MARLENE DAUDEN-HERNAEZv. CFI, HOLLYWOOD FAR EASTPRODUCTIONS, INC.

, AND RAMON
VALENZUELA– GR: no specific form requirement for contracts to be valid
KEY: actress sues to collect acting fees
FACTS
1. Petitioner Hernaez is a motion picture actress; she filed a suit for collection of P14.7K balance unpaid of her
acting services fees from/against Hollywood Far East Productions, Inc., and its president Valenzuela
2. The CFI dismissed the case manly because: "claim of plaintiff was not evidenced by any written document,
either public or private" and the complaint "was defective on its face" for violating Articles 1356 and 1358 –
a. Specifically citing the last paragraph of Art. 1358. […] “All other contracts where the amount involved
exceeds five hundred pesos must appear in writing, even a private one.”
3. Hernaez filed 2 MRs, both eventually dismissed with finality with CFI grounding dismissals still on #2a above
NOTE: there were procedural issues appealed in court as well, perodurh

ISSUE
WON Hernaez contract for personal services was invalid or unenforceable for not being in writing

HELD
- NO. Contract for personal services was valid and enforceable.
RULE OF LAW
- Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the
essential requisites for their validity are present. However, when the law requires that a contract be in some form
in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is
absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be
exercised.
- Art. 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the
following article (Art. 1358), the contracting parties may compel each other to observe that form, once the
contract has been perfected. This right may be exercised simultaneously with the action upon the contract.
APPLICATION TO CASE
- In the matter of formalities, the contractual system of our Civil Code follows that of the Spanish Civil Code in
upholding the spirit and intent of the parties OVER formalities –
o GR: contracts are valid from their perfection (Art. 1315, “mere consent”) regardless or form (Art. 1356)
o EXC: (1) when a specific form is required to be valid – i.e. solemn contracts; (2) when it must be proved a
certain way to be actionable in court – e.g. those covered in the old Statute of Frauds
- The contract sued upon herein (i.e. compensation for services) DOES NOT come under either exception
- In our contractual system it is NOT ENOUGH that the law should require that the contract be in writing, as it does
in Article 1358; the law must FURTHER prescribe that without the writing the contract is not valid or not
enforceable by action:
o Nowhere in Art. 1358 is it provided that the absence of written form in this case will make the agreement
invalid or unenforceable.
o On the contrary, Art. 1357 clearly indicates that contracts covered by Article 1358 are binding and
enforceable by action or suit despite the absence of writing(note: “may compel” … “once contract has
been perfected”)
o As compared to the examples below of solemn contracts, where the articles themselves provide that
said contracts would be void if formalities are not followed:
 Art. 749 – donation ofimmovable–embodied in apublic instrument in order "that the donation may
be valid"
 Art. 748 – donation of movables worth more thanP5K– must be in writing "otherwise the donation
shall be void"
CONCLUSION
- Contract for compensation of services is valid, binding and enforceable even if not in writing
- Case remanded to trial court for further proceedings
 GARCIA v. BISAYA et al – no cause of action, no reformation
KEY: correction of a mistake in a deed of sale for a piece of land

FACTS
1. Defendants executed in favor of plaintiff a deed of sale for a parcel of land
2. Said land was erroneously designated by the parties in the deed of sale as an unregistered land when in truth
said land is a portion of a big mass of land registered under an Original Certificate (said title is in the name of
Torcuata Sandoval a person other than the defendants)
3. Despite persistent demand from plaintiff to have the error corrected defendants refused to do so.
4. Thus, Plaintiff prayed for judgment ordering defendants to make the aforesaid correction in the deed of sale
5. Both parties regard the present action as one for the reformation of an instrument (deed of sale)

ISSUE WON there is a valid ground for the reformation of the deed of sale

HELD NO.

Rule of law:
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 conducts 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.

