SARMING VS DY

RITA SARMING, et. al vs. CRESENCIO DY, et al

G.R. No. 133643            June 6, 2002

Facts:

          Valentina Unto Flores, who owned, among others, Lot 5734, covered by OCT 4918-A; and Lot 4163. After the death of Valentina, her three children, namely: Jose, Venancio, and Silveria, took possession of Lot 5734 with each occupying a one-third portion. Upon their death, their children and grandchildren took possession of their respective shares. The other parcel, Lot 4163 which is solely registered under the name of Silveria, was sub-divided between Silveria and Jose. Two rows of coconut trees planted in the middle of this lot serves as boundary line.

The grandchildren of Jose and now owners of one-half of Lot 4163, entered into a contract with plaintiff Alejandra Delfino, for the sale of one-half share of Lot 4163 after offering the same to their co-owner, Silveria, who declined for lack of money. Silveria did not object to the sale of said portion to Alejandra Delfino.

The late Atty. Pinili, Alejandra's lawyer, called Silveria and the heirs of Venancio to a conference where Silveria declared that she owned half of the lot while the other half belonged to the vendors; and that she was selling her three coconut trees found in the half portion offered to Alejandra Delfino for P15. When Pinili asked for the title of the land, Silveria Flores, through her daughter, Cristita Corsame, delivered Original Certificate of Title No. 4918-A, covering Lot No. 5734, and not the correct title covering Lot 4163. At that time, the parties knew the location of Lot 4163 but not the OCT Number corresponding to said lot.

Believing that OCT No. 4918-A was the correct title corresponding to Lot 4163, Pinili prepared a notarized Settlement of Estate and Sale (hereinafter "deed") duly signed by the parties. As a result, OCT No. 4918-A was cancelled and in lieu thereof, TCT No. 5078 was issued in the names of Silveria Flores and Alejandra Delfino, with one-half share each. Silveria Flores was present during the preparation and signing of the deed and she stated that the title presented covered Lot No. 4163. Alejandra Delfino immediately took possession and introduced improvements on the purchased lot, which was actually one-half of Lot 4163 instead of Lot 5734 as designated in the deed.

Two years later, when Alejandra Delfino purchased the adjoining portion of the lot she had been occupying, she discovered that what was designated in the deed, Lot 5734, was the wrong lot. She sought the assistance of Pinili who approached Silveria and together they inquired from the Registry of Deeds about the status of Lot 4163. They found out that OCT No. 3129-A covering Lot 4163 was still on file. Alejandra Delfino paid the necessary fees so that the title to Lot 4163 could be released to Silveria Flores, who promised to turn it over to Pinili for the reformation of the deed of sale. However, despite repeated demands, Silveria did not do so, prompting Alejandra and the vendors to file a complaint against Silveria for reformation of the deed of sale.

Issue:

          Whether or not a reformation of the contract can take place

Ruling:

          The Supreme Court Held that reformation is that remedy in equity by means of which a written instrument is made or construed so as to express or conform to the real intention of the parties. As provided in Article 1359 of the Civil Code:

Art. 1359. When, there having been a meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed.

If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties, the proper remedy is not reformation of the instrument but annulment of the contract.

An action for reformation of instrument under this provision of law may prosper only upon the concurrence of the following requisites: (1) there must have been a meeting of the minds of the parties to the contact; (2) the instrument does not express the true intention of the parties; and (3) the failure of the instrument to express the true intention of the parties is due to mistake, fraud, inequitable conduct or accident.

All of these requisites, in our view, are present in this case. There was a meeting of the minds between the parties to the contract but the deed did not express the true intention of the parties due to mistake in the designation of the lot subject of the deed. There is no dispute as to the intention of the parties to sell the land to Alejandra Delfino but there was a mistake as to the designation of the lot intended to be sold as stated in the Settlement of Estate and Sale.