Multi-Ventures Capital v. Stalwart Management Services Corporation

Summary

Multi-Ventures Capital sued for reformation of an instrument, claiming that what appeared to be a sale of Land Bank bonds worth P11,557,972.60 was actually a loan agreement for P9,000,000 disguised for expediency. The RTC initially ruled in favor of Multi-Ventures, ordering reformation from sale to loan contract. However, the Court of Appeals reversed this decision, finding the transaction was indeed a sale. The Supreme Court affirmed, holding that Multi-Ventures failed to prove the requisites for reformation under Article 1359 of the Civil Code. The Court found that Multi-Ventures' subsequent transfer of the bonds to AFP Mutual Benefits Association as investment collateral constituted an act of ownership, supporting the sale nature of the transaction. The decision clarifies that expediency and convenience alone are insufficient grounds for contract reformation, and that the burden lies on the party seeking reformation to prove mistake, fraud, inequitable conduct, or accident attended the contract's execution.