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ASUNCION ATILANO, CRISTINA ATILANO, ROSARIO ATILANO, assisted by their respective husbands, HILARIO ROMANO, FELIPE BERNARDO, and MAXIMOLACANDALO, ISABEL ATILANO and GREGORIO ATILANO, plaintiffs- appellees, vs.LADISLAO ATILANO and GREGORIO M. ATILANO, defendants-appellants.

G.R. No. L-22487

May 21, 1961

Doctrine:

When one sells or buys real property - a piece of land, for example - one sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot number assigned to it in the certificate of title.

Issue:

Was the intention of the parties the determining factor in the contract of sale?

Facts:

In 1916, Eulogio Atilano I owned lot No. 535 in the municipality of Zamboanga cadaster which he divided into give (5) parts. Namely as lots Nos. 535-A, 535-B, 535-C, 535-D, and 535-E. Lot. No. 535-E was sold to Eulogio Atilano II, Eulogio Atilano I’s brother, while 535-B to 535-D were sold to other persons. Upon the death of Eulogio Atilano I, the remaining portion of land which is presumably lot no. 535-A, was passed down to defendant Ladislao Atilano.

When Eulogio Atilano II died, his wife Luisa Bautista and his children sought the land to be subdivided. It was then discovered that the land they were occupying was lot No. 535-A and not lot No. 535-E which was covered in the transfer certificate of title. And that the land occupied by Ladislao Atilano was lot No. 535-E. Lot No. 535-E has an area of 2,612 square meters area while lot No. 535-A covered 1,808 square-meter.

Heirs of Eulogio Atilano II filed in the Court of First Instance of Zamboanga demanding the return of lot No. 535-E while surrendering their possession of lot No. 535-A. Defendants refused to accept the exchange and contended that the reference to lot No. 535-E in the deed of sale of May 18, 1920 was an involuntary error and that the intention of the parties in the contract of sale was lot No. 535- A. And that it was evident since Eulogio Atilano even purchased a portion from an adjoining lot which increases the area of his property. It was also found that Eulogio Atilano II has constructed his residence therein even before the sale was constituted

The trial court ruled in favor of the plaintiffs saying that the property was registered under the Land Registration Act and that the defendants could not acquire it through prescription

Ruling:

Yes. When one sells or buys real property - a piece of land, for example - one sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot number assigned to it in the certificate of title. In the particular case before us, the portion correctly referred to as lot No. 535-A was already in the possession of the vendee, Eulogio Atilano II, who had constructed his residence therein, even before the sale in his favor; indeed, even before the subdivision of the entire lot No. 535 at the instance of its owner, Eulogio Atilano I.

The real issue here is not adverse possession, but the real intention of the parties to that sale. From all the facts and circumstances we are convinced that the object thereof, as intended and understood by the parties, was that specific portion where the vendee was then already residing, where he reconstructed his house at the end of the war, and where his heirs, the plaintiffs herein, continued to reside thereafter: namely, lot No. 535-A; and that its designation as lot No. 535-E in the deed of sale was a simple mistake in the drafting of the document. The mistake did not vitiate the consent of the parties, or affect the validity and binding effect of the contract between them. The new Civil Code provides a remedy for such a situation by means of reformation of the instrument. This remedy is available when, there having been a meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident (Art. 1359, et seq.). In this case, the deed of sale executed in 1920 need no longer be reformed. The parties have retained possession of their respective properties conformably to the real intention of the parties to that sale, and all they should do is to execute mutual deed of conveyance.

When there is difference between the lot number stated in a certificate of title and the intention of

the contracting parties the latter must be followed. In the case at bar, it was found that lot No. 535-

A was the intended subject of the contract of sale rather than lot No. 535-E.

Therefore, the judgement appealed from is reversed. Plaintiffs are to execute a deed of conveyance

of lot No. 535-E in favor of defendants and that defendant are to execute a similar document of lot

No. 535-A in favor of plaintiffs.