G.R. No. 230307 - Heirs of Botenes vs. Municipality of Carmen, Davao

The controversy involves the property known as Lot No. 2, Block 25 of PDS-11-025504, originally covered by Transfer Certificate of Title (TCT) No. T-77779 and registered in the name of Wilfredo C. Botenes.
In 1980, the Municipality of Carmen, Davao engaged Geodetic Engineer Leanardo Busque to survey and subdivide a large tract of land in Barangay Poblacion for its conversion into a town site.
A Subdivision Plan (1981 Plan) was subsequently prepared by Engr. Busque and approved by the Municipality on May 21, 1981, which established a specific numerical sequencing for the lots in Block 25.

Based on the 1981 Plan, the Municipality executed two separate Deeds of Sale with Mortgage: one in favor of Botenes for Lot No. 2, and another in favor of Felicisima Prieto for Lots Nos. 17 and 19.
A later subdivision plan (the 1990 Plan), also prepared by Engr. Busque, was approved by the Bureau of Lands on February 28, 1990. This plan modified the lot numbering system so that, for example, Lot 2 under the 1981 Plan became Lot 19 under the 1990 Plan, and vice versa.

On November 6, 1992, the Municipality executed a Deed of Absolute Sale (the 1992 Deed) over Lot No. 2, Block 25 in favor of Botenes after full payment, which led to the registration of TCT No. T-77779 in his name.
Concurrently, Prieto conveyed her interests in Lots 17 and 19 to a third party, Merlyn Plasabas, who sold Lot 2 (formerly Lot 19 under the 1981 Plan) to the Rural Bank of Panabo (Davao), Inc.
The bank’s subsequent attempt to register its ownership was denied because the property was already registered in Botenes’ name.

The bank requested that Botenes allow the correction (or reformation) of the 1992 Deed to reflect the true intent of the parties, arguing that the document mistakenly identified the lot as “Lot 2” (from the 1981 Plan) instead of its new designation under the 1990 Plan.
Botenes, asserting his rights over the property as originally conveyed, refused to allow any correction.
Thus, the Municipality and the bank filed a petition for reformation of instrument, quieting of title, and damages before the Regional Trial Court (RTC).

The RTC dismissed the petition in its Decision dated October 2, 1998.
Following Botenes’ death on March 27, 1999, his heirs substituted him in the proceedings.
The case was remanded for a full-blown trial by the Court of Appeals (CA), yet the parties eventually submitted their memoranda instead of undergoing a trial.
On December 10, 2013, the RTC again dismissed the petition, noting uncertainties over whether the lot sold was properly identified under the conflicting plans and questioning the validity of TCT No. T-77779 given that the bank purportedly purchased Lot 2 under the 1990 Plan.
The Municipality and the bank later filed a Motion for Reconsideration, which was denied on June 20, 2014.

On September 23, 2016, the CA reversed the RTC’s decision by ruling that the evidence clearly indicated that the Municipality intended to sell Lot 19, Block 25 (as per the 1990 Plan) rather than Lot 2.
The CA granted the petition for the reformation of the instrument, directing that the 1992 Deed be amended from “LOT 2, BLOCK 25, PSD-11-025504” to “LOT 19, BLOCK 25, PSD-11-025504.”
The CA further ordered that the Register of Deeds cancel TCT No. T-77779 and issue a new certificate in favor of the petitioners.
The Municipality and the bank filed a Motion for Reconsideration, which was denied in a Resolution dated January 10, 2017.
Ultimately, the final order directed the Rural Bank of Panabo (Davao), Inc. to file a petition within thirty (30) days for the amendment of the title pursuant to Section 108 of Presidential Decree No. 1529.

Whether the 1992 Deed of Absolute Sale should be reformed to accurately reflect the true intention of the parties in specifying the object of the sale.

Does the error in lot numbering, introduced by the transition from the 1981 Plan to the 1990 Plan, warrant a correction of the deed?
Was the Municipality’s intention clearly to sell a distinct lot as evidenced by the separate deeds executed for Botenes and Prieto?

Whether the subsequent issuance and registration of TCT No. T-77779 in favor of Botenes is proper, given the apparent discrepancy between the lot’s designation under the two subdivision plans.

Is the technical description of the property—as provided in the deed and the title—sufficient to determine the true identity of the object of sale, irrespective of numerical designations?
Can the bank claim ownership based solely on lot numbering despite the fact that the registered title and technical description correspond to the lot originally sold to Botenes?