Uniland Resources v.

DBP
G.R. No. 95909, August 16, 1991
J. Gancayco

Topic: Obligations of principals to agents

Doctrine: No one may contract in the name of another without being authorized by the latter,
unless the agent has a right by law to represent the principal.

FACTS

• Marinduque Mining Corp. (MMC) obtained a loan from DBP, mortgaging 2 lots as security
o Warehouse lot and Office building lot

• However, the lots were previously mortgaged to Caltex

o Thus, the mortgage in favor of DBP was entered as a second mortgage

• The account of MMC with DBP was later transferred to Assets Privatization Trust (APT)

• MMC failed to pay its balance with Caltex

o Thus, Caltex foreclosed the lots
o On the other hand, APT offered for sale its right of redemption on the said 2 lots
by public bidding, through DBP

• During bidding, Counsel Realty Corp. was the sole bidder

o An affiliate of Glaxo Philippines, a client of Uniland

• DBP rejected the bid

o Under Caltex’s bidding guidelines, any bid for the purchase of either one will only
be considered should there be another bid for the other one

• Later on, DBP realized that it would make a profit if it redeemed the 2 lots and then offer
them for sale
o Hence, DBP redeemed the lots from Caltex

• DBP then held another bidding where Clarges Realty Corp. (another affiliate of Glaxo)
was the sole bidder for the warehouse lot only
o DBP approved the sale

• DBP later on sold the office building lot to BPI

o DBP paid 5% broker’s fee for this sale to DBP Management Corporation who acted
as broker for the sale

• Uniland Resources then asked from DBP its 5% broker’s fee for instrumenting the sale of
the warehouse lot
o However, the Bidding Committee denied

• Thus, Uniland filed a complaint to recover the broker’s fee against DBP
 • RTC granted
• CA reversed
• Hence, this petition.

Uniland contends:

• Uniland wrote to DBP prior to the bidding and sale, wherein Uniland requested
accreditation as a broker
o It then offered the DBP properties for sale
o It then introduced Glaxo as an interested prospective buyer
• An implied agency existed
o DBP should have stopped, disauthorized and prevented Uniland from selling the
warehouse lot
• The accreditation is merely for formality
o So long as a person or entity looks for a buyer and initiate or promote the interests
of the seller
• DBP must pay Uniland due to equity considerations

ISSUES AND HELD

1. W/N DBP authorized Uniland to find buyers – NO

• Uniland was never able to secure the required accreditation from DBP to transact business
on behalf of DBP

• The letters only indicated its desire to secure such accreditation

o At most, they only prove that they were sent to DBP but DBP never agreed

• There was no express reply from DBP as to the accreditation

• Therefore, Uniland was aware that it had no express authority from DBP to find buyers of
its properties

2. W/N an implied agency existed – NO

• DBP made it clear to Uniland that only accredited brokers may look for buyers on its behalf

• Here, no third party was prejudiced by DBP’s refusal to recognize Uniland as a broker
o The controversy is only between them

• Hence, Art. 1869 does not apply

• No one may contract in the name of another without being authorized by the latter
o Unless the agent has a right by law to represent the principal
3. W/N DBP should still pay Uniland – YES

• Although Uniland was not actively involved in the actual bidding and sale, Uniland initiated
the transaction that eventually took place, even though without proper authority

• DBP was able to profit from the sale of the 2 properties

• Although purely circumstantial, it can be said that DBP became more confident to redeem
the properties from APT due to the presence of a ready and willing buyer
o Which was communicated by Uniland

• It was Uniland who advised Glaxo of the availability of the warehouse lot and aroused its
interest over it
o Uniland’s persistence in communicating with DBP reinforced the seriousness of
the offer

• Hence, this had a bearing on the subsequent decisions made by DBP

• In Prats v. CA, a similar situation happened

o Even though the agent was not the efficient procuring cause, still, he was granted
a claim of P100,000 by the Court due to equity considerations

• Hence, under equity considerations, the Court granted Uniland P100,000 for the role it
played in the transaction between DBP and Glaxo
o From the claim of P1.2M

RULING

Decision appealed from is AFFIRMED WITH MODIFICATIONS.