Republic of the Philippines
G.R. No. 156200. March 31, 2004
MEGAWORLD PROPERTIES AND HOLDINGS, INC.,, Petitioner, vs. HON. JUDGE BENEDICTO G. COBARDE, in his capacity as the Presiding Judge of the Regional Trial Court, Branch 53, Lapu-Lapu City; JUAN GATO, in his capacity as the Sheriff of the Regional Trial Court, Branch 53, Lapu-Lapu City; SERECIO MATTHEW B. JO AND IDA HENARES, Respondents.
D E C I S I O N
This is a case involving the failure to pay the balance of a real estate brokers commission.
The antecedents show that sometime in July 1995, Mar y Cielo Leisure Resort, Inc. (MYC) secured the services of private respondents, Matthew Jo and Ida Henares, to broker a joint venture between MYC and petitioner Megaworld Properties and Holdings, Inc. for the latter to develop MYCs prime parcels of land with vast beach fronts located in Lapu-Lapu City, Cebu[1 into a world-class residential/commercial condominium complex. It was agreed that private respondents would be paid a 3% brokers fee based on the total consideration to be received by MYC from petitioner in the joint venture. A development agreement was then drawn up by petitioner Megaworld, AEV Properties, Inc. and Acoland, Inc. as developers, and MYC, through its owners Manuel, Virginia, Mariano and Richard all surnamed Zamora (Zamora family). Petitioner Megaworld was designated the exclusive marketing agent for the project.
However, before the development agreement could be implemented, or in March 1996, private respondents filed a civil complaint against petitioner Megaworld, MYC, the Zamora family, among others, for allegedly resorting to deceitful conduct to avoid payment of their 3% brokers/consultants fee. Private respondents alleged that MYC entered into simulated deeds of conveyance with certain individual members of the Zamora family to make it appear that MYC was not the owner of the properties subject of the development agreement.
To avert a full-blown trial and to save the joint venture
project, the parties entered into a compromise agreement. Under the said
agreement, MYC and the Zamora family committed themselves to pay private
respondents a settlement amount of
x x x
4. MYC and the ZAMORA FAMILY agree to pay the FIRST PARTY a
settlement amount of TWENTY NINE MILLION PESOS (29,000,000.00) Philippine
Currency. Thus, upon signing of this Compromise Agreement, MYC and the ZAMORA
FAMILY shall pay the FIRST PARTY
(30%) of whatever amount or consideration MYC and/or the ZAMORA FAMILY will
receive from the Joint Venture Agreement shall be applied against the
x x x
6. The DEVELOPERS undertake to withhold, pay and immediately
deliver directly to the FIRST PARTY the latters 30% share until the
On January 24, 1997, judgment[4 was
rendered based on the above compromise agreement. However, more than three
years passed and petitioner Megaworld, MYC and the Zamora family still had not
paid private respondents the balance of
x x x
x x x. The July 27, 1997 Judgment based on a Compromise Agreement
had already been partially fulfilled when the private respondents were paid
Petitioner moved for a reconsideration of the CAs decision but the same was denied.[8Hence, this appeal.
Petitioner contends that its obligation under the compromise
agreement to advance the balance of respondents commission of
In their comment, private respondents counter that the judgment
based on the compromise agreement has long become final and executory, and was
in fact partially executed when MYC and the Zamora family paid private
The only issue to be resolved is whether petitioner is liable for
the balance of private respondents brokers commission amounting to
We hold that petitioner is not liable.
As a rule, the findings of fact of the trial court, when affirmed by the Court of Appeals, are binding and conclusive upon the Supreme Court.[11However, when the judgment of the Court of Appeals is premised on a misapprehension of facts or a failure to consider certain relevant facts that would lead to a completely different conclusion, a review of its factual findings may be made.[12In the case at bar, the Court of Appeals failed to take into account that on February 1, 2000, more than two years after the judgment on the compromise agreement was rendered and partially executed, MYC and the Zamora family unilaterally cancelled the development agreement. Thru counsel, they notified petitioner of said termination in their letter which stated that:
x x x
Pursuant to Section 12 1(b) of the Agreement, we hereby put you on notice that our clients are terminating the agreement, effective sixty (60) days from receipt of this letter.
On our clients behalf, we also demand that you pay them the amount
We hold that the unilateral rescission of the joint venture
agreement by MYC and the Zamora family, pursuant to Section 12.1(b)[14of the development agreement,
effectively discharged petitioner from its obligation under the compromise
agreement to advance the balance of respondents brokers fee in the amount of
6.x x x the DEVELOPERS shall advance the balance thereof due to the FIRST PARTY, which amount shall be deducted, without interest, from the share of MYC and/or ZAMORA FAMILY at the rate of Thirty Percent (30%) of whatever proceeds payable to MYC and/or the ZAMORA FAMILY under the Joint Venture Agreement.15 (underscoring ours)
If the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal meaning of its stipulation shall control.[16It is evident from Section 6 of the compromise agreement, supra, that petitioners obligation to advance the balance of respondents commission was dependent on the success meaning, the earnings of the joint venture project. This is clear from the stipulation of the parties under the said agreement that whatever amount petitioner advanced to respondents was to be deducted from the share of MYC and/or the Zamora family in the proceeds of the joint venture agreement. Consequently, when MYC and the Zamora family unilaterally cancelled the development agreement, petitioner was effectively deprived of its source of payment to respondents since it was left without recourse to reimbursement. To hold petitioner liable under the circumstances will result in the unjust enrichment of MYC, the Zamora family and the respondents. This we cannot countenance.
We likewise note that it was MYC and the Zamora family that gave respondents the authority[17to broker a joint venture agreement between them and petitioner for the development of MYCs prime parcels of land into a world-class residential/ commercial condominium complex, in consideration of three percent (3%) brokers/consultants fee based on the total consideration the Corporation may receive from Megaworld Properties and Holdings, Inc. In short, respondents were the agents or brokers of MYC and the Zamora family, not the petitioner, and the obligation to pay the brokers fee therefore rested on MYC and the Zamora family.
We find it totally unreasonable, oppressive even, for respondents
to exact its brokers fee from a party which is not even its principal or the
entity that engaged its services. Even on the premise that petitioner obligated
itself under the compromise agreement to pay respondents the
Indeed it appears to be respondents theory that the compromise
agreement in effect made the petitioner-developer a surety or solidary
co-obligor of MYC and the Zamora family, absolutely and unconditionally liable
We agree that the judgment on the compromise agreement where
petitioner obligated itself to pay the balance of respondents commission of
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The decision of the Court of Appeals dated August 28, 2002 and its resolution of November 20, 2002 are hereby set ASIDE. The order of public respondent judge dated June 29, 2001 executing the compromise agreement as well as the writ of execution and notices of garnishment are hereby declared NULL AND VOID.
Sandoval-Gutierrez, (Acting Chairman), and Carpio-Morales, JJ., concur.
Vitug, J., (Chairman), on official business leave.
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