MANUEL B. TAN, GREGG M. TECSON AND ALEXANDER SALDAÑA, PETITIONERS, VS. EDUARDO R. GULLAS AND NORMA S. GULLAS, RESPONDENTS.

This is a petition for review seeking to set aside the decision^[1]
of the Court of Appeals^[2] in
CA-G.R. CV No. 46539, which reversed and set aside the decision^[3]
of the Regional Trial Court of Cebu City, Branch 22 in Civil Case No.
CEB-12740.

The records show that private respondents, Spouses Eduardo R.
Gullas and Norma S. Gullas, were the registered owners of a parcel of land in
the Municipality of Minglanilla, Province of Cebu, measuring 104,114 sq. m.,
with Transfer Certificate of Title No. 31465.^[4] On
June 29, 1992, they executed a special power of attorney^[5]
authorizing petitioners Manuel B. Tan, a licensed real estate broker,^[6]
and his associates Gregg M. Tecson and Alexander Saldaña, to negotiate for the
sale of the land at Five Hundred Fifty Pesos (P550.00) per square meter, at a commission of 3% of the gross price. The
power of attorney was non-exclusive and effective for one month from June 29,
1992.^[7]

On the same date, petitioner Tan contacted Engineer Edsel
Ledesma, construction manager of the Sisters of Mary of Banneaux, Inc.
(hereafter, Sisters of Mary), a religious organization interested in acquiring
a property in the Minglanilla area.

In the morning of July 1, 1992, petitioner Tan visited the
property with Engineer Ledesma. Thereafter, the two men accompanied Sisters
Michaela Kim and Azucena Gaviola, representing the Sisters of Mary, to see
private respondent Eduardo Gullas in his office at the University of Visayas.
The Sisters, who had already seen and inspected the land, found the same
suitable for their purpose and expressed their desire to buy it.^[8]
However, they requested that the selling price be reduced to Five Hundred
Thirty Pesos (P530.00) per square meter instead of Five Hundred Fifty Pesos
(P550.00) per square meter. Private
respondent Eduardo Gullas referred the prospective buyers to his wife.

It was the first time that the buyers came to know that private
respondent Eduardo Gullas was the owner of the property. On July 3, 1992,
private respondents agreed to sell the property to the Sisters of Mary, and
subsequently executed a special power of attorney^[9] in
favor of Eufemia Cañete, giving her the special authority to sell, transfer and
convey the land at a fixed price of Two Hundred Pesos (P200.00) per square
meter.

On July 17, 1992, attorney-in-fact Eufemia Cañete executed a deed
of sale in favor of the Sisters of Mary for the price of Twenty Million Eight
Hundred Twenty Two Thousand Eight Hundred Pesos (P20,822,800.00), or at the
rate of Two Hundred Pesos (P200.00) per square meter.^[10]
The buyers subsequently paid the corresponding taxes.^[11]
Thereafter, the Register of Deeds of Cebu Province issued TCT No. 75981 in the
name of the Sisters of Mary of Banneaux, Inc.^[12]

Earlier, on July 3, 1992, in the afternoon, petitioners went to
see private respondent Eduardo Gullas to claim their commission, but the latter
told them that he and his wife have already agreed to sell the property to the
Sisters of Mary. Private respondents refused to pay the broker’s fee and
alleged that another group of agents was responsible for the sale of land to
the Sisters of Mary.

On August 28, 1992, petitioners filed a complaint^[13]
against the defendants for recovery of their broker’s fee in the sum of One
Million Six Hundred Fifty Five Thousand Four Hundred Twelve and 60/100 Pesos
(P1,655,412.60), as well as moral and
exemplary damages and attorney’s fees. They alleged that they were the
efficient procuring cause in bringing about the sale of the property to the
Sisters of Mary, but that their efforts in consummating the sale were
frustrated by the private respondents who, in evident bad faith, malice and in
order to evade payment of broker’s fee, dealt directly with the buyer whom
petitioners introduced to them. They further pointed out that the deed of sale
was undervalued obviously to evade payment of the correct amount of capital
gains tax, documentary stamps and other internal revenue taxes.

In their answer, private respondents countered that, contrary to
petitioners’ claim, they were not the efficient procuring cause in bringing
about the consummation of the sale because another broker, Roberto Pacana,
introduced the property to the Sisters of Mary ahead of the petitioners.^[14]
Private respondents maintained that when petitioners introduced the buyers to
private respondent Eduardo Gullas, the former were already decided in buying
the property through Pacana, who had been paid his commission. Private
respondent Eduardo Gullas admitted that petitioners were in his office on July
3, 1992, but only to ask for the reimbursement of their cellular phone
expenses.

