Coca-Cola Bottlers Phils. Inc. vs. Sps.

Soriano

1. Sps. Soriano are engaged in the business of selling petitioners' products. Was informed by
petitioners via Cipriano that they require security for the continuation of their business.
Was convinced to hand over 2 TCT's over their property and made to sign a document. Also
assured that it will not be notarized and is just for formality.
2. Respondents informed Petitioners that due to their advanced age, they would stop selling
their products, demanded the return of the 2 TCT's. Titles were not given back, however.
3. Respondents discovered that their land was mortgaged in favor of petitioners, and was
already foreclosed. Filed a complaint to annul the sheriff sale as they never signed a
mortgage document and also was not informed of the foreclosure sale. Also averred that
they never had any obligations or debts with petitioners as they paid their deliveries with
cash. Also, they claimed to have only signed a document in Tugegarao, never signed any
document in any other place nor met with Atty. Ilagan for the notarization of the said
document.
4. Petitioners claim that respondents are indebted to them. Their admission of signing the
document in Tugegarao indicates that the mortgage agreement was duly executed. The
non-appearance of respondents before the notary public for execution of the document is
immaterial and does not render the document void or unenforceable.
5. RTC rules in favor of respondents, REM is null and void.
6. CA affirms RTC in toto.
7. SC reverses CA and RTC. Complaint of Sps. Soriano dismissed.

Issue: W/N the REM undertaken by the respondents is valid.

Art. 1358 (1)

The following must appear in public documents:

1.) Acts and contracts which have for their object the creation, transmission, modification, or
extinguishment of real rights over immovable property or of an interest therein are
governed by Art. 1403[2], and 1405.

The respondents argue that the REM agreement is not a public document because it was notarized
by a Clerk of Court of the RTC, who is not allowed by law to notarize public documents not related
to the functions as the clerk of court.

Nonetheless, the defective notarization of the REM agreement merely strips it of its public
character and reduces it to a private document. The failure to observe such form, as provided by
Art. 1358, does not render the transaction invalid. The necessity of a public document for the said
contracts is only for the convenience; it is not essential for its validity or enforceability.
Consequently, when there is a defect in the notarization of a document, the clear and convincing
evidentiary standard originally attached to a duly-notarized document is dispensed with, and the
measure to test the validity of such document is preponderance of evidence.

In light of the foregoing, We find merit in petitioner's argument

that the due execution and genuineness of the REM deed was impliedly
admitted by the respondents when they admitted signing the same.