D2017 AGENCY DIGESTS February 14

Danon vs. Brimo & Co. (12 September 1921)

JULIO DANON, plaintiff-appellee, vs. ANTONIO A. BRIMO & CO., defendantappellant.

September 12, 1921 (Johnson, J.)

Note: Pls read the original. Medyo magulo ang ponencia so better if alam niyo how it was written para
malagyan niyo ng proper sequence of events, according to how you understood the case.

FACTS

Facts found in the SC ruling:

Antonio A. Brimo, in a conversation with Danon, informed the latter that he

(Brimo) desired to sell his factory for P 1.2M

Brimo agreed and promised to pay to Danon a commission of 5% provided

the latter could sell said factory for that amount

No definite period of time was fixed within which Danon should effect the
sale

It seems that another broker, Sellner, was also negotiating the sale, or trying
to find a purchaser for the same property and that Danon was informed of the
fact either by Brimo himself or by someone else; at least, it is probable that
Danon was aware that he was not alone in the field, and his whole effort was
to forestall his competitor by being the first to find a purchaser and effect the
sale.

Danon brought an action to recover P60k from defendant company Brimo & Co.
The 60k is allegedly the value of services rendered to Brimo & Co by Danon as a
It seems that immediately after having an interview with Mr. Brimo, Danon
broker. Danons allegations:
went to see Mauro Prieto (president of the Santa Ana Oil Mill) and offered to
sell to him defendant's property at P1.2. After inspection, Prieto asked for an
In August 1918, defendant company, thru Brimo (manager) employed
appointment with Mr. Brimo to perfect the negotiation. In the meantime
him to look for a purchaser of its factory (Holland American Oil Co.) for
Sellner, the other broker referred to, had found a purchaser for the same
P1.2M payable in cash
property, who ultimately bought it for P1.3M. For that reason Mr. Prieto, the
would be purchaser found by Danon, never came to see Mr. Brimo to perfect
Defendant promised to pay Danon a commission of 5% of P1.2M if the
the proposed negotiation.
sale was consummated, or if Danon should find a purchaser ready, able
and willing to buy the factory for the said price
Danon claims that the reasons why the sale to the Santa Ana Mill was not
consummated was because Mr. Brimo refused to sell to a Filipino firm and
Danon then found a purchaser, but then the defendant refused to sell the
preferred an American buyer; that upon learning such, Danon endeavored to
factory without any justifiable reason, and without notifying Danon of its
procure another purchaser and found a Mr. Leas, who delivered to Danon a
desistance or variation in the price and terms of the sale.
letter addressed to Mr. Brimo, offering to buy the factory at P1.2M, the offer
being good for twenty-four; that said offer was not accepted by Brimo
because while he was reading the letter of Leas, Sellner came in, drew Brimo
into another room, and then and there closed the deal at P1,300,000. The
Defendant interposed a general denial.
last statement is admitted by the defendant.

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TC judge rendered a judgment in favor of the plaintiff and against the defendant question on behalf of his corporation at the price stated (said president testified
that he has not informed Danon of his acceptance of the P1.2M price that was
for P60k, with costs. Hence this appeal.
offered by the latter).

3. The plaintiffs action is one to recover "the reasonable value" of services

rendered. It is perfectly clear and undisputed that his "services" did not any way
contribute towards bringing about the sale of the factory in question. He was not
WON plaintiff was actually given authority to sell the property.
"the efficient agent or the procuring cause of the sale."

ISSUES:
1.
-NO
2.
WON plaintiff performed what was required of him in order to
Cases cited by the Court
entitle him to a commission. NO
3.
(In relation to #2) Is he entitled to recover P60k? --NO
Wylie vs. Marine National Bank, citing a lot of cases: The broker must be the
efficient agent or the procuring cause of sale. The means employed by him and
HELD: Danon is not entitled to the P60k because he was not the efficient
his efforts must result in the sale. He must find the purchaser, and the sale must
agent or the procuring cause of the sale. Although Danon could probably
proceed from his efforts acting as broker.
have effected the sale had not the defendant sold it to someone else, he is not
entitled to the commissions agreed upon because he had no intervention
Sibbald vs. Bethlehem Iron Co.:
whatever in, and much sale in question. No definite period was fixed by the
defendant within which Danon might effect the sale of its factory. Nor was Danon
In all the cases the fundamental and correct doctrine is that the duty assumed by
given by the defendant the exclusive agency of such sale. Therefore Danon
the broker is to bring the minds of the buyer and seller to an agreement for a sale,
cannot complain of the defendant's conduct in selling the property through and the price and terms on which it is to be made, and until that is done his right to
another agent. "One who has employed a broker can himself sell the property to
commissions does not accrue. A broker is never entitled to commissions for
a purchaser whom he has procured, without any aid from the broker."
unsuccessful efforts. The risk of a failure is wholly his. The reward comes only with
his success. That is the plain contract and contemplation of the parties. As we said
(Hungerford vs. Hicks, etc.)
RATIO
1. The proof with regard to the authority of the plaintiff to sell the factory in
question for the defendant, on commission, is extremely unsatisfactory. It
consists solely of the testimony of the plaintiff and of the manager of the
defendant. (see additional facts ^)
2. The proof in this regard is no less unsatisfactory. (see additional facts ^).
Under the proofs in this case, the most that can be said as to what Danon had
accomplished is that he found a person who might have bought the defendant's
factory if the defendant had not sold it to someone else. The evidence does not
show that the Santa Ana Oil Mill had definitely decided to buy the factory for
P1.2M. The board of directors of said corporation had not resolved to purchase
said property; and even if its president could legally make the purchase without
previous formal authorization of the board of directors, yet said president does
not pretend that he had definitely and formally agreed to buy the factory in

in Wylie vs. Marine National Bank, the principal violates no right of the broker by
selling to the first party who offers the price asked, and it matters not that sale is to
the very party with whom the broker had been negotiating. He failed to find or
produce a purchaser upon the terms prescribed in his employment, and the
principal was under no obligation to wait longer that he might make further efforts.
The failure therefore and its consequences were the risk of the broker only. This
however must be taken with one important and necessary limitation. If the efforts of
the broker are rendered a failure by the fault of the employer; if capriciously he
changes his mind after the purchaser, ready and willing, andconsenting to the
prescribed terms, is produced; or if the latter declines to complete the contract
because of some defect of title in the ownership of the seller, some unremoved
incumbrance, some defect which is the fault of the latter, then the broker does not
lose his commissions.
x x x x
One other principle applicable to such a contract as existed in the present case
needs to be kept in view. Where no time for the continuance of the contract is

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fixed by its terms either party is at liberty to terminate it at will, subject only to
the ordinary requirements of good faith. The right of the principal to terminate
his brokers authority is absolute and unrestricted, except only that he may
not do it in bad faith, and as a mere device to escape the payment of the broker's
commissions. If the principal acts in good faith, not seeking to escape the payment
of commissions, but moved fairly by a view of his own interest, he has the absolute
right before a bargain is made while negotiations remain unsuccessful, before
commissions are earned, to revoke the broker's authority, and the latter cannot
thereafter claim compensation for a sale made by the principal, even though it be
to a customer with whom the broker unsuccessfully negotiated, and even though,
to some extent, the seller might justly be said to have availed himself of the fruits of
the broker's labor.

land at a fixed price of P200.00/sqm. Caete executed a deed of sale in favor of

the Sisters of Mary for P20,822,800.00. The Register of Deeds of Cebu issued a
TCT in the name of the Sisters of Mary of Banneaux, Inc.
When Ps went to R Eduardo to claim their commission, the latter refused to pay
the broker's fee and alleged that another group of agents was responsible for the
sale of land to the Sisters of Mary.

