DISTINGUISH FROM OTHER SIMILAR
That
CONTRACTS
SPOUSES FERNANDO AND LOURDES
VILORIA VS CONTINENTAL AIRLINES
(contract of carriage = contract of agency)
FACTS:
1997 while in US- Fernando and his wife purchased 2
roundtrip tix from San Diego California to New
Jersey on board Continental Airlines.
Petitioner purchased the tix $400 each from travel
agency called Holiday Travel and was attended to by
Mager. Spouses agreed to buy certain tix after being
informed that there were no available seats at
Amtrak, passenger train provider in US.
Scheduled flight: to leave Aug 13, 97 – return to San
Diego Aug 21, 97
Ferns requested to reschedule in an earlier flight, Aug
6, but Mager informed them that it was fully booked,
but suggested the alternative flight of a round trip via
Frontier Air but on a higher fare of $526 per
passenger.
Ferns opted for a refund. Mager, however, denied
since it was non-refundable. The only option that
Continental can offer is the re-issuance of new tickets
within one year from the date the subject tickets were
issued.
Ferns decided to reserve seats with Frontier Air.
Having second thoughts, petitioner went to
Greyhound station where he saw Amtrak station. He
made inquiries and found out that there were
available seats and he can travel anytime. He
purchased 2 tix going to Washington, DC.
Ferns confronted Mager. He again asked for a refund
but again refused.
Feb 1998, returning to the PH, petitioner went to CAI
demanding for a refund, and that Mager deluded
them into purchasing the subject tix.
Continental Micronesia denied petitioner’s demand
and advised him that they may take it to ticketing
location for re-issuance of new tix within 2 yrs
(kanina 1 yr sabi). May also be used for payment for
purchase of another Continental tix.
1999, went to ticketing office in Ayala, asking for a
replacement of a single round trip ticket to LA,
California. However, Fernando was informed that
Lourdes’ tix cannot be transferred, cannot be used in
his favor. That ticket was totaling $1,867, so he
would be paying what will not be covered.
1999- petitioner Ferns asking for a refund again.
CAI’s act of charging him high price when other
arilines priced at $856, and refusal to allow him to
use Lourdes’ ticket, breached their undertaking under
1998 letter.
2000 – he filed a complaint praying that CAI be
ordered to refund the money they used in the
purchase.
Respondent defenses: 1) tix were non-refundable 2)
cannot use Lourdes’ ticket in his favor; 3) Mager is
not a CAI employee, latter is not liable for the acts of
Mager; 4) CAI employees and agents did not act in
bad faith.
- That one of the conditions attached to their
contract of carriage is the non-transferability
and non-refundability of the subject tickets.
RTC RULING: Spouses petitioner entitled to a
refund in view of Mager’s misrepresentation in
obtaining their consent in the purchase of the subject
tickets.
- That Mager is considered as CAI’s agent,
hence bound by her bad faith and
misrepresentation. Citing Articles 1868,
1869.
- As its very name implies, travel agency
binds itself to render some service or to do
something in representation or on behalf of
another, with the consent or authority of the
latter.
- Services rendered by Ms Mager of Holiday
Travel were no different from those other
travel agency.
- By its offer in the letter dated March 1998-
an obvious attempt to assuage plaintiff
spouses’ hurt feeling.
APPELLATE COURT RULING: REVERSED RTC
RULING.
- Absence of any proof that a principal-agent
relationship existed between CAI and
Holiday Travel.
- That Holiday travel and CAI is a contract of
sale.
- Refund is not available as the word “non-
refundable” was printed on the face of the
subject tix.
ISSUE: WON PRINCIPAL-AGENT
RELATIONSHIP EXIST BETWEEN CAI AND
HOLIDAY TRAVEL
RULING: YES.

