Theis v.

Court of Appeals
G.R. No. 126013 | February 12, 1997
J. Hermosisima Jr.

Topic: Vitiated Consent - Mistake

Petitioner: Spouses Heinzrich Theis & Betty Theis

Respondents: Calsons Development Corporation

Summary: This case is about an erroneous deed of sale stemming from an equally erroneous
land survey. Both parties in the deed of sale committed a mistake as to the object
of the sale, hence annulment is proper

FACTS:
- Calsons Development Corporation (CDC) is the owner of three (3) adjacent parcels of land
situated along Ligaya Drive, Brgy. Francisco, Tagaytay City:
- Parcel 1 - TCT 15515 – 1,000 m2
- Parcel 2 - TCT 15516 – 226 m2
- Parcel 3 - TCT 15684 – 1,000 m2
- Adjacent Parcel 3 is a vacant lot denominated as Parcel 4 which is not owned by CDC (Owner
not stated)
- In 1985, CDC constructed a 2-storey house on Parcel 3 worth P 1,500,000 while Parcels 1 and 2
remained idle
- However, a survey was conducted in 1985, Parcel 3 was erroneously indicated under TCT 15515
(such TCT is supposed to indicate Parcel 1) and Parcel 4 was mistaken by the surveyor as Parcels
1 and 2.
- On October 26, 1987, CDC, through Atty. Tarcisio Calilung and thinking that they owned Parcel
4 in lieu of the erroneous survey, sold said lots to the Sps. Theis for P 486,000
- To make things worse, the TCTs conveyed to the Sps. Theis were TCT 15516 (for Parcel
2) and TCT 15684 (for Parcel 3). The latter parcel having the two-storey house
constructed by CDC.
- Because of the Spouses’ trip to Germany, they were not able to immediately take possession of
the lots
- In 1990, the Sps. Theis returned to the Philippines and they discovered that:
- Parcel 4, as stated in the deed of sale, was apparently owned by another person
- Unlike Parcel 2, Parcel 3 (under TCT 15684) could not have been the object of the Oct.
1987 sale since the house’s construction cost atop the lot far exceeded the price paid by
the Sps.
- Since the Sps. insisted on following the TCTs on the deed of sale and acquiring both Parcels 2
and 3, CDC offered two remedies for both parties:
- First, CDC offered Parcels 1 and 2 as these were the two vacant lots which were intended
to be sold by CDC in the first place
- The Sps rejected this offer and they insisted on having Parcel 3 since it had the 2-
storey house constructed by CDC
- Second, CDC offered to return an amount double the purchase price paid by the Sps.
- The Spouses still rejected this offer
- CDC filed an action for the annulment of the deed of sale and the reconveyance of the properties
subject thereof
- The RTC of Tagaytay decided in favor of CDC because:
- Atty. Calilung mistook Parcel 4 (which is not owned by CDC) as the object of the
supposed deed of sale, when Parcels 1 and 2 should’ve been the lots conveyed
 - As conceded by Betty Theis in her testimony during trial, the Spouses never
intended to buy the parcel of land where CDC’s house was situated
- Likewise, CDC did not intend to sell Parcel 3 nor did it have the capacity
to sell Parcel 4
- In sum, the deed of sale did not truly express the intent of the parties.
- Since there was a substantial mistake with regard to the object of the sale,
annulment is proper
- The parties could have avoided litigation by opting to reform the deed of sale but
the Spouses were not amenable to such
- The Court of Appeals affirmed the RTC’s decision

ISSUE:

W/N it was proper for the RTC and CA to annul the deed of sale

YES

(Dicta)

NCC 1390 states that:

The ff. contracts are voidable even though there may have been no damage to the contracting parties:
…

(2) Those whose consent is vitiated by mistake, violence and intimidation, undue influence or fraud

NCC 1331 provides for instances where mistake may invalidate consent. It states:

In order that mistake may invalidate consent, it should refer to the substance of the thing which is the
object of the contract, or to those conditions which have principally moved one or both to enter into
the contract

Tolentino explains that the concept of error in both articles includes both:
- Ignorance – absence of knowledge with respect to a thing
- Mistake – wrong conception about a thing; an erroneous belief

(Ratio)

- The error commited by CDC in selling Parcel 4 falls under the category of a “mistake” which is
substantial enough to invalidate consent
- Such vitiation of consent is proven by CDC’s efforts to convey Parcels 1 and 2 to correct
the error or doubly reimburse the Spouses
- Hence, annulment is proper
- The Spouses would be unjustly enriched if they would be allowed to take Parcel 3 since the
construction cost of CDC’s house (P 1,500,000) far exceeds the amount paid by the Spouse for
Parcel 2 and 3 (P 486, 000)

RULING: RTC and CA Decision is affirmed