Manotok Brothers Inc. v. CA

MANOTOK BROTHERS, INC. v.
CA
Topic: Agent
PARTIES:
 Petitioners: Manotok Brothers, Inc.
 Respondents: CA and Salvador Saligumba
FACTS:
 Manotok Brothers Inc. is the owner of a certain parcel of land and building which
were formerly leased by the City of Manila and used by the Claro M. Recto High
School, in Sampaloc, Manila.
 By means of letter dated July 5, 1966, Manotok Brothers authorized Salvador
Saligumba to negotiate with the City of Manila the sale of the aforementioned
property for not less than P425K. Manotok Brothers agreed to pay Saligumba 5%
commission in the event the sale is finally consummated and paid.
 The Manotok Brothers made various extensions of the authority, as evidenced by
several letters.
 Nov. 16, 1967 – Rufino Manotok (president) authorized Saligumba to finalize and
consummate the sale of the property to the City of Manila for not less than P410K. s
 April 26, 1968 – The Mun. Board of the City of Manila passed Ordinance No. 6603,
appropriating the sum of P410K for the purchase of the property. However, the said
ordinance was signed by the City Mayor only on May 17, 1968, 183 days after the
last letter of authorization.
 Jan. 14, 1969 – The parties signed the Deed of Sale of the subject property.
Notwithstanding the realization of the sale, Saligumba never received any
commission, which should have amounted to P20K. this was due to the refusal of
Manotok Brothers to pay Saligumba as the former does not recognize the latter’s
role as agent in the transaction.
 June 29, 1969 – Saligumba filed a complaint against Manotok Brothers, alleging that
he had successfully negotiated the sale of the property. Saligumba claims that it was
because of his efforts that the Mun. Board of Manila passed Ordinance No. 6603
which appropriated the sum for the payment of the property subject of the sale.
 Manotok Brothers argues that (1) Saligumba would be entitled to a commission only
if the sale was consummated and the price paid within the period given in the
respective letters of authority; (2) Saligumba was not the person responsible for the
negotiation and consummation of the sale, instead it was Filomeno Hueglas.
 Saligumba recounted his efforts to ensure the consummation of the sale. Fructuoso
Ancheta and Atty. Bisbal both testified acknowledging the authority of Saligumba
regarding the transaction.
 Atty. Bisbal said that Hueglas was present in the PTA meetings but never offered to
help in the acquisition of the said property. Moreover, he testified that Hueglas was
aware of the fact that it was Saligumba who was negotiating the sale of the property.
 The COFI rendered a judgment sentencing Manotok Brothers to pay Saligumba P20K
by way of his commission. The CA affirmed the ruling of the COFI.
 Manotok Brothers argues that Saligumba’s job is to bring together the parties to a
transaction. Accordingly, if the broker does not succeed in bringing the minds of the
purchaser and the vendor to an agreement with respect to the sale, he is not
entitled to the commission.
 Saligumba argues that it was because of his efforts that a purchase actually
materialized between the parties.
ISSUES/HELD:
 W/N Saligumba is entitled to the commission.
o YES. In the case of Prats v. CA, the Court ruled in favor of a claimant-agent,
despite the expiration of his authority, when a sale was finally consummated.
o In this case, Saligumba is the efficient procuring cause for without his efforts,
the municipality would not have anything to pass and the Mayor would not
have anything to approve. In an earlier case, the Court held that when there
is a close, proximate and causal connection between the agent’s efforts and
labor and the principal’s sale of his property, the agent is entitled to a
commission.
o The City of Manila ultimately became the purchaser of the property mainly
through the efforts of Saligumba.
o Although the Mun. Order No. 6603 was signed by the City Mayor on May 17,
1968, when Saligumba’s authority already expired, it is to be noted that the
ordinance was approved on April 26, 1968 when Saligumba’s authorization
was still in force. Morever, approval by the City Mayor came only three days
after the expiration of Saligumba’s authority.
o It is also worth emphasizing that the only party given a written authority to
negotiate the sale from July 5, 1966 to May 14, 1968 was Saligumba.
o Saligumba pursued with his goal of seeing that the parties reach an
agreement, on the belief that he alone was transacting the business with the
City Government as this was what Manotok Brothers made it to appear.
o Although Hueglas followed-up the matter, his intervention came only after
the ordinance had already passed. Without the efforts of Saligumba, Mayor
Villegas would have nothing to approve in the first place. It was actually
Saligumba’s labor that had set in motion the intervention of the third party
that produced the sale. Thus, he should be compensated.
DOCTRINE:
 Private respondent, as efficient procuring cause in bringing about sale, is entitled to
agent’s commission.
JUDGMENT: Decision of the CA is AFFIRMED.

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MANOTOK BROTHERS, INC. v.

JUDGMENT: Decision of the CA is AFFIRMED.

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