Precision Brokerage v. Claudine L. Darza

Summary

Precision Brokerage sued to nullify a Real Estate Mortgage executed by its president Jovenal Toring in favor of lender Claudine Darza, claiming the mortgage was fictitious due to alleged document irregularities. The corporations had borrowed P22 million from Darza to pay off a previous bank loan, using company property as collateral. When they defaulted, Precision challenged the mortgage's validity. The RTC initially ruled in favor of Precision, finding the mortgage void due to alleged superimpositions and incorrect personal details. However, the Court of Appeals reversed this decision, and the Supreme Court affirmed the reversal. The Supreme Court held that the mortgage was valid, emphasizing that Precision had admitted to receiving the loan and defaulting, that Toring was an experienced business executive who understood the documents he signed, and that the corporations had even issued a board resolution ratifying the mortgage. The case establishes that claims of document irregularity must be supported by clear and convincing evidence to overcome the presumption of regularity accorded to notarized documents.