G.R. No. 230307 , October 16, 2019
HEIRS OF WILFREDO C. BOTENES, PETITIONERS, V. MUNICIPALITY OF CARMEN, DAVAO, REPRESENTED BY MUNICIPAL MAYOR GONZALO O. CUARENTA, AND RURAL BANK OF PANABO (DAVAO), INC., RESPONDENTS.

FACTS

The property subject of the controversy is Lot No. 2, Block 25 of PDS-11-025504, covered by Transfer Certificate of Title (TCT) No. T-77779 registered under Wilfredo C. Botenes. In 1980, the Municipality of Carmen engaged Geodetic Engineer Leonardo Busque to survey and subdivide land for a town site. A subdivision plan was approved in 1981 (1981 Plan), where lots in Block 25 were numbered sequentially in two columns. Based on this plan, the Municipality executed a Deed of Sale with Mortgage over Lot No. 2 in favor of Botenes. Allegedly, another subdivision plan was approved in 1990 (1990 Plan), which modified the numerical sequence of the lots to conform with standard procedure. Under the 1990 Plan, Lot 2 of the 1981 Plan became Lot 19, and Lot 19 of the 1981 Plan became Lot 2. In 1992, after full payment, the Municipality executed a Deed of Absolute Sale over Lot No. 2, Block 25 (1992 Deed) in favor of Botenes, and TCT No. T-77779 was issued in his name. Meanwhile, the original buyer of Lots 17 and 19 under the 1981 Plan, Felicisima Prieto, conveyed her rights, and the subsequent buyer sold Lot 2, Block 25 under the 1990 Plan (formerly Lot 19 under the 1981 Plan) to Rural Bank of Panabo (Davao), Inc. (the bank). The bank’s application for registration was denied because the property was already registered under Botenes’ name. The Municipality and the bank filed a petition for reformation of instrument and quieting of title, alleging a mistake in the object of the contract in the 1992 Deed, as it referred to Lot 2 under the 1981 Plan instead of its new designation as Lot 19 under the 1990 Plan. The Regional Trial Court dismissed the petition. The Court of Appeals reversed, granting the petition for reformation and ordering the reformation of the 1992 Deed to change “LOT 2, BLOCK 25” to “LOT 19, BLOCK 25” and the cancellation of Botenes’ TCT. The heirs of Botenes filed the present Petition for Review.

ISSUE

1. Whether the reformation of the 1992 Deed should be granted to adhere to the true intention of the parties.
2. Whether the issuance of TCT No. T-77779 in favor of Botenes was proper.

RULING

The Supreme Court PARTLY GRANTED the petition, REVERSED and SET ASIDE the Decision and Resolution of the Court of Appeals, and ordered the Rural Bank of Panabo (Davao), Inc. to file the appropriate petition for amendment of the title pursuant to Section 108 of Presidential Decree No. 1529.
The Court held that the 1992 Deed and the certificate of title in Botenes’ name clearly indicated the technical description of Lot 2, Block 25, which defines the exact metes and bounds of the property. The technical description, not the lot number, is determinative of the object of the sale. The evidence showed that the Municipality intended to sell to Botenes the specific lot with that technical description, regardless of the numbering changes in subsequent subdivision plans. The changes in the 1990 Plan pertained only to the numbering of the lots, not their technical descriptions or locations. Therefore, there was no mistake in the 1992 Deed that would warrant reformation under Article 1359 of the Civil Code, as the instrument accurately reflected the parties’ agreement to sell the lot with that specific technical description. The issuance of TCT No. T-77779 in Botenes’ name was proper. However, to avoid confusion due to the conflicting lot numbers, the Court, applying equity, ordered the bank to file a petition for correction of the title to amend the property description from Lot 2, Block 25 of the 1981 Plan to Lot 19, Block 25 of the 1990 Plan, as the bank had an interest in clarifying the title.