NARIC vs. CA et al G.R. No.

L-32320 July 16, 1979 FACTS: The National Rice and Corn Corporation (Naric) had on stock 8000 metric tons of corn which it could not dispose of due to its poor quality. Naric called for bids for the purchase of the corn and rice. But precisely because of the poor quality of the corn, a direct purchase of said corn even with the privilege of importing commodities did not attract good offers. Davao Merchandising Corporation (Damerco) came in with its offer to act as agent in the exportation of the corn, with the agent answering for the price thereof and shouldering all expenses incidental thereto, provided it can import commodities, paying the NARIC therefor from the price it offered for the corn. Damerco was to open a domestic letter of credit, which shall be available to the NARIC drawing therefrom through sight draft without recourse. The availability of said letter or letters of credit to the NARIC was dependent upon the issuance of the export permit. The payment therefor depended on the importation of the collateral goods, that is after its arrival. The first half of the collateral goods were successfully imported. Due to the inferior quality of the corn, it had to be replaced with more acceptable stock. This caused such delay that the letters of credit expired without the NARIC being able to draw the full amount therefrom. Checks and PN were issued by DAMERCO for the purpose of securing the unpaid part of the price of the corn and as guaranty that DAMERCO will purchase the corresponding collateral goods. But because of the change of administration in the government, barter transactions were suspended. Hence, DAMERCO was not able to import the remaining collateral goods. NARIC instituted in the CFI of Manila against DAMERCO and Fieldmens Insurance Co. Inc. an action for recovery of a sum of money representing the balance of the value of corn and rice exported by DAMERCO. The trial court rendered in favor of NARIC ordering DAMERCO and Fieldmens Insurance Co. Inc., to pay, jointly and severally. CA reversed the trial courts decision and rendered a new judgement dismissing the complaint as premature and for lack of cause of action. Hence this petition for certiorari.

ISSUE: Whether DAMERCO only acted as an agent of NARIC or is a buyer HELD: the petition for review is denied and the resolution of the CA appealed from is hereby affirmed AGENT Clearly from the contract between NARIC and DAMERCO: bids were previously called for by the NARIC for the purchase of corn and rice to be exported as well as of the imported commodities that will be brought in, but said biddings did not succeed in attracting good offers. Subsequently, Damerco made an offer. Now, to be sure, the contract designates the Naric as the seller and the Damerco as the buyer. These designations, however, are merely nominal, since the contract thereafter sets forth the role of the buyer (Damerco) as agent of the seller in exporting the quantity and kind of corn and rice as well as in importing the collateral goods thru barter and to pay the aforementioned collateral goods. The contract between the NARIC and the DAMERCO is bilateral and gives rise to a reciprocal obligation. The said contract consists of two parts: (1) the exportation by the DAMERCO as agent for the NARIC of the rice and corn; and (2) the importation of collateral goods by barter on a back to back letter of credit or no-dollar remittance basis. It is evident that the DAMERCO would not have entered into the agreement were it not for the stipulation as to the importation of the collateral goods which it could purchase. It appears that we were also misled to believe that the Damerco was buying the corn. A closer look at the pertinent provisions of the contract, however, reveals that the price as stated in the contract was given tentatively for the purpose of fixing the price in barter. It should likewise be stressed that the aforesaid exportation and importation was on a no-dollar remittance basis. In other words, the agent, herein defendant Damerco, was not to be paid by its foreign buyer in dollars but in commodities. Damerco could not get paid unless the commodities were imported, and Damerco was not exporting and importing on its own but as agent of the plaintiff, because it is the latter alone which could export and import on barter basis according to its charter. Thus, unless Damerco was made an agent of the plaintiff, the former could not export the corn and rice nor import at the same time the collateral goods. This was precisely the intention of the parties. He is not to be considered a buyer, who should be liable for the sum sought by NARIC because the contract itself clearly provides the Damerco was to export the

