digest contracts obli

8/13/2019 Digest Contracts Obli

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Garcia v. bisaya- Plaintiff bought a land w/c is alleged to be not registered under Act 496, nor under the Spanish

Mortgage Law when in truth and in fact saidland is a portion of a big mass of land registered

under Original Certificate of Title No. 6579 in the Office of the Register of Deeds of Oriental

Mindoro

- despite persistent demand from plaintiff to have the error corrected, defendants have refusedto do so. Plaintiff, therefore, prayed for judgment ordering defendants to make the aforesaid

correction in the deed of sale

- Defendants denied having executed the alleged deed of sale and pleaded prescription as adefense

ISSUES

1. WON the action for reformation of instruments has already prescribed

2. WON the action for reformation of instruments may prosper

HELD

1. NO- Both appellant and appellees apparently regard the present action as one for the reformation

of an instrument under Chapter 4, Title II, Book IV of the new Civil Code. Specifically, the object

sought is the correction of an alleged mistake in a deed of sale covering a piece of land. The action.

being upon a written contract, it should prescribe in ten years counted from the day it could have

been instituted. Obviously, appellant could not have instituted his action to correct an error in a

deed until that error was discovered. There being nothing in the pleadings to show that the error

was discovered more than ten years before the present action was filed on May 20, 1952, while, on

the other hand, there is allegation that the error was discovered "only recently", we think the action

should not have been dismissed as having already prescribed before the factual basis for

prescription had been established and clarified by evidence.

2. NO- Appellant's complaint states no cause of action, for it fails to allege that the instrument to the

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. Moreover, courts do not reform instruments merely for the sake of

reforming them, but only to enable some party to asserts right under them as reformed. Disposition

Order of dismissal is affirmed not because of prescription but because of failure to state the cause of

action


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

- article 1359 of the new Civil Code expressly provides that "the proper remedy isnot reformation of the instrument but annulment of the contract."

BENTIRANDPORMIDAVLEANDAANDLEYTEGULF

- lease contract- no stipulation of first refusal- sc: reformationhas prescribed- 1968

ATIATILANO V ATILANO

- Purchased a lot from Villanueva and subdivided it into 5 parcels-

1 parcel sold to brother (535-e),3 to other persons, 1 was retained- Upon death was transferred to ladislao, his successor- Brother has been occupyingA instead of E- Heirs sought for reformation but ladislao denied- 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 funds 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 on accident (Art. 1359,

et seq.) 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

SARMING V DY- Respondents are the successor in interest of the original plaintiff, Alejandra delfino- Successors in interest of the original defendant, silveria flores- Solveria flores and brother jose jointly owned a lot inherited from parents - 3129- Another inherited lot is jointly owned by solveria, jose, and venancio - 4918- share of jose was sold to Alejandra delfino bec.silverka declined to buy it -1956- Instead of giving tct 3129, silveroa gave 4918- 2 yrs later, Alejandra diacovered an the error in the title and asked for reformation but silveria

did not give the correct title

Issue: won there can be reformation

SC: It was established that the wrong title was given to the lawyer when the deed was being prepared.

So the document was done by reason of mistake, and the document did not express the tru intention of

the parties


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- Reformation is that remedy in equity by means of which a written instrument is made orconstrued so as to express or conform to the real intention of the parties as provided in Article

1359 of the Civil Code. Due to the mistake in the designation of the lot subject of the deed,

reformation of the deed is the proper remedy to reflect the true intent of the parties

BORROMEOVCOURTOFAPPEALS- Before 1933, defendant [Jose A. Villamor] was a distributor of lumber belonging to Mr. Miller

who was the agent of the Insular Lumber Company in Cebu City

- Defendant being a friend and former classmate of plaintiff [Canuto O. Borromeo] used toborrow from the latter certain amounts from time to time

- Villamor borrowed money from borromeo to pay obligation with mr. miller and mortgaged hishouse and lot

- Mr. Miller filed a civil action against the defendant and attached his properties including thosemortgaged to plaintiff, inasmuch as the deed of mortgage in favor of plaintiff could not beregistered because not properly drawn up

