Monday, May 27, 2019

[CASE DIGEST] Prats v. CA (G.R. No. L-39822)


January 31, 1978 

Ponente: Fernandez, J.

FACTS:

·         Alfonso Doronila was the registered owner of 300 hectares of land in Montalban, Rizal. He had made several attempts to sell the said property, including to SSS, but all negotiations fell through. So on February 14, 1968, he gave Antonio Prats (doing business under the name of Philippine Real Estate Exchange) an exclusive option and authority in writing to negotiate the sale of the said property. The authority granted to Prats was to last only for 60 days, extendible by 15 days should negotiations have been started with a buyer. In the event of a successful sale at the basic price of P3.00 per square meter, Prats was to receive 10% commission based on P2.10 per square meter or at any price finally agreed upon. But if the property be sold over and above P3.00 per square meter, the excess shall be created and paid to Prats in addition to his 10% commission based on P2.10 per square meter.

·         By virtue of the authority granted to him, Prats made the necessary contacts and representations to have the property sold. He communicated with the Office of the President re: sale of the land in line with the government's low-cost housing initiatives, for which he was referred back to SSS. Negotiations between SSS and Prats (acting on behalf of Doronila) resumed.

·         The authority granted to Prats expired on April 18, 1968, but on account of Doronila's liberality, it was extended for 30 days more or until May 18, 1968. SSS expressed its intent to purchase the property only on May 16, 1968, but no formal offer was made. By the time Prat's authority had expired, Doronila was yet to receive an offer from SSS. But pursuant to the original agreement between Doronila and Prats, the latter's authority was extended for 15 days or until June 3, 1968 on account of the ongoing negotiations with SSS. 

·         On June 7, 1968, with no sale of the property being consummated, Doronila informed Prats that the authority granted to the latter no longer had effect. Thereafter, Doronila took it upon himself to yet again renew his offer with SSS, this time, finally concluding in a successful sale of the subject property on June 20, 1968 for P9.75M. 

·         On September 17, 1968, Prats presented to Doronila a Statement of Account for the payment of his professional services as real estate broker in the amount of P1,380,000.00 representing his commission. Doronila refused to pay, prompting Prats to institute an action against the former. 

·         TRIAL COURT RULING: Doronila is ordered to pay Prats P1.38M with interest, P200,000.00 as moral damages, the sum of P100,000.00 as exemplary damages, and the sum of P150,000.00 as attorney's fees.

·         Doronila appealed before the CA, which reversed the trial court's ruling. The CA noted that by the time Prat's authority to sell had expired, SSS had yet to make a written offer to purchase the subject property.  The agreement between Doronila and Prats was clear that if no such written offer was made until the last day of the authorization, the option and authority shall expire and become null and void. In fact, the extension of authority granted by Doronila to Prats was a mere liberal concession on the part of the former, considering that by the time Prat's authority had expired on May 18, 1968, it cannot be said that there was any ongoing negotiation. In sum, Prats was not entitled to be paid commissions. 

·         Hence, the instant petition.

RULING: 

Initially affirmed CA's ruling in toto, but was modified upon Prats's motion for reconsideration and supplemental petition invoking equity.




Whether Prats is entitled to be paid commissions. – NO.

·         From the stipulation of facts and the evidence of record, it is clear that the offer of Doronila to sell the 300 hectares of land in question to the SSS was formally accepted by the SSS only on June 20, 1968 after the exclusive authority in favor of Prats had expired. The CA's factual findings that Prats was not the efficient procuring cause in bringing about the sale are deemed final. As such, Prats is not entitled to the relief he is praying for. 

·         There is also no basis for Prats to claim that it was he who aroused the interest of the SSS in buying Doronila's property. This is because prior to granting Prats the exclusive authority to sell his property, Doronila had already dealt with SSS with regard to the sale of his land, albeit unsuccessfully.


Whether Prats is entitled to equitable relief. – YES.

·         Despite the fact that Prats cannot be considered the efficient procuring cause, the Court notes that he had taken steps to bring back together Doronila and the SSS. Among these steps include: talking to multiple government agencies, inviting SSS officers over to discuss the offer of the sale of the property, making a formal written offer, attending luncheons with Doronila and SSS officers, etc. 

·         Under the circumstances, the Court grants in equity the sum of One Hundred Thousand Pesos (P100,000.00) by way of compensation for his efforts and assistance in the transaction, which however was finalized and consummated after the expiration of his exclusive authority. The Court likewise sets aside the P10,000.00 attorneys' fees award adjudged against him by the CA.