NIA vs. ESTANISLAO GAMIT [G.R. No. 85869. November 6, 1992.] Fa!s"
On 23 January 1985, the Plaintiff Estanislao Gamit (private respondent herein filed !ith the "#$ of "o%as, &sa'ela, a omplaint a)ainst the defendant *ational &rri)ation +dministration for reformatio reformation n of ontrat, reovery reovery of possession possession and dama)es, dama)es, alle)in), alle)in), amon) others others that in the ontrat of lease entered into, the real a)reement or intention of the parties !as only for the lease of the t!enty five (25, thousand s-uare meters 'y defendant at the rate of P.1 entavos per s-uare meter, for a period of ten (1 years from date of e%eution !ith the ri)ht of defendant to purhase the area upon the termination termination of the lease, on a prie ertain or onsiderati onsideration on to 'e ne)otiated ne)otiated and a)reed upon, 'y and 'et!een the parties after the lapse of the ten (1 year period/ #hat it !as not the real a)reement or intention of the parties, at least that of herein plaintiff, to have the rentals paid as formin) part of the purhase prie later to 'e ne)otiated or a)reed upon, u pon, muh less !as it their intention at least on the part of herein plaintiff, that the prie shall not e%eed P25,., other!ise, there !ill 'e a )ross inade-uay of the purhase prie, enou)h to sho0 the onsiene of man and that of the ourt/ that it !as not also the intention or a)reement of the parties, at least that of herein plaintiff, that in ase the lease ontrat is not rene!ed after the lapse of the ten (1 year period, for failure of the parties to ma0e 'ilateral ommuniation, the lessor or his suessors or assi)ns are deemed to have allo!ed ontinued use of the land in suit !ithout any additional ompensation !hatsoever (see stipulation no. 8, ontrat of lease and neither !as it the true a)reement or real intention of the parties, at least on the part of herein plaintiff, that upon payment pa yment of the rental amount of P25,., herein plaintiff shall 'e deemed to have onveyed and eded all his ri)hts and interest on the su'et property, in favor of herein defendant. "#$ ruled ruled in favor of plaintiff and a)ainst herein defendant. $+ affirmed. ene, the present petition for revie!. Iss#e"
hether or not the ourt of appeals ap peals has properly interpreted the ontrat. $e%&" *O
+ perusal of the omplaint at 'ar and the relief prayed for therein sho!s that this is learly a ase for reformation of instrument &n order that an ation for reformation of instrument as provided in +rtile 1359 of the $ivil $ode may prosper, the follo!in) re-uisites must onur4 (1 there must have 'een a meetin) of the minds of the parties to the ontrat/ (2 the instrument does not e%press the true intention of the parties/ and (3 the failure of the instrument to e%press the true intention of the parties is due to mista0e, fraud, ine-uita'le ondut or aident. Other!ise stated, the omplaint at 'ar alle)es that the ontrat of lease !ith ri)ht to purhase does not e%press the true intention and a)reement of the parties thereto due to mista0e on the part of the plaintiff (private respondent and fraud on the part of the defendant (petitioner, i.e., 'y unla!fully insertin) the stipulations ontained in para)raphs , 8 and 9 in said ontrat of lease. +s a )eneral rule, parol evidene is not admissi'le for the purpose of varyin) the terms of a ontrat. o!ever, !hen the issue that a ontrat does not e%press the intention of the parties and the proper foundation is laid
therefor 6 as in the present ase 6 the ourt should hear the evidene for the purpose of asertainin) the true intention of the parties. 7rom the fore)oin) premises, !e hold that the trial ourt erred in holdin) that the issue in this ase is a -uestion of la! and not a -uestion of fat 'eause it merely involves the interpretation of the ontrat 'et!een the parties. #he lo!er ourt erred in not ondutin) a trial for the purpose of determinin) the true intention of the parties. &t failed to appreiate the distintion 'et!een interpretation and reformation of ontrats. hile the aim in interpretation of ontrats is to asertain the true intention of the parties, interpretation is not, ho!ever, e-uivalent to reformation of ontrats. ine the omplaint in the ase at 'ar raises the issue that the ontrat of lease does not e%press the true intention or a)reement of the parties due to mista0e on the part of the plaintiff (private respondent and fraud on the part of the defendant (petitioner, the ourt a -uo should have onduted a trial and reeived the evidene of the parties for the purpose of asertainin) the true intention of the parties !hen they e%euted e% euted the instrument in -uestion. 7+&= #O EP"E EP "E 'AROL E(I)EN*E R+LE / E$EP#&O*/ "E:E;< E* +G"EE:E*# 7+&= #">E &*#E*# +*; +G"EE:E*# O7 P+"#&E. 6 hen the terms of an a)reement have 'een redued to !ritin), it is onsidered as ontainin) all the terms a)reed upon and there an 'e, 'et!een the parties and their suessors in interest, no evidene of suh terms other than the ontents of the !ritten !ritten a)reement, a)reement, e%ept !hen it fails fails to e%press e%press the true intent and a)reement of the parties parties thereto, in !hih ase, one of the parties may 'rin) an ation for the reformation of the instrument to the end that suh true intention may 'e e%pressed. E"E7O"E, the deision of the trial ourt dated 2 :arh 198? as !ell as the deision of the $ourt of +ppeals dated 1 *ovem'er 1988 are here'y E# +&;E +&;E and the ase should 'e, as it is here'y, "E:+*;E; to the ourt of ori)in for further proeedin)s in aordane !ith this deision. ithout osts.
