G.R. No. 95909, 16 August 1991

FACTS:

The Uniland resource is a private corp., licensed to engage in real estate brokerage while DBP is a govt corp. Engaged in finance and banking in proprietary capacity. Long before this case arose, Marinduque Mining Corporation obtained a loan from the DBP and as security therefor, mortgaged certain real properties to the latter, among them two lots located in Makati.

The said lots, however, been previously mortgaged by Marinduque Mining Corp., to Caltex, and the mortgage in favor of DBP was entered on their titles as a second mortgage. The account of the Marinduque Mining Corp., with the DBP was later transferred to the Assets Privatization Trust (APT) pursuant to Proclamation No. 50. For failure of the Marinduque Mining Corp. to pay its obligations to Caltex, the latter foreclosed its mortgage on the aforesaid two lots.

APT on the other hand, to recover its investment on the Marinduque Account, offered for sale to the public through DBP its right of redemption on said two lots by public bidding. Caltex had required that both lots be redeemed, the bidding guidelines set by DBP provided that any bid to purchase either of the two lots would be considered only should there be two bids or a bid for the two items which, when combined, would fully cover the sale of the two lots in question.

Seeing, however, that it would make a profit if it redeemed the two lots and then offer them for sale, and as its right to redeem said lots from Caltex would expire on May 8, 1987, DBP retrieved the account from APT and, on the last day for the exercise of its right of redemption, May 8, 1987, redeemed said lots from Caltex.

In preparation for the sale of the two lots in question, DBP called a pre-bidding conference wherein a new set of bidding guidelines were formulated the public bidding for the sale of the two lots was held and again, there was only one bidder, the Charges Realty Corp.

Notwithstanding that there was no bidder for the office building lot, the DBP approved the sale of the warehouse lot to Charges Realty Corp., and the proper documentation of the sale was made. The DBP admittedly paid the (five percent) broker’s fee on this sale to the DBP Management Corporation, which acted as broker for said negotiated sale. After the sale through its President, wrote two letters to [respondent DBP], the first through its Senior Vice President and, the second through its Vice Chairman asking for the payment of its broker’s fee in instrument of the sale of its (DBP’s) warehouse lot to Charges Realty Corp. The claim was referred to the Bidding Committee chaired by Amanda S. Guiam which met on November 9, 1987, and which, on November 18, 1987, issued a decision denying [petitioner’s] claim.

Hence, the instant case filed by [petitioner] to recover from [respondent] DBP the aforesaid broker’s fee.
LOWER COURT rendered judgment ORDERING [respondent DBP] to pay [petitioner] the sum of P1,203,500,00 which is the equivalent of [five percent] broker’s fee plus legal interest thereto from the filing of the complaint on February 18, 1988 until fully paid and the sum of P50,000.00 as and for attorney’s fees. Costs against [respondent DBP]. On appeal, the Court of Appeals reversed the judgment of the lower court and dismissed the complaint. The motion for reconsideration filed by petitioner was also subsequently denied.

ISSUE:

Whether there was an agency between Uniland resources and DBP (art 1869 civil code).

RULING:

No agency, SC affirmed CA with modifications in relation with equity consideration. That in equity respondent DBP is ordered to pay petitioner the amount of One Hundred Thousand Pesos

It is obvious that Uniland was never able to secure the required accreditation from respondent DBP to transact business on behalf of the latter. The letters sent by Uniland to the higher officers of the DBP and the APT are merely indicative of Uniland’s desire to secure such accreditation. At best these missives are self-serving; the most that they prove is that they were sent by Uniland and received by DBP, which clearly never agreed to be bound thereto. As declared by the trial court even when it found in favor of Uniland, there was no express reply from the DBP or the APT as to the accreditation sought by Uniland. From the very beginning, therefore, petitioner was aware that it had no express authority from DBP to find buyers of its properties.

The controversy is only between the DBP and petitioner, to whom it was emphasized in no uncertain terms that the arrangement sought did not exist. Article 1869, therefore, has no room for operation in this case

Petitioner’s stance goes against the basic axiom in Civil Law that no one may contract in the name of another without being authorized by the latter, unless the former has by law a right to represent him. From this principle, among others, springs the relationship of agency which, as with other contracts, is one founded on mutual consent: the principal agrees to be bound by the acts of the agent and the latter in turn consents to render service on behalf or in representation of the principal.

In Prats v. Court of Appeals, there was a finding that the petitioner therein as the agent was no longer the efficient procuring cause in bringing about the sale proceeding from the fact of expiration of his exclusive authority. There was therefore no basis in law to grant the relief sought. Nevertheless, this Court in equity granted the sum of P100, 000.00, out of the P1, 380,000.00 claimed as commission, by way of compensation for the efforts and assistance rendered by the agent in the transaction prior to the expiration of his authority. These consist in offering the lot for sale to the eventual buyer, sending follow-up letters, inviting the buyer to dinner and luncheon meetings, etc.

Similar situation in the case at bar, It was petitioner who advised Glaxo, Philippines of the availability of the warehouse property and aroused its interest over the same. Through petitioner, respondent DBP was directly informed of the existence of an interested buyer. Petitioner’s persistence in communicating with respondent DBP reinforced the seriousness of the offer. This piece of information no doubt had a bearing on the subsequent decisions made by respondent DBP as regards the disposition of its properties.

*Case digest by Benjie L. Sumalpong, JD – 4, Andres Bonifacio College, SY 2019 – 2020