CHAPTER 4 – Reformation of Instruments (Articles 1359-1369)

CHAPTER 4
REFORMATION OF INSTRUMENTS
(Arts. 1359-1369)

STUDY GUIDE : SESSION 8

1. What is “reformation of instruments” as a remedy at law?

 Reformation of instruments is that remedy in equity by
means of which a written instrument is changed, modified or construed so
as to express or conform to the real intention of the parties when some
error or mistake has been committed.
 It is an equitable remedy consisting of “rewriting” of a contract
or other document in cases where the written terms of the contract do not
express what was actually agreed upon.

2. Be able to distinguish ‘reformation of instruments’ from

‘reformation of contracts. –

 In reformation of instruments, what is reformed is not the

contract itself, but the instrument embodying the contract ( i.e., the writing
which serves as evidence of the parties’ contract).

 On the other hand, ‘reformation of contracts’ is a modification

of the terms or stipulations of a contract previously agreed upon by the
parties, and can therefore be equated to novation of contracts.

3. What is the rationale for the doctrine of reformation?

 It would be unjust and inequitable to allow the enforcement of
a written instrument which does not reflect or disclose the real meeting of
the minds of the parties.

129
CHAPTER 4 – Reformation of Instruments (Articles 1359-1369)

4. What are the requisites of an action for reformation of instrument?

(a) There must be a meeting of the minds between the parties to the
contract.
(b) The instrument must not express the true intention of the parties.
(c) The failure to express the true intention must be due to either of
the following causes:

 MISTAKE. – To justify the reformation of a written instrument

upon the ground of mistake, the concurrence of
three things is necessary:

 The mistake must be of fact.

 The mistake must be mutual or common to both
parties (Art. 1361).
Exception: Though the mistake is unilateral, but the
other party acted fraudulently or inequitably or is
guilty of concealment, the party who was
mistaken can still ask for reformation (Art.
1362).

 The mistake must be proved by clear and

convincing evidence.

 FRAUD  active (Art. 1362) or passive (Art. 1363)

 Illustrative Example of Passive Fraud under Art. 1363. -

Niño sold his farm lot to Niña. The lot consisted of 9,300 square
meters and was part of a bigger lot owned by Niño. There was here a
meeting of minds as regards the lot area. The written contract of sale
executed by the parties, however, showed an area of 9,800 square
meters. Niño signed the contract in the honest belief that the area
stated therein was 9,300 square meters. On the other hand, Niña

130
CHAPTER 4 – Reformation of Instruments (Articles 1359-1369)

signed the contract with knowledge that the area stated was 9,800 but
concealed such fact from Niño because she wanted to acquire a
bigger area. In this case, Niño may ask for the reformation of the
instrument of sale so as to show that the area was only 9,300 square
meters.

 INEQUITABLE CONDUCT (Art. 1362)

 ACCIDENT (Art. 1364)

(d) There must be clear and convincing proof of the said causes.

5. Reformation (as a remedy) distinguished from

Annulment. –

 In reformation, there is a meeting of the minds of the

parties; hence, a contract is perfected and comes into existence, but the
written instrument purporting to embody the contract does not express the
true intention of the parties (Art. 1359).
 In annulment, there has been no meeting of the minds, the
consent of one of the parties being vitiated (Art. 1390).

Reformation does not invalidate a contract; while
annulment invalidates a contract.

 Illustrative Example of the Distinction:

 Where reformation is the proper remedy. – Jun sold to Jane

his 1000 square-meter lot which is covered by Transfer Certificate of Title (TCT)
No. 14344 for P10 million. Due to the error of the typist, the deed of sale signed
by the parties shows TCT No. 14345, which covers another 1,000 square-meter
lot that also belongs to Jun. In this case, there was a meeting of minds between
Jun and Jane as to the sale of the lot covered by TCT No. 14344. The
instrument, however, signed by the parties shows another lot number – TCT No.
14345. Either party may bring an action to reform the instrument evidencing their

131
CHAPTER 4 – Reformation of Instruments (Articles 1359-1369)

sale, so as to show that the true intention of the parties was the lot covered by
TCT No. 14344. (This example also illustrates the application of Art. 1364.)

