Ong Chua vs Carr, et.al., 53 Phil 975
Subject: Obligations and Contracts
FACTS
Henry
Teck sold his land to Ong Chua with the right to repurchase within four years.
Ong sold the land to Edward Carr with the understanding that Edward Carr was
buying it, subject to the right to repurchase on the part of Teck. At that
time, Carr did not have enough money. So Edward Carr asked for a loan from an
Association.
Association
offered to give a loan provided Carr could offer, as security, land of which he
was absolute owner, that is, land which would not be subject for example to
repurchase. So Carr began to thing. With the help of a lawyer who drafter the
deed, Carr and Ong (who did not know English) signed a contract with Carr was
made out to be the absolute owner of the land and the words regarding the
“right to repurchase” omitted.
Later
Tek was repurchasing the property from Ong, and Ong demanded the reconveyance
of the property from Carr. Carr refused on the ground that he (Carr) was the
absolute owner of the land. Hence, Ong brought this action against Carr.
ISSUE
Whether
or not the contract may be reformed. If so, may Ong now demand the land from
Carr so that it would be resold to Tek.
RULING
Yes,
the contract may be reformed.
Under
the law (Art 1362, NCC), if one party was mistaken and the other acted
fraudulently or inequitably in such a way that the instrument does not show
their true intention, the former may ask for the reformation of the instrument.
In
this case, it follows, therefore, that Ong may now demand the reconveyance of
the property to him so that the land may be repurchased by Tek.
No comments:
Post a Comment