CASE 2013-0020: ORIENTAL PETROLEUM AND MINERALS CORPORATION, PETITIONER, -VERSUS- TUSCAN REAL TV, INC., RESPONDENT. (G.R. NO. 195481, 10 JULY 2013, ABAD J.) SUBJECT/S: BROKER’S COMMISSION; PRINCIPLE OF PROCURING CAUSE. (BRIEF TITLE: ORIENTAL PETROLIUM VS. TUSCAN REALTY)
DISPOSITIVE:
“WHEREFORE, the Court DENIES the petition and AFFIRMS the Decision of the Court of Appeals in CA-G.R. CV 86417 dated August II, 2010.
SO ORDERED.”
SUBJECTS/DOCTRINES/DIGEST:
TUSCAN REALTY WAS ENGAGED BY ORIENTAL PETROLEUM TO LOOK FOR BUYERS FOR ITS CONDOMINIUM UNITS IN CORINTHIAN PLAZA. TUSCAN INTRODUCED GATEWAY TO ORIENTAL PETROLEUM AND A CONTRACT TO SELL WAS EXECUTED. HOWEVER GATEWAY ASSIGNED ITS RIGHT UNDER THE CONTRACT TO SELL IN FAVOR OF ANCHETA WHO ULTIMATELY BOUGHT THE PROPERTY. IS TUSCAN ENTITLED TO BROKER’S COMMISSION?
YES.
BECAUSE OF THE PRINCIPLE OF “PROCURING CAUSE”.
IT WAS ON ACCOUNT OF TUSCAN REALTY’S EFFORT THAT ORIENTAL PETROLEUM GOT CONNECTED TO GATEWAY, THE PROSPECTIVE BUYER, RESULTING IN THE LATTER TWO ENTERING INTO A CONTRACT TO SELL INVOLVING THE TWO CONDOMINIUM UNITS. ALTHOUGH GATEWAY TURNED AROUND AND SOLD THE CONDOMINIUM UNITS TO ANCHETA, THE FACT IS THAT SUCH ULTIMATE SALE COULD NOT HAVE HAPPENED WITHOUT GATEWAY’S INDISPENSABLE INTERVENTION AS INTERMEDIATE BUYER.
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WHAT IS MEANT BY “PROCURING CAUSE”?
THE TERM “PROCURING CAUSE” REFERS TO A CAUSE WHICH STARTS A SERIES OF EVENTS AND RESULTS, WITHOUT BREAK IN THEIR CONTINUITY, IN THE ACCOMPLISHMENT OF A BROKER’S PRIME OBJECTIVE OF PRODUCING A PURCHASER WHO IS READY, WILLING, AND ABLE TO BUY ON THE OWNER’S TERMS.
THIS IS SIMILAR TO THE CONCEPT OF PROXIMATE CAUSE IN TORTS, WITHOUT WHICH THE INJURY WOULD NOT HAVE OCCURRED.
TO BE REGARDED AS THE PROCURING CAUSE OF A SALE, A BROKER’S EFFORTS MUST HAVE BEEN THE FOUNDATION OF THE NEGOTIATIONS WHICH SUBSEQUENTLY RESULTED IN A SALE.
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ORIENTAL PETROLEUM CLAIMS THAT GATEWAY WAS NOT A READY, WILLING, AND ABLE PURCHASER AND THAT IT IN FACT ASSIGNED ITS RIGHT TO ANCHETA WHO BECAME THE ULTIMATE BUYER AND THAT, MOREOVER, IT WAS NOT TUSCAN REALTY THAT INTRODUCED ANCHETA TO ORIENTAL PETROLEUM. IS THIS CONTENTION CORRECT?
NO.
THERE IS NO QUESTION THAT THE CONTRACT TO SELL THAT ORIENTAL PETROLEUM CONCLUDED WITH GATEWAY WAS A VALID AND BINDING CONTRACT TO SELL, WHICH PRECLUDED ORIENTAL PETROLEUM FROM PEDDLING THE PROPERTIES TO OTHERS. INDEED, ORIENTAL PETROLEUM EXECUTED A DEED OF ABSOLUTE SALE IN ANCHETA’S FAVOR BY VIRTUE OF GATEWAY’S ASSIGNMENT TO HIM OF ITS RIGHTS UNDER THE CONTRACT TO SELL. CONSEQUENTLY, IT CANNOT BE SAID THAT ORIENTAL PETROLEUM FOUND A DIRECT BUYER IN ANCHETA WITHOUT THE INTERMEDIATE CONTRACT TO SELL IN FAVOR OF GATEWAY, TUSCAN REALTY’S PROPOSED BUYER.
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ORIENTAL PETROLEUM FURTHER POINTS OUT THAT TUSCAN REALTY TOOK NO PART IN ITS NEGOTIATION WITH GATEWAY. IS THEIR ARGUMENT MERITORIOUS?
NO.
THAT MAY BE THE CASE BUT THE REASON WHY TUSCAN REALTY REFRAINED FROM DOING SO WAS BECAUSE OF ORIENTAL PETROLEUM’S ADVICE THAT IT WOULD HENCEFORTH DIRECTLY NEGOTIATE THE SALE WITH GATEWAY.
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ASSUMING THE ADVICE AMOUNTED TO A REVOCATION OF TUSCAN REALTY’S AUTHORITY TO SELL, IS TUSCAN STILL ENTITLED TO COMMISSION?
YES.
THE COURT HAS ALWAYS RECOGNIZED THE BROKER’S RIGHT TO HIS COMMISSION, ALTHOUGH THE OWNER REVOKED HIS AUTHORITY AND DIRECTLY NEGOTIATED WITH THE BUYER WHOM HE MET THROUGH THE BROKER’S EFFORTS. IT WOULD BE UNFAIR NOT TO GIVE THE BROKER THE REWARD HE HAD EARNED FOR HELPING THE OWNER FIND A BUYER WHO WOULD PAY THE PRICE.
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LASTLY, ORIENTAL PETROLEUM ARGUES THAT THIS IS JUST A SIMPLE CASE OF NON-FULFILLMENT OF A SUSPENSIVE CONDITION. IT CLAIMS THAT THE COMMISSION IS ONLY TO BE AWARDED IF THE PROPERTIES WERE SOLD AT A MINIMUM OF PL20,000.00 PER SQUARE METER AND THAT THE DELIVERY MUST BE MADE WITHIN THE FIRST WEEK OF JANUARY 1997. IS THIS ARGUMENT CORRECT?
NO.
THESE ARE JUST LAME EXCUSES TO AVOID LIABILITY. AS THE CA CORRECTLY NOTED, ORIENTAL PETROLEUM DID NOT RAISE THE ISSUE REGARDING THE DELIVERY DEADLINE IN ITS ANSWER. AS FOR THE FACT THAT THE PROPERTIES WERE EVENTUALLY SOLD FOR LESS THAN THE ORIGINAL ASKING PRICE, THAT ACTION WAS WITHIN ORIENTAL PETROLEUM’S DISCRETION. IT DECIDED THE MATTER UNILATERALLY WITHOUT CONSULTING ITS BROKER. CONSEQUENTLY, IT SHOULD BE DEEMED TO HAVE WAIVED ITS OWN MINIMUM PRICE REQUIREMENT.
TO READ THE DECISION, JUST DOWNLOAD THE FILE BELOW.
SCD-2013-0020 -JULY 2013 – 0RIENTAL PETROLEUM
J.A.B. Bulao & Associates 