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DISTINGUISH FROM OTHER SIMILAR 1999- petitioner Ferns asking for a refund again.

CONTRACTS CAI’s act of charging him high price when other
arilines priced at $856, and refusal to allow him to
SPOUSES FERNANDO AND LOURDES use Lourdes’ ticket, breached their undertaking under
(contract of carriage = contract of agency)

FACTS: 2000 – he filed a complaint praying that CAI be

1997 while in US- Fernando and his wife purchased 2 ordered to refund the money they used in the
roundtrip tix from San Diego California to New purchase.
Jersey on board Continental Airlines.
Petitioner purchased the tix $400 each from travel Respondent defenses: 1) tix were non-refundable 2)
agency called Holiday Travel and was attended to by cannot use Lourdes’ ticket in his favor; 3) Mager is
Mager. Spouses agreed to buy certain tix after being not a CAI employee, latter is not liable for the acts of
informed that there were no available seats at Mager; 4) CAI employees and agents did not act in
Amtrak, passenger train provider in US. bad faith.
Scheduled flight: to leave Aug 13, 97 – return to San - That one of the conditions attached to their
Diego Aug 21, 97 contract of carriage is the non-transferability
and non-refundability of the subject tickets.
Ferns requested to reschedule in an earlier flight, Aug
6, but Mager informed them that it was fully booked, RTC RULING: Spouses petitioner entitled to a
but suggested the alternative flight of a round trip via refund in view of Mager’s misrepresentation in
Frontier Air but on a higher fare of $526 per obtaining their consent in the purchase of the subject
passenger. tickets.
Ferns opted for a refund. Mager, however, denied - That Mager is considered as CAI’s agent,
since it was non-refundable. The only option that hence bound by her bad faith and
Continental can offer is the re-issuance of new tickets misrepresentation. Citing Articles 1868,
within one year from the date the subject tickets were 1869.
issued. - As its very name implies, travel agency
binds itself to render some service or to do
Ferns decided to reserve seats with Frontier Air. something in representation or on behalf of
Having second thoughts, petitioner went to another, with the consent or authority of the
Greyhound station where he saw Amtrak station. He latter.
made inquiries and found out that there were - Services rendered by Ms Mager of Holiday
available seats and he can travel anytime. He Travel were no different from those other
purchased 2 tix going to Washington, DC. travel agency.
- By its offer in the letter dated March 1998-
Ferns confronted Mager. He again asked for a refund an obvious attempt to assuage plaintiff
but again refused. spouses’ hurt feeling.

Feb 1998, returning to the PH, petitioner went to CAI APPELLATE COURT RULING: REVERSED RTC
demanding for a refund, and that Mager deluded RULING.
them into purchasing the subject tix. - Absence of any proof that a principal-agent
Continental Micronesia denied petitioner’s demand relationship existed between CAI and
and advised him that they may take it to ticketing Holiday Travel.
location for re-issuance of new tix within 2 yrs - That Holiday travel and CAI is a contract of
(kanina 1 yr sabi). May also be used for payment for sale.
purchase of another Continental tix. - Refund is not available as the word “non-
refundable” was printed on the face of the
1999, went to ticketing office in Ayala, asking for a subject tix.
replacement of a single round trip ticket to LA,
California. However, Fernando was informed that ISSUE: WON PRINCIPAL-AGENT
Lourdes’ tix cannot be transferred, cannot be used in RELATIONSHIP EXIST BETWEEN CAI AND
his favor. That ticket was totaling $1,867, so he HOLIDAY TRAVEL
would be paying what will not be covered.
*******Even assuming that Mager’s
CONTRARY TO THE FINDINGS OF CA, all the misrepresentation is causal fraud, the subject
elements of an agency exist in this case. First and contracts have been impliedly ratified when Sps
second elements are present as CAI does not deny decided to exercise their right to use the subject
that it concluded an agreement with Holiday Travel, tickets for the purchase of new ones. Article 1393
whereby Holiday would enter into contracts of
carriage with third persons on CAI’s behalf. Another question: do SPS have the right to rescind
the contracts on the ground that CAI’s supposed
Third element – that Holiday merely acted as breach of its undertaking to issue new tickets upon
representative capacity and it is CAI and not Holiday surrender of the subject tickets???
who is bound by the contract of carriage entered into
by Holiday on its behalf. - Contrary to CAI’s claim, that the tickets are
non-transferrable cannot be implied from a
plain reading of the provision printed on the
Fourth element – CAI has not made any allegation subject tickets.
that Holiday exceeded the authority that was granted - CAI is proscribed form taking advantage
to it. of any ambiguity in the contract of
carriage. Since the prohibition on
CAI consistently maintains the validity of the transferability is not written on the face
contracts of carriage that Holiday executed with Sps of the subject tickets and CAI failed to
Viloria, and Mager is not guilty of any inform SPS thereof, CAI cannot refuse to
misrepresentation. apply the value of Lourdes’ ticket as
payment for Fernando’s purchase of a
CAI admits the authority to Holiday to enter into new ticket.
contracts of carriage on its behalf discernible from its Moreover, SPS Viloria’s demand for rescission
letters, recognizing the validity of the contracts cannot prosper as CAI cannot be solely faulted for
entered by Holiday with Viloria. the fact that their agreement failed to consummate
and no tickets to Fernando.
Prior the complaint, CAI never refuted that it gave
Holiday the power and authority. There is also no showng that SPS were discriminated
against in bad faith by being charged with a higher
Difference bet. sale and agency. fare. The only evidence the petitioners presented to
Contract of sale – if the parties intended that the prove that the price of the roundtrip at that time is
delivery of the property will effect a relinquishment only $850 is newspaper advertisement for another
of title, control and ownership in such a way that the airline company, which is admissible for being
recipient may do with the property as he pleases. hearsay evidence, twice removed.

