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(INLAND REALTY INVESTMENT SERVICE, INC V CA

The Court of Appeals affirmed the trial court's decision that the petitioners were not entitled to a brokerage commission from the sale of respondent's shares of stock that occurred over a year after the expiration of the petitioners' authority to sell. The appellate court emphasized the significant lapse of time between the expiration of the authority to sell and the consummation of the sale. The petitioners also did not provide any evidence that they were involved in the negotiations between the eventual buyer and respondent during that lapse in time. As such, the petitioners could not be considered the efficient procuring cause of the sale.

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Abigail Tolabing
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1K views1 page

(INLAND REALTY INVESTMENT SERVICE, INC V CA

The Court of Appeals affirmed the trial court's decision that the petitioners were not entitled to a brokerage commission from the sale of respondent's shares of stock that occurred over a year after the expiration of the petitioners' authority to sell. The appellate court emphasized the significant lapse of time between the expiration of the authority to sell and the consummation of the sale. The petitioners also did not provide any evidence that they were involved in the negotiations between the eventual buyer and respondent during that lapse in time. As such, the petitioners could not be considered the efficient procuring cause of the sale.

Uploaded by

Abigail Tolabing
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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[INLAND REALTY INVESTMENT SERVICE, INC.

and ROMAN M. DE LOS REYES V. The Court of Appeals cannot be faulted for
COURT OF APPEALS, GREGORIO ARANETA, emphasizing the lapse of more than one (1) year and
INC. and J. ARMANDO EDUQUE] five (5) months between the expiration of petitioners'
273 SCRA 70 authority to sell and the consummation of the sale to
HERMOSISIMA, JR., J. Stanford, to be a significant index of petitioners' non-
[DIGESTED BY: ABIGAIL MILLER] participation in the really critical events leading to the
consummation of said sale, i.e., the negotiations to
Facts: convince Stanford to sell at Araneta, Inc.'s asking
price, the finalization of the terms and conditions of
Respondent Corp, through Assist. General Manager the sale, the drafting of the deed of sale, the
J. Armando Eduque granted petitioner authority to sell processing of pertinent documents, and the delivery
its 9,800 shares of stocks in Architects Bldg. of the shares of stock to Stanford.
Petitioner provided prospect buyer Stanford
Microsystems Inc., which latter gave a counter Principle: In a contract of agency, when there is a
proposal to buy 9,800 stocks at P1,000.00 per share significant lapse of the period ( one year and five
or P9,800,000.00, in which respondent viewed the months) between the expiration of petitioners'
offer too low and requested petitioner to improve the authority to sell and the consummation of the sale, as
price offered. Authority to sell given by respondent to shown in the context of the utter lack of evidence of
petitioner was extended, first on October 2, 1975, 30 petitioners' involvement in the negotiations between
days from said date, second on October 28, 1975, 30 the broker and the buyer during that period and in the
days from said date and on December 2, 1975, 30 subsequent processing of the documents pertinent to
days from said date. said sale, it becomes justifiable that the broker was
denied of brokerage commission. Brokers were not
Petitioner finally sold the shares to Stanford only on the efficient procuring cause in bringing about the sale
July 8, 1977, 1 year and 5 months from expiration of and are, therefore, not entitled to the stipulated
the last extended date, for P13,500,000.00. broker's commission.

On Sept. 6, 1977, petitioner demanded payment for


commission but was denied by respondent on the
ground of no legal or factual basis.

Petitioner filed complaint in the RTC but decision


favored the respondents on the ground that authority
to sell expired 30 days from last date of extension,
December 2, 1975. Petitioners then appealed to the
appellate court but the latter was unswayed, affirming
the trial court's decision. Hence the petition.

Issue: WON the contract of agency still exist after 30


days from the last date of extension?

Ruling:

No, From September 16, 1975 to January 1, 1976,


when petitioners' authority to sell was subsisting, if at
all, petitioners had nothing to show that they actively
served their principal's interests, pursued to sell the
shares in accordance with their principal's terms and
conditions, and performed substantial acts that
proximately and causatively led to the consummation
of the sale to Stanford of Araneta, Inc.'s 9,800 shares
in Architects'.

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