In their reply and answer to counterclaim,^[15]
petitioners alleged that although the Sisters of Mary knew that the subject
land was for sale through various agents, it was petitioners who introduced
them to the owners thereof.

After trial, the lower court rendered judgment in favor of
petitioners, the dispositive portion of which reads:

WHEREFORE, UPON THE AEGIS OF THE FOREGOING, judgment is hereby
rendered for the plaintiffs and against the defendants. By virtue hereof, defendants Eduardo and
Norma Gullas are hereby ordered to pay jointly and severally plaintiffs Manuel
Tan, Gregg Tecson and Alexander Saldaña;

1)      The sum of SIX HUNDRED
TWENTY FOUR THOUSAND AND SIX HUNDRED EIGHTY FOUR PESOS (P624,684.00) as
broker’s fee with legal interest at the rate of 6% per annum from the date of
filing of the complaint; and

2)      The sum of FIFTY
THOUSAND PESOS (P50,000.00) as attorney’s fees and costs of litigation.

For lack of merit, defendants’ counterclaim is hereby DISMISSED.

IT IS SO ORDERED.^[16]

Both parties appealed to the Court of Appeals. Private
respondents argued that the lower court committed errors of fact and law in
holding that it was petitioners’ efforts which brought about the sale of the
property and disregarding the previous negotiations between private respondent
Norma Gullas and the Sisters of Mary and Pacana. They further alleged that the
lower court had no basis for awarding broker’s fee, attorney’s fees and the
costs of litigation to petitioners.^[17]

Petitioners, for their part, assailed the lower court’s basis of
the award of broker’s fee given to them. They contended that their 3%
commission for the sale of the property should be based on the price of P55,180,420.00,
or at P530.00 per square meter as agreed upon and not on the alleged actual
selling price of P20,822,800.00 or at P200.00 per square meter, since the
actual purchase price was undervalued for taxation purposes. They also claimed that
the lower court erred in not awarding moral and exemplary damages in spite of
its finding of bad faith; and that the amount of P50,000.00 as attorney’s fees
awarded to them is insufficient. Finally, petitioners argued that the legal
interest imposed on their claim should have been pegged at 12% per annum
instead of the 6% fixed by the court.^[18]

The Court of Appeals reversed and set aside the lower court’s
decision and rendered another judgment dismissing the complaint.^[19]

Hence, this appeal.

Petitioners raise following issues for resolution:

I.

THE APPELLATE COURT GROSSLY ERRED IN THEIR
FINDING THAT THE PETITIONERS ARE NOT ENTITLED TO THE BROKERAGE COMMISSION.

II.

IN DISMISSING THE COMPLAINT, THE APPELLATE
COURT HAS DEPRIVED THE PETITIONERS OF MORAL AND EXEMPLARY DAMAGES, ATTORNEYS’
FEES AND INTEREST IN THE FOREBEARANCE OF MONEY.

The petition is impressed with merit.

The records show that petitioner Manuel B. Tan is a licensed real
estate broker, and petitioners Gregg M. Tecson and Alexander Saldaña are his
associates. In Schmid and Oberly v. RJL
Martinez Fishing Corporation,^[20] we defined a “broker” 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. x x x a broker is one whose occupation is to bring the parties together, in matters of trade, commerce or
navigation.” (Emphasis supplied)

During the trial, it was established that petitioners, as
brokers, were authorized by private respondents to negotiate for the sale of
their land within a period of one month reckoned from June 29, 1992. The
authority given to petitioners was non-exclusive, which meant that private
respondents were not precluded from granting the same authority to other agents
with respect to the sale of the same property. In fact, private respondent
authorized another agent in the person of Mr. Bobby Pacana to sell the same
property. There was nothing illegal or amiss in this arrangement, per se, considering the non-exclusivity
of petitioners’ authority to sell. The problem arose when it eventually turned
out that these agents were entertaining one and the same buyer, the Sisters of
Mary.

As correctly observed by the trial court, the argument of the
private respondents that Pacana was the one entitled to the stipulated 3%
commission is untenable, considering that it was the petitioners who were
responsible for the introduction of the representatives of the Sisters of Mary
to private respondent Eduardo Gullas. Private respondents, however, maintain
that they were not aware that their respective agents were negotiating to sell
said property to the same buyer.

Private respondents failed to prove their contention that Pacana
began negotiations with private respondent Norma Gullas way ahead of
petitioners. They failed to present witnesses to substantiate this claim. It is
curious that Mrs. Gullas herself was not presented in court to testify about
her dealings with Pacana. Neither was Atty. Nachura who was supposedly the one
actively negotiating on behalf of the Sisters of Mary, ever presented in court.

