[G.R. No. 22604. February 3, 1925.

]
GUADALUPE GONZALES and LUIS GOMEZ,
Plaintiffs-Appellants, v. E. J. HABERER,
Defendant-Appellee.
Feria & La O for Appellants.
Paredes, Buencamino & Yulo for Appellee.
SYLLABUS
1. REAL PROPERTY; CONTRACT TO SELL;
INABILITY TO PLACE VENDOR IN POSSESSION
GROUND FOR RESCISSION. A contract for
the sale of land which provides that the
purchaser "shall have the right to take
possession of the aforesaid land immediately
after the execution of this document, together
with all the improvements now existing on the
same land, such as palay plantations and
others" renders it incumbent upon the vendor
to place the purchaser in possession and his
inability to do so constitutes a breach of the
contract sufficient to justify its rescission.
2.
ID.;
ID.;
MISREPRESENTATIONS
BY
VENDORS AGENT. Where a sale of land is
effected on the strength of misrepresentations
of the agent of the vendor, the latter cannot
accept the benefit of such representations
and at the same time deny the responsibility
for them.
DECISION
OSTRAND, J. :

thereof was not in dispute; that on seeking to

obtain possession he found that practically
the entire area of the land was occupied by
adverse claimants and the title thereto
disputed; that he consequently has been
unable to obtain possession of the land; and
that the plaintiffs have made no efforts to
prosecute the proceedings for the registration
of the land. He therefore asks that the
contract be rescinded; that the plaintiffs be
ordered to return to him the P30,000 already
paid by him to them and to pay P25,000 as
damages for breach of the contract.
The court below dismissed the plaintiffs
complaint, declared the contract rescinded
and void and gave the defendant judgment
upon his counterclaim for the sum of P30,000,
with interest from the date upon which the
judgment becomes final. The case is now
before this court upon appeal by the plaintiffs
from the judgment.
The
contract
in
question
follows:jgc:chanrobles.com.ph
"Know
all
men
by
presents:jgc:chanrobles.com.ph

reads

as

these

"That I, Guadalupe Gonzalez y Morales de

Gomez, married with Luis Gomez, of age, and
resident of the municipality of Bautista,
Province of Pangasinan, Philippine Islands, do
hereby state:jgc:chanrobles.com.ph

"1. That I am the absolute and exclusive

owner of a parcel of land situated in the barrio
This action is brought to recover the sum of of Partida, municipality of Guimba, Nueva
P34,260 alleged to be due the plaintiffs from Ecija,
described
as
the defendant upon a written agreement for follows:jgc:chanrobles.com.ph
the sale of a tract of land situated in the
Province of Nueva Ecija. The plaintiffs also ask "Bounded on the north by the land of Don
for damages in the sum of P10,000 for the Marcelino Santos; on the east, by the land of
alleged failure of the defendant to comply Dona Cristina Gonzalez; on the south by the
with his part of the agreement.
Binituan River; and on the west, by the land of
Dona Ramona Gonzalez; containing an area of
The defendant in his answer admits that of 488 hectares approximately.
the purchase price stated in the agreement a
balance of P31,000 remains unpaid, but by "2. That an application was filed for the
way of special defense, cross-complaint and registration of the above described land in the
counter-claim alleges that at the time of registry of property of Nueva Ecija, which
entering into the contract the plaintiffs application is still pending in the Court of First
through false representations lead him to Instance of Nueva Ecija.
believe that they were in possession of the
land and that the title to the greater portion

"3. That in consideration of the sum of P125

per hectare I do hereby agree and bind myself
to sell and transfer by way of real and
absolute sale the land above described to Mr.
E. J. Haberer, binding myself to execute the
deed of sale immediately after the decree of
the court adjudicating said land in my favor is
registered in the registry of property of the
Province of Nueva Ecija. The conditions of this
obligation
to
sell
are
as
follows:jgc:chanrobles.com.ph
"1. That Mr. E. J. Haberer has at this moment
paid me the sum of P30,000 on account of the
price of the aforesaid land.
"2. That said Mr. E. J. Haberer agrees and
binds himself to pay within six months from
the date of the execution of this document the
unpaid balance of the purchase price.

"I, E. J. Haberer, married, of age, and resident

of the municipality of Talavera, Nueva Ecija,
do hereby state that, having known the
contents of this document, I accept the same
with all the stipulations and conditions
thereof.
"I, Luis Gomez, married, of age, and resident
of the municipality of Bautista, Province of
Pangasinan, do hereby grant my wife, Dna.
Guadalupe Gonzalez y Morales de Gomez, the
due marital license to execute this document
and make effective the definite sale of the
land as above stipulated, she being
empowered to execute the deed of sale and
other necessary documents in order that the
full ownership over the aforesaid land may be
transferred to Mr. E. J. Haberer, as stipulated
in this document.

"In testimony whereof, we hereunto set our

"3. That said Mr. E. J. Haberer shall have the hands at Manila, this 7th day of July, 1920.
right to take possession of the aforesaid land
immediately after the execution of this (Sgd.) "GUADALUPE G. DE GOMEZ
document together with all the improvements
now existing on the same land, such as palay "E. J. HABERER
plantations and others.
"LUIS GOMEZ
"4. That said Mr. E. J. Haberer agrees and
binds himself to pay the expenses to be "Signed in the presence of the witnesses;
incurred from this date in the registration of
the aforesaid land up to the filing of the (Sgd.) "EMIGDIO DOMINGO
proper decree in the office of the register of
deeds of the Province of Nueva Ecija.
"L. G. ALVAREZ
"5. That in the event that the court should
hold that I am not the owner of all or any part
of the aforesaid land, I agree and bind myself
to return without interest all such amounts of
money as I have received or may receive from
Mr. E. J. Haberer as the purchase price of said
land, but, in the event that the court should
adjudicate a part of the aforesaid land to me,
then I agree and bind myself to sell said
portion adjudicated to me, returning all the
amounts received from Mr. E. J. Haberer in
excess of the price of said portion at the rate
of P125 per hectare.
"6. That Mr. E. J. Haberer does hereby waive
any interest or indemnity upon the amount
that I am to return to him and which I have
received from Mr. E. J. Haberer as the
purchase price of the aforesaid land.

"(Acknowledged before notary.)"

It is conceded by the plaintiffs that the
defendant never obtained actual or physical
possession of the land, but it is argued that
under the contract quoted the plaintiffs were
under no obligation to place him possession.
This of the contract gave the defendant the
right to take possession of the land
immediately upon the execution of the
contract
and
necessarily
created
the
obligation on the part of the plaintiffs to make
good the right thus granted; it was one of the
essential conditions of the agreement and the
failure of the plaintiffs to comply with this
condition, without fault on the part of the
defendant, is in itself sufficient ground for the
rescission, even in the absence of any
misrepresentation on their part. (Civil Code,
art. 1124; Pabalan v. Velez, 22 Phil., 29.)

It is therefore unnecessary to discuss the

question whether the defendant was induced
to enter into the agreement through
misrepresentations made by the plaintiff
Gomez. We may say, however, that the
evidence leaves no doubt that some
misrepresentations were made and that but
for such misrepresentations the defendant
would not have been likely to enter into the
agreement in the form it appeared. As to the
contention that the plaintiff Gonzalez cannot
be charged with the misrepresentations of
Gomez, it is sufficient to say that the latter in
negotiating for the sale of the land acted as
the agent and representative of the other
plaintiff, his wife; having accepted the benefit
of the land acted as the agent and
representative of the other plaintiff, his wife;
having
accepted
the
benefit
of
the
representations of her agent she cannot, of
course, escape liability for them. (Haskell v.
Starbird, 152 Mass., 117; 23 A.S.R., 809.)
The contention of the appellants that the
symbolic delivery effected by the execution
and delivery of the agreement was a sufficient
delivery of the possession of the land, is also
without merit. The possession referred to in
the contract is evidently physical; if it were
otherwise it would not have been necessary to
mention it in the contract. (See Cruzado v.
Bustos and Escaler, 34 Phil., 17.)
The judgment appealed from is in accordance
with the law, is fully sustained by the
evidence, and is therefore affirmed, with the
costs against the appellants. so ordered.
Johnson, Street, Malcolm, Villamor, Johns, and
Romualdez, JJ., concur.

settled rule as stated by the court is that, in

the absence of an express contract between
broker and his principal, the implication
generally is that the broker becomes entitled
to the usual commissions whenever he brings
to his principal a party who is able and willing
to take the property and enter into a valid
contract upon the terms then named by the
principal, although the particulars may be
arranged and the matter negotiated and
completed between the principal and the
purchaser directly.
3. VENDOR AND PURCHASER; TIME FOR
EXAMINATION OF TITLES. The contract of
sale of real estate usually specifies a time in
which the purchaser may examine the title
before completing the purchase. If no time be
specified he will be entitled to a reasonable
time for that purpose.
4. ID.; ID Where the purchase of land is
made upon condition the title is found good,
the purchaser is entitled to a reasonable time
in which to determine whether he will take the
title the vendor has, or reject it. He cannot
keep the contract open indefinitely, so as to
avail himself of a rise in the value of the
property or relieve himself in case of a
depreciation.
[G.R. No. 9184. February 2, 1916. ]
MACONDRAY & CO., INC., Plaintiff-Appellee, v.
GEORGE C. SELLNER, Defendant-Appellant.
D.R. Williams for Appellant.
Houssermann, Cohn & Fisher for Appellee.
SYLLABUS
1. "MARKET VALUE," DEFINITION. The
following definitions of "market value" cited
and applied. The "market value" of property is
the price which the property will bring in a fair
market after fair and reasonable efforts have
been made to find a purchaser who will give
the highest price for it; or the price that would
in all probability result from fair negotiations
where the seller is willing to sell and the buyer
desires to buy.

DECISION
CARSON, J. :
This action was brought to recover the sum of
P17,175 by way of damaged alleged to have
been suffered by the plaintiff as a result of the
sale of a parcel of land which it is alleged was
made by the defendant for and on behalf of
the plaintiff after authority to make the sale
had been revoked. Judgment was rendered in
favor of the plaintiff for the sum of P3,435,
together with interest at 6 per cent per annum
from the date of the institution of this action.
From this judgment defendant appealed, and
brought the case here on his duly certified bill
of exceptions.