P filed a complaint for the recovery of their broker's fee (P1,655,412.60), as well
as moral & exemplary damages & attorney's fees. They alleged that they were
the efficient procuring cause in bringing about the sale of the property to the
Sisters of Mary, but that their efforts in consummating the sale were frustrated by
the private respondents who, in evident bad faith, malice and in order to evade
Zeimer vs. Antisell and Ayres vs. Thomas: The undertaking to procure a payment of brokers fee, dealt directly with the buyer whom petitioners introduced
purchaser requires of the party so undertaking, not simply to name or introduce a to them.
person who may be willing to make any sort of contract in reference to the
property, but to produce a party capable, and who ultimately becomes the R's answer: another broker, Roberto Pacana, introduced the property to the
purchaser.
Sisters of Mary ahead of the petitioners.[14] Private respondents maintained that
when petitioners introduced the buyers to private respondent Eduardo Gullas, the
former were already decided in buying the property through Pacana, who had
Tan vs. Gullas (3 December 2002)
been paid his commission.
MANUEL B. TAN, GREGG M. TECSON and ALEXANDER SALDAA v. RTC rendered judgment in favor of Ps, ordering Rs to pay them broker's fee with
EDUARDO R. GULLAS and NORMA S. GULLAS
legal interest and attorney's fees. CA reversed, set aside lower court's decision,
3 December 2002 | J. Ynares-Santiago
and dismissed the complaint.
FACTS: Sps. Eduardo & Norma Gullas were the registered owners of a parcel of ISSUE: W/N Ps are entitled to the brokerage commission
land. They executed an SPA authorizing P Manuel Tan (licensed real estate
broker) and his associates Gregg Tecson & Alexander Saldaa to negotiate for HELD: YES. P Tan is a licensed real estate broker, and Tecson & Saldaa are
the sale of the land at P550.00/sqm., at a commission of 3% of the gross price. his associates. Citing Schmid and Oberly v. RJL Martinez Fishing Corporation,
The SPA was non-exclusive & effective for one month from 29 June 1992.
the Court defined a "broker" as one who is engaged, for others, on a
commission, negotiating contracts relative to property with the custody of which
On the same date, P Tan contacted Engr. Edsel Ledesma (construction Manager he has no concern; the negotiator between other parties, never acting in his own
of the Sisters of Mary of Banneaux, Inc. - a religious organization interested in name but in the name of those who employed him. x x x a broker is one whose
acquiring a property in the Minglanilla area), and they visited the property occupation is to bring the parties together, in matters of trade, commerce or
together a few days after. The two men accomapnied Sisters Michaela Kim & navigation.
Azucena Gaviola to see R Eduardo Gullas in his office. The sisters found the
land suitable for the purpose and expressed desire to buy it, but requested that It was establised that Ps, as brokers, were authorized by Rs to negotiate for the
the selling price be reduced to P530.00/sqm. He referred the prospective buyers sale of their land within a period of one month. The authority given to them was
to his wife.
non-exclusive, which meant that Rs were not precluded from granting the same
authority to other agents with respect to the sale of the same property.
R agreed to sell the property to Sisters of Mary, and executed an SPA in favor of
Eufemia Caete, giving her the special authority to sell, transfer and convey the

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Rs failed to prove their contention that Pacana began negotiations with R NormaSC affirmed the amount of P50,000.00 awarded by the trial court to the
Gullas way ahead of Tan et. al. They failed to present witnesses to substantiate petitioners.
this claim. It is curious that Mrs. Gullas herself was not presented in court to
testify about her dealings with Pacana. Neither was Atty. Nachura who was Phil. Health-Care Providers vs. Estrada (28 January 2008)
supposedly the one actively negotiating on behalf of the Sisters of Mary, ever
presented in court.
Facts: [Maxicare] is a domestic corporation engaged in selling health insurance
plans whose Chairman, CEO, and Sales marketing managers are impleaded as
Rs' contention that Pacana was the one responsible for the sale of the land is defendants
also unsubstantiated. There was nothing on record which established the
existence of a previous negotiation among Pacana, Mrs. Gullas and the Sisters On September 15, 1990, [Maxicare] allegedly engaged the services of Carmela
of Mary. The only piece of evidence that the private respondents were able to
Estrada who was doing business under the name of CARA HEALTH to promote
present is an undated and unnotarized Special Power of Attorney in favor of
and sell the prepaid group practice health care delivery program called
Pacana. While the lack of a date and an oath do not necessarily render said
Special Power of Attorney invalid, it should be borne in mind that the contract MAXICARE Plan with the position of Independent Account Executive. [Maxicare]
involves a considerable amount of money. Hence, it is inconsistent with sound formally appointed [Estrada] as its "General Agent," evidenced by a letterbusiness practice that the authority to sell is contained in an undated and agreement dated February 16, 1991. The letter agreement provided for plaintiffunnotarized Special Power of Attorney. Petitioners, on the other hand, were given appellees [Estradas] compensation in the form of commission, viz.:
Commission
the written authority to sell by the private respondents.
In consideration of the performance of your functions and duties as specified in
It is apparent that Rs are trying to evade payment of the commission which this letter-agreement, [Maxicare] shall pay you a commission equivalent to 15 to
rightfully belong to Ps as brokers with respect to the sale. There was no dispute 18% from individual, family, group accounts; 2.5 to 10% on tailored fit plans; and
as to the role that petitioners played in the transaction. At the very least, Ps set10% on standard plans of commissionable amount on corporate accounts from
the sale in motion. They were not able to participate in its consummation only all membership dues collected and remitted by you to [Maxicare].
because they were prevented from doing so by the acts of the private
respondents. In the case of Alfred Hahn v. Court of Appeals and Bayerische
[Maxicare] alleged that it followed a "franchising system" in dealing with its
Motoren Werke Aktiengesellschaft (BMW), the Court ruled that, An agent
receives a commission upon the successful conclusion of a sale. On the other agents whereby an agent had to first secure permission from [Maxicare] to list a
hand, a broker earns his pay merely by bringing the buyer and the seller prospective company as client. [Estrada] alleged that she did apply with
together, even if no sale is eventually made. Clearly, therefore, Ps, as brokers,[Maxicare] for the MERALCO account and other accounts, and in fact, its
should be entitled to the commission whether or not the sale of the property franchise to solicit corporate accounts, MERALCO account included, was
renewed on February 11, 1991.
subject matter of the contract was concluded through their efforts.
Re: damages
[Estrada] submitted proposals and made representations to the officers of
Following the stipulation in the Special Power of Attorney, petitioners are entitled MERALCO regarding the MAXICARE Plan but when MERALCO decided to
to 3% commission for the sale of the land in question. Petitioners maintain that subscribe to the MAXICARE Plan, [Maxicare] directly negotiated with MERALCO
their commission should be based on the price at which the land was offered for regarding the terms and conditions of the agreement and left [Estrada] out of the
sale, i.e., P530.00 per square meter. However, the actual purchase price for discussions on the terms and conditions.
which the land was sold was only P200.00 per square meter. Therefore, equity
considerations dictate that petitioners commission must be based on this
On November 28, 1991, MERALCO eventually subscribed to the MAXICARE
price.To rule otherwise would constitute unjust enrichment on the part of
petitioners as brokers. In the matter of attorneys fees and expenses of litigation, Plan and signed a Service Agreement directly with [Maxicare] for medical
coverage of its qualified members. As of May 1996, the total amount of premium
paid by MERALCO to [Maxicare] was P20,169,335.00.

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These efforts were recognized by Meralco as shown by the certification issued by