Private respondents’ contention that Pacana was the one responsible
for the sale of the land is also unsubstantiated. There was nothing on record
which established the existence of a previous negotiation among Pacana, Mrs.
Gullas and the Sisters of Mary. The only piece of evidence that the private
respondents were able to present is an undated and unnotarized Special Power of
Attorney in favor of Pacana. While the lack of a date and an oath do not
necessarily render said Special Power of Attorney invalid, it should be borne
in mind that the contract involves a considerable amount of money. Hence, it is
inconsistent with sound business practice that the authority to sell is
contained in an undated and unnotarized Special Power of Attorney. Petitioners,
on the other hand, were given the written authority to sell by the private
respondents.

The trial court’s evaluation of the witnesses is accorded great
respect and finality in the absence of any indication that it overlooked
certain facts or circumstances of weight and influence, which if reconsidered,
would alter the result of the case.^[21]

Indeed, it is readily apparent that private respondents are
trying to evade payment of the commission which rightfully belong to
petitioners as brokers with respect to the sale. There was no dispute as to the
role that petitioners played in the transaction. At the very least, petitioners
set the sale in motion. They were not able to participate in its consummation
only because they were prevented from doing so by the acts of the private
respondents. In the case of Alfred Hahn
v. Court of Appeals and Bayerische Motoren Werke Aktiengesellschaft (BMW)^[22] we ruled that, “An agent receives a commission upon the successful conclusion of a
sale. On the other hand, a broker earns his pay merely by
bringing the buyer and the seller together, even if no sale is eventually
made.” (Underscoring ours). Clearly, therefore, petitioners, as brokers, should
be entitled to the commission whether or not the sale of the property subject
matter of the contract was concluded through their efforts.

Having ruled that petitioners are entitled to the brokers’
commission, we should now resolve how much commission are petitioners entitled
to?

Following the stipulation in the Special Power of Attorney,
petitioners are entitled to 3% commission for the sale of the land in
question. Petitioners maintain that
their commission should be based on the price at which the land was offered for
sale, i.e., P530.00 per square
meter. However, the actual purchase
price for which the land was sold was only P200.00 per square meter. Therefore, equity considerations dictate
that petitioners’ commission must be based on this price. To rule otherwise
would constitute unjust enrichment on the part of petitioners as brokers.

In the matter of attorney’s fees and expenses of litigation, we
affirm the amount of P50,000.00 awarded by the trial court to the petitioners.

WHEREFORE, in view of the foregoing, the petition is
GRANTED. The May 29, 2000 decision of
the Court of Appeals is REVERSED and SET ASIDE. The decision of the Regional Trial Court of Cebu City, Branch 22,
in Civil Case No. CEB-12740 ordering private respondents Eduardo Gullas and
Norma S. Gullas to pay jointly and severally petitioners Manuel B. Tan, Gregg
Tecson and Alexander Saldaña the sum of Six Hundred Twenty-Four Thousand and
Six Hundred Eighty-Four Pesos (P624,684.00) as broker’s fee with legal interest
at the rate of 6% per annum from the filing of the complaint; and the sum of
Fifty Thousand Pesos (P50,000.00) as attorney’s fees and costs of litigation,
is REINSTATED.

SO ORDERED.

Vitug, and Carpio, JJ., concur.

Davide, Jr., C.J., (Chairman), no
part due to close relationship to a party.

Azcuna, J., on official leave.

^[1]
Dated May 29, 2000, Rollo, p. 16.

^[2]
Penned by Associate Justice Mariano M. Umali and concurred in by Associate
Justices

Conrado M. Vazquez, Jr. and Eriberto U. Rosario, Jr.

^[3]
Penned by Judge Pampio A. Abarintos, promulgated on March 11, 1994, Rollo, p. 8.

^[4]
Annex “F”, Record, p. 16.

^[5]
Annex “A”, Record, pp. 8-9.

^[6]
Folder of Exhibits, Exhibit “I”.

^[7]
Ibid., Exhibits “A” and “A-3”.

^[8]
Record, p. 131.

^[9]
Folder of Exhibits, Exhibit “C”, dated July 4, 1992.

^[10]
Ibid., Exhibit “D”.

^[11]
Id., Exhibit “E”.

^[12]
Id., Exhibit “F”.

^[13]
Record, pp. 1-7.

^[14]
Record, pp. 28-34.

^[15]
Id., at 35-38.

^[16]
Record, p. 206.

^[17]
Rollo, p. 21.

^[18]
Id., at 21-22.

^[19]
Rollo, pp. 32-33.

^[20]
166 SCRA 493 (1988).

^[21]
People v. Realm, 301 SCRA 495 (1999); Yam v.
Court of Appeals, 303 SCRA 1 (1999); People
v. Maglatay, 304 SCRA 272 (1999).

^[22]
266 SCRA 537 (1997).