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Manotok Brothers, Inc. v. CA

[G.R. No. 94753] | [April 7, 1993] | [CAMPOS, JR., J]

Petitioner: MANOTOK BROTHERS, INC.

Respondents: THE HONORABLE COURT OF APPEALS, THE HONORABLE JUDGE OF THE REGIONAL
TRIAL COURT OF MANILA (Branch VI), and SALVADOR SALIGUMBA

Doctrine: The broker or agent should be paid his commission where he was the sufficient-procuring cause in
bringing the sale, where said agent, notwithstanding the expiration of his authority, nonetheless, took diligent
steps to bring back together the parties such that a sale was finalized and consummated between them.

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CASE SUMMARY
Trigger word/s: commission

FACTS: Petitioner Manotok Brothers, Inc. authorized private respondent Saligumba to negotiate the sale of its
property to the City of Manila and agreed to pay Saligumba 5% commission once the sale is consummated.
The Deed of Sale was executed, and the purchase price of the subject property was fully paid but Saligumba
never received any commission. Hence, he filed a complaint against petitioner. Private respondent claims that
he is entitled to commission since he had successfully negotiated the sale of the property. Petitioner alleged
that private respondent is not entitled to a commission since the sale was NOT consummated within the period
provided in its letters of authority. The CA affirmed the CFI ruling in favor of private respondent. Hence, this
petition.

HELD: Petition dismissed. Assailed CA decision is affirmed. The City of Manila became the purchaser of
petitioner's property mainly through the efforts of private respondent. Hence, he should be compensated
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FACTS

 Petitioner Manotok Brothers, Inc. is the owner of a parcel of land and building formerly leased by the
City of Manila and used by the Claro M. Recto High School at Sampaloc Manila (subject property)
 July 5, 1966 - Petitioner authorized private respondent Saligumba by means of a letter to negotiate with
the City of Manila the sale of the subject property for not less than P425,000. In the same writing,
petitioner agreed to pay private respondent a five percent (5%) commission in the event the sale is
finally consummated and paid.
 November 16, 1967 – date of letter from petitioner authorizing private respondent to finalize and
consummate the sale of the property to the City of Manila for not less than P410,000. With this letter
came another extension of 180 days
 April 26, 1968 – the Municipal Board of the City of Manila passed Ordinance No. 6603 appropriating
P410,816 for the purchase of the subject property.
 May 17, 1968 - The ordinance was signed by the City Mayor (Note: 3 days after the last letter of
authorization was issued by petitioner)
 1969 – the Deed of Sale was executed, and the purchase price of the subject property was fully paid
but the private respondent never received any commission which should have amounted to P20,554.50
 Private respondent filed a complaint against petitioner to recover his commission
 As a counterclaim, petitioner demanded the sum of P4,000.00 as attorney's fees and for moral
damages
 Private respondent’s arguments
(1) He is entitled to commission since he had
successfully negotiated the sale of the property
(2) It was because of his efforts that the Municipal
Board of Manila passed Ordinance which
appropriated the sum for the payment of the subject
property. Private respondent went to the ff:
1. Meeting with Manotok at the office of C.M. Recto
High School’s principal
2. Councilor Mariano Magsalin, the author of the
Ordinance which appropriated the money for the
purchase of subject property.
3. Assessor's Office for appraisal of the value of the
property
Petitioner’s arguments
(1) 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) private respondent was not the person
responsible for the negotiation and
consummation of the sale, instead it was
Filomeno E. Huelgas, the PTA president for
1967-1968 of the Claro M. Recto High
School.

CASE TRAIL

[CFI] ruled in favor of private respondent

 Sentenced Petitioner to pay private respondent the sum of P20,540.00 by way of his commission fees
with legal interest thereon from the date of the filing of the complaint until payment + P4,000.00 as and
for attorney's fees
[CA] affirmed the CFI ruling

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ISSUES & HELD

1. W/N private respondent is entitled to the five percent (5%) agent's commission – YES

 SC: The City of Manila became the purchaser of petitioner's property mainly through the efforts of
private respondent. Hence, he should be compensated.

Applicable jurisprudence
Prats vs. Court of Appeals – the Court held that while petitioner Prats (claimant-agent) was not
the efficient procuring cause in bringing about the sale (considering the fact of expiration of his
exclusive authority), still petitioner was awarded compensation for his services
o Reyes vs. Manaoat – the 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
ICAB:
o Private respondent is the efficient procuring cause for without his efforts, the municipality would
not have anything to pass and the Mayor would not have anything to approve
o While private respondent’s authority had already expired when Municipal Ordinance No. 6603
was signed by the City Mayor, the ordinance was approved when private respondent's
authorization was still in force. Moreover, the approval by the City Mayor came only 3 days after
the expiration of private respondent's authority. Also, from the records, the only party given a
written authority by petitioner to negotiate the sale from July 5, 1966 to May 14, 1968 was
private respondent
Re Petitioner’s allegations
 o Danon vs. Brimo (invoked by petitioner)– NOT APPLICABLE since claimant-agent in this case
fully comprehended the possibility that he may not realize the agent's commission as he was
informed that another agent was also negotiating the sale and thus, compensation will pertain to
the one who finds a purchaser and eventually effects the sale
o While it may be true that Filomeno Huelgas followed up the matter with Councilor Magsalin, the
author of Municipal Ordinance No. 6603 and Mayor Villegas, his intervention regarding the
purchase came only after the ordinance had already been passed.
o Without the efforts of private respondent then, Mayor Villegas would have nothing to approve in
the first place.
o It was actually private respondent's labor that had set in motion the intervention of the third party
that produced the sale, hence he should be amply compensated.
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RULING: Petition dismissed (in favor of Respondents).

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.

SO ORDERED.
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