On March 24, 1992, [Estrada], through counsel, demanded from [Maxicare] that it its Manpower Planning and Research Staff Head. [Estradas] efforts were
be paid commissions for the MERALCO account and nine other accounts. In instrumental in introducing the Meralco account to [Maxicare] in regard to the
reply, [Maxicare], through counsel, denied [Estradas] claims for commission for latters Maxicare health insurance plans. [Estrada] was the efficient "intervening
the MERALCO and other accounts because [Maxicare] directly negotiated with cause" in bringing about the service agreement with Meralco.
MERALCO and that no agent was given the go signal to intervene in the
negotiations for the terms and conditions and the signing of the service The finding of "efficient procuring cause" by the CA is a question of fact which we
agreement. So if ever [Maxicare] was indebted to [Estrada], it was only for desist from passing upon as it would entail delving into factual matters on which
P1,555.00 and P43.l2 as commissions on the accounts of Overseas Freighters such finding was based.
Co. and Mr. Enrique Acosta, respectively.
The jettisoning of the petition is inevitable even upon a close perusal of the
After trial, the RTC found Maxicare liable for breach of contract and ordered it to merits of the case.
pay Estrada actual damages in the amount equivalent to 10% of P20,169,335.00,
representing her commission for the total premiums paid by Meralco to Maxicare First. Maxicares contention that Estrada may only claim commissions from
from the year 1991 to 1996.
membership dues which she has collected and remitted to Maxicare as expressly
provided for in the letter-agreement does not convince us. It is readily apparent
On appeal, the CA affirmed in toto the RTCs decision. In ruling for Estrada, both that Maxicare is attempting to evade payment of the commission which rightfully
the trial and appellate courts held that Estrada was the "efficient procuring cause" belongs to Estrada as the broker who brought the parties together. In fact,
in the execution of the service agreement between Meralco and Maxicare.
Maxicares former Chairman Roberto K. Macasaet testified that Maxicare had
been trying to land the Meralco account for two (2) years prior to Estradas entry
Issue: WoN Estrada is entitled to the commissions.
in 1990. Even without that admission, we note that Meralcos Assistant VicePresident, in a letter to then Maxicare President, categorically acknowledged
Held: Yes. Maxicare urges us that both the RTC and CA failed to take into Estradas efforts relative to the sale of Maxicare health plans to Meralco.
account the stipulations contained in the February 19, 1991 letter agreement
authorizing the payment of commissions only upon satisfaction of twin conditions, At the very least, Estrada penetrated the Meralco market, initially closed to
i.e., collection and contemporaneous remittance of premium dues by Estrada to Maxicare, and laid the groundwork for a business relationship. The only reason
Maxicare. Allegedly, the lower courts disregarded Estradas admission that the Estrada was not able to participate in the collection and remittance of premium
negotiations with Meralco failed. Thus, the flawed application of the "efficient dues to Maxicare was because she was prevented from doing so by the acts of
procuring cause" and the erroneous conclusion upholding Estradas entitlement Maxicare, its officers, and employees.
to commissions on contracts completed without her participation.
In Tan v. Gullas, we had occasion to define a broker and distinguish it from an
SC not persuaded.
agent, thus:
[O]ne who is engaged, for others, on a commission, negotiating contracts relative
There is no dispute as to the role that [Estrada] played in selling [Maxicares] to property with the custody of which he has no concern; the negotiator between
health insurance plan to Meralco. [Estradas] efforts consisted in being the first to the other parties, never acting in his own name but in the name of those who
offer the Maxicare plan to Meralco, using her connections with some of Meralco employed him. [A] broker is one whose occupation is to bring the parties
Executives, inviting said executives to dinner meetings, making submissions and together, in matter of trade, commerce or navigation.
representations regarding the health plan, sending follow-up letters, etc.
An agent receives a commission upon the successful conclusion of a sale. On

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the other hand, a broker earns his pay merely by bringing the buyer and the Medicard wanted to increase premium for the 3 rd year, but Unilab refused.
Medicard asked Sanchez to reduce his commission, and ofc he refused.
seller together, even if no sale is eventually made.
In relation thereto, we have held that the term "procuring cause" in describing a But Unilab did not want to prejudice its employees by the termination of the
brokers activity, refers to a cause originating a series of events which, without health insurance so it entered into a new insurance scheme with Medicard this
break in their continuity, result in the accomplishment of the prime objective of the time without the assistance of Sanchez. Under the new scheme, Unilab shall pay
Medicard only the amount corresponding to the actual hospitalization expenses
employment of the brokerproducing a purchaser ready, willing and able to buy
incurred by each personnel plus 15% service fee for using Medicard facilities,
on the owners terms. To be regarded as the "procuring cause" of a sale as to be
which amount shall not be less than P780k. No commission for Sanchez this
entitled to a commission, a brokers efforts must have been the foundation on time.
which the negotiations resulting in a sale began. Verily, Estrada was instrumental
in the sale of the Maxicare health plans to Meralco. Without her intervention, no Sanchez demanded from Medicard payment of P338,000.00 as his commission
sale could have been consummated.
plus damages, but the latter refused to heed his demand. Thus he filed a
complaint for sum of money against Medicard before the RTC of Makati.
Second. Maxicare next contends that Estrada herself admitted that her
RTC: Dismissed petition.
negotiations with Meralco failed.
CA: Affirmed RTC decision. Agency revoked. Not entitled to commission since
Even a cursory reading of the Complaint and all the pleadings filed thereafter contract expired.
before the RTC, CA, and this Court, readily show that Estrada does not concede, Hence this Petition for review on certiorari.
at any point, that her negotiations with Meralco failed. Clearly, Maxicares
Issue: W/N contract of agency has been revoked
assertion that Estrada herself does not pretend to be the "efficient procuring
cause" in the execution of the service agreement between Meralco and Maxicare Held: GR: For an agent to be entitled to a commission, he must be the
is baseless and an outright falsehood.
procuring cause of the sale, which simply means that the measures employed by
Sanchez vs. Medicard (2 September 2005)
Carlos Sanchez v Medicard PH, Montoya and Ejercito
Facts: Agent Sanchez is a special
corporate agent of Principal Medicard.
Through his efforts, Medicard was
to sell insurance to 3rd party Unilab (for
employees).
The
Health
Care
Program Contract was renewed for
another year with an increased
premium.
Sanchez
was
paid
commission
for
both
years
(P746k+P1.34M).

him and the efforts he exerted must result in a sale. Conversely, it follows that
where his efforts are unsuccessful, or there was no effort on his part, he is not
entitled to a commission.
EXC: Equity shiz! This Court held in Prats v CA that for the purpose of equity, an
agent who is not the efficient procuring cause is nonetheless entitled to his
commission, where said agent, notwithstanding the expiration of his authority,
nonetheless, took diligent steps to bring back together the parties, such that
able a sale was finalized and consummated between them. Also in Manotok v. Ca,
the SC held that an agent is still entitled to a commission if he was the efficient
its
procuring cause of the sale even if it took place after his authority had lapsed.
The proximate, close, and causal connection between the agents efforts and the
principals sale of his property cannot be ignored.
In this case, it is clear that since Sanchez refused to reduce his commission,
Medicard directly negotiated with Unilab, thus revoking its agency contract with
petitioner. We hold that such revocation is authorized by Article 1924 of the Civil
Code which provides:

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Defendant admitted having contracted the services of the plaintiffs to sell her
property as set forth in the complaint, but stated that she agreed to pay them a
commission of P1,200 only on condition that they buy her a property
somewhere in Taft Avenue to where she might transfer after selling her
Moreover, as found by the lower courts, Sanchez did not render services to property. Defendant avers that while plaintiffs took steps to sell her property as
Medicard to entitle him to a commission. There is no indication from the records agreed upon, they sold the property at Taft Avenue to another party and because
that he exerted any effort in order that Unilab and Medicard can renew the of this failure it was agreed that the authority she had given them be cancelled.
contract for the third time. Obviously, he was not the agent or the procuring
cause of the third Health Care Program Contract between Medicard and Lower Court: in favor of plaintiffs. Infante must pay them 2,500 pesos as
Unilab.
damages plus legal interest.
Art. 1924. The agency is revoked if the principal directly manages the
business entrusted to the agent, dealing directly with third persons.

SC finds no reason in law or in equity to rule that he is entitled to aCourt of Appeals: Affirmed.
commission.
ISSUE: WON plaintiffs are entitled to the commission?
HELD: YES.
Infante vs. Cunanan (31 August 1953)
There is no dispute that respondents were authorized by petitioner to sell her
CONSEJO INFANTE, vs. JOSE CUNANAN, JUAN MIJARES and THE COURT property for the sum of P30,000 with the understanding that they will be given a
commission of 5 percent plus whatever overprice they may obtain for the
OF APPEALS, SECOND DIVISION.
property. Petitioner, however, contends that authority has already been withdrawn
on November 30, 1948 when, by the voluntary act of respondents, they executed
FACTS: Consejo Infante, was the owner of two parcels of land, together with a
a document stating that said authority shall be considered cancelled and without
house built thereon, situated in the City of Manila and covered by Transfer
any effect.
Certificate of Title No. 61786. On or before November 30, 1948, she contracted
the services of Jose Cunanan and Juan Mijares, plaintiff herein, to sell the abovementioned property for a price of P30,000 subject to the condition that thePetitioner argues that since the agency was already revoked, there is no more
purchaser would assume the mortgage existing thereon in the favor of the obligation on her part to give the plaintiffs their commission because she dealt
with Noche on her own. It is true that a principal may withdraw the authority
Rehabilitation Finance Corporation.
given to an agent at will. However, respondents claim that while they agreed to
cancel the written authority given to them, they did so merely upon the verbal
She agreed to pay them a commission of 5 per cent on the purchase price
assurance given by petitioner that, should the property be sold to their own
plus whatever overprice they may obtain for the property. Cunanan and
buyer, Pio S. Noche, they would be given the commission agreed upon.
Mijares found one Pio S. Noche who was willing to buy the property. Upon
Petitioner, however stresses that the lower courts should not have allowed the
introduction of Noche to Infante, Infante told them that she was no longer
respondents to present oral evidence to prove the same since the agreement
interested in selling the property. She asked them to sign a document stating that
was reduced into writing..
the written authority she had given them was already cancelled.
The plea that oral evidence should not have been allowed to prove the alleged
A few days after, Infante dealth with Noche directly and sold the said property to
verbal assurance is well taken it appearing that the written authority given to
the latter for a price of 31,000 pesos. Thus, upon learning this transaction,
respondents has been cancelled in a written statement. The rule on this matter is
plaintiffs demanded from defendant the payment of their commission, but she
that "When the terms of an agreement have been reduced to writing, it is to be
refused and so they brought the present action.
considered as containing all those terms, and, therefore, there can be, between

