Riosa v. Tabaco La Suerte Corporation
REITERATIONFacts
The Antecedents: Petitioner Aquiles Riosa alleged that he was the owner of a commercial lot and building, which he acquired from his parents. He obtained loans totaling P50,000.00 from Sia Ko Pio, and when presented with a document to sign, he believed it was a receipt and undertaking for the loan, but without reading it due to trust, he affixed his signature. Subsequently, he was informed by respondent Tabaco La Suerte Corporation (La Suerte) that the lot was registered in its name. Riosa claimed he was defrauded into signing a deed of sale, asserting he never appeared before a notary public and that the notary was not authorized to notarize such a deed. He also contended that the commercial building was not included in the sale. Procedural History: Aquiles Riosa filed a complaint before the Regional Trial Court (RTC) for the annulment of the deed of absolute sale and transfer certificate of title, seeking reconveyance and damages. La Suerte, in its answer, claimed it was the lawful owner of the property, having purchased it from Riosa on December 7, 1990, and that Riosa had been allowed to remain in possession subject to demand. The RTC ruled in favor of Riosa, annulling the sale and title, and ordering damages and attorney's fees. La Suerte appealed to the Court of Appeals (CA). The CA reversed the RTC decision, upholding the validity of the deed of sale in favor of La Suerte, but granted Riosa's daughter the right to reimbursement for renovation expenses. Riosa's motion for reconsideration was denied by the CA. The Petition: This case is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure, filed by Aquiles Riosa, assailing the decision and resolution of the Court of Appeals. Riosa argues that the CA erred in reversing the RTC's findings, in holding that a personal loan was the consideration for the sale, in finding a valid contract of sale, in its resolution of his possession of the property, and in awarding damages to the respondent. The core issue presented is whether there was a perfected and valid contract of sale between Riosa and La Suerte, with Riosa contending that there was no meeting of the minds, no board resolution authorizing the purchase, no proof that the loan came from La Suerte, and irregularities in the notarization of the deed of sale.
Issue(s)
Whether the Court of Appeals committed serious error in reversing the findings of the Trial Court regarding the existence of a valid contract of sale. Whether the Court of Appeals committed serious error of law in holding that the personal loan of petitioner obtained and granted by Sia Ko Pio is a consideration of sale of the property in favor of the respondent corporation La Suerte Corporation, specifically concerning corporate authorization. Whether the Court of Appeals erred in finding that there was a valid and perfected contract of sale of real property between petitioner and respondent corporation La Suerte Corporation, focusing on irregularities in the deed of sale and notarization. Whether the Court of Appeals committed serious error of law and applicable jurisprudence in resolving petitioner’s actual physical possession of the property in question, and the related issue of tax payments. Whether the Court of Appeals committed serious error of law by awarding damages to the respondent, and the overall reversal of the RTC findings.
Ruling
The petition is GRANTED. The May 30, 2012 Decision of the Court of Appeals in CA-G.R. CV No. 96459 is REVERSED and SET ASIDE. The September 30, 2010 Decision of the Regional Trial Court, Branch 15 Tabaco City, Albay, is REINSTATED. This disposition is without prejudice to any valid claim of the heirs of Sia Ko Pio against Aquiles.
Ratio Decidendi
On the issue of whether there was a valid and perfected contract of sale: The Court reinstated the RTC's finding that there was no perfected contract of sale. The elements of a contract of sale are consent, determinate subject matter, and certain price. Aquiles' testimony indicated he did not intend to transfer ownership; he borrowed money from Sia Ko Pio, and signed a document evidencing his debt, not a sale. The Court found no clear and convincing evidence that Aquiles sold the property or that La Suerte authorized Sia Ko Pio to purchase it. The amounts received by Aquiles were personal loans from Sia Ko Pio, not consideration for a sale to La Suerte. The Court emphasized that mere allegations of fraud are insufficient; intentional acts to deceive must be specifically alleged and proved, and Aquiles' consistent claim of not knowing he was signing a sale, due to trust in Sia Ko Pio, was given credence. On the issue of corporate authorization: The Court found that Sia Ko Pio, despite being an officer of La Suerte, lacked authority from the Board of Directors to purchase Aquiles' property. The Corporation Code vests corporate powers in the board of directors. While agents can be appointed, the final decision rests with the board. Sia Ko Pio's son admitted no board resolution existed authorizing the purchase. Therefore, the transaction was a personal loan from Sia Ko Pio to Aquiles, not a sale to La Suerte, and La Suerte was not involved. On the issue of irregularities in the deed of sale and notarization: The Court noted material discrepancies in the dates appearing on the deed of sale (1999 in the body, 1990 in the acknowledgment and notarial reference). The ex-officio notary public, Judge Base, was not presented to explain this discrepancy. Furthermore, Judge Base, as an ex-officio notary public, was not authorized to notarize documents unrelated to his official duties, especially when there were other commissioned notaries public in Tabaco City, and no certification of lack of lawyers or notaries was attached. Aquiles' wife also denied signing the document or appearing before a notary. These irregularities reduced the evidentiary value of the deed of sale to that of a private document, which La Suerte failed to prove the authenticity and due execution of. On the issue of possession and tax payments: The Court agreed with both the RTC and CA that the prescriptive period for reconveyance did not run against Aquiles because he remained in possession. The Court also noted that Aquiles religiously paid real property taxes and his daughter invested ₱300,000.00 in improvements, which, coupled with La Suerte's failure to demand possession earlier, bolstered Aquiles' claim that he did not sell the property. These circumstances supported the finding that no sale occurred. On the issue of damages and reversal of RTC findings: The Court found that the CA erred in reversing the RTC's factual findings without strong and valid reasons, especially when the RTC was in a better position to assess witness demeanor. The Court concluded that the preponderance of evidence favored Aquiles due to the lack of consent, absence of corporate authority, and irregularities in the deed of sale and its notarization. Consequently, the RTC's annulment of the sale was correct, and the CA's decision was reversed.
Main Doctrine
A contract of sale requires a meeting of the minds on the subject matter and the price. Without clear and convincing evidence of consent to transfer ownership in exchange for a price, and absent proper corporate authorization for the transaction, a purported deed of sale may be annulled, especially when attended by irregularities in its execution and notarization.