CONTRARY TO THE FINDINGS OF CA, all the
elements of an agency exist in this case. First and
second elements are present as CAI does not deny
that it concluded an agreement with Holiday Travel,
whereby Holiday would enter into contracts of
carriage with third persons on CAI’s behalf.
Third element – that Holiday merely acted as
representative capacity and it is CAI and not Holiday
who is bound by the contract of carriage entered into
by Holiday on its behalf.
Fourth element – CAI has not made any allegation
that Holiday exceeded the authority that was granted
to it.
CAI consistently maintains the validity of the
contracts of carriage that Holiday executed with Sps
Viloria, and Mager is not guilty of any
misrepresentation.
CAI admits the authority to Holiday to enter into
contracts of carriage on its behalf discernible from its
letters, recognizing the validity of the contracts
entered by Holiday with Viloria.
Prior the complaint, CAI never refuted that it gave
Holiday the power and authority.
Difference bet. sale and agency.
Contract of sale – if the parties intended that the
delivery of the property will effect a relinquishment
of title, control and ownership in such a way that the
recipient may do with the property as he pleases.
In agency – the principal retains ownership and
control over the property and the agent merely acts
on the principal’s behalf and under his instructions in
furtherance of the objectives for which the agency
was established.
As to the existence of fraud
The court finds that the fraud alleged by Sps Viloria
has not been satisfactorily established as causal in the
nature to warrant annulment of the contracts.
As to the Amtrak statement – it was possible that
during the intervening period of three weeks, other
passengers may have cancelled their booking and
reservations with Amtrak.
*******Even assuming that Mager’s
misrepresentation is causal fraud, the subject
contracts have been impliedly ratified when Sps
decided to exercise their right to use the subject
tickets for the purchase of new ones. Article 1393
Another question: do SPS have the right to rescind
the contracts on the ground that CAI’s supposed
breach of its undertaking to issue new tickets upon
surrender of the subject tickets???
- Contrary to CAI’s claim, that the tickets are
non-transferrable cannot be implied from a
plain reading of the provision printed on the
subject tickets.
- CAI is proscribed form taking advantage
of any ambiguity in the contract of
carriage. Since the prohibition on
transferability is not written on the face
of the subject tickets and CAI failed to
inform SPS thereof, CAI cannot refuse to
apply the value of Lourdes’ ticket as
payment for Fernando’s purchase of a
new ticket.
Moreover, SPS Viloria’s demand for rescission
cannot prosper as CAI cannot be solely faulted for
the fact that their agreement failed to consummate
and no tickets to Fernando.
There is also no showng that SPS were discriminated
against in bad faith by being charged with a higher
fare. The only evidence the petitioners presented to
prove that the price of the roundtrip at that time is
only $850 is newspaper advertisement for another
airline company, which is admissible for being
hearsay evidence, twice removed.
 The first case the plaintiff acted as a broker, and the
second case as a commission merchant, the court
ordered the defendant to return to the plaintiff the
amount collected from it.

ISSUE: WON there is a double taxation; the plaintiff

acted as commission merchant as to the sugar
delivered ex-warehouse, and as commercial broker as
to the sugar delivered ex-ship.

1. YES, since Victorias Milling already paid

PACIFIC COMMERCIAL COMPANY VS
ALFREDO YATCO
FACTS:
Plaintiff, corporation engaged in business as a
merchant, with offices in MNL, CBU, and ILO, sold
in the PH, for the account of Victorias Milling,
another PH corporation, refined sugar, manufactured
by the said corporation, having received by way of
commission for the sale the amount of P29. 534.29.
Victorias paid the CIR for this sale as merchant sales
tax in its capacity as manufacturer and owner of the
sugar sold.
Notwithstanding the payment made by V, CIR also
collected from the plaintiff the same tax for the same
amount P16, 944.90.
The sales of this sugar were made by the plaintiff in
two ways. Plaintiff looked for purchasers of the
sugar, and once the corresponding purchase order is
obtained from them, the same is sent to the office of
Victorias Milling.
the merchant sales tax for the sales of sugar,
in its capacity as manufacturer and owner of
the sugar sold, another tax by the plaintiff,
who effected the sale, constituted double
taxation.
2. A commission merchant is one engaged in
the purchase or sale for another of personal
property which, for this purpose, is placed in
his possession and at his disposal. He
maintains relation not only with his principal
and purchaser but also with the property
which is the subject matter of the
transaction.
- The deposit of the sugar in the warehouses
of the plaintiff was made upon its own
account and at its own risk until it was sold
and taken by the purchaser. There is no
doubt that the plaintiff, after taking the sugar
on board until sold, had it in its possession
and at its own risk, circumstances
determinative of its status as a commission
merchant in connection with the sugar under
these conditions.
- Plaintiff also merely acted as a commercial
broker as to the sale of the sugar delivered to
the purchaser ex-ship. The broker has no
relation with the thing he sells or buys. He
acquires no possession or custody of the
thing sold.

At times, purchase is made for the delivery of the

sugar ex-warehouse of the plaintiff and other times
for delivery ex-ship. In all cases, the bill of lading is
sent to the plaintiff.