rice and corn, AND TO BUY THE collateral goods. There is nothing in the contract providing unconditionally that Damerco was buying the rice and corn. To be more specific, if the agreement was just a sale of corn to Damerco, the contract need not specify that Damerco was to buy the collateral goods. NATIONAL MARKETING CORPORATION VS. FEDERATION OF UNITED NAMARCO DISTRIBUTORS, INC. 49 SCRA 238 FACTS: On November 16, 1959, the NAMARCO and the FEDERATION entered into a Contract of Sale stipulating among others that Two Hundred Thousand Pesos (P200,000.00) be paid as part payment, and FEDERATION deposits with the NAMARCO upon signing of the items and/or merchandise a cash basis payment upon delivery of the duly indorsed negotiable shipping document covering the same. To insure payment of the goods by the FEDERATION, the NAMARCO accepted three domestic letters of credit which is an accepted draft and duly executed trust receipt approved by the Philippine National Bank. Upon arrival of the goods in Manila in January, 1960, the NAMARCO billed FEDERATION Statement of Account for P277,357.91, covering shipment of the 2,000 cartons of PK Chewing Gums, 1,000 cartons of Juicy Fruit Chewing Gums, and 500 cartons of Adams Chicklets; Statement of Account of P135,891.32, covering shipment of the 168 cartons of Blue Denims; and Statement of Account of P197,824.12, covering shipment of the 183 bales of Khaki Twill, or a total of P611,053.35. Subsequently, it was received by FEDERATION on January 29, 1960. However, on March 2, 1960 FEDERATION filed a complaint against Namarco for undelivery of some items contained in the contract of sale. FEDERATION refuses to pay acknowledge the domestic letters of credit until full delivery is done by NAMARCO. ISSUE: Should FEDERATION be obliged to pay the amount of the merchandise even if there was still incomplete delivery of items by NAMARCO? RULING: Yes. The right of the NAMARCO to the cost of the goods existed upon delivery of

the said goods to the FEDERATION which, under the Contract of Sale, had to pay for them. Therefore, the claim of the NAMARCO for the cost of the goods delivered arose out of the failure of the FEDERATION to pay for the said goods, and not out of the refusal of the NAMARCO to deliver the other goods to the FEDERATION. Furthermore, FEDERATIONs nonpay ment would result to it being unjustly enriched. However, the lower court erred in imposing interest at the legal rate on the amount due, "from date of delivery of the merchandise", and not from extra-judicial demand. In the absence of any stipulations on the matter, the rule is that the obligor is considered in default only from the time the obligee judicially or extra-judicially demands fulfillment of the obligation and interest is recoverable only from the time such demand is made. There being no stipulation as to when the aforesaid payments were to be made, the FEDERATION is therefore liable to pay interest at the legal rate only from June 7, 1960, the date when NAMARCO made the extra-judicial demand upon said party.

MEDRANO and IBAAN RURAL BANK vs. COURT OF APPEALS G.R. No. 150678 February 18, 2005 Facts: Bienvenido Medrano was the Vice-Chairman of Ibaan Rural Bank. He asked Flor (a cousin), to look for a buyer of a foreclosed asset of the bank (17-hectare mango plantation with 720 trees priced at P2.2M). Dominador Lee, a Makati businessman was a client of respondent Pacita Borbon, a licensed real estate broker. Borbon relayed to her business associates and friends that she had a ready buyer for a mango orchard. Flor then advised her that her cousin-in-law owned a mango plantation which was up for sale. She told Flor to confer with Medrano and to give them a written authority to negotiate the sale of the property. Medrano issued the Letter of Authority to Borbon and Antonio to negotiate with any prospective buyer for the sale of the mango plantation. He promised Borbon to pay a commission of 5% of the total purchase price to be agreed upon by the buyer and seller.

An ocular inspection was held by Lee. Lee informed Antonio that he already purchased the property and had made a down payment ofP1M. The remaining balance of P1.2M was to be paid upon the approval of the incorporation papers of the corporation he was organizing by the SEC. According to Antonio, Lee asked her if they had already received their commission. She answered no, and Lee expressed surprise over this. Since the sale of the property was consummated, the respondents asked from the petitioners their commission, or 5% of the purchase price. The petitioners refused to pay and offered a measly sum of P5,000.00 each. Hence, the present action. Medranos defense: Borbon and Antonio did not perform any act to consummate the sale. The petitioners pointed out that the respondents (1) did not verify the real owner of the property; (2) never saw the property in question; (3) never got in touch with the registered owner of the property; and (4) neither did they perform any act of assisting their buyer in having the property inspected and verified. Issue: WON the plaintiffs are entitled to any commission for the sale of the subject property? YES Held: The respondents are indeed the procuring cause of the sale. If not for the respondents, Lee would not have known about the mango plantation being sold by the petitioners. The sale was consummated. The bank had profited from such transaction. It would certainly be iniquitous if the respondents would not be rewarded their commission pursuant to the letter of authority. Procuring cause = the proximate cause. The term procuring cause, in describing a brokers activity, refers to a cause originating a series of events which, without break in their continuity, result in accomplishment of prime objective of the employment of the broker producing a purchaser ready, willing and able to buy real estate on the owners terms. The evidence on record shows that the respondents were instrumental in the sale of the property to Lee. Without their intervention, no sale could have been consummated. They were the ones who set the sale of the subject land in motion. While the letter-authority issued in favor of the respondents was non-exclusive, no evidence was adduced to show that there were other persons, aside from the respondents, who informed Lee about the property for sale. When there is a close,

