G.R. No. L-1849. October 25, 1949.

Testate estate of the deceased Raymundo Melliza y Angulo. LAUREANA GABIN, claimant-appellant, v.
MARIA MELLIZA ET AL., Oppositors-Appellees.

Fulgencio Vega for Appellant.

V. Sian Melliza and Juan Jamora, Jr. for Appellees.

SYLLABUS

1. EXECUTORS AND ADMINISTRATORS; CLAIMS AGAINST ESTATE; CASE AT BAR. — In his lifetime M contracted
the services of G to administer certain haciendas belonging to M for a period of thirty years at a compensation of
350 cavans of palay per agricultural year, with the stipulation that G cannot be dismissed from the service without
just and legal cause during the time she cared to serve within the said period of thirty years, and in case of
dismissal she shall have the right to be indemnified for the rest of the period at the rate of 150 cavans of palay for
each agricultural year. After M’s death his executrix took from G the administration of said haciendas, and G filed a
claim against the estate for the payment of 150 cavans of palay per agricultural year for twenty-nine years. Held:
That the claim is not allowable, first, because it arose after the death of the decedent and, second, because it is not
a claim for money falling under Rule 87 of the Rules of Court.

D E C I S I O N - OZAETA, J.

On January 19, 1944, Raymundo Melliza and Laureana Gabin entered into a written agreement whereby the former
contracted the personal services of the latter to administer certain haciendas owned by Raymundo Melliza for a
period of thirty years from said date, at the option of Laureana Gabin. As compensation for said personal services
Melliza agreed to pay Gabin 350 cavans of palay every agricultural year. It was further stipulated that Laureana
Gabin cannot be dismissed from the service without just and legal cause during the time she cared to serve within
the said period of thirty years, and in case of dismissal she shall have the right to be indemnified for the rest of the
period at the rate of 150 cavans of palay for each agricultural year.

Raymundo Melliza died on December 11, 1945, and testamentary proceedings were thereafter instituted in the
Court of First Instance of Iloilo for the administration and distribution of his estate.

Having been deprived by the executrix Remedios S. de Villanueva of the administration of the haciendas in
question, Laureana Gabin presented to the probate court a claim against the estate of the deceased Raymundo
Melliza for the payment to her by the executrix of 150 cavans of palay beginning the agricultural year 1945-1946
until the termination of the testamentary proceedings, and that thereafter the heir or heirs to whom the haciendas
may be adjudicated be ordered to pay the claimant the same amount of palay every year until the expiration of
thirty years from the agricultural year 1945-1946.

The heirs of the deceased opposed said claim on the following grounds: (1) That, not being a claim for money, it is
not a proper claim under section 5 of Rule 87; (2) that the agreement or contract on which it is based is one of
agency which was terminated by the death of the principal; (3) that Raymundo Melliza could not, except by will,
dispose of the administration of his properties after his death; and (4) that there was no consideration for the
granting of such administration for 30 years with remuneration.

The probate court sustained the first ground of the opposition and denied the claim. Hence this appeal.

The question to determine is whether appellant’s claim for 150 cavans of palay a year for the remainder of the
thirty-year period mentioned in the agreement Exhibit A is a proper claim which may be allowed in the
testamentary proceedings under Rule 87. Section 1 of said rule provides that immediately after the granting of
letters testamentary or of administration the court shall issue a notice requiring all persons having money claims
against the decedent to file them in the office of the clerk of said court; and section 5 provides that all claims for
money against the decedent arising from contract, express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses and expenses of the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in the notice. "By money claims, is meant any
claim for ’money, debt, or interest thereon,’ according to section 21 of Rule 3 and section 1 of Rule 88. Not all
money claims may, however, be presented, but only those which are proper against the decedent, that is, claims
upon a liability contracted by the decedent before his death. Accordingly, claims arising after his death cannot thus
be presented, except funeral expenses." (Moran on the Rules of Court, Volume 2, second edition, p. 347.)

Upon the facts and the law involved in this case, we find no valid reason to reverse the order appealed from.

In the first place, the claim in question arose after the death of the decedent. Assuming without deciding that the
contract on which the claim is based is valid, the decedent appears to have complied with it up to the time of his
death. It was the executrix who dismissed the claimant from the service as administratrix or manager of the
haciendas of the deceased.

In the second place, the claim is not for money, debt, or interest thereon but for 150 cavans of palay a year for
twenty-nine agricultural years (one agricultural year having elapsed before the death of Raymundo Melliza). Even if
it wanted to, the probate court could not determine in advance the value of the palay in money because the price
of palay varies from year to year.