Ex-ship: plaintiff to hand over the BOD to purchaser

and collect the price.
Ex-warehouse: sugar deposited in the warehouse of
the plaintiff before delivery to the purchaser.

LITONJUA JR VS ETERNIT CORPORATION
FACTS:
Eternit had been engaged in the manufacture of
roofing materials and pipe products. Its operations
were conducted on eight parcels of land. Their
Mandaluyong properties were covered by TCT under
the name of FEBTC, as trustee. 90% of shares were
owned by Eteroutremer SA Corporation, organized
and registered under the laws of Belgium.
Glanville, Aussie, general manager and President of
EC, while Delsaux was Regional Director of Asia of
ESAC.
1986 – management of ESAC wanted to stop
operations in the PH because of the political sitch.
The committee of Asia of ESAC instructed Adams,
member of the Board, wanted to dispose the eight
parcels of land. Adams is a realtor/broker Marquez so
that the properties could be offered for sale to
prospective buyers. Glanville later showed the
properties to Marquez.
Marquez offered the parcel of land and the
improvements thereon to Litonjua. In 1986, Marquez
declared that he was authorized to sell the properties
for P27M and the terms were subject to negotiation.
Petitioner responded to the offer. The Litonjua
siblings offered to buy the property for P20M in cash.
However, Delsaux in Belgium did not respond to the
offer to sell.
Glanville telexed Delsaux inquiring in his
counterproposal to the offer of the Litonjua siblings.
It was only in 1987 that Delsaux sent a telex to
Glanville stating that based on the Belgian decision,
the final offer was P2.5M.
Marquez furnished Litonjua with a copy of the telex
sent by Delsaux. Liton accepted the counterproposal
of Delsaux. Marquez conferred with Glanville, and
confirmed that the siblings had accepted the
counterproposal of Delsaux. That the siblings will
also make a full payment in 90 days.
The siblings then deposited $1M with the Security
Bank.
Sometime later, Marquez and the bros inquired from
Glanville when the sale would be implemented.
Glanville informed Delsaux that he had met with the
buyer. He also emphasized to Delsaux that the buyers
were concerned because they would incur expense in
bank commitment fees.
(meanwhile, Aquino assumption as President, the
political sitch had improved)
**** Marquez received a call from Glanville, that the
sale would no longer proceed. Glanville told that he
had been instructed by his principal to inform
Marquez that the deicison had been taken at a Board
Meeting not to sell the properties on which Eternit
Corp is situated.
Litonjua brothers demanded for payment for
damages they had suffered on account of the aborted
sale. They filed for specific performance and
damaged against EC.
Respondent contention: that since Eteroutremer was
not doing business in the PH, it cannot be subject to
the jurisdiction of PH courts. That the boards never
approved any resolution to sell subjects properties
nor authorized Marquez to sell the same; that it was
Glanville own personal making which did not bind
the EC.
Trial court: that the authority of the agents/realtors
was not in writing, void and not unenforceable.
Plaintiffs could not assume that defendants had
agreed to sell the property without clear authorization
from the corporation concerned.
Litonjua contention: that an agency by estoppels
was created when the corporation clothed Marquez
with apparent authority to negotiate for the sale of the
property. Since it was a bilateral contract to buy and
sell, it was equivalent to a perfected contract of sale.
EC CONTENTION: that Marquez had not written
authority from the Board of Directors to bind it;
neither were Glanville and Delsaux authorize by its
board of directors to offer the property for sale. Since
it involved substantially all corporation’s asset, it
would need the authority from the stockholders.
CA ruling: that Marquez was a real estate broker,
was a special agent within the purview of Article
1874
Petitioner contention: that it is incongruous for
Granville and Delsaux to make a counter offer to
petitioner’s offer and thereafter reject such offer
unless they were authorized to do so by respondent
EC. Petitioner insist that Delsaux confirmed his
authority to sell the properties in his letter to
Marquez.
Respondent contention: maintain that Glanville,
Delsaux and Marquez had no authority from the
stockholders of respondent EC and it BOD to offer
the properties for sale to the properties
PETITIONER maintain that Marquez was able to
communicate the offer of respondent EC and the
petitioner’s acceptance thereof. There was no time
that they acted without the knowledge of
respondents. In fact, respondent EC never repudiated
the acts of Glanville, Marquez and Delsaux.
ISSUE: WON G, M, and D were authorized by
respondent EC to act as its agents relative to the
sale of the properties of EC
Any sale of real property of a corporation by a person
purporting to be an agent thereof but without written
authority from the corporation is null and void. The
declarations of the agent alone are generally
insufficient to establish the fact or extent of his/her
authority.
By the contract of agency, a person binds himself to
render some service or to do something in
representation on behalf of another, with the consent
or authority of the latter. Consent of both principal
and agent is necessary to create an agency. The
principal must intend that the agent shall act for him;
the agent must intend to accept the authority and act
on it, and the intention of the parties must find
expression either in words or conduct between them.
However, to create or convey real rights over
immovable property, a special power of attorney
is necessary. 36 Thus, when a sale of a piece of
land or any portion thereof is through an agent,
the authority of the latter shall be in writing,
otherwise, the sale shall be void.

