FACTS:

The case revolves around a disagreement regarding the payment of a broker's fee in the sale of a parcel of land. The registered owners of the land, Spouses Eduardo R. Gullas and Norma S. Gullas, authorized petitioner Manuel B. Tan and his associates to negotiate for the sale of the land through a special power of attorney. Petitioner Tan contacted Engineer Edsel Ledesma, who represented the Sisters of Mary, an interested religious organization looking to acquire property in the area. Petitioner Tan and Engineer Ledesma visited the property along with Sisters Michaela Kim and Azucena Gaviola, who found the land suitable but requested a lower selling price. The prospective buyers were then referred to private respondent Eduardo Gullas, the owner of the property.

Private respondents agreed to sell the land to the Sisters of Mary and executed a special power of attorney in favor of Eufemia Cañete. Subsequently, a deed of sale was executed and the buyers paid the mandated taxes. Petitioners asserted their entitlement to a broker's fee, but private respondents refused to pay, claiming the involvement of another group of agents in the sale. Petitioners then filed a complaint to recover their broker's fee, which the lower court ruling granted. Both parties appealed the decision to the Court of Appeals.

ISSUES:

1. Whether the petitioners were the efficient procuring cause in bringing about the sale of the property to the Sisters of Mary.

2. Whether the lower court had a basis for awarding broker's fee, attorney's fees, and costs of litigation to the petitioners.

RULING:

1. No. The Court of Appeals held that the petitioners were not the efficient procuring cause in bringing about the sale of the property to the Sisters of Mary. It was established that another broker, Roberto Pacana, introduced the property to the Sisters of Mary ahead of the petitioners. The court found that when the petitioners introduced the buyers to the private respondents, the buyers were already decided in buying the property through Pacana, who had already been paid his commission. Therefore, the petitioners were not entitled to the broker's fee.

2. No. Since the petitioners were not the efficient procuring cause in bringing about the sale, the basis for awarding broker's fee, attorney's fees, and costs of litigation to the petitioners was absent. Thus, the Court of Appeals reversed the decision of the lower court and dismissed the counterclaim filed by the private respondents.

PRINCIPLES:

• The efficient procuring cause is the proximate cause, which sets into motion a series of events that, without any break in their continuity, result in the accomplishment of the prime objective of the employment of the broker - the sale of the property. (citing the ruling in Victore v. Court of Appeals)

• A broker is entitled to a commission only if he is the proximate cause of the sale. To be the primary cause, the broker’s efforts must have been the active and effective cause that sets into motion a chain of events that resulted in the sale. (citing the ruling in Heirs of Marcosa v. Court of Appeals)