Early in 1912 the defendant, a real estate

broker, sold the parcel of land described in the
complaint to the plaintiff company for
P17,175. The formal deed of sale was not
executed and accepted until July 29, 1912, the
2. BROKERS; RIGHT TO COMMISSIONS The agreement to purchase being conditioned on
business of a real estate broker or agent, the delivery of a Torrens title, which was not
generally, is only to find a purchaser, and the secured until early in that month. In the

meantime the land was flooded by high tides,

and the plaintiff company became highly
dissatisfied with its purchase. When the final
transfer was made the plaintiff company
informed defendant that the land was wholly
unsuited for requested him to find another
purchaser. At that time it was expressly
understood and agreed that the plaintiff
company was willing to dispose of the land for
P17,175, and that defendant was to have as
his commission for securing a purchaser
anything over that amount which he could
get.
A short time thereafter, defendant reported to
plaintiff that he had a purchaser for the land
in the person of Antonio M. Barretto, who was
willing to pay P2.75 per square meter, or a
total of P18,892.50. Plaintiff thereupon
executed a formal deed of conveyance which,
together with the certificate of title (Torrens),
was delivered to defendant, with the
understanding that he was to conclude the
sale, deliver the title-deed and certificate to
Barretto, and received from him the purchase
price. The deed was dated August 21, 1912.
Thereafter defendant advised Barretto that
plaintiff had executed the title-deed and that
he was ready to close the deal. Barretto
agreed to accept the land it, upon
examination, the title and the deed should
prove satisfactory; and defendant left the
deed of conveyance with him, with the
understanding that if the title and the deed of
conveyance were as represented, Barretto
would give him his check for the amount of
the purchase price. Defendant retained
possession of the Torrens certificate of title. A
few days afterwards Barretto was compelled
to go to Tayabas on business and was
detained by a typhoon which delayed his
return until the 31st of August.
During Barrettos absence the plaintiff
company advised defendant that he must
consummate the sale and collect the
purchase
money
without
delay
upon
Barrettos return to Manila. On the arrival of
Barretto on Saturday, August 31st, defendant
called upon him and informed him that the
plaintiff company desired to close up the
transaction at once, and Barretto, who was
somewhat indisposed from his trip, promised
to examine the papers as soon as he could
get to them, and assured the defendant that

he would send his check for the purchase

price in a day or two if he found the
documents in proper shape. These assurances
were reported to Young, the plaintiff
companys
general
manager
and
representative throughout the transaction, on
Monday morning, September 2d. Young then
formally notified defendant that unless the
purchase price was paid before five oclock of
that same afternoon the deal would be off.
Defendant again called upon Barretto, who
informed him that if he would turn over the
Torrens certificate of title he would let him
have a check for the purchase price.
Defendant sent the certificate as requested,
but did not receive the check until thirty-six
hours afterwards, on Wednesday morning. On
receipt of Barrettos check he immediately
tendered plaintiff company a check for the
agreed selling price, P17,175, Plaintiffs
manager refused to accept the check and
soon thereafter filed this action, claiming that
the sale had been "cancelled" upon the failure
of defendant to turn over the purchase price
on the afternoon of Monday, September 2d.
The following is a copy of plaintiff companys
letter to defendant advising him that the sale
would be "cancelled" unless the purchase
price was paid at five oclock of the day on
which it was written.
"SEPT. 2, 1912,
"MR. GEO. C. SELLNER, Manila
"Dear Sir: In accordance with our conversation
today, this is to notify you that we consider
the sale of our lot in Nagtajan to Antonio M.
Barretto as cancelled in view of the
nonpayment of the purchase price before five
o clock this afternoon.
"Please confirm.
"Yours very truly, MACONDRAY & CO., INC.,
(Sgd.) "CARLOS YOUNG,
"General Manager."cralaw virtua1aw library
As to the fact just narrated there is practically
no dispute, the only matters of fact as to
which there is any real contention in the
record being limited to questions as to the

value of the land, and as to the original the agreement, other than that the manager
instructions to defendant in regard to the of the plaintiff company had been annoyed by
delivery of the title deeds.
the delays which occurred during the earlier
stage of the negotiations, and had changed
Plaintiffs manager testified that as he had no his mind as to the desirability of making the
confidence in Barretto, he expressly instructed sale at the price agreed upon, either because
defendant not to deliver the title deeds until he believed that he could get a better price
Barretto turned over the purchase price. elsewhere, or that the land was worth more to
Defendant swore that he had received no his company than the price he had agreed to
such instructions. Upon this conflict of take for it. It is very evident that plaintiff
testimony we do not deem it necessary to companys manager hoped that by setting a
make an express finding, because, as we view limit of a few hours upon the time within
the transaction, it could in no event affect our which he would receive the money, his
disposition of this appeal.
company would be relieved of the obligation
to carry out its contract.
We are opinion that the disputed evidence
clearly discloses that on August 21st the Upon the question of the value of the land we
plaintiff company, through the defendant real think that the evidence clearly discloses that
estate broker, agreed to sell the land to at the date of the sale its actual and its true
Barretto for P18,892.50, and that Barretto market value was not more than the amount
agreed to buy the land at that price on the paid for it by Barretto, that is to say,
usual condition precedent that before turning P18,892.50. The evidence discloses that it had
over the purchase price the title deeds and been in the hands of an expert real estate
deed of transfer from the company should be agent for many months prior to the sale, with
found to be in due and legal form. That for the every inducement to him to secure the
purpose of consummating the sale the highest cash price which could be gotten for
plaintiff company turned over the defendant a it. That he actually sold it to the plaintiff
deed of transfer to Barretto, together with a company, a few months prior to the sale to
Torrens title certificate to the land, executed Barretto, for P17,175. That the plaintiff
as of the day when the agreement to sell was company was highly dissatisfied with its
entered into. That the defendant, with full purchase, and readily agreed o resell at that
authority from plaintiff company, agreed to price. That the defendant, in his capacity as a
deliver the deed and certificate to Barretto on real estate agent, with a personal and direct
payment of the purchase price. That from the interest in securing the highest possible price
very nature of the transaction it was for the land, sold it to Barretto for P18,892.50.
understood that the purchaser should have a
reasonable time in which to examine the deed The only evidence in the record tending to
of transfer and the other documents of title, prove that the land had a higher market value
and that defendant exercising an authority than the price actually paid for it under such
impliedly of not expressly conferred upon him, circumstances in the testimony of a rival real
gave the purchaser a reasonable time in estate broker, who had never been on the
which to satisfy himself as to the legality and land, but claimed that he was familiar with its
correctness of the documents of title. That the general location from maps and description,
company through its manager Young, and asserted that in his opinion it was worth
acquiesced in and ratified what had been considerably more than the price actually paid
done by defendant in this regard when, with for it, and that he thought he could have sold
full knowledge of all the facts, Young advised the land for it, and that he thought he could
the defendant, during Barrettos absence in have sold the land for P3 a meter, or
Tayabas, that the deal must be closed up approximately P20,610. Of course an expert
without delay on Barrettos return to Manila.
opinion of this kind, however sincere and
honest the witness may have been in forming
No reason appears, nor has any reason been it, is wholly insufficient to maintain a finding
assigned for the demand by the plaintiff that the land was worth any more than it
company for the delivery of the purchase actually brought when sold under the
price at the hour it would decline to carry out conditions above set forth.

of the property, title to which had been lost as

a result of the sale. We are not now
considering any question as to the right of the
owner, under such circumstances, to recover
the property from the purchase, or damages
for its detention or the like; but merely his
right to recover monetary damages from his
agent should he elect, as the plaintiff
company did in this case, to ratify the sale
and recoup from the agent any loss resulting
from his alleged unauthorized consummation
of the sale.

It may be that the land has a speculative

value much higher than the actual market
value at the time of the sale, so that if held for
an opportune turn in the market, or until a
buyer of some special need for it happened to
present himself, a price approximating that
indicated by this witness might be secured for
it. But the question of fact ruled upon is the
actual market value of the land at the time of
its sale to Barretto, and not any speculative,
value which might be assigned to it in
anticipation of unknown, indefinite and
uncertain contigencies.
The market value of the land in question was
P18,892.50. Of this the plaintiff company has
Among other definitions of "market value" to received P17,175, leaving a balance of
be found in "Words and Phrases", vol. 5 p. P1,717.50 unpaid. But, whatever may be the
4383, and supported by citation of authority, view which should be taken as to the right of
are the following:jgc:chanrobles.com.ph
the plaintiff company to terminate the
negotiations for the sale of the property to
"The market value of the property is the Barretto at the time fixed by it in its letter to
price which the property will bring in a fair the defendant real estate agent, there can be
market after fair and reasonable efforts have no question as to the liability of the plaintiff
been made to find a purchaser who will give company to the real estate agent, in the event
the highest price for it.
that it did so terminate the negotiations, for
x
x
x
the amount of the commission which it agreed
to pay him should he find a purchaser for the
land at the price agreed upon in his agency
"The market value of land is the price that contract. The commission agreed upon was all
would in all probability result from fair over P17,175 which the defendant could
negotiations where the seller is willing to sell secure from the property, and it is clear that
and the buyer desires to buy."cralaw allowing the defendant this commission, and
virtua1aw library
offsetting it against the unpaid balance of the
market value of the land, the plaintiff
Upon the foregoing statement of the facts company is not entitled to a money judgment
disclosed by the record, we are of opinion that against the defendant.
the judgment entered in the court below
should be reversed and the complaint We do not mean to question the general
dismissed without costs in this instance.
doctrine as to the power of a principal to
revoke the authority of his agent at will, in the
1. Even were we to admit, which we do not, absence of a contract fixing the duration of
that the plaintiff company had the right to the agency (subject, however, to some well
terminate the negotiations at the time defined exceptions). Our ruling is that at the
indicated by its manager, and to direct its real time fixed by the manager of the plaintiff
estate agent not to make the sale to Barretto company for the termination of the
after the hour indicated, nevertheless we negotiations, the defendant real estate agent
would be compelled to hold, upon the had already earned the commissions agreed
evidence before us, that the plaintiff company upon, and could not be deprived thereof by
has no cause of action for monetary damages the arbitrary action of the plaintiff company in
against the defendant real estate agent.
declining to execute the contract of sale for
some reason personal to itself.
The measure of the damages which the
plaintiff would be entitled to recover from the The question as to what constitutes a sale so
real estate agent for the unauthorized sale of as to entitle a real estate broker to his
its property would be the actual market value commission is extensively annotated in the

