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G.R. No. 143978           December 3, 2002 After trial, the lower court rendered judgment in favor of petitioners, the
dispositive portion of which reads:
MANUEL B. TAN, GREGG M. TECSON and ALEXANDER
SALDAÑA, petitioners, vs. EDUARDO R. GULLAS and NORMA S. WHEREFORE, UPON THE AEGIS OF THE FOREGOING, judgment is
GULLAS, respondents. hereby rendered for the plaintiffs and against the defendants. By virtue
hereof, defendants Eduardo and Norma Gullas are hereby ordered to pay
YNARES-SANTIAGO, J.: jointly and severally plaintiffs Manuel Tan, Gregg Tecson and Alexander
Saldaña;
This is a petition for review seeking to set aside the decision 1 of the Court of
Appeals2 in CA-G.R. CV No. 46539, which reversed and set aside the 1) The sum of SIX HUNDRED TWENTY FOUR THOUSAND AND SIX
decision3 of the Regional Trial Court of Cebu City, Branch 22 in Civil Case HUNDRED EIGHTY FOUR PESOS (P624,684.00) as broker’s fee with
No. CEB-12740. legal interest at the rate of 6% per annum from the date of filing of the
complaint; and
The records show that private respondents, Spouses Eduardo R. Gullas
and Norma S. Gullas, were the registered owners of a parcel of land in the 2) The sum of FIFTY THOUSAND PESOS (P50,000.00) as attorney’s fees
Municipality of Minglanilla, Province of Cebu, measuring 104,114 sq. m., and costs of litigation.
with Transfer Certificate of Title No. 31465. 4 On June 29, 1992, they
executed a special power of attorney5 authorizing petitioners Manuel B. For lack of merit, defendants’ counterclaim is hereby DISMISSED.
Tan, a licensed real estate broker,6 and his associates Gregg M. Tecson
and Alexander Saldaña, to negotiate for the sale of the land at Five IT IS SO ORDERED.16
Hundred Fifty Pesos (P550.00) per square meter, at a commission of 3% of
the gross price. The power of attorney was non-exclusive and effective for Both parties appealed to the Court of Appeals. Private respondents argued
one month from June 29, 1992.7 that the lower court committed errors of fact and law in holding that it was
petitioners’ efforts which brought about the sale of the property and
On the same date, petitioner Tan contacted Engineer Edsel Ledesma, disregarding the previous negotiations between private respondent Norma
construction manager of the Sisters of Mary of Banneaux, Inc. (hereafter, Gullas and the Sisters of Mary and Pacana. They further alleged that the
Sisters of Mary), a religious organization interested in acquiring a property lower court had no basis for awarding broker’s fee, attorney’s fees and the
in the Minglanilla area. costs of litigation to petitioners.17

In the morning of July 1, 1992, petitioner Tan visited the property with Petitioners, for their part, assailed the lower court’s basis of the award of
Engineer Ledesma. Thereafter, the two men accompanied Sisters Michaela broker’s fee given to them. They contended that their 3% commission for
Kim and Azucena Gaviola, representing the Sisters of Mary, to see private the sale of the property should be based on the price of P55,180.420.00, or
respondent Eduardo Gullas in his office at the University of Visayas. The at P530.00 per square meter as agreed upon and not on the alleged actual
Sisters, who had already seen and inspected the land, found the same selling price of P20,822,800.00 or at P200.00 per square meter, since the
suitable for their purpose and expressed their desire to buy it.8 However, actual purchase price was undervalued for taxation purposes. They also
they requested that the selling price be reduced to Five Hundred Thirty claimed that the lower court erred in not awarding moral and exemplary
Pesos (P530.00) per square meter instead of Five Hundred Fifty Pesos damages in spite of its finding of bad faith; and that the amount of
(P550.00) per square meter. Private respondent Eduardo Gullas referred P50,000.00 as attorney’s fees awarded to them is insufficient. Finally,
the prospective buyers to his wife. petitioners argued that the legal interest imposed on their claim should have
been pegged at 12% per annum instead of the 6% fixed by the court.18
It was the first time that the buyers came to know that private respondent
Eduardo Gullas was the owner of the property. On July 3, 1992, private The Court of Appeals reversed and set aside the lower court’s decision and
respondents agreed to sell the property to the Sisters of Mary, and rendered another judgment dismissing the complaint. 19
subsequently executed a special power of attorney 9 in favor of Eufemia
Cañete, giving her the special authority to sell, transfer and convey the land Hence, this appeal.
at a fixed price of Two Hundred Pesos (P200.00) per square meter.
Petitioners raise following issues for resolution:
On July 17, 1992, attorney-in-fact Eufemia Cañete executed a deed of sale
I.
in favor of the Sisters of Mary for the price of Twenty Million Eight Hundred
Twenty Two Thousand Eight Hundred Pesos (P20,822.800.00), or at the THE APPELLATE COURT GROSSLY ERRED IN THEIR FINDING THAT
rate of Two Hundred Pesos (P200.00) per square meter.10 The buyers THE PETITIONERS ARE NOT ENTITLED TO THE BROKERAGE
subsequently paid the corresponding taxes.11Thereafter, the Register of COMMISSION.
Deeds of Cebu Province issued TCT No. 75981 in the name of the Sisters
of Mary of Banneaux, Inc.12 II.

