FACTS: By virtue
of RA
4726 or the
Condominium Act, Multi-Realty
Incorporated (MDC) Makati Tuscany
(MATUSCO) to hold
over title and
manage its condominium,
the Makati Tuscany. To enable it to perform its function, MDC and
MATUSCO executed a Master Deed and a Deed of Assignment transferring to
MATUSCO the common areas,
including the 98
parking lots. Despite
the deeds, MDC
exercised ownership over
the parking lots such that
it sold some of it in several occasions
to unit owners.
Subsequently,
MDC filed a
complaint against MATUSCO
for reformation of
contract with damages.
MDC alleged that
the deed did
not reflect the
true intent of
the parties. Considering
that it was
new to the
industry and Makati
Tuscany was its
first condominium, it is
inexperienced in handling
these matters. MDC
asserted that the
true intent of
the parties was
not to include
the 98 parking
lots to be
transferred to MATUSCO.
For its part,
MATUSCO averred that
the deeds were
prepared by MDC
itself. Thus, it
was very unlikely
that it would
commit a mistake
in preparing it.
It likewise stated that
the MDC is
estopped from impugning
the content of
the contract as it
recognized its existence and did not object to it for more than 10 years.
Affirming the defense of MATUSCO, the RTC denied the
complaint. On appeal to the
CA, the decision
was reversed and
set aside. CA
gave more credence
into the position of
MDC that the
instrument did not
contain the intent
of the parties.
Thus, MATUSCO elevated this case on appeal by certiorari.
ISSUE: Is the
reformation of instrument proper?
HELD: WHEREFORE, premises
considered, the Petition
for Review on
Certiorari Is DENIED.
Reformation has the following elements: 1) there was a
meeting of the minds in a contract; 2)
the instrument does not reflect the true intent of the parties; and 3) the
failure to reflect such intent is due to mistake, fraud, inequitable conduct or
accident. However, what is more
difficult to ascertain is the real intent of the parties. How is the real intent determined? Intent, being a state of mind is
determined by the acts before, during or after
the execution of the instrument.
In this case, it
is evident that
the MDC exercised
dominion over the 98 parking
lots even after the execution of the deed. In fact, for two instances,
MDC even sold some of the
lots to unit
owners without any
opposition from MATUSCO.
These acts of
the parties are
indicative of their
true intent that
the 98 parking
lots are not
included in the
Deed of Transfer.
Moreover, the mistake
in the instrument
is apparent. The
court here gave
more weight in
the position of
the MDC that
it was new
to the industry.
Its inexperience in these situations made it vulnerable to
mistakes. Considering their true intent, it leads only to the
lone conclusion that
the inclusion of
the parking lots
in the instrument
is only by mistake.
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