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.
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

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

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.
The siblings then deposited $1M with the Security

Sometime later, Marquez and the bros inquired from

Glanville when the sale would be implemented.
LITONJUA JR VS ETERNIT CORPORATION Glanville informed Delsaux that he had met with the
buyer. He also emphasized to Delsaux that the buyers
FACTS: were concerned because they would incur expense in
Eternit had been engaged in the manufacture of bank commitment fees.
roofing materials and pipe products. Its operations
were conducted on eight parcels of land. Their (meanwhile, Aquino assumption as President, the
Mandaluyong properties were covered by TCT under political sitch had improved)
the name of FEBTC, as trustee. 90% of shares were
owned by Eteroutremer SA Corporation, organized **** Marquez received a call from Glanville, that the
and registered under the laws of Belgium. sale would no longer proceed. Glanville told that he
had been instructed by his principal to inform
Glanville, Aussie, general manager and President of Marquez that the deicison had been taken at a Board
EC, while Delsaux was Regional Director of Asia of Meeting not to sell the properties on which Eternit
ESAC. Corp is situated.

1986 – management of ESAC wanted to stop Litonjua brothers demanded for payment for
operations in the PH because of the political sitch. damages they had suffered on account of the aborted
sale. They filed for specific performance and
The committee of Asia of ESAC instructed Adams, damaged against EC.
member of the Board, wanted to dispose the eight
parcels of land. Adams is a realtor/broker Marquez so Respondent contention: that since Eteroutremer was
that the properties could be offered for sale to not doing business in the PH, it cannot be subject to
prospective buyers. Glanville later showed the the jurisdiction of PH courts. That the boards never
properties to Marquez. approved any resolution to sell subjects properties
nor authorized Marquez to sell the same; that it was
Marquez offered the parcel of land and the Glanville own personal making which did not bind
improvements thereon to Litonjua. In 1986, Marquez the EC.
declared that he was authorized to sell the properties
for P27M and the terms were subject to negotiation. Trial court: that the authority of the agents/realtors
was not in writing, void and not unenforceable.
Petitioner responded to the offer. The Litonjua Plaintiffs could not assume that defendants had
siblings offered to buy the property for P20M in cash. agreed to sell the property without clear authorization
However, Delsaux in Belgium did not respond to the from the corporation concerned.
offer to sell.
Litonjua contention: that an agency by estoppels
Glanville telexed Delsaux inquiring in his was created when the corporation clothed Marquez
counterproposal to the offer of the Litonjua siblings. with apparent authority to negotiate for the sale of the
property. Since it was a bilateral contract to buy and
It was only in 1987 that Delsaux sent a telex to sell, it was equivalent to a perfected contract of sale.
Glanville stating that based on the Belgian decision,
the final offer was P2.5M. 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
Marquez furnished Litonjua with a copy of the telex it involved substantially all corporation’s asset, it
sent by Delsaux. Liton accepted the counterproposal would need the authority from the stockholders.
of Delsaux. Marquez conferred with Glanville, and
confirmed that the siblings had accepted the CA ruling: that Marquez was a real estate broker,
counterproposal of Delsaux. That the siblings will was a special agent within the purview of Article
also make a full payment in 90 days. 1874
Petitioner contention: that it is incongruous for Any sale of real property of a corporation by a person
Granville and Delsaux to make a counter offer to purporting to be an agent thereof but without written
petitioner’s offer and thereafter reject such offer authority from the corporation is null and void. The
unless they were authorized to do so by respondent declarations of the agent alone are generally
EC. Petitioner insist that Delsaux confirmed his insufficient to establish the fact or extent of his/her
authority to sell the properties in his letter to authority.
By the contract of agency, a person binds himself to
Respondent contention: maintain that Glanville, render some service or to do something in
Delsaux and Marquez had no authority from the representation on behalf of another, with the consent
stockholders of respondent EC and it BOD to offer or authority of the latter. Consent of both principal
the properties for sale to the properties and agent is necessary to create an agency. The
principal must intend that the agent shall act for him;