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parties and their successors in interest, no evidence of the terms of the FACTS:
agreement other than the contents of the writing." (Section 22, Rule 123, Rules of The late Eduardo Ybaez (Ybaez) owned a 1,000sqm lot in Cebu City and
Court.) The only exceptions to this rule are: "(a)Where a mistake or imperfection entered into an Agreement and Authority to Negotiate and Sell (Agency
of the writing, or its failure to express the true intent and agreement of the Agreement) with respondent Florencio Saban (Saban). Under the Agency
parties, or the validity of the agreement is put in issue by the pleadings"; and "(b) Agreement, Ybaez authorized Saban to look for a buyer of the lot for
Where there is an intrinsic ambiguity in the writing." (Ibid.) There is no doubt thatP200,000.00 and to mark up the selling price to include the amounts needed
the point raised does not come under any of the cases excepted, for there is for payment of taxes, transfer of title and other expenses incident to the
nothing therein that has been put in issue by respondents in their complaint. The sale, as well as Sabans commission for the sale.
terms of the document seem to be clear and they do not contain any reservation
which may in any way run counter to the clear intention of the parties.
Through Sabans efforts, Ybaez and his wife were able to sell the lot to the
petitioner Genevieve Lim (Lim) and the spouses Benjamin and Lourdes Lim (the
But even disregarding the oral evidence adduced by respondents in Spouses Lim). The price of the lot as indicated in the Deed of Absolute Sale is
contravention of the parole evidence rule, we are, however, of the opinion that P200,000.00. It appears, however, that the vendees agreed to purchase the
there is enough justification for the conclusion reached by the lower court lot at the price of P600,000.00, inclusive of taxes and other incidental
as well as by the Court of Appeals to the effect that respondents are entitled to expenses of the sale. After the sale, Lim remitted to Saban the amounts of
the commission originally agreed upon. It is a fact found by the Court of AppealsP113,257.00 for payment of taxes due on the transaction as well as P50,000.00
that after petitioner had given the written authority to respondents to sell her land as brokers commission. Lim also issued in the name of Saban four postdated
for the sum of P30,000, respondents found a buyer in the person of one Pio S. checks in the aggregate amount of P236,743.0. Subsequently, Ybaez sent a
Noche who was willing to buy the property under the terms agreed upon, and this letter addressed to Lim asking Lim to cancel all the checks issued by her in
matter was immediately brought to the knowledge of petitioner. But the latter, Sabans favor and to extend another partial payment for the lot in his
perhaps by way of strategem, advised respondents that she was no longer (Ybaezs) favor. After the four checks in his favor were dishonored upon
interested in the deal and was able to prevail upon them to sign a document presentment, Saban filed a Complaint for collection of sum of money and
damages against Ybaez and Lim with the RTC Cebu City.
agreeing to the cancellation of the written authority.
That petitioner had changed her mind even if respondents had found a In his Complaint, Saban alleged that Ybaez told Lim that he (Saban) was not
buyer who was willing to close the deal, is a matter that would not give rise entitled to any commission for the sale since he concealed the actual selling
to a legal consequence if respondents agree to call off the transaction in price of the lot from Ybaez and because he was not a licensed real estate
deference to the request of the petitioner. But the situation varies if one of the broker. Ybaez was able to convince Lim to cancel all four checks. Saban further
parties takes advantage of the benevolence of the other and acts in a manner averred that Ybaez and Lim connived to deprive him of his sales
that would promote his own selfish interest. This act is unfair as would amount to commission by withholding payment of the first three checks. He also
bad faith. This act cannot be sanctioned without acccording to the party claimed that Lim failed to make good the fourth check which was dishonored
prejudiced the reward which is due him. This is the situation in which because the account against which it was drawn was closed. In his Answer,
respondents were placed by petitioner. Petitioner took advantage of the services Ybaez claimed that Saban was not entitled to any commission because he
rendered by respondents, but believing that she could evade payment of their concealed the actual selling price from him and because he was not a
commission, she made use of a ruse by inducing them to sign the deed of licensed real estate broker. Lim, for her part, argued that she was not privy to
cancellation Exhibit 1. This act of subversion cannot be sanctioned and cannot the agreement between Ybaez and Saban, and that she issued stop payment
serve as basis for petitioner to escape payment of the commission agreed upon. orders for the three checks because Ybaez requested her to pay the purchase
price directly to him, instead of coursing it through Saban. She also alleged that
she agreed with Ybaez that the purchase price of the lot was
Lim vs. Saban (15 December 2004)
only P200,000.00. (Ybaez died during the pendency of the case before the
RTC. Upon motion of his counsel, the trial court dismissed the case only against
Genevieve Lim vs Florencio Saban GR No. 163720 16 Dec 2004 (Tinga)
him without any objection from the other parties)

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revoked since Ybaez requested that Lim stop making payment orders for the
RTC dismissed Sabans complaint, declared 4 checks issued by Lim as stale checks payable to Saban only after the consummation of the sale. At that time,
and non-negotiable, ABSOLVING Lim from any liability towards Saban. Saban Saban had already performed his obligation as Ybaezs agent when, through his
appealed to CA.
(Sabans) efforts, Ybaez executed the Deed of Absolute Sale of the lot with Lim
and the Spouses Lim. To deprive Saban of his commission subsequent to the
CA REVERSED TC. Held that Saban was entitled to his commission sale which was consummated through his efforts would be a breach of his
amounting to P236,743.00. Ybaezs revocation of his contract of agency with contract of agency with Ybaez which expressly states that Saban would be
Saban was invalid because the agency was coupled with an interest and Ybaez entitled to any excess in the purchase price after deducting the P200,000.00 due
effected the revocation in bad faith in order to deprive Saban of his commission to Ybaez and the transfer taxes and other incidental expenses of the sale.
and to keep the profits for himself. The appellate court found that Ybaez and
Lim connived to deprive Saban of his commission. It declared that Lim is liableMacondray & Co. v. Sellner, - The Court held that it would be in the height of
to pay Saban the amount of the purchase price of the lot corresponding to injustice to permit the principal to terminate the contract of agency to the
his commission because she issued the four checks knowing that the total prejudice of the broker when he had already reaped the benefits of the brokers
amount thereof corresponded to Sabans commission for the sale, as the efforts. Infante v. Cunanan, et al., The Court ruled that the sellers withdrawal in
agent of Ybaez. Further, in issuing the checks in payment of Sabans bad faith of the brokers authority cannot unjustly deprive the brokers of their
commission, Lim acted as an accommodation party. She signed the checks ascommissions as the sellers duly constituted agents. The pronouncements of
drawer, without receiving value therefor, for the purpose of lending her name to a the Court in the aforecited cases are applicable to the present case,
third person. As such, she is liable to pay Saban as the holder for value of the especially considering that Saban had completely performed his
checks.
obligations under his contract of agency with Ybaez by finding a suitable
buyer to preparing the Deed of Absolute Sale between Ybaez and Lim and
MR Denied Present Petition
her co-vendees. Moreover, the contract of agency very clearly states that
Saban is entitled to the excess of the mark-up of the price of the lot after
LIM: argues that CA ignored the fact that after paying her agent and remitting to deducting Ybaezs share of P200,000.00 and the taxes and other incidental
Saban the amounts due for taxes and transfer of title, she paid the balance of theexpenses of the sale.
purchase price directly to Ybaez. She is not liable for Ybaezs debt to Saban
under the Agency Agreement as she is not privy thereto, and that Saban has no However, the Court does NOT agree with the CAs pronouncement that Sabans
one but himself to blame for consenting to the dismissal of the case against agency was one coupled with an interest. Under Article 1927 of the Civil
Ybaez and not moving for his substitution by his heirs. Lim prays that should Code, an agency is deemed as one coupled with an interest where it is
she be found liable to pay Saban the amount of his commission, she should only established for the mutual benefit of the principal and of the agent, or for
be held liable to the extent of one-third (1/3) of the amount, since she had twothe interest of the principal and of third persons, and it cannot be revoked
co-vendees (the Spouses Lim) who should share such liability.
Inby the principal so long as the interest of the agent or of a third person
his Comment, Saban maintains that Lim agreed to purchase the lot subsists. In an agency coupled with an interest, the agents interest must be in
for P600,000.00, which consisted of the P200,000.00 which would be paid tothe subject matter of the power conferred and not merely an interest in the
Ybaez, the P50,000.00 due to her broker, the P113,257.00 earmarked for taxesexercise of the power because it entitles him to compensation. When an agents
and other expenses incidental to the sale and Sabans commission as broker for interest is confined to earning his agreed compensation, the agency is not one
Ybaez. According to Saban, Lim assumed the obligation to pay him his coupled with an interest, since an agents interest in obtaining his compensation
commission. He insists that Lim and Ybaez connived to unjustly deprive him of as such agent is an ordinary incident of the agency relationship.
his commission from the negotiation of the sale.
ISSUE2: WON Lim proper party against whom Saban should address his claim.
ISSUE1: WON Saban is entitled to receive his commission from the sale; and, Sabans right to receive compensation for negotiating as broker for
assuming that Saban is entitled thereto, whether it is Lim who is liable to pay Ybaez arises from the Agency Agreement between them. Lim is not a
Saban his sales commission. YES. Court agrees with CA. Agency was not party to the contract. However, the record reveals that she had knowledge

