G.R. No. 94753 - Manotok Brothers, Inc. vs. Court of Appeals

Case Summary (G.R. No. 94753)

Factual Background

Manotok Brothers, Inc. owned a parcel of land and building formerly leased by the City of Manila for Claro M. Recto High School. By letter dated July 5, 1966, petitioner authorized Salvador Saligumba to negotiate the sale of the property for not less than P425,000.00 and agreed to pay a five percent (5%) commission if sale was consummated and paid. Subsequent extensions of authority were given on March 4, 1967, June 26, 1967, and November 16, 1967, the last of which extended authority for 180 days and set a minimum price of P410,000.00. The Municipal Board passed Ordinance No. 6603 on April 26, 1968 appropriating P410,816.00 for the purchase; the Mayor signed the ordinance on May 17, 1968, 183 days after the last letter. The deed of sale was executed January 14, 1969, and the purchase price was fully paid by a second payment by check on April 8, 1969. Petitioner refused to pay the commission of P20,554.50 claimed by Saligumba, who thereafter sued for his commission.

Trial Court Proceedings

At trial, Saligumba testified concerning his negotiations with city officials, the appraisal process, and the endorsements that led to Municipal Ordinance No. 6603. Witnesses Fructuoso Ancheta and Atty. Dominador Bisbal corroborated his authority to negotiate. Petitioner presented Filomeno Huelgas and Rufino Manotok, who asserted that Huelgas had followed up the sale and that Manotok had agreed to give Huelgas a gratification. The trial court found for plaintiff and ordered petitioner and/or Rufino Manotok to pay Saligumba P20,540.00 as commission with legal interest from filing of the complaint and P4,000.00 as attorney’s fees.

Court of Appeals Ruling

The Court of Appeals affirmed the trial court’s judgment. The decision was penned by Associate Justice Vicente V. Mendoza and concurred in by Associate Justices Manuel C. Herrera and Jorge S. Imperial. Petitioner’s Motion for Reconsideration before the Court of Appeals was denied on June 22, 1987.

Supreme Court: Original Petition and Procedural Posture

Petitioner filed a Petition for Review on Certiorari before the Supreme Court docketed as G.R. No. 78898 on August 10, 1987. The Court required comment from private respondent by Minute Resolution dated August 31, 1987, but the resolution was returned unserved. On March 13, 1989 the Court required petitioner to locate Saligumba and provide his present address. Petitioner manifested inability to locate him, and on May 3, 1989 the Court dismissed the petition for failure to join the private respondent; the dismissal became final and executory on that date. After Saligumba filed a Motion to Execute the judgment on January 9, 1990, petitioner discovered the development and filed the present Petition for Relief on August 30, 1990, alleging deprivation of opportunity to be heard and seeking, in the alternative, leave to re-file its Petition for Certiorari (G.R. No. 78898). By Resolution dated October 1, 1990 the Court set aside the May 3, 1989 entry of judgment in G.R. No. 78898, admitted the amended petition, and issued a temporary restraining order to stay execution of the judgment appealed from.

Issue Presented

The sole issue was whether Saligumba was entitled to a five percent (5%) agent’s commission for negotiating the sale of petitioner’s property to the City of Manila.

Parties’ Contentions

Petitioner argued that a broker is entitled to a commission only when he brings about an agreement between vendor and purchaser and only if consummation and payment occur within the period of authority; thus, petitioner contended that Saligumba was not entitled to commission because the deed of sale was executed after his authority had expired. Saligumba maintained that his efforts were the efficient procuring cause of the sale and that the sale would not have occurred but for his negotiations and the approvals he secured while his authority was in force.

Supreme Court Ruling

The Court ruled in favor of Saligumba and affirmed the judgment of the Court of Appeals. The Court found no reversible error in the appellate ruling and ordered that the temporary restraining order issued October 1, 1990 be lifted.

Legal Basis and Reasoning

The Court recognized the general rule that an agent or broker earns a commission only upon successful performance of the job given. The Court held, however, that the present case fell within the established exception exemplified by Prats vs. Court of Appeals, where compensation was awarded in equity despite expiration of exclusive authority because the agent’s efforts were instrumental in bringing about and finalizing the sale. The Court reasoned that Saligumba was the efficient procuring cause here: he negotiated with city officials, secured appraisal and endorsements, and set in motion the approvals that produced Municipal Ordinance No. 6603. The ordinance was passed on April 26, 1968 while Saligumba’s authority remained in force, and the Mayor’s subsequent signing on May 17, 1968 occurred only three days after expiration

Case Syllabus (G.R. No. 94753)

Parties and Procedural Posture

Manotok Brothers, Inc. filed the petition seeking relief from this Court's Resolution of May 3, 1989 and sought a preliminary injunction and contempt proceedings against private respondent.
The Honorable Court of Appeals and The Honorable Judge of the Regional Trial Court of Manila (Branch VI) were named as respondents in their official capacities.
Salvador Saligumba was the private respondent and claimant of a five percent commission for negotiating the sale of petitioner's property.
The case originated in Civil Case No. 76997 in the then Court of First Instance, which rendered judgment for Salvador Saligumba, and was affirmed by the Court of Appeals.
Manotok Brothers, Inc. elevated the case to this Court by Petition for Review on Certiorari docketed as G.R. No. 78898, which was dismissed by this Court on May 3, 1989 for failure to locate and join the private respondent.
Manotok Brothers, Inc. filed the instant petition (G.R. No. 94753) after discovery that private respondent moved to execute the May 3, 1989 judgment, and this Court temporarily restrained execution and admitted the amended petition on October 1, 1990.

Key Facts

Manotok Brothers, Inc. owned a parcel of land and building formerly leased and occupied by Claro M. Recto High School in Sampaloc, Manila.
Salvador Saligumba received a written authority on July 5, 1966 to negotiate the sale for not less than P425,000 and successive written extensions were given, the last extending authority until May 14, 1968.
The Municipal Board of Manila passed Ordinance No. 6603 on April 26, 1968 appropriating PHP 410,816 for the purchase, and the Mayor signed the ordinance on May 17, 1968.
A deed of sale was executed on January 14, 1969 and the purchase price was fully paid by April 8, 1969.
Saligumba claimed a five percent commission amounting to P20,554.50 but received nothing and filed suit on June 29, 1969.
The trial court awarded Saligumba P20,540.00 as commission with legal interest and PHP 4,000.00 as attorneys' fees, and the Court of Appeals affirmed that judgment.

Trial and Appeals History

The trial court found Saligumba entitled to the commission and attorneys' fees and entered judgment in Civil Case No. 76997.
The Court of Appeals affirmed the trial court's ruling through a decision penned by Associate Justice Vicente V. Mendoza.
Manotok Brothers, Inc. filed a Petition for Review on Certiorari with this Court (G.R. No. 78898) which was ordered served, returned unserved, and ultimately dismissed by this Court on May 3, 1989 fo