LAW AND ORDER
SC: Notarized documents still void if proven fraudulent
5/2/25, 10:03 AM
The Supreme Court (SC) has reaffirmed that although notarized documents are presumed authentic, this presumption is nullified once they are proven to be fraudulent.
In a decision penned by Associate Justice Amy C. Lazaro-Javier, the SC’s Second Division absolved Gil Chua (Chua) of liability for a PHP 150 million loan owed by Interbrand Logistics and Distribution, Inc. (Interbrand) to the Bank of Commerce (Bank).
The loan was secured through promissory notes and notarized Continuing Surety Agreements (CSAs) signed by several Interbrand officers. Although Chua was listed as one of the sureties, he was neither an officer, director, nor shareholder of the company.
When Interbrand defaulted, the Bank sued the company and all named sureties. Chua denied signing any CSA or appearing before a notary public, but the Bank relied on the presumption of validity attached to notarized documents.
Both the Regional Trial Court and the Court of Appeals held Chua jointly liable. However, the Supreme Court reversed their rulings, finding serious doubts surrounding the authenticity of the CSA attributed to Chua.
The SC stressed that notarization cannot validate a forged 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 Court found that Chua had convincingly refuted the document’s authenticity. He consistently denied executing the CSA or appearing before a notary. He had no ties to Interbrand, and the Bank had no signature specimen to verify the CSA. Further casting doubt, the CSA bearing his name and another were supposedly signed on the same day in distant locations but had the same witnesses. The notary public who allegedly notarized Chua’s CSA was never presented in court.
The Supreme Court ordered Interbrand and the remaining sureties to pay the Bank PHP 150 million, plus interest, penalties, and PHP 1 million in attorney’s fees.