TAN v.

GULLAS (2002)
Topic: Agent and broker, difference;

PARTIES:
 Petitioners: Manuel B. Tan
 Respondents: Eduardo Gullas

FACTS:
 Eduardo and Norma Gullas were registered owners of a parcel of land in the
Municipality of Minglanilla, Cebu.
 June 29, 1992 –Gullas executed a special power of attorney authorizing petitioner
Manuel B. Tan, a licensed real estate broker, and his associates to negotiate for the sale
of the land at P550 per sqm, at the commission of 3% of the gross price. The power of
attorney was non-exclusive and effective for one month from June 29, 1992.
 Tan contacted Eng. Ledesma, construction manager of the Sisters of Mary, a religious
organization interested in acquiring the property in the Minglanilla area. Tan visited the
property with Eng. Ledesma. They then accompanied the sisters representing the Sisters
of Mary to see Gullas in his office at the University of Visayas. The sisters found the land
suitable for their purpose and expressed their desire to buy it. However, they requested
that the selling price be reduced to P530 per sqm instead of P550 per sqm.
 Eduardo Gullas referred the prospective buyers to his wife. Gullas then agreed to sell the
property to the Sisters of Mary. They executed a Special power of Attorney in favor of
Eufemia Cañete, giving her the special authority to sell, transfer and convey the land at a
fixed price of P200 per sqm.
 Attorney-in-fact Cañete executed a Deed of Sale in favor of the Sisters of Mary for the
price of P20M, or at the rate of P200 per sqm.
 Tan went to Gullas to claim their commission, but Gullas informed them that his wife
have already agreed to sell the property to the Sisters of Mary. Gulas refused to pay the
broker’s fee and alleged that another group of agents was responsible for the sale of
land to the Sisters of Mary.
 Tan filed a complaint against Gullas for the recovery of their broker’s fee in the sum of
P1.6M, as well as moral and exemplary damages. Tan alleged that they were the
efficient procuring cause in bringing about the sale of the property to the Sisters of
Mary, but their efforts in consummating the sale were frustrated by the private
respondents, who, in evident bad faith, malice and in order to evade payment of
broker’s fees, dealt directly with the buyer whom petitioners introduced to them.
 Gullas countered that petitioners were not the efficient procuring cause in bringing
about the consummation of the sale because another broker, Roberto Pacana,
introduced the property to the Sisters of Mary ahead of petitioners.
 Gullas maintained that when petitioners introduced the buyers to them, the former
were already decided in buying the property through Pacana, who had been paid his
commission.
 Tan alleged that although the Sisters of Mary knew that the subject land was for sale
through various agents, it was petitioners who introduced them to the owners thereof.
 The RTC rendered a decision in favor of Tan, ordering Gullas to pay them P624K as
broker’s fees.
 Gullas argued that the RTC erred in finding that it was Tan’s efforts which brought about
the sale of the property. Petitioners Tan likewise assailed the RTC’s basis of the award of
broker’s fees given to them. They content that their 3% commission should be based on
 the price of P55M or at P530 per sqm as agreed upon and not the alleged selling price of
P20M, or at P200 sqm.
 The CA reversed the decision of the RTC.

ISSUES/HELD:
 W/N the CA erred in finding that the petitioners are not entitled to the brokerage
commission.
o The records show that Tan is a licensed real estate broker, and his co-petitioners
are his associates.
o During the trial, it was established that petitioners,as brokers, were authorized
by Gullas to negotiate for the sale of their land within a period of 1 month
reckoned from June 29, 1992. The authority given to petitioners was non-
exclusive, meaning that Gullas were not preluded from granting the same
authority to other agents with respect to the sale of the same property. In fact,
Gullas authorized Pacana to sell the same property. There is nothing illegal in
this agreement, per se, considering the non-exclusivity of Tan’s authority to sell.
o Gullas failed to prove their contention that Pacana began the negotiations way
ahead of Tan. Their contention that Pacana was the one responsible for the sale
of the land is also unsubstantiated. There was nothing on the record which
established the existence of a previous negotiation among Pacana, Gullas and
the Sisters of Mary.
o It is apparent that Gullas is trying to evade payment of the commission which
rightfully belong to Tan as brokers with respect to the sale.
o There is no dispute as to the role that petitioners played in the transaction. At
the very least, petitioners set the sale in motion. They were not able to
participate in its commission only because they were prevented from doing so by
the acts of Gullas.
o Petitioners, as brokers, should be entitled to the commission whether or not the
sale of the property subject matter of the contract was concluded through their
efforts.
o With regard to the amount of the commission – The actual purchase price for
which the land was sold was P200 per sqm. Equity and consideration dictate that
petitioner’s commission must be based on this price. To rule otherwise would
constitute unjust enrichment on the part of the petitioners as brokers.

DOCTRINE:
 “Broker” – one who is engaged, for others, on a commission, negotiating contracts
relative to property with the custody of which he has no concern; the negotiator
between other parties, never acting in his own name but in the name of those who
employed him. A broker is one whose occupation is to bring parties together, in matters
of trade, commerce or navigation.
 An agent receives a commission upon the successful conclusion of the sale. On the other
hand, a broker earns his pay by merely bringing the buyer and the seller together, even if
no sale is eventually made. (Alfred Hahn v. CA)

JUDGMENT: Petition is GRANTED.