Thursday, July 6, 2023

Case Digest: Constate Amor de Castro vs Court of Appeals, G.R. No. 11838

Constate Amor de Castro vs Court of Appeals, GR No. 11838, July 18, 2002

Subject: Obligations and Contracts

FACTS

Appellants were co-owners of four (4) lots located at EDSA corner New York and Denver Streets in Cubao, Quezon City. In a letter dated January 24, 1984, appellee was authorized by appellants to act as real estate broker in the sale of these properties for the amount of P 23,000,000.00, five percent (5%) of which will be given to the agent as commission. It was appellee who first found Times Transit Corporation, represented by its president Mr. Rondaris, as prospective buyer which desired to buy two (2) lots only, specifically lots 14 and 15. Eventually, sometime in May of 1985, the sale of lots 14 and 15 was consummated. Appellee received from appellants P48,893.76 as commission.

It was then that the rift between the contending parties soon emerged. Appellee apparently felt short changed because according to him, his total commission should be P 352,500.00 which is five percent (5%) of the agreed price of P 7,050,000.00 paid by Times Transit Corporation to appellants for the two (2) lots, and that it was he who introduced the buyer to appellants and unceasingly facilitated the negotiation which ultimately led to the consummation of the sale. Hence, he sued below to collect the balance of P 303,606.24 after having received P 48,893.76 in advance.

On the other hand, appellants completely traverse appellee's claims and essentially argue that appellee is selfishly asking for more than what he truly deserved as commission to the prejudice of other agents who were more instrumental in the consummation of the sale. Although appellants readily concede that it was appellee who first introduced Times Transit Corp. to them, appellee was not designated by them as their exclusive real estate agent but that in fact there were more or less eighteen (18) others whose collective efforts in the long run dwarfed those of appellee's, considering that the first negotiation for the sale where appellee took active participation failed and it was these other agents who successfully brokered in the second negotiation. But despite this and out of appellants' "pure liberality, beneficence and magnanimity", appellee nevertheless was given the largest cut in the commission (P 48,893.76), although on the principle of quantum meruit he would have certainly been entitled to less. So, appellee should not have been heard to complain of getting only a pittance when he actually got the lion's share of the commission and worse, he should not have been allowed to get the entire commission. Furthermore, the purchase price for the two lots was only P3.6 million as appearing in the deed of sale and not P7.05 million as alleged by appellee. Thus, even assuming that appellee is entitled to the entire commission, he would only be getting 5% of the P3.6 million, or P180,000.00.

RTC ruled in favor of Francisco Artigo.CA also affirmed in toto the decision of the trial court. Hence, the instant petition

ISSUE

Whether or not the CA erred in not ordering the dismissal of the complaint for failure to implead indispensable parties-in-interest.

RULING

No, CA did not err in ordering the dismissal of the complaint for failure to implead parties-in-interest.

Under the law (Art 1216), the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected.

In this case, SC views De Castros’ contention that Artigo's complaint should have been dismissed for failure to implead all the co-owners of the two lots is devoid of legal basis. The rule on mandatory joinder of indispensable parties is not applicable to the instant case because there is no dispute that Constante appointed Artigo in a handwritten note dated January 24, 1984 to sell the properties of the De Castros for P23 million at a 5% commission. The authority was on a first come, first serve basis. Constante signed the note as owner and as representative of the other co-owners. Under this note, a contract of agency was clearly constituted between Constante and Artigo. Whether Constante appointed Artigo as agent, in Constante's individual or representative capacity, or both, the De Castros cannot seek the dismissal of the case for failure to implead the other co-owners as indispensable parties. The De Castros admit that the other co-owners are solidarily liable under the contract of agency. The Court applied the ruling in the case of “Operators Incorporated vs. American Biscuit Co., Inc.” that "solidarity does not make a solidary obligor an indispensable party in a suit filed by the creditor.

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