case of Lunney v. Healey (Nebraska) 56313 without

remuneration."cralaw
virtua1aw
reported in 44 Law Rep. Ann. 593 [Note], and library
the long line of authorities there cited support
the following rule:jgc:chanrobles.com.ph
2. We are of opinion that under all the
circumstances surrounding the negotiations
"The business of a real estate broker or agent, as disclosed by the practically undisputed
generally, is only to find a purchaser, and the evidence of record, the plaintiff company
settled rule as stated by the courts is that, in could not lawfully terminate the negotiations
the absence of an express contract between at the tome it attempted to do so and
the broker and his principal, the implication thereafter decline to convey the land to
generally is that the broker becomes entitled Barretto, who had accepted an offer of sale
to the usual commissions whenever he bring made to him by the plaintiffs duly authorized
to his principal a party who is able and willing agent, subject only to an examination of the
to take the property and enter into a valid documents of title, and stood ready t pay the
contract upon the terms then named by the purchase price upon the delivery of the duly
principal, although the particulars may be executed deed of conveyance and other
arranged and the matter negotiated and necessary documents of title. We are not now
completed between the principal and the considering the right or the power of the
purchaser directly."cralaw virtua1aw library
plaintiff company to terminate or revoke the
agency of the defendant at that time. The
In the case of Watson v. Brooks (17 Fed. Rep., revocation of the agents authority at that
54; 8 Sawy., 316), it was held that a sale of time could in no wise relieve the plaintiff
real property, entitling a broker to his company of its obligation to sell the land to
commissions, was an agreement by the Barretto for the price and on the terms agreed
vendor to convey the title thereto, or an upon before the agency was revoked.
estate therein to the vendee for a certain
valuable consideration then or thereafter to If we are correct in our conclusions in this
be paid, and was complete without regard, it follows, of course that no matter
conveyance, although the legal title remained what was the actual value of the land, the
in the vendor.
plaintiff company suffered no damage by the
delivery of the title deeds to Barretto, and the
The rights of a real estate broker to be consummation of the sale by the defendant
protected against the arbitrary revocation of upon the terms and at the price agreed upon
his agency, without remuneration for services prior to the revocation of his agency.
rendered in finding a suitable purchaser prior
to the revocation, are clearly and forcefully Without considering any of the disputed
stated in the following citation from the questions of fact it clearly appears that before
opinion in the case of Blumenthal v. Goodall the manager of the plaintiff company wrote
(89 Cal., 251).
the letter dated September 2, 1912, which is
set forth in the foregoing statement of facts,
"The act of the agent in finding a purchaser and before the conversation was had to which
required time and labor for its completion, and that letter refers, the defendant real estate
within three days of the execution of the agent had offered to sell the land to Barretto
contract, and prior to its revocation, he had for P18,892.50 and that he did so with the
placed the matter in the position that success knowledge and consent, and under the
was practically certain and immediate, and it authority of the plaintiff company. I further
would be the height if injustice to permit the clearly appears that this offer had been duly
principal then to withdraw the authority and accepted by Barretto, who stood ready and
terminate the agency as against an express willing to pay over the agreed purchase price,
provision of the contract, and perchance reap upon the production and delivery of the
the benefit of the agents labors, without necessary documents of title, should these
being liable to him for his commissions. This documents be found, upon examination, to be
would offer a premium for fraud by enabling executed in due and legal form. The only
one of the parties to take advantage of his question, then, which we need consider, is
own wrong and secure the labor of the other whether the plaintiff company could lawfully

"cancel" or rescind this agreement for the sale

and purchase of the land, on the sole ground
that the purchase price was not paid at the
hour designated in the letter to the defendant.

the sale of real estate, where no agreement to

the contrary appears, it may fairly be
assumed that it was the intention of the
parties to allow a reasonable time for the
examination of the documents of title; and in
any case in which time has been expressly
allowed for the purpose, the vendor cannot
arbitrarily demand the payment of the
purchase price before the expiration of the
time reasonably necessary therefor.

The only reasons assigned for th sudden and

arbitrary demand for the payment of the
purchase price which was made with the
manifest hope that it would defeat the agents
deal with Barretto, are that the plaintiff
companys manager had become satisfied
that the land was worth more that he had The doctrine supported by citation of
agreed to accept for it; and that he was authority is set forth as follows on page, 165,
piqued and annoyed at the delays which "Maupin on Marketable Title to Real Estate:"
marked the earlier stages of the negotiations.
"The contract of sale usually specifies a time
Time does not appear to have been of the in which the purchaser may examine the title
essence of the contract. The agreement to sell before completing the purchase. If no time be
was made without any express stipulation as specified, he will be entitled to a reasonable
to the time within which the purchase price time for that purpose, but cannot keep the
was to be paid, except that the purchaser contract open indefinitely so as to avail
reserved the right to examine the documents himself of a rise in the value of the property or
of title before making payment of the escape loss in case of depreciation. He cannot
purchase price, though it was understood that be required to pay the purchase money before
the sale was for case upon the delivery of the he has examined the abstract, unless he has
documents of title executed in due form. expressly stipulated so to do. It has been held
Under the agreement with the agent of the that if the contract provide that the purchaser
plaintiff company, the purchaser had a perfect shall be furnished an abstract of title, and
right to examine the documents of title; and shall have a specified time in which to
in the absence of an express agreement fixing examine the title and pay the purchase
the time to be allowed therefore, he was money after that time, even though no
clearly entitled to such time as might be abstract of the title was furnished.
reasonably necessary for that purpose.
"The purchaser is entitled to a reasonable
The plaintiff company, through its agent, had time
within
which
to
determine
by
given Barretto and opportunity to examine the investigation the validity of apparent liens
documents of title, with the express disclosed by the record. After the purchaser
understanding that if they were satisfactory has examined the abstract, or investigated
he would hand the agent his cheek for the the title in the time allowed for that purpose,
purchase price, and it is very clear that the it is his duty to point out or make known his
plaintiff company could not arbitrarily, and of objections of the title, if any, so as to give the
its own convenience, deprive Barretto of this vendor
an
opportunity
to
remove
opportunity to make such examination of the them."cralaw virtua1aw library
documents as might be reasonably necessary.
In the case of Hoyt v. Tuxbury (70 Ill., 331,
Of course we are not to be understood as 332),
the
rule
is
stated
as
denying the right of the vendor the couple his follows:jgc:chanrobles.com.ph
agreement to sell with a stipulation that the
purchase price must be paid at a specific day, "Where the purchase of land is made upon
hour and minute; nor that the obligation to condition the title is found good, the
pay over the purchase price forthwith may not purchaser is only entitled to a reasonable time
be inferred from all the circumstances in which to determine whether he will take the
surrounding the transaction in a particular title the vendor has, or reject it. He cannot
case. Time may be, and often is of the very keep the contract open indefinitely, so as to
essence of the contract. But in a contract for avail of a rise in the value of the property, or

relieve
himself
in
case
of
depreciation."cralaw virtua1aw library

a to which he was entitled by virtue of the

express agreement of the plaintiff companys
agent before any attempt was made to revoke
In the case of Easton v. Montgomery (90 Cal., his agency. It follows that Barrettos right to
307),
the
rule
is
set
forth
as enforce the agreement to sell was in no wise
follows:jgc:chanrobles.com.ph
affected by the attempt of the plaintiff
company to "cancel" the agreement; and that
"A contract for the sale of land which provides the plaintiff company suffered no damage by
title to prove good or no sale. without the consummation of the agreement by the
specifying the time within which the acceptance of the stipulated purchase price
examination is to be made, implies a by the defendant real estate agent.
reasonable time."cralaw virtua1aw library
Perhaps we should indicate that in arriving at
In Cyc., 1332, the general rule, supported by these conclusions we have not found it
numerous
citations,
is
set
forth
as necessary to pass upon the disputed question
follows:jgc:chanrobles.com.ph
of fact, as to whether or not the plaintiff
companys manager instructed the defendant
"If the contract of sale does not specify the not to deliver the title-deed until he had
time of performance, a reasonable time will received the purchase price. On this point
be implied. In other words a reasonable time there is a direct conflict of evidence. But as
for performance will be allowed, and we understand the transaction, it was clearly
performance within a reasonable time will be understood that the purchaser would have a
required. What is a reasonable time reasonable opportunity to inspect and
necessarily depends upon the facts and examine the documents of title before paying
circumstances of the particular case. The rule over a large sum of money in exchange
permitting and requiring performance within a therefor, whether the agent did or did not
reasonable time applies both to the time for have the authority to make actual delivery of
making and executing the conveyance by the the title deed for that purpose.
vendor, and to the time for making or
tendering payment by the purchaser; and Twenty days hereafter let judgment be
where some precedent is to be performed, or entered reversing the judgment entered in the
within which a contingency upon which the court below without costs in this instance, and
transaction depends os to happen, and to the directing the dismissal of the complaint with
performance of various acts by the parties the costs in first instance against the plaintiff
such as the furnishing of an abstract of title, company, and ten days thereafter let the
or making a survey, or any act which is to record be returned to the court wherein it
precede or may affect the time of conveyance originated. So ordered.
or payment, or which one of the parties may
do at his option which may affect the rights of Arellano, C.J., Torres, Moreland, Trent, and
the parties under the contract. If the Araullo, JJ., concur.
purchaser is entitled to an examination of the
title a reasonable time therefor will be
implied."cralaw virtua1aw library
Under all the circumstances surrounding the
transaction in the case at bar, as they appear
from the evidence of record, we have no
hesitation in holding that the plaintiff
companys letter of September 22, 1912
demanding payment before five o clock of
the afternoon of that day, under penalty of
the cancellation of its agreement to sell, was
an arbitrary and unreasonable attempt to
deny to the purchaser the reasonable
opportunity to inspect the documents of title,

During the period of his authorization,

petitioner diligently took steps to bring back
together private respondent and the Social
Security System. On March 16, 1968, he wrote
the System inviting the chairman to discuss
the officer of the sale of the property. On May
16, 1968, he made a formal written offer to
sell the property at P6.00 per square meter.
Thereafter, respondent received a telegram
dated May 17, 1968 from the System
informing him that it was considering the
purchase of his property. However, since
respondent did not receive a written offer for
the purchase of the property during
petitioners period of authorization (except a
latter dated May 18, 1968 coming from
petitioner himself on behalf of an undisclosed
buyer who was willing to buy at P4.50 per
square meter), respondent informed petitioner
in a lot or that pursuant to their agreement
the latters authority was deemed terminated.
Thereafter, on June 19, 1968, respondent
renewed his offer to sell his 300-hectare land
to the System. The transaction was finalized
on July 30, 1968, with the System buying at
its original counter offer of P3.25 per square
meter.
[G.R. No. L-39822. January 31, 1978.]
ANTONIO E. PRATS, doing business under the
name
of
Philippine
Real
Estate
Exchange,Petitioner, v. HON. COURT OF
APPEALS, ALFONSO DORONILA and PHILIPPINE
NATIONAL BANK, Respondents.
SYNOPSIS
Private respondent offered to sell his 300hectare land to the Social Security System at
P4.00 per square meter. He received and
accepted a counter-offer of P3.25 per square
meter. But since the System did not take
definite action on the transaction, private
respondent granted petitioner an exclusive
60-day option and authority to sell the
property on condition that if no written offer
was made to private respondent until the last
day of the authorization, the authority shall
expire and become null and avoid. The option
should have expired on April 18, 1968, but
this was extended by private respondent to
May 18, 1968.

Petitioner presented his statement of account

to respondent for professional services as real
estate broker in the amount of P1,380,000.
Respondent refused to pay. Hence, petitioner
sued respondent to recover the sum plus
damages. The trial court found for the
petitioner, but on appeal, the Court of Appeals
reversed the decision on factual findings that
petitioner was not the efficient procuring in
bringing about the sale (prescinding from the
fact of expiration of his exclusive authority).
Hence, this petition.
The Supreme Court found no basis in law to
reverse the factual findings of the Appellate
Court and to grant relief to petitioner.
However, in equity, noting that petitioner had
diligently taken steps to bring back together
respondent and the Social Security System,
the Supreme Court affirmed the decision
appealed from, but ordered respondent to pay
petitioner the amount of P100,000, and set
aside that portion of the decision ordering
petitioner to pay respondent attorneys fees.
SYLLABUS

1. APPEAL; FACTUAL FINDINGS OF THE COURT

OF APPEALS, CONCLUSIVE ON THE SUPREME
COURT. The factual findings of the Court of
Appeals are conclusive on the Supreme Court.
2. EQUITY; PRINCIPAL AND AGENT; ALTHOUGH
AGENT IS NOT THE EFFICIENT PROCURING
CAUSE, HE MAY BE COMPENSATED FROM
EFFORTS EXERTED TO BRING PRINCIPAL AND
BUYER TOGETHER. In an action by a real
estate broker to recover commission from the
principal, although the Court of Appeals
factual findings provide no basis in law to
grant relief to the broker, since said court
found that the broker was not the efficient
procuring cause in bringing about the sale,
nevertheless, relief in equity may be granted
where it appears that the agent had diligently
taken steps to bring back together the
principal and the prospective buyer.
3. CONTRACTS; PARTIES BOUND BY TERMS
AND CONDITIONS THEREOF. Where the
contract between the real estate broker and
the principal requires the former to present to
the latter a written offer by the prospective
buyer within the period of the brokers
authorization,
otherwise
the
brokers
authorization shall expire and become null
and void, the failure of the broker to present
such written offer within the stipulated period
will terminate the brokers authorization.

