JULIO DANON, PLAINTIFF AND APPELLEE, VS. ANTONIO A. BRIMO & CO., DEFENDANT AND APPELLANT.

To that complaint the defendant interposed a general denial.
Upon the issue thus presented, the Honorable Simplicio del Rosario,
judge, after hearing and considering the evidence adduced during the
trial of the cause, rendered a judgment in favor of the plaintiff and
against the defendant for the sum of P60,000, with costs. From that
judgment the defendant appealed to this court.

The proof with regard to the authority of the plaintiff to sell the
factory in question for the defendant, on commission, is extremely
unsatisfactory. It consists solely of the testimony of the plaintiff,
on the one hand, and of the manager of the defendant company, Antonio
A. Brimo, on the other. From a reading of their testimony we believe
that neither of them has been entirely free from prevarications.
However, after giving due weight to the finding of the trial court in
this regard and after carefully considering the inherent probability or
improbability of the testimony of each of said witnesses, we believe we
are approximating the truth in finding: (1) That Antonio A. Brimo, in a
conversation with the plaintiff, Julio Danon, about the middle of
August, 1918, informed the latter that he (Brimo) desired to sell his
factory, the Holland American Oil Co., for the sum of P1,200,000; (2)
that he agreed and promised to pay to the plaintiff a commission of 5
per cent provided the latter could sell said factory for that amount;
and (3) that no definite period of time was fixed within which the
plaintiff should effect the sale. It seems that another broker,
Sellner, was also negotiating the sale, or trying to find a purchaser
for the same property and that the plaintiff was informed of that fact
either by Brimo himself or by someone else; at least, it is probable
that the plaintiff was aware that he was not alone in the field, and
his whole effort was to forestall his competitor by being the first to
find a purchaser and effect the sale. Such, we believe, was the
contract between the plaintiff and the defendant, upon which the
present action is based.

The next question to determine is whether the plaintiff had
performed all that was required of him under that contract to entitle
him to recover the commission agreed upon. The proof in this regard is
no less unsatisfactory. It seems that immediately after having an
interview with Mr. Brimo, as above stated, the plaintiff went to see
Mr. Mauro Prieto, president of the Santa Ana Oil Mill, a corporation,
and offered to sell to him the defendant’s property at P1,200,000. The
said corporation was at that time in need of such a factory as the
plaintiff was offering for sale, and Mr. Prieto, its president,
instructed the manager, Samuel E. Kane, to see Mr. Brimo and ascertain
whether he really wanted to sell said factory, and, if so, to get
permission from him to inspect the premises. Mr. Kane inspected the
factory and, presumably, made a favorable report to Mr. Prieto. The
latter asked for an appointment with Mr. Brimo to perfect the
negotiation. In the meantime Sellner, the other broker referred to, had
found a purchaser for the same property, who ultimately bought it for
P1,300,000. For that reason Mr. Prieto, the would be purchaser found by
the plaintiff, never came to see Mr. Brimo to perfect the proposed
negotiation.

Under the proofs in this case, the most that can be said as to what
the plaintiff had accomplished is, that he had found a person who might have bought
the defendant’s factory if the defendant had not sold it to someone
else. The evidence does not show that the Santa Ana Oil Mill had definitely
decided to buy the property in question at the fixed price of
P1,200,000. The board of directors of said corporation had not resolved
to purchase said property; and even if its president could legally make
the purchase without previous formal authorization of the board of
directors, yet said president does not pretend that he had definitely
and formally agreed to buy the factory in question on behalf of his
corporation at the price stated. On direct examination he testified for
the plaintiff as follows:

On cross-examination the same witness testified:

The plaintiff claims that the reasons why the sale to the Santa Ana
Oil Mill was not consummated was because Mr. Brimo refused to sell to a
Filipino firm and preferred an American buyer; that upon learning such
attitude of the defendant the plaintiff endeavored to procure another
purchaser and found a Mr. Leas, who delivered to the plaintiff a letter
addressed to Mr. Brimo, offering to buy the factory in question at
P1,200,000, the offer being good for twenty-four hours; that said offer
was not accepted by Brimo because while he was reading the letter of
Leas, Sellner came in, drew Brimo into another room, and then and there
closed the deal at P1,300,000. The last statement is admitted by the
defendant.

