G.R. No. 173857; March 21, 2012
LEONCIA MANUEL & MARINA S. MUDLONG, Petitioners, vs. LEONOR SARMIENTO, Respondent.

FACTS

Petitioner Leoncia Manuel, through her attorney-in-fact and granddaughter Marina Mudlong, authorized the sale of a parcel of land. Respondent Leonor Sarmiento, a real estate broker, was informed the property was for sale. In anticipation, Sarmiento voluntarily advanced expenses for title reconstitution, survey, and tax payments. On March 8, 1997, Mudlong signed a notarized Exclusive Authority to Sell in Sarmiento’s favor, stipulating a one-month term, an asking price of ₱65/sq.m., and a commission equal to the difference between that price and the final selling price.
Subsequently, a prospective buyer, Chiao Liong Tan, emerged through other brokers. Sarmiento facilitated meetings and provided required documents to Tan. However, on March 25, 1997, Tan purchased the property directly from Mudlong for ₱90/sq.m., consummating the sale within the one-month exclusive period granted to Sarmiento. After being excluded from the sale, Sarmiento demanded reimbursement for her expenses and payment of her broker’s commission, which petitioners refused.

ISSUE

Whether respondent Leonor Sarmiento is entitled to her broker’s commission despite the sale being concluded directly between the owner and a buyer introduced during her exclusive agency period.

RULING

Yes, respondent is entitled to her commission. The Supreme Court affirmed the findings of the Court of Appeals and the trial court. The core legal principle applied is that an exclusive agent is entitled to a commission if a sale is consummated within the exclusive period, regardless of whether the agent personally effected the sale. Here, the notarized Exclusive Authority to Sell created a valid contract of agency, and its one-month term was binding. The sale to Chiao Liong Tan was finalized on March 25, 1997, which was within the exclusive period that commenced on March 8, 1997.
The Court rejected petitioners’ defenses. The existence of other, unnotarized authority forms given to different brokers did not invalidate the prior, notarized exclusive grant to Sarmiento. Petitioners’ claim that the buyer lost trust in Sarmiento was unsubstantiated and, critically, the defense of revocation of her authority was not raised in the lower courts and thus could not be entertained for the first time on appeal. Since the sale was perfected within the exclusive period, Sarmiento was the efficient procuring cause. Therefore, she was legally entitled to her stipulated commission, calculated as the difference between the ₱65/sq.m. asking price and the ₱90/sq.m. selling price. The awards for moral and exemplary damages were deleted for lack of basis, but the commission and reimbursement for proven expenses were upheld.