RULING: Neither may respondent EC be deemed to have

ratified the transactions between the petitioners and
In the absence of express written terms creating the respondent ESAC, through Glanville, Delsaux and
relationship f an agency, the existence of an agency is Marquez. The transactions and the various
a fact question. communications inter se were never submitted to the
Board of Directors of respondent EC for ratification.
It was the duty of the petitioners to prove that
respondent EC had decided to sell its properties, and
that it had empowered Adams, G, D or M to offer the
properties for sale to prospective buyers and to accept
any counter offer.

A corporation is a juridical person separate and

distinct from its members or stockholders. It may
only act through it BOD or when authorized either by
its bylaws or by board resolution through its officers
or agents in the normal course of business.

The general principles of agency govern the relation

between the corporation and its officers or agents,
subject to the articles of incorporation, by laws or
relevant provisions of law.

HOWEVER, the property of corporation is not

property of the members or stockholders, may not be
sold without express authority from the BOD. And
absent any such valid delegation or authorization,
declaration of an individual director relating to the
affairs of the corporation, but not in the course of or
connected with , the performance of authorized duties
of such director, are not binding on the corporation.
VICENTE DOMINGO,represented by heirs vs
GREGORIO DOMINGO
(agent must take account of anything that he
receives)
FACTS:
Petitioner, represented by his heirs, granted
respondent Gregorio, a real estate broker, exclusive
agency to sell his lot of Piedad Estate, 2.00 per sq
meter with a commission of %% of the total price, if
the property is sold by Vicente within 3 months from
the termination of the agency to a purchaser. Said
agency was in triplicate: one to Vicente and 2 for G.
June 3, 1956, G authorized an intervenor Teofilo to
look for a buyer, promising the half of the 5%.
Purisima introduced Oscar De Leon to Gregorio as a
prospective buyer, but offering in a lower price.
After several conference, G and De Leon raised the
offer to P109,000.
De Leon then paid P1000 as earnest money, Vicente
advanced to Gregorio the sum of 300.
De Leon confirmed that the rate is 1.20 per sq meter.
Vicente asked for 1000 earnest money again.
Sept 1956, that De Leon will vacate his house as part
of the purchase price. But amended to Dec 1, but
again asked to stay in his house until June 1957.
Cubao, QC.
De Leon then give 1000 as a gift to Gregorio in
allowing him to buy the property at 1.20 per sq
meter. HOWEVER, the gift was not disclosed to
Vicente. Neither did Oscar pay Vicente the additional
amount as earnest money.
Aug 1956, when no deed of sale was executed by
Vicente, and that Oscar did not receive any money
from his brother in US, he is giving up from the
negotiation including the 1000 earnest money.
*****
When Oscar did not see him after several weeks, G
knew something fishy. So he went to Vicente, that
Vicente is still committed in giving to pay him 5%
commission, if the sale is consummated within 3
months after the expiration 30 day period. Contract of
agency was executed on June 2, 1956. Vicente then
grabbed the contract and tore it to pieces.
G went to Register of Deeds of QC, found out that
there was already a deed of sale executed on Sept
1956 by Amparo Diaz, wife of Oscar their house in
Cubao in favor of Vicente.
Gregorio then demanded payment of his commission
on the sale price of 109K.
G also conferred with Oscar that Vicente went to
him, to eliminate G in the transaction, and the sale
will become 104K.
Vicente’s reply in G’s letter : that G is not entitled
with the 5% since the property was sold not to Oscar
but to his wife.
CA ruled: the contract of agency is genuine. That a
sale to the wife of Oscar is a sale to Oscar as well;
that intervenor Purisima is efficient cause of the sale;
the second earnest money was not in writing, hence,
it is not valid earnest money.
ISSUE: WON V OR G would be directly liable to
the intervenor Purisima for the latter’s share in
the expected commission of G.
HELD:
The duties and liabilities of a broker to his employer
are essentially those which an agent owes to his
principal.
Article 1891:
Every agent is bound to render an account of his
transactions and to deliver to the principal whatever
he may have received by virtue of the agency, even
though it may not be owing to the principal.
Every stipulation exempting the agent from the
obligation to render an account shall be void.
Article 1909:
The agent is responsible not only for fraud, but also
for negligence, which shall be judged with more or
less rigor by the courts, according to whether the
agency was or was not for a compensation.
Because of his responsibility under Article 1720, an
agent is likewise liable for estafa for failure to deliver
to his principal to the total amount collected buy him
in behalf of his principal and cannot retain the
commission pertaining to him by subtracting the
same from his collections.
***In the case at bar, respondent received 1000 from
the buyer Oscar without the knowledge of his
principal. His acceptance of said substantial monetary
gift corrupted his duty to serve the interests only of
his principal and undermined his loyalty to his
principal.
Article 1891 apply only to agents/broker, not it he
acted only as middleman merely bringing together
the vendor and vendee, who thereafter will negotiate