Earlier, on July 3, 1992, in the afternoon, petitioners went to see private IN DISMISSING THE COMPLAINT, THE APPELLATE COURT HAS
respondent Eduardo Gullas to claim their commission, but the latter told DEPRIVED THE PETITIONERS OF MORAL AND EXEMPLARY
them that he and his wife have already agreed to sell the property to the DAMAGES, ATTORNEYS’ FEES AND INTEREST IN THE
Sisters of Mary. Private respondents refused to pay the broker’s fee and FOREBEARANCE OF MONEY.
alleged that another group of agents was responsible for the sale of land to
the Sisters of Mary. The petition is impressed with merit.

On August 28, 1992, petitioners filed a complaint 13 against the defendants The records show that petitioner Manuel B. Tan is a licensed real estate
for recovery of their broker’s fee in the sum of One Million Six Hundred Fifty broker, and petitioners Gregg M. Tecson and Alexander Saldaña are his
Five Thousand Four Hundred Twelve and 60/100 Pesos (P1,655,412.60), associates. In Schmid and Oberly v. RJL Martinez Fishing Corporation, 20 we
as well as moral and exemplary damages and attorney’s fees. They alleged defined a "broker" as "one who is engaged, for others, on a commission,
that they were the efficient procuring cause in bringing about the sale of the negotiating contracts relative to property with the custody of which he has
property to the Sisters of Mary, but that their efforts in consummating the no concern; the negotiator between other parties, never acting in his own
sale were frustrated by the private respondents who, in evident bad faith, name but in the name of those who employed him. x x x a broker is one
malice and in order to evade payment of broker’s fee, dealt directly with the whose occupation is to bring the parties together, in matters of trade,
buyer whom petitioners introduced to them. They further pointed out that commerce or navigation." (Emphasis supplied)
the deed of sale was undervalued obviously to evade payment of the
correct amount of capital gains tax, documentary stamps and other internal During the trial, it was established that petitioners, as brokers, were
revenue taxes. authorized by private respondents to negotiate for the sale of their land
within a period of one month reckoned from June 29, 1992. The authority
In their answer, private respondents countered that, contrary to petitioners’ given to petitioners was non-exclusive, which meant that private
claim, they were not the efficient procuring cause in bringing about the respondents were not precluded from granting the same authority to other
consummation of the sale because another broker, Roberto Pacana, agents with respect to the sale of the same property. In fact, private
introduced the property to the Sisters of Mary ahead of the respondent authorized another agent in the person of Mr. Bobby Pacana to
petitioners.14 Private respondents maintained that when petitioners sell the same property. There was nothing illegal or amiss in this
introduced the buyers to private respondent Eduardo Gullas, the former arrangement, per se, considering the non-exclusivity of petitioners’ authority
were already decided in buying the property through Pacana, who had been to sell. The problem arose when it eventually turned out that these agents
paid his commission. Private respondent Eduardo Gullas admitted that were entertaining one and the same buyer, the Sisters of Mary.
petitioners were in his office on July 3, 1992, but only to ask for the
reimbursement of their cellular phone expenses.

