MANOTOK BROTHERS v.

CA
November 22, 2004 | Campos, Jr., J. | Prats Doctrine and Manotok Test | Conejero

PETITIONER: Manotok Brothers, Inc. (MBI)

RESPONDENTS: CA, RTC Manila (Br. 6), and Salvador Saligumba

SUMMARY: MBI wishes to seek relief from an SC resolution dismissing its petition for review on certiorari
assailing MBI v. Saligumba and CA. In the aforementioned case, MBI was adjudged liable by the CFI to
Saligumba for his P20,540 commission fee from the sale of a Sampaloc land and building. CA affirmed CFI on
appeal, so MBI filed the petition which was dismissed because MBI could not locate Saligumba to comment
on the petition (and thus the issues could not be joined). Saligumba then resurfaced suddenly to file for the
execution of the MBI v. Saligumba and CA judgment in his favor, leading MBI to file for relief from judgment.
The issue in this case was whether or not Saligumba as a broker actually did his job of bringing MBI and the
buyer City of Manila together to consummate the sale. The SC ruled for Saligumba and affirmed the CA.
RULING: We agree with CA that the City of Manila ultimately became the purchaser of MBIs property
mainly through the efforts of Saligumba [see Fact 3]. When Municipal Ordinance No. 6603 was signed by the
City Mayor on May 17, 1968, Saligumbas authority had already expired, however the ordinance was
approved on April 26, 1968 when his authorization was still in force. Moreover, the approval by the City
Mayor came only three days after the expiration of private respondent's authority. It is also worth emphasizing
that from the records, the only party given a written authority to negotiate the sale from July 5, 1966 to May
14, 1968 was Saligumba. This case is therefore the coverage of the exception in Prats v. CA where the Court
ruled for the claimant-agent despite expiration of his authority when a sale was consummated [see Issue/Held].
DOCTRINE: 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.

FACTS:
1. MBI authorized Salvador Saligumba in several letters to negotiate a sale of property with the City of
Manila for not less than P425,000 with 5% commission if the sale is consummated and paid.
a. The July 5, 1996 authorization letter indicated the subject property as land and a building in
Sampaloc formerly leased by Manila and used by the Claro M. Recto High School.
b. The authorization was extended for 120 days in a March 4, 1967 letter.
c. Another 120 day extension was granted in a June 26, 1967 letter.
d. A last 180 day extension was granted in a November 16, 1967 letter where MBI with its
President Rufino Manoto authorized Saligumba to finalize the sale for P410,000.
e. The Municipal Board of the City of Manila on April 26, 1968, passed Ordinance No. 6603,
appropriating P410,816.00 for the purchase of the Sampaloc, which was signed by the City
Mayor on May 17, 1968, 183 days after the last letter of authorization or 3 days after expiry.
2. The deed of sale was signed January 14, 1969; the price was paid in full by April.
3. Saligumba filed a complaint on June 29, 1969 against MBI which did not pay his P20,540
commission despite his efforts to make Ordinance 6603 for the appropriation of the sales price pass:
a. He was asked to negotiate the sale at a meeting with Rufino Manotok and PTA president
Atty. Dominador Bisbal at C.M. Recto H.S. principal Fructuoso Anchetas office
b. He presented the project to Councilor Mariano Magsalin, the author of Ordinance 6603.
c. He went to the Assessor's Office for the appraisal committees report on the propertys value.
d. Rufino Manotok renewed his authorization until the last, which would last til May 14, 1968.
e. He went to the City Mayor's Office, which indorsed the matter to the Supt. of City Schools of
Manila, then went back to the Mayors which indorsed the same to the Municipal Board.
4. MBI denied Saligumbas claim and filed counterclaim for P4,000 attorneys fees and moral damages:
a. The sale was not consummated and paid within the period given in the letters of authority.
b. Filomeno E. Huelgas, the 1967-1968 PTA president of the Claro M. Recto High School, was
responsible and followed up the sale from the start and up to the Mayor, per agreement with
Rufino Manotok where he would be given a P20,000 gratification if the sale was expedited.
5. The CFI (now RTC) ruled for Saligumba, ordering MBI to pay the commission and attorney's fees.
 6. The CA affirmed CFI and denied MR. The SC dismissed MBIs petition for review as the issues could
not be joined, given that Saligumba could not be located by MBI to comment on the petition.
7. Saligumba suddenly resurfaced and filed on January 9, 1990 a Motion to Execute the judgment in
MBI v. Saligumba and CA which became final and executory by the entry of judgment on May 3, 1989.
8. Sensing a fraudulent scheme by Saligumba, MBI instituted this instant Petition for Relief, on August
30, 1990, amending it to include its petition to re-file its Petition for Certiorari. The SC then set aside
the entry of judgment, admitted the amended petition, and issued TRO.

ISSUE/HELD:
Whether private respondent is entitled to the five percent (5%) agent's commissionYES. If in Prats v. CA,
Prats was compensated for bringing the parties together after the expiration of his extended exclusive
authority, so may Saligumba be compensated here. Moreover, Saligumba is the efficient procuring cause here
as differentiated from Prats, and therefore has more reason to be entitled to commission. While PTA president
Huelgas did follow up the sale, this was after Ordinance 6603 was passed due to Saligumbas efforts.

DISPOSITIVE: CA decision affirmed, SC TRO in the October 1, 1990 resolution lifted.

RATIO:

1. This case is within the coverage of the exception in Prats v. CA where the Court ruled in favor of the
claimant-agent despite the expiration of his authority when a sale was consummated.
a) Prats v. CA: Prats was not the efficient procuring cause for the sale and finalization of the sale
was after expiration of Prats' extended exclusive authority, yet he was granted P100,000 as
compensation for taking steps to bring together Doronila and the SSS, the former of which
sold property to the latter at P3.25/sq.m.
b) Saligumba is with more reason entitled to commission as the efficient procuring cause, as
without his efforts, the municipality would not have anything to pass and the Mayor would
not have anything to approve. The ordinance was approved on April 26, 1968 when private
respondent's authorization was still in force. Moreover, the approval by the City Mayor came
only three days after the expiration of private respondent's authority.
c) While Filomeno Huelgas followed up the matter with Councilor Magsalin and Mayor
Villegas, his intervention regarding the purchase came only after the ordinance had already
been passed when the buyer has already agreed to the purchase and to the price for which
said property is to be paid. It was actually Saligumbas labor regarding the ordinance that had
set in motion the intervention of the third party that produced the sale, hence he should be
compensated.

2. Petitioners cited case of Danon v. Brimo does not apply squarely to the instant petition.
a) Claimant-agent there fully comprehended the possibility that he may not realize the agent's
commission as he was informed that another agent was also negotiating the sale and thus,
compensation will pertain to the one who finds a purchaser and eventually effects the sale.
b) Here, Saligumba pursued his goal of seeing that the parties reach an agreement, on the belief
that he alone was transacting business with the City Government as this was what MBI made
it to appear.