G.R. No. 27404 , December 24, 1927
M. SINGH, plaintiff-appellee, vs. TAN CHAY, defendant-appellant.

Ponente: STREET, J.

FACTS

M. Singh, a real estate broker, sued Tan Chay for damages arising from two alleged breaches of contract. First, Singh claimed Tan Chay breached a contract (Exhibit A) dated August 25, 1925, wherein Tan Chay agreed to buy certain coconut lands from the estate of Eduardo Campos through Singh’s mediation for P160,000. Tan Chay refused to proceed, allegedly because Singh misrepresented the number of coconut trees on the land. Second, Singh claimed Tan Chay breached a subsequent contract (Exhibit B) dated November 16, 1925, wherein Tan Chay agreed to buy three lots from Bernardo Marquez through Singh’s mediation at a price based on the number of coconut trees. Tan Chay then secretly purchased the same properties directly from Marquez and a mortgage creditor, cutting Singh out of the transaction. The trial court ruled in favor of Singh, awarding him P25,000 for the first breach and P50,000 for the second breach.

ISSUES:
1. Whether Tan Chay is liable for damages for breaching the first contract (Exhibit A) concerning the Campos estate.
2. Whether Tan Chay is liable for damages for breaching the second contract (Exhibit B) concerning the Marquez properties, and if so, whether the award of P50,000 is supported by the evidence.

RULING

1. On the First Cause of Action: REVERSED. The Supreme Court absolved Tan Chay from liability. The contract (Exhibit A) was merely an agreement to buy *through* Singh’s mediation. It did not obligate Tan Chay to advance any money or make a deposit as a sign of good faith prior to the final consummation of the sale. Tan Chay’s refusal to make the deposit requested by the seller’s administrator did not constitute a breach of his contractual obligation to Singh.
2. On the Second Cause of Action: REMANDED for New Trial. The Court found Tan Chay liable in principle for evading Singh’s brokerage commission by dealing directly with the seller. However, the award of P50,000 in damages was based on an unsubstantiated estimate of 50,000 coconut trees on the land, which Singh claimed Marquez told him. The Court deemed this hearsay evidence insufficient to support such a significant monetary judgment. Although the evidence was not objected to at trial, the Court exercised its discretionary power to order a new trial in the interest of justice, noting the defendant’s interests were poorly represented below and a miscarriage of justice could occur. The case was remanded to the trial court for a proper determination of damages based on competent evidence of the actual number of trees.

DISPOSITION:
The judgment on the first cause of action is reversed and Tan Chay is absolved. The judgment on the second cause of action is set aside and the case is remanded to the court of origin for a new trial. No costs.

SEPARATE OPINION:
Justice Malcolm dissented in part, stating he would have affirmed the judgment on the second cause of action and denied the petition for a new trial.