Uniland Resources v.

DBP

CASE SUMMARY
Uniland, a private corporation engaged in real estate brokering, sought accreditation from DBP to transact business on
behalf of the latter, in this case, as a broker in a sale of properties including a warehouse property and an office building
lot. DBP did not respond, but still, Uniland informed its client of the availability of the properties and the client made a
successful bid for the warehouse property. Uniland sought to collect the brokers fee (5%) from DBP, notwithstanding the
fact that Unliand was not accredited/ authorized as DBPs broker/ agent nor was it the procuring cause in the sale. The
Court ruled that Uniland is entitled to commissions because, based on Prats v. Court of Appeals, an unauthorized agent or
one who is not an agent at all may be entitled to commission if, despite its lack of authority, it initiated and made efforts to
bring about the sale. This is by way of equitable considerations and not as an agent.

DOCTRINE
An unauthorized agent, or one who is not an agent at all, may be entitled to commission, despite its lack of authority or it
not being the procuring cause, for initiating and making efforts to bring about a sale for the benefit of the principal.

This is given purely out of equity and thus subject to the sound discretion of the courts.

FACTS
1. Unliand is a private corporation engaged in real estate brokerage and licensed as such. DBP is a government
corporation engaged in finance and banking in a proprietary capacity.
2. A corporation (Marinduque Mining Corporation - MMC) obtained a loan from the DBP and as security, it
mortgaged properties, among which are two lots located in Makati:
a. Corner lot in Pasong Tamo with a four-story concrete building etc. (office building lot)
b. Another lot in Pasong Tamo with a concrete/steel warehouse etc. (warehouse lot)
3. The aforementioned lots have been previously mortgaged by MMC to Caltex, the mortgage to DBP is thus a
second mortgage.
4. The account of MMC was subsequently transferred to the Assets Privatization Trust (APT) pursuant to
Proclamation No. 50.
5. MMC failed to pay its obligations to Caltex, thus the latter foreclosed its mortgage on the said lots. In order to
recover its investment, APT offered for sale its right to redemption of the said lots to the public, through public
bidding by DBP.
6. Because Caltex had required that both lots be redeemed, the guidelines set by DBP provided that any bid to
purchase either of the two lots would be considered only if there will be two bids or a bid for both items which
when combined would fully cover the sale of the two lots in question.
7. There was only one bidder, Counsel Realty Corp. (an affiliate of Glaxo, Philippines, the client of Uniland
Resources), and the same bid for the warehouse property only. This was duly rejected by the DBP.
8. Eventually, DBP realized that it will earn more if by itself it redeems the said lots and subsequently sells them.
Thus, DBP redeemed the lots and eventually offered the same for sale.
9. There was only one bidder, Clarges Realty Group (another affiliate of Glaxo) only for the warehouse lot and
offered an amount slightly higher than what was previously offered by Counsel Realty. This time however, DBP
approved the sale, even though no bid was submitted for the office building lot. Eventually DBP was able to sell
the office building lot through negotiated sale to the Bank of the Philippine Islands.
10. The DBP admittedly paid the 5% brokers fee to the DBP Management Corporation which acted as broker for the
said negotiated sale to BPI.
11. After the aforesaid sale, petitioner Uniland wrote DBP, asking for the payment of its brokers fee in instrumenting
the sale of DBPs warehouse lot to Clarges Realty. DBP denied the claim. Thus, Uniland filed a case with the trial
court to recover from DBP the brokers fee.
12. The RTC ruled in favor of Uniland which DBP subsequently appealed to the Court of Appeals. The CA reversed
the judgement of the RTC and dismissed the complaint. Uniland filed a motion for reconsideration which was
denied. Thus it filed the present petition before the Supreme Court.
ISSUES AND RULING
Whether or not Uniland is entitled to compensation/ commissions.
YES, but only compensation in the spirit of EQUITY, not the whole 5% that the petitioner was asking for.
The Supreme Court, though finding the primary assertion of the petitioner without merit, eventually decided to give a
monetary award in the spirit of equity, recognizing the efforts of petitioner in bringing together DBP and an interested and
financially-able buyer. The Court made the following pronouncements:
 PETITIONER ALLEGATION
Alleged that the CA disregarded the
following pieces of evidence in its favor:
Uniland sent letters to DBPs
higher officers prior to the bidding
and sale where it requested
accreditation
The said letters also informed DBP
that it had offered the properties
for sale and volunteered the name
of its client, Glaxo, Philippines, as
an interested prospective buyer
Invokes Article 1869 of the NCC, claiming
there was an implied agency and that they
should have been stopped by DBP from
the start
The accreditation is merely a formality and
a mechanical act which requires not much
discretion as long as a person/ entity looks
for a buyer and initiates or promotes the
interests of the seller
Invokes equity considerations
Claims the amount of PHP 1,203,500
awarded by the TC as commission
computed at 5% of the warehouse property
sale price
DISPOSITIVE
WHEREFORE, the decision appealed from is hereby AFFIRMED, with the MODIFICATION that in equity respondent DBP
is ordered to pay petitioner the amount of One Hundred Thousand Pesos (PHP 100,000.00). No pronouncement as to
costs.
SC RESPONSE
This would have us go over the facts of the case which is not
possible in petitions for certiorari as only questions of law may be
raised which do not call for any examination of the probative value of
evidence presented
Mere disagreement between the CA and the TC as to the facts of a
case does not immediately warrant the Courts review of the same,
so long as the findings of the CA are borne out by the record or
based on substantial evidence
Petitioner has not sufficiently proved that his case falls under the
known exceptions
It was never necessary for DBP to stop Uniland from the start because:
It was always made clear to petitioner that only accredited brokers
may look for buyers on behalf of DBP
This is not a situation where a third party was prejudiced by the
refusal of DBP to recognize petitioner as its broker
The controversy is only between DBP and Uniland where the former
has time and time again emphasized that the arrangement sought by
Uniland did not exist
These are designed and adopted specifically to prevent the occurrence of
situations similar to the ones in this case
Petitioner should do better to adopt the opposite attitude and
appreciate that formalities result from the evolution of sound
business practices for the protection and benefit of all parties
concerned
Petitioners stance goes against the basic axiom in Civil Law that no
one may contract in the name of another without being authorized by
the latter unless the former has by a law a right to represent him
The relationship of agency is one founded on mutual consent: the
principal agrees to be bound by the acts of the agent and the latter in
turn consents to render service on behalf of and in representation of
the principal
The Court recognizes the efforts of the petitioner in bringing together DBP
and an interested and financially-able buyer.
There is reason to believe (though purely circumstantial) that DBP
became more confident to venture and redeem the properties from
APT due to the presence of a ready and willing buyer as
communicated and assured by petitioner.
Cites Prats v. CA and rules that parallel circumstances are present in
this case as it was petitioner who advised Glaxo, Philippines of the
availability of the warehouse property and aroused its interest
Through petitioner, DBP was directly informed of the existence of an
interested buyer and Unilands insistence reinforced the seriousness
of the offer. This no doubt had a bearing on DBPs decisions
regarding its disposition of its properties.
The circumstances do not meet the minimum legal standards for the
existence of an agency relationship and thus the award shall be based
purely on equity considerations in the sum of PHP 100,000.00
SO ORDERED.

Digester: Kim