Saturday, September 28, 2013

A notarized document can be questioned as to validity of its execution or contents

Case title:Spouses Lehner and Ludy Martires v. Menelia Chua,” G.R. NO. 174240, March 20, 2013


Validity of a notarized document

Equitable mortgage

Background facts

[1] Menelia Chua and her mother owned 24 memorial lots located at the Holy Cross Memorial Park in Barangay Bagbag, Novaliches, Quezon City. Menelia borrowed Php 150,000.00 from spouses Lehner and Ludy Martires. Menelia promised to pay a monthly interest of 8% and an additional 10% monthly interest in case of default. The loan was secured by a real estate mortgage over the memorial lots.

[2] Menelia failed to fully settle her obligation. Subsequently, without foreclosing the mortgage, the Martires couple transferred ownership of the lots in their name through a Deed of Transfer.

[3] Menelia filed with the Regional Trial Court (RTC) of Quezon City a complaint against the Martires couple, Manila Memorial Park Inc. (owner of the Holy Cross Memorial Park), and the Register of Deeds of Quezon City. She asked the RTC to:

  • annul the contract of mortgage between her and the Martires couple on the ground that the interest rates imposed were unjust and exorbitant;

  • determine her liability under the law; and

  • reconvey the disputed property to her.

Menelia later on alleged that the Deed of Transfer and Affidavit of Warranty were forged and asked that they be annulled.

[4] The RTC dismissed Menelia’s complaint for lack of merit and granted the counterclaims of the Martires couple.

[5] The Court of Appeals (CA) reversed the RTC decision. The CA ruled, among other things, that the Deed of Transfer was not duly notarized because there was no convincing proof that Menelia appeared before the notary public.

Supreme Court ruling: notarization does not guarantee the validity of a document’s contents

[1] The CA has pointed out the dubious circumstances and irregularities in the alleged notarization of the Deed of Transfer. Among others:

  • the Administrative Officer of the Notarial Section of the Makati City RTC certified that their office could not find a copy of the Deed of Transfer in their files;

  • the Deed did not state the date of execution and lacked the marital consent of Menelia's husband;

  • the notary public whose certification was presented by the Martires couple did not testify and therefore could not be cross-examined as to the truthfulness of his certification;

  • the certification of the Clerk of Court of the Notarial Section of the Makati City RTC was not based on documents existing in their files, but was simply based on the certification issued by the notary public.

[2] A notarized document enjoys the presumption of regularity. But notarization does not guarantee the validity of the document’s contents. The presumption is not absolute and may be rebutted by clear and convincing evidence to the contrary.