File No. 812.6363/211
Most of the oil lands in the State of Vera Cruz are now in the hands of
foreigners. There are a great many oil men who have invested large sums
in subsoil leases, with a view to transferring their leases to oil
companies at a profit. Under this new decree it will now be impossible
to transfer oil leases without first obtaining the authorization of the
governor of the state. This authorization can be obtained only by making
a trip to Jalapa, Vera Cruz, and then only after incurring expenses in
proportion to the amount involved in the transaction. A representative
of one of the
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large oil
companies recently leased a piece of oil property from a Mexican
citizen. Before the deal could be consummated the permission of the
governor had to be obtained. A copy of the contract was submitted
through the regular channels to the governor for examination and
approval. The governor decided that the property was worth 100 per cent
more than was offered by the company and refused to approve the
contract.
[Inclosure—Translation]
Decree of General Cándido Aguilar
(From El Dictamen, Veracruz,
January 16, 1916.)
General Cándido Aguilar, Governor of the State of Veracruz, to the
inhabitants thereof, know ye:
That using the faculties with which I am invested, and whereas; the
reasons and motives of this Government in issuing the Decree No. 3
in Tuxpam, August 3, 1914, still subsist, by reason of which this
said decree still responds to a social necessity and should be
maintained in vigor, and
Whereas the fundamental principle that inspired said decree demands
that it be made general in two ways: amplification so that it shall
cover not only the contracts to which it refers, but also all those
covering any land within the limits of the State, and also
generalization to cover lands situated not only in the cantons
stated in said decree, but within the area of the State.
Whereas to effectively give sanction to the fundamental disposition
in the decree in question, it is necessary to establish not only the
indirect penalties of confiscation and others fixed thereby, but
also to create a civil sanction by virtue of which the lack of
authorization which it decrees must be obtained for the execution of
contracts referred to, may affect the existence of rights and
obligations arising from such contracts for which it is necessary to
give to the authorization referred to, the legal character of a
formality extraneous to the contract but thus constituted an element
thereof, necessary for its validity, in accordance with civil
legislation, and
Whereas in the practice of the application of the decree above
mentioned it becomes necessary to adopt regulations to clear up some
of its precepts and to fix the administrative steps which must be
followed to obtain the authorization prescribed by the decree, now,
therefore, I have seen fit to decree the following:
- Art. 1. No contract of sale, lease, mortgage, quit-rent or
of any other character covering any land situated within the
boundaries of the State of Veracruz or which affects
directly or indirectly such lands, shall be made, unless the
parties shall previously obtain the authorization of the
State Government thereto.
- Art. 2. The owners or possessors of lands situated within
the limits of the State who have acquired rights of any sort
whatsoever to such lands by virtue of any contract of the
nature mentioned in the foregoing article shall not cede,
transfer or alienate to third persons or to companies in
return for stock or in any other manner, the lands or rights
acquired by virtue of such contracts, nor the contracts
themselves, without previously obtaining the authorization
of the State Government thereto.
- Art. 3. For all legal effects, it is declared that the
authorization referred to in the two foregoing articles is a
formality, extraneous to the contract in question, but
necessary for its validity. Therefore the contracts lacking
this formality are null, shall produce no legal effect of
any sort whatsoever, give rise to no rights, obligations or
rights of action whatsoever between the contracting parties
nor to or against third parties, and cannot be inscribed in
the Public Property Register.
- Art. 4. To obtain the authorization referred to in Arts. 1
and 2 hereof, the contracting parties shall apply in writing
to the State Government, where the
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administrative file in the matter
shall be made up with the fallowing proceedings:
- I.
- With the petition (solicitud) properly complying
with the terms of the law, shall be presented the
document that sufficiently proves the legal
personality of the petitioner, a draft of the
contract proposed to be entered into, with the
stipulations and clauses that have met with the
agreement of the parties, and maps of the lands in
question.
- II.
- When the State Government shall deem necessary it
shall also demand the exhibition of the title deeds
covering the land.
- III.
