SUPER SUMMARY

Petitioner Manotok Brothers Inc. authorized, through a letter, private respondent

Salvador Saligumba to negotiate with the City of Manila for the sale of their land
and agreed to give him a 5 percent commission. Saligumba facilitated the sale;
however, when the property was sold, he was never given his commission because the
petitioner did not recognize his role as agent in the transaction.

Hence, he filed a case in order to claim his commission. Both the RTC and CA ruled
in favor of the private respondent; hence, the petitioner elevated the case to the
Supreme Court.

DOCTRINE:

AGENT'S COMMISSION; WHEN ENTITLED' RULE;

When there is a close, proximate and causal connection between the agent's efforts
and labor and the principal's sale of his property, the agent is entitled to a
commission.

FACTS

Petitioner Manotok Brothers is the owner of a certain parcel of land and building
that were formerly leased by the City of Manila and used by the Claro M. Recto High
School.

By means of a letter, petitioner authorized private respondent Salvador Saligumba

to negotiate with the City of Manila the sale of the property for not less than
P425,000.00 and also agreed to pay private respondent a five percent (5%)
commission in the event the sale is finally consummated.

Through another letter, the corporation, with Rufino Manotok, its president, as
signatory, authorized the private respondent to finalize and consummate the sale of
the property to the City of Manila for not less than P410,000.00.

The Municipal Board of the City of Manila passed an ordinance appropriating the sum
of P410,816.00 for the purchase of the property that the private respondent was
authorized to sell.

Finally, the parties signed the deed of sale of the subject property.

Notwithstanding the realization of the sale, the private respondent never received
any commission, which should have amounted to P20,554.50. This was due to the
petitioner's refusal to pay the private respondent the said amount, as the former
does not recognize the latter's role as agent in the transaction.

Consequently, a private respondent filed a complaint against the petitioner,

alleging that he had successfully negotiated the sale of the property. He claimed
that it was because of his efforts that the Municipal Board of Manila passed
Ordinance No. 6603, which appropriated the sum for the payment of the property
subject to the sale.

The petitioner claimed otherwise. It denied the claim of the private respondent on
the following grounds: (1) the private respondent would be entitled to a commission
only if the sale was consummated and the price paid within the period given in the
respective letters of authority; and (2) the private respondent was not the person
responsible for the negotiation and consummation of the sale; instead, it was
Filomeno E. Huelgas, the PTA president.
The trial ensued. The Court of First Instance rendered judgment, sentencing
petitioner and/or Rufino Manotok to pay to private respondent the sum of P20,540.00
by way of his commission fees with legal interest.

The petitioner appealed said decision, but the Court of Appeals affirmed the ruling
of the trial court.

Hence, the petition was elevated to the Supreme Court.

ISSUE

Whether or not private respondent is entitled to the five percent (5%) agent's
commission.

RULING:

Yes, he is entitled to the five percent (5%) agent's commission.

The Supreme Court ruled that when there is a close, proximate, and causal
connection between the agent's efforts and labor and the principal's sale of his
property, the agent is entitled to a commission.

In this case, the private respondent pursued his goal of seeing that the parties
reach an agreement and the sale be consummated.

While it may be true that Filomeno Huelgas followed up on the matter with Councilor
Magsalin, the author of the Municipal Ordinance, his intervention regarding the
purchase came only after the ordinance had already been passed—when the buyer had
already agreed to the purchase and to the price for which said property was to be
paid. Without the efforts of the private respondent, then, Mayor Villegas would
have nothing to approve in the first place. It was actually the private
respondent's labor that set in motion the intervention of the third party that
produced the sale; hence, he should be amply compensated.

FALLO: WHEREFORE, in the light of the foregoing and finding no reversible error
committed by respondent Court, the decision of the Court of Appeals is hereby
AFFIRMED. The temporary restraining order issued by this Court in its Resolution
dated October 1, 1990 is hereby lifted.