(S) Medrano v. Court of Appeals, 452 SCRA 77 (2005)

Medrano v.
Court of Appeals, 452 SCRA 77 (2005)
Topic: Agency
Doctrine: A broker is generally defined as one who is engaged, for others, on a commission,
negotiating contracts relative to property with the custody of which he has no concern; the
negotiator between other parties, never acting in his own name but in the name of those who
employed him; he is strictly a middleman and for some purposes the agent of both parties.
Bar Question:
A asked X to look for a buyer of a mango plantation. B informed Y, a licensed real estate broker,
that he preferred a land with mango trees. X then told Y that A owned a mango plantation
which was up for sale, to which Y informed B. They then ask A to give them a written authority
to negotiate the sale of the property, which he did indicating Y, a licensed real estate broker,
and X to have the authority to negotiate with a prospective buyer for the sale of a mango
plantation and that they will have a commission of 5% of the total purchase price. Y and X
arranged for an ocular inspection of the property together with B but was not materialized due
to reasons beyond their control.
Later, B called Y to ask for the exact address of the property, which she gave, however, Y and X
can no longer accompany him at the time. After two days, Y inquired to B about the result of his
ocular inspection. B informed her that he already purchased the property. Y and X asked from A
their commission. A refused to pay arguing that the letter of authority was not binding and
enforceable, that Y and X never saw the property in question and neither did they perform any
act of assisting their buyer in having the property inspected and verified.
Are X and Y entitled to a commission?
Answer:
Yes.
A broker is generally defined as one who is engaged, for others, on a commission, negotiating
contracts relative to property with the custody of which he has no concern; the negotiator
between other parties, never acting in his own name but in the name of those who employed
him; he is strictly a middleman and for some purposes the agent of both parties. A broker is one
whose occupation is to bring parties together, in matters of trade, commerce or navigation.
Further, the term "procuring cause," in describing a broker’s activity, refers to a
cause originating a series of events which, without break in their continuity, result in
accomplishment of prime objective of the employment of the broker – producing a purchaser
ready, willing and able to buy real estate on the owner’s terms. A broker will be regarded as the
"procuring cause" of a sale, so as to be entitled to commission, if his efforts are the foundation
on which the negotiations resulting in a sale are begun. The broker must be the efficient agent
or the procuring cause of the sale. The means employed by him and his efforts must result in
the sale. He must find the purchaser, and the sale must proceed from his efforts acting as
broker.
Here, Y is a licensed real estate broker and X is her associate. With the foregoing circumstances,
they were instrumental in the sale of the property to B. Without their intervention, no sale
could have been consummated. They were the ones who set the sale of the subject land in
motion. Upon being informed by X that O was selling the said property, Y informed B about the
property. An ocular inspection was immediately planned; unfortunately, it never pushed
through for reasons beyond their control. Since B was in a hurry to see the property, he asked
the Y the exact address. While the letter-authority issued in favor of Y and X was non-exclusive,
no evidence was adduced to show that there were other persons, aside from them, who
informed B about the property for sale. The fact that it was B who personally called Y and asked
for directions prove that it was only through them that B learned about the property for sale.
All these circumstances lead us to the inescapable conclusion that the X and Y were the
procuring cause of the sale. When there is a close, proximate and causal connection between
the broker’s efforts and the principal’s sale of his property, the broker is entitled to a
commission. Hence, X and Y are entitled to a commission.

(S) Medrano v. Court of Appeals, 452 SCRA 77 (2005)

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(S) Medrano v. Court of Appeals, 452 SCRA 77 (2005)

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Medrano v.

Court of Appeals, 452 SCRA 77 (2005)

Are X and Y entitled to a commission?

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