on the terms and conditions of the transactions.
In the case at bar, Gregorio was not merely a
middleman of the petitioner, and the buyer Oscar.
He was the broker and agent of said petitioner-
appellant only.
The fact that the buyer appearing in the deed of sale
is Amparo Diaz, wife, does not materially alter the
situation; because the transaction, to be valid, must
be necessarily with the consent of the husband Oscar,
who is the administrator of the conjugal assets.
ANTONIO PRATS doing business under PH Real
Estate Exchange v CA, ALFONSO DORONILA,
PNB
FACTS:
Prats, doing business under the name PH Real estate
Exchange, instituted against Doronila and PNB to
recover a sum of money and damages.
Defendant Doronila was the registered owner of 300
has. and tried to sell the lots and designated several
agents.
By his failure to sell the property to SSS, he gave the
plaintiff an exclusive option and authority in writing
to negotiate the sale of his aforementioned property,
and to be published in Manila Times. The agreement
was basic price shall be 3.00 per sq meter; that
plaintiff shall be entitled of commission of 10%
based on 2.10/sq.m. or at any price, and if sold over
and above 300 per sq.m., excess shall be credited to
the plaintiff in addition to his 10% commission based
on 2.10/sq.m.
Defendant then wrote letter to SSS withdrawing
previous offer. SSS then returned all the papers, gave
them to the plaintiff as his duly authorized real estate
broker.
** That by virtue of the policy of President to
promote low housing program, plaintiff in return
worked to negotiate the property to SSS, making
necessary contracts and representations to bring the
parties together.
Deputy Administrator of the SSS wrote letter to
Defendant inviting the latter to a conference re: the
property, that the SSS would like to take the offer.
Doronilla declined the offer but instead told to deal
directly with the plaintiff.
Plaintiff wrote a letter to SSS saying that he would be
glad to sit with the officials to discuss the sale of the
property.
A written offer to sell the property was made by
plaintiff to the SSS, and then the latter considered on
purchasing the property for its housing project.
The plaintiff accompanied defendant to the China
Banking to arrange the matter of clearing payment by
check and delivery of the titles.
SSCommission passed resolution 636 making counter
offer of 3.25 per sq.m subject to an appraisal report;
Resolution 662 was adopted authorizing Toples and
Harding to conduct appraisal of the property and
submit a report; the price was then appraised to
3.34/sq.m.
Taking note of the favorable appraisal report of T&H,
SSC approved the purchase at 3.25/sq.m or total of
9.750M
Terms of payment:
60% (5.850) – immediately after signing the deed
40% - 30 days after the signing of the deed of
absolute sale
August 21, 1968 – payment of purchase price, deed
was executed and presented for registration. That
defendants has received the full amount of purchase
price
Sept 1968 – plaintiff presented his statement to and
demanded to defendant the payment of his prof fees.
Under their agreement which is 1.380M. and due to
the refusal to pay plaintiff, the latter suffer mental
anguish, anxiety and social humiliation, which
defendant will be held liable for moral damages.
DEFENDANT CONTENTION:
- That when the plaintiff offered the property
to SSS, he had already offered the property
beforehand, and had a closed transaction or
contract of sale. That during the period of
authorization, defendant did not receive any
written offer from other prospective buyers.
That the plaintiff did not bring SSS and
defendant together since plaintiff’s offer of
6.00/sq.m was declined since the parties
already agreed at 3.25. hence, plaintiff is not
entitled of the payment of services.
(stipulation of the agency bet parties, pg. 22)
LETTER TRANSACTIONS
1. Prats to Doronila – asking to withdraw the
offer of Doronila to SSS
2. Doronila to SSS – that since 5 months had
passed without any action, he asked to
deliver the papers to Prats
3. SSC to Doronila – conference offer
4. D to SSC – refused, instead if want to
transact, transact directly to Prats
5. Prats to SSC
6. April 18, 1968 – Doronila extended the
authority of Prats, until May 18
7. May 6 – P to SSC – made an offer at 6/sqm
8. May 30 – P to D – this is to advise you that
SSS agreed to purchase the property
9. HOWEVER: Juner 6, D to P – that
defendant has not received any written offer
from the SSS or others to purchase the
property during the exclusive authority of P.
10. June 19 – D to SSS- that he is renewing his
offer to sell the land, agreeing the counter
offer at 3.25/sq.m; that the same was offered
by Prats at 6.00 but no action had been taken
by the System.
Trial court decision:
To pay the plaintiff the sum of the commission.
CA decision:
Defendant appealed to the CA, reveres the decision
of the trial court; that there should have been a
written offer by the prospective buyer, and that if no
such written offer is made until the last day, the
option and authority shall expire and become null and
void.
ISSUE: WON Prats is considered as agent of
Doronilla
HELD:
The Supreme Court found no basis in law to
reverse the factual findings of the Appellate Court
and to grant relief to petitioner, In an action by a
real estate broker to recover commission from the
principal, although the CA’s 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.
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 broker’s authorization, otherwise the
broker’s 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 broker’s authorization.

