Is it required that an agreement be notarized involving real property in order that it can be enforced?

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Notarization of agreements involving real property

Is it required that an agreement be notarized involving real property in order that it can be enforced? Stated otherwise, can you enforced a private agreement involving a piece of land?

The above issues were settled by the Supreme Court in its latest Decision (as of this writing) in ESTATE OF PEDRO C. GONZALES and HEIRS OF PEDRO C. GONZALES vs. THE HEIRS OF MARCOS PEREZ, G.R. No. 169681 promulgated last November 5, 2009.

In the above-cited case, a deed of sale was executed covering a real property but the same was not notarized. When the parties to the said deed of sale both died, the heirs representing the vendee sought for the reconveyance of the sold property but the heirs representing the vendor refused.

The trial court ruled that since the deed of sale was not notarized, the same is considered void and of no effect. The said ruling was reversed by the Court of Appeals which ruled that a sale of real property, though not consigned in a public instrument, is nevertheless valid and binding among the parties and that the form required in Article 1358 of the Civil Code is not essential to the validity or enforceability of the transactions but only for convenience.

The issue of whether an agreement which is not notarized covering a real property is valid or not is a common talk especially among real estate practitioners who consider the transaction as null and void, as what the trial court did in this case.

In resolving the issue, the Supreme Court agreed with the Court of Appeals. The SC said that Article 1358 of the Civil Code enumerates the acts and contracts that should be embodied in a public document, to wit:
Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by Articles 1403, No. 2 and 1405;
(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains;
(3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; and
(4) The cession of actions or rights proceeding from an act appearing in a public document.
All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles 1403, No. 2 and 1405.

On the other hand, the SC said that pertinent portions of Article 1403 of the Civil Code provide as follows:
Art. 1403. The following contracts are unenforceable, unless they are ratified:
x x x x
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
x x x x
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein; x x x[27]
Under Article 1403(2), the sale of real property should be in writing and subscribed by the party charged for it to be enforceable. In the present case, the deed of sale is in writing and subscribed by the vendor and his wife; hence, it is enforceable under the Statute of Frauds.

However, not having been subscribed and sworn to before a notary public, the deed of sale is not a public document and, therefore, does not comply with Article 1358 of the Civil Code.
Nonetheless, it is a settled rule that the failure to observe the proper form prescribed by Article 1358 does not render the acts or contracts enumerated therein invalid. It has been uniformly held that the form required under the said Article is not essential to the validity or enforceability of the transaction, but merely for convenience.

The SC said that a sale of real property, though not consigned in a public instrument or formal writing, is, nevertheless, valid and binding among the parties, for the time-honored rule is that even a verbal contract of sale of real estate produces legal effects between the parties. Stated differently, although a conveyance of land is not made in a public document, it does not affect the validity of such conveyance. Article 1358 does not require the accomplishment of the acts or contracts in a public instrument in order to validate the act or contract but only to insure its efficacy.

LEGAL HEIRS

LEGAL HEIRS

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By Beverly Caboteja

As is implicit in said Section 119 of the Public Land act, where the vendor is still living, he alone has the right of redemption, but if he had died, his widow and his legal heirs have that right.

As stated in Section 119: “Every conveyance of land acquired under the free patent or homestead provisions of the Public Land Act, when proper, shall be subject to repurchase by the applicant, his widow or legal heirs, within a period of five (5) years from the date of conveyance.”

It has been noted that the enumeration in the law as to who can effect the repurchase within a period of five years from the date of conveyance is not an exclusionary rule. It merely includes the persons qualified under the law to make repurchase, without regard to order of preference. Hence, the son and lawful heir of the homesteader can exercise the right of repurchase while the latter is still living, and a deed of assignment to that effect is valid.

Further, the term legal heir, as explained in the case of Medarcos v. Merrced (174 SCRA 599), is used in Section 119 in a generic sense. It is broad enough to cover any person who is called to the succession either by provision of a will or by operation of law. Thus, legal heirs, according to the Court, include both testate and intestate heirs depending upon whether succession is by the will of the testator or by law. Legal heirs are not necessarily compulsory heirs but they may be if the law so prescribes or reserves it for them. Nonetheless, well-settled is the rule that only the vendor has the right to redemption.

In the aforementioned case, as the decedents had left no will, the law supplanted its intention. Since the deceased couple were childless and are survived only by their nephew and nieces, the latter succeeded to the entire estate of the deceased.

Article 975 of the Civil Code states that “when children of one or more brothers or sisters of the deceased survive, they shall inherit from the latter by representation, if they survive with their uncles or aunts. But if they alone survive, they shall inherit in equal portions.”

Verily, the Court held that petitioners are legal heirs. Having been decreed under the rules on intestacy as entitled to succeed the estate of the Catain spouses due to the absence of compulsory heirs, they now step into the shoes of the decedents. They should be considered as among the legal heirs contemplated by Section 119 as entitled to redeem the property.

In sum, in any of the 3, the applicant, his widow or his legal heirs may avail of the right to repurchase but take note, that it is only the vendor who has the right of redemption.