The Importance of Due Diligence in Notarization to Prevent Fraudulent Property Transfers

Manuel R. Leonor v. Attys. Dickson C. Ayon-Ayon and Eulogio C. Mananquil, Jr., 885 Phil. 32 (2020)

Imagine waking up to find that your property, your home, has been sold without your knowledge or consent. This nightmare became a reality for Manuel Leonor, who discovered that his land had been fraudulently transferred to another party. The case of Manuel R. Leonor v. Attys. Dickson C. Ayon-Ayon and Eulogio C. Mananquil, Jr. sheds light on the critical role of notaries in safeguarding property rights through meticulous identity verification. This case underscores the necessity of due diligence in notarization processes to prevent such devastating incidents of fraud.

At the heart of the case, Manuel Leonor accused two attorneys of notarizing documents that facilitated the fraudulent sale of his property. The central legal question revolved around whether the notaries fulfilled their obligations under the 2004 Rules on Notarial Practice, particularly in verifying the identities of those who appeared before them.

Legal Context: Understanding Notarial Duties and Identity Verification

Notaries public play a vital role in the legal system, acting as impartial witnesses to the signing of documents. Their primary duty is to ensure the authenticity of the signatures and the voluntary nature of the document execution. The 2004 Rules on Notarial Practice, specifically Section 1, Rule II, defines “acknowledgment” as an act where an individual appears in person before the notary public and presents a complete instrument or document. This rule emphasizes the notary’s responsibility to verify the identity of the person through competent evidence, such as government-issued identification bearing a photograph and signature.

Terms like “competent evidence of identity” might be unfamiliar to many. In simple terms, it refers to documents that reliably confirm a person’s identity. For instance, a driver’s license or a passport serves as competent evidence because they are issued by official agencies and contain both a photo and a signature.

The importance of these rules cannot be overstated. Consider a scenario where a person attempts to sell a property using forged documents. A notary’s thorough verification process could prevent such fraud, protecting the rightful owner’s rights. The case of Leonor highlights the real-world impact of these legal principles, as the notary’s failure to properly verify identities could have led to significant injustice.

Case Breakdown: The Journey of Manuel Leonor’s Complaint

Manuel Leonor’s ordeal began when he discovered that his property in Project 6, Quezon City had been sold to Frederick Bonamy based on a Deed of Absolute Sale notarized by Atty. Dickson C. Ayon-Ayon. Leonor, who had never intended to sell his property, filed a complaint against Atty. Ayon-Ayon and Atty. Eulogio C. Mananquil, Jr., who had allegedly notarized a related Sworn Statement.

Leonor’s wife, Teresita, was in the United States at the time of the alleged notarization, making their physical presence before the notaries impossible. This led to the complaint being filed with the Integrated Bar of the Philippines (IBP)-Commission on Bar Discipline (CBD).

Atty. Mananquil defended himself by asserting that he did not notarize the Sworn Statement and provided evidence to support his claim. Atty. Ayon-Ayon, on the other hand, argued that he had taken all necessary steps to verify the identities of those who appeared before him, including requesting identification documents.

The IBP-CBD initially recommended the revocation of Atty. Ayon-Ayon’s notarial commission and a three-month suspension from practicing law due to negligence. However, upon further review, the IBP-Board of Governors (BOG) reversed this decision, absolving Atty. Ayon-Ayon of any liability. The BOG found that Atty. Ayon-Ayon had complied with the 2004 Rules on Notarial Practice by verifying the identities of the individuals through their identification cards and the original title of the property.

Key quotes from the Supreme Court’s decision include:

“Atty. Ayon-Ayon substantially complied with the provisions of the 2004 Rules on Notarial Practice, and he observed utmost care and diligence in the performance of his duty as notary public.”

“The persons who appeared before Atty. Ayon-Ayon and claimed to be the sellers of the subject property were able to present the Deed.”

“The identification cards presented by the persons who appeared before Atty. Ayon-Ayon were sufficient for him to reasonably believe that the persons were the same persons indicated as owners in the Deed.”

The Supreme Court ultimately dismissed the complaint against both attorneys, affirming the IBP-BOG’s decision that Atty. Ayon-Ayon had acted in good faith and complied with the notarial rules.

Practical Implications: Safeguarding Property Rights Through Notarial Vigilance

The ruling in Leonor’s case has significant implications for property transactions and the role of notaries. It reinforces the importance of notaries exercising due diligence in verifying the identities of individuals appearing before them. This decision may encourage notaries to adopt more stringent verification processes to prevent similar instances of fraud.

For property owners, this case serves as a reminder to monitor their property titles closely and to act swiftly if they suspect any unauthorized transactions. Businesses involved in real estate should also ensure that their notaries are well-trained in the latest notarial practices and identity verification techniques.

Key Lessons:

• Notaries must verify the identities of individuals through competent evidence of identity, such as government-issued IDs.
• Property owners should regularly check their property titles and be vigilant against potential fraud.
• Businesses should invest in training for notaries to ensure compliance with notarial rules and prevent fraudulent transactions.

Frequently Asked Questions

What is the role of a notary public in property transactions?

A notary public verifies the identity of individuals signing documents and ensures that the signatures are authentic and the document execution is voluntary.

What is considered competent evidence of identity?

Competent evidence of identity includes government-issued identification documents, such as a driver’s license or passport, that bear the individual’s photograph and signature.

Can a notary be held liable for notarizing a fraudulent document?

Yes, a notary can be held liable if they fail to verify the identities of the individuals or if they notarize a document without the physical presence of the signatories.

What should property owners do if they suspect their property has been fraudulently transferred?

Property owners should immediately file an adverse claim with the Registry of Deeds and seek legal advice to pursue criminal and civil actions against the perpetrators.

How can businesses ensure their notaries are compliant with notarial rules?

Businesses should provide regular training on the latest notarial practices and ensure that notaries maintain detailed records of their notarizations.

ASG Law specializes in property law and notarial practice. Contact us or email hello@asglawpartners.com to schedule a consultation.