Veloso v.

CA

The following are the antecedent facts:

Petitioner Francisco Veloso was the owner of a parcel of land situated in the district of
Tondo, Manila, with an area of one hundred seventy seven (177) square meters and
covered by Transfer Certificate of Title No. 49138 issued by the Registry of Deeds of
Manila.i[2] The title was registered in the name of Francisco A. Veloso, single,ii[3] on
October 4, 1957.iii[4] The said title was subsequently canceled and a new one, Transfer
Certificate of Title No. 180685, was issued in the name of Aglaloma B. Escario, married
to Gregorio L. Escario, on May 24, 1988.iv[5]

On August 24, 1988, petitioner Veloso filed an action for annulment of documents,
reconveyance of property with damages and preliminary injunction and/or restraining
order. The complaint, docketed as Civil Case No. 88-45926, was raffled to the Regional
Trial Court, Branch 45, Manila. Petitioner alleged therein that he was the absolute owner
of the subject property and he never authorized anybody, not even his wife, to sell it. He
alleged that he was in possession of the title but when his wife, Irma, left for abroad, he
found out that his copy was missing. He then verified with the Registry of Deeds of
Manila and there he discovered that his title was already canceled in favor of defendant
Aglaloma Escario. The transfer of property was supported by a General Power of
Attorneyv[6] dated November 29, 1985 and Deed of Absolute Sale, dated November 2,
1987, executed by Irma Veloso, wife of the petitioner and appearing as his attorney-in-
fact, and defendant Aglaloma Escario.vi[7] Petitioner Veloso, however, denied having
executed the power of attorney and alleged that his signature was falsified. He also
denied having seen or even known Rosemarie Reyes and Imelda Santos, the supposed
witnesses in the execution of the power of attorney. He vehemently denied having met or
transacted with the defendant. Thus, he contended that the sale of the property, and the
subsequent transfer thereof, were null and void. Petitioner Veloso, therefore, prayed that
a temporary restraining order be issued to prevent the transfer of the subject property; that
the General Power of Attorney, the Deed of Absolute Sale and the Transfer Certificate of
Title No. 180685 be annulled; and the subject property be reconveyed to him.

Defendant Aglaloma Escario in her answer alleged that she was a buyer in good faith and
denied any knowledge of the alleged irregularity. She allegedly relied on the general
power of attorney of Irma Veloso which was sufficient in form and substance and was
duly notarized. She contended that plaintiff (herein petitioner), had no cause of action
against her. In seeking for the declaration of nullity of the documents, the real party in
interest was Irma Veloso, the wife of the plaintiff. She should have been impleaded in the
case. In fact, Plaintiffs cause of action should have been against his wife, Irma.
Consequently, defendant Escario prayed for the dismissal of the complaint and the
payment to her of damages.vii[8]

Pre-trial was conducted. The sole issue to be resolved by the trial court was whether or
not there was a valid sale of the subject property.viii[9]
During the trial, plaintiff (herein petitioner) Francisco Veloso testified that he acquired
the subject property from the Philippine Building Corporation, as evidenced by a Deed of
Sale dated October 1, 1957.ix[10] He married Irma Lazatin on January 20, 1962.x[11]
Hence, the property did not belong to their conjugal partnership. Plaintiff further asserted
that he did not sign the power of attorney and as proof that his signature was falsified, he
presented Allied Bank Checks Nos. 16634640, 16634641 and 16634643, which allegedly
bore his genuine signature.

Witness for the plaintiff Atty. Julian G. Tubig denied any participation in the execution of
the general power of attorney. He attested that he did not sign thereon, and the same was
never entered in his Notarial Register on November 29, 1985.

In the decision of the trial court dated March 9, 1990,xi[12] defendant Aglaloma Escaro
was adjudged the lawful owner of the property as she was deemed an innocent purchaser
for value. The assailed general power of attorney was held to be valid and sufficient for
the purpose. The trial court ruled that there was no need for a special power of attorney
when the special power was already mentioned in the general one. It also declared that
plaintiff failed to substantiate his allegation of fraud. The court also stressed that plaintiff
was not entirely blameless for although he admitted to be the only person who had access
to the title and other important documents, his wife was still able to possess the copy.
Citing Section 55 of Act 496, the court held that Irmas possession and production of the
certificate of title was deemed a conclusive authority from the plaintiff to the Register of
Deeds to enter a new certificate. Then applying the principle of equitable estoppel,
plaintiff was held to bear the loss for it was he who made the wrong possible. Thus:

WHEREFORE, the Court finds for the defendants and against plaintiff-

a. declaring that there was a valid sale of the subject property in favor of the defendant;

b. denying all other claims of the parties for want of legal and factual basis.