It appears from the record that before presenting the claim in question the claimant filed a motion in the probate
court praying that she be appointed coadministratrix of the estate of the deceased on the strength of the contract
of service hereinabove mentioned. But Judge Blanco denied said motion without prejudice to the right of the
claimant to present a claim in due form against the estate. Appellant now contends in her third assignment of error
that said order of Judge Blanco not having been appealed from, "the lower court erred in not holding that the
question of the presentation and admission of the claimant’s claim has become res judicata." This assignment of
error is without merit because the mere reservation by Judge Blanco to the claimant of her right to present the
claim in question in lieu of her appointment as coadministratrix of the estate of the deceased did not preclude the
court from denying said claim if, after hearing, it found the same to be improper or not allowable in these
proceedings.

Wherefore, without deciding whether or not the contract claimed upon is valid and binding against the heirs of the
decedent, and without prejudice to any proper action that the appellant may bring upon said contract, we affirm
the order appealed from, with costs against the Appellant.

Moran, C.J., Paras, Feria, Padilla, Tuason, Montemayor, Reyes and Torres, JJ., concur.

GENEVIEVE LIM, G.R. No. 163720 December 16, 2004

Petitioner, v. Chairman, AUSTRIA-MARTINEZ, CALLEJO, SR., TINGA, and
FLORENCIO SABAN, CHICO-NAZARIO, JJ.

D E C I S I O N - TINGA, J.:

Before the Court is a Petition for Review on Certiorari assailing the Decision[1] dated October 27, 2003 of the Court
of Appeals, Seventh Division, in CA-G.R. V No. 60392.[2]

The late Eduardo Ybaez (Ybaez), the owner of a 1,000-square meter lot in Cebu City (the lot), entered into
an Agreement and Authority to Negotiate and Sell (Agency Agreement) with respondent Florencio Saban (Saban)
on February 8, 1994. Under the Agency Agreement, Ybaez authorized Saban to look for a buyer of the lot for Two
Hundred Thousand Pesos (P200,000.00) and to mark up the selling price to include the amounts needed for
payment of taxes, transfer of title and other expenses incident to the sale, as well as Sabans commission for the
sale.[3]

Through Sabans efforts, Ybaez and his wife were able to sell the lot to the petitioner Genevieve Lim (Lim) and the
spouses Benjamin and Lourdes Lim (the Spouses Lim) on March 10, 1994. The price of the lot as indicated in
the Deed of Absolute Sale is Two Hundred Thousand Pesos (P200,000.00).[4] It appears, however, that the vendees
agreed to purchase the lot at the price of Six Hundred Thousand Pesos (P600,000.00), inclusive of taxes and other
incidental expenses of the sale. After the sale, Lim remitted to Saban the amounts of One Hundred Thirteen
Thousand Two Hundred Fifty Seven Pesos (P113,257.00) for payment of taxes due on the transaction as well as
Fifty Thousand Pesos (P50,000.00) as brokers commission.[5] Lim also issued in the name of Saban four postdated
checks in the aggregate amount of Two Hundred Thirty Six Thousand Seven Hundred Forty Three Pesos
(P236,743.00). These checks were Bank of the Philippine Islands (BPI) Check No. 1112645 dated June 12, 1994
for P25,000.00; BPI Check No. 1112647 dated June 19, 1994 for P18,743.00; BPI Check No. 1112646 dated June
26, 1994 for P25,000.00; and Equitable PCI Bank Check No. 021491B dated June 20, 1994 for P168,000.00.

Subsequently, Ybaez sent a letter dated June 10, 1994 addressed to Lim. In the letter Ybaez asked Lim to
cancel all the checks issued by her in Sabans favor and to extend another partial payment for the lot in his
(Ybaezs) favor.[6]

After the four checks in his favor were dishonored upon presentment, Saban filed a Complaint for collection of sum
of money and damages against Ybaez and Lim with the Regional Trial Court (RTC) of Cebu City on August 3,
1994.[7] The case was assigned to Branch 20 of the RTC.

In his Complaint, Saban alleged that Lim and the Spouses Lim agreed to purchase the lot
for P600,000.00, i.e., with a mark-up of Four Hundred Thousand Pesos (P400,000.00) from the price set by Ybaez.
Of the total purchase price of P600,000.00, P200,000.00 went to Ybaez, P50,000.00 allegedly went to Lims agent,
and P113,257.00 was given to Saban to cover taxes and other expenses incidental to the sale. Lim also issued four
(4) postdated checks[8] in favor of Saban for the remaining P236,743.00.[9]
Saban alleged that Ybaez told Lim that he (Saban) was not entitled to any commission for the sale since he
concealed the actual selling price of the lot from Ybaez and because he was not a licensed real estate broker. Ybaez
was able to convince Lim to cancel all four checks.

