The Supreme Court (SC) has reiterated that while notarized documents are presumed authentic, they will be invalidated if proven to be fake.
In a Decision written by Associate Justice Amy C. Lazaro-Javier, the SC’s Second Division cleared Gil Chua of liability for Interbrand Logistics and Distribution, Inc.’s (Interbrand) unpaid P150 million loan from the Bank of Commerce (Bank).
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 Interbrand 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 insisted that the CSA, as a notarized document, is presumed valid.
Both the Regional Trial Court and the Court of Appeals held Chua liable, together with the other sureties. However, the SC reversed these rulings, finding that the CSA was questionable and Chua was not bound by it.
The SC emphasized that notarization does not cure a forged or fabricated document:
“[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 found that Chua successfully challenged the validity of the CSA. He consistently denied signing the document or appearing before a notary. He held no position or interest in Interbrand, and the Bank had no specimen of his signature to verify the CSA. 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 directed Interbrand and the remaining sureties to pay the Bank P150 million plus interest and penalties, and P1 million in attorney’s fees.
