Which contracts must appear in a public document?

What "public document" actually means

A public document is one acknowledged before a notary public, or issued by a public officer in the course of official duty. In everyday practice this means a notarised deed. It is not the same thing as a registered document — registration is a separate step that happens afterwards, usually with the Registry of Deeds.

Article 1358 of the Civil Code lists what must take this form. First and most important are acts and contracts concerning real rights over immovable property: creating them, transferring them, modifying them or extinguishing them. Deeds affecting land, buildings, easements, usufructs and mortgages sit here.

The other three groups

Second, the cession, repudiation or renunciation of hereditary rights, or of rights in the conjugal partnership of gains. An heir waiving his inheritance in favour of his siblings is squarely covered — a handwritten waiver among relatives is exactly the document that later falls apart.

Third, the power to administer property, and any other power whose object is an act that appears or should appear in a public document, or that would prejudice a third person. This is why a special power of attorney to sell or mortgage land is notarised. Fourth, the cession of actions or rights proceeding from an act already appearing in a public document.

The consequence is weaker than most people fear

This is the part that surprises readers. Failing to put a covered contract in a public document does not automatically make it void. As a rule, a contract is binding once the essential requisites are present, whatever its form. What Article 1358 gives is the right of either party to compel the other to execute the proper document, so the agreement can be registered and made effective against third persons.

The real cost of ignoring it is practical, not theoretical. Without a notarised deed, the Registry of Deeds will not register the transfer, the tax declaration will not move, and a buyer in good faith who registers first can defeat you.

Where form does decide the case

Article 1358 itself points elsewhere for two important situations: sales of real property or an interest in it, and sales of goods, chattels or things in action. Those are governed by Article 1403 and the Statute of Frauds, where the rule bites harder — an agreement for the sale of real property or an interest in it, or for a lease longer than one year, is unenforceable by action unless it is in writing and signed by the party charged.

The last paragraph of the article also requires all other contracts above five hundred pesos to be in writing, even privately. That figure has not been updated and covers almost everything today. Have any deed touching land drawn and notarised properly; the fee is small next to the cost of a title that cannot be transferred.

Related provisions

• Civil Code, Article 1358 — What Must Be in a Public Document
• Civil Code, Article 1403 — Unenforceable Contracts and the Statute of Frauds