- The State Government may direct that there be
carried out on the land in question, direct
inspection, examination and check of documents and
other proceedings necessary to identify the reality,
establish in a clear manner the rights the parties
have therein through anterior deeds or by virtue of
the contract itself, and in general to provide
against doubts or differences in the interpretation
and compliance with the contract.
- IV.
- The State Government shall refuse its
authorization if the contract shall appear unjust or
prejudicial to any of the parties thereto, when the
development to be carried on thereunder redounds
exclusively to the benefit of the unnationalized
companies to the prejudice of the Mexican citizens,
when (the contract in question) tends to solidify
the predominance of foreign capital constituting a
menace to the integrity or the progress of the
nation, or in other cases when the contract is
against the true interests of the State.
- V.
- The State Government shall aid, to suppress and
modify the clauses of the proposed contract
presented for authorization, in accordance with the
provisions of the foregoing article, notifying the
parties in writing. The parties may then appear
again with such observation as they deem opportune
and so continue until an agreement is
reached.
- VI.
- Authorization shall be granted on the
understanding that, when the contract is executed,
it shall be strictly in accord with the terms of the
proposed contract presented and the modifications
which have been deemed pertinent.
- VII.
- When the contract shall be finally executed in
public document or private deed, it shall begin with
a literal repetition of the oficio of the State
Government granting its authorization, without which
requisite the contract shall fall within the
prescriptions of Art. 3 of the decree.
- Art. 5. Contracts executed up to now without the
authorization referred to in this decree, and in which it
does not appear that this lack is due to bad faith on the
part of the parties thereto, shall fall within the
prescriptions of Art. 3; but all such contracts may be
revalidated with the approval of the State
Government.
- Art. 6. Such approval shall be granted in cases in which
previous authorization would be granted, and by the
proceedings mentioned in Art. 4 with the following
modifications:
- (1)
- A true copy of the executed contract shall
accompany the petition.
- (2)
- In order to introduce therein the modifications
agreed upon, and to insert the oficio proving the
authorization, the parties shall execute a
complementary public or private deed, which shall
form an integral part of the text of the original
contract, which shall serve for all legal effects,
it being understood that without the complementary
contract, the original shall fall within the
prescriptions of the 3d article hereof.
- Art. 7. If bad faith shall appear in the execution of
contracts made without the authorization provided for by
this decree, such contracts shall fall within the
prescriptions of Art. 3 hereof and the lands covered thereby
shall be forthwith confiscated, but rights shall be reserved
for those who may enjoy them, to proceed against those
persons who may be responsible civilly or criminally.
- Art. 8. Lands object of clandestine contracts shall also
be confiscated, as shall lands object of contracts the
execution of which has been in any manner hidden from the
State Government.
- Art. 9. Notaries who shall authorize deeds containing
contracts covered by this decree without complying with the
provisions of fraction VII of Art. 4 hereof, shall pay the
damages caused and in case of insolvency, shall be suspended
for two years.
- Art. 10. The persons in charge of public registries who
shall register contracts falling within the provision of
this decree which shall not contain the oficio of
authorization from the State Government shall be suspended
for two years.
- Art. 11. For the effects of the law it is hereby declared
that all persons who take part directly or indirectly in the
execution of contracts referred to in this decree, shall be
considered to be Mexicans, whatever their nationality or
origin, and may not in any case allege the defense of
foreign citizenship nor ask protection or aid from foreign
diplomatic or consular officers, nor from the Government of
other countries, nor have any more rights than the laws of
the country concede to Mexicans.
- Art. 12. In the proper department of the State Government
there shall be a registry book, in which shall be noted the
authorizations or refusals thereof, granted under this
decree, and in it the contracts whose authorization has been
solicited shall be copied in full.
- Art. 13. The authorizations or approvals referred to by
this decree shall not incur any tax whatsoever, and shall be
granted without cost to the parties.
Transitory Article: This decree shall have effect from the date of
its publication.
Given in the City of Vera
Cruz, January 15, 1916.
C. Aguilar
Manuel Garcia Jurado,
The Secretary General of the Government
