Mutual mistake as basis for reformation

Reformation is remedy in equity by means of which a written instrument is made or construed so as to express or conform to the real intention of the parties when some error or mistake has been committed.[1] Article 1361 of the Civil Code of the Philippines provides:

ART. 1361. When a mutual mistake of the parties causes the failure of the instrument to disclose their real agreement, said instrument may be reformed.

To justify reformation under this article, the following requisites must concur:

(1) The mistake must be of fact (Art. 1331.), for if it is one of law, the remedy is annulment (Art. 1334.); 

(2) Such mistake must be proved by clear and convincing evidence; 

(3) The mistake must be mutual, that is, common to both parties to the instrument; and 

(4) The mistake must cause the failure of the instrument to express their true intention.[2][3]

Moreover, in Vda. de Gonzales vs. Santos,[4] the Supreme Court held that relief by way of reformation of a written agreement will not be granted unless the proof of mutual mistake is of the clearest and the most satisfactory character. The amount of evidence necessary to sustain a prayer for relief where it is sought to impugn a fact in a document is always more than a mere preponderance of evidence.

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[1] Reyes and Puno. Obligations and Contracts.

[2] De Leon. (2014) Obligations and Contracts.

[3] Bank of P.I. vs. Fidelity & Surety Co., 51 Phil. 57 (1927); Alaras vs. Court of Appeals, 64 SCRA 671 (1975); Cunanan vs. Antepasado, 5 SCRA 1028 (1962); Dizon vs. Gaborro, 83 SCRA 688 (1978).

[4] Vda. de Gonzales Mondragon vs. Santos, 87 Phil. 471 (1950).