Saban further averred that Ybaez and Lim connived to deprive him of his sales commission by withholding payment
of the first three checks. He also claimed that Lim failed to make good the fourth check which was dishonored
because the account against which it was drawn was closed.

In his Answer, Ybaez claimed that Saban was not entitled to any commission because he concealed the actual
selling price from him and because he was not a licensed real estate broker.

Lim, for her part, argued that she was not privy to the agreement between Ybaez and Saban, and that she issued
stop payment orders for the three checks because Ybaez requested her to pay the purchase price directly to him,
instead of coursing it through Saban. She also alleged that she agreed with Ybaez that the purchase price of the lot
was only P200,000.00.

Ybaez died during the pendency of the case before the RTC. Upon motion of his counsel, the trial court dismissed
the case only against him without any objection from the other parties.[10]

On May 14, 1997, the RTC rendered its Decision[11] dismissing Sabans complaint, declaring the four (4) checks
issued by Lim as stale and non-negotiable, and absolving Lim from any liability towards Saban.

Saban appealed the trial courts Decision to the Court of Appeals.

On October 27, 2003, the appellate court promulgated its Decision[12] reversing the trial courts ruling. It held that
Saban was entitled to his commission amounting to P236,743.00.[13]
The Court of Appeals ruled that Ybaezs revocation of his contract of agency with Saban was invalid because the
agency was coupled with an interest and Ybaez effected the revocation in bad faith in order to deprive Saban of his
commission and to keep the profits for himself.[14]

The appellate court found that Ybaez and Lim connived to deprive Saban of his commission. It declared that Lim is
liable to pay Saban the amount of the purchase price of the lot corresponding to his commission because she
issued the four checks knowing that the total amount thereof corresponded to Sabans commission for the sale, as
the agent of Ybaez. The appellate court further ruled that, in issuing the checks in payment of Sabans commission,
Lim acted as an accommodation party. She signed the checks as drawer, without receiving value therefor, for the
purpose of lending her name to a third person. As such, she is liable to pay Saban as the holder for value of the
checks.[15]

Lim filed a Motion for Reconsideration of the appellate courts Decision, but her Motion was denied by the Court of
Appeals in a Resolution dated May 6, 2004.[16]

Not satisfied with the decision of the Court of Appeals, Lim filed the present petition.

Lim argues that the appellate court ignored the fact that after paying her agent and remitting to Saban
the amounts due for taxes and transfer of title, she paid the balance of the purchase price directly to Ybaez.[17]

She further contends that she is not liable for Ybaezs debt to Saban under the Agency Agreement as she
is not privy thereto, and that Saban has no one but himself to blame for consenting to the dismissal of the case
against Ybaez and not moving for his substitution by his heirs.[18]

Lim also assails the findings of the appellate court that she issued the checks as an accommodation party
for Ybaez and that she connived with the latter to deprive Saban of his commission.[19]

Lim prays that should she be found liable to pay Saban the amount of his commission, she should only be
held liable to the extent of one-third (1/3) of the amount, since she had two co-vendees (the Spouses Lim) who
should share such liability.[20]

In his Comment, Saban maintains that Lim agreed to purchase the lot for P600,000.00, which consisted of
the P200,000.00 which would be paid to Ybaez, the P50,000.00 due to her broker, the P113,257.00 earmarked for
taxes and other expenses incidental to the sale and Sabans commission as broker for Ybaez. According to
Saban, Lim assumed the obligation to pay him his commission. He insists that Lim and Ybaez connived to unjustly
deprive him of his commission from the negotiation of the sale.[21]
The issues for the Courts resolution are whether Saban is entitled to receive his commission from the sale; and,
assuming that Saban is entitled thereto, whether it is Lim who is liable to pay Saban his sales commission.

The Court gives due course to the petition, but agrees with the result reached by the Court of Appeals.

The Court affirms the appellate courts finding that the agency was not revoked since Ybaez requested that Lim
make stop payment orders for the checks payable to Saban only after the consummation of the sale on March 10,
1994. At that time, Saban had already performed his obligation as Ybaezs agent when, through his (Sabans)
efforts, Ybaez executed the Deed of Absolute Sale of the lot with Lim and the Spouses Lim.

