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    Contracts Veluz V. Veluz Facts

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    Ceedee Ragay
    Ernesto Veluz filed a complaint alleging that in 1953 he took out a loan from his siblings and signed what he believed was a mortgage but was actually a deed of sale. He argued this did not reflect the true agreement and asked the court to reform the document to a mortgage. The defendants claimed the case was time-barred and failed to state a cause of action. The court ruled the case was properly one for reformation of the contract to reflect the parties' true intentions, not annulment, and the 10-year prescriptive period for reformation had not expired. Therefore, reformation was warranted.

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    Contracts Veluz V. Veluz Facts

    Uploaded by

    Ceedee Ragay
    124 views2 pages
    Ernesto Veluz filed a complaint alleging that in 1953 he took out a loan from his siblings and signed what he believed was a mortgage but was actually a deed of sale. He argued this did not reflect the true agreement and asked the court to reform the document to a mortgage. The defendants claimed the case was time-barred and failed to state a cause of action. The court ruled the case was properly one for reformation of the contract to reflect the parties' true intentions, not annulment, and the 10-year prescriptive period for reformation had not expired. Therefore, reformation was warranted.

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    Veluz vs Veluz

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    Ernesto Veluz filed a complaint alleging that in 1953 he took out a loan from his siblings and signed what he believed was a mortgage but was actually a deed of sale. He argued this did not reflect the true agreement and asked the court to reform the document to a mortgage. The defendants claimed the case was time-barred and failed to state a cause of action. The court ruled the case was properly one for reformation of the contract to reflect the parties' true intentions, not annulment, and the 10-year prescriptive period for reformation had not expired. Therefore, reformation was warranted.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    124 views2 pages

    Contracts Veluz V. Veluz Facts

    Uploaded by

    Ceedee Ragay
    Ernesto Veluz filed a complaint alleging that in 1953 he took out a loan from his siblings and signed what he believed was a mortgage but was actually a deed of sale. He argued this did not reflect the true agreement and asked the court to reform the document to a mortgage. The defendants claimed the case was time-barred and failed to state a cause of action. The court ruled the case was properly one for reformation of the contract to reflect the parties' true intentions, not annulment, and the 10-year prescriptive period for reformation had not expired. Therefore, reformation was warranted.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CONTRACTS

    VELUZ V. VELUZ

    FACTS:

     There was no trial in this case. Instead of an answer, the defendants filed a motion to dismiss upon the
    grounds of prescription and want of cause of action. The facts as alleged in the complaint must, therefore,
    be considered hypothetically admitted.

     Ernesto Veluz filed a complaint before the Court of First Instance of Quezon on July 30, 1958.

     Plaintiff alleged that on January 2, 1953 he asked defendants for a loan of five thousand pesos, to secure
    the payment of which he proposed to mortgage his share on a parcel of land.

     He also alleged that the defendants agreed and caused forthwith the preparation of a deed and that when
    defendants asked plaintiff to sign the deed as prepared, the latter noticed that the deed was an absolute
    sale instead of a mortgage, and so he asked defendants why the documents was couched that way.

     Defendant answered that it had to be so in order that defendants could take possession and enjoy the fruits
    of the land and that plaintiff had nothing to worry about the document as defend ants, being his brothers and
    sisters, would not take advantage of the deed of sale, and that plaintiff could redeem the property any time;
    that because of the assurance of his brothers and sisters.

     Plaintiff affixed his signature on the document.

     Plaintiff prayed that judgment be issued "ordering the reformation of the deed of sale to express the true
    intention of the parties to wit: the same be made as a deed of mortgage..." and that defendants be ordered
    to pay actual and moral damages and attorney's fees.

     Defendants moved for the dismissal of the complaint upon the grounds that the cause of action has
    prescribed and that the complaint states no cause of action, to which motion plaintiff filed his opposition.

    ISSUE:

    Whether reformation of contract warrants in the case at bar.

    RULING:

    YES. The purpose of an action and the law that should govern it, including the period of prescription, are determined
    by the allegations and relief prayed for in the complaint itself. Where the complaint, as in the case at bar, specifically
    alleges that the instrument in question does not express the true intention of the parties and prays that judgment be
    issued ordering its reformation, on the ground that the agreement of the parties was that the land of the plaintiff was
    to be mortgaged, but the defendants caused to be prepared a deed of absolute sale, the action is clearly one for
    reformation of an instrument as contemplated in Articles 1359 and 1365 of the Civil Code of the Philippines.

    Reformation of instrument presupposes a valid existing contract, in which there had been a meeting of the minds of
    the parties but the instrument drawn up and signed by them does not correctly express the terms of their agreement.
    Annulment of a contract, on the other hand, presupposes a defective contract in which the minds of the parties did
    not meet, or the consent of one was vitiated. The equity of reformation is ordinarily limited to written agreements, and
    its purpose is to establish and perpetuate the true agreement; annulment, on the other hand, is intended to declare
    the inefficiency which the contract already carries in itself and to render the contract inefficacious.

    Hence, in the case at bar, even if the ten-year period of prescription be computed from the date of the execution of
    the instrument on January 2, 1953, or from May, 1958 when defendants refused to allow redemption — evincing thus
    their intent not to live up to the true agreement and thereby giving rise to the right of action, 7 — until July 30, 1958
    when the instant case was commenced, the ten-year period for prescription of the action had not yet elapsed.

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