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Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 76969 June 9, 1997

INLAND REALTY INVESTMENT SERVICE, INC. and ROMAN

M. DE LOS REYES, petitioners,
vs.
HON. COURT OF APPEALS, GREGORIO ARANETA, INC. and J.
ARMANDO EDUQUE, respondents.

HERMOSISIMA, JR., J.:

Herein petitioners Inland Realty Investment Service, Inc.

(hereafter, "Inland Realty") and Roman M. de los Reyes seek
the reversal of the Decision 1 of the Intermediate Appellate Court
(now Court of Appeals) 2 which affirmed the trial court's dismissal
3 of petitioners' claim for unpaid agent's commission for brokering
the sales transaction involving 9,800 shares of stock in Architects'
Bldg., Inc. (hereafter, "Architects"') between private respondent
Gregorio Araneta, Inc. (hereafter, "Araneta, Inc.") as seller and
Stanford Microsystems, Inc. (hereafter, "Stanford") as buyer.

Petitioners come to us with a two-fold agenda: (1) to obtain

from us a declaration that the trial court and the respondent
appellate court gravely erred when appreciating the facts of
the case by disregarding Exhibits "L," a Letter dated October
28, 1976 signed by Gregorio Araneta II, renewing petitioners'
authority to act as sales agent for a period of thirty (30) days
from same date, and Exhibit "M," a Letter dated November 16,
1976 signed by petitioner de los Reyes, naming four (4) other
prospective buyers, respectively; and (2) to obtain from us a
categorical ruling that a broker is automatically entitled to the
stipulated commission merely upon securing for, and
introducing to, the seller the particular buyer who ultimately
purchases from the former the object of the sale, regardless
of the expiration of the broker's contract of agency and
authority to sell.

Before we proceed to address petitioners' objectives, there is

a need to unfold the facts of the case. For that purpose, we
quote hereunder the findings of fact of the Court of Appeals
with which petitioners agree, except as to the respondent
appellate court's non-inclusion of the aforementioned Exhibits
"L" and "M":

From the evidence, the following facts appear

undisputed: On September 16, 1975, defendant
corporation thru its co-defendant Assistant General
Manager J. Armando Eduque, granted to plaintiffs a
30-day authority to sell its . . . 9,800 shares of stock in
Architects' Bldg., Inc. as follows:

September
16, 1975

TO WHOM IT MAY CONCERN:

This is to authorize Mr. R.M. de los Reyes,

representing Inland Realty, to sell on a first
 come first served basis the total holdings of
Gregorio Araneta, Inc. in Architects' [Bldg.], Inc.
equivalent to 98% or 9,800 shares of stock at
the price of P1,500.00 per share for a period of
30 days.

(SGD.) J. ARMANDO
EDUQUE

Asst. General
Manager'

Plaintiff Inland Realty Investment Service, Inc. (Inland

Realty for short) is a corporation engaged [in], among
others . . . the real estate business [and] brokerages,
duly licensed by the Bureau of Domestic Trade . . .
[Inland Realty] planned their sales campaign, sending
proposal letters to prospective buyers. One such
prospective buyer to whom a proposal letter was sent
to was Stanford Microsystems, Inc. . . . [that] counter-
proposed to buy 9,800 shares offered at P1,000.00 per
share or for a total of P9,800,000.00, P4,900,000.00
payable in five years at 12% per annum interest until
fully paid.

Upon plaintiffs' receipt of the said counter-proposal, it

immediately [sic] wrote defendant a letter to register
Stanford Microsystems, Inc. as one of its prospective
buyers . . . Defendant Araneta, Inc., thru its Assistant
General Manager J. Armando Eduque, replied that the
price offered by Stanford was too low and suggested
that plaintiffs see if the price and terms of payment
can be improved upon by Stanford . . . Other
prospective buyers were submitted to defendants
among whom were Atty. Maximo F. Belmonte and Mr.
 Joselito Hernandez. The authority to sell given to
plaintiffs by defendants was extended several times:
the first being on October 2, 1975, for 30 days from
said date (Exh. "J"), the second on October 28, 1975 for
30 days from said date (Exh. "L") and on December 2,
1975 for 30 days from said date (Exh. "K").

Plaintiff Roman de los Reyes, manager of Inland

Realty's brokerage division, who by contract with
Inland Realty would be entitled to 1/2 of the claim
asserted herein, testified that when his company was
initially granted the authority to sell, he asked for an
exclusive authority and for a longer period but
Armando Eduque would not give, but according to this
witness, the life of the authority could always be
extended for the purpose of negotiation that would be
continuing.