Without pronouncement as to costs.

SO ORDERED.

Not satisfied with the decision, petitioner Veloso filed his appeal with the Court of
Appeals. The respondent court affirmed in toto the findings of the trial court.

Hence, this petition for review before us.

This petition for review was initially dismissed for failure to submit an affidavit of
service of a copy of the petition on the counsel for private respondent.xii[13] A motion
for reconsideration of the resolution was filed but it was denied in a resolution dated
March 30, 1992.xiii[14] A second motion for reconsideration was filed and in a
resolution dated Aug. 3, 1992, the motion was granted and the petition for review was
reinstated.xiv[15]
A supplemental petition was filed on October 9, 1992 with the following assignment of
errors:

The Court of Appeals committed a grave error in not finding that the forgery of the power
of attorney (Exh. C) had been adequately proven, despite the preponderant evidence, and
in doing so, it has so far departed from the applicable provisions of law and the decisions
of this Honorable Court, as to warrant the grant of this petition for review on certiorari.

II

There are principles of justice and equity that warrant a review of the decision.

III

The Court of Appeals erred in affirming the decision of the trial court which misapplied
the principle of equitable estoppel since the petitioner did not fail in his duty of observing
due diligence in the safekeeping of the title to the property.

We find petitioners contentions not meritorious.

An examination of the records showed that the assailed power of attorney was valid and
regular on its face. It was notarized and as such, it carries the evidentiary weight
conferred upon it with respect to its due execution. While it is true that it was
denominated as a general power of attorney, a perusal thereof revealed that it stated an
authority to sell, to wit:

2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands, tenements and
hereditaments or other forms of real property, more specifically TCT No. 49138, upon
such terms and conditions and under such covenants as my said attorney shall deem fit
and proper.xv[16]

Thus, there was no need to execute a separate and special power of attorney since the
general power of attorney had expressly authorized the agent or attorney in fact the power
to sell the subject property. The special power of attorney can be included in the general
power when it is specified therein the act or transaction for which the special power is
required.

The general power of attorney was accepted by the Register of Deeds when the title to the
subject property was canceled and transferred in the name of private respondent. In LRC
Consulta No. 123, Register of Deeds of Albay, Nov. 10, 1956, it stated that:

Whether the instrument be denominated as general power of attorney or special power of

attorney, what matters is the extent of the power or powers contemplated upon the agent
or attorney in fact. If the power is couched in general terms, then such power cannot go
beyond acts of administration. However, where the power to sell is specific, it not being
merely implied, much less couched in general terms, there can not be any doubt that the
attorney in fact may execute a valid sale. An instrument may be captioned as special
power of attorney but if the powers granted are couched in general terms without
mentioning any specific power to sell or mortgage or to do other specific acts of strict
dominion, then in that case only acts of administration may be deemed conferred.

Petitioner contends that his signature on the power of attorney was falsified. He also
alleges that the same was not duly notarized for as testified by Atty. Tubig himself, he did
not sign thereon nor was it ever recorded in his notarial register. To bolster his argument,
petitioner had presented checks, marriage certificate and his residence certificate to prove
his alleged genuine signature which when compared to the signature in the power of
attorney, showed some difference.

We found, however, that the basis presented by the petitioner was inadequate to sustain
his allegation of forgery. Mere variance of the signatures cannot be considered as
conclusive proof that the same were forged. Forgery cannot be presumed.xvi[17]
Petitioner, however, failed to prove his allegation and simply relied on the apparent
difference of the signatures. His denial had not established that the signature on the
power of attorney was not his.

We agree with the conclusion of the lower court that private respondent was an innocent
purchaser for value. Respondent Aglaloma relied on the power of attorney presented by
petitioners wife, Irma. Being the wife of the owner and having with her the title of the
property, there was no reason for the private respondent not to believe in her authority.
Moreover, the power of attorney was notarized and as such, carried with it the
presumption of its due execution. Thus, having had no inkling on any irregularity and
having no participation thereof, private respondent was a buyer in good faith. It has been
consistently held that a purchaser in good faith is one who buys property of another,
without notice that some other person has a right to, or interest in such property and pays
a full and fair price for the same, at the time of such purchase, or before he has notice of
the claim or interest of some other person in the property.xvii[18]

