Dear PAO,

I was charged with estafa and violation of Batas Pambansa Blg. 22 (BP 22) in court. In order to escape any criminal liability, I succeeded in convincing the plaintiff of a compromise by which I signed a promissory note to settle my obligation guaranteed by a Real Estate Mortgage (REM). Accordingly, the court dismissed the complaint. Please enlighten me if I can later ask the court to cancel the REM on the grounds that the main reason I signed it was due to my fear of being threatened with imprisonment, thus, my consent was actually flawed when I signed it.

Jomel

Dear Jamel,

To answer your question, we refer you to a Supreme Court decision that squarely answers your concern. In Conjoints Binua v Ong (GR 207176, June 18, 2014), written by former associate judge Andres Reyes, the Court held:

“Article 1390, paragraph 2, of the Civil Code provides that contracts whose consent is vitiated by error, violence, intimidation, abuse or fraud are voidable or voidable. Article 1335 of the Civil Code, meanwhile, provides that “[t]There is intimidation when one of the contracting parties is compelled by the reasonable and well-founded fear of imminent and serious harm to his person or his property, or to the person or property of his spouse, his descendants or ascendants, to give consent. The same article, however, further clarifies that “[a] the threat to pursue a claim through a competent authority, if the claim is just or legal, does not vitiate consent.”

In De Leon v. Court of Appeals, the Court held that for intimidation to vitiate consent and invalidate the contract, the following conditions must be met: (1) the intimidation must be the determinative cause of the contract, or must have give consent; (2) whether the threatened act is unjust or illegal; (3) that the threat is real and serious, the obvious disproportion between the evil and the resistance that all men can offer, leading to choosing the contract as the lesser evil; and (4) it creates a reasonable and well-founded apprehension that the person from whom it emanates has the means or capacity to inflict the threat of injury.

In cases involving mortgages, a preponderance of evidence is essential to establish its invalidity, and in order to demonstrate fraud, duress or undue influence of a mortgage, clear and convincing evidence is required.

Based on the Petitioners’ own allegations, what the Respondent did was simply to inform them of the conviction of the Petitioner Edna in the criminal cases for estafa. It might have evoked a sense of fear or dread on the part of the plaintiffs, but there is certainly nothing unjust, illegal or wrong in the defendant’s act. xxx In Callanta c. National Labor Relations Commission, the Court said that the threat to sue for estafa not being an unjust act, but rather a valid and legal act to assert a claim, can in no way be considered as intimidation. As the CA correctly judged, “[i]f the judgment of conviction is the only basis for the [petitioners] by saying that their consents were flawed, that will not be enough to set aside the immovable mortgages and the subsequent foreclosure of the mortgaged properties.

Applying the above case law to your case, you cannot cancel the immovable mortgage you took out solely on the basis of your argument that your consent was vitiated. If you were found guilty of estafa, it would have been the result of a valid legal process, thus disqualifying the threat as an unjust act.

We hope we were able to answer your questions. This advice is based solely on the facts you have related and our assessment of them. Our opinion may change when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily chronicle of the public ministry. Questions for Chef Acosta can be sent to [email protected]