SC affirmed the decision appealed from, but ordered

the respondent to pay petitioner the amount of 100K
and set aside that portion of the decision ordering the
petitioner to pay respondent attorney’s fee.

MANOTOK BROTHERS INCS VS CA
FACTS:
Manotok Bros, petitioner is the owner of a parcel of
land and bldg formerly leased by the City of Manila
and used by Claro M Recto HS, MF Jhocson St,
Sampaloc Mnl.
By means of letter, petitioner authorized PR Salvador
Saligumba to negotiate with the COM the sale of the
property for not less than 425,000. Petitioner also
agreed to pay PR for 5% commission if sale is
consummated and paid.
Petitioner executed another letter extending authority
of the PR for 120 days. June 1967, extended the
authority for another 120 days.
Through another letter, the corporation with Rufino
Manotok, authorized PR to finalize the sale with the
COM for not less than 410K. and another extension
of 180 days.
April 26, 1968, COM passed Ordinance
appropriating sum of P410, 816 for the purchase of
the property which PR is authorized to sell.
HOWEVER, ordinance was signed by the City
Mayor 183 days after the last letter of authorization.
1969, parties signed the deed of sale of the subject
property. Initial payment was 200K, and April 8
,1969, fully satisfied the remaining balance.
Despite the realization of the sale, PR never received
any commission. Reason is that petitioner refused to
acknowledge the PR’s role as agent in the
transaction.
PR filed for a complaint against petitioner, that he
successfully negotiated the sale of the property.
Petitioner claimed otherwise. That PR should’ve
been entitled of the commission if the sale was
made within the period given in the respective
letters. That it was Huelgas, PTA President of
CMR HS who is responsible for the negotiation.
Huelgas testified and that he said that he only knew
the Manotok Bros only in Aug 1968, that he would
be given a gratification in the amount of P20K.
On rebuttal, Atty Bisbal said that Huelgas was
present in the pTA meetings from 1965 to 1957 but
never offered to help in the acquisition of said
property.
CFI and CA both ruled in favor of the PR.
ISSUE: WON PR is entitled to the 5% agent’s
commission
RULING:
PETITIONER CONTENTION: as broker, PR’s
job is to bring together the parties to a transaction.
That the broker does not succeeding bringing the
minds of the purchaser and the vendor to an
agreement with respect to the sale, he is not entitled
to the commission.
PR CONTENTION: opposes petitioner’s position
maintaining that it was because of his efforts that a
purchas actually materialized between parties.
Court ruled in favor of the PR.
Although the deed of sale was executed after he his
authority had already expired, one might be misled to
believe that this case squarely falls within the ambit
of the established principle that a broker is not
entitled t o any commission until he has successfully
done the job given to him.
The exception being that enunciated in the case of
Prats vs CA: the claimant-agent is entitled, despite
the expiration of his authority, when the sale was
finally consummated.
In the case at bar, the private respondent is the
efficient procuring cause for without his efforts,
the municipality would not have anything to pass
and the Mayor would not have anything to
approve.
In Prats case, the agent was not even the efficient
procuring cause in bringing about the sale.
This court ruled in some cases, that when there is a
close, proximate, and causal connection between the
agent’s efforts and labor and the principal’s sale of
his property, the agent is entitled to a commission.
SC agreed with respondent court that the City of
Manila became the purchaser of the petitioner’s
property mainly through the efforts of PR.