To deprive Saban of his commission subsequent to the sale which was consummated through his efforts would be a
breach of his contract of agency with Ybaez which expressly states that Saban would be entitled to any excess in
the purchase price after deducting the P200,000.00 due to Ybaez and the transfer taxes and other incidental
expenses of the sale.[22]
In Macondray & Co. v. Sellner,[23] the Court recognized the right of a broker to his commission for finding a suitable
buyer for the sellers property even though the seller himself consummated the sale with the buyer. [24] The Court
held that it would be in the height of injustice to permit the principal to terminate the contract of agency to the
prejudice of the broker when he had already reaped the benefits of the brokers efforts.

In Infante v. Cunanan, et al.,[25] the Court upheld the right of the brokers to their commissions although the seller
revoked their authority to act in his behalf after they had found a buyer for his properties and negotiated the sale
directly with the buyer whom he met through the brokers efforts. The Court ruled that the sellers withdrawal in bad
faith of the brokers authority cannot unjustly deprive the brokers of their commissions as the sellers duly
constituted agents.

The pronouncements of the Court in the aforecited cases are applicable to the present case, especially considering
that Saban had completely performed his obligations under his contract of agency with Ybaez by finding a suitable
buyer to preparing the Deed of Absolute Sale between Ybaez and Lim and her co-vendees. Moreover, the contract
of agency very clearly states that Saban is entitled to the excess of the mark-up of the price of the lot after
deducting Ybaezs share of P200,000.00 and the taxes and other incidental expenses of the sale.
However, the Court does not agree with the appellate courts pronouncement that Sabans agency was one coupled
with an interest. Under Article 1927 of the Civil Code, an agency cannot be revoked if a bilateral contract depends
upon it, or if it is the means of fulfilling an obligation already contracted, or if a partner is appointed manager of a
partnership in the contract of partnership and his removal from the management is unjustifiable. Stated differently,
an agency is deemed as one coupled with an interest where it is established for the mutual benefit of the principal
and of the agent, or for the interest of the principal and of third persons, and it cannot be revoked by the principal
so long as the interest of the agent or of a third person subsists. In an agency coupled with an interest, the agents
interest must be in the subject matter of the power conferred and not merely an interest in the exercise of the
power because it entitles him to compensation. When an agents interest is confined to earning his agreed
compensation, the agency is not one coupled with an interest, since an agents interest in obtaining his
compensation as such agent is an ordinary incident of the agency relationship.[26]

Sabans entitlement to his commission having been settled, the Court must now determine whether Lim is
the proper party against whom Saban should address his claim.

Sabans right to receive compensation for negotiating as broker for Ybaez arises from the Agency Agreement
between them. Lim is not a party to the contract. However, the record reveals that she had knowledge of the fact
that Ybaez set the price of the lot at P200,000.00 and that the P600,000.00the price agreed upon by her and
Sabanwas more than the amount set by Ybaez because it included the amount for payment of taxes and for
Sabans commission as broker for Ybaez.

According to the trial court, Lim made the following payments for the lot: P113,257.00 for taxes, P50,000.00 for
her broker, and P400.000.00 directly to Ybaez, or a total of Five Hundred Sixty Three Thousand Two Hundred Fifty
Seven Pesos (P563,257.00).[27] Lim, on the other hand, claims that on March 10, 1994, the date of execution of
the Deed of Absolute Sale, she paid directly to Ybaez the amount of One Hundred Thousand Pesos (P100,000.00)
only, and gave to Saban P113,257.00 for payment of taxes and P50,000.00 as his commission,[28] and One
Hundred Thirty Thousand Pesos (P130,000.00) on June 28, 1994,[29] or a total of Three Hundred Ninety Three
Thousand Two Hundred Fifty Seven Pesos (P393,257.00). Ybaez, for his part, acknowledged that Lim and her co-
vendees paid him P400,000.00 which he said was the full amount for the sale of the lot.[30] It thus appears that he
received P100,000.00 on March 10, 1994, acknowledged receipt (through Saban) of the P113,257.00 earmarked
for taxes and P50,000.00 for commission, and received the balance of P130,000.00 on June 28, 1994. Thus, a total
of P230,000.00 went directly to Ybaez. Apparently, although the amount actually paid by Lim was P393,257.00,
Ybaez rounded off the amount to P400,000.00 and waived the difference.
Lims act of issuing the four checks amounting to P236,743.00 in Sabans favor belies her claim that she and her co-
vendees did not agree to purchase the lot at P600,000.00. If she did not agree thereto, there would be no reason
for her to issue those checks which is the balance of P600,000.00 less the amounts of P200,000.00 (due to
Ybaez), P50,000.00 (commission), and the P113,257.00 (taxes). The only logical conclusion is that Lim changed
her mind about agreeing to purchase the lot at P600,000.00 after talking to Ybaez and ultimately realizing that
Sabans commission is even more than what Ybaez received as his share of the purchase price as vendor.
Obviously, this change of mind resulted to the prejudice of Saban whose efforts led to the completion of the sale
between the latter, and Lim and her co-vendees. This the Court cannot countenance.