Documents acknowledged before a notary public have the evidentiary weight with
respect to their due execution. The questioned power of attorney and deed of sale, were
notarized and therefore, presumed to be valid and duly executed. Atty. Tubig denied
having notarized the said documents and alleged that his signature had also been falsified.
He presented samples of his signature to prove his contention. Forgery should be proved
by clear and convincing evidence and whoever alleges it has the burden of proving the
same. Just like the petitioner, witness Atty. Tubig merely pointed out that his signature
was different from that in the power of attorney and deed of sale. There had never been
an accurate examination of the signature, even that of the petitioner. To determine
forgery, it was held in Cesar vs. Sandiganbayanxviii[19] (quoting Osborn, The Problem
of Proof) that:
The process of identification, therefore, must include the determination of the extent,
kind, and significance of this resemblance as well as of the variation. It then becomes
necessary to determine whether the variation is due to the operation of a different
personality, or is only the expected and inevitable variation found in the genuine writing
of the same writer. It is also necessary to decide whether the resemblance is the result of a
more or less skillful imitation, or is the habitual and characteristic resemblance which
naturally appears in a genuine writing. When these two questions are correctly answered
the whole problem of identification is solved.

Even granting for the sake of argument, that the petitioners signature was falsified and
consequently, the power of attorney and the deed of sale were null and void, such fact
would not revoke the title subsequently issued in favor of private respondent Aglaloma.
In the case of Tenio-Obsequio vs. Court of Appeals,xix[20] it was held, viz.:

The right of an innocent purchaser for value must be respected and protected, even if the
seller obtained his title through fraud. The remedy of the person prejudiced is to bring an
action for damages against those who caused or employed the fraud, and if the latter are
insolvent, an action against the Treasurer of the Philippines may be filed for recovery of
damages against the Assurance Fund.

Finally, the trial court did not err in applying equitable estoppel in this case. The principle
of equitable estoppel states that where one or two innocent persons must suffer a loss, he
who by his conduct made the loss possible must bear it. From the evidence adduced, it
should be the petitioner who should bear the loss. As the court a quo found:

Besides, the records of this case disclosed that the plaintiff is not entirely free from
blame. He admitted that he is the sole person who has access to TCT No. 49138 and other
documents appertaining thereto (TSN, May 23, 1989, pp. 7-12). However, the fact
remains that the Certificate of Title, as well as other documents necessary for the transfer
of title were in the possession of plaintiffs wife, Irma L. Veloso, consequently leaving no
doubt or any suspicion on the part of the defendant as to her authority. Under Section 55
of Act 496, as amended, Irmas possession and production of the Certificate of Title to
defendant operated as conclusive authority from the plaintiff to the Register of Deeds to
enter a new certificate.xx[21]

Considering the foregoing premises, We found no error in the appreciation of facts and
application of law by the lower court that will warrant the reversal or modification of the
appealed decision.

ACCORDINGLY, the petition for review is hereby DENIED for lack of merit.

SO ORDERED.
Lim v. Saban

TINGA, J.:

Before the Court is a Petition for Review on Certiorari assailing the Decision[1]
dated October 27, 2003 of the Court of Appeals, Seventh Division, in CA-G.R. V No.
60392.[2]

The late Eduardo Ybaez (Ybaez), the owner of a 1,000-square meter lot in Cebu City (the
lot), entered into an Agreement and Authority to Negotiate and Sell (Agency Agreement)
with respondent Florencio Saban (Saban) on February 8, 1994. Under the Agency
Agreement, Ybaez authorized Saban to look for a buyer of the lot for Two Hundred
Thousand Pesos (P200,000.00) and to mark up the selling price to include the amounts
needed for payment of taxes, transfer of title and other expenses incident to the sale, as
well as Sabans commission for the sale.[3]

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 Spouses Lim) on
March 10, 1994. The price of the lot as indicated in the Deed of Absolute Sale is Two
Hundred Thousand Pesos (P200,000.00).[4] It appears, however, that the vendees agreed
to purchase the lot at the price of Six Hundred Thousand Pesos (P600,000.00), inclusive
of taxes and other incidental expenses of the sale. After the sale, Lim remitted to Saban
the amounts of One Hundred Thirteen Thousand Two Hundred Fifty Seven Pesos
(P113,257.00) for payment of taxes due on the transaction as well as Fifty Thousand
Pesos (P50,000.00) as brokers commission.[5] Lim also issued in the name of Saban four
postdated checks in the aggregate amount of Two Hundred Thirty Six Thousand Seven
Hundred Forty Three Pesos (P236,743.00). These checks were Bank of the Philippine
Islands (BPI) Check No. 1112645 dated June 12, 1994 for P25,000.00; BPI Check No.
1112647 dated June 19, 1994 for P18,743.00; BPI Check No. 1112646 dated June 26,
1994 for P25,000.00; and Equitable PCI Bank Check No. 021491B dated June 20, 1994
for P168,000.00.

