G.R. No. 133643 ; June 6, 2002
RITA SARMING, ET AL., petitioners, vs. CRESENCIO DY, ET AL., respondents.

FACTS

The case involves a dispute over two parcels of land, Lot 4163 and Lot 5734. Petitioners are successors-in-interest of Silveria Flores, while respondents are successors-in-interest of Alejandra Delfino and other Flores heirs. In 1956, certain Flores heirs sold a one-half portion of Lot 4163 to Alejandra Delfino. During the preparation of the deed, the wrong title, OCT No. 4918-A for Lot 5734, was inadvertently presented and used. Consequently, the executed “Settlement of Estate and Sale” deed incorrectly identified the sold property as Lot 5734. Alejandra Delfino took possession and improved the actual one-half of Lot 4163. The error was discovered two years later. Despite demands, Silveria Flores refused to cooperate in correcting the deed, prompting a complaint for reformation of instrument.
The trial court ruled in favor of the respondents, ordering the reformation of the deed to reflect the correct lot number. The Court of Appeals affirmed this decision. Petitioners appealed, arguing that the contract was clear and that reformation was improper, and further contesting the award of damages.

ISSUE

Whether the deed of sale is subject to reformation to correct the erroneous description of the property from Lot 5734 to Lot 4163.

RULING

The Supreme Court affirmed the appellate court’s decision, granting reformation but modifying the award of damages. Reformation is a remedy in equity to conform an instrument to the true intention of the parties when, due to mistake or fraud, the written document does not express their real agreement. The Court found clear and convincing evidence that the true agreement was to sell a one-half portion of Lot 4163, not Lot 5734. This was supported by the parties’ conduct: Alejandra Delfino immediately possessed and improved the specific half of Lot 4163, the vendors only owned a share in that lot, and Silveria Flores was present during the transaction and did not object to the sale of that portion. The mutual mistake in using the wrong title was proven. Therefore, reformation is proper to reflect the true meeting of the minds.
However, the Court set aside the awards of actual and moral damages for lack of evidentiary basis and absence of a finding of bad faith, respectively. The award of attorney’s fees was upheld, as petitioners’ unjustified refusal to correct the deed compelled respondents to litigate. The instrument was ordered reformed by changing “Lot 5734” to “Lot 4163.”