PETITIONER maintain that Marquez was able to the agent must intend to accept the authority and act
communicate the offer of respondent EC and the on it, and the intention of the parties must find
petitioner’s acceptance thereof. There was no time expression either in words or conduct between them.
that they acted without the knowledge of
respondents. In fact, respondent EC never repudiated However, to create or convey real rights over
the acts of Glanville, Marquez and Delsaux. immovable property, a special power of attorney
is necessary. 36 Thus, when a sale of a piece of
ISSUE: WON G, M, and D were authorized by land or any portion thereof is through an agent,
respondent EC to act as its agents relative to the the authority of the latter shall be in writing,
sale of the properties of EC 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 G went to Register of Deeds of QC, found out that
there was already a deed of sale executed on Sept
(agent must take account of anything that he 1956 by Amparo Diaz, wife of Oscar their house in
receives) Cubao in favor of Vicente.
Gregorio then demanded payment of his commission
Petitioner, represented by his heirs, granted on the sale price of 109K.
respondent Gregorio, a real estate broker, exclusive
agency to sell his lot of Piedad Estate, 2.00 per sq G also conferred with Oscar that Vicente went to
meter with a commission of %% of the total price, if him, to eliminate G in the transaction, and the sale
the property is sold by Vicente within 3 months from will become 104K.
the termination of the agency to a purchaser. Said
agency was in triplicate: one to Vicente and 2 for G. Vicente’s reply in G’s letter : that G is not entitled
with the 5% since the property was sold not to Oscar
June 3, 1956, G authorized an intervenor Teofilo to but to his wife.
look for a buyer, promising the half of the 5%.
CA ruled: the contract of agency is genuine. That a
Purisima introduced Oscar De Leon to Gregorio as a sale to the wife of Oscar is a sale to Oscar as well;
prospective buyer, but offering in a lower price. that intervenor Purisima is efficient cause of the sale;
the second earnest money was not in writing, hence,
After several conference, G and De Leon raised the it is not valid earnest money.
offer to P109,000.

De Leon then paid P1000 as earnest money, Vicente ISSUE: WON V OR G would be directly liable to
advanced to Gregorio the sum of 300. the intervenor Purisima for the latter’s share in
the expected commission of G.
De Leon confirmed that the rate is 1.20 per sq meter.
Vicente asked for 1000 earnest money again. HELD:

Sept 1956, that De Leon will vacate his house as part The duties and liabilities of a broker to his employer
of the purchase price. But amended to Dec 1, but are essentially those which an agent owes to his
again asked to stay in his house until June 1957. principal.
Cubao, QC. Article 1891:
Every agent is bound to render an account of his
De Leon then give 1000 as a gift to Gregorio in transactions and to deliver to the principal whatever
allowing him to buy the property at 1.20 per sq he may have received by virtue of the agency, even
meter. HOWEVER, the gift was not disclosed to though it may not be owing to the principal.
Vicente. Neither did Oscar pay Vicente the additional Every stipulation exempting the agent from the
amount as earnest money. obligation to render an account shall be void.

Aug 1956, when no deed of sale was executed by Article 1909:

Vicente, and that Oscar did not receive any money The agent is responsible not only for fraud, but also
from his brother in US, he is giving up from the for negligence, which shall be judged with more or
negotiation including the 1000 earnest money. 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
When Oscar did not see him after several weeks, G to his principal to the total amount collected buy him
knew something fishy. So he went to Vicente, that in behalf of his principal and cannot retain the
Vicente is still committed in giving to pay him 5% commission pertaining to him by subtracting the
commission, if the sale is consummated within 3 same from his collections.
months after the expiration 30 day period. Contract of
agency was executed on June 2, 1956. Vicente then ***In the case at bar, respondent received 1000 from
grabbed the contract and tore it to pieces. the buyer Oscar without the knowledge of his
principal. His acceptance of said substantial monetary ANTONIO PRATS doing business under PH Real
gift corrupted his duty to serve the interests only of Estate Exchange v CA, ALFONSO DORONILA,
his principal and undermined his loyalty to his PNB
Article 1891 apply only to agents/broker, not it he
acted only as middleman merely bringing together Prats, doing business under the name PH Real estate
the vendor and vendee, who thereafter will negotiate Exchange, instituted against Doronila and PNB to
on the terms and conditions of the transactions. recover a sum of money and damages.

