De Castro v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Private respondent Francisco Artigo sued petitioners Constante and Corazon Amor de Castro to recover unpaid commission from the sale of four lots. Artigo was authorized as a real estate broker for the sale of these properties, with a stipulated commission of five percent (5%) of the selling price. He introduced Times Transit Corporation as a prospective buyer for two of the lots, and the sale was eventually consummated. Artigo received a partial payment of P48,893.76 but claimed a balance of P303,606.24, asserting the total purchase price was P7,050,000.00. The petitioners contended that Artigo was not the sole agent, that other agents were more instrumental in the sale, and that the actual purchase price was P3,600,000.00. 2. Procedural History: Artigo filed a complaint against the De Castros before the Regional Trial Court (RTC) of Quezon City, Branch 80, for the collection of the unpaid broker's commission. The RTC ruled in favor of Artigo, ordering the De Castros to pay the unpaid commission, moral damages, and attorney's fees. The De Castros appealed this decision to the Court of Appeals (CA). The CA affirmed the RTC's decision in toto, finding that a contract of agency existed, Artigo was entitled to his commission, and the other co-owners were not indispensable parties. The CA also upheld the trial court's admission of parol evidence to establish the actual purchase price and the award of damages. The De Castros then filed a Petition for Review on Certiorari with the Supreme Court. 3. The Petition: The petitioners, Constante and Corazon Amor de Castro, seek review of the Court of Appeals' decision through a Petition for Review on Certiorari under Rule 45 of the Rules of Court. They argue that the complaint should have been dismissed for failure to implead indispensable parties (other co-owners), that Artigo's claim was extinguished by payment or waiver, that the courts considered incompetent evidence and perjured testimony, and that the award of moral damages and attorney's fees was improper. They also contend that they should have been awarded damages. The core of their argument revolves around the determination of the purchase price and the extent of Artigo's involvement and entitlement to commission.
Issue(s)
Whether the complaint should be dismissed for failure to implead indispensable parties. Whether Artigo's claim has been extinguished by full payment, waiver, or abandonment. Whether the determination of the purchase price violated the Rules on Evidence. Whether the award of moral damages and attorney's fees was proper.
Ruling
The petition is bereft of merit. The Supreme Court affirmed in toto the Decision of the Court of Appeals dated May 4, 1994, which upheld the trial court's decision ordering Constante and Corazon Amor de Castro to jointly and solidarily pay Francisco Artigo the sum of P303,606.24 representing unpaid commission, P25,000.00 for moral damages, and P45,000.00 for attorney's fees, plus costs.
Ratio Decidendi
On the issue of indispensable parties: The Court ruled that the complaint should not be dismissed for failure to implead the other co-owners. The handwritten authorization letter clearly constituted a contract of agency between Constante and Artigo. Even if Constante acted in a representative capacity, the De Castros admitted that the other co-owners are solidarily liable under Article 1915 of the Civil Code. This solidary liability means the agent can recover the whole compensation from any one of the co-principals. Article 1216 of the Civil Code allows a creditor to proceed against any one of the solidary debtors, and solidarity does not make a solidary obligor an indispensable party in a suit filed by the creditor, citing Operators Incorporated vs. American Biscuit Co., Inc.. On the issue of extinguishment of claim: The Court held that Artigo's claim was not extinguished by full payment, waiver, or abandonment. The contract of agency is the law between the parties, and the intervention of other agents, who were employees of the buyer, did not alter Artigo's entitlement to his 5% commission based on the agreed selling price. The acceptance of partial payment does not equate to acceptance of incomplete performance under Article 1235 of the Civil Code, thus no waiver or estoppel occurred. Furthermore, the claim was filed within the ten-year prescriptive period for written contracts, and laches does not apply when the action is filed within the statutory period, as delay within the prescriptive period is sanctioned by law, citing Agra vs. Philippine National Bank. On the issue of evidence and purchase price: The Court reiterated that it is not a trier of facts and cannot re-examine the probative value of evidence. Whether the purchase price was P7.05 million or P3.6 million is a question of fact. The De Castros' contention that the trial and appellate courts erred in considering incompetent evidence and disregarding the best evidence and parol evidence rules was dismissed. The Court affirmed the findings of the lower courts that evidence aliunde was admissible to prove the actual purchase price, as Artigo was not a party to the deed of sale and was suing under the contract of agency, not the deed itself. On the award of moral damages and attorney's fees: The Court found the award of moral damages and attorney's fees to be proper. The De Castros' lack of good faith and unkind treatment in refusing to give Artigo his due commission warranted the award. Moral damages are awardable when there is a breach of contract with bad faith or wanton disregard of contractual obligations, and attorney's fees are granted when the defendant acted in gross and evident bad faith in refusing a plainly valid claim, citing Article 2208 of the Civil Code.
Main Doctrine
Co-principals in a contract of agency are solidarily liable to the agent for all consequences of the agency, and the agent may recover the whole compensation from any one of them. The agent's claim for commission is not extinguished by partial payment, waiver, or abandonment, and laches does not apply if the action is filed within the statutory prescriptive period. Evidence aliunde is admissible to prove the true purchase price in a contract of agency, even if it differs from the deed of sale, especially when the agent is not a party to the deed.