MULTI-VENTURES VS ST ALWART 2.

the instrument does not express the true intention of the parties; and
MANAGEMENT (2007)
14 Jan 2018
[G.R. No. 157439; July 4, 2007] Obligations and Contracts| Reformation
MULTI-VENTURES CAPITAL and MANAGEMENT CORPORATION,
Petitioner.
vs.
STALWART MANAGEMENT SERVICES CORPORATION, MARIAN G.
TAJO, CESAR TAJO and ARIANA GALANG, Respondents*
3. the failure of the instrument to express the true intention of the parties is
due to mistake, fraud, inequitable conduct or accident.
In the present case, there is no question that there was a meeting of the minds
between the parties. The transaction of sale entered into by the parties on
January 1991 is accurately expressed in the Confirmation of Agreement.
Petitioner, however, failed to show that mistake, fraud, inequitable conduct
or accident attended the execution of the agreement such that their true
intention was not reflected.
Petitioner, therefore, has no cause of action for its reformation.

FACTS: Petition is denied.

In 1991, Multi-Ventures Capital and Management Corporation filed a
Complaint for Reformation of Instrument against Stalwart Management and
its officers. It is alleged that respondent obtained from the former a loan but
for purposes of expediency, said transaction was denominated as a sale
whereby petitioner bought from respondent various Land Bank bonds; that
the bonds serve as a partial collateral for the payment of the loan.
Reformation is a remedy in equity, whereby a written instrument is made or
construed so as to express or conform to the real intention of the parties,
Respondent, on the other hand, claim, among others, that both petitioner and
where some error or mistake has been committed. In granting reformation,
respondent are companies engaged in dealing and trading government
the remedy in equity is not making a new contract for the parties, but
securities. That the transaction stated in the present controversy is really a
establishing and perpetuating the real contract between the parties which,
purchase of Land Bank bonds, and there is no mistake, fraud, or accident in
under the technical rules of law, could not be enforced but for such
the preparation of the true agreement of the parties such that reformation is
reformation.
called for.

ISSUE:
Whether the contract entered into by Multi-Ventures Capital and
Management Corporation and Stalwart Management Services Corporation is
one of loan or sale. BPI vs CA Credit Digest
BPI Investment Corporation
HELD: -vs-
The transaction between the parties was one of sale and not of loan. CA
GR No. 133632, 15 February 2002
377 SCRA 117
In order that an action for reformation of instrument may prosper, the
following requisites must concur:
FACTS
Frank Roa obtained a loan from Ayala Investment and
1. there must have been a meeting of the minds of the parties to the contract; Development Corporation (AIDC), for the construction of his
house. Said house and lot were mortgaged to AIDC to secure
the loan. Roa sold the properties to ALS and Litonjua, the
latter paid in cash and assumed the balance of Roa’s
indebtedness wit AIDC. AIDC was not willing to extend the
old interest to private respondents and proposed a grant of
new loan of P500,000 with higher interest to be applied to
Roa’s debt, secured by the same property. Private
respondents executed a mortgage deed containing the
stipulation. The loan contract was signed on 31 March 1981
and was perfected on 13 September 1982, when the full loan
was released to private respondents.

BPIIC, AIDC’s predecessor, released to private respondents

P7,146.87, purporting to be what was left of their loan after
full payment of Roa’s loan. BPIIC filed for foreclosure
proceedings on the ground that private respondents failed to
pay the mortgage indebtedness. Private respondents
maintained that they should not be made to pay amortization
before the actual release of the P500,000 loan. The suit was
dismissed and affirmed by the CA.

ISSUE
Whether or not a contract of loan is a consensual contract.

HELD
The Court held in the negative. A loan contract is not a
consensual contract but a real contract. It is perfected only
upon delivery of the object of the contract. A contract o loan
involves a reciprocal obligation, wherein the obligation or
promise of each party is the consideration for that of the
other; it is a basic principle in reciprocal obligations that
neither party incurs in delay, if the other does not comply or
is not ready to comply is a proper manner with what is
incumbent upon him