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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
CONSTANTE AMOR DE CASTRO and CORAZON AMOR DE CASTRO, by appellee. Thus, even assuming that appellee is entitled to the entire
petitioners, vs. COURT OF APPEALS and FRANCISCO ARTIGO, commission, he would only be getting 5% of the P3.6 million,
respondents. or P180,000.00.
[G.R. No. 115838. July 18, 2002] RTC ruled in favor of Artigo and ordered defendants Constante
Facts: CONSTANTE AMOR DE CASTRO and CORAZON AMOR were co- and Corazon Amor de Castro jointly and solidarily liable to plaintiff the
owners of four lots located at EDSA corner New York and Denver sum of the commission and damages
Streets in Cubao, Quezon City. The Court of Appeals affirmed in toto the decision of the trial court.
In a letter dated January 24, 1984 FRANCISCO ARTIGO was First. The Court of Appeals found that Constante authorized Artigo
authorized by appellants to act as real estate broker in the sale of these to act as agent in the sale of two lots in Cubao, Quezon City. The
properties for the amount of P23,000,000.00, five percent will be the handwritten authorization letter signed by Constante clearly
commission for the agent. established a contract of agency between Constante and Artigo

Artigo sold 2 lots only specifically lots 14 and 15 to Times Artigo facilitated the negotiations which eventually led to the sale
Transit Corporation, represented by its president Mr. Rondaris and of the two lots. Therefore, the Court of Appeals decided that Artigo is
received from appellants P48,893.76 as commission. entitled to the 5% commission on the purchase price as provided in the
contract of agency.
Appellee apparently felt short changed because according to
Second. The Court of Appeals ruled that Artigos complaint is not
him, his total commission should be P352,500.00 which is five percent
dismissible for failure to implead as indispensable parties the other co-
(5%) of the agreed price of P7,050,000.00 paid by Times Transit owners of the two lots. The Court of Appeals explained that it is not
Corporation to appellants for the two (2) lots, and that it was he who necessary to implead the other co-owners since the action is exclusively
introduced the buyer to appellants and unceasingly facilitated the based on a contract of agency between Artigo and Constante.
negotiation which ultimately led to the consummation of the sale.
Hence, he sued below to collect the balance of P303,606.24 after having Hence this petition.
received P48,893.76 in advance. Issue(s):
On the other hand, appellants completely traverse appellees First Issue: whether the complaint merits dismissal for failure to
claims and essentially argue that appellee is selfishly asking for more implead other co-owners as indispensable parties
than what he truly deserved as commission to the prejudice of other
agents who were more instrumental in the consummation of the sale. Second Issue: whether Artigos claim has been extinguished by full
payment, waiver or abandonment
But despite this and out of appellants pure liberality,
beneficence and magnanimity, appellee nevertheless was given the
largest cut in the commission (P48,893.76).
Ruling: A contract of agency which is not contrary to law, public order,
public policy, morals or good custom is a valid contract, and constitutes
First Issue: whether the complaint merits dismissal for failure to the law between the parties. The contract of agency entered into by
implead other co-owners as indispensable parties- No. Constante with Artigo is the law between them and both are bound to
comply with its terms and conditions in good faith.
The De Castros argue that Artigos complaint should have been
dismissed for failure to implead all the co-owners of the two lots. They The mere fact that other agents intervened in the consummation
contend that failure to implead such indispensable parties is fatal to the of the sale and were paid their respective commissions cannot vary the
complaint since Artigo, as agent of all the four co-owners, would be terms of the contract of agency granting Artigo a 5 percent commission
paid with funds co-owned by the four co-owners. based on the selling price. These other agents turned out to be
employees of Times Transit, the buyer Artigo introduced to the De
The contention is devoid of legal basis. Castros.

The rule on mandatory joinder of indispensable parties is not In any event, the SC found that the 5 percent real estate brokers
applicable to the instant case. commission is reasonable and within the standard practice in the real
estate industry for transactions of this nature.
Constante appointed Artigo in a handwritten note dated
January 24, 1984 to sell the properties of the De Castros for P23 million The De Castros further argue that laches should apply because Artigo
at a 5 percent commission. Constante signed the note as owner and as did not file his complaint in court until May 29, 1989, or almost four
representative of the other co-owners. Under this note, a contract of years later. Hence, Artigos claim for the balance of his commission is
agency was clearly constituted between Constante and Artigo. Whether barred by laches.
Constante appointed Artigo as agent, in Constantes individual or
representative capacity, or both, the De Castros cannot seek the Actions upon a written contract, such as a contract of agency, must
dismissal of the case for failure to implead the other co-owners as be brought within ten years from the time the right of action accrues.
indispensable parties. The De Castros admit that the other co-owners The right of action accrues from the moment the breach of right or duty
are solidarily liable under the contract of agency citing Article 1915. occurs. From this moment, the creditor can institute the action even as
the ten-year prescriptive period begins to run
Second Issue: whether Artigos claim has been extinguished by full
Laches does not apply because only four years had lapsed from the
payment, waiver or abandonment-No.
time of the sale in June 1985. Artigo made a demand in July 1985 and
filed the action in court on May 29, 1989, well within the ten-year
The De Castros claim that Artigo was fully paid on June 14, 1985 prescriptive period. This does not constitute an unreasonable delay in
and no longer entitled to any balance. According to them, Artigo was asserting ones right.
just one of the agents involved in the sale and entitled to a
proportionate share in the commission. They assert that Artigo did
absolutely nothing during the second negotiation but to sign as a
witness in the deed of sale. He did not even prepare the documents for
the transaction as an active real estate broker usually does.
These arguments are flimsy.