In contract law, the true intention of the parties involved takes precedence over the literal wording of the documents, especially when mistakes or ambiguities arise. This means that even if a contract contains errors, the courts will strive to understand what the parties really meant to agree upon by looking at their actions and the surrounding circumstances. The Supreme Court, in this case, emphasized this principle, prioritizing the real intentions of parties over potential typographical errors in land transfer agreements, ultimately ensuring that farmer-beneficiaries are not deprived of their rightful land ownership due to technical defects in documentation.

From Paper Trails to Real Intent: Unraveling a Land Dispute in Nueva Vizcaya

The case of Salun-at Marquez and Nestor Dela Cruz v. Eloisa Espejo, et al. revolves around a dispute over two parcels of agricultural land in Bagabag, Nueva Vizcaya: the Lantap property and the Murong property. At the heart of the matter is determining which parties rightfully own each property based on a series of transactions involving the Rural Bank of Bayombong, Inc. (RBBI) and the application of agrarian reform laws. The petitioners, Marquez and Dela Cruz, claimed ownership of the Murong property through Certificates of Land Ownership Award (CLOAs), while the respondents, the Espejos, asserted their right to the same property based on a Deed of Sale. This conflict necessitated a careful examination of contractual intent, challenging the primacy of documentary evidence in property disputes.

The factual backdrop involves the Espejos, who initially owned both the Lantap and Murong properties, which they later mortgaged to RBBI. Upon failing to repay their loans, RBBI foreclosed on the properties, consolidating titles under its name. Subsequently, the Espejos sought to repurchase one of the properties. This is where the confusion begins. The Deed of Sale identified the repurchased property by its Transfer Certificate of Title (TCT) number, which corresponded to the Murong property. However, the Espejos continued to allow Nemi Fernandez to till the Lantap property which led to questions about the actual intent of the parties.

Meanwhile, RBBI, in compliance with agrarian reform laws, executed Deeds of Voluntary Land Transfer (VLTs) in favor of Marquez and Dela Cruz, who were tenants of the Murong property. These VLTs, however, mistakenly referred to the TCT number of the Lantap property. Following the completion of payments, the Department of Agrarian Reform (DAR) issued CLOAs to Marquez and Dela Cruz, identifying the parcels as located in Barangay Murong. The Espejos later filed a complaint seeking cancellation of the CLOAs. This legal battle highlighted the discrepancies between the documented transactions and the actual on-the-ground realities.

The case initially went through different agrarian reform adjudicators, leading to conflicting decisions. The OIC-RARAD prioritized the TCT numbers in the documents, concluding that the Espejos repurchased the Murong property, while Marquez and Dela Cruz were mistakenly awarded the Lantap property. The DARAB reversed this decision, emphasizing that Marquez and Dela Cruz were the actual tillers of the Murong property and, therefore, qualified beneficiaries. The Court of Appeals (CA) sided with the OIC-RARAD, applying the Best Evidence Rule and holding that the TCT numbers in the documents were conclusive proof of the parties’ intentions. The Supreme Court disagreed with the CA’s strict application of the Best Evidence Rule and its interpretation of contractual intent.

The Supreme Court emphasized that the core issue was not the contents of the documents per se, but rather whether these documents accurately reflected the true intentions of the parties involved. The Court found that the CA erred in applying the Best Evidence Rule, which is relevant when the actual contents of a document are in dispute, not when the issue is whether the document reflects the parties’ true intentions. Moreover, the Court found that the Parol Evidence Rule was also improperly applied by the CA, because respondents are not parties of the VLTs executed between RBBI and petitioners. The Parol Evidence Rule generally prevents parties from introducing evidence to contradict or vary the terms of a written agreement, but it admits exceptions, particularly when there is an intrinsic ambiguity or a failure to express the true intent of the parties. In such cases, extrinsic evidence is admissible to clarify the agreement.

The Supreme Court invoked Articles 1370 and 1371 of the Civil Code, which prioritize the intention of the contracting parties over the literal meaning of the contract’s stipulations. Article 1370 states that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control, but if the words appear contrary to the evident intention of the parties, the latter shall prevail over the former. Article 1371 further clarifies that to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. These provisions highlight the importance of examining the conduct of the parties to ascertain their true agreement.

Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that prevails, for the intention is the soul of a contract, not its wording which is prone to mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and precedence to mere typographical errors and defeat the very purpose of agreements.

