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Bragado [OBLICON]

CALIFORNIA BUS LINES, INC., petitioner, Plaintiff alleged that on January 2, 1953 he asked
vs. defendants for a loan of five thousand pesos, to secure the
STATE INVESTMENT HOUSE, INC., respondent. payment of which he proposed to mortgage his share on a
Topic: Other Mistake parcel of land
. He also alleged that the defendants agreed and caused
forthwith the preparation of a deed and that when defendants
DOCTRINE: asked plaintiff to sign the deed as prepared, the latter noticed
PRESCRIPTION OF ACTION; REFORMATION OF INSTRUMENTS. that the deed was an absolute sale instead of a mortgage,
An action for reformation of an instrument under Article 1365 of the
Civil Code, prescribes in ten(10) years as provided for in Article 1144 and so he asked defendants why the document was couched
of the Civil Code that way
ART. 1365. If two parties agree upon the mortgage or pledge of real Defendant answered that it had to be so in order that
or personal property, but the instrument states that the property is defendants could take possession and enjoy the fruits of the
sold absolutely or with a right of repurchase, reformation of the land and that plaintiff had nothing to worry about the
instrument is proper. document as defendants, being his brothers and sisters,
would not take advantage of the deed of sale, and that
SHORT ANSWERS: plaintiff could redeem the property anytime; that because of
1. When did the problem start: When Plaintiff tried to redeem the assurance of his brothers and sisters.
his property but was refused by defendants Plaintiff affixed his signature on the document.
2. Who was chasing who: Originally Ernesto Veluz succeded Plaintiff prayed that judgment be issued "ordering the
by his heirs was going after Socorro Veluz et. al. reformation of the deed of sale to express the true intention
3. When did the obligation arise: When Plaintiff entered into of the parties, to wit: the same be made as a deed of
contract with his siblings for a loan mortgage . . ." and that defendants be ordered to pay actual
and moral damages and attorneys fees.
FACTS: Defendants moved for the dismissal of the complaint upon
There was no trial in this case. Instead of an answer, the the grounds that the cause of action has prescribed and that
defendants filed a motion to dismiss upon the grounds of the complaint states no cause of action, to which motion
prescription and want of cause of action. The facts as plaintiff filed his opposition.
alleged in the complaint must, therefore, be considered ISSUE:
hypothetically admitted. 1. WON An action for reformation of an instrument has
Ernesto Veluz 1 filed a complaint before the Court of First prescribed
Instance of Quezon on July 30, 1958
HELD:
Bragado [OBLICON]

No, in the case at bar, even if the ten-year period of is made or construed so as to express or conform to the real
prescription be computed from the date of the execution of intention of the parties when some error or mistake has been
the instrument on January 2, 1953, or from May, 1958 when committed
defendants refused to allow redemption evincing thus their "Reformation of Instruments" carries no provision regarding
intent not to live up to the true agreement and thereby giving the period when the action for reformation of instrument shall
rise to the right of action, 7 until July 30, 1958 when the
instant case was commenced, the ten-year period for be brought.
prescription of the action had not yet elapsed. The ruling in the Conde case is squarely applicable to the
The prayer is to have the deed declared void as a sale and
case now before Us because, as in the Conde case, the
construed or given the effect of a mere mortgage so as to
make it conform to the real intention of the parties. In other question involved is the reformation of an instrument which
words, what is sought is reformation, which is defined as appears to be a deed of absolute sale when the real
that remedy in equity by means of which a written instrument
intention of the parties was to execute a deed of mortgage.

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