G.R. No. 95909 - Uniland Resources vs. Development Bank of the Philippines

Case Summary (G.R. No. 95909)

Factual Background

Uniland Resources represented that it could introduce prospective buyers for two lots in Makati that had been mortgaged by Marinduque Mining Corporation, were foreclosed by Caltex, and as to which the Marinduque account had been transferred to the Assets Privatization Trust (APT). The two lots comprised an office building lot (TCT No. 114138, 3,330 sq. mts.) and a warehouse lot (TCT No. 16279, 12,355 sq. mts.). APT offered its right of redemption through DBP by public bidding with guidelines requiring combined bids covering both lots. On May 5, 1987 only one bidder offered P23,900,000 for the warehouse lot, and the bid was rejected. On May 8, 1987 DBP redeemed the lots from Caltex for P33,096,321.62 and thereafter prepared the lots for sale. At the July 30, 1987 public bidding only Clarges Realty Corp. (an affiliate of Glaxo, Philippines) bid P24,070,000 for the warehouse lot; there was no bid for the office building lot. DBP approved and documented the sale of the warehouse lot; the office building lot was later sold by negotiated sale for P17,460,000, with DBP Management Corporation receiving a five percent broker’s fee for that negotiated sale.

Petitioner’s Pre-Bidding Communications

Prior to the July 1987 bidding, Uniland Resources sent letters to DBP officers and to the APT seeking accreditation as a broker, stating that it had a client, Glaxo, Philippines, interested in the warehouse property. Those communications are in evidence as Exhibits A and B and as other documentary exhibits, but DBP did not grant accreditation nor did it expressly accept Uniland Resources as its broker.

Trial Court Proceedings and Judgment

Uniland Resources filed suit on February 18, 1988 to recover a broker’s fee of five percent of the warehouse sale price, computed as P1,203,500.00. The Regional Trial Court, Branch 105, Quezon City, presided over by Honorable Tomas V. Tadeo, Jr., found in favor of Uniland Resources and, on October 25, 1988, ordered DBP to pay P1,203,500.00 as broker’s fee with legal interest from filing, plus P50,000.00 attorney’s fees and costs.

Court of Appeals Ruling

The Court of Appeals, Ninth Division, reversed the trial court and dismissed the complaint. The appellate court concluded that Uniland Resources had no accreditation and no express authority from DBP to act as broker. The Court of Appeals found the petitioner’s letters to be self-serving evidence of a desire for accreditation and not proof of an accepted agency relationship.

Issues Presented to the Supreme Court

The principal legal questions framed involved whether Uniland Resources was entitled to a broker’s commission despite lacking express accreditation; whether an implied agency arose under Article 1869 of the Civil Code from the acts, silence, or failure of DBP to repudiate petitioner’s conduct; and whether equitable relief should be granted for services rendered that led to the sale.

Petitioner’s Contentions on Review

Uniland Resources argued that the Court of Appeals ignored material evidence showing it had requested accreditation before the sale and had informed DBP of an interested and financially able buyer, Glaxo, Philippines. Petitioner maintained that these facts established at least an implied agency or, alternatively, justified an award of the broker’s commission as a matter of equity.

Standard of Review and Evidentiary Assessment

The Supreme Court observed that the petition invoked Rule 45 and therefore raised questions of law only, which do not permit reexamination of the probative value of evidence. The Court reiterated that findings of fact by the Court of Appeals, if supported by substantial evidence, bind the Supreme Court. The Court found no basis to invoke the exceptions permitting factual review and held that the Court of Appeals’ factual conclusions were supported by the record.

Legal Reasoning on Agency and Accreditation

The Court reaffirmed the principle that an agency relationship rests on mutual consent under Art. 1317, Civil Code, and that one cannot bind another in the name of the latter without authority. The Court held that the absence of express accreditation and of any DBP acceptance of petitioner’s proposed agency deprived Uniland Resources of the legal prerequisites for recovery of a broker’s commission. The Court ruled that Article 1869 had no application because petitioner’s communications did not transform DBP’s silence or inaction into acceptance where DBP had explicitly required accreditation and had not bound itself to petitioner.

Equity Considerations and Precedent

Although denying legal recovery of the commission, the Court considered equitable relief. The Court acknowledged that Uniland Resources initiated contact between DBP and a prospective buyer and that its persistent communications may have cont

Case Syllabus (G.R. No. 95909)

Parties and Procedural Posture

Uniland Resources was a licensed private corporation engaged in real estate brokerage and was the Petitioner in this Court.
Development Bank of the Philippines was a government corporation engaged in finance and banking and was the Respondent in this Court.
The Regional Trial Court, Branch 105, Quezon City rendered judgment ordering DBP to pay Uniland Resources a five percent broker's fee plus interest and attorney's fees.
The Court of Appeals, Ninth Division reversed the RTC and dismissed the complaint.
Uniland Resources filed a petition for review under Rule 45, Rules of Court, raising primarily questions of law, and the case reached this Court.

Key Factual Allegations

Marinduque Mining Corporation mortgaged two Makati lots to DBP as a second mortgage, and the Marinduque account was later transferred to the Assets Privatization Trust.
Caltex foreclosed its prior mortgage on the two lots, and DBP acquired the right of redemption and redeemed the lots from Caltex on May 8, 1987 for PHP 33,096,321.62.
A public bidding on May 5, 1987 produced only one bid for the warehouse lot which DBP rejected because the bidding rules required combined bids for both lots or two separate bids.
A subsequent public bidding on July 30, 1987 produced only one bid by Clarges Realty Corp. for the warehouse lot at PHP 24,070,000, and no bid for the office building lot.
DBP approved the sale of the warehouse lot to Clarges Realty Corp. and executed documentation on November 23, 1987, while the office building lot was later sold by negotiated sale to the Bank of P.I. as trustee for PHP 17,460,000.00.
Uniland Resources sent letters to higher officers of DBP and to the APT seeking accreditation as broker and advising that its client Glaxo, Philippines was an interested buyer.
The DBP Bidding Committee denied Uniland Resources' claim on November 18, 1987, and Uniland Resources thereafter filed suit seeking a five percent broker's fee.

Issues Presented

Whether an unauthorized intermediary who had no express accreditation or authority from the seller was entitled to a five percent broker's commission for a sale ultimately consummated between parties the intermediary introduced.
Whether an implied agency under Art. 1869, Civil Code arose from the facts and the parties' conduct.
Whether equity permitted recovery for efforts of an unauthorized broker absent the legal requisites for agency.

Contentions of Petitioner

Uniland Resources contended that its pre-bidding letters to DBP and the APT requesting accreditation and naming Glaxo as a prospective buyer established an agency relationship or at least constituted sufficient conduct for an implied agency under Art. 1869, Civil Code.
Uniland Resources asserted that it was the procuring cause of the sale and was entitled to a five percent commission equal to PHP 1,203,500.00.
Uniland Resources argued that the Court of Appeals based its decision on controversial factual findings and failed to give due weight to the documentary evidence of its communications.

Contentions of Respondent

DBP maintained that Uniland Resources never secured accreditation and therefore lacked authority to act as broker for DBP.
DBP denied the existence of any express or implied agency and asserted that the bidding and sale procedures were governed by formal accreditation rules known to Uniland Resources.
DBP noted that it paid a broker's fee to DBP Management Corporation for a negotiated sale of the office building lot and that no broker's fee was due to Uniland Re