DECISION

FERNANDEZ, J.:

This is a petition for certiorari to review the

decision of the Court of Appeals in CA-G.R. No.
45974-R entitled "Antonio E. Prats, doing
business under the name of Philippine Real
Estate Exchange, versus Alfonso Doronila and
the Philippine National Bank", the dispositive
part of which reads:jgc:chanrobles.com.ph
"In view of all the foregoing, it is our
considered opinion and hold that the decision
of the lower court he, as it is hereby reversed,
and the complaint, dismissed. On appellants
counterclaim, judgment is hereby rendered
directing appellee to pay attorneys fees in

the sum of P10,000 to appellant, no moral

damages as therein claimed being awarded
for lack of evidence to justify the same. The
injunction issued by the lower court on the
P2,000,000.00 cash deposit of the appellant is
hereby lifted. No special pronouncement as to
costs.
SO ORDERED." 1
On September 23, 1958 Antonio E. Prats,
doing business under the name of "Philippine
Real Estate Exchange" instituted against
Alfonso Doronila and Philippine National Bank
Civil Case No. Q-12412 in the Court of First
Instance of Rizal at Quezon City to recover a
sum of money and damages.
The complaint stated that defendant Alfonso
Doronila was the registered owner of 300
hectares of land situated in Montalban, Rizal,
covered by Transfer Certificates of Title Nos.
77011, 77013, 216747 and 216750; that
defendant Doronila had for sometime tried to
sell his aforesaid 300 hectares of land and for
that purpose had designated several agents;
that at one time, he had offered the same
property to the Social Security System but
failed to consummate any sale; that his offer
to sell to the Social Security System having
failed, defendant Doronila on February 14,
1968 gave the plaintiff an exclusive option
and authority in writing to negotiate the sale
of his aforementioned property, which
exclusive option and authority the plaintiff
caused to be published in the Manila Times on
February 22, 1968; that it was the agreement
between plaintiff and defendant Doronila that
the basic price shall be P3.00 per square
meter; that plaintiff shall be entitled to a
commission of 10% based on P2.10 per
square meter or at any price finally agreed
upon and if the property be sold over and
above P300 per square meter, the excess
shall be credited and paid to the plaintiff in
addition to his 10% commission based on
P2.10 per square meter; that as a result of the
grant of the exclusive option and authority to
negotiate the sale of his 300 hectares of land
situated in Montalban, Rizal, in favor of the
plaintiff, the defendant Doronila, on February
20, 1968, wrote a letter to the Social Security
System withdrawing his previous offer to sell
the same land and requesting the return to
him of all papers concerning his offered

property; that the Social Security System,

complying with said request of defendant
Doronila, returned all the papers thereon and
defendant Doronila, in turn, gave them to the
plaintiff as his duly authorized real estate
broker; that by virtue of the exclusive written
option and authority granted him and relying
upon the announced policy of the President of
the Philippines to promote low housing
program, the plaintiff immediately worked to
negotiate the sale of defendant Doronilas 300
hectares of land to the Social Security System,
making
the
necessary
contacts
and
representations to bring the parties together,
namely, the owner and the buyer, and bring
about the ultimate sale of the land by
defendant Doronila to the Social Security
System; that February 27, 1968, after plaintiff
had already contacted the Social Security
System, its Deputy Administrator, Reynaldo J.
Gregorio, wrote a letter to defendant Doronila
inviting the latter to a conference regarding
the property in question with Administrator
Teodoro, Chairman Gaviola and said Reynaldo
J. Gregorio on March 4, 1968 at 10:00 oclock
in the morning, stating that the SSS would like
to take up the offer of the lot; that having
granted plaintiff the exclusive written option
and authority to negotiate the sale of his 300
hectares of land, defendant Doronila in a
letter dated February 28, 1968 declined the
invitation extended by the Social Security
System to meet with its Administrator and
Chairman, and requested them instead "to
deal directly" with the plaintiff; that on March
16, 1968, at the suggestion of defendant
Doronila , the plaintiff wrote a letter to the
Social Security System to the effect that
plaintiff would be glad to sit with the officials
of the Social Security System to discuss the
sale of the property of the defendant Doronila;
that on March 18, 1968, the Social Security
System sent a telegram to defendant Doronila
to submit certain documents regarding the
property offered; that on May 6, 1968, a
written offer to sell the 300 hectares of land
belonging to defendant Doronila was formally
made by the plaintiff to the Social Security
System and accordingly, on May 7, 1968, the
Social
Security
System
Administrator
dispatched
the
following
telegram
to
defendant Doronila "SSS considering purchase
your property for its housing project
Administrator Teodoro" ; that a few days
thereafter, the plaintiff accompanied the

defendant Doronila to the China Banking

Corporation to arrange the matter of clearing
payment by check and delivery of the titles
over the property to the Social Security
System; that having been brought together by
the plaintiff, the defendant Doronila and the
officials of Social Security System, on May 29,
1968 and on June 4, 1968, met at the office of
the SSS Administrator wherein the price for
the purchase of the defendant Doronilas 300
hectares of land was, among others, taken up;
that on June 20, 1968, the Social Security
Commission passed Resolution No. 636
making a counter-offer of P3.25 per square
meter subject to an appraisal report; that on
June 27, 1968, Resolution No. 662 was
adopted by the Social Security Commission
authorizing the Toples & Harding (Far East)
Inc. to conduct an appraisal of the property
and to submit a report thereon; that pursuant
thereto, the said company submitted its
appraisal report specifying that the present
value of the property is P3.34 per square
meter
and
that
a
housing
program
development would sent the highest and best
use thereof; that on July 18, 1968, the Social
Security Commission, at its regular meeting;
taking note of the favorable appraisal report
of the Toples & Harding (Far East) Inc., passed
Resolution No. 738, approving the purchase of
defendant Doronilas 300 hectares of land in
Montalban, Rizal, at a price of P3.25 per
square meter or for a total purchase price of
Nine Million Seven Hundred Fifty Thousand
Pesos (P9,750,000.00), appropriating the said
amount for the purpose and authorizing the
SSS Administrator to sign the necessary
documents to implement the said resolution;
that on July 30, 1968, defendant Doronila and
the Social Security System executed the
corresponding deed of absolute the 300
hectares of land in Montalban, Rizal, covered
by Transfer Certificate of Title Nos. 7701,
77013, 216747 and 216750 under the terms
of which the total price of P9,750,000.00 shall
be payable as follows: (a) 60% of the agreed
purchase price, or Five Million Eight Hundred
Fifty
Thousand
Pesos
(P5,850,000.00)
immediately after signing the deed of sale,
and (b) the balance of 40% of the agreed
price, or Three Million Nine Hundred Thousand
Pesos (3,900,000.00) thirty days after the
signing of the deed of absolute sale; that on
August 21, 1968, after payment of the
purchase price, the deed of absolute sale

executed by defendant Doronila in favor of

the Social Security System was presented for
registration in the Office of the Register of
Deeds of Rizal, and Transfer Certificates of
Title Nos. 226574, 226575, 226576, and
226577 in the name of the Social Security
System were issued; that defendant Doronila
has received the full purchase price for his
300 hectares of and in the total amount of
P9,750,000.00, which amount he deposited in
his bank Account No. 0012-443 with the
defendant Philippine National Bank; that on
September 17, 1968, the plaintiff presented
his statement to, and demanded of defendant
Doronila the payment of his professional fee
as real estate broker as computed under the
agreement of February 14, 1968 in the total
amount
of
P1,380,000.00;
that
notwithstanding such demand; the defendant
Doronila, in gross and evident bad faith, after
having availed of the services of plaintiff as
real estate broker, refused to pay the
professional fees due him; that as a result of
defendant Doronilas gross and evident bad
faith and unjustified refusal to pay plaintiff the
professional fees due him under the
agreement, the latter has suffered and
continues to suffer mental anguish, serious
anxiety, and social humiliation for which
defendant Doronila shall be held liable to pay
moral damages; and, that by reason likewise
of the aforesaid act of defendant Doronila, the
plaintiff has been compelled to file this action
and to engage the services of counsel at a
stipulated professional fee of P250,000.00.
In his answer filed on November 18, 1968, the
defendant Doronila alleged that when the
plaintiff offered the answering defendants
property to the Social Security System on May
6, 1968, said defendant had already offered
his property to, and had a closed transaction
or contract of sale of, said property with the
Social Security System; that the letter
agreement had become null and void because
defendant Doronila had not received any
written offer from any prospective buyers of
the plaintiff during the agreed period of 60
days until the last day of the authorization
which was April 13, 1968 counting from
February 14, 1968; that it is not true that
plaintiff brought together defendant Doronila
and the officials of the Social Security System
to take up the purchase price of defendant
Doronilas property for the simple reason that

the plaintiffs offer was P6.00 per square

meter and later on reduced to P4.50 per
square meter because the SSS Chairman had
already a closed transaction with the
defendant Doronila at the price of P3.25 per
square meter and that the offer of the plaintiff
refused by the officials of the Social Security
System; and defendant Doronila did not
answer the statement of collection of the
plaintiff because the latter had no right to
demand the payment for services not
rendered according to the agreement of the
parties. The answering defendant interposed
a counterclaim for damages and attorneys
fees.
On January 18, 1969, the plaintiff and
defendant Alfonso Doronila submitted the
following
stipulation
of
facts:jgc:chanrobles.com.ph
"STIPULATION OF FACTS
COME NOW the plaintiff and defendant
DORONILA, I their respective undersigned
counsel, and to this Honorable Court, by way
of abbreviating the proceeding in the case at
bar, without prejudice to presentation of
explanatory evidence, respectfully submit the
following STIPULATION OF FACTS:chanrob1es
virtual 1aw library
1.
That defendant Doronila was the registered
owner of 300 hectares of land, situated in
Montalban, Rizal, covered by Transfer
Certificates of Title Nos. 77011, 77013,
216747 (formerly TCT No. 116621) and
216750 (formerly TCT No. 77012).
2.
That on July 3, 1967, defendant DORONILA
under his letter (marked Annex 1 of the
answer) addressed to the SSS Chairman,
offered his said property to the Social Security
System (SSS) at P4.00 per square meter.
That on July 17, 1967 (Annex 2 of the
Answer) the SSS Chairman, Mr. Ramon G.
Gaviola, Jr., replied to defendant DORONILA,
as follows:chanrob1es virtual 1aw library