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of the fact that Ybaez set the price of the lot atP200,000.00 and that would not give rise to a legal consequence if [Cunanan and Mijares] agreed to
the P600,000.00the price agreed upon by her and Sabanwas more than the call off the transaction in deference to the request of [Infante]. But the situation
amount set by Ybaez because it included the amount for payment of taxes and varies if one of the parties takes advantage of the benevolence of the other and
for Sabans commission as broker for Ybaez. Lims act of issuing the four acts in a manner that would promote his own selfish interest. This act is unfair as
checks amounting to P236,743.00 in Sabans favor belies her claim that she would amount to bad faith. This act cannot be sanctioned without according the
and her co-vendees did not agree to purchase the lot at P600,000.00. Ifparty prejudiced the reward which is due him. This is the situation in which
she did not agree thereto, there would be no reason for her to issue those checks [Cunanan and Mijares] were placed by [Infante]. [Infante] took advantage of
which is the balance of P600,000.00 less the amounts of P200,000.00 (due tothe services rendered by [Cunanan and Mijares], but believing that she
Ybaez), P50,000.00 (commission), and the P113,257.00 (taxes). The onlycould evade payment of their commission, she made use of a ruse by
logical conclusion is that Lim changed her mind about agreeing to purchase the inducing them to sign the deed of cancellation.This act of subversion
lot at P600,000.00 after talking to Ybaez and ultimately realizing that Sabans cannot be sanctioned and cannot serve as basis for [Infante] to escape
commission is even more than what Ybaez received as his share of the payment of the commission agreed upon.
purchase price as vendor. Obviously, this change of mind resulted to the
prejudice of Saban whose efforts led to the completion of the sale between the **EXTRA: (accommodation party) The appellate court however erred in ruling
latter, and Lim and her co-vendees. This the Court cannot countenance. CA hadthat Lim is liable on the checks because she issued them as an accommodation
sufficient basis for concluding that Ybaez and Lim connived to deprive Saban of party. The accommodation party is liable on the instrument to a holder for value
his commission by dealing with each other directly and reducing the purchase even though the holder at the time of taking the instrument knew him or her to be
price of the lot and leaving nothing to compensate Saban for his merely an accommodation party. The accommodation party may of course seek
efforts.Considering the circumstances surrounding the case, and the undisputed reimbursement from the party accommodated. As gleaned from the text of
fact that Lim had not yet paid the balance ofP200,000.00 of the purchase price Section 29 of the Negotiable Instruments Law, the accommodation party is one
of P600,000.00, it is just and proper for her to pay Saban the balance who meets all these three requisites, viz: (1) he signed the instrument as maker,
of P200,000.00. Furthermore, since Ybaez received a total of P230,000.00 fromdrawer, acceptor, or indorser; (2) he did not receive value for the signature; and
Lim, or an excess of P30,000.00 from his asking price ofP200,000.00, Saban (3) he signed for the purpose of lending his name to some other person. In the
may claim such excess from Ybaezs estate, if that remedy is still available, incase at bar, while Lim signed as drawer of the checks she did not satisfy the two
view of the trial courts dismissal of Sabans complaint as against Ybaez, with other remaining requisites. Lim received value for her signature on the checks.
Sabans express consent, due to the latters demise.
Neither is there any indication that Lim issued the checks for the purpose of
enabling Ybaez, or any other person for that matter, to obtain credit or to raise
***EXTRA (BABY CASE): Infante v. Cunanan, et al., is enlightening for the facts money, thereby totally debunking the presence of the third requisite of an
therein are similar to the circumstances of the present case. Consejo Infanteaccommodation party.
asked Jose Cunanan and Juan Mijares to find a buyer for her two lots and the
house built thereon for Thirty Thousand Pesos (P30,000.00) . She promised to
pay them five percent (5%) of the purchase price plus whatever overprice they
may obtain for the property. Cunanan and Mijares offered the properties to Pio
Noche who in turn expressed willingness to purchase the properties. Cunanan
and Mijares thereafter introduced Noche to Infante. However, the latter told
Cunanan and Mijares that she was no longer interested in selling the property
and asked them to sign a document stating that their written authority to act as
her agents for the sale of the properties was already cancelled. Subsequently,
Infante sold the properties directly to Noche for Thirty One Thousand Pesos
(P31,000.00). The Court upheld the right of Cunanan and Mijares to their
commission, explaining that[Infante] had changed her mind even if
respondent had found a buyer who was willing to close the deal, is a matter that Prats vs. CA (31 January 1978)

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Antonio E. Prats, doing business under the name of Phil. Real Estate
Exchange v. CA, Alfonso Doronilla, and Phil. Natl Bank
Jan. 31, 1978; Fernandez
Prepared by Tobie Reynes
Putative Agent: PRATS
Putative Principal: DORONILLA
Putative 3rd Person: SSS
Facts

d. That the written offers must be made by the prospective buyers,

unless they prefer to have the owners take the offer for and in
their behalf of some buyers who do not want to be known in the
early stages of negotiations;
e. That if no written offer is made until the last day of the
authorization, the option and authority shall expire and become
null and void;
f. That all prospective buyers and interested parties by referred to
the owners, and that PRATS will not even quote a price directly
to any agent or buyer; and
g. That the fact that some squatters are occupying small portions of
the land will be reported and the removal of said squatters will be
at the owners expense.