Subsequently, Ybaez sent a letter dated June 10, 1994 addressed to Lim. In the letter
Ybaez asked Lim to cancel all the checks issued by her in Sabans favor and to extend
another partial payment for the lot in his (Ybaezs) favor.[6]

After the four checks in his favor were dishonored upon presentment, Saban filed a
Complaint for collection of sum of money and damages against Ybaez and Lim with the
Regional Trial Court (RTC) of Cebu City on August 3, 1994.[7] The case was assigned to
Branch 20 of the RTC.

In his Complaint, Saban alleged that Lim and the Spouses Lim agreed to purchase the lot
for P600,000.00, i.e., with a mark-up of Four Hundred Thousand Pesos (P400,000.00)
from the price set by Ybaez. Of the total purchase price of P600,000.00, P200,000.00
went to Ybaez, P50,000.00 allegedly went to Lims agent, and P113,257.00 was given to
Saban to cover taxes and other expenses incidental to the sale. Lim also issued four (4)
postdated checks[8] in favor of Saban for the remaining P236,743.00.[9]

Saban alleged that Ybaez told Lim that he (Saban) was not entitled to any commission for
the sale since he concealed the actual selling price of the lot from Ybaez and because he
was not a licensed real estate broker. Ybaez was able to convince Lim to cancel all four
checks.
Saban further averred that Ybaez and Lim connived to deprive him of his sales
commission by withholding payment of the first three checks. He also claimed that Lim
failed to make good the fourth check which was dishonored because the account against
which it was drawn was closed.

In his Answer, Ybaez claimed that Saban was not entitled to any commission because he
concealed the actual selling price from him and because he was not a licensed real estate
broker.

Lim, for her part, argued that she was not privy to the agreement between Ybaez and
Saban, and that she issued stop payment 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
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 him without any objection from the other
parties.[10]

On May 14, 1997, the RTC rendered its Decision[11] dismissing Sabans complaint,
declaring the four (4) checks issued by Lim as stale and non-negotiable, and absolving
Lim from any liability towards Saban.

Saban appealed the trial courts Decision to the Court of Appeals.

On October 27, 2003, the appellate court promulgated its Decision[12] reversing the trial
courts ruling. It held that Saban was entitled to his commission amounting to
P236,743.00.[13]

The Court of Appeals ruled that Ybaezs revocation of his contract of agency with Saban
was invalid because the agency was coupled with an interest and Ybaez effected the
revocation in bad faith in order to deprive Saban of his commission and to keep the
profits for himself.[14]

The appellate court found that Ybaez and Lim connived to deprive Saban of his
commission. It declared that Lim is liable to pay Saban the amount of the purchase price
of the lot corresponding to his commission because she issued the four checks knowing
that the total amount thereof corresponded to Sabans commission for the sale, as the
agent of Ybaez. The appellate court further ruled that, in issuing the checks in payment of
Sabans commission, Lim acted as an accommodation party. She signed the checks as
drawer, without receiving value therefor, for the purpose of lending her name to a third
person. As such, she is liable to pay Saban as the holder for value of the checks.[15]

Lim filed a Motion for Reconsideration of the appellate courts Decision, but her Motion
was denied by the Court of Appeals in a Resolution dated May 6, 2004.[16]

Not satisfied with the decision of the Court of Appeals, Lim filed the present
petition.

Lim argues that the appellate court ignored the fact that after paying her agent and
remitting to Saban the amounts due for taxes and transfer of title, she paid the balance of
the purchase price directly to Ybaez.[17]
 She further contends that she is not liable for Ybaezs debt to Saban under the
Agency Agreement as she is not privy thereto, and that Saban has no one but himself to
blame for consenting to the dismissal of the case against Ybaez and not moving for his
substitution by his heirs.[18]

Lim also assails the findings of the appellate court that she issued the checks as an
accommodation party for Ybaez and that she connived with the latter to deprive Saban of
his commission.[19]

Lim prays that should she be found liable to pay Saban the amount of his
commission, she should only be held liable to the extent of one-third (1/3) of the amount,
since she had two co-vendees (the Spouses Lim) who should share such liability.[20]

