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97.G.R. No. 126013.

February 12, 1997

Fa!"#$ Private respondent Calsons Development Corporation is the owner of three (3) adjacent parcels of
land. Adjacent to parcel no. 3, which is the lot covered by TCT o. !"#$%, is a vacant lot denominated as
parcel no. %. Calsons Development constr&cted a two'storey ho&se on parcel no. 3. (n a s&rvey
cond&cted in !)$", the two idle lands (parcel nos. ! and *) were mista+enly s&rveyed to be located on
parcel no. %, which was not owned by private respondent. ,naware of the mista+e, Calsons Development
thro&-h its a&thori.ed representative, one Atty. Tarcisio /. Calil&n-, sold said parcel no. % to petitioners.
0hen petitioners ret&rned to the Philippines, they went to Ta-aytay to loo+ over the vacant lots and to
plan the constr&ction of their ho&se thereon, they discovered that parcel no. % was owned by another
person. They also discovered that the lots act&ally sold to them were parcel nos. * and 3 covered by TCT
os. !""!# and !"#$%, respectively. Parcel no. 3, however, co&ld not have been sold to the petitioners by
the private respondents as a two'storey ho&se, the constr&ction cost of which far e1ceeded the price paid
by the petitioners, had already been b&ilt thereon even prior to the e1ec&tion of the contract between the
disp&tin- parties. To remedy the mista+e, private respondent offered parcel nos. ! and * covered by TCT
os. !""!" and !""!#, respectively, as these two were precisely the two vacant lots which private
respondent owned and intended to sell when it entered into the transaction with petitioners. Petitioners
adamantly rejected the -ood faith offer.
I##ue2 0hether or not the Contract of /ale between /po&ses Theis and Calsons corporation is voidable.
Ru%&'(2 3es. ,nder Article !3)4, contracts are voidable or ann&llable when the consent is vitiated by
mista+e, violence, intimidation, &nd&e infl&ence, or fra&d. Calsons obvio&sly committed an honest mista+e
in sellin- parcel no. % for it is 5&ite impossible to sell the lot in 5&estion as the same is not owned by
Calsons. The -ood faith of the private respondent is evident in the fact that when the mista+e was
discovered, it immediately offered two other vacant lots to the petitioners or to reimb&rse them with twice
the amo&nt paid. That petitioners ref&sed either option left the private respondent with no other choice b&t
to file an action for the ann&lment of the deed of sale on the -ro&nd of mista+e. A contract may be
ann&lled where the consent of one of the contractin- parties was proc&red by mista+e, fra&d, intimidation,
violence, or &nd&e infl&ence. Art. !33! of the ew Civil Code provides for the sit&ations whereby mista+e
may invalidate consent. (t states2
6Art. !33!. (n order that mista+e may invalidate consent, it sho&ld refer to the s&bstance of the thin-
which is the object of the contract, or to those conditions which have principally moved one or both parties
to enter into the contract.6
The concept of error in this article m&st incl&de both i-norance, which is the absence of +nowled-e
with respect to a thin-, and mista+e properly spea+in-, which is a wron- conception abo&t said thin-, or a
belief in the e1istence of some circ&mstance, fact, or event, which in reality does not e1ist. (n both cases,
there is a lac+ of f&ll and correct +nowled-e abo&t the thin-. The mista+e committed by the private
respondent in sellin- parcel no. % to the petitioners falls within the second type. 7erily, s&ch mista+e
invalidated its consent and as s&ch, ann&lment of the deed of sale is proper.