Application:
- Plaintiff's complaint states no cause of action, for it fails to allege that the instrument to be reformed does
not express the real agreement or intention of the parties. Such allegation is essential since the object sought
in an action for reformation is to make an instrument conform to the real agreement or intention of the parties. But
the complaint does not even allege what the real agreement or intention was. How then is the court to know
that the correction sought will make the instrument conform to what was agreed or intended by the parties? It is
not the function of the remedy of reformation to make a new agreement, but to establish and perpetuate
the true existing one.
- Moreover, court do not reform instruments merely for the sake of reforming them, but only to enable some party
to assert rights under them as reformed. If the instrument in the present case is reformed by making it state
that the land therein conveyed is already covered by a Torrens certificate of title, what right will the plaintiff, as
vendee, be able to assert under the reformed instrument when said title is in the name of Torcuata Sandoval,
obviously a person other than the vendor? Would not the sale to him then be ineffective, considering that he
would be in the position of one who knowingly purchased property not belonging to the vendor?
- Perhaps plaintiff's real grievance is that he has been led to enter into the contract of sale through fraud or
misrepresentation on the part of the vendor or in the mistaken belief that, as stated in the deed, the property he
was buying was unregistered land. But if that be the case, article 1359 of the new Civil Code expressly provides
that "the proper remedy is not reformation of the instrument but annulment of the contract." Plaintiff's
complaint, however, does not ask for the annulment of the deed; neither does it contain allegations essential
to an action for that purpose.

Conclusion:
- Case dismissed because complaint states no cause of action.
 YOLANDA ROSELLO-BENTIR et al v. RTC, and LEYTE GULF TRADERS, INC.– reformation; prescription,
appropriate civil action for reformation
KEY: lease of land for 20 years + 4 years extension; action for reformation already prescribed
FACTS
1. 1968: Leyte Gulf Traders (lessee) entered into a lease contract over a parcel of land owned by Bentir for 20 years
2. 1988: Lease contract was allegedly extended for another 4 years to end in 1992
3. 1989: Bentir sold land subject to lease to spouses Pormada
4. Leyte Gulf questioned the sale and insisted upon Bentir that it had a right of first refusal – Bentir did not yield
5. Leyte Gulf filed complaint seeking reformation of the lease contract –
a. Leyte Gulf’s lawyer inadvertently omitted to incorporate in the contract of lease executed in 1968, the
verbal agreement or understanding between the parties that in the event thatBentir leases or sells the lot
after the expiration ofthe lease, Leyte Gulf has the right to equal the highest offer
6. Bentir’s defenses:
a. Inadvertence is not a ground for reformation;
b. Law sets 10 years as the prescriptive period for reformation, thus 1968-1989 = more than 10 years
already elapsed, thus the action has already prescribed.

ISSUE
WON the lease contract may be reformed

HELD
- NO. The lease contract may no longer be reformed.
RULE OF LAW:
- 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.
- RATIONALE for the remedy of reformation is the principle of equity–
o in order to express the true intention of the contracting parties, an instrument already executed is
allowed by law to be reformed;
o since it would be unjust and unequitable to allow the enforcement of a written instrument which does
notreflect or disclose the real meeting of the minds of the parties.
- Courts must necessarily exercise the power to reform contract sparingly and with great caution. Moreover, the
remedy, being an extraordinary one, must besubject to limitations as may be provided by law, such as the
prescriptive period of 10 years.
APPLICATION TO CASE:
- Prescriptive period: The prescriptive period of 10years applies by operation of law, not by the will of the parties,
thus, the right of action for reformation accrued from the date ofexecution of the contract of lease in 1968.
- Declaratory relief: EVEN IF WE WERE TO ASSUME FOR THE SAKE OF ARGUMENT that the instant action
for reformation is not time-barred, Leyte Gulf’s action will still notprosper –
o Under Sec. 1, Rule 64, an action for the reformation of an instrument is instituted as a special civil action
for declaratory relief to secure an authoritative statement of the rights and obligations of the parties
for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising
from an alleged breach thereof, it may be entertained only BEFORE the breach or violation of the law
or contract to which it refers.
o Here, Leyte Gulf brought the present action for reformation AFTER an alleged breach or violation of the
contract was already committed by Bentir. Consequently, the remedy of reformation nolonger lies.
CONCLUSION
- Reformation can no longer be availed.