In his Comment, Saban maintains that Lim agreed to purchase the lot for P600,000.00,
which consisted of the P200,000.00 which would be paid to Ybaez, the P50,000.00 due to
her broker, the P113,257.00 earmarked for taxes and other expenses incidental to the sale
and Sabans commission as broker for Ybaez. According to Saban, Lim assumed the
obligation to pay him his commission. He insists that Lim and Ybaez connived to
unjustly deprive him of his commission from the negotiation of the sale.[21]

The issues for the Courts resolution are whether Saban is entitled to receive his
commission from the sale; and, assuming that Saban is entitled thereto, whether it is Lim
who is liable to pay Saban his sales commission.
The Court gives due course to the petition, but agrees with the result reached by the Court
of Appeals.

The Court affirms the appellate courts finding that the agency was not revoked since
Ybaez requested that Lim make stop payment orders for the checks payable to Saban
only after the consummation of the sale on March 10, 1994. At that time, Saban had
already performed his obligation as Ybaezs agent when, through his (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 sale which was consummated
through his efforts would be a breach of his contract of agency with Ybaez which
expressly states that Saban would be entitled to any excess in the purchase price after
deducting the P200,000.00 due to Ybaez and the transfer taxes and other incidental
expenses of the sale.[22]

In Macondray & Co. v. Sellner,[23] the Court recognized the right of a broker to his
commission for finding a suitable buyer for the sellers property even though the seller
himself consummated the sale with the buyer.[24] The Court held that it would be in the
height of injustice to permit the principal to terminate the contract of agency to the
prejudice of the broker when he had already reaped the benefits of the brokers efforts.

In Infante v. Cunanan, et al.,[25] the Court upheld the right of the brokers to their
commissions although the seller revoked their authority to act in his behalf after they had
found a buyer for his properties and negotiated the sale directly with the buyer whom he
met through the brokers efforts. The Court ruled that the sellers withdrawal in bad faith of
the brokers authority cannot unjustly deprive the brokers of their commissions as the
sellers duly constituted agents.
The pronouncements of the Court in the aforecited cases are applicable to the present
case, especially considering that Saban had completely performed his 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 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 deducting Ybaezs share of P200,000.00 and the taxes and other incidental
expenses of the sale.

However, the Court does not agree with the appellate courts pronouncement that Sabans
agency was one coupled with an interest. Under Article 1927 of the Civil Code, an
agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of
fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is
unjustifiable. Stated differently, an agency is deemed as one coupled with an interest
where it is established for the mutual benefit of the principal and of the agent, or for the
interest of the principal and of third persons, and it cannot be revoked by the principal so
long as the interest of the agent or of a third person subsists. In an agency coupled with
an interest, the agents interest must be in the subject matter of the power conferred and
not merely an interest in the exercise of the power because it entitles him to
compensation. When an agents interest is confined to earning his agreed compensation,
the agency is not one coupled with an interest, since an agents interest in obtaining his
compensation as such agent is an ordinary incident of the agency relationship.[26]

Sabans entitlement to his commission having been settled, the Court must now
determine whether Lim is the proper party against whom Saban should address his claim.

Sabans right to receive compensation for negotiating as broker for Ybaez arises from the
Agency Agreement between them. Lim is not a party to the contract. However, the record
reveals that she had knowledge of the fact that Ybaez set the price of the lot at
P200,000.00 and that the P600,000.00the price agreed upon by her and Sabanwas more
than the amount set by Ybaez because it included the amount for payment of taxes and
for Sabans commission as broker for Ybaez.

According to the trial court, Lim made the following payments for the lot: P113,257.00
for taxes, P50,000.00 for her broker, and P400.000.00 directly to Ybaez, or a total of Five
Hundred Sixty Three Thousand Two Hundred Fifty Seven Pesos (P563,257.00).[27] Lim,
on the other hand, claims that on March 10, 1994, the date of execution of the Deed of
Absolute Sale, she paid directly to Ybaez the amount of One Hundred Thousand Pesos
(P100,000.00) only, and gave to Saban P113,257.00 for payment of taxes and P50,000.00
as his commission,[28] and One Hundred Thirty Thousand Pesos (P130,000.00) on June
28, 1994,[29] or a total of Three Hundred Ninety Three Thousand Two Hundred Fifty
Seven Pesos (P393,257.00). Ybaez, for his part, acknowledged that Lim and her co-
vendees paid him P400,000.00 which he said was the full amount for the sale of the
lot.[30] It thus appears that he received P100,000.00 on March 10, 1994, acknowledged
receipt (through Saban) of the P113,257.00 earmarked for taxes and P50,000.00 for
commission, and received the balance of P130,000.00 on June 28, 1994. Thus, a total of
P230,000.00 went directly to Ybaez. Apparently, although the amount actually paid by
Lim was P393,257.00, Ybaez rounded off the amount to P400,000.00 and waived the
difference.