In the case at bar, Gregorio was not merely a Defendant Doronila was the registered owner of 300
middleman of the petitioner, and the buyer Oscar. has. and tried to sell the lots and designated several
He was the broker and agent of said petitioner- agents.
appellant only.
By his failure to sell the property to SSS, he gave the
The fact that the buyer appearing in the deed of sale plaintiff an exclusive option and authority in writing
is Amparo Diaz, wife, does not materially alter the to negotiate the sale of his aforementioned property,
situation; because the transaction, to be valid, must and to be published in Manila Times. The agreement
be necessarily with the consent of the husband Oscar, was basic price shall be 3.00 per sq meter; that
who is the administrator of the conjugal assets. 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

** 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

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 9. HOWEVER: Juner 6, D to P – that
Harding to conduct appraisal of the property and defendant has not received any written offer
submit a report; the price was then appraised to from the SSS or others to purchase the
3.34/sq.m. property during the exclusive authority of P.
10. June 19 – D to SSS- that he is renewing his
Taking note of the favorable appraisal report of T&H, offer to sell the land, agreeing the counter
SSC approved the purchase at 3.25/sq.m or total of offer at 3.25/sq.m; that the same was offered
9.750M by Prats at 6.00 but no action had been taken
by the System.
Terms of payment:
60% (5.850) – immediately after signing the deed Trial court decision:
40% - 30 days after the signing of the deed of To pay the plaintiff the sum of the commission.
absolute sale
CA decision:
August 21, 1968 – payment of purchase price, deed Defendant appealed to the CA, reveres the decision
was executed and presented for registration. That of the trial court; that there should have been a
defendants has received the full amount of purchase written offer by the prospective buyer, and that if no
such written offer is made until the last day, the
Sept 1968 – plaintiff presented his statement to and option and authority shall expire and become null and
demanded to defendant the payment of his prof fees. void.
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. ISSUE: WON Prats is considered as agent of
- 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 HELD:
written offer from other prospective buyers.
That the plaintiff did not bring SSS and The Supreme Court found no basis in law to
defendant together since plaintiff’s offer of reverse the factual findings of the Appellate Court
6.00/sq.m was declined since the parties and to grant relief to petitioner, In an action by a
already agreed at 3.25. hence, plaintiff is not
real estate broker to recover commission from the
entitled of the payment of services.
(stipulation of the agency bet parties, pg. 22) principal, although the CA’s factual findings provide
no basis in law to grant relief to the broker, since said
LETTER TRANSACTIONS court found that the broker was not the efficient
1. Prats to Doronila – asking to withdraw the procuring cause in bringing about the sale,
offer of Doronila to SSS nevertheless, relief in equity may be granted where it
2. Doronila to SSS – that since 5 months had appears that the agent had diligently taken steps to
passed without any action, he asked to
bring back together the principal and the prospective
deliver the papers to Prats
3. SSC to Doronila – conference offer buyer.
4. D to SSC – refused, instead if want to
transact, transact directly to Prats Where the contract between the real estate broker and
5. Prats to SSC the principal requires the former to present to the
6. April 18, 1968 – Doronila extended the latter a written offer by the prospective buyer within
authority of Prats, until May 18 the period of the broker’s authorization, otherwise the
7. May 6 – P to SSC – made an offer at 6/sqm broker’s authorization shall expire and become null
8. May 30 – P to D – this is to advise you that
and void, the failure of the broker to present such
SSS agreed to purchase the property
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.
never offered to help in the acquisition of said

CFI and CA both ruled in favor of the PR.


