LEGAL NOTE 0137: WHAT IS PROCURING CAUSE?
SOURCE: 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)
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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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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J.A.B. Bulao & Associates 