Notarial Diligence: The Duty to Verify Identity in Property Transactions

The Supreme Court has long reminded notaries public that their office is impressed with public interest. When a notary fails to verify the true identity of persons executing documents, especially those involving property, the consequences can be severe. In Bernardo vda. de Bernardo v. Atty. Restauro (452 Phil. 745 [2003]), the Court suspended a notary public for six months for failing to exercise utmost diligence in ascertaining the identities of parties to a Special Power of Attorney — even though the notary acted in good faith.

The Facts of the Case

Complainant Felicidad Vda. de Bernardo and Marcelino G. Soriano were co-owners of a parcel of land in Davao City covered by TCT No. T-39100. On July 19, 1990, respondent Atty. Jose R. Restauro prepared and notarized a Special Power of Attorney (SPA) making it appear that Felicidad, her deceased husband Alberto Bernardo, and Hildegarda Mejia appointed Marcelino G. Soriano, Jr. as attorney-in-fact to sell the property.

The problem: Alberto Bernardo had died on January 30, 1980 — more than ten years before the SPA was supposedly executed. The complainant alleged that she and her late husband never appeared before the notary. The persons who presented themselves were impostors who used Community Tax Certificates bearing the names of the real owners.

The Issue

The central question was whether the notary public could be held administratively liable for notarizing a document executed by impostors, particularly when he claimed he relied on their identification papers and representations.

The Ruling

The Supreme Court held that while the notary was not a party to the fraud, he still failed in his duty. The Court emphasized that a notary public's principal function is to authenticate documents. When a notary certifies the due execution and delivery of a document, that document is given the force of evidence and is entitled to full faith and credit upon its face. Courts, administrative agencies, and the public must be able to rely on notarial acknowledgments.

The Court agreed with the Integrated Bar of the Philippines that the respondent should have exercised utmost diligence in ascertaining the true identity of the persons executing the SPA, considering that it authorized the sale of the complainant's pro indiviso half share of the property. The notary's failure to do so warranted sanction.

However, the Court found that disbarment or indefinite suspension was not warranted given the absence of evidence of fraud on the notary's part. Instead, the Court suspended Atty. Restauro as notary public for six months and warned that similar incidents in the future would be dealt with more severely.

The Standard of Care for Notaries

The decision clarifies the standard: a notary public is duty-bound to require the person executing a document to be personally present and to acknowledge that the document is their act and deed. The notary must require the party to produce identification papers. However, the Court cautioned that this does not diminish the notary's responsibility to exercise due diligence in ascertaining true identity — especially in documents involving the disposition of property.

Practical Takeaways

• Verify identity rigorously. A notary must go beyond mere presentation of identification papers, particularly when the document involves property rights or substantial interests.
• Be extra careful with Special Powers of Attorney. An SPA authorizing the sale of real property carries significant consequences. The notary must exert utmost efforts to confirm the identities of the parties.
• Good faith is not a complete defense. A notary who acts in good faith but fails to exercise due diligence can still be administratively sanctioned.
• Notarial documents carry evidentiary weight. Because courts rely on notarial acknowledgments, a notary's carelessness can cause serious harm to innocent parties.
• Expect severe penalties. The Court warned that future cases of notarial negligence in property transactions will be dealt with more severely.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.