In evaluating the evidence, the Court gave significant weight to the actions and circumstances surrounding the transactions. The Espejos, after the alleged repurchase, did not exercise any ownership rights over the Murong property, which was continuously possessed and tilled by Marquez and Dela Cruz. Moreover, Nemi Fernandez, the husband of one of the Espejos, continued to cultivate the Lantap property without paying rent to RBBI, indicating that the Espejos considered themselves the owners of the Lantap property. These factors supported the conclusion that the Espejos intended to repurchase the Lantap property, not the Murong property, despite the TCT number indicated in the Deed of Sale.

Similarly, the Court found compelling evidence that the VLTs were intended to transfer the Murong property to Marquez and Dela Cruz. They were the actual tenant-farmers of the Murong property, paying lease rentals to RBBI. The DAR, in issuing the CLOAs, recognized them as qualified beneficiaries of the Murong property. These circumstances strongly suggested that the reference to the Lantap property’s TCT number in the VLTs was a mistake. The Supreme Court pointed out that both properties are bounded by a road and public land. Hence, were it not for the detailed technical description, the titles for the two properties are very similar.

Building on this analysis, the Supreme Court reinstated the DARAB’s decision, affirming Marquez and Dela Cruz as the rightful owners of the Murong property and directing the correction of the property titles accordingly. The Court’s decision underscores the principle that the true intent of contracting parties should prevail over literal interpretations, especially when mistakes or ambiguities are evident. The Court’s ruling has significant implications for agrarian reform and land ownership disputes, ensuring that technicalities do not undermine the rights of qualified beneficiaries. This decision serves as a reminder that contracts should be interpreted in light of the parties’ actions and the surrounding circumstances, rather than relying solely on potentially flawed documentation.

FAQs

What was the key issue in this case?	The key issue was determining the true intention of the parties in land transfer agreements, specifically when there were discrepancies in the property descriptions and TCT numbers. The Court had to decide whether to prioritize the literal wording of the documents or the actions and circumstances surrounding the transactions.
What is the Best Evidence Rule?	The Best Evidence Rule dictates that when the content of a document is in question, the original document is the best evidence. However, this rule does not apply when the dispute concerns the true intention of the parties behind the document, as opposed to the document’s content itself.
What is the Parol Evidence Rule?	The Parol Evidence Rule generally prohibits parties from introducing extrinsic evidence to contradict, vary, add to, or subtract from the terms of a written agreement. Exceptions exist, such as when there is an intrinsic ambiguity or a claim that the writing fails to express the parties’ true intent.
What did the Court say about contractual interpretation?	The Court emphasized that in cases of doubt, the intention of the contracting parties prevails over the literal wording of the contract. This principle is rooted in the Civil Code, which directs courts to consider the contemporaneous and subsequent acts of the parties when interpreting contracts.
Who were the parties involved in the dispute?	The parties involved were Salun-at Marquez and Nestor Dela Cruz (the petitioners), who claimed ownership of the Murong property based on CLOAs, and Eloisa Espejo, et al. (the respondents), who asserted their right to the same property based on a Deed of Sale. Rural Bank of Bayombong, Inc. (RBBI) was also a key party, as it was involved in the original mortgage and subsequent land transfers.
What was the significance of the CLOAs in this case?	The Certificates of Land Ownership Award (CLOAs) issued to Marquez and Dela Cruz were significant because they indicated that the DAR recognized them as qualified beneficiaries of the Murong property. This recognition was based on their actual possession and cultivation of the land.
How did the Court resolve the conflicting property descriptions?	The Court resolved the conflicting property descriptions by examining the actions and circumstances surrounding the transactions, giving weight to the fact that Marquez and Dela Cruz were the actual tillers of the Murong property, while the Espejos did not exercise ownership rights over that property.
What was the final ruling of the Supreme Court?	The Supreme Court ruled in favor of Marquez and Dela Cruz, affirming their ownership of the Murong property and directing the correction of the property titles. The Court emphasized that the true intent of the parties should prevail over literal interpretations, especially when mistakes or ambiguities are evident.

This case highlights the importance of thoroughly documenting and verifying land transactions to avoid future disputes. It also underscores the judiciary’s role in ensuring that agrarian reform laws are implemented fairly and effectively, protecting the rights of farmer-beneficiaries. By prioritizing the actual intentions of the parties and considering the surrounding circumstances, the Supreme Court ensured that the law served its intended purpose of promoting social justice and equitable land distribution.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SALUN-AT MARQUEZ AND NESTOR DELA CRUZ VS. ELOISA ESPEJO, ET AL., G.R. No. 168387, August 25, 2010