G.R. No. 90270 July 24, 1992
ARMANDO V. SIERRA, petitioner, vs. HON. COURT OF APPEALS, EPIFANIA EBARLE, SOL AND ELE EBARLE, respondents.

FACTS

Petitioner Armando V. Sierra filed a complaint in the Regional Trial Court of Dumaguete City against private respondents Epifania Ebarle, Sol Ebarle, and Ele Ebarle to recover a sum of money based on a promissory note dated September 8, 1984, wherein the respondents promised to pay him P85,000.00 on or before October 8, 1984. The note was notarized. In their answers, the private respondents denied under oath the genuineness and due execution of the promissory note, alleging it was executed under duress, fear, and undue influence. They claimed the true debt was only P20,000.00, which Epifania Ebarle had borrowed, and that they were tricked into signing the note for P85,000.00 (and another for P54,550.00) upon Sierra’s assurance it was a mere formality to show his business partner and that if sued, they should not answer to be declared in default, after which a new agreement for the correct amount would be made. The trial court held the promissory note invalid and found the respondents liable only for P20,000.00. The Court of Appeals affirmed this decision.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s decision which invalidated the promissory note and limited the respondents’ liability to P20,000.00, despite the note being a notarized document and the respondents’ defenses being allegedly unbelievable.

RULING

The Supreme Court REVERSED and SET ASIDE the decision of the Court of Appeals. The Court held that the testimonies of the private respondents regarding the circumstances of the promissory note’s execution were not credible. The respondents were educated professionals (a former English professor and holders of college degrees) who fully understood the document, which was written in plain English. Their claim that they signed notes totaling P139,550.00 for an actual debt of only P20,000.00 based on the petitioner’s assurances was deemed preposterous. The Court found no evidence of duress or undue influence, as defined in Article 1337 of the Civil Code, and noted that Sol Ebarle admitted no harassment or threat was used. The promissory note, as a notarized document, carried the presumption of validity and regularity. The parol evidence presented to challenge it was not clear and convincing enough to overturn the written agreement. Consequently, the Court rendered a new judgment ordering the private respondents to pay the petitioner P85,000.00 with 12% interest from September 8, 1984, plus P15,000.00 as moral damages and P15,000.00 as attorney’s fees.