The approval by the City of Mayor came only 3 days
after the expiration of PR’s authority (May 17). It is
also worth emphasizing that from the records, the
only party given a written authority by petitioner to
negotiate the from 1966 to 1968 was the PR.
Huelgas intervention came nly after the ordinance has
already been passed-when the buyer has already
agreed to the purchase and to the price which the
property is to be paid.
Without the effort of the PR, Mayor Villegas would
have nothing to approve in the first place.
BIENVENIDO MEDRANO VS CA, Borbon and
Flor
FACTS:
Medrano was the Vice Chairman of Ibaan Rural
Bank, owned by Medrano Fam. 1986, Medrano asked
Flor, cousin in law, to look for a buyer for a
foreclosed asset, mango plantation.
Mr. Lee is a businessman from Makati, client of PR
Borbon. Borbon has put up an ad in a newspaper
hectare property planted with atis tree. But Lee
preferred mango trees, so Borbon promised to get
back to him soon.
Borbon relayed to his friends and associated of a
ready buyer of mango plantation. Flor then advised
that her cousin in law owned a mango plantation up
for sale. Borbon then told Flor to confer with
Medrano to give them a written authority to negotiate
the sale of the property.
Respondent arranged for an ocular inspection of the
property together with Lee which never materialized-
1st due to inclement weather; 2nd no car available for
the tripping in Batangas.
Lee then called up Borbon and told her that he was
on his way to Lipa to inspect another property, also
look what Borbon is offering. Borbon wasn’t
available to accompany Lee in the inspection.
Medrano’s daughter, officer of the bank, was
contacted by Lee regarding the property.
2 days after the visit, respondent Antonio called Lee
to inquire about the result of the inspection. Lee said
that the mangoes looked sick, he is calling for an
agriculturist.
3 weeks later, Antonio called again for a follow up.
Lee informed her that he already purchased the
property and had made a downpayment of P1M, and
remaining P1.2M was to be paid upon the approval of
the incorporation papers.
Lee then asked Antonio if they had already received
the commission. A replied “no”, and Lee expressed
surprise.
Deed of sale was then executed represented by the
GM Teresita Ganzon (President) and KGB Farms,
represented by Lee as vendee, for the purchase price
of P1.2M. since the sale was consummated, the
respondents asked the petitioners their commission of
5% of the purchase price.
PETITIONER CONTENTION:
Medrano issued letter of authority in favor of all the
respondents, upon the representation of Flor that she
has a prospective buyer. Flor was the only one known
to Medrano, had never met Borbon and Antonio.
Ganzon also asked Lee if he had an agent, he replied
none
- Petitioner also said that the property was
only P1.2M
- That the letter of authority signed by
Medrano was not binding or enforceable
against the bank because the latter has a
separate and distinct personality from
Medrano.
- That Medrano is not the registered owner,
but the bank
ISSUE: WON the letter of authority is binding
and enforceable against the defendant bank only
or both defendants.
HELD:
Trial court: Medrano signed the letter of authority
for and in behalf of the bank, and as owner of the
property, promising to pay the respondents 5%
commission.
In the case as bar, the role of the respondents in
the transaction is undisputed. Whether or not they
participated in the negotiations of the sale is of no
moment. Armed with an authority to procure a
purchaser, and with a license to act as a broker,
we see no reason why the respondents cannot
recover compensation for their efforts when, in
fact, they are the procuring cause of the sale.