This will acknowledge your letter of July 3rd, cooperate to make our drinking water safer
1967 relative to your offer for sale of your real from any pollution.
estate property.
3.
In this regard, may I please be informed as to
how many hectares, out of the total 300 That on July 19, 1967, defendant DORONILA
hectares offered, are located in Quezon City wrote another letter (marked as Annex 3 on
and how many hectares are located in his Answer) addressed to the SSS Chairman,
Montalban, Rizal. Likewise, as regards your Mr. Ramon G. Gaviola, Jr., stating, among
offer of P4.00 per square meter, would there others, the following:chanrob1es virtual 1aw
be any possibility that the same be reduced to library
P3.25 per square meter? Finally and before I
submit your proposal for process it is In this connection, I have your counter-offer
requested that the NAWASA certify to the of P3.25 per square meter against my offer of
effect that they have no objection to having P4.00 per square meter, although your
this parcel of land subdivided for residential counter-offer is lower comparing to the prices
house purposes.
of adjacent properties, I have to consider the
difference as my privilege and opportunity to
Thank you for your offer and may I hear from contribute or support the Presidential policy to
you at the earliest possible time.
promote low cost housing in this country
particularly to the SSS members by accepting
2-a
gladly your counter-offer of P3.25 per square
meter with the condition that it should be paid
That on July 19, 1967, defendant DORONILA in cash and such payment shall be made
wrote a letter (a, xerox copy, attached hereto within a period of 30 days from the above
marked as Annex 2-a for DORONILA) to stated date (2nd paragraph of letter dated
NAWASA, and that in reply thereto, on July 25, July 18, 1967, Annex 3 of the Answer).
1967, the NAWASA wrote the following letter
(Xerox copy attached hereto to be marked as 3.a
Annex 2-b for DORONILA) to defendant
DORONILA.
That on August 10, 1967, the SSS Chairman,
Mr. Ramon G. Gaviola, Jr., wrote the following
In connection with your proposed subdivision (Xerox copy attached hereto and marked as
plan of your properties adjacent to our Annex 2-c for DORONILA: addressed to
Novaliches Watershed, this Office would like defendant DORONILA:chanrob1es virtual 1aw
to impose the following conditions:chanrob1es library
virtual 1aw library
With reference to your letter, dated July 1967,
1. Since your property is an immediate please be informed that the same is now with
boundary of our Novaliches Watershed, a 20- the Administrator for study and comment. The
meter road should be constructed along our Commission will act on receipt of information
common boundary.
re such studies.
2. That no waste or drainage water from the With the assurance that you will be
subdivision
should
flow
towards
the periodically informed of developments, we
watershed.
remain.
3. That the liquid from the septic tanks or 3-b
similar waste water should be treated before
it is drained to the Alat River above our Alat That on October 30, 1967, Mr. Pastor B.
Dam.
Sajorda, By authority of Atty. Alfonso
Doronila, property owner, wrote the following
The above conditions are all safeguards to the request (Xerox copy attached hereto and
drinking water of the people of Manila and marked as Annex 2-d for DORONILA)
Suburbs. It is therefore expected that we all addressed to Realtor Vicente L. Narciso for a

certification regarding the actual prices of 1. The price of the property is THREE (P3.00)
DORONILAs
property
quoted
as PESOS per square meter.
follows:chanrob1es virtual 1aw library
2. A commission of TEN (10%) PERCENT will
May I have the honor to request for your be paid to us based on P2.10 per square
certification as a member of the Board of meter, or at any price that you (DORONILA)
Realtor regarding the actual prices of my real finally agree upon, and all expenses shall be
estate raw-land properties described as Lots for our account, including preparation of the
3-B-7, 26-B, 6 and 4-C-3 all adjacent to each corresponding
deed
of
conveyance,
other, containing a total area of 3,000,000 documentary stamps and registration fee,
square meters, all registered in the name of whether the sale is caused directly or
Alfonso Doronila, covered by T.C.T. Nos. indirectly by us within the time of this option.
116631, 77013, 77011, and 71012, located at If the property is sold over and above P3.00
Montalban, Rizal, all adjacent to the Northern per square meter, the excess amount shall be
portion of the NAWASA properties in Quezon credited and the herein brokers. In addition to
City including those other surrounding the 10% commission based on P2.10 per
adjacent properties and even those properties square meter, provided the brokers shall pay
located before reaching my own properties the corresponding taxes to the owner of the
coming from Manila.
excess amount over P3.00 per square meter,
unless paid by check which would the be
This request is purposely made for my deductible as additional expenses.
references in case decided to sell my said
properties mentioned above.
3. This exclusive option and authority is good
for a period of sixty (60) days from the date of
3-c
your conformity; provided, however, that
should negotiations have been started with a
That on November 3, 1961, Realtor Vicente buyer, said period is automatically extended
Narciso wrote the following reply (Xerox copy until said negotiations is terminated, but not
attached hereto and marked as Annex 2-e more than fifteen (15) days;
for
DORONILA)
to
Mr.
Pastor
B.
Sajorda:chanrob1es virtual 1aw library
4. The written offers must be made by the
prospective buyers, unless they prefer to have
As per your request dated (October 30, 1967, us take the offer for and in their behalf some
regarding prices of raw land, it is my finding buyers do not want to be known in the early
that the fair market value of raw land in the stages of the negotiations;
vicinity of the NAWASA properties at Quezon
City and Montalban, Rizal, including the 5. If no written offer is made to you until the
properties of Atty. Alfonso Doronila, more last day of this authorization, this option and
particularly known as lots 3-B-7, 26-B, and 4- authority shall expire and become null and
C-3 containing approximately 3,000,000 void;
square meters is P3.00 to P3.50 per square
meter.
6. It is clearly understood that prospective
buyers and all parties interested in this
Current prices before reaching Doronilas property shall be referred to us, and that you
property range from P6.00 to P7.00 per will not even quote a price directly to any
square meter.
agent or buyer. You agree to refer all agents
or brokers to us DURING the time this option
4.
is in force; and
That on February 14, 1968, defendant
DORONILA granted plaintiff an exclusive
option and authority (Annex A of complaint),
under
the
following
terms
and
conditions:chanrob1es virtual 1aw library

7. There are some squatters occupying small

portions of the property, which fact will be
reported to the prospective buyers, and said
squatters will be removed at our expense."
(Annex A of the complaint.).

Very truly yours,

RECEIVED ORIGINAL:chanrob1es virtual 1aw

library

PHILIPPINE REAL
By: (Sgd.) ROGELIO DAPITAN
ESTATE EXCHANGE
6.
(Sgd.) ANTONIO E. PRATS
General Manager
CONFORME:chanrob1es virtual 1aw library

That on February 20, 1968, pursuant to the

letter dated February 19, 1968 of plaintiff,
defendant DORONILA wrote a letter (Annex B
of the complaint) to the SSS Administrator
stating:chanrob1es virtual 1aw library

(Sgd.) ALFONSO DORONILA

Date: February 14, 1968
5.

Inasmuch as the SSS has not acted on my

offer to sell a 300 hectare lot located in
Montalban, Rizal, for the last five (5) months I
respectfully requested for the return of all my
papers concerning this offered property.

That on February 19, 1968, plaintiff wrote the

following letter to defendant DORONILA 7.
(Annex 4 of the Answer), quoted as
follows:chanrob1es virtual 1aw library
That on February 27, 1968, defendant
DORONILA received the following letter
February 19, 1968
(Annex C of the complaint) from the SSS
Deputy Administrator, Mr. Reynaldo J.
Don Alfonso Doronila
Gregorio, to wit:chanrob1es virtual 1aw library
Plaza Ferguzon
Ermita, Manila

May I take this opportunity of inviting you in

behalf of Administrator Teodoro, to meet with
him, Chairman Gaviola and myself on Friday,
March 4, 10:00 A.M. lot offer.

Dear Don Alfonso:chanrob1es virtual 1aw

library
Thanks and regards.
In view of the exclusive option extended to us
for the sale of your property consisting 300
hectares located at Montalban, Rizal, we
earnestly request that you take immediate
steps to withdraw any and all papers
pertaining to this property offered to the
SOCIAL SECURITY SYSTEM.
Very truly yours,
PHILIPPINE REAL

8.
That on February 28, 1968, defendant
DORONILA wrote the following letter (Annex
D of the complaint) to the SSS Deputy
Administrator:chanrob1es virtual 1aw library
Thank you for your invitation to meet
Administrator Teodoro, Chairman Gaviola and
your goodself, to take up my former offer to
sell my property to the Social Security
System.

ESTATE EXCHANGE
(Sgd.) ANTONIO E. PRATS
General Manager

Since the SSS had not acted on my offer

dated July 19, 1967, more than seven (7)
months ago, I have asked for the return of my
papers, as per my letter of February 20, 1968,
and which you have kindly returned to me.

AEP/acc
As of February 20, 1968, I gave the Philippine
Real Estate Exchange an exclusive option and

authority to negotiate the sale of this 300

hectare land, and I am no longer at liberty to
negotiate its sale personally; I shall therefore
request you communicate directly with the
Philippine Real Exchange, P. O. Box 84,
Quezon City, and deal with them directly if
you are still interested in my property.

10.

With my kind personal regards, I am

11.

9.

That on May 6, 1968, plaintiff made a formal

written offer to the Social Security System to
sell the 300 hectare land of defendant
DORONILA at the price of P6.00 per square
meter, a Xerox copy of which, bearing the
stamp or receipt of the Social Security System
is attached hereof as Annex D-plaintiff.

That on March 16, 1968, plaintiff, acting upon

the letter of defendant DORONILA dated
February 28, 1968 (Annex D for plaintiff),
wrote
the
following
letter
to
SSS
Administrator:chanrob1es virtual 1aw library
Don Alfonso Doronila, owner of the 300
hectare land located at Montalban, Rizal,
adjoining the Quezon City boundary, has
informed us that the Administrator of the
SOCIAL SECURITY SYSTEM, through Mr.
Reynaldo J. Gregorio, has invited him to meet
with the Administrator and Chairman Gaviola
to take up the former offer to sell his property
to the SSS.
In his letter to the Administrator dated
February 20, 1968 (which has been received
by the SSS on the same day). Mr. Doronila
advised you that as of February 20, 1968, he
gave the PHILIPPINE REAL ESTATE EXCHANGE
(PHILREX) the exclusive option and authority
to negotiate the sale of his 300 hectare land
in Montalban, and that he is no longer at
liberty to negotiate its sale personally, and
that, if you are still interested in this property,
the SSS should communicate directly with the
PHILIPPINE REAL ESTATE EXCHANGE.
It is by virtue of this arrangement that Mr.
Doronila now refers to us your invitation and
his reply to the SSS and has requested us to
get in touch with you.
While,
at
present
we
have
several
prospective buyers interested in this property,
we shall, in compliance with the request of Mr.
Doronila, be happy to sit down with you and
Chairman Ramon Gaviola, Jr.
Please let us know when it will be convenient
to hold the conference.

That on April 18, 1968, defendant DORONILA

extended the plaintiff exclusive option and
authority to expire May 18, 1968. (Annex B
Reply, letter of Doronila to SSS Deputy
Administrator dated May 8, 1968).

