997, novated the original agreement into a purely civil obligation, and ordered Edna to pay the respondent actual damages with interest. Edna failed to settle the obligation, leading the respondent to foreclose the mortgaged properties. The petitioners filed a complaint for nullity of the mortgage contracts, which was dismissed by the RTC-Branch 5, and the Court of Appeals affirmed the dismissal.

ISSUE

Whether the real estate mortgage contracts executed by petitioner Victor are null and void due to being executed under fear, duress, and threat, thereby vitiating consent.

RULING

The Supreme Court DENIED the petition and upheld the validity of the mortgage contracts. The Court ruled that the petitioners failed to prove that the mortgages were executed under the kind of intimidation that vitiates consent under Article 1335 of the Civil Code. The fear alleged by the petitioners stemmed from the threat of enforcing a just and legal claim—specifically, the respondent’s threat to enforce the criminal conviction against Edna unless the obligation was secured by mortgage. Article 1335 explicitly states that “a threat to enforce one’s claim through competent authority, if the claim is just or legal, does not vitiate consent.” The Court found that the respondent’s claim was just and legal, as ultimately recognized in the final and executory RTC-Branch 2 Decision dated February 24, 2006, which established Edna’s civil liability. Furthermore, the Court emphasized that a petition for review under Rule 45 raises only questions of law, and the factual findings of the lower courts, supported by substantial evidence, are conclusive. The petitioners’ arguments, including those regarding the interest rate, were deemed unmeritorious as they essentially sought a re-evaluation of facts and challenged the immutability of a final judgment.