Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=49796:gr-157439-2007&amp;catid=1494&amp;Itemid=566
Timestamp: 2019-04-24 01:51:12+00:00

Document:
G.R. No. 157439 - Multi-Ventures Capital & Mgt. Corp. v. Stalwart Mgt. Services Corp., et al.
The sole issue in this case is whether the contract entered into by Multi-Ventures Capital and Management Corporation (petitioner) and Stalwart Management Services Corporation (respondent) is one of loan or sale.
1. These instruments subject matter of this case are hereby ordered REFORMED as Contract of Loan and not a Contract of Sale.
5. To order defendants' jointly and severally, to pay the costs of suit.
Dissatisfied, respondent and its officers appealed to the Court of Appeals (CA). In a Decision dated February 24, 2003,4 the CA sustained respondent's position that the transaction was, in fact, a sale; reversed the RTC Decision; and dismissed petitioner's complaint and respondent's counterclaim.
A. THAT DUE TO MISAPPRECIATION OF FACTS AND EVIDENCE, THE COURT OF APPEALS ERRED IN REVERSING THE COURT A QUO'S DECISION AND IN NOT DECLARING THAT THE INTENDED AND TRUE TRANSACTION AGREED UPON AND ENTERED INTO BETWEEN MULTI-VENTURES AND STALWART WAS THAT OF LOAN, NOT SALE OF LAND BANK BONDS.
After a careful examination of the evidence on record, the Court sustains the CA's ruling that the transaction between the parties was one of sale and not of loan.
ARTICLE 1359. When, there having been a meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement, by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed.
In the present case, there is no question that there was a meeting of the minds between the parties. What remains to be resolved is whether the contract expressed their true intention; and, if not, whether it was due to mistake, fraud, inequitable conduct or accident.
The onus probandi is upon the party who insists that the contract should be reformed.11 Moreover, the presumption is that an instrument sets out the true agreement of the parties thereto and that it was executed for valuable consideration.12 Unfortunately, petitioner was not able to overturn the presumption of validity of the contract and it also failed to discharge the burden of proving that the true intention of the parties has not been expressed.
There is nothing on record, as well as in the buy-back letter, that clearly and convincingly proves or substantiates petitioner's contention that the real intent of the parties was to enter into a loan agreement for the amount of P11,557,972.60, inclusive of interest. In fact, respondent's buy-back letter supports the finding that the agreement entered into by the parties was a sale transaction. For if the bonds were only to serve as a collateral for the loan, why would respondent offer to buy them back from petitioner if they were not sold in the first place? Obviously, ownership of the bonds had been transferred from respondent to petitioner on January 11, 1991; for if it were not so and the bonds were merely being held by petitioner as a security for the payment of the alleged loan, then ownership would have remained with respondent and there would have been no need to buy it back.
Finally, petitioner failed to show that mistake, fraud, inequitable conduct or accident attended the execution of the agreement such that their true intention was not reflected. As admitted by petitioner, the parties agreed to execute a purchase and sale agreement "for purposes of expediency and convenience."18 Expediency and convenience, however, are not grounds for the reformation of an instrument. As such, absent any proof of mistake, fraud, inequitable conduct or accident, the Confirmation of Agreement dated January 11, 1991 remains the best evidence to ascertain the real intent of the parties.
The transaction of sale entered into by the parties on January 11, 1991 is accurately expressed in the Confirmation of Agreement. Petitioner, therefore, has no cause of action for its reformation.
* The Court of Appeals, impleaded as respondent, is deleted from the title of herein case, pursuant to Section 4, Rule 45 of the Rules of Court.
4 Penned by Associate Justice Rodrigo V. Cosico, with Associate Justices Rebecca de Guia-Salvador and Regalado E. Maambong, concurring; CA rollo, pp. 138-150.
6 Microsoft Corporation v. Maxicorp, Inc., G.R. No. 140946, September 13, 2004, 438 SCRA 224, 232.
8 Quiros v. Arjona, G.R. No. 158901, March 9, 2004, 425 SCRA 57, 65.
9 The National Irrigation Administration v. Gamit, G.R. No. 85869, November 6, 1992, 215 SCRA 436, 451.
10 Sarming v. Dy, 432 Phil. 685, 699 (2002).
11 Huibonhua v. Court of Appeals, 378 Phil. 386, 407 (1999).
12 BA Finance Corporation v. Intermediate Appellate Court, G.R. No. 76497, January 20, 1993, 217 SCRA 261, 277.
16 CA rollo, pp. 149-150.

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