Lims act of issuing the four checks amounting to P236,743.00 in Sabans favor belies her
claim that she and her co-vendees did not agree to purchase the lot at P600,000.00. If she
did not agree thereto, there would be no reason for her to issue those checks which is the
balance of P600,000.00 less the amounts of P200,000.00 (due to Ybaez), P50,000.00
(commission), and the P113,257.00 (taxes). The only logical conclusion is that Lim
changed her mind about agreeing to purchase the lot at P600,000.00 after talking to
Ybaez and ultimately realizing that Sabans commission is even more than what Ybaez
received as his share of the 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 latter, and Lim and her co-vendees. This the Court cannot countenance.

The ruling of the Court in Infante v. Cunanan, et al., cited earlier, is enlightening for the
facts therein are similar to the circumstances of the present case. In that case, Consejo
Infante 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 would not give rise to a legal
consequence if [Cunanan and Mijares] agreed to call off the transaction in
deference to the request of [Infante]. But the situation varies if one of the
parties takes advantage of the benevolence of the other and acts in a
manner that would promote his own selfish interest. This act is unfair as
would amount to bad faith. This act cannot be sanctioned without
according the party prejudiced the reward which is due him. This is the
situation in which [Cunanan and Mijares] were placed by [Infante].
[Infante] took advantage of the services rendered by [Cunanan and
Mijares], but believing that she could evade payment of their commission,
she made use of a ruse by inducing them to sign the deed of
cancellation.This act of subversion cannot be sanctioned and cannot serve
as basis for [Infante] to escape payment of the commission agreed
upon.[31]
The appellate court therefore had sufficient basis for concluding that Ybaez and Lim
connived to deprive Saban of his commission by dealing with each other directly and
reducing the purchase price of the lot and leaving nothing to compensate Saban for his
efforts.

Considering the circumstances surrounding the case, and the undisputed fact that Lim had
not yet paid the balance of P200,000.00 of the purchase price of P600,000.00, it is just
and proper for her to pay Saban the balance of P200,000.00.

Furthermore, since Ybaez received a total of P230,000.00 from Lim, or an excess of

P30,000.00 from his asking price of P200,000.00, Saban may claim such excess from
Ybaezs estate, if that remedy is still available,[32] in view of the trial courts dismissal of
Sabans complaint as against Ybaez, with Sabans express consent, due to the latters
demise on November 11, 1994.[33]

The appellate court however erred in ruling that Lim is liable on the checks because she
issued them as an accommodation party. Section 29 of the Negotiable Instruments Law
defines an accommodation party as a person who has signed the negotiable instrument as
maker, drawer, acceptor or indorser, without receiving value therefor, for the purpose of
lending his name to some other person. The accommodation party is liable on the
instrument to a holder for value even though the holder at the time of taking the
instrument knew him or her to be merely an accommodation party. The accommodation
party may of course seek reimbursement from the party accommodated.[34]

As gleaned from the text of Section 29 of the Negotiable Instruments Law, the
accommodation party is one who meets all these three requisites, viz: (1) he signed the
instrument as maker, drawer, acceptor, or indorser; (2) he did not receive value for the
signature; and (3) he signed for the purpose of lending his name to some other person. In
the case at bar, while Lim signed as drawer of the checks she did not satisfy the two other
remaining requisites.

The absence of the second requisite becomes pellucid when it is noted at the
outset that Lim issued the checks in question on account of her transaction, along with the
other purchasers, with Ybaez which was a sale and, therefore, a reciprocal contract.
Specifically, she drew the checks in payment of the balance of the purchase price of the
lot subject of the transaction. And she had to pay the agreed purchase price in
consideration for the sale of the lot to her and her co-vendees. In other words, the
amounts covered by the checks form part of the cause or consideration from Ybaezs end,
as vendor, while the lot represented the cause or consideration on the side of Lim, as
vendee.[35] Ergo, Lim received value for her signature on the checks.

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 money,
thereby totally debunking the presence of the third requisite of an accommodation party.

WHEREFORE, in view of the foregoing, the petition is DISMISSED.