Sale of land on a private document is valid

Scenario one: A sells land to B in a private instrument. Scenario two: A sells land to B in a public document but the notary public is bogus. What happens now? Is the sale valid? In case of a breach, can the aggrieved party sue for damages and/or enforcement?

We always have that notion that when the sale of land is not notarized, the sale is void. And, therefore, such a document cannot be a source of right. That is because what has been embedded in our minds is the provision of the Civil Code that says that a document transmitting rights over real property from one party to another must be in a public document.

While said provision indeed exists, it does not however make the sale invalid if the instrument conveying such property is not notarized.

Here is how the Supreme Court explained this issue:

“Basic is the rule in civil law that the necessity of a public document for contracts which transmit or extinguish real rights over immovable property, as mandated in Article 1358 of the Civil Code, is only for convenience. It is not essential for its validity or enforceability.

“In other words, the failure to follow the proper form prescribed in Article 1358 of the Civil Code does not render the acts or contracts invalid. Where a contract is not in the form prescribed by law, the parties can merely compel each other to observe that form, once the contract has been perfected.

“In addition, it has been held, time and again, that a sale of a real property that is not consigned in a public instrument is, nevertheless, valid and binding among the parties. This is in accordance with the time-honored principle that even a verbal contract of sale of real estate produces legal effects between the parties.

“Contracts are obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. Following these principles, the defective notarization of the Deed of Absolute Sale dated 20 November 1990 does not affect the validity of the transaction between the Orbetas and respondents. It has no effect on the transfer of rights over the subject property from the Orbetas to respondents.

“A defective notarization will merely strip the document of its public character and reduce it to a private instrument. Consequently, when there is a defect in the notarization of a document, the clear and convincing evidentiary standard normally attached to a duly notarized document is dispensed with, and the measure to test the validity of such document is the preponderance of evidence.

“The document with a defective notarization shall be treated as a private document and can be examined under the parameters of Section 20, Rule 132 of the Rules of Court which provides that, ‘Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either: (a) by anyone who saw the document executed or written; or (b) by evidence of the genuineness of the signature or handwriting of the maker...’

“In the instant case, Ricardo positively testified that he personally went to the Orbetas and that he was actually present when the Orbetas signed the contract. He likewise testified that while the deed of sale was not signed by the Orbetas before the notary public, they appeared before the latter and affirmed that their signatures therein were authentic. Ricardo had personal knowledge of the fact that the Orbetas signed the questioned deed of sale.

“Beyond a doubt, the respondents proved, by preponderant evidence, that they are the rightful owners of the subject property. Moreover, the non-appearance of the parties before the notary public who notarized the document neither nullified nor rendered the parties’ transaction void ab initio. The failure of the Orbetas to appear before the notary public when they signed the questioned deed of sale does not nullify the parties’ transaction.

“Based on the foregoing, the Court finds that the CA did not err in ruling that the DoAS dated 20 November 1990 is valid and binding.”

The facts and redacted decision are from S.C. G.R. 222530 (16 October 2019).