Case Summary (G.R. No. 150678)
Factual Background
In 1986, Medrano tasked Flor with finding a buyer for the bank's foreclosed property, a mango plantation valued at P2,200,000.00. Borbon, responding to prior client Dominador Lee's preference for mango trees, became involved after being informed by Flor about the available property. Subsequently, Medrano issued a letter authorizing Borbon and Antonio to negotiate the sale, committing to pay them a 5% commission from the total sale price.
Ocular Inspection and Buyer Interaction
Initial attempts for Lee to inspect the property were hindered by logistics. Ultimately, Lee conducted an independent visit, arranged to talk to Medrano's daughter for more details. Following the visit, Lee indicated he intended to purchase the property, leading to a deed of sale executed between Lee and the bank for P1,200,000.00. Respondents sought their commission post-sale, which the petitioners contested.
Dispute Over Commission and Authority
Petitioners argued that Medrano's authority was improperly granted since he was not the registered owner of the property. They also claimed the respondents failed to fulfill their obligations under the letter of authority. As a result, the petitioners only offered a nominal fee instead of the full commission.
Trial Court Decision
The Regional Trial Court upheld the validity of the letter of authority, concluding that it effectively bound both Medrano and the bank. The court ruled that respondents had played a critical role in facilitating the sale and, thus, were entitled to the promised commission. They were awarded P60,000.00 representing their commission, alongside additional costs for attorney fees and litigation expenses.
Appeal and Court of Appeals Decision
Dissatisfied with the ruling, the petitioners appealed, reiterating arguments regarding the authority's non-binding nature and disputing the respondents' role in the transaction. The Court of Appeals affirmed the lower court's findings, emphasizing that Medrano's authority was valid and the respondents were instrumental in the sale’s consummation. The appellate court held that the action for commission persisted despite Medrano's death, and that obligations arising from the sale were valid claims against his estate.
Legal Principles - Broker's Role and Commission
The core legal principle involved is the definition and rights of a broker as an agent in real estate transactions. A broker earns a commission for bringing a buyer ready, willi
...continue readingCase Syllabus (G.R. No. 150678)
Case Overview
- This case revolves around a petition for review concerning the decision of the Court of Appeals affirming the Regional Trial Court's (RTC) ruling which awarded a 5% broker's commission to the respondents.
- The petitioners are Bienvenido R. Medrano and the Ibaan Rural Bank, while the respondents are Pacita G. Borbon, Josefina E. Antonio, and Estela A. Flor.
Background Facts
- Bienvenido R. Medrano, Vice-Chairman of the Ibaan Rural Bank, tasked his cousin-in-law, Estela Flor, to find a buyer for a 17-hectare mango plantation owned by the bank.
- Mrs. Pacita G. Borbon, a licensed real estate broker, had previously interacted with Dominador Lee, a businessman looking for a mango plantation.
- Borbon communicated with Flor about the sale, leading to Medrano issuing a Letter of Authority on September 3, 1986, authorizing Borbon and Antonio to negotiate the sale.
The Letter of Authority
- The Letter of Authority detailed the property, including its location, area, improvements, and price of P2,200,000.00.
- Medrano committed to paying a 5% commission to the respondents for their efforts in finding a buyer.
Ocular Inspection and Sale Process
- Initial attempts for Lee to inspect the property failed due to weather and transportation issues.
- Lee eventually inspected the property without the respondents and expressed interest, leading to a down payment of P1,000,000.00 and a final price of P1,200,000.00.
- The sale was formalized through a Deed of Sale on November 6, 1986.
Demand for Commission
- After the sale, the respondents demanded their commission, which the petitioners refused to pay, offering only P5,000