G.R. No. L-5180; August 31, 1953
CONSEJO INFANTE, petitioner, vs. JOSE CUNANAN, JUAN MIJARES and THE COURT OF APPEALS, SECOND DIVISION, respondents.

FACTS

Petitioner Consejo Infante owned two parcels of land with a house in Manila, covered by Transfer Certificate of Title No. 61786. On or before November 30, 1948, she contracted the services of respondents Jose Cunanan and Juan Mijares to sell the property for P30,000, subject to the condition that the purchaser would assume the existing mortgage with the Rehabilitation Finance Corporation. She agreed to pay them a commission of 5% of the purchase price plus any overprice obtained. Respondents found a buyer, Pio S. Noche, willing to purchase under the agreed terms. However, when they introduced Noche to Infante, she informed them she was no longer interested in selling and persuaded them to sign a document stating that her written authority to them was cancelled. Despite this, on December 20, 1948, Infante sold the property directly to Pio S. Noche for P31,000. Upon learning of the sale, respondents demanded their commission, but Infante refused. Respondents then filed an action to recover the commission.
Infante admitted contracting respondents’ services but claimed she agreed to pay a commission of only P1,200 on the condition that they procure a property for her on Taft Avenue to relocate to after the sale. She averred that respondents failed to do so, having sold the Taft Avenue property to another party, leading to the mutual agreement to cancel the authority. The lower court found the preponderance of evidence in favor of respondents and ordered Infante to pay P2,500 with legal interest from February 2, 1949, plus costs. The Court of Appeals affirmed this decision in toto.

ISSUE

Whether respondents are entitled to their commission despite the signed document cancelling their authority to sell, considering Infante’s subsequent direct sale to the buyer procured by respondents.

RULING

Yes, respondents are entitled to the commission. The Supreme Court affirmed the decisions of the lower court and the Court of Appeals.
The Court acknowledged that, under the old Civil Code, a principal may withdraw the authority given to an agent at will (Article 1733). Infante contended that the authority was validly withdrawn on November 30, 1948, via the signed cancellation document, freeing her from any obligation when she later sold to Noche. Respondents, however, claimed they agreed to the cancellation only upon Infante’s verbal assurance that they would still receive the commission if the property was sold to their buyer, Noche.
The Court noted that the parole evidence rule (Section 22, Rule 123, Rules of Court) generally prohibits evidence of terms outside a written agreement. The written cancellation document (Exhibit 1) was clear and contained no reservations; thus, oral evidence to prove the alleged verbal assurance was improperly allowed, as it did not fall under any exception to the rule (such as mistake, imperfection, failure to express true intent, or intrinsic ambiguity).
Nevertheless, the Court held that even disregarding the improperly admitted oral evidence, there was sufficient justification to award the commission. It found that respondents had performed their duty by procuring a ready, willing, and able buyer (Pio S. Noche) under the agreed terms. Infante, acting in bad faith, induced respondents to sign the cancellation document under the pretext of disinterest, only to then directly sell the property to the same buyer, thereby appropriating the benefit of respondents’ services while attempting to evade payment. This act of subversion was unfair and amounted to bad faith, which cannot be sanctioned. Consequently, Infante was liable to pay the commission originally agreed upon.
The decision appealed from was affirmed, with costs against petitioner Infante.
Separate Opinion:
Justice Labrador concurred in the result but dissented from the majority’s application of the parole evidence rule. He argued that evidence of the circumstances under which the cancellation document was signed—specifically, the promise to pay the commission if the property was sold to respondents’ buyer—should be admissible. Such evidence does not alter or vary the terms of the document, which was merely a withdrawal of authority, not an agreement to forgo the commission.