G.R. No. 76969 June 9, 1997
INLAND REALTY INVESTMENT SERVICE, INC. and ROMAN M. DE LOS REYES, petitioners, vs. HON. COURT OF APPEALS, GREGORIO ARANETA, INC. and J. ARMANDO EDUQUE, respondents.

FACTS

Petitioners Inland Realty Investment Service, Inc. and Roman M. de los Reyes sought to collect an unpaid broker’s commission for allegedly brokering the sale of 9,800 shares of stock in Architects’ Bldg., Inc. from respondent Gregorio Araneta, Inc. (seller) to Stanford Microsystems, Inc. (buyer). On September 16, 1975, Araneta, Inc., through its Assistant General Manager J. Armando Eduque, granted petitioners a 30-day authority to sell the shares at P1,500 per share. Petitioners submitted Stanford as a prospective buyer, but Stanford counter-offered at P1,000 per share with terms of payment. Araneta, Inc. found the offer too low and suggested petitioners try to improve it. The authority to sell was extended several times: on October 2, 1975, October 28, 1975, and finally on December 2, 1975, each for 30 days from the date of extension. The sale to Stanford was ultimately consummated on July 8, 1977, for P13,500,000. Petitioners demanded a 5% broker’s commission, which was refused. The trial court dismissed petitioners’ complaint, a decision affirmed by the Court of Appeals. Petitioners now argue that the appellate court erred in disregarding Exhibits “L” (a letter dated October 28, 1976, allegedly renewing their authority) and “M” (a letter dated November 16, 1976, naming other prospective buyers), and that a broker is automatically entitled to commission upon introducing the ultimate buyer, even after the agency’s expiration.

ISSUE

1. Whether the Court of Appeals erred in its factual appreciation by disregarding Exhibits “L” and “M.”
2. Whether a broker is automatically entitled to the stipulated commission merely upon introducing the buyer who ultimately purchases the property, regardless of the expiration of the broker’s contract of agency.

RULING

The Supreme Court denied the petition and affirmed the decisions of the lower courts.
1. On Exhibits “L” and “M”: The Court found petitioners’ claims regarding these exhibits to be without merit. Petitioners alleged that Exhibit “L” was a letter dated October 28, 1976, renewing their authority. The Court held this was a “blatant lie,” as the trial and appellate courts considered Exhibit “L” to be a letter dated October 28, 1975. Petitioners failed to provide any certified or machine copy of the alleged 1976 letter. Regarding Exhibit “M” (a letter dated November 16, 1976), the Court ruled it had no probative value as its existence was doubtful and, even if it existed, its content (listing other prospective buyers) did not prove a renewal or revival of the agency contract that had expired on January 1, 1976. Furthermore, as it was signed by petitioner de los Reyes, it would be a self-serving document.
2. On Entitlement to Broker’s Commission: The Court ruled that petitioners were not entitled to the commission. The agency contract and authority to sell expired thirty days from its last renewal on December 2, 1975, or on January 1, 1976. The sale was consummated over a year and five months later, on July 8, 1977. During the intervening period, there was no evidence that petitioners were involved in the negotiations or performed substantial acts that proximately caused the sale. The Court emphasized that a broker is entitled to commission only if he is the efficient procuring cause of the sale. Merely submitting the name of the buyer, without successfully negotiating the sale under the principal’s terms during the agency’s existence, does not entitle the broker to automatic commission, especially after the agency has expired. Petitioners failed to prove they were the efficient procuring cause of the sale consummated in July 1977.
WHEREFORE, the petition was DISMISSED. Costs against petitioners.