Spouses Heinzrich Theis v. Honorable Court of Appeals

Summary

This case involved the annulment of a deed of sale due to mistake in property identification. Calsons Development Corporation owned three adjacent parcels in Tagaytay City, but an erroneous 1985 survey misidentified the properties. Based on this survey, Calsons mistakenly sold parcel no. 4 (which it did not own) to the Theis spouses for P486,000.00. When the spouses attempted to take possession in 1990, they discovered the error. Instead of accepting Calsons' offer of alternative vacant lots or double reimbursement, they insisted on keeping parcel no. 3, which contained a house worth P1,500,000.00. The Supreme Court affirmed the lower courts' annulment of the contract under Articles 1390 and 1331 of the Civil Code, finding that the substantial mistake vitiated consent and that allowing petitioners to retain the valuable property would constitute unjust enrichment. The decision reinforced principles of mistake as a vitiating factor in contracts and the prevention of unjust enrichment.