Garcia vs. Bisaya

A complaint for reformation of an instrument must allege that the instrument does not express the true agreement or intention of the parties; reformation will not be granted merely to correct a factual error when the reformed instrument would not enable the plaintiff to assert any enforceable right thereunder.

On November 12, 1938, the defendants executed a deed of sale conveying a parcel of land to the plaintiff. The deed described the land as “unregistered,” although the land was in reality a portion of a larger registered parcel covered by Original Certificate of Title No. 6579 in the Office of the Register of Deeds of Oriental Mindoro. The plaintiff later discovered the discrepancy and demanded that the defendants correct the error, but they refused. The plaintiff then filed an action to compel correction of the deed, framing it as a suit for reformation of an instrument under the Civil Code. The defendants denied executing the deed and interposed prescription as a defense. The plaintiff replied that he had learned of the error only recently and could not have brought the action earlier.

• Nature of the Action: Plaintiff sought the correction of an alleged mistake in a deed of sale dated November 12, 1938, under which defendants had conveyed a parcel of land to him. The mistake consisted in describing the land as unregistered when it was actually a portion of registered land under Original Certificate of Title No. 6579. The complaint prayed for an order compelling defendants to make the correction.

• Pleadings and Grounds for Dismissal: Defendants denied executing the deed and pleaded prescription. Plaintiff countered that he discovered the error only recently and therefore the prescriptive period had not run. On motion, the lower court dismissed the complaint for prescription without trial.

• Deficiency in the Complaint: The complaint did not allege that the deed failed to express the real agreement or intention of the parties. It also did not state what the true agreement was. Without such allegations, the court could not determine whether the proposed correction would make the instrument conform to the parties’ actual intent.

• Title in a Third Person’s Name: During the appeal, plaintiff’s counsel disclosed that the certificate of title covering the land stood in the name of Torcuata Sandoval, a person other than the vendor. Consequently, even if the deed were reformed to reflect the registered status of the land, the plaintiff would be in the position of a buyer who knowingly purchased property not belonging to the seller, casting doubt on the efficacy of the sale.

• Prescription: Petitioner contended that the action had not prescribed because the error in the deed was discovered only recently, well within the ten-year prescriptive period for actions upon written contracts, and that prescription could not be resolved on the pleadings alone without trial on the factual issue of discovery.

• Right to Reformation: Petitioner argued that the deed should be reformed to state the true character of the land — that it was registered — so that the instrument would accurately reflect the property conveyed.

• Denial of Execution: Respondents denied having executed the deed of sale, effectively challenging the very existence of the contract sought to be reformed.

• Prescription: Respondents maintained that the action was barred by prescription, as the deed had been executed in 1938 and the suit was filed only in 1952.

• Cause of Action for Reformation: Whether the complaint stated a cause of action for reformation of an instrument under Article 1359 of the New Civil Code.

• Prescription: Whether the lower court correctly dismissed the case on the ground that the action had prescribed.

• Cause of Action for Reformation: The complaint failed to state a cause of action. Under Article 1359 of the New Civil Code, reformation is granted to make an instrument conform to the real agreement or intention of the parties. An essential averment in a complaint for reformation is that the written instrument does not express the true agreement of the parties. The present complaint omitted this allegation entirely and did not even specify what the real agreement was. Without such pleading, a court has no basis to decree reformation. The remedy of reformation is not designed to create a new contract but to establish and perpetuate the true existing one. Moreover, courts do not reform instruments merely for the sake of correction; reformation must enable a party to assert a right under the instrument as reformed. In this case, because the certificate of title was in the name of a third person, the reformed instrument would not have allowed plaintiff to assert any effective right thereunder; he would instead appear to have knowingly purchased property not owned by the vendor. If the true grievance was that plaintiff had been induced to contract through fraud or mistake, Article 1359 itself provides that the proper remedy is annulment, not reformation. The complaint sought only reformation and contained no allegations essential to an action for annulment. Accordingly, the lower court’s dismissal, although based on a different ground, was correct on the ground of failure to state a cause of action.

• Prescription: The dismissal on the ground of prescription was premature. The complaint alleged that the error was discovered only recently, and the pleadings did not establish when the prescriptive period began to run. Prescription could not be properly adjudicated without first receiving evidence. However, the affirmance of the dismissal was warranted on the independent substantive ground that the complaint stated no cause of action.

• Essential Allegation in Actions for Reformation — A complaint for reformation of an instrument must contain a specific averment that the written instrument fails to express the real agreement or intention of the parties. The omission of this allegation is fatal to the cause of action. This requirement flows from the nature of reformation, which is to bring the written memorial into conformity with the parties’ actual meeting of the minds, not to supply terms or correct factual errors extraneous to the contractual intent.

• Purpose of Reformation — Reformation is a remedy to establish and perpetuate the true existing agreement of the parties, not to make a new agreement. It will not be granted simply to rectify a descriptive inaccuracy when the correction would not enable the plaintiff to assert a right under the instrument as reformed. If the reformed instrument cannot serve as the basis for an enforceable right — for instance, because the property belongs to a third person — reformation is improper.

• Reformation versus Annulment — When a party enters into a contract through fraud or under a mistaken belief as to the character of the property, Article 1359 of the New Civil Code prescribes annulment, not reformation, as the proper remedy. The distinction turns on whether the defect lies in the expression of the agreement (reformation) or in the validity of the consent (annulment).

• “It is not the function of the remedy of reformation to make a new agreement, but to establish and perpetuate the true existing one.”

• “Courts 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 appellant, as vendee, be able to assert under the reformed instrument when according to himself … 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?”

• N/A — The decision does not cite Philippine judicial precedents; it relies on the general principles of reformation drawn from 23 R.C.L. (Ruling Case Law), paragraphs 2 and 4, as persuasive authority on the purpose and requirements of reformation.

• Article 1359, New Civil Code — Provides the grounds for reformation of instruments and expressly states that when the real agreement is vitiated by mistake, fraud, or other causes, the proper remedy is annulment, not reformation. The Court applied this provision to hold that the complaint, which lacked the essential allegation that the instrument did not reflect the true agreement, failed to state a cause of action for reformation. The same article indicated that if plaintiff had been misled about the character of the land, his remedy was annulment, which he did not seek.

• Prescriptive provisions for written contracts (implied) — The Court noted that actions upon written contracts prescribe in ten years under the Civil Code, but no specific article was invoked; the issue was not reached due to the defect in the cause of action.

Justices Bengzon, Padilla, Montemayor, Jugo, Bautista Angelo, Labrador, Concepcion, and J. B. L. Reyes concurred.

No dissenting opinion was recorded; the decision was unanimous.