INLAND REALTY INVESTMENT SERVICE, INC v.

CA
[G.R. No. 76969. June 9, 1997]
Facts: On Sept. 16, 1975, Gregorio Araneta, Inc. granted Inland Realty
Investment
Service (Petitioners), Inc. a 30-day authority to sell its 9,800
shares of stock in
Architect’s Bldg., Inc. at the price of P1,500/share. Petitioners sent proposal
letters to its
prospective buyers, one of which was Stanford Microsystems, Inc. Stanford
offered to
buy the shares at P1,000/share. Petitioners sent a letter to Gregorio Araneta
Inc. to
register Stanford as one of its prospective buyers. Gregorio Araneta Inc. replied
that the
price offered by Stanford was too low and suggested if petitioners may make it
better.
Petitioner’s authority to sell was extended several times: 1) Oct. 2, 1975 for 30
days 2)
October 28, 1975 for 30 days and 3) Dec. 2, 1975 for 30 days. On July 8, 1977,
the
shares were finally sold to Stanford. Petitioners then demanded payment of
their 5%
broker’s commission from the proceeds of P13.5M or P675,000.
Gregorio Araneta
Inc.declined to pay. Petitioners filed a claim for unpaid agent’s commission for
brokering
the sales transaction.
The Trial Court dismissed Petitioner’s complaint holding that after the
authority to sell
expired 30 days from Dec. 2, 1975 or on Jan. 1, 1976, PETITIONERS
abandoned the
sales transaction and were no longer privy to the consummation and
documentation
thereof. PETITIONERS appealed. CA dismissed appeal holding that
there was no
longer any agency after the last extension (Dec. 2). Petitioner’s agency contract
and
authority to sell expired on Jan. 1, 1976 while the consummation of the sale to
Stanford
occurred more than 1 year and 5 months after the said expiration (July 8,
1977).
ISSUE:
WON Inland Realty Investment Service was instrumental in the final
consummation of
the sale to Stanford which was the same company name submitted to
GREGORIO
ARANETA INC.as prospective buyer
WON Inland Realty Investment Service is entitled to broker’s commission
HELD:
Where a party is not the efficient procuring cause in bringing about a sale, he
is not
entitled to the stipulated broker’s commission.
From Sept. 16, 1975 to Jan. 1, 1976, when petitioner’s authority to sell was
subsisting, if
at all, Petitioner had nothing to show that they actively served their principal’s
interests,
pursued to sell the shares in accordance with the terms and conditions, and
performed
substantial acts that proximately and causatively led to the consummation of
the sale to
Stanford of Araneta, Inc.’s shares in Architect’s.
Instant petition is HEREBY DISMISSED
Facts: On Sept. 16, 1975, Gregorio Araneta, Inc. granted Inland Realty
Investment Service (Petitioners), Inc. a 30-day authority to sell its
9,800 shares of stock in Architect’s Bldg., Inc. at the price of
P1,500/share. Petitioners sent proposal letters to its prospective buyers, one of
which was Stanford Microsystems, Inc. Stanford offered to buy the shares at
P1,000/share. Petitioners sent a letter to Gregorio Araneta Inc. to register
Stanford as one of its prospective buyers. Gregorio Araneta Inc. replied that the
price offered by Stanford was too low and suggested if petitioners may make it
better. Petitioner’s authority to sell was extended several times: 1) Oct. 2, 1975
for 30 days 2) October 28, 1975 for 30 days and 3) Dec. 2, 1975 for 30 days.
On July 8, 1977, the shares were finally sold to Stanford. Petitioners then
demanded payment of their 5%broker’s commission from the proceeds of
P13.5M or P675,000. Gregorio AranetaInc.declined to pay. Petitioners filed
a claim for unpaid agent’s commission for brokering the sales transaction. The
Trial Court dismissed Petitioner’s complaint holding that after the authority to
sell expired 30 days from Dec. 2, 1975 or on Jan. 1, 1976, PETITIONERS
abandoned the sales transaction and were no longer privy to the
consummation and documentation thereof. PETITIONERS appealed. CA
dismissed appeal holding that there was no longer any agency after the last
extension (Dec. 2). Petitioner’s agency contract and authority to sell expired on
Jan. 1, 1976 while the consummation of the sale to Stanford occurred more
than 1 year and 5 months after the said expiration (July 8, 1977).
ISSUE: WON Inland Realty Investment Service was instrumental in the final
consummation of the sale to
 Stanford which was the same company name submitted to
GREGORIOARANETA INC.as prospective buyer
WON Inland Realty Investment Service is entitled to broker’s commission
HELD: Where a party is not the efficient procuring cause in bringing about a
sale, he is not entitled to the stipulated broker’s commission. From Sept. 16,
1975 to Jan. 1, 1976, when petitioner’s authority to sell was subsisting, if at
all, Petitioner had nothing to show that they actively served their principal’s
interests, pursued to sell the shares in accordance with the terms and
conditions, and performed substantial acts that proximately and causatively
led to the consummation of the sale to Stanford of Araneta, Inc.’s shares in
Architect’s. Instant petition is HEREBY DISMISSED.