Such are the facts in this case, as nearly accurate as we can
gather them from the conflicting evidence before us. Under those facts,
is the plaintiff entitled to recover the sum of P60,000, claimed by him
as compensation for his services? It will be noted that, according to
the plaintiff’s own testimony, the defendant agreed and promised to pay
him a commission of 5 per cent provided he (the plaintiff) could sell the factory at P1,200,000 (“con
tal que V. me venda la fabrica en P1,200,000”). It will also be noted
that all that the plaintiff had accomplished by way of performance of
his contract was, that he had found a person who might have bought the factory in question had not the defendant sold it to someone else. (Beaumont vs. Prieto, 41 Phil., 670; 249 U. S., 554.)

Under these circumstances it is difficult to see how the plaintiff
can recover anything in the premises. The plaintiff’s action is not one
for damages for breach of contract; it is an action to recover “the
reasonable value” of services rendered. This is unmistakable both from
the plaintiff’s complaint and his testimony as a witness during the
trial.

What benefit did the plaintiff, by his “services,” bestow upon the
defendant to entitle him to recover from the latter the sum of P50,000?
It is perfectly clear and undisputed that his “services” did not in any
way contribute towards bringing about the sale of the factory in
question. He was not “the efficient agent or the procuring1 cause of
the sale.”

“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.” (Wylie vs. Marine National Bank, 61 N. Y., 415, 416, citing: McClure vs. Paine, 49 N. Y., 561; Lloyd vs. Mathews, 51 id., 124; Lyon vs. Mitchell, 36 id., 235; Briggs vs. Rowe, 4 Keyes, 424; Murray vs. Currie, 7 Carr. & Payne, 584; Wilkinson vs. Martin, 8 id., 5.)

A leading case on the subject is that of Sibbald vs.
Bethlehem Iron Co. (83 N. Y., 378; 38 Am. Rep., 441). In that case,
after an exhaustive review of various cases, the Court of Appeals of
New York stated the rule as follows:

“In all the cases, under all and varying forms of expression, the fundamental and correct doctrine is, that the
duty assumed by the broker is to bring the minds of the buyer and
seller to an argument for a sale, and the price and terms on which it
is to be made, and until that is done his right to commissions does not
accrue. (McGavock vs. Woodlief, 20 How., 221; Barnes vs. Roberts, 5 Bosw., 73; Holly vs. Gosling, 3 E. D. Smith, 262; Jacobs vs. Kolff, 2 Hilt., 133; Kock vs. Emmerling, 22 How., 72; Corning vs. Calvert, 2 Hilt., 56; Trundy vs. N. Y. & Hartf. Steamboat Co., 6 Robt., 312; Van Lien vs. Burns, 1 Hilt., 134.)”

* * * * * * *

“It follows, as a necessary deduction from the
established rule, that a broker is never entitled to commissions for
unsuccessful efforts. The risk of a failure is wholly his. The reward
comes only with his success. That is the plain contract and
contemplation of the parties. The broker may devote his time and labor,
and expend his money with ever so much/of devotion to the interest of
his employer, and yet if the fails, if without effecting an agreement
or accomplishing a bargain, he abandons the effort, or his authority is
fairly and in good faith terminated, he gains no right to commissions.
He loses the labor and effort which was staked upon success. And in
such event it matters not that after his failure, and the termination
of his agency, what he has done proves of use and benefit to the
principal. In a multitude of cases that must necessarily result. He may
have introduced to each other parties who otherwise would have never
met; he may have created impressions, which under later and more
favorable circumstances naturally lead to and materially assist in the
consummation of a sale; he may have planted the very seed from which
others reap the harvest; but all that gives him no claim. It was part
of his risk that failing himself, not successful in fulfilling his
obligation, others might be left to some extent to avail themselves of
the fruit of his labors. As was said in Wylie vs. Marine
National Bank (61 N. Y., 416), in such a case the principal violates no
right of the broker by selling to the first party who offers the price
asked, and it matters not that sale is to the very party with whom the
broker had been negotiating. He failed to find or produce a purchaser
upon the terms prescribed in his employment, and the principal was
under no obligation to wait longer that he might make further efforts.
The failure therefore and its consequences were the risk of the broker
only. This however must be taken with one important and necessary
limitation. If the efforts of the broker are rendered a failure by the
fault of the employer; if capriciously he changes his mind after the purchaser, ready and willing, and consenting to the prescribed terms, is
produced; or if the latter declines to complete the contract because of
some defect of title in the ownership of the seller, some unremoved
incumbrance, some defect which is the fault of the latter, then the
broker does not lose his commissions. And that upon the familiar
principle that no one can avail himself of the nonperformance of a
condition precedent, who has himself occasioned its nonperformance. But
this limitation is not even an exception to the general rule affecting
the broker’s right for it goes on the ground that the broker has done
his duty, that he has brought buyer and seller to an agreement, but
that the contract is not consummated and fails though the after-fault
of the seller. The cases are uniform in this respect. (Moses vs. Burling, 31 N. Y., 462; Glentworth vs. Luther, 21 Barb., 147; Van Lien vs. Burns, 1 Hilt., 134.)