Manotok Bros, petitioner is the owner of a parcel of ISSUE: WON PR is entitled to the 5% agent’s
land and bldg formerly leased by the City of Manila commission
and used by Claro M Recto HS, MF Jhocson St,
Sampaloc Mnl. RULING:

By means of letter, petitioner authorized PR Salvador PETITIONER CONTENTION: as broker, PR’s

Saligumba to negotiate with the COM the sale of the job is to bring together the parties to a transaction.
property for not less than 425,000. Petitioner also That the broker does not succeeding bringing the
agreed to pay PR for 5% commission if sale is minds of the purchaser and the vendor to an
consummated and paid. agreement with respect to the sale, he is not entitled
to the commission.
Petitioner executed another letter extending authority
of the PR for 120 days. June 1967, extended the PR CONTENTION: opposes petitioner’s position
authority for another 120 days. maintaining that it was because of his efforts that a
purchas actually materialized between parties.
Through another letter, the corporation with Rufino
Manotok, authorized PR to finalize the sale with the Court ruled in favor of the PR.
COM for not less than 410K. and another extension
of 180 days. Although the deed of sale was executed after he his
authority had already expired, one might be misled to
April 26, 1968, COM passed Ordinance believe that this case squarely falls within the ambit
appropriating sum of P410, 816 for the purchase of of the established principle that a broker is not
the property which PR is authorized to sell. entitled t o any commission until he has successfully
HOWEVER, ordinance was signed by the City done the job given to him.
Mayor 183 days after the last letter of authorization.
The exception being that enunciated in the case of
1969, parties signed the deed of sale of the subject Prats vs CA: the claimant-agent is entitled, despite
property. Initial payment was 200K, and April 8 the expiration of his authority, when the sale was
,1969, fully satisfied the remaining balance. finally consummated.

Despite the realization of the sale, PR never received In the case at bar, the private respondent is the
any commission. Reason is that petitioner refused to efficient procuring cause for without his efforts,
acknowledge the PR’s role as agent in the the municipality would not have anything to pass
transaction. and the Mayor would not have anything to
PR filed for a complaint against petitioner, that he
successfully negotiated the sale of the property. In Prats case, the agent was not even the efficient
Petitioner claimed otherwise. That PR should’ve procuring cause in bringing about the sale.
been entitled of the commission if the sale was
made within the period given in the respective This court ruled in some cases, that when there is a
letters. That it was Huelgas, PTA President of close, proximate, and causal connection between the
CMR HS who is responsible for the negotiation. agent’s efforts and labor and the principal’s sale of
his property, the agent is entitled to a commission.
Huelgas testified and that he said that he only knew
the Manotok Bros only in Aug 1968, that he would SC agreed with respondent court that the City of
be given a gratification in the amount of P20K. Manila became the purchaser of the petitioner’s
property mainly through the efforts of PR.
On rebuttal, Atty Bisbal said that Huelgas was
present in the pTA meetings from 1965 to 1957 but 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 Lee then called up Borbon and told her that he was
only party given a written authority by petitioner to on his way to Lipa to inspect another property, also
negotiate the from 1966 to 1968 was the PR. look what Borbon is offering. Borbon wasn’t
available to accompany Lee in the inspection.
Huelgas intervention came nly after the ordinance has
already been passed-when the buyer has already Medrano’s daughter, officer of the bank, was
agreed to the purchase and to the price which the contacted by Lee regarding the property.
property is to be paid.
2 days after the visit, respondent Antonio called Lee
Without the effort of the PR, Mayor Villegas would to inquire about the result of the inspection. Lee said
have nothing to approve in the first place. that the mangoes looked sick, he is calling for an

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
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.
Medrano issued letter of authority in favor of all the
FACTS: respondents, upon the representation of Flor that she
has a prospective buyer. Flor was the only one known
Medrano was the Vice Chairman of Ibaan Rural to Medrano, had never met Borbon and Antonio.
Bank, owned by Medrano Fam. 1986, Medrano asked Ganzon also asked Lee if he had an agent, he replied
Flor, cousin in law, to look for a buyer for a none
foreclosed asset, mango plantation. - Petitioner also said that the property was
only P1.2M
Mr. Lee is a businessman from Makati, client of PR - That the letter of authority signed by
Borbon. Borbon has put up an ad in a newspaper Medrano was not binding or enforceable
hectare property planted with atis tree. But Lee against the bank because the latter has a
preferred mango trees, so Borbon promised to get separate and distinct personality from
back to him soon. Medrano.
- That Medrano is not the registered owner,
Borbon relayed to his friends and associated of a but the bank
ready buyer of mango plantation. Flor then advised
that her cousin in law owned a mango plantation up ISSUE: WON the letter of authority is binding
for sale. Borbon then told Flor to confer with and enforceable against the defendant bank only
Medrano to give them a written authority to negotiate or both defendants.
the sale of the property.
Respondent arranged for an ocular inspection of the
property together with Lee which never materialized- Trial court: Medrano signed the letter of authority
1st due to inclement weather; 2nd no car available for for and in behalf of the bank, and as owner of the
the tripping in Batangas. property, promising to pay the respondents 5%
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.