Comparing an Agent and a Broker

Rule: Distinguish if the Broker was a broker in the commercial sense, or an Agent under the provisions on the Law on Agency
AGENT
BROKER
MAIN PURPOSE
For representation
To find a purchaser; to bring the buyer and

To enter into juridical acts on behalf of the principal

seller together; to be the efficient procuring
cause of the sale; MIDDLEMAN /
INTERMEDIARY
ELEMENT OF CONTROL
Through the principal, agent/commission-agent is one engaged in
No relation with:
OVER SUBJECT
the purchase or sale for another of a property which for this

The thing he buys or sells

PROPERTY
purpose is placed upon his possession and at his disposal. (agent

The Principal
has a relation with the principal and the subject property)
REPRESENTATION
COMPENSATION

Agent represents the Principal by legal fiction

Receives commission upon the successful conclusion of a sale

Broker cannot represent the Principal

Exception: Domingo v Domingo
Earns his pay merely by bringing the buyer
and seller together, even if no sale is
consummated

EFFICIENT PROCURING CAUSE: A cause originating a series of events which, without break in their continuity, result in the accomplishment of
the prime objective of the employment of the broker
CASE
DOCTRINE / HOW CONCEPT WAS APPLIED
Pratts v CA
Manotok Bros.
Inc. v CA
Inland Realty
v CA

Medrano v CA

An agent would be entitled to the commission on sales consummated after the expiration of his agency when the facts show
that the agent was the efficient procuring cause in bringing about the sale.
Saligumba, the agent, was the efficient procuring cause of the salenot the PTA Presidenteven if the object of the agency
was perfected 3 days after the expiration of the agency period. Otherwise, the City of Manila would not have passed an
Ordinance to acknowledge the sale.
Petitioners are not entitled to the 5% brokers commission.
Why not?
(1) Merely submitted a companys name as a prospective buyer
(2) NON-PARTICIPATION in crucial stages of the sale

Lapse of 1 year and 5 months between expiration of authority to sell and the consummation of the sale
Agents were entitled to the 5% commission for the following reasons:
(1) Efforts are the foundation on which the negotiations resulting in a sale began
(2) Acted as middleman between Medrano (Seller) and Lee (Buyer)
(3) No advertisement for property

Lee would not have known of the property were it not for the agents information