2. FACTS: Several parcels of land were mortgaged by the respondents during

the lifetime of the respondent’s grandparents to the Rural bank of Milaor as
shown by the Deed of Real Estate Mortgage and the Promissory Note. Spouses
Felicisimo Ocfemia and Juanita Ocfemia, one of the respondents, were not able
to redeem the mortgaged properties consisting of seven parcels of land and so
the mortgage was foreclosed and thereafter ownership was transferred to the
petitioner bank. Out of the seven parcels of land that were foreclosed, five of
them are in the possession of the respondents because these five parcels of
land were sold by the petitioner bank to the respondents as evidenced by a
Deed of Sale. However, the five parcels of land cannot be transferred in the
name of the parents of Merife Nino, one of the respondents, because there is a
need to have the document of sale registered. The Register of deeds, however,
said that the document of sale cannot be registered without the board
resolution of the petitioner bank confirming both the Deed of sale and the
authority of the bank manager, Fe S. Tena, to enter such transaction.

The petitioner bank refused her request for a board resolution and made many
alibis. Respondents initiated the present proceedings so that they could
transfer to their names the subject five parcel of land and subsequently
mortgage said lots and to use the loan proceeds for the medical expenses of
their ailing mother.

ISSUE: May the Board of Directors of a rural banking corporation be compelled

to confirm a deed of absolute sale of real property owned by the corporation
which deed of sale was executed by the bank manager without prior authority
of the board of directors of the rural banking corporation?

HELD: YES. The bank acknowledges, by its own acts or failure to act, the
authority of Fe S. Tena to enter into binding contracts. After the execution of
the Deed of Sale, respondents occupied the properties in dispute and paid the
real estate taxes. If the bank management believed that it had title to the
property, it should have taken measured to prevent the infringement and
invasion of title thereto and possession thereof. Likewise, Tena had previously
transacted business on behalf of the bank, and the latter had acknowledged
her authority. A bank is liable to innocent third persons where representation
is made in the course of its normal business by an agent like Manager Tena
even though such agent is abusing her authority. Clearly, persons dealing with
her could not be blamed for believing that she was authorized to transact
business for and on behalf of the bank.

The bank is estopped from questioning the authority of the bank to enter into
contract of sale. If a corporation knowingly permits one of its officers or any
other agent to act within the scope of an apparent authority, it holds the agent
out to the public as possessing the power to do those acts; thus, the
corporation will, as against anyone who has in good faith dealt with it through
such agent, be estopped from denying the agent’s authority.

FACTS:

Under an Agency Agreement, Ybañez authorized Saban to look for a buyer of

the lot for Two Hundred Thousand Pesos (P200,000.00) and to mark up the
selling price to include the amounts needed for payment of taxes, transfer of
title and other expenses incident to the sale, as well as Saban's commission for
the sale. 