12.
That on May 17, 1968, the defendant
DORONILA received the following telegram
(Annex E of the complaint) from the SSS
Administrator, reading:chanrob1es virtual 1aw
library
SSS
CONSIDERING
PURCHASE
PROPERTY FOR ITS HOUSING PROJECT

YOUR

13.
That on May 18, 1968, after plaintiffs
exclusive option and authority had been
extended, plaintiff wrote the following letter
(Annex A-Reply of plaintiffs REPLY TO
ANSWER) to defendant DORONILA, to
wit:chanrob1es virtual 1aw library
CONFIDENTIAL
In our conference last Monday, May 13, 1968,
you have been definitely advised by
responsible parties that the SOCIAL SECURITY
SYSTEM is acquiring your 300-hectare land at
Montalban, Rizal, adjoining the Quezon City
Boundary - and that said property will be
acquired in accordance with exclusive option
and authority you gave the PHILIPPINE REAL
ESTATE EXCHANGE. You were assured in that
conference that the property will be acquired
definitely, but, as it has been mentioned
during the conference, it may take from 30 to
60 days to have all the papers prepared and
to effect the corresponding payment. The
telegram from the SSS confirming these

negotiations has already been received by To expedite the negotiations, we suggest that
you, a copy of which you yourself have kindly we sit down sometime early next week with
furnished us.
our principal to take up the final arrangement
and other details in connection with the
Pursuant to paragraph 3 of the terms of the purchase of the subject property.
option that you have kindly extended, we still
have fifteen days more from today; May 18, To give you further assurance of the validity
1968, within which to finish the negotiations of this offer, we refer you to the CHINA
for the sale of your property to the SSS. For BANKING CORPORATION (Trust Department)
your convenience, we quote the pertinent who has already been apprised of these
portion
of
paragraph
3
of
the negotiations, to which Bank we strongly
option:chanrob1es virtual 1aw library
recommend that this transaction be coursed
through,
for
your
own
security
and
. . . provided, however, that should protection.
negotiation have been started with a buyer,
said period is automatically extended until 15.
said negotiation is terminated, but no more
than fifteen (15) days.
That on May 30, 1968, plaintiff wrote the
following letter (Xerox copy attached hereto,
Please be assured that we will do our very and marked as Annex I for plaintiff) to
best to complete these negotiations for the defendant
DORONILA,
quoted
as
sale of your property within this fifteen-day follows:chanrob1es virtual 1aw library
period. In the meantime, we hope you will
also observe the provisions of paragraph 6 of This is to advise you that the SOCIAL
the exclusive option you have extended to SECURITY SYSTEM agreed to purchase your
us.
300-hectare land located at Montalban, Rizal,
which purchase can be conformed by the
14.
Chairman
of
the
SOCIAL
SECURITY
COMMISSION. The details will have to be
That on May 18, 1968, plaintiff wrote the taken up between you and the Chairman, and
following letter (Xerox copy attached and we suggest that you communicate with the
marked hereof as Annex H for plaintiff) Chairman at your earliest convenience.
addressed to defendant DORONILA, to
wit:chanrob1es virtual 1aw library
This negotiation was made by virtue of the
exclusive option and authority you have
By virtue of the exclusive option and granted
the
PHILIPPINE
REAL
ESTATE
authority you have granted the PHILIPPINE EXCHANGE, which option is in full force and
REAL ESTATE EXCHANGE to negotiate the sale effect, and covers the transaction referred
of your 300-hectare land located at above.
Montalban, Rizal, adjoining the Quezon City
boundary, which properties are covered by 16.
Transfer Certificate of Titles Nos. 116631,
77011, 77012 and 77013, of the Registry of That on June 6, 1968, defendant DORONILA
Deeds for the Province of Rizal, we hereby wrote the following letter (Annex 7 for
make a firm offer, for and in behalf of our DORONILA), to the plaintiff, to wit:chanrob1es
buyer, to purchase said property at the price virtual 1aw library
of FOUR PESOS AND FIFTY CENTAVOS (P4.50)
per square meter, or the total amount of I have to inform you officially, that I have not
THIRTEEN MILLION FIVE HUNDRED THOUSAND received any written offer from the SSS or
(P13,500,000.00) PESOS, Philippine Currency, others, to purchase my Montalban property of
payable in Cash and D.B.P. Progress Bonds, on which you were given an option and exclusive
a ratio to be decided between you and our authority as appearing in your letter-contract
principal.
dated February 14, 1968, during the 60 days
of your exclusive authority which expired on
April 14, 1968, nor during the extension which

was properly a new exclusive authority of 30

days from April 18, which expired on May 18,
1968, nor during the provided 15 days grace,
in case that you have closed any transaction
to terminate it during that period, which also
expired on June 3, 1968.
As stated in said letter, we have the following
condition:chanrob1es virtual 1aw library
5. If no written offer is made to you until the
last day of this authorization, this option and
authority shall expire and becomes null and
void.
As I have informed you, that on April 16,
1968 or two days after your option expired I
have signed an agreement to sell my property
to a group of buyers to whom I asked later
that the effectivity of said agreement will be
after your new authority has expired will be on
June 2, and they have accepted; As your
option has expired, and they know that there
was no written offer made by the SSS for any
price of my property, aside of their previous
letter announcing me that they are ready to
pay, I was notified on June 4, 1968 by their
representative, calling my attention about our
agreement; that is why I am writing you, that
having expired your option and exclusive
authority to offer for sale my said property, I
notified only this afternoon said to comply our
agreement.
Hoping for your consideration on the matter,
as we have to be guided by contracts that we
have to comply, I hereby express to you my
sincere sentiments.
17.

You will recall that last year, I offered to the

Social Security System the same properties at
the price of Four (P4.00) pesos per square
meter. After 3 ocular inspection of Chairman
Gaviola, one of said inspections accompanied
by Commissioner Arroyo and after receiving
the written appraisal report of Manila realtor
Vicente L. Narciso, the System then made a
counter-offer of Three pesos and twenty-five
(P3.25) per square meter which I accepted
under the condition that the total amount be
paid within a period of thirty (30) days from
the date of my acceptance (July 19, 1967). My
acceptance was motivated by the fact that
within said period of time I had hoped to
repurchase my sugarcane hacienda in Iloilo
with the proceeds I expected from the sale.
No action was however taken by the System
thereon.
Recently, the same properties were offered by
Antonio E. Prats of the Philippine Real Estate
Exchange to the Presidential Assistant on
Housing, at the price of six pesos (P6.00) per
square meter, who referred it to the System,
but against no action had been taken by the
System.
Considering the lapse of time since our
original offer during which prices of real estate
have increased considerably, on the one
hand, and in cooperation with the Systems
implementation of our governments policy to
provide low cost houses to its members, on
the other hand, I am renewing my offer to sell
my properties to the system only at the same
price of P4.00 per square meter, or for a total
amount
of
twelve
million
pesos
(P12,000,000.00), provided the total amount
is paid in cash within a period of fifteen (15)
days from this date.

That on June 19, 1968, defendant DORONILA

wrote the following letter (Annex 5 of the
Answer) to the SSS Administrator, renewing 18.
his offer to sell his 300 hectare land to the
SSS at P4.00 per square meter, to That on June 20, 1968, the Social Security
wit:chanrob1es virtual 1aw library
Commission passed Resolution No. 636 by
which the SSS formalized its counter-offer of
This is to renew my offer to sell my properties P3.25 per square meter. (See Annex F of the
located at Montalban, Rizal identified as Lot complaint)
Nos. 3-B-7, 26-B, 6, and 4-C-3, registered in
my name in the office of the Registry of Deeds 19.
of Rizal under T.C.T. Nos. 116631, 77013,
77011 and 216750, containing a total area of That on June 25, 1968, the SSS Administrator,
300 hectares or 3,000.000 square meters.
Mr. Gilberto Teodoro, wrote the following reply

letter (Annex 6 of the Answer) to defendant That on July 17, 1968, the Social Security
DORONILA, to wit:chanrob1es virtual 1aw Commission taking note of the report of Toples
library
& Harding (Far East), passed Resolution No.
738, approving the purchase of the 300
This has reference to your letter dated June 9, hectare land of defendant DORONILA, at the
1968 renewing your offer to sell your property price of P3.25 per square meter, for a total
located at Montalban, Rizal containing an area purchase price of NINE MILLION SEVEN
of 300 hectares at P4.00 per square meter. HUNDRED
FIFTY
THOUSAND
PESOS
Please be informed that the said letter was (P9,750,000.00), and appropriating the said
submitted for the consideration of the Social amount of money for the purpose. (See Annex
Security Commission at its last meeting on F of the complaint).
June 20, 1968 and pursuant to its Resolution
No. 636, current series, it decided that the 22.
System reiterate its counter-offer for P3.25
per square meter subject to a favorable That on July 30, 1968, defendant DORONILA
appraisal report by a reputable appraisal executed the deed of absolute sale (Annex G
entity as regards particularly to price and of the complaint) over his 300-hectare land,
housing project feasibility. Should this counter- situated in Montalban, Rizal, covered by TCT
offer be acceptable to you, kindly so indicate Nos. 77011, 77013, 216747 (formerly TCT No.
by signing hereunder your conformity 116631) and 216750 (formerly TCT No.
thereon.
77012), in favor of the Social Security System,
for the total purchase price of NINE MILLION
Trusting that the foregoing sufficiently advises SEVEN HUNDRED FIFTY THOUSAND PESOS
you on the matter, I remain.
(P9,750,000.00), Philippine currency, which
deed of sale was presented for registration in
Very truly yours,
the Office of the Register of Deeds of Rizal on
August 21, 1968.
GILBERTO TEODORO
23.
Administrator
That defendant DORONILA had received the
CONFORME: With condition that the sale will full purchase price of NINE MILLION SEVEN
consummated within Twenty (20) days from HUNDRED
FIFTY
THOUSAND
PESOS
this date.
(P9,750,000.00), Philippine Currency, in two
installments.
ALFONSO DORONILA
24.
Returned and received the original by
That on September 17, 1968, plaintiff
June 25/68
presented his STATEMENT OF ACCOUNT, dated
September 16, 1968 (Xerox copy of which is
Admtrs Office
attached hereto and marked as Annex J
plaintiff to defendant DORONILA for the
20.
payment of his professional services as real
estate broker in the amount of P1,380,000.00,
That on June 27, 1968, the Social Security as computed on the basis of the letterCommission passed Resolution No. 662 agreement, Annex A of the complaint, which
authorizing the Toples & Harding (Far East) to defendant failed to pay.
conduct an appraisal of the property of
defendant DORONILA and to submit a report Manila, for Quezon City, January 18, 1968.
thereon. (See Annex F of the complaint)
Respectfully submitted:chanrob1es virtual
21.
1aw library
CRISPIN D. BAIZAS & ASSOCIATES

SO ORDERED.
and A.N. BOLINAO, JR.
December 12, 1969, Quezon City, Philippines.
By: (Sgd.)
(SGD.) LOURDES P. SAN DIEGO
Counsel for the plaintiff
J u d g e" 3
Suite 305, Shurdut Bldg.
Intramuros, Manila

The defendant appealed to the Court of

Appeals where the appeal was docketed as
CA-G.R. No. 45974-R.

