by Nil Jay Perolina
CHAPTER 4 - REFORMATION OF INSTRUMENTS
ART. 1366. There shall be no reformation in the following cases:
(1) Simple donations inter vivos wherein no condition is imposed;
(2) Wills;
(3) When the real agreement is void
Art. 1367. When one of the parties has brought an action to enforce the instrument, he cannot subsequently ask for its reformation.
What is the meaning of these articles?
When reformation is not allowed:
1. Simple donations inter vivos with no condition imposed
2. Wills
3. When the real agreement is void
4. When one of the parties has brought an action to enforce the instrument
What is the reason behind the article?
• Both donations and wills are gratuitous dispositions of property.
• Void agreements are agreements which are not valid, nothing to reform because reformation presumes valid agreement.
• Courts deny relief of reformation when the party seeking reformation has brought an action to enforce the instrument, because there has been an election as between inconsistent remedies, one in affirmance of the written contract and the other in disaffirmance.
What is the exemption to the general rule?
If the donation is onerous in character or involves a condition, the deed may be reformed so that real intent may be expressed.
Not every mistake in a will can be corrected. Only imperfect or erroneous descriptions of persons or property can be corrected; but the manner in which the testator disposes of his property cannot be changed by a reformation of the instrument.
What is the effect in these cases where reformation is not allowed?
1. In donation, the act is essentially gratuitous and the donee has, therefore, no just cause for complaint. If in the deed of donation, a mistake or defect has been committed, it is a mere failure in a bounty which, as the donor was not bound to make, he is not bound to correct. (see 45 Am. Jur. 599.) Of course, the donor may ask for the reformation of a deed of donation.
2. Like a donation, the making of a will is a strictly personal and a free act which cannot be left to the discretion of a third person (see Art. 784.); hence, upon the death of the testator, the right to reformation is lost. Furthermore, a will may be revoked by the testator any time before his death and this right is not subject to waiver or restriction. (see Art. 828.)
3. If the real agreement is void, there is nothing to reform. Reformation would be useless because the real agreement being void, it is unenforceable.
Therefore, an instrument which when corrected will be void or inoperative, will not be reformed
4. Article 1367 is based on estoppel (Art. 1431.) or ratification. (see Arts. 1392, 1396.) When a party brings an action to enforce the contract, he admits its validity and that it expresses the true intention of the parties. The bringing of the action is thus inconsistent with reformation. There is no prohibition against joining in one action the reformation of instrument and its enforcement as reformed.
Courts deny relief of reformation when the party seeking reformation has brought an action to enforce the instrument, because there has been an election as between inconsistent remedies, one in affirmance of the written contract and the other in disaffirmance. The party suing under the written contract may be said to have ratified the same.
Illustrations/Examples
1. Simple donations inter vivos with no condition imposed
A donated the trademark recipe for his fried chicken to B without conditions. In this case, the act is essentially gratuitous and B has no just cause for complaint.
2. Wills
A, the testator, is the husband of B and the father of C and D. A made his will and upon his death as the testator, the right to reformation is lost. However, his will may be revoked by him as the testator any time before his death and this right is not subject to waiver or restriction.
3. When the real agreement is void
X and Y has an existing agreement which they wish for reformation to express their true intentions, however their real agreement is void, therefore reformation is not allowed.
4. When one of the parties has brought an action to enforce the instrument
Anna who is in need of money negotiated a contract of chattel mortgage with Ben using Anna’s Car for security. Through machination perpetrated by Ben, Anna signed a document of sale believing that it was a chattel mortgage. Later Anna filed a case against Ben for delivery of the car based on the deed of sale. The action failed. Ben can no longer seek the reformation of the instrument to consider it a chattel mortgage. He is estopped for the law has deemed him to have waived the action for reformation.
Case Digest from Original Case
Citation:
Veluz v Veluz 24 SCRA 559 1968
Case Docket:
G.R. No. L-23261
Date:
July 31, 1968
Plaintiff-Appellant:
ERNESTO VELUZ
Defendants-Appellees:
SOCORRO VELUZ, ET AL.
Counsel for Plaintiff- Appellant:
Lucio B. Bondad
Counsel for Defendants-Appellees:
De Mesa & De Mesa
Ponente:
ZALDIVAR, J.
FACTS:
Original plaintiff Ernesto Veluz filed a complaint before the Court of First Instance of Quezon on July 30, 1958. On a motion for bill of particulars by defendants, the court ordered plaintiff to file an amended complaint, which plaintiff did. In the amended complaint plaintiff alleged that on January 2, 1953 he asked defendants for a loan of five thousand pesos, to secure the payment of which he proposed to mortgage his share on a parcel of land covered by TCT No. 27247 of the Registry of Deeds of Quezon; that the defendants agreed and caused forthwith the preparation of a deed, a copy of which is attached to the complaint as Annex A; that when defendants asked plaintiff to sign the deed as prepared, the latter noticed that the deed was an absolute sale instead of a mortgage, and so he asked defendants why the document was couched that way, to which query defendants answered that it had to be so in order that defendants could take possession and enjoy the fruits of the land and that plaintiff had nothing to worry about the document as defendants, being his brothers and sisters, would not take advantage of the deed of sale, and that plaintiff could redeem the property anytime; that because of the assurance of his brothers and sisters, plaintiff affixed his signature on the document; that said document did not express the real intention of the parties; that in May 1956 plaintiff wanted to redeem the property but the defendants refused, claiming that what plaintiff had executed was a deed of sale; that several days later, plaintiff came to know that the property had been registered already in defendants’ name; that the value of the land with its improvements would be no less than P80,000.00 yielding a monthly produce valued at no less than P1,000.00. Plaintiff prayed that judgment be issued "ordering the reformation of the deed of sale attached hereto as Annex ‘A’ to express the true intention of the parties, to wit: the same be made as a deed of mortgage and that defendants be ordered to pay actual and moral damages and attorney’s fees.
ISSUE:
When does an action for the reformation of instrument prescribe?
RULING:
The Court ruled that, the appealed order of the lower court, dated June 28, 1960, dismissing plaintiff’s complaint, should be, as it is hereby, set aside; and this case is remanded to the court a quo for further proceedings. Costs against defendants-appellees.
The Court believed that the decision in the Conde case should prevail, not only because it is of a later date but also because the issue decided therein refers to the period of prescription in an action for reformation of instruments; whereas, in the Carlota case, the issue decided refers to the annulment of contracts. The ruling in the Conde case is squarely applicable to the case now before Us because, as in the Conde case, the question involved is the reformation of an instrument which appears to be a deed of absolute sale when the real intention of the parties was to execute a deed of mortgage.
Hence, in the case at bar, even if the ten-year period of prescription be computed from the date of the execution of the instrument on January 2, 1953, or from May, 1958 when defendants refused to allow redemption — evincing thus their intent not to live up to the true agreement and thereby giving rise to the right of action — until July 30, 1958 when the instant case was commenced, the ten-year period for prescription of the action had not yet elapsed.
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