CATALINA PONS CALDERON AS GUARDIAN OF MINORS: ANTONIO P. CALDERON AND MILAGROS P. CALDERON, ET AL., PLAINTIFFS-APPELLANTS, VS. LEONARDO MEDINA, DEFENDANT-APPELLEE.

This is an appeal from the
decision of the Court of First Instance of Rizal in
Civil Case No. 4654, dismissing appellants’ complaint against appellee. The appeal, originally taken to the Court of
Appeals, was certified to this Court for review, there being no dispute as to
the facts and the issues raised being questions of law.

Appellants filed the complaint to
seek the cancellation of a mortgage which they had executed in favor of the
appellee. They alleged that in November, 1956, they
entered into an agreement with the appellee whereby
the latter would finance the construction of an apartment house costing not more
than P15,000 on appellants’ lot in
Manila. To secure the payment of appellee’s expenses in building the house, a mortgage on the
lot was to be executed in his favor. According to appellants, they executed the
mortgage but the appellee failed to carry out his
obligation.

For his part, appellee denied the existence of any oral agreement to build
a house for the appellants and averred that the mortgage was made to secure the
sum of P15,000, which he loaned to appellants, and the
further sum of P1,035.86, which he paid to the Luzon Surety Co. to discharge a
prior lien on the mortgaged premises.

As special defenses, appellee contended that the supposed oral agreement to build
a house was unenforceable; that appellants’ action was barred by prior judgment;
and that appellants were estopped from questioning the
validity of the mortgage after they themselves had asked for its approval by the
guardianship court in Special Proceedings No. 647. Appellee filed a counter claim for P1,000 as attorney’s fees.

Appellee’s special defenses are based on
the fact that appellant Catalina Pons Calderon, as
guardian of the other appellants, who are her children, had petitioned the
guardianship court in Special Proceedings No. 647 for authority to mortgage her
ward’s property in order to secure a loan with which to build an apartment and
thereby make the property productive. In its order of December 15,
1956, the
guardianship court granted the authority requested and approved the mortgage.
This order is the basis of appellee’s defense of res judicata and
estoppel.

At the hearing, appellant
Catalina Pons Calderon testified but when asked
questions tending to prove that appellants never received the amount of P15,000 contrary to the recitals of the mortgage instrument and
that appellee had agreed to build an apartment for
appellants, appellee’s counsel objected on the ground
that the deed of mortgage was the best evidence and that appellant was estopped from denying the validity of the mortgage. The
trial court sustained the objection, whereupon appellants’ counsel made an offer
of proof and rested his case. Appellee did not present
evidence; instead he asked for the dismissal of the case. The lower court
dismissed the case stating:

“The due execution and
genuineness of the deed of mortgage is not in dispute. The only question it
appears is the issue of whether or not the guardian received the consideration
of P15,000.00 appearing in said deed. But even this
question falls into insignificance because of the indubitable fact that said
deed of mortgage has been regular. This is admitted by the parties.
Consequently, the certificate of the Notary Public who ratified the document in
question cannot also be questioned. And said Notary expressly stated that the
plaintiffs Catalina Pons Calderon, as guardian of the
minors Antonio P. Calderon and Milagros P. Calderon, and Luz Calderon and Elvira
P. Calderon, acknowledged to him that the deed in question was their free and
voluntary act and deed. Moreover the plaintiffs expressly acknowledged in the
same document having received the sum of P15,000.00 in express words ‘receipt of
which is hereby acknowledged.’ The certificate of the Notary has not been
questioned. The plaintiffs can not now be heard to complaint that they have not
received the consideration of the mortgage, and to allow it would be to
overthrow the very admissions of regularity, and consequently, the sanctity of
the said document. It results that the oral agreement alleged by the plaintiffs
cannot be allowed to differ the written agreement
appearing in the real estate mortgage by means of testimonial evidence. Finally,
the stamp of approval by the guardianship court on the document in question can
lend no other meaning than the transaction was for a mortgage and no other, the
consideration of which was duly received by the
plaintiffs-mortgagors.”

Appellants’ assignment of error
centers on the refusal of the trial court to permit evidence on the supposed
failure of appellee to pay the consideration of the
mortgage and appellee’s alleged undertaking to finance
the construction of an apartment on appellants’ land. Thus they contend that
under the ruling of Maulini v. Serrano, 28 Phil. 642
(1914), parol evidence is admissible to show failure
of consideration.

On the other
hand, appellee argues that the issue is not whether
appellants are estopped by the recitals of the
mortgage instrument, but whether they are precluded by their conduct in seeking
approval by the court of the mortgage deed in which they acknowledged receipt of
P15,000. In short, instead of instead of estoppel by deed, the claim is that there is estoppel in pais.^[1]

We think the appellee is right. By asking the guardianship court So
approve the mortgage, appellants must necessarily be deemed to have represented
to the court that the mortgage was what it purported to be and they just not now
be heard to say the contrary. It is true that in their motion, appellants merely
stated that “Mr. Leonardo Medina [appellee herein] had
agreed to advance the loan,” but it must be remembered that at the time the
motion was prepared the mortgage contract had not yet been executed. Thus the
motion appears to have been prepared on December 5,
1956
while the deed of mortgage, in which receipt of P15,000
is expressly acknowledged, on December 8,
1956 and
both motion and mortgage were submitted to the court on December
12.

It is true that in Maulini v. Serrano, supra, it was held that
parol evidence is admissible to prove failure of
consideration but even if Catalina Pons Calderon had
been allowed to testify and deny receipt of P15,000,
her testimony could not prevail over the recitals of the mortgage instrument.
That instrument was ratified by the appellants, including Catalina Pons Calderon, before a notary public. As stated in one
case, “if the biased and interested testimony of a grantor (witness Catalina
Pons Calderon in this case) and the vague and
uncertain testimony of his son are deemed sufficient to overcome a public
instrument drawn up with all the formalities prescribed by the law then there
will have been established a very dangerous doctrine which would throw wide open
the doors to fraud.” (El Hogar Filipino v. Olviga, 60 Phil. 17, 21 [1934]; MacDonald v. National City
Bank, 99 Phil. 156, 162-163 [1956]) Nor would a mere denial of receipt suffice
to contradict what appears in a clear and unequivocal manner in a public
instrument. It was incumbent on appellants to prove their claim with “clear,
convincing and more than merely preponderant evidence” (Mendozona v. Philippine Sugar Estates Dev. Co., 41 Phil. 475
[1921]), which a mere denial cannot do.

WHEREFORE, the decision appealed from is
affirmed, without pronouncement as to costs.

Concepcion, C. J., Dizon, Makalintal, Bengzon, J. P., Zaldivar, Sanchez and Ruiz Castro, JJ., concur.

Reyes, J. B. L., J.,
concurs in the
result.

^[1] For a classification of
estoppels into (1) estoppel by deed, (2) estoppel by record and (3) estoppel in pais, see Borlaza v. Ramos, 89 Phil. 464 (1951).