G.R. No. 54598 - Ledesma vs. Court of Appeals

Case Summary (G.R. No. 54598)

Factual Background

Constante and Corazon were co-owners of four lots at EDSA corner New York and Denver Streets, Cubao, Quezon City. On January 24, 1984 Constante signed a handwritten authorization appointing Francisco Artigo as real estate broker to sell the properties at an asking price of P23,000,000 with a five percent commission, the authority to operate on a first-come, first-serve basis. Artigo introduced Times Transit Corporation as a prospective buyer and eventually the sale of two lots, lots 14 and 15, was consummated in May or June of 1985. Artigo received P48,893.76 as an advance commission and later claimed that the true selling price for the two lots was P7,050,000 and that his total five percent commission therefore amounted to P352,500, leaving a balance of P303,606.24. The De Castros maintained that the deed of sale showed a price of P3.6 million and argued that other agents participated in a second negotiation, reducing Artigo’s entitlement.

Trial Court Proceedings

Francisco Artigo sued the De Castros to collect the asserted unpaid balance of his brokers commission. The Regional Trial Court found the existence of the agency contract between Constante and Artigo, accepted parol evidence to establish the actual purchase price, and concluded that Artigo was entitled to five percent of P7,050,000. The trial court held the defendants jointly and solidarily liable and awarded P303,606.24 as unpaid commission, P25,000 as moral damages, P45,000 as attorneys fees, and costs of suit.

Court of Appeals Decision

The Court of Appeals affirmed the judgment of the trial court in toto. It held that the handwritten authorization constituted a valid contract of agency; that the action arose exclusively from that contract so that joinder of other co-owners was not indispensable; and that evidence aliunde was admissible to prove the true purchase price because Artigo was not a party to the deed of sale and was suing under the separate contract of agency. The appellate court accepted the factual finding that the actual purchase price was P7,050,000.

Issues Presented

Petitioners urged that the Court of Appeals erred in: I. not dismissing the complaint for failure to implead indispensable parties-in-interest; II. not dismissing the complaint on the ground that Artigo’s claim had been extinguished by full payment, waiver, or abandonment; III. considering incompetent evidence; IV. giving credence to patently perjured testimony; V. sanctioning an award of moral damages and attorneys fees in favor of Artigo; and VI. not awarding the De Castros moral and exemplary damages and attorneys fees.

The Parties' Contentions

The De Castros asserted that the two lots were co-owned and that all co-owners were indispensable; that Artigo was only one among many agents and had been fully paid; that parol evidence and photocopied correspondences were incompetent; and that Artigo had lied about his broker’s license and therefore was not entitled to relief. Francisco Artigo maintained that a valid contract of agency existed with Constante, that the co-owners were solidarily liable under Art. 1915, that partial payment did not extinguish the obligation, that his demand and suit were timely, and that the trial court properly admitted and weighed evidence to establish the actual selling price and his entitlement to the balance, moral damages and attorneys fees.

Supreme Court's Ruling

The Supreme Court denied the petition for lack of merit and affirmed the Court of Appeals decision of May 4, 1994 in all respects. The Court sustained the findings that a contract of agency existed, that the joinder of other co-owners was not indispensable, that Artigo’s acceptance of a partial payment did not constitute waiver of the balance, that laches did not bar the action, that the factual finding of the sale price was supported by the record and could not be revalued on Rule 45 review, and that the awards of moral damages and attorneys fees were proper and reasonable.

Legal Basis and Reasoning — Indispensable Parties

The Court recognized the general rule that an indispensable party is one without whom no final determination can be had. It nevertheless concluded that joinder of all co-owners was unnecessary because the contract of agency was between Constante and Artigo and because the law imposes solidary liability upon principals who appoint an agent for a common transaction under Art. 1915. The Court cited Art. 1216 to show that a creditor may proceed against any one of solidary debtors. The solidary obligation therefore rendered the other co-owners non-indispensable and justified proceeding against those who had been sued.

Legal Basis and Reasoning — Payment, Waiver and Laches

The Court held that the contract of agency governed the parties’ relations and bound them to its terms. The intervention and payment to other agents did not alter Artigo’s contractual right to five percent of the selling price. Receipt of a partial payment did not amount to acceptance that would extinguish the obligation under Art. 1235. The Court further rejected the plea of laches because Artigo filed suit within the ten‑year prescriptive period for actions upon a written contract under Art. 1144, and equitable laches does not abate a collection suit filed within the statutory prescriptive period.

Legal Basis and Reasoning — Evidentiary Questions

The Supreme Court declined to reweigh the evidence. It emphasized the settled rule that in a petition under Rule 45, Rules of Court, the Court rest

Case Syllabus (G.R. No. 54598)

Parties and Posture

Constante Amor de Castro and Corazon Amor de Castro were petitioners who sought review by the Supreme Court from the Court of Appeals' decision affirming the Regional Trial Court judgment.
Court of Appeals and Francisco Artigo were respondents in the petition for certiorari under Rule 45, Rules of Court.
The petition assailed the Court of Appeals' affirmance of the RTC, Branch 80, Quezon City's decision ordering the De Castros to pay unpaid broker's commission and damages.
The Supreme Court rendered its decision on July 18, 2002, denying the petition and affirming the lower courts in toto.
Justices Puno and Panganiban concurred with the judgment, and Justice Sandoval-Gutierrez took no part due to a close family relation with a party.

Key Facts

Francisco Artigo was authorized by a handwritten note dated January 24, 1984 to act as real estate broker for the sale of property at EDSA corner New York and Denver Streets, Cubao, Quezon City, at an asking price of P23,000,000 with a five percent commission.
The authorization letter stated that the agency was on a "first-come First serve" basis and that Constante signed as owner and as representative of co-owners.
Artigo introduced Times Transit Corporation as a prospective buyer and facilitated negotiations that led to the sale of lots 14 and 15 in May and June 1985.
Artigo received a partial commission payment of P48,893.76 and later demanded payment of the balance on the basis of an asserted actual selling price of P7,050,000.00, claiming a remaining commission of P303,606.24.
The deed of sale recited a purchase price of P3,600,000.00, and the De Castros contended that this figure established the basis for any commission.

Procedural History

The trial court rendered judgment on December 20, 1991 finding the De Castros jointly and solidarily liable to Artigo for P303,606.24 unpaid commission, P25,000.00 moral damages, P45,000.00 attorneys fees, and costs.
The Court of Appeals, Seventh Division, affirmed the RTC decision in CA-G.R. CV No. 37996 by Decision dated May 4, 1994.
The De Castros filed a petition for review on certiorari under Rule 45 before the Supreme Court, which denied the petition and affirmed the Court of Appeals' decision.

Issues Presented

Whether the complaint should have been dismissed for failure to implead indispensable co-owners of the two lots.
Whether Artigo's claim was extinguished by full payment, waiver, or abandonment.
Whether the lower courts erred in considering allegedly incompetent evidence to establish the actual purchase price.
Whether the courts erred in giving credence to allegedly perjured testimony by Artigo.
Whether the award of moral damages and attorneys fees to Artigo was improper.
Whether the De Castros were entitled to moral and exemplary damages and attorneys fees instead.

Court's Holdings

The Supreme Court held that the petition was without merit and affirmed the Court of Appeals' decision in toto.
The Supreme Court held that joinder of the other co-owners was not required because solidarity among co-principals under Art. 1915, Civil Code permitted Artigo to sue any one principal.
The Supreme Court held that Art