(Sgd.) E. V. Obon
Atty. EUGENIO V. OBON
Counsel for the defendant
9 West Point Street
Quezon City
ALFONSO DORONILA
Counsel for the defendant
428 Plaza de Ferguson
Ermita, Manila" 2
The trial court rendered its decision dated
December 12, 1969, the dispositive part of
which reads:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered in
favor plaintiff, ordering defendant Alfonso
Doronila, under the first cause of action, to
pay to plaintiff the sum of P1,380,000.00 with
interest thereon at the rate of 6% per annum
from September 23, 1968 until fully paid; and
under the second Cause of Action, to pay
plaintiff the sum of P200,000.00 as moral
damages; the sum of P100,000. as exemplary
damages; the sum of P150,000.00 as
attorneys fees, including the expenses of
litigation and costs of this suit.
The writ of preliminary injunction issued in
this case is hereby made permanent; and the
defendant Philippine National Bank is hereby
ordered to pay to the plaintiff the amount of
P1,380,000.00
and
interest
on
the
P1,380,000.00 to be computed separately out
P2,000,000.00 which it presently holds under
a fixed time deposit.

In a decision promulgated on September 19,

1974, the Court of Appeals reversed the
decision of the trial court and dismissed the
complaint because:jgc:chanrobles.com.ph
"In any event, since it has been found that the
authority of appellee expired on June 2, 1968,
rather than June 12, 1968 as the lower court
opined, the inquiry would be whether up to
that time, a written offer was made by
appellee in behalf of the SSS. The stipulation
is clear on this point. There should he a
written offer by the prospective buyer or by
appellee for or in their behalf, and that if no
such written offer is made until the last day of
the authorization, the option and authority
shall expire and become null and void. Note
that the emphasis is placed on the need of a
written offer to save the authority from an
automatic termination on the last day of the
authorization. We note such emphasis with
special significance in view of the condition
relative to automatic extension of not more
than 15 days if negotiations have been
started. The question then is when are
negotiations deemed started? In the light of
the provisions just cited, it would be when a
response is given by the prospective buyer
showing his interest to buy the property when
an offer is made by the seller or broker and
make an offer of the price. Strictly, therefore,
prior to May 29, 1968, there were no
negotiations
yet
started
within
the
contemplation of the letter-agreement of
brokerage (Exh. A) Nevertheless, appellant
extended appellees exclusive authority on
expire on May 18, 1968 (par. 10, Stipulation of
Facts; R.A. p. 89), which was automatically
extended by 15 days under their agreement,
to expire on June 2, 1968, if the period
extended up to May 18, 1968, was a new
authority. For, it may even be considered as
taking the place of the 15-day automatic

extension, since appellees pretension is that

negotiations have been started within the
original period of 60 days. Appellant, in fixing
the expiry date on June 2, 1968, has thus
made a liberal concession in favor of appellee,
when he chose not to regard the extension up
to May 18, 1968 as the automatic extension
which ought to have been no more than 15
days, but which he generously stretched twice
as long." 4

question to the Social Security System was

formally accepted by the System only on June
20, 1968 after the exclusive authority, Exhibit
A, in favor of the plaintiff, petitioner herein,
had expired. The respondent courts factual
findings that petitioner was not the efficient
procuring cause in bringing about the sale
(prescinding from the fact of expiration of his
exclusive authority) which are admittedly final
for purposes of the present petition, provide
no basis in law to grant relief to petitioner.
The
petitioner
assigned
the
following The following pertinent excerpts from
errors:chanrob1es virtual 1aw library
respondent courts extensive decision amply
"I
demonstrate this:jgc:chanrobles.com.ph

THE RESPONDENT COURT OF APPEALS ERRED

CONCLUDING THAT PETITIONER WAS NOT THE
EFFICIENT PROCURING CAUSE IN BRINGING
ABOUT THE SALE PRIVATE RESPONDENT
DORONILAS LAND TO THE SSS.
II

THE RESPONDENT COURT OF APPEALS ERRED

CONCLUDING THAT THERE WAS FAILURE ON
THE PART OF HEREIN PETITIONER TO COMPLY
WITH THE TERMS CONDITIONS OF HIS
CONTRACT WITH PRIVATE RESPONDENT.
III

THE RESPONDENT COURT OF APPEALS ERRED

IN CONCLUDING THAT PETITIONER IS NOT
ENTITLED TO HIS COMMISSION.
IV

THE RESPONDENT COURT OF APPEALS ERRED

IN AWARDING ATTORNEYS FEES TO PRIVATE
RESPONDENT
DORONILA
INSTEAD
OF
AFFIRMING THE AWARD OF MORAL AND
EXEMPLARY
DAMAGES
AS
WELL
AS
ATTORNEYS FEES TO PETITIONER." 5
The Court in its Resolution of May 23, 1975
originally denied the petition for lack of merit
but
upon
petitioners
motion
for
reconsideration and supplemental petition
invoking equity, resolved in its Resolution of
August 20, 1975 to give due course thereto.
From the stipulation of facts and the evidence
of record, it is clear that the offer of defendant
Doronila to sell the 300 hectares of land in

"It is noted, however, that even in his brief,

when he said
According to the testimony of the plaintiffappellee a few days before May 29, 1968, he
arranged with Mr. Gilberto Teodoro, SSS
Administrator, a meeting with Doronila. He
talked with Mr. Teodoro over the telephone
and fixed the date of the meeting with
defendant-appellant Doronila for May 29,
1968, and that he was specifically requested
by Mr. Teodoro not to be present at the
meeting, as he, Teodoro, wanted to deal
directly with the defendant-appellant alone.
(Tsn., pp. 44-46, March 1, 1969). Finding
nothing wrong with such a request, as the sale
could be caused directly or indirectly (Exh.A),
and believing that as a broker all that he
needed to do to be entitled to his commission
was to bring about a meeting between the
buyer and the seller as to ripen into a sale,
plaintiff-appellee readily acceded to the
request.
appellee is not categorical that it was through
his efforts that the meeting took place on May
29, 1968. He refers to a telephone call he
made a few days before May 29, 1968, but in
the conversation he had with Mr. Teodoro, the
latter requested him not to be present in the
meeting. From these facts, it is manifest that
the SSS officials never wanted to be in any
way guided by, or otherwise subject to, the
mediation or intervention of, appellee relative
to the negotiation for the purchase of the
property. It is thus more reasonable to
conclude that if a meeting was held on May
29, 1968, it was done independently, and not
by virtue of, appellees wish or efforts to hold
such meeting." 6

". . . It is even doubtful if he tried to make any

arrangement for meeting at all, because on
May 18, 1968, he told appellant:chanrob1es
virtual 1aw library

acquire the property had been sufficiently

aroused for there to be any need for appellee
to stimulate it further. Appellee should know
this fact for according to him, the 10-day
grace period was agreed upon to give the SSS
a chance to pay the price of the land at P3.25
per sq. m., as a compromise to appellants
insistence that the SSS be excluded from
appellees option or authority to sell the land."
9

. . . we hereby make a firm offer, for and in

behalf of our buyer, to purchase said property
at the price of Four Pesos and Fifty Centavos
(P4.50) per square meter . . . .
". . . There should be a written offer by the
prospective buyer or by appellee for or in their
"As this offer is evidently made in behalf of behalf, and that if no such written offer is
buyer other than the SSS which had never made until the last day of the authorization,
offered the price of P4.50 per square meter, the option and authority shall expired and
appellee could not have at the same time become null and void. . . . Yet, no such written
arranged a meeting between the SSS officials offer was made. . . ." 10
and appellant with a view to consummating
the sale in favor of the SSS which had made In equity, however, the Court notes that
an offer of only P3.25 per sq. m. and thus lose petition diligently taken steps to bring back
the much bigger profit he would realize with a together respondent Doronila and the SSS,
higher price of P4.50 per sq. meter. This firm among which may be mentioned the
offer of P4.50 per sq. m. made by appellee following:chanrob1es virtual 1aw library
betrayed his lack of any efficient intervention
in the negotiations with the SSS for the In July, 1967, prior to February 14, 1968,
purchase by it of appellants property. . . ." 7
respondent Doronila had offered to sell the
x
x
x
land in question to the Social Security System.
Direct negotiations were made by Doronila
with the SSS. The SSS did not then accept the
". . . This becomes more evident when it is offer of Doronila. Thereafter, Doronila
considered that on May 6, 1968 he was executed the exclusive authority in favor of
making his first offer to sell the property at petitioner
Prats
on
February
14,
P6.00 per sq. m. to the SSS to which offer he 1968.chanrobles virtual lawlibrary
received no answer. It is this cold indifference
of the SSS to him that must have prompted Prats communicated with the Office of the
him to look for other buyers, resulting in his Presidential Housing Commission on February
making the firm offer of P4.51 per sq. m. on 23, 1968 offering the Doronila property. Prats
May 18, 1968, a fact which only goes to show wrote a follow-up letter on April 18, 1968
that for being ignored by the SSS, he gave up which was answered by the Commission with
all effort to deal with the SSS. . . . ." 8
the suggestion that the property be offered
x
x
x
directly to the SSS. Prats wrote the SSS on
March 16, 1968, inviting Chairman Ramon
Gaviola, Jr. to discuss the offer of the sale of
". . . For him to claim that it was he who the property in question to the SSS. On May 6,
aroused the interest of the SSS in buying 1968, Prats made a formal written offer to the
appellants property is to ignore the fact that Social Security System to sell the 300-hectare
as early as June, (July) 1967, the SSS had land of Doronila at the price of P6.00 per
directly dealt with appellant to such an extent square meter. Doronila received on May 17,
that the price of P3.25 as offered by the SSS 1968 from the SSS Administrator a telegram
was accepted by appellant, the latter that the SSS was considering the purchase of
imposing only the condition that the price Doronilas property for its housing project.
should be paid in cash, and within 30 days Prats and his witness Raagas testified that
from the date of the acceptance. It can truly Prats had several dinner and lunch meetings
be said then that the interest of SSS to with Doronila and/or his nephew, Atty. Manuel

D. Asencio, regarding the progress of the Thousand Pesos (P100,000.00) which is

negotiations with the SSS.
ordered segregated therefrom to satisfy the
award herein given to petitioner; the lifting of
Atty. Asencio had declared that he and his said injunction, as herein ordered, is
uncle, Alfonso Doronila, were invited several immediately executory upon promulgation
times by Prats, sometimes to luncheons and hereof.
sometimes to dinner. On a Sunday, June 2,
1968, Prats and Raagas had luncheon in Sulu No pronouncement as to costs.
Hotel in Quezon City and they were joined
later by Chairman Gaviola of the SSS.
Teehankee (Chairman), Makasiar, Muoz
Palma and Guerrero, JJ., concur.
The Court has noted on the other hand that
Doronila finally sold the property to the Social
Security System at P3.25 per square meter
which was the very same price counteroffered by the Social Security System and
accepted by him in July, 1967 when he alone
was dealing exclusively with the said buyer
long before Prats came into the picture but
that on the other hand Prats efforts somehow
were instrumental in bringing them together
again
and
finally
consummating
the
transaction the same price of P3.25 square
meter, although such finalization was after the
expiration of Prats extended exclusive
authority. Still, such price was higher than that
stipulated in the exclusive authority granted
by Doronila to Prats.
Under the circumstances, the Court grants in
equity the sum of One Hundred Thousand
Pesos (P100,000.00) by compensation for his
efforts and assistance in the transaction,
which
however
was
finalized
and
consummated after the expiration of his
exclusive authority and sets aside the
P10,000.00-attorneys fees award adjudged
against him by respondent court.
WHEREFORE, the decision appealed from is
hereby affirmed, with the modification that
private respondent Alfonso Doronila in equity
is ordered to pay petitioner or his heirs the
amount of One Hundred Thousand Pesos
(P100,000.00) and that the portion of the said
decision sentencing petitioner Prats to pay
respondent Doronila attorneys fees in the
sum of P10,000.00 is set aside.chanrobles
virtual lawlibrary
The lifting of the injunction issued by the
lower court on the P2,000,000.00 cash deposit
of respondent Doronila as ordered by
respondent court is hereby affirmed, with the
exception of the sum of One Hundred

