Macondray & Co v.

Sellner
GR No. 9184, 2 Feb 1916, Carson, J.
Agency
Topic: Obligations of the Principal to the Agent

Sellner, a real estate broker, found on commission for Macondray, Inc. a buyer for a parcel of
land. The buyer agreed to the price set by Macondray, but the delivery of the purchase price was
delayed by the buyer’s inspection of the documents of title, and Macondray ended negotiations
for the sale of the same. The sale was consummated, however, and Macondray claims it had
revoked Sellner’s authority to sell the land and the latter had no right to sell the same. The court
ruled that Sellner had already earned his commission the moment the buyer had agreed to the
terms Macondray had set, and its revocation of his agency could not relieve it of this obligation.

FACTS
 Sellner, a real estate broker, was requested to sell for PET the subject land.
o PET was willing to sell the land for P17,175, and RESP had as a commission
anything over that amount.
 RESP reported that he had found a buyer in Barretto, who was willing to buy the
land for P18,892.50.
 PET delivered to RESP a deed of conveyance (dated August 21, 1912) along with the
Torrens title to the land; RESP was to conclude the sale, deliver the documents, and
receive payment from Barretto.
 Barretto agreed to accept the land should the above documents be satisfactory, and
RESP left the deed with him and kept the title.
o Barretto had to leave Manila for business and his return was delayed.
 PET advised RESP that he must complete the sale immediately upon Barretto’s
return.
o Barretto arrived on Saturday, Aug 31, and RESP informed him that PET wanted
to finish the sale immediately. Barretto promised to inspect the documents and
send the check for the price within a couple of days.
 PET’s general manager and representative was informed of this promise on Monday,
Sept 2; he told RESP that the price had to be paid that same day, Monday afternoon, 5pm,
or the deal would be cancelled.
 RESP informed Barretto, who said that he would send the check if the former would give
him the title.
o RESP sent the title but only received the check on Wednesday morning.
 RESP tendered the check to the PET for the agreed selling price, but it was refused, and
the action at bar was filed, claiming that the sale was cancelled upon failure to turn over
the price on Monday afternoon.
 PET: it suffered damages because the land was sold by the RESP after the authority to
make the sale was revoked.
 Lower court ruled in favor of PET.
ISSUES & HOLDING
 WON the sale was valid? – YES.
o WON PET had the obligation to give RESP his commission for the sale? YES. At
the time the termination of negotiations was fixed the RESP had already
earned the commission agreed upon.

RATIO
 The court found that it was clearly shown that RESP had authority from PET when he
agreed to deliver the deed and certificate to Barretto on payment of the purchase price.
o PET gave RESP a deed of transfer to Barretto, as well as the Torrens title to the
land, for the purpose of consummating the sale.
o The purchaser should have a reasonable time to examine the documents, and the
RESP was exercising an authority impliedly, if not expressly conferred, to give
Barretto a reasonable time to do so.
 PET ratified what RESP had done when with full knowledge its general manager advised
RESP that the deal must be closed immediately upon Barretto’s return to Manila.
 PET is not entitled to a money judgment against RESP as it agreed on a commission to
the same for the amount in excess of P17,715.
o This does not go against the power of the principal to revoke the authority of his
agent at will in the absence of a contract fixing the duration of the agency. At the
time fixed for the termination of the negotiations, RESP had already earned
the commissions agreed upon, and could not be deprived of it by the
arbitrary action of the PET.
 Lunney v. Healey:
o The business of a real estate broker is generally only to find a purchaser, and in
the absence of an express contract between the parties, the broker becomes
entitled to the usual commissions whenever he brings to his principal a party able
and willing to take the property and enter into a valid contract upon the terms
named by the principal, although the matter may be negotiated and completed
between the principal and the purchaser.
 Waltson v. Brooks:
o A sale of property entitling a broker to his commissions was an agreement by the
vendor to convey the title thereto….
 The real estate broker has a right to be protected against the arbitrary revocation of his
agency without remunerations rendered in finding a suitable purchaser prior to the
revocation.
 PET could not lawfully terminate the negotiations at the time it attempted to do so,
and decline to convey the land to Barretto, who accepted an offer of sale by the
PET’s duly authorized agent, subject to the examination of the documents of title.
 The revocation of the agent’s authority could not relieve PET of its obligation to sell
the land to Barretto for the price and on the terms agreed upon before the agency
was revoked.
 On the sudden demand for the purchase price: the court found that PET had realized that
the land was worth more than it had agreed to sell for it, and hoped that the sudden
deadline would defeat the deal RESP had made with Barretto.
o Time however was not the essence of the contract; the agreement was made
without stipulation as to time, except that there was a reservation of the right to
examine the documents of title before paying the purchase price.

DISPOSITIVE
Lower court OVERRULED.