Spouses Nilo Ramos v. Raul Obispo

Summary

Spouses Ramos sued to annul a Real Estate Mortgage, claiming their friend Obispo deceived them into signing a blank form for a P250,000 loan, but he actually mortgaged their property for P1,159,096 to secure his own debt with Far East Bank. The RTC sided with the spouses, finding fraud and voiding the mortgage. However, the Court of Appeals reversed, ruling they were accommodation mortgagors under Civil Code Article 2085. The Supreme Court affirmed, finding insufficient evidence of fraud. The Court noted suspicious circumstances: the spouses received money from Obispo (not the bank), never dealt directly with the bank during 15 months of payments, and failed to produce supporting documents. The Court concluded the mortgage was valid and the spouses' lengthy delay in challenging it constituted estoppel, emphasizing that clear and convincing evidence is required to prove fraud in mortgage transactions.