Ticong v. Malim
REITERATIONFacts
The Antecedents: Manuel A. Malim (Malim), Minda Abangan (Abangan), and May Macal (Macal) (collectively, respondents), a realty broker/dealer and his associates, filed a complaint for collection of sum of money, damages, and attorney's fees against Lorenzo Ticong, Patrocinio Ticong, and Wilma Ticong Lao (collectively, petitioners or Ticongs). Respondents alleged that the Ticongs, registered owners of several parcels of land in Digos, Davao del Sur, authorized them on February 5, 2000, to sell the properties. Malim, with Lorenzo Ticong's conformity, sent a letter of "formal intent to sell" to Jainus C. Perez (Perez), the real estate field supervisor of the Church of Jesus Christ of Latter-Day Saints (Buyer), offering the properties for P2,000.00 per square meter. On February 11, 2000, respondents and the Ticongs signed a Memorandum of Agreement (MOA) authorizing respondents to "look, negotiate, and sell" the properties on a commission basis, and to charge an "overprice" on top of the Ticongs' net price of P900.00 per square meter. The properties were eventually sold to the Buyer for P1,460.00 per square meter, totaling P7,300,000.00. Respondents claimed an overprice commission of P2,800,000.00 (P560.00 per square meter overprice multiplied by 5,000 square meters), but alleged they only received P50,000.00. The Ticongs countered that respondents were not entitled to the overprice, asserting that the MOA was solely prepared by respondents and signed by the Ticongs without full comprehension due to limited education. They claimed the sale prospered through their own active efforts, including suing the Buyer, and that respondents were not licensed realty brokers. The Ticongs also alleged respondents received a total of P225,000.00, not just P50,000.00. Procedural History: The Regional Trial Court (RTC), Branch 11, Davao City, rendered a Decision on December 3, 2007, upholding the validity of the MOA and finding respondents to be the procuring cause of the sale. It ordered the Ticongs to pay respondents P2,750,000.00 with interest and P100,000.00 as attorney's fees. The Ticongs appealed to the Court of Appeals (CA). In its May 27, 2015 Decision, the CA denied the appeal, affirming the RTC's judgment with the modification that the award of attorney's fees was deleted. The CA held that respondents' lack of a license did not invalidate the MOA, that they were the procuring cause of the sale, and were entitled to the P2,800,000.00 overprice commission. Ma. Lorena Ticong, as an heir of Lorenzo Ticong, filed a motion for reconsideration, which the CA denied on September 23, 2015. Patrocinio S. Ticong and Wilma T. Lao also filed a separate motion for reconsideration, which the CA denied on January 12, 2016. The Petition: Ma. Lorena Ticong filed a petition for review on certiorari under Rule 45 of the Rules of Court (G.R. No. 220785), arguing that the CA violated established law and jurisprudence on agency by affirming that respondents were the efficient procuring cause. She contended that respondents' efforts were meager and did not contribute to the conclusion of the transaction, as the Ticongs had to file a complaint for specific performance against the Buyer, which she claimed constituted a break in the continuity of events. Patrocinio S. Ticong and Wilma T. Lao also filed a separate petition (G.R. No. 222887), alleging that the CA gravely erred and abused its discretion in awarding P2.8 million as commission/overprice and in ignoring undisputed facts and clear provisions of the MOA. They insisted that respondents were only entitled to a 5% Broker's Finders Fee and that the awarded amount was unconscionable, especially since respondents were not licensed brokers. Respondents countered that they were indeed the procuring cause, citing documentary evidence and testimony, and also raised procedural defects in G.R. No. 222887, specifically late filing and a defective Verification and Certification of Non-Forum Shopping.
Issue(s)
Whether respondents Malim, et al. were entitled to the payment of their brokers' overprice commission for being the procuring cause of the sale.
Ruling
The consolidated petitions are DENIED. The May 27, 2015 Decision of the Court of Appeals, Cagayan de Oro City and its September 23, 2015 and January 12, 2016 Resolutions in CA-G.R. CV No. 01838-MIN, are AFFIRMED, without prejudice to the deduction of the amount already paid by the Ticongs. All awards shall earn interest of 12% per annum from April 2001 until June 30, 2013, and interest of 6% per annum from July 1, 2013 until its full satisfaction.
Ratio Decidendi
On Issue 1: The Court found no cogent reason to grant the consolidated petitions, affirming the RTC and CA's conclusion that the respondents were the procuring cause of the sale. The Court reiterated that in petitions for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be put into issue, and the question of whether respondents were the procuring cause is factual in nature. The Court noted that the petition in G.R. No. 222887 was filed out of time and contained a defective Verification and Certification of Non-Forum Shopping, failing to comply with jurisdictional requirements, though it proceeded to address the merits. The Court defined "procuring cause" as a cause originating a series of events which, without break in their continuity, results in the accomplishment of the prime objective of employing the broker – to produce a purchaser ready, willing and able to buy real estate on the owner's terms, citing Medrano v. Court of Appeals. It found that respondents' role in the successful consummation of the sale was undisputed, as they were instrumental in setting the sale in motion and bringing the Ticongs and the Buyer together for negotiations. Documentary evidence, such as the letter of intent, the Ticongs' letter recognizing respondents as their sole agents, and the partial payment of commission, along with testimony, proved respondents' efforts. The Court also upheld the award of P2.8 million as overprice commission, based on the clear provisions of the Memorandum of Agreement (MOA) which authorized respondents to charge an "overprice" on top of the P900.00 per square meter net asking price. The Court emphasized that a contract is the law between the parties, and the Ticongs, having freely and willingly entered into the MOA, cannot renege on their obligation to pay the overprice commission on the flimsy excuse that respondents were not licensed brokers or did not spend much money. The Court found no reversible error in the factual findings of the CA and the RTC.
Main Doctrine
The main doctrine established and applied in this case is the principle of "procuring cause" in the context of real estate brokerage. This doctrine holds that a broker is entitled to their commission if their efforts were the foundation of the negotiations that ultimately led to the sale, even if the broker's direct involvement ceased before the final consummation. The Court emphasized that a continuous series of events, initiated by the broker, resulting in the sale, is sufficient. Additionally, the case reinforces the fundamental principle of contract law that a validly executed contract, such as a Memorandum of Agreement (MOA), is the law between the parties and its stipulations are binding, unless contrary to law, morals, good customs, public order, or public policy.