On July 8, 1977, plaintiffs finally sold the 9,800 shares

of stock
[in] Architects' [Bldg.], Inc. to Stanford Microsystems,
Inc. for P13,500,000.00 . . .

On September 6, 1977, plaintiffs demanded formally

[from] defendants, through a letter of demand, for
payment of their 5% broker['s] commission at
P13,500,000.00 or a total amount of P675,000.00 . . .
which was declined by [defendants] on the ground that
the claim has no factual or legal basis. 4

Ascribing merit to private respondents' defense that, after

their authority to sell expired thirty (30) days from December
2, 1975, or on January 1, 1976, petitioners abandoned the
sales transaction and were no longer privy to the
consummation and documentation thereof, the trial court
dismissed petitioners' complaint for collection of unpaid
broker's commission.

Petitioners appealed, but the Court of Appeals was unswayed

in the face of evidence of the expiration of petitioners' agency
contract and authority to sell on January 1, 1976 and the
consummation of the sale to Stanford on July 8, 1977 or more
than one (1) year and five (5) months after petitioners' agency
contract and authority to sell expired. Respondent appellate
court dismissed petitioners' appeal in this wise:

. . . The resolution would seem to hinge on the

question of whether plaintiff was instrumental in the
final consummation of the sale to Stanford which was
the same name of the company submitted to
defendants as a prospective buyer although their price
was considered by defendant to be too low and
defendants wrote to plaintiff if the price may be
improved upon by Stanford . . . This was on October
13, 1975. After that, there was an extension for 30 days
from October 28, 1975 of the authority (Exh. "L") and
another on December 2, 1975 for another 30 days from
the said date . . . . There is nothing in the record or in
the testimonial evidence that the authority extended 30
days from the last date of extension was ever reserved
nor extended, nor has there been any communication
made to defendants that the plaintiff was actually
negotiating with Stanford a better price than what was
previously offered by it . . . .

In fact there was no longer any agency after the last

extension. Certainly, the length of time which had
transpired from the date of last extension of authority
to the final consummation of the sale with Stanford of
about one (1) year and five (5) months without any
 communication at all from plaintiffs to defendants with
respect to the suggestion or defendants that Stanford's
offer was too low and suggested if plaintiffs may make
it better. We have a case of proposal and counter-
proposal which would not constitute a definite closing
of the transaction just because it was plaintiff who
solely suggested to defendants the name of Stanford
as buyer . . . . 5

Unable to accept the dismissal of its claim for unpaid broker's

commission, petitioners filed the instant petition for review
asking us (1) to pass upon the factual issue of the alleged
extension of their agency contract and authority to sell and (2)
to rule in favor of a broker's automatic entitlement to the
stipulated commission merely upon securing for, and
introducing to, the seller, the particular buyer who ultimately
purchases from the former the object of the sale, regardless
of the expiration of the broker's contract of agency and
authority to sell.

We find for private respondents.

Petitioners take exception to the finding of the respondent

Court of Appeals that their contract of agency and authority to
sell expired thirty (30) days from its last renewal on December
2, 1975. They insist that, in the Letter dated October 28, 1976,
Gregorio Araneta III, in behalf of Araneta, Inc., renewed
petitioner Inland Realty's authority to act as agent to sell the
former's 9,800 shares in Architects' for another thirty (30)
days from same date. This Letter dated October 28, 1976,
petitioners claim, was marked as Exhibit "L" during the trial
proceedings before the trial court.
This claim is a blatant lie. In the first place, petitioners have
conspicuously failed to attach a certified copy of this Letter
dated October 28, 1976. They have, in fact, not attached even
a machine copy thereof. All they gave this court is their word
that said Letter dated October 28, 1976 does exist, and on that
basis, they expect us to accordingly rule in their favor.

Such naivety, this court will not tolerate. We will not treat
lightly petitioners' attempt to mislead this court by claiming
that the Letter dated October 28, 1976 was marked as Exhibit
"L" by the trial court, when the truth is that the trial court
marked as Exhibit "L", and the respondent Court of Appeals
considered as Exhibit "L," private respondent Araneta, Inc.'s
Letter dated October 28, 1975, not 1976. Needless to say, this
blatant attempt to mislead this court, is contemptuous
conduct that we sternly condemn.