Alfonso DORONILLA owns a 300 ha. parcel of land located in

Montalban, Rizal. On July 3, 1967, DORONILLA wrote directly to the Chairman
Social Security System (SSS) Ramon GAVIOLA, offering the said property to
SSS at PHP4.00/sq.m. GAVIOLA replied on July 17, 1967, inquiring about details
surrounding the parcel of land (e.g. area located in QC, area located in Rizal,
On Feb. 19, 1968, PRATS wrote a letter to DORONILLA requesting him
possibility of reduced price of PHP3.25/sq.m). On July 19, 1967, DORONILLA to withdraw any and all papers pertaining to the property offered to the SSS.
wrote another letter to GAVIOLA, accepting his counter-offer of P3.25/sq.m. DORONILLA then wrote a letter to the SSS Administrator requesting for the
on the condition that the same should be paid in cash within a period of 30 days. return of all documents concerning his offered property. The SSS Administrator
On Aug. 10, 1967, GAVIOLA wrote to DORONILLA informing the latter GREGORIO replied by inviting DORONILLA to meet with him and GAVIOLA
that his July 19 letter is with the Administrator for study and comment, and that about the lot offer. DORONILLA replied by stating that since the SSS has not
the Commission will act upon receipt of such studies.
acted on his offer more that seven months ago, he has asked for the return of the
papers, which have actually been returned. He added that as of Feb. 20, 1968,
On Oct. 30, 1967 Pastor SAJORDA, by authority of DORONILLA, wrote he has given the Phil. Real Estate Exchange (PREE) (i.e. PRATS) an
a letter to realtor Vicente Narciso for certification regarding the actual price of exclusive option and authority to negotiate the sale of his land. He then
DORONILLAs properties. The realtor replied, stating that the fair market value requested the SSS Administrator to communicate directly with PREE if they are
range from PHP3.00 to PHP3.50/sq.m.
still interested in his property.
On Feb. 14, 1968, DORONILLA granted Antonio PRATS an exclusive
On Mar. 16, 1968, PRATS wrote the SSS Administrator to discuss the
option and authority under the following terms and conditions:
sale of the property.
a. that the price of the property is PHP3.00/sq.m;
b. that a commission of 10% will be paid based on PHP2.10/sq.m.
On Apr. 18, 1968, DORONILLA extended the exclusive option and
or at any price that PRATS finally agrees upon; provided, that if authority until May 18, 1968.
the property is sold over PHP3.00/sq.m. the excess amount shall
be credited and paid to the herein brokers in addition to the 10%
On May 6, 1968, PRATS made a formal written offer to SSS at the
commission based on PHP2.10/sq.m, provided that PRATS shall price of PHP6.00/sq.m. SSS replied via telegram on May 17, 1968 to
pay the corresponding taxes to the DORONILLA of the excessDORONILLA stating that it is considering the purchase. The next day (May 18,
amount over PHP3.00/sq.m;
also the extended expiry date) PRATS wrote to DORONILLA reminding him
c. that the exclusive option and authority is good for a period of 60 that they still had 15 days from [May 18] within which to finish the
days from the date of conformity by PRATS; provided, that negotiations. On the same daye (May 18) PRATS wrote to DORONILLA stating
should negotiations have been started with a buyer, said period that they are making a firm offer of PHP4.50/sq.m. and suggesting that they
is automatically extended until said negotiations are terminated, sit down with the SSS to finalize the arrangement.
but not more than 15 days;

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On May 30, 1968, PRATS wrote to DORONILLA advising him that the
SSS has agreed to purchase the property which can be confirmed by the SSS
Under the circumstances, the Court grants in equity PHP100,000 by way
Chairman.
of compensation for PRATS effort and assistance in the transaction. The award
of attorney fees adjudged against PRATS is deleted.
However, on June 6, 1968, DORONILLA wrote to PRATS stating that he
has not received any written offer from SSS or others during the effectivity of
the extended exclusive authority. On June 19, 1968, DORONILLA himself wroteManotok Brothers vs. CA (7 April 1993)
to the SSS Administrator renewing his offer to sell the land at PHP4.00/sq.m.
On June 20, 1968, the Social Security Commission (SSC) passed Res. MANOTOK BROTHERS, INC. vs. THE HONORABLE COURT OF APPEALS,
No. 636 by which the SSS formalized its counter offer of PHP3.25/sq.m. Also, on THE HONORABLE JUDGE OF THE REGIONAL TRIAL COURT OF MANILA
July 17, 1968, the SSC passed Res. No. 738 approving the purchase of (Branch VI), and SALVADOR SALIGUMBA
DORONILLAs land at PHP3.25/sq.m. Thus, on July 30, 1968, DORONILLA
executed a deed of absolute sale in favor of SSS for the total price pf
G.R. No. 94753 | April 7, 1993 | J. Campos, Jr.
PHP9.75M.
In a letter dated Sept. 17, 1968, PRATS wrote to DORONILLA
demanding payment of PHP1.38M for his services. When this was denied, FACTS:
PRATS sued DORONILLA before the RTC, which decided in favor of PRATS, By means of a letter 5 dated July 5, 1966, Manotok Brothers, Inc. authorized
and ordered DORONILLA to pay PHP1.38M with interest, PHP200,000 as moral herein private respondent Salvador Saligumba to negotiate with the City of
damages, PHP100,000 as exemplary damages, and PHP150,000 as attorneys Manila for the sale of a parcel of land and building which the City formerly leased
fees. The CA reversed the RTC decision and awarded attorneys fees in favor of for not less than P425,000.00. It was being used as Claro M. Recto High School.
DORONILLA. It reasoned that the authority of PRATS expired on June 2, 1968. In the same writing, petitioner agreed to pay private respondent a five
percent (5%) commission in the event the sale is finally consummated and
paid.
Issue/Held/Ratio
W/N PRATS is entitled to compensation as stipulated in the exclusive
option and authority NO, he is not. BUT, DORONILLA, in equity, should He was granted two extensions of authority for 120 days each time. Finally, the
corporation with Rufino Manotok, its President, as signatory, authorized private
pay PRATS PHP100,000 as compensation for his efforts and assistance.
respondent to finalize and consummate the sale of the property to the City of
It is clear that the offer of DORONILLA to sell the land to the SSS wasManila for not less than P410,000.00. With this letter came another extension of
formally accepted by the latter only on June 20, 1968, after the exclusive180 days.
authority in favor of PRATS had expired. There is no basis in law to grant relief
to PRATS. In equity, however, it must be noted that PRATS had diligently takenThe Municipal Board of the City of Manila passed Ordinance No. 6603,
appropriating the sum of P410,816.00 for the purchase of the property which
steps to bring back DORONILLA and SSS together.
Saligumba was authorized to sell. However, the City Mayor only signed the
DORONILLA finally sold the property to SSS at the very same price ordinance on May 17, 1968, one hundred eighty three (183) days after the
counter offered by the latter in July 1967 when he alone was dealing with SSS. last letter of authorization.
PRATS efforts, however, were somehow instrumental in bringing them
together again and finally consummating the transaction at the same price ofThe deed of sale was perfected but Saligumba never received his commission,
PHP 3.25/sq.m., although such finalization was after the expiration of the which should have amounted to P20, 554.50. The Manotok Brothers refused to
exclusive authority. Still, such price was higher than that stipulated in the acknowledge his role as the agent in the transaction.
exclusive authority.

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Saligumba filed a complaint against Manotok Brothers so he may receive his

commission. Manotok Brothers denied saying that he would have only received ISSUE: WON Saligumba is entitled to the five percent (5%) agent's commission
his commission if a sale was perfected and if it was perfected within the given Yes, Huelgas was not the agent of Manotok Brothers
time and that the one responsible for the perfection of the sale was actually
another person. A counterclaim for P4000 for attorneys fees and damages was HELD:
filed. After hearing the testimonies and accepting evidence, the CFI sentencedAt first sight, it would seem that private respondent is not entitled to any
petitioner and/or Rufino Manotok to pay Saligumba P20,540.00 by way of his commission as he was not successful in consummating the sale between the
commission fees with legal interest as well as attorneys fees. The CA affirmed parties, for the sole reason that when the Deed of Sale was finally executed, his
the CFI decision. When it was brought up to the SC as a petition for review on extended authority had already expired.
certiorari, a resolution was entered (after having difficulty locating Saligumba)
dismissing the case because the issues could not be joined.
Going deeper however into the case would reveal that it is within the coverage of
the exception rather than of the general rule, the exception being that enunciated
This petition for relief was filed because Saligumba filed a motion to execute. in the case of Prats vs. Court of Appeals. In its decision in the abovecited case,
Sensing fraudulent schemes in the manner by which Saligumba came to know of this Court said, that while it was respondent court's factual findings that petitioner
the SCs resolution, it filed this case.
Prats was not the efficient procuring cause in bringing about the sale (prescinding
from the fact of expiration of his exclusive authority), still petitioner was awarded
compensation for his services.
The process which Saligumba underwent as an agent: He went to a
meeting with Rufino Manotok and Atty. Bisbal, then PTA president where In the case at bar, private respondent is the efficient procuring cause for
they asked Saligumba to negotiate the sale to the City of Manila. He then without his efforts, the municipality would not have anything to pass and
the Mayor would not have anything to approve.
went to Councilor Magsalin (author of the ordinance) and to the Assessors
Office (to appraise the value). After securing the report of the appraisal
committee, he went to the City Mayor's Office, which indorsed the matter to
In an earlier case, this Court ruled that when there is a close, proximate and
the Superintendent of City Schools of Manila who approved the appraisal.
causal connection between the agent's efforts and labor and the principal's sale
Subsequently, on April 26, 1968, Ordinance No. 6603 was passed by the
of his property, the agent is entitled to a commission.
Municipal Board for the appropriation of the sum corresponding to the
purchase price.
We agree with respondent Court that the City of Manila ultimately became the
purchaser of petitioner's property mainly through the efforts of private
Opposition to Saligumbas story: Fructuoso Huelgas testified to the effect that
respondent. Without discounting the fact that when Municipal Ordinance No.
after being inducted as PTA president in August, 1967 he was the one that
6603 was signed by the City Mayor on May 17, 1968, private respondent's
followed up the sale from the start with Councilor Magsalin until after it was
authority had already expired, it is to be noted that the ordinance was
approved by the Mayor on May 17, 1968. Rufino Manotok confirmed that he
approved on April 26, 1968 when private respondent's authorization was
knew Huelgas and that there was an agreement between the two of them
still in force. Moreover, the approval by the City Mayor came only three days
regarding the "gratification". On rebuttal, Atty. Bisbal said that Huelgas was
after the expiration of private respondent's authority. It is also worth
present in the PTA meetings from 1965 to 1967 but he never offered to help in
emphasizing that from the records, the only party given a written authority
the acquisition of said property. Moreover, he testified that Huelgas was aware of
by petitioner to negotiate the sale from July 5, 1966 to May 14, 1968 was
the fact that it was private respondent who was negotiating the sale of the subject
private respondent.
property.

