MANILA, Philippines — Even though notarized documents are presumed authentic, they will be voided if proven to be fake or forged, according to the Supreme Court (SC).
In a ruling penned by Associate Justice Amy Lazaro-Javier, the SC’s Second Division said notarization “does not cure a forged or fabricated document.”
The case arose after a certain Gil Chua was implicated in his company’s Interbrand Logistics and Distribution for an unpaid P150-million loan from the Bank of Commerce.
The loan was secured by promissory notes and notarized Continuing Surety Agreements (CSAs) signed by several of Interbrand’s officers.
Chua was listed as one of the sureties, but unlike the other signatories, he was not an officer, director or shareholder of the company.
When the firm failed to pay the loans, the bank sued the company and all the sureties.
Chua denied any involvement, saying he never signed a CSA nor appeared before a notary public. The bank, however, argued that the CSA, as a notarized document, is presumed valid.
Both the Regional Trial Court and the Court of Appeals held Chua and the other sureties liable.
However, the SC reversed the rulings, finding that the CSA was questionable and Chua was not bound by it.
“(A)lthough the notarization of the subject CSA carries with it the presumption of regularity, it is not the intention nor the function of the notary public to validate and make it binding when such CSA, in the first place, was never intended to have any binding legal effect upon Chua,” the SC ruled.
The high tribunal also found that Chua successfully challenged the validity of the CSA, as he consistently denied signing the document or appearing before a notary. He also argued that he held no position or interest in the firm, and the bank could not verify his signature.
Additionally, his CSA and another were allegedly signed on the same day in far-apart locations but had identical witnesses – raising doubts about their authenticity.
The notary public who supposedly notarized the CSA was also never presented in court, the SC noted.
The high court cleared Chua of liability for the loan and ordered the firm and the remaining sureties to pay the bank P150 million plus interest and penalties, and P1 million in attorney’s fees.