The ruling of the Court in Infante v. Cunanan, et al., cited earlier, is enlightening for the facts therein are similar to
the circumstances of the present case. In that case, Consejo Infante asked Jose Cunanan and Juan Mijares to find
a buyer for her two lots and the house built thereon for Thirty Thousand Pesos (P30,000.00) . She promised to pay
them five percent (5%) of the purchase price plus whatever overprice they may obtain for the property. Cunanan
and Mijares offered the properties to Pio Noche who in turn expressed willingness to purchase the properties.
Cunanan and Mijares thereafter introduced Noche to Infante. However, the latter told Cunanan and Mijares that
she was no longer interested in selling the property and asked them to sign a document stating that their written
authority to act as her agents for the sale of the properties was already cancelled. Subsequently, Infante sold the
properties directly to Noche for Thirty One Thousand Pesos (P31,000.00). The Court upheld the right of Cunanan
and Mijares to their commission, explaining that

[Infante] had changed her mind even if respondent had found a buyer who was willing to close the deal, is
a matter that would not give rise to a legal consequence if [Cunanan and Mijares] agreed to call off the
transaction in deference to the request of [Infante]. But the situation varies if one of the parties takes
advantage of the benevolence of the other and acts in a manner that would promote his own selfish
interest. This act is unfair as would amount to bad faith. This act cannot be sanctioned without according
the party prejudiced the reward which is due him. This is the situation in which [Cunanan and Mijares]
were placed by [Infante]. [Infante] took advantage of the services rendered by [Cunanan and Mijares],
but believing that she could evade payment of their commission, she made use of a ruse by inducing them
to sign the deed of cancellation.This act of subversion cannot be sanctioned and cannot serve as basis for
[Infante] to escape payment of the commission agreed upon.[31]

The appellate court therefore had sufficient basis for concluding that Ybaez and Lim connived to deprive Saban of
his commission by dealing with each other directly and reducing the purchase price of the lot and leaving nothing
to compensate Saban for his efforts.

Considering the circumstances surrounding the case, and the undisputed fact that Lim had not yet paid the balance
of P200,000.00 of the purchase price of P600,000.00, it is just and proper for her to pay Saban the balance
of P200,000.00.

Furthermore, since Ybaez received a total of P230,000.00 from Lim, or an excess of P30,000.00 from his asking
price of P200,000.00, Saban may claim such excess from Ybaezs estate, if that remedy is still available, [32] in view
of the trial courts dismissal of Sabans complaint as against Ybaez, with Sabans express consent, due to the latters
demise on November 11, 1994.[33]

The appellate court however erred in ruling that Lim is liable on the checks because she issued them as an
accommodation party. Section 29 of the Negotiable Instruments Law defines an accommodation party as a person
who has signed the negotiable instrument as maker, drawer, acceptor or indorser, without receiving value therefor,
for the purpose of lending his name to some other person. The accommodation party is liable on the instrument to
a holder for value even though the holder at the time of taking the instrument knew him or her to be merely an
accommodation party. The accommodation party may of course seek reimbursement from the party
accommodated.[34]

As gleaned from the text of Section 29 of the Negotiable Instruments Law, the accommodation party is
one who meets all these three requisites, viz: (1) he signed the instrument as maker, drawer, acceptor, or
indorser; (2) he did not receive value for the signature; and (3) he signed for the purpose of lending his name to
some other person. In the case at bar, while Lim signed as drawer of the checks she did not satisfy the two other
remaining requisites.

The absence of the second requisite becomes pellucid when it is noted at the outset that Lim issued the
checks in question on account of her transaction, along with the other purchasers, with Ybaez which was a sale
and, therefore, a reciprocal contract. Specifically, she drew the checks in payment of the balance of the purchase
price of the lot subject of the transaction. And she had to pay the agreed purchase price in consideration for the
sale of the lot to her and her co-vendees. In other words, the amounts covered by the checks form part of the
cause or consideration from Ybaezs end, as vendor, while the lot represented the cause or consideration on the
side of Lim, as vendee.[35] Ergo, Lim received value for her signature on the checks.
 Neither is there any indication that Lim issued the checks for the purpose of enabling Ybaez, or any other
person for that matter, to obtain credit or to raise money, thereby totally debunking the presence of the third
requisite of an accommodation party.

WHEREFORE, in view of the foregoing, the petition is DISMISSED.

SO ORDERED.