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a) Office building lot

b) Warehouse lot
Saligumba pursued with his goal of seeing that the parties reach an agreement,
on the belief that he alone was transacting the business with the City The aforesaid lots had, however, been previously mortgaged by Marinduque
Mining Corp. to Caltex, and the mortgage in favor of DBP was entered on their
Government as this was what petitioner made it to appear. This is unlike Danon
titles as a second mortgage.
vs Brimo where the agent was not sure about his role as against another person
purporting to be an agent.
The account of the Marinduque Mining Corp., with the DBP was later transferred
to the Assets Privatization Trust (APT) pursuant to Proclamation No. 50.
For failure of the Marinduque Mining Corp. to pay its obligations to Caltex, the
While it may be true that Filomeno Huelgas followed up the matter with Councilor latter foreclosed its mortgage on the aforesaid two lots. APT on the other hand, to
Magsalin, the author of Municipal Ordinance No. 6603 and Mayor Villegas, hisrecover its investment on the Marinduque Account, offered for sale to the public
intervention regarding the purchase came only after the ordinance had through DBP its right of redemption on said two lots by public bidding.
already been passed when the buyer has already agreed to the purchase
Considering, however, that Caltex had required that both lots be redeemed, the
and to the price for which said property is to be paid. Without the efforts of
bidding guidelines set by DBP provided that any bid to purchase either of the two
private respondent then, Mayor Villegas would have nothing to approve in the lots would be considered only should there be two bids or a bid for the two items
first place. It was actually private respondent's labor that had set in motion the which, when combined, would fully cover the sale of the two lots in question.
intervention of the third party that produced the sale, hence he should be amply
compensated.
The aforesaid bidding was held on May 5, 1987, with only one bidder, the
Counsel Realty Corp. (an affiliate of Glaxo, Philippines, the client of petitioner),
which offered a bid only for the warehouse lot in the amount of P23,900,000.00.
Said bid was thus rejected by DBP.
Uniland Resources vs. DBP (16 August 1991)
Uniland Resources v. DBP
G.R. No. 95909 | Aug 16, 1991 | J. Gancayco
PARTIES
Putative Principal DBP
Putative Agent Uniland Resources
Third Person Counsel Realty

Seeing, however, that it would make a profit if it redeemed the two lots and then
offer them for sale, and as its right to redeem said lots from Caltex would expire
on May 8, 1987, DBP retrieved the account from APT and, on the last day for the
exercise of its right of redemption, May 8, 1987, redeemed said lots from Caltex
for P33,096,321.62, thus acquiring them as its physical assets.
The public bidding for the sale of the two lots was held and again, there was only
one bidder, the Charges Realty Corp. (another affiliate of Glaxo, Philippines), for
only the warehouse lot and for the amount of P24,070,000.00, which is slightly
higher than the amount previously offered by Counsel Realty Corp.

FACTS
P Uniland Resources is a private corporation engaged in real estate brokerage
and licensed as such while R DBP is a government corporation engaged in Notwithstanding that there was no bidder for the office building lot, the DBP
approved the sale of the warehouse lot to Charges Realty Corp. As for the office
finance and banking in a proprietary capacity.
building lot, it was later sold by DBP in a negotiated sale to the BPI as trustee for
Long before this case arose, Marinduque Mining Corporation obtained a loan the "Perpetual Care Fund of the Manila Memorial Park. The DBP admittedly paid
from the DBP and as security therefor, mortgaged certain real properties to the the 5% broker's fee on this sale to the DBP Management Corporation, which
acted as broker for said negotiated sale.
latter, among them two lots located in Makati:

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arrangement sought did not exist. Article 1869, therefore, has no room for
After the aforesaid sale, P through its President, wrote two letters to DBP, asking operation in this case.
for the payment of its broker's fee in instrumenting the sale of DBP's warehouse
lot to Charges Realty Corp. The claim was referred to the Bidding Committee No one may contract in the name of another without being authorized by the
which issued a decision denying the claim. Hence, the instant case filed by P to latter, unless the former has by law a right to represent him. From this principle,
recover from DBP the aforesaid broker's fee.
among others, springs the relationship of agency which, as with other contracts,
is one founded on mutual consent: the principal agrees to be bound by the acts
Lower court ordered DBP to pay P1,203,500.00 which is the equivalent of 5% of the agent and the latter in turn consents to render service on behalf or in
broker's fee plus legal interest from the filing of the complaint until fully paid and representation of the principal.
the sum of P50,000.00 for atty's fees.
Equity and Prats doctrine
CA reversed. MR denied.
In equity, the Court recognizes the efforts of P in bringing together respondent
ISSUE
DBP and an interested and financiallyable buyer. While not actively involved in
W/N middleman who had no authority broker the transaction may recover
the actual bidding and transfer of ownership of the warehouse property, P may be
brokers fee if the sale was eventually consummated between parties introduced said to have initiated, albeit without proper authority, the transaction that
by said middleman
eventually took place. The Court is also aware that DBP was able to realize a
substantial profit from the sale of its two properties. While purely circumstantial,
HELD
there is sufficient reason to believe that the DBP became more confident to
NO, but SC allowed due to equity Prats doctrine.
venture and redeem the properties from the APT due to the presence of a ready
and willing buyer, as communicated and assured by petitioner.
It is obvious that P was never able to secure the required accreditation from DBP
to transact business on behalf of the latter. The letters sent by petitioner to the Prats v. Court of Appeals: There was a finding that the petitioner therein as the
higher officers of the DBP and the APT are merely indicative of P's desire to agent was no longer the efficient procuring cause in bringing about the sale
secure such accreditation. At best these missives are selfserving; the most thatproceeding from the fact of expiration of his exclusive authority. There was
they prove is that they were sent by P and received by DBP, which clearly never therefore no basis in law to grant the relief sought. Nevertheless, this Court in
agreed to be bound thereto. There was no express reply from the DBP or the equity granted the sum of P100,000.00, out of the P1,380,000.00 claimed as
APT as to the accreditation sought by P. From the very beginning, therefore, P commission, by way of compensation for the efforts and assistance rendered by
was aware that it had no express authority from DBP to find buyers of its the agent in the transaction prior to the expiration of his authority. These consist
properties.
in offering the lot for sale to the eventual buyer, sending followup letters, inviting
the buyer to dinner and luncheon meetings, etc.
No implied Agency
Parallel circumstances obtain in the case at bar. It was petitioner who advised
P also invokes NCC 1869 in contending that an implied agency existed. P argues Glaxo, Philippines of the availability of the warehouse property and aroused its
that it "should have been stopped, disauthorized and outrightly prevented from interest over the same. Through P, DBP was directly informed of the existence of
dealing the warehouse by the DBP from the inception." On the contrary, these an interested buyer. P's persistence in communicating with respondent DBP
steps were never necessary. In the course of P's dealings with the DBP, it was reinforced the seriousness of the offer. This piece of information no doubt had a
always made clear to P that only accredited brokers may look for buyers on bearing on the subsequent decisions made by DBP as regards the disposition of
behalf of DBP. This is not a situation wherein a third party was prejudiced by the its properties.
refusal of DBP to recognize P as its broker. The controversy is only between the
DBP and P, to whom it was emphasized in no uncertain terms that the

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DISPOSITION
P100,000.00 awarded to P. The circumstances that came into play in this
case do not meet the minimum legal standards required for the existence of
an agency relationship and that the award is based purely on equity
considerations.

