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    Bentir vs. Leanda

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    Danica Caballes
    This case involves a dispute over the sale of a leased property between the original lessor, Bentir, and the lessee, Leyte Gulf Traders. Leyte Gulf Traders claimed they had a right of first refusal if the property was sold, but Bentir sold it to a third party in 1989. Leyte Gulf Traders then filed a case in 1992 seeking to reform the original 1968 lease contract to include the alleged right of first refusal. The court held that (1) the complaint to reform the contract was time-barred, as the prescriptive period to reform a contract is 10 years; and (2) even if it wasn't time-barred, reformation is not an

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    Bentir vs. Leanda

    Uploaded by

    Danica Caballes
    354 views1 page
    This case involves a dispute over the sale of a leased property between the original lessor, Bentir, and the lessee, Leyte Gulf Traders. Leyte Gulf Traders claimed they had a right of first refusal if the property was sold, but Bentir sold it to a third party in 1989. Leyte Gulf Traders then filed a case in 1992 seeking to reform the original 1968 lease contract to include the alleged right of first refusal. The court held that (1) the complaint to reform the contract was time-barred, as the prescriptive period to reform a contract is 10 years; and (2) even if it wasn't time-barred, reformation is not an

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    Bentir-vs-Leanda

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    This case involves a dispute over the sale of a leased property between the original lessor, Bentir, and the lessee, Leyte Gulf Traders. Leyte Gulf Traders claimed they had a right of first refusal if the property was sold, but Bentir sold it to a third party in 1989. Leyte Gulf Traders then filed a case in 1992 seeking to reform the original 1968 lease contract to include the alleged right of first refusal. The court held that (1) the complaint to reform the contract was time-barred, as the prescriptive period to reform a contract is 10 years; and (2) even if it wasn't time-barred, reformation is not an

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    354 views1 page

    Bentir vs. Leanda

    Uploaded by

    Danica Caballes
    This case involves a dispute over the sale of a leased property between the original lessor, Bentir, and the lessee, Leyte Gulf Traders. Leyte Gulf Traders claimed they had a right of first refusal if the property was sold, but Bentir sold it to a third party in 1989. Leyte Gulf Traders then filed a case in 1992 seeking to reform the original 1968 lease contract to include the alleged right of first refusal. The court held that (1) the complaint to reform the contract was time-barred, as the prescriptive period to reform a contract is 10 years; and (2) even if it wasn't time-barred, reformation is not an

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Bentir vs.

    Leanda
    Facts:
    On May 15, 1992, respondent Leyte Gulf Traders, Inc. (herein referred to as respondent corporation)
    filed a complaint for reformation of instrument, specific performance, annulment of conditional sale
    and damages with prayer for writ of injunction against petitioners Yolanda Rosello-Bentir and the
    spouses Samuel and Charito Pormida. Respondent corporation alleged that it entered into a contract of
    lease of a parcel of land with petitioner Bentir for a period of twenty (20) years starting May 5, 1968.
    According to respondent corporation, the lease was extended for another four (4) years or until May 31,
    1992. On May 5, 1989, petitioner Bentir sold the leased premises to petitioner spouses Samuel Pormada
    and Charito Pormada. 

    Respondent corporation questioned the sale alleging that it had a right of first refusal. Rebuffed, it
    filed a civil case seeking the reformation of the expired contract of lease on the ground that its lawyer
    inadvertently omitted to incorporate in the contract of lease executed in 1968, the verbal agreement
    or understanding between the parties that in the event petitioner Bentir leases or sells the lot after
    the expiration of the lease, respondent corporation has the right to equal the highest offer.

    Petitioners filed their answer alleging that the inadvertence of the lawyer who prepared the lease
    contract is not a ground for reformation. They further contended that respondent corporation is guilty
    of laches for not bringing the case for reformation of the lease contract within the prescriptive period
    of ten (10) years from its execution.

    Issue:
    1. Whether the complaint for reformation filed by respondent Leyte Gulf Traders, Inc. has
    prescribed
    2. Whether it is entitled to the remedy of reformation sought

    Held:

    1. Yes, respondent corporation had ten (10) years from 1968, the time when the contract of
    lease was executed, to file an action for reformation. Sadly, it did so only on May 15, 1992 or
    twenty-four (24) years after the cause of action accrued, hence, its cause of action has become
    stale, hence, time-barred. 

    A suit for reformation of an instrument may be barred by lapse of time. The prescriptive period for
    actions based upon a written contract and for reformation of an instrument is ten (10) years under
    Article 1144 of the Civil Code. Prescription is intended to suppress stale and fraudulent claims arising
    from transactions like the one at bar which facts had become so obscure from the lapse of time or
    defective memory.

    The prescriptive period of ten (10) years provided for in Art. 1144 applies by operation of law, not by
    the will of the parties. Therefore, the right of action for reformation accrued from the date of
    execution of the contract of lease in 1968.

    2. No, even if we were to assume for the sake of argument that the instant action for reformation
    is not time-barred, respondent corporation’s action will still not prosper. Under Section 1, Rule 64 of
    the New Rules of Court, an action for the reformation of an instrument is instituted as a special civil
    action for declaratory relief. Since the purpose of an action for declaratory relief is to secure an
    authoritative statement of the rights and obligations of the parties for their guidance in the
    enforcement thereof, or compliance therewith, and not to settle issues arising from an alleged
    breach thereof, it may be entertained only before the breach or violation of the law or contract to
    which it refers. Here, respondent corporation brought the present action for reformation after an
    alleged breach or violation of the contract was already committed by petitioner Bentir.
    Consequently, the remedy of reformation no longer lies.

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