KHO - Riosa v. Tabaco La Suerte Corporation

KHO, Francis Cedric G.
Contract of Sale
Sales / 2D Article 1458
Case Digest Riosa v. Tabaco La Suerte Corporation
Aquiles Riosa v. Tabaco La Suerte Corporation

G.R. No. 203786, 23 October 2013
FACTS:
Riosa filed a Complaint for Annulment/Declaration of Nullity of Deed of Absolute Sale and
Transfer Certificate of Title, Reconveyance and Damages against respondent Tabaco La Suerte
Corporation. Riosa alleged that the 52-square meter commercial lot given to him by his parents
through deed of cession and quitclaim was maliciously taken from him by Sia Ko Pio, who was
the Chief Executive Officer of Tabaco La Suerte Corporation, who made him sign the document
which he thought was a receipt and undertaking to pay the loan, when in reality, it was a
document of sale. Riosa received a ₱50,000.00 loan and used the commercial lot as a security
for the said loan. On September 2001, Riosa received a letter from La Suerte informing him that
the subject lot was already registered in its name.
La Suerte Corporation, in its defense, averred that they already purchased the property but
allowed Riosa to remain in possession of the property to avoid the ire of Pablo Riosa, Sr., the
petitioner’s father, subject to the petitioner’s obligation to vacate the premises anytime upon
demand. La Suerte Corporation also claimed that Riosa undertook the cost repairs and failed to
pay rent and found his opinion that only the land was sold absurd as the Riosa tried to transact
with Sia Ko Pio since the sale of the principal included its accessories.
RTC RULING
Aquiles that he was made to sign an instrument of sale without his knowledge because he
trusted Sia Ko Pio and he was of the belief that what he had signed was merely an instrument of
indebtedness. It cited, as legal basis, Article 1330 of the Civil Code which provides that a
contract where the consent is given thru violence, intimidation, undue influence or fraud is
voidable.
CA RULING
Reversed the RTC decision and upheld the validity of the subject deed of sale in favor of La
Suerte. It declared La Suerte as the lawful owner of the subject lot and improvements thereon,
subject to the right of reimbursement for the renovation expenses. The CA held that tax
declarations or realty tax payments by Aquiles were not conclusive evidence of ownership,
citing Spouses Camara v. Spouses Malabao, where it was ruled that a party’s declaration of real
property and his payment of realty taxes could not defeat a certificate of title which was an
absolute and indefeasible evidence of ownership of the property in favor of the person whose
name appeared thereon.
ISSUE/S:
1.) Whether or not, there was a valid and perfected contract of sale of real property?
RULING:
KHO, Francis Cedric G. Contract of Sale
Sales / 2D Article 1458
Case Digest Riosa v. Tabaco La Suerte Corporation
In Re: Existence of a valid and perfected contract of sale of real property
The elements of a contract of sale are: (CONSENT-SUBJECT MATTER-EQUIVALENT VALUE)

a.) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for
the price;
b.) Determinate subject matter; and
c.) Price certain in money or its equivalent.
In this case, there was no clear and convincing evidence that Aquiles definitely sold the subject
property to La Suerte, nor was there evidence that La Suerte authorized its chief executive
officer, Sia Ko Pio, to negotiate and conclude a purchase of the property. Aquiles gave Sia Ko
Pio a photocopy of the deed of cession and quitclaim (as for the latter’s request) AS A
SECURITY for the payment of loans. The sale of the subject properties were annulled on the
ground of fraud as Aquiles was made to sign an instrument which he believed to be a receipt of
indebtedness.
Furthermore, the transactions were between Aquiles and Sia Ko Pio and not between Aquiles
and La Suerte Corporaton. Aquiles acknowledged that he signed the receipt for the total loan
amount of ₱50,000.00 plus ₱2,000.00 as attorney’s fees. There is, however, no proof that it
came from La Suerte as the consideration of the sale. The existence of a signed document
purporting to be a contract of sale does not preclude a finding that the contract is invalid when
the evidence shows that there was no meeting of the minds between the seller and buyer.
Lastly, if Aquiles sold the property in favor of La Suerte, he would not have religiously and
continuously paid the real property taxes. Also of note is the fact that his daughter spent ₱
300,000.00 for the renovation of improvements. More important, La Suerte did not earlier ask
him to transfer the possession thereof to the company.
DISPOSITION:
REINSTATED RTC’s ruling. Court ordered the annulment of sale of the subject lot, the Transfer
Certificate Title in the name of defendant corporation.
Ordered the defendant corporation to pay plaintiff:

1.) Twenty Thousand Pesos (₱20,000.00) as Attorney’s fee.
Ordered the defendant to pay plaintiff:

1.) Twenty Thousand (₱20,000.00) as exemplary damages; and
2.) Twenty Thousand Pesos (₱20,000.00) as Attorney’s fees.

KHO - Riosa v. Tabaco La Suerte Corporation

Uploaded by

Copyright:

Available Formats

KHO - Riosa v. Tabaco La Suerte Corporation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

KHO - Riosa v. Tabaco La Suerte Corporation

Uploaded by

Copyright:

Available Formats

KHO, Francis Cedric G.

Aquiles Riosa v. Tabaco La Suerte Corporation

In Re: Existence of a valid and perfected contract of sale of real property

The elements of a contract of sale are: (CONSENT-SUBJECT MATTER-EQUIVALENT VALUE)

Ordered the defendant corporation to pay plaintiff:

Ordered the defendant to pay plaintiff:

You might also like