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Maagad vs Maagad

Maagad vs Maagad

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Published by is_still_art
2009. Article 1361 NCC.
2009. Article 1361 NCC.

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Published by: is_still_art on Mar 14, 2012
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01/13/2014

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 Topic: Article 1361. When a mutual mistake of the parties causes the failure of theinstrument to disclose their real agreement, said instrument may be reformed. Title: Lynn Maagad and Director of Lands vs Juanito MaagadFacts:- The parcel of land in dispute (Lot 6297) located in Bulua, Cagayan de Oro City,formed part of the estate of Proceso Maagad. Upon his death, he was survived by hischildren Amadeo, Adelo (father of petitioner Lynn), Loreto and Juanito).- The heirs executed an Extrajudicial Partition of Real Estate dividing amongthemselves their father's properties. Lot 6297 was conveyed to Adelo while Lot 6270was allotted to respondent Juanito.- Juanito claimed that there was a mistake in the allotment, wherein Lot 6270 wassupposed to be allotted to Adelo and Lot 6297 to him for the following reasons: hehad been in continuous possession of Lot 6297 even before Proceso's death, the lotwas given to him when he got married in 1952, he had been religiously paying therealty taxes, Adelo (up to his death in 1989) possessed and paid the realty taxes forLot 6271 and recognized and respected Juanito's possession and ownership of Lot6297.- To rectify the mistake, Juanito and the children of Adelo (Dina, Ely, Lynn) executed amemorandum of exchange. However, due to a mistake in the assignment of the"Party of the First Part" and the "Party of the Second Part," Lot 6297 was againallotted to the heirs of Adelo and Lot 6270 to Juanito (as if no exchange happened). Juanito only found out about the mistake when Lynn caused the publication of thepartition in a local newspaper.- Without Juanito's knowledge, Lynn, representing his siblings, applied for a freepatent over Lot 6297. Subsequently, he demanded from Juanito that he surrender thepossession of Lot 6297 which was ignored by Juanito, believing that the demand hadno basis. The free patent application was granted in the name of 'Heirs of AdeloMaagad represented by Lynn Maagad.'- Juanito filed a complaint for Annulment of Title with damages, which was lateramended to include a prayer for alternative relief of reconveyance of title. Lynn fileda demurrer to evidence.- RTC granted the demurrer and dismissed the case for lack of evidence. RTC statedin its decision that the allegation of the witnesses for Juanito that Lot 6297 was onlymistakenly adjudicated to Adelo is belied by the fact that he signed the extrajudicialpartition. He waived whatever right he may have had to the lot by signing thedocument. Although a Deed of Exchange was executed, it was done so 18 years afterthe partition, and it clearly stated that Lot 6297 belonged to Adelo and Lot 6270 to Juanito. The parol evidence rule forbids any addition to or contradiction of the termsof a written agreement by testimony purporting to show that at or before the signingof the document, other or different terms were orally agreed upon by the parties.Evidence falls short of justifying the reformation.- CA reversed RTC decisionIssue:- Whether Juanito has a superior right over Lot 6297 (whether a reformation of theinstrument by reason of mutual mistake is justified, making him rightful owner of thelot)
 
Held:- Yes, Juanito has a superior right over the lot in dispute.Ratio:SC cites the ruling of the CA which states that the records show that the Deed of Extrajudicial Partition contained a mistake by the adjudication of Lot 6297 to Adeloand of Lot 6270 to Juanito, and the necessity to rectify the error arose. AMemorandum of Exchange was executed, however, for reasons beyond theintervention of the parties, the memorandum had the same mistake and no exchangewas effected.However, the voluntary and active participation in the execution of the memorandumclearly demonstrated a recognition of the mistake in the instrument of partition. Theintent to effect the exchange was strongly manifested in the voluntary subscription tothe instrument. By this voluntary subscription, Lynn is estopped from negating theexistence of a mistake in the partition.SC agrees with the CA in stating that it would be highly illogical and absurd for theparties to execute a memorandum of exchange if there was nothing to exchange atall. The purpose was precisely to rectify and effect the correct adjudication of the twolots. The parol evidence rule, as applied by the RTC, is not absolute and has exceptions. Aparty may present evidence to modify, explain, or add to the terms of the agreementif he puts in his pleading a mistake in the written agreement. The
elements of amistake
are: the mistake should be of fact, it should be mutual or common to bothparties to the instrument, and it should be alleged and proved by clear andconvincing evidence. In this case, all three elements are present, and there was amistake in the partition. The mere fact of execution of a memorandum of exchangeindicates the existence of a mistake in the partition which the parties sought tocorrect. The
strongest evidence of mistake
is the admission by Lynn in his petition forreview on certiorari, wherein he states that because of mutual mistake, thememorandum failed to express the agreement of the parties to exchange theproperties. A
 judicial admission
conclusively binds the party making it unless it wasshown that the admission was made through palpable mistake or that no admissionwas made.
Other issue
(just in case it will be asked) whether the free patent granted to Lynnover Lot 6297 should be declared null and void. Yes it should. SC affirmed CA decision to declare free patent grant null and void. The requirements of free patent are that the applicant must have continuouslyoccupied and cultivated, either by himself or through his predecessors-in-interest, thetract or tracts of agricultural public lands, that the applicant shall have paid the realestate tax, and that the land has not been occupied by any person. Although Lynn’spetition was granted wherein it was stated that the applicant complied with all the

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