Chika lang on legal antecedents in case nai interested lol:

- RTC: dismissed complaint on grounds of prescription;
o MR filed, RTC reversed its previous ruling, saying that the 10 year period should instead be counted from the date of
extension of the lease (1989) and not from date if inception (1968)
- CA: affirmed the RTC ruling; reformation may be granted.
 ATILANO vs ATILANO –Procedure of reformation Art. 1369
Keyword/s: Bali diay ilang yuta sa nakabutang sa deed
Facts:

1. Eulogio Atilano I acquired by purchase from one Gerardo Villanueva.

2. Then he had the land subdivided into five parts,
3. On the same year, after the subdivision had been effected, Eulogio Atilano I, for the sum of P150.00,
executed a deed of in favor of his brother Eulogio Atilano II, who thereupon obtained transfer title in his
name. Three other portions were likewise sold to other persons, the original owner, Eulogio Atilano I,
retaining for himself only the remaining portion of the land. Upon his death the title to this lot passed to
Ladislao Atilano, defendant in this case, in whose name the corresponding certificate was issued.
4. Eulogio Atilano II having become a widower, he and his children obtained title in their names as co-owners.
5. Desiring to end the co-ownership, they had the land resurveyed so that it could properly be subdivided; and
it was then discovered that the land they were actually occupying on the strength of the deed of sale was a
different lot. While the land which remained in the possession of the vendor, Eulogio Atilano I, and which
passed to his successor, defendant Ladislao Atilano was the supposed lot of Eulogio Atilano II. (so
nagkabali ang mga lot)
6. The heirs of Eulogio Atilano II filed the present action alleging that they had offered to surrender to the
defendants the possession of lot No. 535-A and demanded in return the possession of lot No. 535-E, but
that the defendants had refused to accept the exchange.
7. The plaintiffs' insistence is quite understandable, since lot No. 535-E has an area of 2,612 square meters, as
compared to the 1,808 square-meter area of lot No. 535-A.

Defendant’s contention:

Defendants alleged that the reference to lot No. 535-E in the deed of sale was an involuntary error; that the intention
of the parties to that sale was to convey the lot correctly identified as lot No. 535-A; that since 1916, when he
acquired the entirety of lot No. 535, and up to the time of his death

Eulogio Atilano I had been possessing and had his house on the portion designated as lot No. 535-E, after which he
was succeeded in such possession by the defendants herein; and that as a matter of fact Eulogio Atilano I even
increased the area under his possession when he bought a portion of an adjoining lot from its owner Fruto del
Carpio.

Defendants interposed a counterclaim, praying that the plaintiffs be ordered to execute in their favor the
corresponding deed of transfer with respect to lot No. 535-E.

Issue:

WON the real intention of the parties in the sale is that stipulated in the title.

Ruling: YES

Rule of law:

Art. 1369. The remedy of reformation of the instrument is available 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.

Application to the case:

o Court is convinced that the object thereof, as intended and understood by the parties, was that specific
portion where the vendee was then already residing, where he reconstructed his house and where his
heirs, the plaintiffs herein, continued to reside thereafter: namely, lot No. 535-A; and that its designation
as lot No. 535-E in the deed of sale was simple mistake in the drafting of the document.1âwphi1.ñet The
 mistake did not vitiate the consent of the parties, or affect the validity and binding effect of the contract
between them.
o In this case, the deed of sale executed in 1920 need no longer reformed. The parties have retained
possession of their respective properties conformably to the real intention of the parties to that
sale, and all they should do is to execute mutual deeds of conveyance.

Conclusion:

The plaintiffs are ordered to execute a deed of conveyance of lot No. 535-E in favor of the defendants, and the latter
in turn, are ordered to execute a similar document, covering lot No. 595-A, in favor of the plaintiffs.

Not so important:

The logic and common sense of the situation lean heavily in favor of the defendants' contention.

WHY? Bec. When one sells or buys real property — a piece of land, for example — one sells or buys the property
as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot number assigned to
it in the certificate of title

The two brothers continued in possession of the respective portions the rest of their lives, obviously ignorant of the
initial mistake in the designation of the lot subject when the mistake was discovered for the first time.
 CARANTES VS. CA
Key: Laokan Airport