In their reply and answer to counterclaim,15 petitioners alleged that although

the Sisters of Mary knew that the subject land was for sale through various
agents, it was petitioners who introduced them to the owners thereof.
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As correctly observed by the trial court, the argument of the private

respondents that Pacana was the one entitled to the stipulated 3%
commission is untenable, considering that it was the petitioners who were
responsible for the introduction of the representatives of the Sisters of Mary
to private respondent Eduardo Gullas. Private respondents, however,
maintain that they were not aware that their respective agents were
negotiating to sell said property to the same buyer.

Private respondents failed to prove their contention that Pacana began

negotiations with private respondent Norma Gullas way ahead of
petitioners. They failed to present witnesses to substantiate this claim. It is
curious that Mrs. Gullas herself was not presented in court to testify about
her dealings with Pacana. Neither was Atty. Nachura who was supposedly
the one actively negotiating on behalf of the Sisters of Mary, ever presented
in court.

Private respondents’ contention that Pacana was the one responsible for
the sale of the land is also unsubstantiated. There was nothing on record
which established the existence of a previous negotiation among Pacana,
Mrs. Gullas and the Sisters of Mary. The only piece of evidence that the
private respondents were able to present is an undated and unnotarized
Special Power of Attorney in favor of Pacana. While the lack of a date and
an oath do not necessarily render said Special Power of Attorney invalid, it
should be borne in mind that the contract involves a considerable amount of
money. Hence, it is inconsistent with sound business practice that the
authority to sell is contained in an undated and unnotarized Special Power
of Attorney. Petitioners, on the other hand, were given the written authority
to sell by the private respondents.

The trial court’s evaluation of the witnesses is accorded great respect and
finality in the absence of any indication that it overlooked certain facts or
circumstances of weight and influence, which if reconsidered, would alter
the result of the case.21

Indeed, it is readily apparent that private respondents are trying to evade

payment of the commission which rightfully belong to petitioners as brokers
with respect to the sale. There was no dispute as to the role that petitioners
played in the transaction. At the very least, petitioners set the sale in
motion. They were not able to participate in its consummation only because
they were prevented from doing so by the acts of the private respondents.
In the case of Alfred Hahn v. Court of Appeals and Bayerische Motoren
Werke Aktiengesellschaft (BMW)22 we ruled that, "An agent receives a
commission upon the successful conclusion of a sale. On the other hand, a
broker earns his pay merely by bringing the buyer and the seller together,
even if no sale is eventually made." (Underscoring ours). Clearly, therefore,
petitioners, as brokers, should be entitled to the commission whether or not
the sale of the property subject matter of the contract was concluded
through their efforts.

Having ruled that petitioners are entitled to the brokers’ commission, we

should now resolve how much commission are petitioners entitled to?

Following the stipulation in the Special Power of Attorney, petitioners are

entitled to 3% commission for the sale of the land in question. Petitioners
maintain that their commission should be based on the price at which the
land was offered for sale, i.e., P530.00 per square meter. However, the
actual purchase price for which the land was sold was only P200.00 per
square meter. Therefore, equity considerations dictate that petitioners’
commission must be based on this price. To rule otherwise would constitute
unjust enrichment on the part of petitioners as brokers.

In the matter of attorney’s fees and expenses of litigation, we affirm the

amount of P50,000.00 awarded by the trial court to the petitioners.

WHEREFORE, in view of the foregoing, the petition is GRANTED. The May

29, 2000 decision of the Court of Appeals is REVERSED and SET ASIDE.
The decision of the Regional Trial Court of Cebu City, Branch 22, in Civil
Case No. CEB-12740 ordering private respondents Eduardo Gullas and
Norma S. Gullas to pay jointly and severally petitioners Manuel B. Tan,
Gregg Tecson and Alexander Saldaña the sum of Six Hundred Twenty-Four
Thousand and Six Hundred Eighty-Four Pesos (P624,684.00) as broker’s
fee with legal interest at the rate of 6% per annum from the filing of the
complaint; and the sum of Fifty Thousand Pesos (P50,000.00) as attorney’s
fees and costs of litigation, is REINSTATED.

SO ORDERED.