AGENCY

Prats v. CA (1978) Fernandez, J.

Under what topic: IX. What are the obligations and liabilities of principals to agents?

Petitioner: Antonio E. Prats, doing business under the name of Philippine Real Estate Exchange

Respondent: Courts of Appeals, Alfonso Doronila, and Philippine National Bank

Synopsis: This is a petition for certiorari to review the decision of CA, dismissing Prats case for recovery of sum of money. Doronila was ordered in the RTC to pay Prats P1.380M based on an alleged exclusive option and authority to negotiate the sale of Doronilas property. CA reversed. SC said that there was no evidence that shows that Prats was the efficient procuring cause in bringing about the sale, hence he is not entitled to the commission which was awarded by the RTC. However, he was awarded an amount in the interest of equity.

Doctrine: The principal has the obligation to pay commissions to his agent, subject to the limitations of the stipulations in the agency. Based on equity, however, in this case, it is but proper to give compensation to the efforts of the agent which helped further the principals interest.

AGENCYHERNANDEZ

Facts: This is a suit for the recovery of a sum of money and damages instituted by Prats against Doronila and PNB.

July 1967: Doronila was the registered owner of a 300-hectare land in Rizal. He offered to sell such land to the Social Security System (SSS) for PHP 4.00/sq. m. SSS made a counter-offer of PHP 3.25/sq. m.

February 14, 1968: Doronila then gave Prats an exclusive option and authority in writing to negotiate the sale of the property under the following terms:a. Prats is to sell the land at a basic price of PHP 3.00/sq. m.b. A 10% commission shall be paid to Prats based on PHP 2.10/sq. m. or at any price finally agreed upon and if the property be sold over and above PHP 3.00/sq. m., the excess shall be paid to Prats in addition to his 10% commission.c. Such exclusive option and authority is good for (60) days from the date of conformity; provided that should negotiations with the buyer have been started, said period is automatically extended until said negotiations is terminated, but not more than (15) days. d. The written offers must be made by the prospective buyers and if no written offer is made to Doronila until the last day of this authorization, this option and authority shall expire and become null and void.e. Prospective buyers and all parties interested shall be referred to Prats.

As a result of this exclusive option and authority to negotiate, Doronila withdrew his previous offer to sell to SSS and asked for the return of all papers concerning his offered property. These papers were given to Prats as Doronilas authorized real estate broker.

February 26, 1968: Doronila was invited by SSS to have a meeting but the former declined and asked that SSS communicate directly with Prats. Prats wrote SSS signifying his intentions to sit down and meet with the latter.

April 18, 1968: Doronila extended Prats exclusive option and authority up to May 18.

May 6, 1968: Prats made a formal written offer to the SSS at the price of PHP6.00/sq. m. SSS ignored said offer.

May 18, 1968: Prats wrote to Doronila emphasizing that they still had (15) days within which to complete the negotiations as per agreement or until June 2.

May 30, 1968: Prats wrote to Doronila again advising him that the SSS agreed to purchase the land, though no formal offer was made by the latter.

June 6, 1968: Doronila wrote to Prats informing him that he has not received any written offer from the SSS during the 60 days of the exclusive option and authority which expired on April 14, nor during the period of extension which expired on May 18, nor during the 15-day grace period. As per their agreement, the option expired and became null and void.

June 19, 1968: Doronila wrote to SSS renewing his offer to sell the land at PHP 4.00/sq. m. SSS replied and made a counter-offer of PHP 3.25/sq. m., for a total price of P9,750,000.00.

July 30, 1968: Doronila accepted the counter-offer and executed the deed of absolute sale.

September 17, 1968: Prats presented his statement of account to Doronila for the payment of his professional services as real estate broker in the amount of P1,380,000.00. Doronila refused to pay. Hence, a suit was filed.

RTC ruled in favor of Prats, ordering Doronila to pay the commission plus damages.

CA reversed. As per the agreement, a written offer by the prospective buyer was required and if no such written offer is made until the last day of the authorization, the option shall expire.

Issue/s - Holding:WON CA erred in concluding that Prats was not the efficient procuring cause in bringing about the sale of Doronilas land to SSS and as such should not be entitled to his commission. NO. CA was correct.

Ratio: It is clear from the stipulation of facts and evidence on record that the offer of Doronila to sell the land to SSS was formally accepted by SSS only on June 20, 1968 after the exclusive option had already expired. Prats was not the efficient procuring case in bringing about the sale proceeding from the fact of expiration of his exclusive option. This is manifested by the fact that the SSS officials specifically requested Prats not to be present at the meeting with Doronila on May 29 because the SSS officials never wanted the mediation or intervention of Prats. The conclusion is that this May 29 meeting was done independently and not by virtue of Prats wish or efforts to hold such meeting. The fact that Prats also made offers of PHP 4.50/sq. m. and PHP 6.00/sq. m. belies the claim that he arranged the May 29 meeting as SSS was only willing to buy it at PHP 3.25/sq. m. Prats offers to SSS received no attention. However, the Court took note that Prats had taken steps to bring back together Doronila and SSS: Prats wrote several letters to SSS offering the land and inviting them to discuss the offer. He even made a former offer of PHP 6.00/sq. m., albeit it was ignored. Prats had several dinner and lunch meetings with Doronila and his nephew Atty. Asencio. The latter corroborated this fact.

As such, the Court granted in equity a sum of PHP 100,000.00 by way of compensation for Prats efforts and assistance in the transaction, which however was finalized and consummated after the expiration of his exclusive option.

Dispositive:WHEREFORE, the decision appealed from is hereby affirmed, with the modification that private respondent Alfonso Doronila in equity is ordered to pay petitioner or his heirs the amount of One Hundred Thousand Pesos (P100,000.00) and that the portion of the said decision ordering Prats to pay respondent Doronila attorneys' fees in the sum of P10,000.00 is set aside.The lifting of the injunction issued by the lower court on the PHP 2,000,000.00 cash deposit of respondent Doronila as ordered by respondent court is hereby with the exception of the sum of One Hundred Thousand Pesos (P100,000.00) which is ordered segregated therefrom to satisfy the award herein given to petitioner, the lifting of said injunction, as herein ordered, is immediately executory upon promulgation hereof.