 Where annulment is the proper remedy. – Jun offered to sell

to Jane his inside lot consisting of 1000 square meters and covered by TCT No.
14344. Jane thought that she was buying the lot of Jun located beside the road
which also consisted of 1000 square meters and covered by TCT No. 14345.
The Deed of Sale, which was prepared by Jun’s secretary, reflected the sale of
the inside lot which was covered by TCT No. 14344. Here, there was no meeting
of minds between the parties as to the object of the contract of sale. Hence, the
proper remedy in this case is not reformation, but annulment of the contract of
sale on the ground of mistake on Jane’s part. [ Art. 1331 in relation to Art.
1390(2)]

6. What instruments cannot be the proper subject of reformation?

(a) Simple donations inter vivos wherein no condition is imposed.

[Art. 1366(1)]
Reason: Donation is essentially gratuitous and the donee,
therefore, has no cause for complaint.

(b) Wills. [Art. 1366(2)]

Reason: The making of a will is strictly a personal act. They
cannot be reformed except by the testator himself.

(c) Void agreements. [Art. 1366(3)]

Reason: Void contracts are inexistent, so there is nothing to
reform.

(d) Instruments for which an action to enforce has been brought by

one of the parties. (Art. 1367)
Reason: In such case, there is estoppel, waiver or ratification
by the party who seeks to enforce the contract.

132
CHAPTER 4 – Reformation of Instruments (Articles 1359-1369)

7. Who may file an action for reformation of instrument? (Art. 1368)

(a) If the mistake is mutual, either of the parties or their successors

in interest.
(b) In all other cases, the injured party or his heirs and assigns.

 READ THESE CASES IN THEIR ORIGINAL TEXT:

(1) Sarming vs. Dy, G.R. No. 133643,

June 6, 2002.
(2) Rosello-Bentir vs. Hon. Leanda,
G.R. No. 128991, April 12, 2000.

APPLICATION/PROBLEMS :
1. S owns two (2) cars: a BMW 525i worth P3.9M and a BMW 320i
worth P2.1M. Today, S offers for sale to B the BMW 320i for 3.5M. B
accepts the offer of S because B thinks all the while that S is offering his
BMW 525i, and not the BMW 320i. In the instrument of sale, however, as
drafted, the car specified as object of the sale is the BMW 320i. Can B
ask for reformation?

2. S agreed with B that S would be loaned P10M by B. In the

contract, however, drafted by B, it was stated that S was selling his house
to B for said amount. It had been B’s experience in previous transactions
that S outrightly signed their contracts without examining the same but
relied in good faith on the representations of B. As expected, S
subsequently signed the contract in the belief that it was really a contract
of loan. Under the facts, can B ask for reformation of the instrument of
sale?

3. S sold B a house. S fraudulently made the contract one of

mortgage instead of sale. Both signed the contract of mortgage, with B

133
CHAPTER 4 – Reformation of Instruments (Articles 1359-1369)

believing all the time that it was a contract of sale. Later, B brought an
action to foreclose the mortgage and at the same time brought an action
to reform the contract of mortgage on the ground that S had acted
fraudulently in making him (B) sign a contract of mortgage when what they
had in fact agreed upon was a contract of sale over the house of S. If B
is able to positively prove the fact of fraud on the part of S, can the
contract of mortgage be reformed in favor of B?

*** END ***

FOOD FOR THOUGHT

“Failure will never overtake me

if my determination to succeed is strong enough.”
Og Mandino

“Most of the important things in the world have been

accomplished by people who have kept on trying when
there seemed to be no help at all.”
Dale Carnegie

134