DECISION

JUGO, J.:

This is an appeal by Consolacion L. Ramos as

administratrix of the estate of Concepcion
Ramos from an order issued by the Court of
First Instance of Batangas on June 15, 1951.
On August 16,1948, Concepcion Ramos
Dipusoy executed before a notary public two
documents which have been marked as Annex
"A" and Annex "B."cralaw virtua1aw library
Annex "A" is a power of attorney which reads
as follows:jgc:chanrobles.com.ph
"SPECIAL POWER OF ATTORNEY
[G.R. No. L-5142. February 26, 1954.]
KNOW
ALL
MEN
BY
THESE
CONSOLACION L. RAMOS, administratrix- PRESENTS:jgc:chanrobles.com.ph
appellant, v. BENIGNO A. CAOIBES, attorney-in
fact-appellee.
"That I, Concepcion Ramos Dipusoy, of legal
age, single, Filipino citizen and resident of
Consolacion L. Ramos in her own behalf.
Balayan, Batangas, have made, constituted
and appointed, and by these presents do
Benigno A. Caoibes in his own behalf.
make, constitute and appoint Mr. Benigno A.
Caoibes, also of legal age, married, Filipino
citizen and at present residing at 1047
SYLLABUS
Antipolo Street, Sampaloc, Manila, my true
and lawful attorney-in-fact, for me and in my
name, place and stead, to collect any amount
1. PRINCIPAL AND AGENT; OBLIGATIONS OF due me from the Philippine War Damage
AN AGENT. Where an agent makes use of Commission, regarding my claim filed for my
his power of attorney after the death of his properties that were lost during the last war in
principal, the agent has the obligation to Balayan, Batangas, to cash checks, warrants
deliver the amount collected by him by virtue and to sign receipts, vouchers, documents
of said power to the administratrix of the which shall be necessary to the said purpose.
estate of his principal.
"That I am giving and granting unto my said
2. ID.; DONATION OF PERSONAL PROPERTY; attorney-in-fact Benigno A. Caoibes, full and
REQUISITES FOR ITS VALIDITY. Where a absolute power and authority to do and
donation of personal property was made in perform all any every act or thing whatsoever
writing but has not been accepted in the same to be done necessary in and about the
form, the donation is not valid. Nor can it be premises, as fully to all intents and purposes
considered
a
donation
upon
valuable as I might or could myself do if I were
consideration where no services or valuable personally present, and hereby confirming
consideration were involved. The mere fact and ratifying all that my said attorney-in-fact
that the agent collected the principals claim shall lawfully do or cause to be done and by
from the War Damage Commission is not such virtue of these presents.
a service as to require compensation.

"IN WITNESS WHEREOF, I have hereunto set the corresponding amount and the other half
my hand this 16th day of August, 1948, in the (1/2) shall be given to my nephew and niece
City of Manila, Philippines.
Mr. and Mrs. Benigno A. Caoibes.
"(Miss) CONCEPCION RAMOS DIPUSOY.

"IN WITNESS WHEREOF, I have hereunto set

my hand this 16th day of August, 1948, in the
"Signed in the presence of:chanrob1es virtual City of Manila.
1aw library
(Sgd.) CONCEPCION RAMOS DIPUSOY.
1. (Sgd.) CONSOLACION L. RAMOS Witness.
Signed in the presence of:chanrob1es virtual
2. (Sgd.) SOCORRO L. RAMOS Witness.
1aw library
"REPUBLIC OF THE PHILIPPINES } s.s. CITY OF (Sgd.) CONSOLATION L. RAMOS
MANILA.
(Sgd.) SOCORRO L. RAMOS
"Before me a Notary Public for and in the City
of
Manila,
personally
appeared
Miss "Subscribed and sworn to before me this 16th
Concepcion Ramos Dipusoy, with Residence day of August, 1948, in the City of Manila.
Certificate No. A-3115097, issued at Balayan, Affiant
have
exhibited
her
residence
Batangas, on February 26, 1948, who is certificate No. A-3115097, issued at Balayan,
known to me to be the same person who Batangas, on February 26, 1948.
executed the foregoing power of attorney in
favor of Mr. Benigno A. Caoibes, and (Sgd.) ARTEMIO ABAYA Noraty Public.
acknowledged to me that the same is her free
and voluntary act and deed.
My Commission expires on December 31,
1948"
"IN WITNESS WHEREOF, I have hereunto set
my hand this 16th day of August, 1948, in the Concepcion Ramos died on August 19,1948,
City of Manila and affixed my Notarial Seal.
leaving a will dated January 7, 1927 admitted
to probate on October 4, 1948, in which she
(Sgd.) ARTEMIO ABAYANotary Public.
ordered that the credits due to her be
distributed among the children of the
My commission expires on December 31, deceased
Antonino
Ramos,
namely,
1948."
Consolacion, Ramon, Socorro, and Cirila.
Annex B is an affidavit of the following One year before she died, Concepcion Ramos
tenor:jgc:chanrobles.com.ph
filed with the War Damage Commission a
claim which was identified as No. 411773. On
"REPUBLIC OF THE PHILIPPINES } s.s. CITY OF August 31,1948, the Commission issued check
MANILA.
No. 348444, in the amount of P501.62,
payable to the deceased Concepcion Ramos.
AFFIDAVIT
This check was returned to the Commission
and substituted by the latter with check No.
"That I, CONCEPCION RAMOS DIPUSOY, of 564614, on November 10, 1948, for the same
legal age, single, Filipino citizen, and resident amount, but payable to Benigno A. Caoibes,
of Balayan, Batangas, after having been duly who had presented to said entity Annexes "A"
sworn to in accordance to law depose and and "B", above mentioned, in order to
say:jgc:chanrobles.com.ph
exchange the first check No. 564614, which
he cashed for himself.
"That in case payment of any amount or
amounts collected from the Philippine War Annexes "A" and "B" were presented to the
Damage Commission, my nephew and at the Commission by Caoibes after the death of
same time attorney-in-fact, shall give my Concepcion. The administratrix, Consolacion
sister Teopista Vda. de Basa one-half (1/2), of L. Ramos, the appellant herein, discovered the

collection made by Caoibes when she saw the

note "previous payment" which appeared in
the account sent to her by the Commission on
October 13, 1950. She filed a motion with the
court asking that Caoibes be ordered to
deposit the sum of P501.62 with the clerk of
court. Caoibes answered the motion admitting
that after the death of Concepcion, he
presented Annexes "A" and "B" to the
Commission and received in cash the sum of
P501.62, amount of the second check, above
mentioned, but stating that he was willing to
deliver to the clerk the sum of P250.81. He
contended that, by virtue of Annex "A", and
Annex "B", he had the right to retain, for
himself, half of the sum of P501.62.
The court below issued
order:jgc:chanrobles.com.ph

the

Annex A is only a power of attorney. Caoibes,

as agent, had the obligation to deliver the
amount collected by virtue of said power to
his principal, Concepcion, or, after her death,
to
the
administratrix
of
her
estate,
Consolacin. There is absolutely no cession of
rights made in favor of Caoibes in Annex "A",
and under Article 1711 of the old Civil Code
(which was in force at the time of the
transaction), the contract of agency is
presumed to be gratuitous, unless the agent
is a professional agent. There is no proof that
Caoibes was such. Furthermore, according to
Article 1732 of said Code, an agency is
terminated, among other causes, by the death
of the principal or of the agent. When Caoibes
made use of the power of attorney, his
following principal, Concepcion, was already dead.

"Considering the motion of the administratrix

praying that Atty. Benigno A. Caoibes turn
over the amount of P501.62, representing war
damage claim, to the office of the Clerk of this
Court, and the answer of Atty. Caoibes to the
said motion and this Court having had the
opportunity to personally confer with the
parties and Attorney Caoibes being agreeable
to turn over the amount of P250.81 to the
Clerk of this Court in final settlement of this
matter it is ordered that the said Atty.
Caoibes deposit the amount of P250.81 with
the Clerk of this Court, the said amount to be
at the disposal of the administratrix and the
other parties in this intestate proceedings.
With this order, the matter before this Court is
deemed closed.

Coming now to Annex "B", the alleged

document of donation, it should be noted that
it is not a donation of real but of personal
property and is governed by article 632 of the
old
Civil
Code,
which
reads
as
follows:jgc:chanrobles.com.ph
"Donations of personal property may be made
verbally or in writing.
"Verbal donation requires the simultaneous
delivery of the gift. In the absence of this
requisite the donation shall produce no effect,
unless made in writing and accepted in the
same form."cralaw virtua1aw library

The alleged donation was made in writing but

it has not been accepted in the same form,
and, consequently, has no validity. It cannot
"SO ORDERED.
be considered a donation upon valuable
consideration, for no services nor any
Batangas, Batangas, June 15, 1951.
valuable consideration had passed from the
donees to the donor. The mere fact that
(Sgd.) E. SORIANO Judge"
Caoibes collected the claim from the War
Damage Commission is not such a service as
On July 3, 1951, the administratrix filed a to require compensation. Caoibes did not
motion for reconsideration, which was denied even prepare the claim.
by the order of the court dated July 12, 1951.
(In the printed Record on Appeal the date The court below in its order of June 15, 1951,
appears to be July 12, 1950, but it is evidently said that it "having had the opportunity to
a mistake and it should be July 12, 1951.)
personally confer with the parties and
Attorney Caoibes being agreeable to turn over
We will now proceed to consider the two the amount of P250.81 to the Clerk of this
documents.
Court in final settlement of this matter it is
ordered that the said Atty. Caoibes deposit the
amount of P250.81 with the Clerk of this

Court, the said amount to be at the disposal of

the administratrix and the other parties in
these intestate proceedings. With this order,
the matter before the administratrix never
consented to the reduction of the claim.
In view of the foregoing, the order appealed
from is reversed and Benigno A. Caoibes is
ordered to deposit with the Clerk of Court of
Batangas the sum of P501.62 to be at the
disposal of the administratrix in her capacity
as such, without pronouncement as to costs.
So ordered.
Paras,
C.J.,
Pablo,
Bengzon,
Padilla,
Montemayor,
Reyes,
Bautista
Angelo,
Labrador, Concepcion and Diokno, JJ., concur.