Debt collection

I have a friend who refuses to pay his debt because he claims that the written contract we signed is not valid because it wasn’t notarized. I am a little worried because this is true. Help me, attorney.

Theresa Dear Theresa,

You can still collect from your friend even if the written contract was not notarized. The contract is valid as long as its requisites are present. The following provisions of the New Civil Code of the Philippines find application to your legal concern:

“Article 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Article 1318. There is no contract unless the following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established.”

Correlative thereto, Article 1306 of the said law also states that “the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy.”

Thus, the written contract between you and Shirley remains to be valid as long as the same is not contrary to law, morals, good customs, public order or public policy.

To enlighten you further regarding notarization, please be guided by the decision of the court in the case of OMB-C-C-13-0104 Atty. Maranan vs Domagoso vs Atty. Maranan, (AC 12877, 7 December 2020), where the Supreme Court, through Associate Justice Estela Perlas-Bernabe, stated that:

“The act of notarization is not an ordinary routine but is imbued with substantive public interest. A notary public is empowered to perform a variety of notarial acts, the most common of which are the acknowledgment and affirmation of documents or instruments. In the performance of these notarial acts, the notary public must be mindful of the significance of the notarial seal affixed on documents. The notarial seal converts a document from a private to a public instrument, after which it may be presented as evidence without the need for proof of its genuineness and due execution. A notarized document is entitled to full faith and credit upon its face. Thus, a notary public should observe utmost care in performing his duties to preserve public confidence in the integrity of notarized documents.”

Applying the above-cited decision in your situation, the written contract between you and your friend is a private instrument. Such a private instrument, when presented for notarization, will be converted into a public document. A notarized document is entitled to full faith and credit and may be presented as evidence without the need for proof of its genuineness and due execution. Thus, the statement of your friend claiming that the written agreement is not valid for the simple reason that it was not notarized has no legal basis. Notarization has nothing to do with the validity of the written agreement.

Hope this helps.