24.03_Mangahas v Brobio

G.R. No. 183852

October 20, 2010

CARMELA BROBIO MANGAHAS, Petitioner, vs. EUFROCINA A. BROBIO, Respondent. FACTS: Pacifico died and left 3 parcels of land. He was survived by his wife, Eufrocina, 4 legit and 3 illegit children. Carmela is one of the illegitimate children. The heirs executed a Deed of Extrajudicial Settlement of Estate with Waiver. In the Deed, Carmela and the other children, in consideration of their love and affection for Eufrocina and the sum of P150k waived their shares over the land in favor of Eufrocina. According to Carmela, Eufrocina promised to give her an additional amount for her share in her father’s estate. After the signing of the Deed, Carmela demanded from Eufrocina the promised additional amount, but Eufrocina refused to pay. Later, Eufrocina needed an original copy of the Deed for submission to the BIR. She didn’t have a copy anymore so she asked Carmela to countersign a copy of the Deed. Carmela refused, demanding that Eufrocina first give her the additional amount that she promised. Carmela asked for P1M, but Eufrocina begged her to lower the amount. Carmela agreed to lower it to P600k. Because Eufrocina did not have the money at that time, Eufrocina executed a promissory note. Upon maturity of the PN, Eufrocina failed and refused to pay despite several demands so Carmela filed a complaint with the RTC. Eufrocina alleged that she was practically held "hostage" by the demand of Carmela because at that time, Eufrocina was so much pressured to submit the documents to the BIR. She (Eufrocina) also claimed that the circumstances in the execution of the promissory note were obviously attended by involuntariness and the same was issued without consideration at all or for illegal consideration. The RTC ruled in favor of Carmela. The CA reversed the RTC decision because there was a complete absence of consideration in the execution of the promissory note, which made it inexistent and without any legal force and effect. The court noted that "financial assistance" was not the real reason why Eufrocina executed the promissory note, but only to secure Carmela’s signature. The CA held that the waiver of Carmela’s share in the properties may not be considered as the consideration of the promissory note, considering that Carmela signed the Deed way back in 2002 and she had already received the consideration of P150k for signing the same. The CA also found that intimidation attended the signing of the promissory note. Eufrocina needed the Deed countersigned by Carmela in order to comply with a BIR requirement so Eufrocina was forced to sign the promissory note to assure Carmela that the money promised to her would be paid. ISSUE/S:

1. W/N the CA erred in the appreciation of the facts of this case when it found that intimidation attended the execution of the promissory note subject of this case. 2. W/N the CA erred when it found that the promissory note was without consideration. (this is the more relevant issue) HELD: 1. YES 2. YES RATIO: Eufrocina insists that she was "forced" into signing the promissory note because Carmela would not sign the document required by the BIR. Being forced into a situation does not amount to vitiated consent where it is not shown that the party is deprived of free will and choice. There is undue influence when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. For undue influence to be present, the influence exerted must have so overpowered the mind of a contracting party as to destroy his free agency, making him express the will of another rather than his own. Eufrocina may have desperately needed petitioner’s signature on the Deed, but there is no showing that she was deprived of free agency when she signed the promissory note. Section 24 of the NIL provides that “A contract is presumed to be supported by cause or consideration.” The presumption that a contract has sufficient consideration cannot be overthrown by a mere assertion that it has no consideration. To overcome the presumption, the alleged lack of consideration must be shown by preponderance of evidence. The burden to prove lack of consideration rests upon whoever alleges it, which, in the present case, is Eufrocina. Eufrocina failed to prove that the promissory note was not supported by any consideration. From her testimony and her assertions in the pleadings, it is clear that the promissory note was issued for a cause or consideration, which, at the very least, was Carmela’s signature on the document. It may very well be argued that if such was the consideration, it was inadequate. Nonetheless, even if the consideration is inadequate, the contract would not be invalidated, unless there has been fraud, mistake, or undue influence. As previously stated, none of these grounds had been proven present in this case.