Through Saban's efforts, Ybañez and his wife were able to sell the lot to the
petitioner Genevieve Lim (Lim) and the spouses Benjamin and Lourdes Lim (the
Spouses Lim) on March 10, 1994. The price of the lot as indicated in the Deed
of Absolute Sale is Two Hundred Thousand Pesos (P200,000.00).  It appears,
however, that the vendees agreed to purchase the lot at the price of Six
Hundred Thousand Pesos (P600,000.00), inclusive of taxes and other
incidental expenses of the sale.
After the sale, Lim remitted to Saban the amounts of P113,257 for payment of
taxes due on the transaction as well as P50,000.00 as broker's commission.
Lim also issued in the name of Saban four postdated checks in the aggregate
amount of P236,743.00.

Subsequently, Ybañez sent a letter dated June 10, 1994 addressed to Lim. In
the letter Ybañez asked Lim to cancel all the checks issued by her in Saban's
favor and to "extend another partial payment" for the lot in his (Ybañez's)
favor. 

After the four checks in his favor were dishonored upon presentment, Saban
filed a complaint for collection of sum of money and damages against Ybañez
and Lim
Saban alleged that Ybañez told Lim that he (Saban) was not entitled to any
commission for the sale since he concealed the actual selling price of the lot
from Ybañez and because he was not a licensed real estate broker. Ybañez was
able to convince Lim to cancel all four checks.

In his Answer, Ybañez claimed that Saban was not entitled to any commission
because he concealed the actual selling price from him and because he was not
a licensed real estate broker.

ISSUE:
          Whether Saban is entitled to receive his commission from the sale

HELD:

          Yes, Saban is entitled to receive his commission from the sale.

          The Supreme Court held that to deprive Saban of his commission

subsequent to the sale which was consummated through his efforts would be a
breach of his contract of agency with Ybañez which expressly states that Saban
would be entitled to any excess in the purchase price after deducting the
P200,000.00 due to Ybañez and the transfer taxes and other incidental
expenses of the sale.
          Moreover, the Court has already decided in earlier cases that would be
in the height of injustice to permit the principal to terminate the contract of
agency to the prejudice of the broker when he had already reaped the benefits
of the broker's efforts.
4. FACTS:
Florencia Baluyot offered Atty. Pedro L. Linsang an a lot called Garden State at
the Holy Cross Memorial Park owned by petitioner (MMPCI). According to
Baluyot, a former owner of a memorial lot under Contract No. 25012 was no
longer interested in acquiring the lot and had opted to sell his rights subject to
reimbursement of the amounts he already paid. The contract was for
P95,000.00. Baluyot reassured Atty. Linsangan that once reimbursement is
made to the former buyer, the contract would be transferred to him. Atty.
Linsangan agreed and gave Baluyot P35,295.00 representing the amount to be
reimbursed to the original buyer and to complete the down payment to MMPCI.
Baluyot issued handwritten and typewritten receipts for these payments.
Baluyot verbally advised Atty. Linsangan that Contract No. 28660 was
cancelled for reasons the latter could not explain, and presented to him
another proposal for the purchase of an equivalent property. He refused the
new proposal and insisted that Baluyot and MMPCI honor their undertaking.
For the alleged failure of MMPCI and Baluyot to conform to their agreement,
Atty. Linsangan filed a Complaint for Breach of Contract and Damages against
the former. For its part, MMPCI alleged that Contract No. 28660 was cancelled
conformably with the terms of the contract because of non-payment of
arrearages. MMPCI stated that Baluyot was not an agent but an independent
contractor, and as such was not authorized to represent MMPCI or to use its
name except as to the extent expressly stated in the Agency Manager
Agreement.

ISSUE: Whether or not a contract of agency exists between Baluyot and

MMPCI.

RULING: NO. The acts of an agent beyond the scope of his authority do not
bind the principal, unless he ratifies them, expressly or impliedly. Only the
principal can ratify; the agent cannot ratify his own unauthorized acts.
Moreover, the principal must have knowledge of the acts he is to ratify. No
ratification can be implied in the instant case. Atty. Linsangan failed to show
that MMPCI had knowledge of the arrangement. As far as MMPCI is concerned,
the contract price was P132,250.00, as stated in the Offer to Purchase signed
by Atty. Linsangan and MMPCI's authorized officer. Likewise, this Court does
not find favor in the Court of Appeals' findings that "the authority of defendant
Baluyot may not have been expressly conferred upon her; however, the same
may have been derived impliedly by habit or custom which may have been an
accepted practice in their company in a long period of time." A perusal of the
records of the case fails to show any indication that there was such a habit or
custom in MMPCI that allows its agents to enter into agreements for lower
prices of its interment spaces, nor to assume a portion of the purchase price of
the interment spaces sold at such lower price. No evidence was ever presented
to this effect.