- Plaintiff then pressed the defendant for settlement of his obligation, but defendant insteadoffered to execute a document promising to pay his indebtedness even after the lapse of ten

years

- Liquidation was made and defendant was found to be indebted to plaintiff in the sum ofP7,220.00, for which defendant signed a promissory note therefor on November 29, 1933 with

interest at the rate of 12% per annum, agreeing to pay as soon as I have money

- The note further stipulates that defendant 'hereby relinguish, renounce, or otherwise waive myrights to the prescriptions established by our Code of Civil Procedure for the collection or

recovery of the above sum of P7,220.00. * * * at any time even after the lapse of ten years fromthe date of this instrument

- Verbal demand but no payment- After 10 yrs, filed a case and asked for paymentIssue: WON agreement is invalid bec of stipulation of renouncing future prescription

SC: Between two possible interpretations, that which saves rather than destroys is to be preferred

- It is a fundamental principle in the interpretation of contracts that while ordinarily the literalsense of the words employed is to be followed, such is not the case where they "appear to be

contrary to the evident intention of the contracting parties," which "intention shall prevail

- The terms, clauses and conditions contrary to law, morals and public order (in this case thecontested stipulation) should be separated from the valid and legal contract when such

separation can be made because they are independent of the valid contract which expresses the

will of the contracting parties


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- Where an agreement founded on a legal consideration contains several promises, or a promiseto do several things, and a part only of the things to be done are illegal, the promises which, can

be separated, or the promise, so far as it can be separated, from the illegality, may be valid

- The rule is that a lawful promise made for a lawful consideration is not invalid merely becausean unlawful promise was made at the same time and for the same consideration, and this rule

applies, although the invalidity is due to violation of a statutory provision, unless the statute

expressly or by necessary implication declares the entire contract void

KASILAG V RODRIGUEZ- Kasilag brought lot from ambrosia6.7 tct 325- Land improvements was mortgaged- 4 years after date of the execution of the instrument, the sum of P1,000 with interest at 12

per cent per annum, then the mortgage shall become null and void

ISSUES 1. WON the contract entered into between the parties was one of absolute sale of the

land and its improvements and that the agreement is null and void 2. WON petitioner acted in

bad faith in taking possession of the land HELD 1. NO Ratio In the interpretation of contracts,

the intention of the contracting parties should always prevail because their will has the force

of law between them. Furthermore, terms, clauses and conditions contrary to law, morals and

public order should be separated from the valid and legal contract and when such separation

can be made because they are independent of the valid contract which expresses the will of

the contracting parties

- Art 1281 of the Civil Code: if the terms of a contract are clear and leave no doubt as to theintention of the contracting parties, the literal sense of its stipulations shall be followed; and ifthe words appear to be contrary to the evident intention of the contracting parties, the

intention shall prevail

- Where an agreement founded on a legal consideration contains several promises, or apromise to do several things, and a part only of the things to be done are illegal, the promises

which can be separated, or the promise, so far as it can be separated, from the illegality, may

be valid. The rule is that a lawful promise made for a lawful consideration is not invalid merely

because an unlawful promise was made at the same time and for the same consideration, and

this rule applies, although the invalidity is due to violation of a statutory provision, unless the

statute expressly or by necessary implication declares the entire contract void. The contract

set out in the agreement should be interpreted in accordance with these rules

2. NO Ratio Gross and inexcusable ignorance of law may not be the basis of good faith, but

possible, excusable ignorance may be such basis. Reasoning The Civil Code does not expressly

define what is meant by bad faith, but section 433 provides that "Every person who is unaware of

any flaw in his title, or in the manner of its acquisition, by which it is invalidated, shall be deemed

a possessor in good faith"; and provides further, that "Possessors aware of such flaw are deemed

possessors in bad faith". It is a fact that the petitioner is not conversant with the laws because he


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is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-

grounded belief that he was not violating the prohibition regarding the alienation of the land. In

taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a

jurist does, that the possession and enjoyment of the fruits are attributes of the contract of

antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again

bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116

is excusable and may, therefore, be the basis of his good faith

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