De Castro v. Court of Appeals

De Castro v.
Court of Appeals
jurist
G.R. No. 115838, 18 July 2002
FACTS:
Appellants were co-owners of four (4) lots located at EDSA corner New York
and Denver Streets in Cubao, Quezon City. In a letter dated January 24, 1984
(Exhibit “A-1, p. 144, Records), appellee6 was authorized by appellants to act
as real estate broker in the sale of these properties for the amount of
P23,000,000.00, five percent (5%) of which will be given to the agent as
commission. It was appellee who first found Times Transit Corporation,
represented by its president Mr. Rondaris, as prospective buyer which
desired to buy two (2) lots only, specifically lots 14 and 15. Eventually,
sometime in May of 1985, the sale of lots 14 and 15 was consummated.
Appellee received from appellants P48,893.76 as commission.
It was then that the rift between the contending parties soon emerged.
Appellee apparently felt short changed because according to him, his total
commission should be P352,500.00 which is five percent (5%) of the agreed
price of P7,050,000.00 paid by Times Transit Corporation to appellants for
the two (2) lots, and that it was he who introduced the buyer to appellants
and unceasingly facilitated the negotiation which ultimately led to the
consummation of the sale. Hence, he sued below to collect the balance of
P303,606.24 after having received P48,893.76 in advance.
On the other hand, appellants completely traverse appellee’s claims and

essentially argue that appellee is selfishly asking for more than what he truly
deserved as commission to the prejudice of other agents who were more
instrumental in the consummation of the sale. Although appellants readily
concede that it was appellee who first introduced Times Transit Corp. to
them, appellee was not designated by them as their exclusive real estate
agent but that in fact there were more or less eighteen (18) others whose
collective efforts in the long run dwarfed those of appellee’s, considering
that the first negotiation for the sale where appellee took active participation
failed and it was these other agents who successfully brokered in the
second negotiation. But despite this and out of appellants’ “pure liberality,
beneficence and magnanimity”, appellee nevertheless was given the largest
cut in the commission (P48,893.76), although on the principle of quantum
meruit he would have certainly been entitled to less. So appellee should not
have been heard to complain of getting only a pittance when he actually got
the lion’s share of the commission and worse, he should not have been
allowed to get the entire commission. Furthermore, the purchase price for
the two lots was only P3.6 million as appearing in the deed of sale and not
P7.05 million as alleged by appellee. Thus, even assuming that appellee is
entitled to the entire commission, he would only be getting 5% of the P3.6
million, or P180,000.00.”
The Court of Appeals affirmed in toto the decision of the trial court. Hence,
this appeal.
ISSUE:
Whether or not the complaint merits dismissal for failure to implead other
co-owners as indispensable parties?
RULING:
No.
The De Castros argue that Artigo’s complaint should have been dismissed
for failure to implead all the co-owners of the two lots. The De Castros claim
that Artigo always knew that the two lots were co-owned by Constante and
Corazon with their other siblings Jose and Carmela whom Constante merely
represented. The De Castros contend that failure to implead such
indispensable parties is fatal to the complaint since Artigo, as agent of all the
four co-owners, would be paid with funds co-owned by the four co-owners.
The De Castros’ contentions are devoid of legal basis.
An indispensable party is one whose interest will be affected by the court’s

action in the litigation, and without whom no final determination of the case
can be had.7 The joinder of indispensable parties is mandatory and courts
cannot proceed without their presence.8 Whenever it appears to the court in
the course of a proceeding that an indispensable party has not been joined,
it is the duty of the court to stop the trial and order the inclusion of such
party.
However, the rule on mandatory joinder of indispensable parties is not

applicable to the instant case.
There is no dispute that Constante appointed Artigo in a handwritten note
dated January 24, 1984 to sell the properties of the De Castros for P23
million at a 5 percent commission. The authority was on a first come, first
serve basis.
Constante signed the note as owner and as representative of the other co-
owners. Under this note, a contract of agency was clearly constituted
between Constante and Artigo. Whether Constante appointed Artigo as
agent, in Constante’s individual or representative capacity, or both, the De
Castros cannot seek the dismissal of the case for failure to implead the other
co-owners as indispensable parties. The De Castros admit that the other
co-owners are solidarily liable under the contract of agency, citing
Article 1915 of the Civil Code, which reads:
Art. 1915. If two or more persons have appointed an agent for a common
transaction or undertaking, they shall be solidarily liable to the agent for all
the consequences of the agency.
The solidary liability of the four co-owners, however, militates against the De
Castros’ theory that the other co-owners should be impleaded as
indispensable parties. A noted commentator explained Article 1915 thus –
“The rule in this article applies even when the appointments were made by
the principals in separate acts, provided that they are for the same
transaction. The solidarity arises from the common interest of the principals,
and not from the act of constituting the agency. By virtue of this solidarity,
the agent can recover from any principal the whole compensation and
indemnity owing to him by the others. The parties, however, may, by express
agreement, negate this solidary responsibility. The solidarity does not
disappear by the mere partition effected by the principals after the
accomplishment of the agency.
If the undertaking is one in which several are interested, but only some
create the agency, only the latter are solidarily liable, without prejudice to the
effects of negotiorum gestio with respect to the others. And if the power
granted includes various transactions some of which are common and
others are not, only those interested in each transaction shall be liable for it.”
11
When the law expressly provides for solidarity of the obligation, as in the
liability of co-principals in a contract of agency, each obligor may be
compelled to pay the entire obligation.12 The agent may recover the whole
compensation from any one of the co-principals, as in this case.
Indeed, Article 1216 of the Civil Code provides that a creditor may sue any of
the solidary debtors. This article reads:
Art. 1216. The creditor may proceed against any one of the solidary debtors
or some or all of them simultaneously. The demand made against one of
them shall not be an obstacle to those which may subsequently be directed
against the others, so long as the debt has not been fully collected.
Thus, the Court has ruled in Operators Incorporated vs. American Biscuit
Co., Inc. that –
“x x x solidarity does not make a solidary obligor an indispensable party

in a suit filed by the creditor. Article 1216 of the Civil Code says that the
creditor `may proceed against anyone of the solidary debtors or some or all
of them simultaneously’.” (Emphasis supplied)
*Case digest by Mary Tweetie Antonette G. Semprun, JD – 4, Andres

Bonifacio College, SY 2019 – 2020

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De Castro v.

G.R. No. 115838, 18 July 2002

On the other hand, appellants completely traverse appellee’s claims and

The De Castros’ contentions are devoid of legal basis.

An indispensable party is one whose interest will be affected by the court’s

However, the rule on mandatory joinder of indispensable parties is not

“x x x solidarity does not make a solidary obligor an indispensable party

*Case digest by Mary Tweetie Antonette G. Semprun, JD – 4, Andres

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