“One other principle applicable to such a contract as existed in the present case needs to be kept in view. Where no time for the continuance of the contract is fixed by its terms either party is at liberty to terminate it at will, subject
only to the ordinary requirements of good faith. Usually the broker is
entitled to a fair and reasonable opportunity to perform his
obligation, subject of course to the right of the seller to sell
independently. But having been granted him, the right of the principal
to terminate his authority is absolute and unrestricted, except
only that he may not do it in bad faith, and as a mere device to escape
the payment of the broker’s commissions. Thus, if in the midst of
negotiations instituted by the broker, and which were plainly and
evidently approaching success, the seller should revoke the authority
of the broker, with the view of concluding the bargain without his aid, and avoiding the payment of commission about
to be earned, it might be well said that the due performance his
obligation by the broker was purposely prevented by the principal. But
if the latter acts in good faith, not seeking to escape the payment of
commissions, but moved fairly by a view of his own interest, he has the
absolute right before a bargain is made while negotiations remain
unsuccessful, before commissions are earned, to revoke the broker’s authority, and
the latter cannot thereafter claim compensation for a sale made by the
principal, even though it be to a customer with whom the broker
unsuccessfully negotiated, and even though, to some extent, the seller
might justly be said to have availed himself of the fruits of the
broker’s labor.” (Ibid. pp. 444, 445 and 446.)

The rule laid down in the foregoing case was adopted and followed in the, cases of Zeimer vs. Antisell (75 Cal. 509), and Ayres vs. Thomas (116 Cal., 140).

“The undertaking to procure a purchaser requires of the party so
undertaking, not simply to name or introduce a person who may be
willing to make any sort of contract in reference to the property, but
to produce a party capable, and who ultimately becomes the purchaser.”
(Kimberly vs. Henderson and Lupton, 29 Md., 512, 515, citing: Keener vs. Harrod & Brooke, 2 Md. 63; McGavock vs. Woodlief, 20 How., 221. See also Richards, Executor, vs. Jackson, 31 Md., 250.)

“The defendant sent a poposal to a broker in these words: If you
send or cause to be sent to me, by advertisement or otherwise, any
party with whom I may see fit and proper to effect a sale or exchange
of my real estate, above described I will pay you the sum of $200. The
broker found a person who proposed to purchase the property, but the
sale was not effected. Held: That the broker was not entitled to compensation.” (Walker vs. Tirrel, 3 Am. Rep., 352.)

It is clear from the foregoing authorities that, although the
present plaintiff could probably have effected the sale of the
defendant’s factory had not the defendant sold it to someone else, he
is not entitled to the commissions agreed upon because he had no
intervention whatever in, and much sale in question. It must be borne
in mind that no definite period was fixed by the defendant within which
the plaintiff might effect the sale of its factory. Nor was the
plaintiff given by the defendant the exclusive agency of such sale.
Therefore, the plaintiff cannot complain of the defendant’s conduct in
selling the property through another agent before the plaintiff’s
efforts were crowned with success. “One who has employed a broker can
himself sell the property to a purchaser whom he has procured, without
any aid from the broker/’ (Hungerford vs. Hicks, 39 Conn., 259; Wylie vs. Marine National Bank, 61 N. Y., 415, 416.)

For the foregoing reasons the judgment appealed from is hereby
revoked and the defendant is hereby absolved from all liability under
the plaintiff’s complaint, with costs in both instances against the
plaintiff. So ordered.

Araullo, Street, Avancena, and Villamor, JJ., concur.