proximate and causal connection between the brokers efforts and the principals sale of his property, the broker is entitled to a commission. In the absence of fraud, irregularity or illegality in its execution, such letterauthority serves as a contract, and is considered as the law between the parties. The clear intention is to reward the respondents for procuring a buyer for the property. MEDRANO Facts: Bienvenido Medrano was the Vice-Chairman of Ibaan Rural Bank. He asked Flor (a cousin), to look for a buyer of a foreclosed asset of the bank (17-hectare mango plantation with 720 trees priced at P2.2M). Dominador Lee,a Makati businessman was a client of respondent Pacita Borbon, a licensed real estate broker. Borbon relayed toher business associates and friends that she had a ready buyer for a mango orchard. Flor then advised her thather cousin-in-law owned a mango plantation which was up for sale. She told Flor to confer with Medrano and togive them a written authority to negotiate the sale of the property. Medrano issued the Letter of Authority toBorbon and Antonio to negotiate with any prospective buyer for the sale of the mango plantation. He promisedBorbon to pay a commission of 5% of the total purchase price to be agreed upon by the buyer and seller.An ocular inspection was held by Lee. Lee informed Antonio that he already purchased the property and hadmade a down payment ofP1M. The remaining balance of P1.2M was to be paid upon the approval of theincorporation papers of the corporation he was organizing by the SEC. According to Antonio, Lee asked her if they had already received their commission. She answered "no," and Lee expressed surprise over this. Since thesale of the property was consummated, the respondents asked from the petitioners their commission, or 5% of the purchase price. The petitioners refused to pay and offered a measly sum of P5,000.00 each. Hence, the present action. Medranos defense: Borbon and Antonio did not perform any act to consummate the sale. The petitioners pointed out that the respondents (1) did not verify the real owner of the property; (2) never saw the property inquestion; (3) never got in touch with the registered owner of the property; and (4) neither did they perform anyact of assisting their buyer in having the property inspected and verified.

Issue: WON the plaintiffs are entitled to any commission for the sale of the subject property? YESHeld: The respondents are indeed the procuring cause of the sale. If not for the respondents, Lee would not haveknown about the mango plantation being sold by the petitioners. The sale was consummated. The bank had profited from such transaction. It would certainly be iniquitous if the respondents would not be rewarded their commission pursuant to the letter of authority. Procuring cause = the proximate cause. The term "procuring cause," in describing a brokers activity, refersto a cause originating a series of events which, without break in their continuity, result in accomplishment of prime objective of the employment of the broker producing a purchaser ready, willing and able to buy realestate on the owners terms.The evidence on record shows that the respondents were instrumental in the sale of the property to Lee. Withouttheir intervention, no sale could have been consummated. They were the ones who set the sale of the subjectland in motion. While the letter-authority issued in favor of the respondents was non-exclusive, no evidence wasadduced to show that there were other persons, aside from the respondents, who informed Lee about the property for sale. When there is a close, proximate and causal connection between the brokers efforts and the principals sale of his property, the broker is entitled to a commission.In the absence of fraud, irregularity or illegality in its execution, such letter-authority serves as a contract,and is considered as the law between the parties.

The clear intention is to reward the respondents for procuring a buyer for the property.

Bicol Savings and Loan Association vs. CA Facts:Juan de Jesus was the owner of a parcel of land in Naga City. He executed a Special Power of Attorney in favor of Jose de Jesus, his son, wherein the latter could negotiate and mortgage the formers property in any bank preferably in the Bicol Savings and Loan Association. By virtue of such document,Jose was able to obtain P20,000 from Bicol Savings. To secure payment, he executed a deed of mortgagewherein it was stipulated that upon the mortgagor s failure or refusal to pay the obligation, the mortgagee may immediately foreclose the property. Juan de Jesus died and the loan obligation was not paid. As aresult, Bicol Savings extrajudicially foreclosed the mortgaged property. The bank won as the highest bidder during the auction sale. Jose and the other heirs failed to redeem the property. Thereafter, theytried to negotiate with Bicol Savings but the parties did not come up to an agreement. Bicol Savings soldthe property to another person. Hence, Jose filed for annulment of the foreclosure sale. The lower court dismissed the case. On appeal, the CA reversed RTCs decision. Hence, this appeal. Issue:Whether or not the extrajudicial foreclosure sale of the property was valid.Ruling.Yes. Art 1879 of the CC which states that special power to sell excludes the power to mortgageand vice versa is inapplicable in the case. What it proscribes is a voluntary and independent contract of sale and not an auction sale resulting from extrajudicial foreclosure caused by the default of themortgagor. The power to foreclose is not an ordinary agency but is primarily conferred upon themortgagee for its protection. The right of the bank to foreclose is independent of the mortgage contract asit is recognized by the Rules of Court.