Lim v. Saban
REITERATIONFacts
The Antecedents: Eduardo Ybañez (Ybañez), owner of a lot, entered into an Agency Agreement with Florencio Saban (Saban) to sell the lot for P200,000.00, with authority to mark up the price to cover expenses and Saban's commission. Saban facilitated the sale of the lot to Genevieve Lim (Lim) and spouses Benjamin and Lourdes Lim (Spouses Lim) for P600,000.00. Lim paid P113,257.00 for taxes and P50,000.00 as commission to Saban. Lim also issued four postdated checks totaling P236,743.00 in Saban's favor. Ybañez later asked Lim to cancel the checks and pay him directly. After the checks were dishonored, Saban filed a collection case against Ybañez and Lim. Procedural History: The Regional Trial Court (RTC) dismissed Saban's complaint, declaring the checks stale and absolving Lim. The Court of Appeals (CA) reversed the RTC decision, holding Saban entitled to P236,743.00 as commission and finding Lim liable. The CA ruled that Ybañez's revocation was invalid due to bad faith and that Lim, as an accommodation party, was liable on the checks. Lim's motion for reconsideration was denied. The Petition: Lim assails the CA's decision, arguing she is not privy to the agency agreement, paid the balance directly to Ybañez, and that the CA erred in finding her an accommodation party and in concluding she connived with Ybañez. She also contends that if liable, her liability should be shared with the Spouses Lim.
Issue(s)
Whether Saban is entitled to receive his commission from the sale. Whether Genevieve Lim is liable to pay Saban his sales commission.
Ruling
The petition is DISMISSED. The Supreme Court affirms the Court of Appeals' decision, holding that Saban is entitled to his commission and that Lim is liable to pay the same. The Court, however, modifies the CA's ruling regarding Lim's liability on the checks, clarifying she is not an accommodation party but liable for the balance of the purchase price.
Ratio Decidendi
On the issue of whether Saban is entitled to his commission: Yes, Saban is entitled to his commission. The Supreme Court affirmed the Court of Appeals' finding that the agency agreement between Ybañez and Saban was not validly revoked. This is because Ybañez's request for stop payment orders on the checks issued to Saban occurred after the sale was consummated on March 10, 1994. At that point, Saban had already fulfilled his obligation as Ybañez's agent by finding a suitable buyer and facilitating the execution of the Deed of Absolute Sale. To deprive Saban of his commission after the sale, which was a direct result of his efforts, would constitute a breach of the agency contract. The contract expressly stipulated that Saban would receive any excess in the purchase price beyond P200,000.00, plus taxes and incidental expenses. The Court cited Macondray & Co. v. Sellner and Infante v. Cunanan, et al., emphasizing that it would be unjust to allow a principal to revoke an agency contract to the prejudice of the broker after reaping the benefits of the broker's efforts. The Court clarified that while Saban's entitlement to commission is settled, the agency was not one 'coupled with an interest' under Article 1927 of the Civil Code, as Saban's interest was primarily in earning his compensation, an ordinary incident of the agency relationship. On the issue of whether Lim is liable to pay Saban his sales commission: Yes, Lim is liable to pay Saban his sales commission. Although Lim was not a direct party to the agency agreement between Ybañez and Saban, the records show she was aware of the arrangement. She knew that Ybañez set the lot price at P200,000.00 and that the P600,000.00 purchase price agreed upon included amounts for taxes and Saban's commission. Lim's issuance of four postdated checks totaling P236,743.00 in Saban's favor strongly belies her claim that she did not agree to the P600,000.00 purchase price. These checks represented the balance of the P600,000.00 after deducting Ybañez's share, Saban's commission, and taxes. The Court found that Lim, after initially agreeing to the P600,000.00 price, changed her mind after speaking with Ybañez, which prejudiced Saban. The Court found that Ybañez and Lim connived to deprive Saban of his commission by dealing directly with each other and reducing the purchase price. Considering the circumstances and the fact that Lim had not fully paid the P600,000.00 purchase price, the Court found it just and proper for her to pay Saban the balance of P200,000.00, which represented the remaining portion of the commission. The Court also noted that Ybañez received an excess of P30,000.00 from his asking price, which Saban could claim from Ybañez's estate. However, the Court clarified that Lim was not liable on the checks as an accommodation party, as she received value for them as part of the purchase price. Her liability stems from her participation in the scheme to deprive Saban of his commission.
Main Doctrine
An agency agreement, where the agent is entitled to any excess in the purchase price after deducting the principal's share and incidental expenses, cannot be revoked in bad faith by the principal to deprive the agent of his commission, especially when the sale has already been consummated through the agent's efforts. The buyer who is privy to this arrangement and issues checks for the commission may be held liable.