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.

Negotiations for a Treaty Dealing with Biopiracy Resumes in Canada

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Treaty On Biopiracy in Canada
8th ABS Working Group Meeting
Montreal, Canada
10 November 2009

Day 1 Update
Negotiations for a Treaty Dealing with Biopiracy Resumes in Canada
By Atty. Elpidio Peria

MONTREAL, Canada – 9 October 2009 – Member-countries of the United Nations Convention on Biological Diversity (CBD) gathered again in Montreal, Canada today to resume its negotiations on the International Regime on Access and Benefit-Sharing, an instrument that will stop biopiracy, in a meeting that its officials say is the most important in its history.

“This is an extraordinary meeting; it is not just a meeting, it is the meeting where postponing action is not an option,” said Jochen Flasbarth of Germany, the President of the Conference of the Parties.
Germany is the current President of the Conference of the Parties, the highest decision-making body of the UN treaty, by virtue of its hosting of the Conference in Germany in May 2008.
Countries attending the meeting did not waste time in the morning putting forward new texts that will be subjected to negotiations later in the week, on topics ranging from the nature of the instrument that will stop biopiracy, traditional knowledge of indigenous and local communities and capacity-building.

There was even time left in the afternoon to further consider texts on compliance, or the rules on how to make countries follow or implement their obligations under the instrument.

Later in the interventions made by countries, the African Group stated its unhappiness as one African country, Zambia, has been denied a visa to Canada to attend the meeting of the CBD body.
Canadian officials said however, informally, that they have nothing to do with the changes in the visa processing procedures in developing countries.

The African Group sentiment was supported by GRULAC, Argentina and Mexico.

The Philippines also expressed the same experience, saying it has been “victimized” by the change in procedures in the Canadian Embassy though it hoped it will not ever happen again in succeeding meetings of the CBD.

In this first day of the meeting, countries who have signed on to the CBD merely reiterated old positions, though taking into account of some recent developments.

The positions on what kind of instrument will be approved mainly delved on whether the instrument should become a legally binding instrument or will just be a set of voluntary guidelines.

This issue on the nature of the legal instrument is important as this will determine if it can stop biopiracy from happening at the national and international level.

Namibia speaking for the African Group said that the International Regime should be a comprehensive legally binding instrument, containing a set of principles, norms and rules and compliance and enforcement measures.
Mexico, speaking for the GRULAC, the regional grouping of Latin American countries, stated their consensus position that it wants a binding instrument.

Norway's position is that the International Regime is not limited to a single, legally binding instrument,and it should be a Protocol to the Convention on Biological Diversity developed from the Bonn Guidelines, with binding and non-legally binding provisions and compliance being the core legally binding provision and some institutional provisions.

Japan said that it is not in a position to accept a legally binding position unconditionally though it is open to have some binding provisions on awareness-raising, and it is their view that the nature of the instrument can be determined after discussing the various elements of the International Regime.

Thailand supports the development of the International Regime, especially consisting of one or more legally binding and non-legally binding instruments.

New Zealand said that any legally binding element of the International Regime should make legal sense and is workable, which means it is able to be implemented. Its view is that if the instrument will have to be legally binding, what would that legally binding provision be in New Zealand and how shall it be implemented. A legally binding instrument should be implementable nationally and internationally.

Switzerland is for a legally binding instrument, but said that this instrument should be flexible so as to contain norms, rules and procedures that are legally and non-legally binding. It is also important that this instrument should be implemented with other ABS agreements and be flexible with other specialized instruments that are in harmony with the CBD.

Brazil, for the Like-Minded Megadiverse Group of Countries, or LMMC, wants the instrument to be a single legally binding instrument, a Protocol to the CBD.

The EC said it follows the form follows function principle in the negotiations, and that for its part, the International Regime should include international access standards that could constitute a mix of legally and non-legally binding measures or a mix of the two.

Cuba, Indonesia, Bangladesh and Argentina spoke, in favor of a single, legally binding instrument.
Canada said that the nature of the instrument should not be considered in a vacuum and mindful of the over-arching instruction of the Conference of the Parties to the CBD, the International Regime can either have (a) binding, (b) non-legally binding, © or a mix of binding and non-legally binding outcomes.
Costa Rica spoke about its experience in applying ABS measures and said that the International Regime should be a legally-binding instrument.

Serbia said that the International Regime could either be a legally binding instrument or a combination of legally and non-legally instrument.

Jordan is for a binding instrument that has a number of measures with it, particularly compliance and implementation.

Tunisia, Liberia and Namibia supported Namibia for a binding one single instrument.

The International Indigenous Forum on Biodiversity said that the International Regime must have legally binding elements protecting the traditional knowledge and genetic resources of indigenous peoples in accordance with relevant international instruments.

Francois Meienberg, speaking for the civil society groups in the CBD said that the Bonn Guidelines have failed to protect the rights of countries and thus the instrument needs to be a protocol to the CBD and that this protocol should recognize the rights of indigenous peoples.

In the afternoon, the interventions on traditional knowledge and capacity-building were made in general, upon the instructions of the two Co-Chairs, Tim Hodges of Canada and Fernando Casas of Colombia, as the full outline of these proposals were submitted directly to the Secretariat, to be consolidated in one text to be considered the following day.

There is a three-step process agreed upon in these negotiations. The first step involves the presentation or reading of regional and country positions. The second step involves the actual negotiation where these texts are compressed, merged, deleted or bracketed taking into account other similar elements in the emerging text.
The third step involves a further negotiation of what should come out as a semi-final text that will be consolidated in the next meeting of the ABS Working Group.

The next meeting of this Working Group will be in Colombia in March 2009 but there are ideas being floated on what may be post-ABS 8 activities or meetings, mainly to firm up the text that will be finally considered in that third and final meeting.

This international instrument to control biopiracy is expected to be adopted in the 10th meeting of the Conference of the Parties to the CBD in Nagoya, Japan in October 2010.

There are however discussions in the sidelines among developing countries in Asia-Pacific that they might come up with a like-minded group of countries that will join other countries, especially the LMMC, in demanding a legally-binding instrument.

How that will turn out eventually will be determined in the coming days, and it is too early to say what will happen, as this is just the first day of a seven-day negotiating session.
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