Facts:

On January 4, 1956, A.U. Valencia & Co., a real estate broker, initiated a legal action in the Municipal Court of Manila against Herminia C. Layug and her husband, Marcial Layug. The objective of the lawsuit was to recover a commission amounting to P1,510.00 for facilitating the sale of Herminia's property to a buyer named Lope Yutuc. This commission claim was based on a brokerage or exclusive agency contract, which was attached to the filed complaint. In their response, the Layugs submitted an answer that included a counterclaim, disputing the validity of the agency agreement. Subsequent to the hearings, the court ruled in favor of A.U. Valencia & Co., ordering the Layugs to pay the claimed commission, plus interest and attorney's fees, along with the costs of the suit. Following this decision, the Layugs appealed to the Court of First Instance of Manila, arguing the dismissal of the initial complaint. They contended that the agency contract was void because the

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Facts:

Background of the Case

• Plaintiff A.U. Valencia & Co., a real estate broker, initiated an action in the Municipal Court of Manila to recover a commission of P1,510.00 for facilitating the sale of a property.
• The commission was based on an alleged exclusive agency or brokerage contract between the plaintiff and defendant Herminia C. Layug, to whom the property was attributed as her own.
• A copy of the agency contract was annexed to the complaint, clearly evidencing the terms and the authorization by Herminia.

Proceedings in the Municipal Court

• After the plaintiff’s filing and the defendants’ response—which included an answer and a counterclaim—the Municipal Court rendered judgment in favor of the plaintiff.
• The judgment awarded the plaintiff the sum of P1,510.00, with interest, P100.00 as attorney’s fees, and payment of costs.

Motion to Dismiss in the Court of First Instance

• The defendants, on appeal, filed a motion to dismiss the complaint on the ground that it failed to state a cause of action.
• The central argument of the defendants was that the property sold belonged to the conjugal partnership; hence, only defendant Marcial Layug (the husband) as its administrator had the authority to enter into the agency contract.
• It was asserted that defendant Herminia, lacking such authority, rendered the agency contract void.

Proceedings Leading to the Supreme Court

• The trial court (Court of First Instance) accepted the defendants’ theory, holding that the agency contract was null and void, and accordingly dismissed the complaint on June 23, 1956, with costs.
• Plaintiff A.U. Valencia & Co. directly appealed the dismissal order to the Supreme Court, asserting that the complaint sufficiently presented a cause of action.

Evidentiary Considerations

• At no point in the complaint did it appear that the property in question was conjugal property; the agency contract and accompanying documents identified the property as belonging solely to Herminia.
• A deed of absolute sale attached to the memorandum of the plaintiff further corroborated Herminia’s ownership, with the husband’s signature serving merely to indicate marital consent rather than ownership or administrative authority.

Issue:

• Whether the complaint, even when the alleged facts are assumed to be true, sufficiently stated a cause of action for the recovery of commission based on the alleged agency contract.

• Whether the dismissal of the complaint was proper given the defendants’ defense that the property was conjugal, thereby questioning Herminia’s authority to contract as an owner.

• Whether issues regarding the status and ownership of the property, raised as factual matters by the defense, should constitute grounds for a pre-trial dismissal rather than be resolved during trial.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)