SUBJECT: Obligations and Contracts

TOPIC: Reformation of Instruments

Atilano vs. Atilano

No. L-22487 | May 21, 1969 | Makalintal, J.

GENERAL RULE OF LAW/DOCTRINE

Civil law; Contracts; Reformation of instruments; Remedy where there is simple mistake in the drafting of
the document.—The remedy where there is simple mistake in the drafting of the document of sale in
designating the land object of the sale, is reformation of the instrument, there being a meeting of the
minds of the parties to a contract.

Same; Same; Mistake; When not a ground for annulment of contract of sale.—Where the real intention of
the parties is the sale of a piece of land but there is a mistake in designating the particular lot to be sold in
the document, the mistake does not vitiate the consent of the parties, or affect the validity and binding
effect of the contract.

Same; Same; Same; Same; Reason.—The reason is that 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.

Same; Same; When reconveyance, not reformation of instrument, is proper.—In this case, the deed of
sale need not be 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.

CASE SUMMARY:
LONG STORY SHORT:

Eulogio I has 5 lots: 535-A, 535-B, 535-C, 535-D, 535-E. He sold everything except 535-A, which he
retained. 535-E, belonging to Luisa Bautista, was then transferred to Eulogio II and their children when
Luisa died. Eulogio II and his children co-owned 535-E but after deciding to subdivide it, they realized that
they were actually occupying Lot 535-A and that Eulogio I’s heirs (represented by Ladislao Atilano) were
occupying Lot 535-E. So they wanted Ladislao to exchange 535-A and 535-E.

The issue here is the intention of the parties during the sale. The court ruled that even before the sale,
Vendee (Luisa Bautista and Eulogio II) were already in possession of 535-A and that Eulogio I for 535-E;
and that the mistake in the interchanged 535-A and 535-E did not vitiate the consent of the original parties
to the sale. The remedy then of this mistake is by reformation of contracts (Article 1359 of the NCC).

FACTS
 Eulogio Atilano I (Eulogio I) purchased Lot No. 535 from Gerardo Villanueva. Eulogio I obtained
TCT No. 1134 in his name.
 He had the land subdivided into five parts (535-A, 535-B, 535-C, 535-D, and 535-E).
 Eulogio I executed a deed of sale covering 535-E in favor his brother Eulogio Atilano II (Eulogio
II). Who obtained CTC No. 3129 in his name.
 535-B, 535-C, and 535-D were sold to other persons. 535-A is retained to Eulogio I.
 Eulogio I died and 535-D was passed to Ladislao Atilano (defendant in this case) with TCT No. T-
5056.
 Eulogio II and his children obtained TCT No. 4489 over Lot 535-E (because the owner, his wife
Luisa Bautista, died). They became co-owners of this land/
 They decided to end the co-ownership and have Lot 535-E subdivided. But they found out they
were occupying 535-A while the land that was retained by Eulogio I (and now Ladislao) was lot
535-E and not 535-A.
 Eulogio II died and his heirs filed an action in the CFI, alleging that they offered to surrender to
defendants Lot 535-A demanded that Lot 535-E be given to heirs of Eulogio II, but defendants
refused.
(535-E has an area of 2,612 square meters and 535-A has 1,808 square meters).
 In their Answer, defendants alleged that the interchanged 535-A and 535-E was an involuntary
error and that the intention of the parties to that sale was to convey the lot correctly as 535-A, and
that from the sale of the entire Lot 535 up to Eulogio I’s death, the 535-E portion had been under
Eulogio I’s possession.

ISSUE
Whether Lot 535-E belongs to heirs of Eulogio I or the heirs of Eulogio II?

RULING

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Obligations and Contracts
Atilano v. Atilano
It belongs to the heirs of Eulogio I.

The issue here is the REAL INTENTION OF THE PARTIES TO THAT SALE. The object of the sale, as
intended and understood by the parties, was that specific portion where the Vendee (Luisa Bautista and
Eulogio II) was then already residing, where he reconstructed his house at the end of the war, 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 a simple mistake in the drafting of the document.
The mistake did not vitiate the consent of the parties, or affect the validity and binding effect of the
contract between them.

The new Civil Code provides a remedy for such a situation by means of reformation of the instrument.
This remedy 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 (Art. 1359, et seq.) In this case, the deed of sale executed
in 1920 need no longer be 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.

RELEVANT LAWS APPLICABLE

ARTICLE 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.

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Obligations and Contracts
Atilano v. Atilano