Domingo vs. Domingo (29 October 1971)

Baltazar vs. Ombudsman (6 December 2006
Antonio Baltazar v. Hon. Ombudsman, Eulogio Mariano, Jose Jimenez, Jr.,
Toribio Ilao, Jr., and Ernesto Salenga
GR No. 136433, December 6, 2006

o Mercado (Attorney-in-Fact) filed motion to intervene

May 29, 1995: Provincial Adjudicator of DARAB Pampanga, Ilao, Jr.
dismissed Complaint for lack of merit, appealed to DARAB Appellate
Board
November 24, 1994: (pending resolution) Baltazar, alleged nephew of
Mercado, instituted Complaint before Ombudsman, charging private
respondents of conspiracy through issuance of TRO in allowing Salenga
to retain possession of fishpond, etc. and Ilao, Jr. had no jdxn to hear
and act on case since no tenancy relation bet. Salenga and Lopez.
Ombudsman found probable cause. Information filed before
Sandiganbayan. Ilao, Jr. filed MR and/or reinvestigation granted. After
reinvestigation, case was recommended to be dismissed. Ombudsman
approved.

Nephew of attorney-in-fact filed a criminal case stemming from a civil (agrarian)

Issue: WoN Ombudsman committed GAD
case. But agency cannot be delegated so he has no standing to file a complaint
before the Ombudsman.
Held: No. Petitioner has no legal standing. He is not the real-party-in-interest.
Agency cannot be further delegated
P: Paciencia Regala
A: Faustino Mercado (A of A: Antonio Baltazar)
Petitioner asserts he is duly authorized by Mercado to instituted suit by virtue of
T: Lessee: Lapid (Sublessee: Rafael, Fishpond Watchman: Salenga)
SPA. However, Mercado is an agent himself and as such cannot further delegate
his agency to another. Otherwise put, an agent cannot delegate to another the
Facts:
same agency. The legal maxim potestas delegata non delegare potest; a power
Paciencia Regala owns a 7-ha fishpond at Sasmuan, Pampanga.
once delegated cannot be redelegated, while applied primarily in political law to
Attorney-in-Fact, Faustino Mercado, leased fishpond to Eduardo Lapid the exercise of legislative power, is a principle of agency. For another, a
for P230k for 3 yrs (August 7, 1990 August 7, 1993)
redelegation of the agency would be detrimental to the principal as the second
Lapid subleased to Rafael Lopez for P50k for last 7 months of original agent has no privity of contract with the former. Petitioner has no privity of
lease (January 10 August 7, 1993)
contract with Regala, owner of fishpond and principal of Mercado.
Lapid hired Ernesto Salenga as fishpond watchman, sublessee Lopez
NCC 1892 allows the agent to appoint a substitute, such is not the situation in the
rehired Salenga.
March 11, 1993: Salenga, through Francis Lagman, sent a January 28, instant case. The SPA clearly delegates the agency to petitioner to pursue the
1993 demand letter to Lopez and Lapid for unpaid salaries and non- case and not merely as a substitute. Besides, it is clear that what is allowed is a
substitute and not a delegation of the agency.
payment of 10% share in harvest
June 5, 1993: Lopez replied, the last 2 months of the sub-lease, he gave
Petitioner is neither a real party in interest with regard to the agrarian case nor in
rights to Mario Palad and Ambit Perez for P20k.
Salenga filed Complaint before the Provincial Agrarian Adjudication the crim proceedings conducted by the Ombudsman, elevated to the
Sandiganbayan. He is not a party who will be benefited/injured by the results of
Board (PARAB) for Maintenance of Peaceful Possession, Collection of
both cases.
Sum of Money and Supervision of Harvest
o Amended complaint: prayer for issuance of TRO and preliminary
Other Issues: Submission of Counter-Affidavit and Agrarian Dispute
injunction
o July 21, 1993: TRO issued

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Petition denied for lack of merit. Order and Memorandum of Office of Special
Prosecutor are affirmed in toto
Serona vs. People (18 November 2002)
VIRGIE SERONA, petitioner, vs. HON. COURT OF APPEALS and THE PEOPLE
OF THE PHILIPPINES, respondents.

other obligation involving the duty to make delivery of, or to return, the
same;
(2) that there be misappropriation or conversion of such money or
property by the offender or denial on his part of such receipt;
(3) that such misappropriation or conversion or denial is to the prejudice of
another; and
(4) that there is a demand made by the offended party on the offender.

FACTS: Leonida Quilatan delivered pieces of jewelry to petitioner Virgie Serona The law on agency allows the appointment by an agent of a substitute or subto be sold on commission basis. P shall remit payment or return the pieces of agent in the absence of an express agreement to the contrary between the agent
jewelry if not sold to Quilatan within 30 days.
and the principal. In the case at bar, the appointment of Labrador as petitioners
sub-agent was not expressly prohibited by Quilatan, as the acknowledgment
Unknown to Quilatan, petitioner had earlier entrusted the jewelry to one Marichu receipt does not contain any such limitation. Neither does it appear that petitioner
Labrador for the latter to sell on commission basis. Petitioner was not able to was verbally forbidden by Quilatan from passing on the jewelry to another
collect payment from Labrador, which caused her to likewise fail to pay her person. Thus, it cannot be said that petitioners act of entrusting the jewelry to
obligation to Quilatan. Quilatan, sent a letter of demand to petitioner for failure to Labrador is characterized by abuse of confidence because such an act was not
settle her obligation. Thereafter, an information for estafa under Article 315 par proscribed and is, in fact, legally sanctioned.
1(b) was filed against petitioner.
In the case at bar, the pieces of jewelry were given by petitioner to Labrador to
Marichu Labrador confirmed that she received pieces of jewelry from petitioner achieve the very same end for which they were delivered to her in the first place.
worth P441,035.00. She testified that she sold the jewelry to a person who Consequently, there is no conversion since the pieces of jewelry were not
absconded without paying her. Labrador also explained that in the past, she too devoted to a purpose or use different from that agreed upon. Similarly, it cannot
had directly transacted with Quilatan for the sale of jewelry on commission basis; be said that petitioner misappropriated the jewelry or delivered them to Labrador
however, due to her outstanding account with the latter, she got jewelry from without right. It is consistent with usual practice for the seller to necessarily part
petitioner instead.
with the valuables in order to find a buyer and allow inspection of the items for
sale.
TC rendered a decision finding petitioner guilty of estafa. Petitioner appealed to
the Court of Appeals, which affirmed the judgment of conviction. MR denied.
In the present case, the agents to whom personal property was entrusted for
sale, conclusively proves the inability to return the same is solely due to
PETITONER argues that she neither abused the confidence reposed upon her by malfeasance of a subagent to whom the first agent had actually entrusted the
Quilatan nor converted or misappropriated the subject jewelry; that her giving the property in good faith, and for the same purpose for which it was received; there
pieces of jewelry to a sub-agent for sale on commission basis did not violate her being no prohibition to do so and the chattel being delivered to the subagent
undertaking with Quilatan. It was established that petitioner had not derived any before the owner demands its return or before such return becomes due, we hold
personal benefit from the loss of the jewelry.
that the first agent cannot be held guilty of estafa by either misappropriation or
conversion. The abuse of confidence that is characteristic of this offense is
ISSUE: W/N the act of contracting a sub-agent makes P guilty of estafa thru missing under the circumstances.
abuse of confidence No.
Notwithstanding the above, however, petitioner is not entirely free from any
HELD: The elements of estafa through misappropriation or conversion are:
liability towards Quilatan. The rule is that an accused acquitted of estafa may
(1) that the money, good or other personal property is received by the nevertheless be held civilly liable where the facts established by the evidence so
offender in trust, or on commission, or for administration, or under any warrant. Then too, an agent who is not prohibited from appointing a sub-agent
but does so without express authority is responsible for the acts of the sub-agent.

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Considering that the civil action for the recovery of civil liability arising from the WHEREFORE, the petition is GRANTED.
offense is deemed instituted with the criminal action, petitioner is liable to pay
complainant Quilatan the value of the unpaid pieces of jewelry.

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