G.R. No. L-10705; March 30, 1960
LUIS ATIENZA BIJIS, petitioner, vs. FRANCISCO LEGASPI, ET AL., respondents.

FACTS

The respondents, Francisco Legaspi and the heirs of his deceased wife Ana Medina, filed a suit against petitioner Luis Atienza Bijis. They claimed to be the pro-indiviso owners of a parcel of land in Rosario, Cavite, known as Lot No. 1155, covered by Transfer Certificate of Title No. 9595, and the improvements thereon (a house and a storehouse). They alleged that in May 1947, the petitioner, through misrepresentation and fraud, caused the storehouse to be removed and sold for his benefit. The petitioner asserted ownership of the lot and improvements, claiming he acquired it by purchase from the Agricultural and Industrial Bank (later the Rehabilitation Finance Corporation), which had acquired it from the San Lazaro Estate Fund.
The original registered owner was Pedro Medina, who owned two lots: Lot 1155 (in the poblacion, with improvements) and Lot 1357 (in barrio Bagbag, without improvements). In 1920, Pedro Medina mortgaged a property to the San Lazaro Estate Fund. The mortgage deed (Exhibit “5”) identified the property as Lot No. 1357 but described it as being in the poblacion of Rosario with an area of 627 sq.m. and having improvements (a house and a storehouse), which matched the actual description of Lot 1155. The appraisal report and insurance documents pertained to these improvements. Due to non-payment, the mortgage was foreclosed, and the property was acquired by the San Lazaro Estate Fund, then passed to the Agricultural and Industrial Bank, which executed a promise of sale to the petitioner in 1943. Later, the Rehabilitation Finance Corporation executed an absolute deed of sale to the petitioner in 1949 (Exhibit “9”), again identifying the property as Lot 1357. The petitioner subsequently registered the sale and obtained Transfer Certificate of Title No. T-3050 for Lot 1357.
Meanwhile, in 1932, Pedro Medina had transferred the Bagbag property (Lot 1357) to spouses Francisco Legaspi and Ana Medina, who obtained TCT No. 9595 for it. The petitioner later discovered an error: the property he purchased and possessed in the poblacion (with improvements) was actually Lot 1155, while the lot registered in his name (Lot 1357) was the unimproved property in Bagbag. The respondents were in possession of the Bagbag lot (Lot 1357). To rectify the error in the lot numbers, the parties attempted to execute mutual deeds of sale: the petitioner executed a deed selling Lot 1357 to the respondents, and the respondents executed a deed selling Lot 1155 to the petitioner, both for the same price of P2,000, indicating an intent to exchange the properties. This exchange was not completed due to a misunderstanding.
The Court of First Instance declared the petitioner the owner of Lot 1155. The Court of Appeals reversed this and declared the respondents the owners of Lot 1155.

ISSUE

Which party is the rightful owner of Lot No. 1155 situated in the poblacion of Rosario, Cavite?

RULING

The Supreme Court reversed the decision of the Court of Appeals and affirmed the decision of the Court of First Instance, declaring petitioner Luis Atienza Bijis the owner of Lot 1155.
The Court held that the mere mention of “Lot No. 1357” in the contract of sale, deed of absolute sale, and certificate of title in favor of the petitioner was not conclusive. The evidence showed that the property intended to be mortgaged by Pedro Medina and subsequently sold to the petitioner was the lot in the poblacion (with improvements, area of 627 sq.m.), which was actually Lot 1155, not the unimproved Lot 1357 in Bagbag. The description in the mortgage deed (location, area, improvements) matched Lot 1155, and the insurance covered the buildings on that lot. The subsequent acts of possession and rental collection by the petitioner pertained to the poblacion property. The mutual deeds of sale executed by the parties, which were essentially instruments of exchange for the same price, further demonstrated their clear intention that the petitioner should own Lot 1155 and the respondents should own Lot 1357. Applying Article 1370 of the Civil Code, the evident intention of the parties prevails over the literal words of the contract. Therefore, the petitioner is the owner of Lot 1155.