Art. 1362 – Unilateral mistake.
Petitioner – Ong Chua
Respondents
– Edward Carr et al
Facts:
·
In 1923, Ong Chua
bought four properties of the spouses Henry E. Teck and Magdalena Lim. Chua executed
a public document granting the spouses the right to repurchase within four
years. But neither one of the documents was placed on record with the register
of deeds.
·
In
1925, Edward Carr came to Atty. P.J. Moore for advice and assistance in the
former’s desire to purchase coconut lands. Later, Moore informed Carr that he
could buy the lots purchased by Chua from the spouses Teck and Lim.
·
After
long negotiations, Chua agreed to sell the properties in question to Carr on
the condition that the sale should be subject to the rights of Teck and Lim to reconvey
the properties, and that said rights were to be respected by the vendee.
·
However,
Atty. Moore told Carr that they would make the deed of sale to appear absolute,
but that Carr was to bear in mind that the rights of Teck and Lim still existed,
and that the deed and other documents must be left in Moore's possession until
the expiration of the term for the right of repurchase.
·
Hence,
the deed of sale did not include therein the condition that the sale was
subject to Teck's and Lim's rights to repurchase. The deed was signed by Chua,
who was unfamiliar of English, trusting Atty. Moore that such public document
contained sufficient conditions as agreed.
·
In
1926, Atty. Moore got critically ill. While the Atty. was under medical
treatment, Carr annoyed the former. Carr
demanded the Atty. to surrender the deed to him for registration to the register
of deeds.
·
Teck
offered to repurchase the property in question from Chua who thereupon demanded
of Carr the reconveyance of the property to the spouses. But Carr refused to do so, claiming that he
had an absolute title to said property.
·
Upon
learning that the deed in question contained no reference to the rights of
reconveyance, Chua filed an action to reform the deed of the sale in accordance
with the original agreement. Subsequent to his answer, Carr died. He was
substituted by the administrator of his estate, Manuel Igual.
·
The
CFI Zamboanga rendered the judgment in favor of Chua.
·
On
appeal, Igual argued that the facts proven did not justify the reformation of
the deed in question.
Issue:
WoN the petitioner performs a fraudulent
conduct and unfair advantage over Chua to casue for the reformation of the deed.
Held:
Yes,
the Court holds that the evidence is conclusive that the conduct of Carr constituted
fraud and was calculated to obtain an unfair advantage over Chua.
Under
Art. 1362, reformation will be given "where there is a mistake on one side
and fraud or unfair dealing on the other".
In the case at
bar, Carr knew the contents of the deed and fully agreed to Moore's plan to
place it in escrow until the expiration of the term for the repurchase or
redemption of the land. But he violated his own agreement when he harassed
Moore into giving him possession of the deed prematurely. He took immediate
advantage of that circumstance and hastened to have the document presented to
the register of deeds for the issuance of certificates of title. Hence, such
conduct constitutes fraud and was calculated to obtain an unfair advantage over
the plaintiff.
Thus, the appealed judgement is
AFFIRMED.
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