Title
Supreme Court
Philippine Trust Co. vs. Gabinete
Case
G.R. No. 216120
Decision Date
Mar 29, 2017
Philtrust Bank sued Shangrila Realty and sureties for unpaid loans. Gabinete claimed forgery on the suretyship agreement. SC ruled forgery unproven, reinstating RTC's decision holding Gabinete liable.

Case Summary (G.R. No. 216120)

Factual Background and Loan Agreement

Philtrust granted Shangrila Realty Corporation a renewal of its bills discounting line amounting to Twenty Million Pesos (₱20,000,000.00), evidenced by a letter-advice dated May 28, 1997, signed purportedly by authorized representatives, respondents Elisa Tan and Redentor Gabinete. The loan was secured by a Continuing Suretyship Agreement dated August 20, 1997, with Shangrila as the borrower and Tan and Gabinete as sureties, jointly and severally liable for the loan's punctual payment.

The loan included four promissory notes totaling ₱20,940,000.00, with varying interest rates (21%-25% per annum) and secured by a Real Estate Mortgage covering property titles under Shangrila’s name. Additional obligations and interest accrued to over ₱60 million as of the auction date due to non-payment and subsequent demands.

Procedural History and Trial Court Decision

Upon Shangrila's default in paying the loan, Philtrust initiated extrajudicial foreclosure and later filed a complaint for collection. Respondents initially defaulted for failure to answer but were later allowed to participate in the trial after respondent Gabinete's motion to lift the order of default was granted. Gabinete denied liability, asserting forgery of his signature on the suretyship agreement and lack of authority by Tan to bind Shangrila.

Philtrust presented witnesses and documents at trial, including notarization evidencing Gabinete’s signature. Gabinete filed a motion for the National Bureau of Investigation (NBI) to examine the authenticity of his signature. The NBI document examiner testified that the questioned signature was not written by the same person as the specimen signatures submitted. Despite this, the Regional Trial Court (RTC) rendered a decision dated April 20, 2010, ruling in favor of Philtrust and ordering respondents to pay the total outstanding loan obligations, attorney’s fees equivalent to 10% of the total amount due, and costs.

Court of Appeals Decision and Grounds of Appeal

Respondent Gabinete appealed, and the Court of Appeals (CA) reversed the RTC decision in its March 25, 2014 ruling. The CA held that the RTC erred in ignoring the NBI document examiner’s findings and its own independent evaluation revealed significant differences between Gabinete’s alleged genuine shortened signature and the signature on the suretyship agreement. Consequently, the CA ruled that Gabinete’s signature was forged and that he was not liable for the loan obligations.

The CA also noted the absence of authorization documents granting Tan or Gabinete authority to incur loans on behalf of Shangrila and irregularities related to the loan security.

Philtrust’s petition for review raised the following principal grounds asserting:

  • The CA erred in crediting the flawed NBI signature analysis.
  • The CA wrongly ruled that Gabinete’s signature was forged.
  • The CA disregarded the presumption of regularity of the notarized Continuing Suretyship Agreement.
  • The CA failed to recognize that Gabinete agreed to be jointly and severally liable by signing the letter-advice dated May 28, 1997.

Supreme Court’s Analysis on Factual Findings and Handwriting Examination

The Supreme Court stressed its role is limited to questions of law under Rule 45 and that it generally defers to factual findings of lower courts when supported by substantial evidence. It cited established jurisprudence underscoring that forgery must be proven by clear, positive, and convincing evidence, as this presumption does not arise lightly.

The Court analyzed the expert testimony of the NBI document examiner and found significant procedural and evidentiary shortcomings:

  • The specimen signatures submitted did not include Gabinete’s shortened signature, which appeared on the suretyship agreement.
  • The submitted specimens showed variation and were not contemporaneous with the questioned signature dated 1997.
  • The NBI examiner admitted variations in signatures over time, yet no specimen signature from the relevant period was submitted.
  • The NBI examiner did not conclusively find forgery.

The Supreme Court further emphasized the RTC judge exercised independent judgment and conducted a detailed examination of the questioned signatures and evidence. Notably, the RTC discredited the forgery claim due to lack of proper comparison standards and the admitted use of two signature styles by Gabinete.

Presumption of Regularity and Evidentiary Weight of Notarized Document

The Supreme Court highlighted the legal principle that a notarized document carries a presumption of regularity and authenticity, which can only be overturned by clear, convincing, and more than merely preponderant evidence. The notary public testified that Gabinete signed the suretyship agreement in her presence, thereby bolstering the document’s authenticity.

The Court referenced precedent affirming that the positive testimony of attesting witnesses and notaries outweighs expert opinions when latter are inconclusive or uncorroborated. Mere denial by the signatory and expert testimony alone are insufficient to overcome the presumption.

Conclusion on Burden of Proof and Verdict

Because respo

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