Case Digest (G.R. No. 232825)
Facts:
Ulysses Rudi V. Banico v. Lydia Bernadette M. Stager (substituted by her compulsory heirs), G.R. No. 232825, September 16, 2020, Supreme Court First Division, Lopez, J., writing for the Court. The core dispute arose from the sale of portions of Lot No. 199 in Barangay Manoc-Manoc, Boracay Island, owned by Lydia Bernadette M. Stager. In 1992 Lydia and Ulysses Banico executed a Deed of Absolute Sale dated February 8, 1992 purporting to convey an 800-sq m portion for P350,000.00. Banico immediately took possession of a flat coastal area suitable for a beach resort, engaged a surveyor and began construction, but later discovered the deed’s technical description pointed to an elevated, rocky northern portion instead of the flat terrain he occupied. Lydia allegedly promised to correct the deed.Subsequently Lydia offered Banico an adjacent 400-sq m parcel on installment for P160,000.00, and they executed a separate contract to sell dated October 19, 1992. Banico made numerous payments and constructed improvements; Lydia claimed an unpaid balance remained. In 2001 Lydia presented a notarized Deed of Absolute Sale dated December 6, 2001 that, she contended, correctly described the 800-sq m parcel, but Banico refused to sign it for lack of correct consideration.
On July 9, 2002 Banico filed before the Regional Trial Court (RTC) Civil Case No. 02-104001 an action for specific performance and damages seeking reformation of the February 8, 1992 deed to reflect the parcel he actually purchased and collection of amounts due under the contract to sell. Lydia (later substituted by her heirs after her death in 2012) answered, asserting the transactions were distinct and contending Banico had not fully paid for the 400-sq m parcel.
On February 18, 2015 the RTC ordered reformation of the February 8, 1992 Deed to reflect the exact location of the 800-sq m parcel, found Banico owed P6,600.00 balance on the 400-sq m contract to sell, and denied damages. Both parties appealed to the Court of Appeals (CA), which, in CA-G.R. CV No. 104805, on February 22, 2017 modified and reversed the RTC: the CA held the reformation claim was prescribed, reduced the unpaid balance to P5,860.00, ordered execution of the deed for the 400-sq m upon payment, and denied damages. Motions for reconsideration were denied by the CA on July 11, 20...(Subscriber-Only)
Issues:
- Is Banico’s action for reformation of the February 8, 1992 Deed of Absolute Sale time-barred by prescription?
- May a party who caused or whose counsel drafted an ambiguous instrument nevertheless obtain reformation when contemporaneous and subsequent acts show the deed does not express the parties’ true intention?
- Does Banico still owe an unpaid balance under the October 19, 1992 contract to sell for the 400-sq m parcel, and...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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