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U.S. Supreme Court

Philippine Sugar Estates Dev. Co., Ltd. v. Philippines, 247 U.S. 385 (1918)

Philippine Sugar Estates Development Company, Limited

v. Government of the Philippine Islands

No. 189

Argued March 13, 1918

Decided June 3, 1918

247 U.S. 385


Where, owing to a mutual mistake, a written contract fails to express the intention of the parties, it may be reformed to express their true intention, although the mistake was one of law respecting its interpretation and construction.

Reformation will be granted only where the evidence of mistake is clear and satisfactory.

Relief in such cases may be obtained by a defendant under Philippine Code of Civil Procedure, § 285, upon appropriate pleadings, without resort to an independent suit for reformation of the contract.

In this case, it is established by proof of the clearest and most satisfactory character that certain rails and sugar-mill machinery were intended not to go with a sale and conveyance of land to the Philippine government, and that the failure of the written contract and deed to except them was due to a mutual mistake of law.

The Court cannot accept a construction placed upon a Philippine statute by the Supreme Court of the Islands when it is clearly erroneous.

Upon an appeal from a decree of the Supreme Court of the Philippine Islands erroneously reversing the trial court solely on a question of

Page 247 U. S. 386

law, this Court, to dispose finally of the case, may decide the facts when all evidence proffered was admitted and is in the record and when the appellant in the court below sought to renew the trial court's finding, under § 497, par. 2, of the Philippine Code of Civil Procedure.

Where, in an action at law on a contract, the answer set up was, in effect, a bill in equity, seeking reformation and incidentally to enjoin the action at law, the proceeding was converted into an equitable one, and hence ca be reviewed only by appeal, and not by writ of error.

30 Phil.Rep. 27 reversed.

The case is stated in the opinion.

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