5. Victoria’s Milling Co vs CA
Facts: St. Therese Merchandising (hereafter STM) regularly bought sugar from
petitioner Victoria’s Milling., Inc. In the course of their dealings, petitioner
issued several Shipping List/Delivery Receipts to STMas proof of purchases.
Among these was SLDR No. 1214M, which gave rise to the instant case. SLDR
No.1214M covers 25,000 bags of sugar. The transaction it covered was
a "direct sale. “Thereafter, STM sold to private respondent Consolidated Sugar
Corporation (CSC) its rights in SLDR No.1214M. That same day, CSC wrote
petitioner that it had been authorized by STM to withdraw the sugar covered by
the SLDR. However, after 2,000 bags had been released, petitioner refused to
allow further withdrawals of sugar. CSC thus inquired when it would be
allowed to withdraw the remaining 23,000bags. In its reply, petitioner said that
it could not allow any further withdrawals of sugar because STM had already
withdrawn all the sugar covered by the cleared checks. Petitioner also noted
that CSC had represented itself to be STM's agent as it had withdrawn the
2,000 bags "for and in behalf" of STM.As a result, CSC filed a complaint for
specific performance. Petitioner's primary defense a quo was that it was an
unpaid seller for the 23,000 bags. Since STM had already drawn in full all the
sugar corresponding to the amount of its cleared checks, it could no longer
authorize further delivery of sugar to CSC. Petitioner also contended that it had
no privity of contract with CSC. Furthermore, the SLDRs prescribed delivery of
the sugar to the party specified therein and did not authorize the transfer of
said party's rights and interests. The Trial Court rendered its judgment
favoring the private respondent CSC. The appellate court affirmed said decision
but modified the costs against petitioner.
Issue: Whether or not the Court of Appeals erred in not ruling that CSC was an
agent of STM and hence, stopped to sue upon SLDR No. 1214M as an assignee.
Held: It is clear from Article 1868 that the basis of agency is representation.
One factor which most clearly distinguishes agency from other legal concepts is
control; one person - the agent - agrees to act under the control or direction of
another - the principal That the authorization given to CSC contained the
phrase "for and in our (STM's) behalf" did not establish an agency. Ultimately,
what is decisive is the intention of the parties. That no agency was meant to be
established by the CSC and STM is clearly shown by CSC's communication to
petitioner that SLDR No.1214M had been "sold and endorsed" to it. The use of
the words "sold and endorsed" means that STM and CSC intended a contract of
sale, and not an agency. Hence, on this score, no error was committed by the
respondent appellate court when it held that CSC was not STM's agent and
could independently sue petitioner. Petitioner heavily relies upon STM's letter
of authority allowing CSC to withdraw sugar against SLDR No.1214M to show
that the latter was STM's agent. The pertinent portion of said letter reads: “This
is to authorize Consolidated Sugar Corporation or its representative to
withdraw for and in our behalf (stress supplied) the refined sugar covered by
Shipping List/Delivery Receipt = Refined Sugar (SDR) No. 1214 dated October
16, 1989 in the total quantity of 25, 000 bags. “The Civil Code defines a
contract of agency as follows: “Art. 1868. By the contract of agency, a person
binds himself to render some service or to do something in representation or on
behalf of another, with the consent or authority of the latter. “It is clear from
Article 1868 that the basis of agency is representation. On the part of the
principal, there must be an actual intention to appoint or an intention
naturally inferable from his words or actions; and on the part of the agent,
there must be an intention to accept the appointment and act on it, and in the
absence of such intent, there is generally no agency. One factor which most
clearly distinguishes agency from other legal concepts is control; one person -
the agent - agrees to act under the control or direction