FACTS:
1. Mateo Carantes was the owner of Lot. 44 in Baguio City. He died in 1913.
2. In 1930, the Government commenced the construction of Laokan Airport in Baguio wherein a portion of Mateo’s land
was expropriated.
3. In 1933, Special Proceedings for the settlement of the estate of Mateo Carantes was filed wherein one of his sons,
Maximino Carantes, was appointed as judicial administrator.
4. Maximino then files for Partition of such property where he listed the heirs, which includes himself and his brothers
and sisters, who will inherit his Father’s estate
5. Subsequently, a Deed of Assignment of Right to Inheritance was executed by the other children of Mateo assigned to
Maximino
6. Such Assignment stated the monetary value of such transaction for P1.00 and contained a provision stating that said
lots rightly and exclusively belong to Maximino
7. Thereafter, Maximino sold the remaining lots to the Government for the expansion of such airport and divided the
proceeds among the heirs of Mateo.
8. The other heirs then filed for the cancellation of old title of the said land and registration of new title wherein the heirs
become the ownerre thereof. A new title was issued in the name of the heirs.
9. Maximino then subsequently registered the Deed of Assignment of Right to Inheritance and the lots bought by the
government was registered under its name while the remaining lots were registered under Maximino
10. The title in the name of the heirs was then cancelled and a new title was registered under the name of Maximino only
11. A complaint was filed by the other Children of Mateo to declare the Deed of Assignment as null and void on the basis
of fraud contending
12. The RTC ruled that the action to annul a contract has already prescribed. The heirs then appealed to the CA and
asked for reformation of contract.

ISSUE
WON the action of reformation of the heirs, as contended by Maximino under Appeal, has already been prescribed?

RULING
No.

The petitioner's theory that the private respondents' action is for reformation of an instrument is a new one, adopted by the
petitioner for the first time on appeal to this Court.

Her husband did not raise it as a defense in his answer filed with the trial court, where, consequently, trial proceeded on
the theory that the action sought the declaration of nullity of the deed of assignment.

When the case reached the respondent court the petitioner likewise did not raise this issue, although in truth, even had
she done so, it would have been a belated and futile exercise.

The settled rule is that defenses not pleaded in the answer may not be raised for the first time on appeal. party cannot, on
appeal, change fundamentally the nature of the issue in the case.

When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not
be permitted to change the same on appeal, because to permit him to do so would be unfair to the adverse party.

Consequently, we have to disregard the petitioner's theory that the action is for reformation of an instrument, and must
proceed on the basis of the issues properly raised and ventilated before the trial court.
 163. SARMING VS. DY
(Note: Wrong title ang nahatagsa buyer)

Topic: Reformation of contracts

Facts:
1. Petitioners and respondents are the successor-in-interest of the original petitioners and respondents.
2. Jose, Silveria and Venancio Flores are the heirs of Valentina Flores who owned lots 5734 (OCT 4918-A), 4163 ((OCT 3129-A)
in Dumaguete.
3. The grandchildren of Jose, now the owners of ½ of lot 4163 entered into a contract of sale with AlejandraDelfino for Lot
4163 offering it first to Silveria who declined for lack of money.
4. Preparing the document of sale was Atty. Pinili who asked for the title of the land (the lot was registered in Silveria’s name
because she was the only one who went to register the land). Silveria’s daughter delivered OCT 4918-A, covering lot 5734
and not the correct title covering lot 4163. The parties knew of the location of lot 4163 but not its OCT number.
5. Atty. Pinili prepared a notarized Settlement of Estate and Sale cancelling OCT 4918-A in lieu of TCT 5078 in the name of
Silveria and Alejandra.
6. Alejandra took possession of the land and introduced improvements on ½ of lot 4163 without opposition from Silveria.
7. After 2 years, Alejandra purchased the adjoining portion of the lot and discovered that what was designated in the deed
was the wrong lot. She asked for the reformation of the contract with Silveria but Silveria refused.
8. Silveria claimed she was the sole owner of Lot 4163. The contract of sale clearly stated that theproperty being sold was Lot
5734, not Lot 4163. She also claimed thatrespondents illegally took possession of one-half of Lot 4163. She prayed that she
be declared the sole owner of Lot 4163 and be immediatelyplaced in possession thereof. She also asked for compensatory,
moral, andexemplary damages and attorney's fees.

Issue: WON the contract can be reformed?

Ruling:
Yes. 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 under Art. 1369. An action forreformation 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 contract;
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 these requisites are present in this case. The subsequent acts of the parties clearly indicate that what was intended to be sold to
Alejandra Delfino was Lot 4163 and not Lot 5734 as evidenced by her possession of the lot without objection from Silveria.

SC ordered that the Settlement of Estate and Sale be reformed by changing the phrase"Lot 5734" to "Lot 4163. (Only attorney’s fees
were awarded, no actual and moral damages.)