SAYRUDDIN, KEN LANVIN

UNILAND RESOURCES vs. DEVELOPMENT BANK OF THE PHILIPPINESG.R. No.

95909 August 16, 1991

Principle: A middleman who, in the first place had no authority, express or implied, from the seller to
broker the transaction, has no right to claim for commission even though the sale was eventually
consummated between the parties introduced by said middleman.

Facts:

DBP sold their two properties- a warehouse lot and an office building lot in a public bidding.
Uniland, a private corporation engaged in real state brokerage, without securing the accreditation
from DBP as their broker, was able to convince Charges Realty Corp to purchase the warehouse lot.
Uniland communicated this to DBP during the pre-bidding conference and eventually the sale was
consummated.

After the sale, Uniland through its President, sent two letters to DBP asking for the payment
of its broker's fee in instrumenting the sale of its (DBP's) warehouse lot to Charges Realty Corp.
Uniland contends that an implied agency existed and argued that DBP should have stopped,
disauthorized and outrightly prevented them from dealing the warehouse lot from the inception.

Issue:

Whether or not a contract of agency existed between DBP and Uniland.

Ruling:

No. In the course of petitioner Uniland’s dealings with the respondent DBP, it was always
made clear to them that only accredited brokers may look for buyers on behalf of DBP. It is obvious
that Uniland was never able to secure the required accreditation from respondent DBP to transact
business on behalf of the latter. The letters sent by petitioner to the higher officers of the DBP are
merely indicative of petitioner's desire to secure such accreditation. At best these missives are self-
serving; the most that they prove is that they were sent by petitioner and received by respondent
DBP, which clearly never agreed to be bound thereto. As correctly declared by the trial court there
was no express reply from the DBP as to the accreditation sought by petitioner. From the very
beginning, therefore, petitioner was aware that it had no express authority from DBP to find buyers
of its properties.

Petitioner belittled the formality of accreditation as merely a mechanical act, which requires
not much discretion, as long as a person or entity looks for a buyer and initiate or promote the
interests of the seller. Being engaged in business, petitioner should do better to adopt the opposite
attitude and appreciate that formalities, such as the need for accreditation, result from the evolution
of sound business practices for the protection and benefit of all parties concerned. They are
designed and adopted specifically to prevent the occurrence of situations similar to that obtaining in
this case.