G.R. No. L-9435; July 31, 1958
FREDERICK L. WORCESTER, petitioner, vs. RAMON LORENZANA, respondent.

FACTS

Petitioner Frederick L. Worcester owned a piece of real estate known as “La Cumbre de Guadalupe.” In July 1950, he sold the property to the Roman Catholic Archbishop of Manila through the mediation of broker Benito V. Jalbuena. Respondent Ramon Lorenzana, another broker, claimed credit for having negotiated the sale and demanded a brokerage commission from Worcester. Upon refusal, Lorenzana filed a suit in the Court of First Instance of Manila to recover commission and moral damages. Worcester contested the suit, characterized it as “malicious and unjustified,” and set up a counterclaim for actual and moral damages. Lorenzana, in reply, denied the counterclaim’s allegations and set up his own claim for moral damages. Upon filing the suit, Lorenzana had an attachment levied on Worcester’s property, alleging Worcester was disposing of his properties with intent to defraud. The attachment was discharged after Worcester filed the required bond.
After trial, the Court of First Instance of Manila found Lorenzana not entitled to any commission, dismissed his complaint, and awarded Worcester, on his counterclaim, P5,895.80 as compensatory damages and P1,000.00 as moral damages. On appeal, the Court of Appeals upheld the dismissal of Lorenzana’s complaint but revoked the award of damages to Worcester. Worcester appealed to the Supreme Court via certiorari, protesting the revocation.
The Court of Appeals found that Worcester had placed his property for sale with several brokers, including Lorenzana and Jalbuena, without giving any exclusive authority, on a “winner take all” basis (the broker who closed the deal would receive the full 5% commission). Lorenzana was the first to interest the Archbishop as a prospective buyer, and Worcester was informed of this but did not revoke Lorenzana’s authority. Later, Jalbuena informed Worcester he had found the same prospective buyer (the Archbishop). Worcester advised Jalbuena that Lorenzana was ahead by about a week and would be given a chance to close. Jalbuena agreed, and Worcester communicated this to Lorenzana. Notwithstanding, Worcester later instructed Lorenzana to withdraw the offer to the Archbishop, then contacted Jalbuena to proceed with negotiations. Jalbuena secured a definite offer, which Worcester accepted. The sale was consummated, Jalbuena was paid his commission, and Worcester left for Jamaica. The Court of Appeals ruled Lorenzana was not the efficient procuring cause of the sale but also found his suit was not clearly unfounded or filed in bad faith, as he had intervened with proper authority and could have believed in good faith he was entitled to a commission.

ISSUE

Whether the Court of Appeals erred in revoking the trial court’s award of damages (both compensatory and moral) to Worcester on his counterclaim.

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the judgment of the Court of Appeals, holding that the award of damages to Worcester was unwarranted.
The Supreme Court agreed with the Court of Appeals’ findings. Lorenzana’s action was not clearly unfounded. He was engaged by Worcester to sell the property, was the first to offer it to the Archbishop, and had several interviews for that purpose. As a non-lawyer, he could have believed in good faith he was entitled to a commission. Therefore, he did not act in gross and evident bad faith in filing the suit.
Regarding Worcester’s counterclaim for damages based on the allegation that the suit was “malicious and unjustified,” the Supreme Court noted that this was a mere conclusion unsupported by facts and could not be deemed admitted even if not specifically denied in Lorenzana’s general denial reply.
Concerning the attachment, the Court of Appeals found, and it was undisputed, that Worcester was disposing of all his properties in the Philippines at the time, a fact known to Lorenzana. Thus, Lorenzana’s action in seeking attachment was justified. Furthermore, Lorenzana acted in good faith, which is fatal to any award for damages.
The Supreme Court also rejected Worcester’s contention that the Court of Appeals erred in setting aside the award of damages because Lorenzana did not present arguments on it in his brief. The appellate court has the discretion to determine questions not raised by the appellant.
The judgment of the Court of Appeals was affirmed, with costs against petitioner Worcester.