GR 146726; (June, 2006) (Digest)
G.R. No. 146726 ; June 16, 2006
Multi-Realty Development Corporation vs. Makati Tuscany Condominium Corporation
FACTS
Petitioner Multi-Realty developed the Makati Tuscany Condominium. The Master Deed, executed in 1975, stated under Section 5 that parking lots assigned to each unit were part of the unit. Section 7(d) defined common areas to include “parking areas other than those assigned to each unit under Sec. 5.” Of the 270 total slots, 164 were assigned to units, 8 were designated as guest slots, and 98 were unallocated. Multi-Realty retained these 98 slots, selling 26 of them from 1977 to 1986 without objection from respondent MATUSCO, the condominium corporation. In 1979, MATUSCO’s board even considered purchasing 36 of these slots from Multi-Realty.
The dispute arose in 1989 when MATUSCO, for the first time, claimed ownership of the remaining 72 unallocated slots as common areas, rejecting Multi-Realty’s request to use two slots. Consequently, in 1990, Multi-Realty filed a complaint for reformation of instrument, alleging a mutual mistake in the Master Deed for failing to specify its retained ownership over the 98 slots.
ISSUE
Whether Multi-Realty’s action for reformation of the Master Deed had already prescribed.
RULING
Yes, the action had prescribed. The Court affirmed the appellate court’s dismissal. An action for reformation of an instrument on the ground of mistake prescribes in ten years from the date of the instrument’s execution, pursuant to Article 1144 of the Civil Code. The Master Deed was executed in 1975. Multi-Realty’s cause of action accrued then, as the alleged mistake was intrinsic to the document from its inception. The ten-year prescriptive period expired in 1985.
Multi-Realty’s claim that the prescriptive period should run from 1989—when it allegedly discovered the mistake upon MATUSCO’s claim—is untenable. The mistake, if any, was one of fact, not a latent ambiguity discovered later. The company’s own acts, including selling 26 slots and engaging in negotiations with MATUSCO in 1979, demonstrated its early awareness of the ownership issue concerning the unallocated slots. Its failure to seek judicial reformation within the decade from 1975 rendered its 1990 complaint time-barred. The Court emphasized that prescription, once it has set in, cannot be disrupted by subsequent events like the 1989 demand.