The Supreme Court (SC) has ruled that an erroneous lot number in a deed of sale may be corrected when evidence clearly establishes the property the parties actually intended to buy and sell, holding that a mistaken technical description should not defeat their true agreement.

In a decision penned by Associate Justice Henri Jean Paul B. Inting, the SC granted the petition of Spouses Genara and Felipe Abay Jr., Gefe Gusaya and Mary Genafe Abay, reversed the Court of Appeals (CA), and ordered the reformation of the deeds to reflect the property actually sold to them.

“Accordingly, the error in designation should not defeat the true intent of the parties,” the Court said.

FACTS AND ISSUE

The case stemmed from a dispute over a 491-square-meter property in Cebu City that the Abays claimed to have purchased from Crispin Caballes and the Gallardos through deeds executed in 1979, 1981 and 1982. While the deeds identified the property as Lot No. 6036-B, the parcel they had fenced and occupied was Lot 7 of Lot No. 6012-E.

The dispute arose after workers hired by Spouses Jacinto and Chiok Ngo Lim Young entered the property in May 2000 and demolished portions of the Abays’ concrete fence. The Abays later discovered that the property had been registered in the Young spouses’ names under TCT No. 155087.

In 2012, the Regional Trial Court ruled for the Abays and ordered Spouses Young to reconvey the property, finding that the Abays had established prior ownership and that the Young spouses were not innocent purchasers for value.

The CA initially affirmed the ruling in 2022 but reversed itself on reconsideration in 2023, finding that the Abays had purchased Lot No. 6036-B, not the disputed property, and that Spouses Young were buyers in good faith. It also found the Abays guilty of inordinate delay in asserting their rights.

The issue before the SC was whether Spouses Young’s title should prevail over the Abays’ claim of prior ownership.

RULING

The SC reversed the CA, finding that the parties intended the deeds to cover the 491-square-meter property actually delivered to and occupied by the Abays despite the erroneous lot number.

The Court found that the parties had a meeting of the minds over the disputed property but that, because of a mistake in its designation, the deeds failed to reflect their true agreement, warranting reformation of the instruments. It explained that real property is bought not merely by its technical lot number but as actually identified by its monuments, boundaries and improvements.

The Abays’ possession and improvements, along with evidence that the sellers had identified the property and its boundaries to them, supported the finding that the disputed parcel was the property the parties intended to convey. The SC also found that the sellers had acquired the portions of the property they subsequently conveyed to the Abays.

The SC also rejected Spouses Young’s claim that they were innocent purchasers for value, finding that the property was already fenced and occupied when they acquired it, which should have prompted them to investigate the occupants’ rights.

“Spouses Young cannot claim good faith to overturn petitioners’ prior and valid titles,” the Court said.

The Court likewise rejected the finding of laches, noting that the Abays had continuously possessed the property until 2000 and filed their complaint the following year within the applicable prescriptive periods.

Accordingly, the SC ordered the deeds reformed to identify the property as Lot 7 of Lot No. 6012-E, declared the Abays its absolute owners, ordered Spouses Young to reconvey it, and directed the cancellation of their title and issuance of a new one in the Abays’ names.

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