II

The Letter dated November 16, 1976, claimed by petitioners to

have been marked as Exhibit "M", has no probative value,
considering that its very existence remains under a heavy
cloud of doubt and that hypothetically assuming its existence,
its alleged content, namely, a listing of four (4) other
prospective buyers, does not at all prove that the agency
contract and authority to sell in favor of petitioners was
renewed or revived after it expired on January 1, 1976. As in
the case of the Letter dated October 28, 1976, petitioners have
miserably failed to attach any copy of the Letter dated
November 16, 1976. A copy thereof would not help
petitioners' failing cause, anyway, especially considering that
said letter was signed by petitioner De los Reyes and would
therefore take on the nature of a self-serving document that
has no evidentiary value insofar as petitioners are concerned.
 III

Finally, petitioners asseverate that, regardless of whether or

not their agency contract and authority to sell had expired,
they are automatically entitled to their broker's commission
merely upon securing for and introducing to private
respondent Araneta, Inc. the buyer in the person of Stanford
which ultimately acquired ownership over Araneta, Inc.'s
9,800 shares in Architects'.

Petitioners' asseverations are devoid of merit.

It is understandable, though, why petitioners have resorted to

a campaign for an automatic and blanket entitlement to
brokerage commission upon doing nothing but submitting to
private respondent Araneta, Inc., the name of Stanford as
prospective buyer of the latter's shares in Architects'. Of
course petitioners would advocate as such because precisely
petitioners did nothing but submit Stanford's name as
prospective buyer. Petitioners did not succeed in outrightly
selling said shares under the predetermined terms and
conditions set out by Araneta, Inc., e.g., that the price per
share is P1,500.00. They admit that they could not dissuade
Stanford from haggling for the price of P1,000.00 per share
with the balance of 50% of the total purchase price payable in
five (5) years at 12% interest per annum. From September 16,
1975 to January 1, 1976, when petitioners' authority to sell
was subsisting, if at all, petitioners had nothing to show that
they actively served their principal's interests, pursued to sell
the shares in accordance with their principal's terms and
conditions, and performed substantial acts that proximately
and causatively led to the consummation of the sale to
Stanford of Araneta, Inc.'s 9,800 shares in Architects'.
The Court of Appeals cannot be faulted for emphasizing the
lapse of more than one (1) year and five (5) months between
the expiration of petitioners' authority to sell and the
consummation of the sale to Stanford, to be a significant
index of petitioners' non-participation in the really critical
events leading to the consummation of said sale, i.e., the
negotiations to convince Stanford to sell at Araneta, Inc.'s
asking price, the finalization of the terms and conditions of
the sale, the drafting of the deed of sale, the processing of
pertinent documents, and the delivery of the shares of stock
to Stanford. Certainly, when the lapse of the period of more
than one (1) year and five (5) months between the expiration
of petitioners' authority to sell and the consummation of the
sale, is viewed in the context of the utter lack of evidence of
petitioners' involvement in the negotiations between Araneta,
Inc. and Stanford during that period and in the subsequent
processing of the documents pertinent to said sale, it
becomes undeniable that the respondent Court of Appeals did
not at all err in affirming the trial court's dismissal of
petitioners' claim for unpaid brokerage commission.

Petitioners were not the efficient procuring cause 6 in bringing

about the sale in question an July 8, 1977 and are, therefore, not
entitled to the stipulated broker's commission of "5% on the total
price."

WHEREFORE, the instant petition is HEREBY DISMISSED.

Costs against petitioners.

SO ORDERED.

Bellosillo, Vitug and Kapunan, JJ., concur.

Padilla, J., is on leave.

Footnotes

1 In AC-G.R. CV No. 00221, promulgated on May 29,

1986, and penned by Associate Justices Floreliana
Castro-Bartolome with Associate Justices Jorge R.
Coquia and Bienvenido C. Ejercito, concurring; Rollo,
pp. 61-65.

2 Third Civil Cases Division.

3 Decision rendered on January 5, 1981 by the Court of

First Instance (now Regional Trial Court) of Manila,
Branch VII.

4 Decision of the Court of Appeals dated May 29, 1986,

pp. 2-3; Rollo, pp. 62-63.

5 Decision of the Court of Appeals dated May 29, 1986,

pp. 3-5; Rollo, pp. 63-65.

6 Prats v. Court of Appeals, 81 SCRA 360, 381 [1978].

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