In Philippine law, the unauthorized use of another person’s name to incur debt involves a collision of civil liability, criminal responsibility, and the principle of equity. When a person (the "impostor") represents themselves as another (the "victim") to secure a loan or credit, the legal system must determine who bears the loss: the person whose name was stolen or the creditor who extended the funds.
1. The General Rule: Lack of Consent
The bedrock of Philippine contract law is Article 1318 of the Civil Code, which requires three elements for a contract to exist:
- Consent
- Object Certain
- Cause or Consideration
If a debt is contracted using another person's name without their authority, the element of consent is missing. Under Article 1317, no person may bind another without being authorized by the latter or having by law a right to represent him.
Legal Consequence: A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed.
2. Civil Liability and the Doctrine of Apparent Authority
While the victim is generally not liable, there are specific exceptions where the law may hold them responsible for the debt:
Ratification
If the person whose name was used discovers the debt and begins paying it, or signs documents acknowledging the debt, they have ratified the contract. Once ratified, the debt becomes fully enforceable against them as if they had signed it originally.
Negligence and Estoppel
Under the Principle of Estoppel, if the victim's own negligence allowed the impostor to represent themselves as the victim, the victim might be barred from denying liability. For example, if a person leaves their valid IDs and signed blank documents in a public place, and a third party uses them to get a loan from a bank that exercised due diligence, the victim may be held liable for damages or the debt itself.
The "Mirror" Rule in Negotiable Instruments
Under the Negotiable Instruments Law (Section 23), when a signature is forged or made without the authority of the person whose signature it purports to be, it is "wholly inoperative." No right to enforce payment against any party thereto can be acquired through such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.
3. Criminal Liability of the Impostor
Contracting debt using another’s name is not merely a civil wrong; it constitutes several felonies under the Revised Penal Code (RPC) and special laws:
- Estafa (Article 315, RPC): If the impostor used a fictitious name or falsely pretended to possess power, influence, or qualifications to defraud a creditor, they are guilty of Estafa.
- Falsification of Public/Commercial Documents (Article 172, RPC): If the impostor forged a signature on a notarized loan agreement or a commercial check, they face penalties for falsification.
- Identity Theft (R.A. 10175 - Cybercrime Prevention Act of 2012): If the debt was contracted online or through digital means using another person's identifying information, it constitutes computer-related identity theft.
- R.A. 8484 (Access Devices Regulation Act): If the impostor used another person's credit card or "access device" information to incur debt, they face stringent penalties specifically designed for credit card fraud.
4. Remedies for the Victim
If a person discovers that a debt has been contracted in their name, the following steps are typically recognized in Philippine jurisprudence:
Affidavit of Denial
The victim should execute an Affidavit of Denial and a Third-Party Claim (if properties are being levied). This sworn statement asserts that they did not participate in the transaction and that the signature therein is a forgery.
Petition for Nullity
The victim may file a civil case to declare the contract null and void or unenforceable insofar as they are concerned. This is often necessary to clear one's credit rating or to lift encumbrances on properties (such as unauthorized mortgages).
Injunction
If a creditor attempts to collect or foreclose on property based on a fraudulent debt, the victim may seek a Preliminary Injunction from the court to stay the execution while the validity of the debt is being litigated.
5. Liability of the Creditor
The Supreme Court of the Philippines often applies the "Banking Degree of Diligence" for financial institutions. If a bank or lending company failed to properly verify the identity of the borrower (e.g., failing to spot a clear discrepancy in signatures or photos), the loss typically falls on the creditor. The law protects "innocent purchasers for value" only when the owner’s negligence contributed to the fraud.
| Scenario | Primary Liable Party | Basis |
|---|---|---|
| Pure Forgery | Impostor | Lack of Consent / Art. 1317 |
| Victim Ratifies Debt | Victim | Art. 1393 (Ratification) |
| Victim's Negligence | Victim (potentially) | Equitable Estoppel |
| Bank's Failure to Verify | Creditor/Bank | Breach of Fiduciary Duty |
6. Summary of Legal Position
In the Philippine context, you cannot be held liable for a debt you did not authorize, provided you have not benefited from it or ratified it. The law views the impostor as the sole debtor and a criminal. However, the burden of proving that the signature is a forgery or that the identity was stolen rests initially with the person denying the debt, often requiring the expertise of forensic document examiners (such as those from the NBI or PNP) to prove the lack of authenticity.