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  • Ignacio v. Ragasa - Interests

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    The Supreme Court ruled that the petitioner is not entitled to brokerage fees because the petitioner sought the SC to review evidence, which is not allowed. The Court agreed with the petitioner that interest should be at 6% per annum, not 12%, in accordance with previous rulings on interest rates. However, 12% still applies until June 30, 2013, after which the new 6% rate applies prospectively. This case involves brokerage services rather than loans, so the 6% rate for interest awarded in disputes applies instead of the 12% imposed by lower courts.

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    1. Ignacio v. Ragasa - Interests

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    The Supreme Court ruled that the petitioner is not entitled to brokerage fees because the petitioner sought the SC to review evidence, which is not allowed. The Court agreed with the petitioner that interest should be at 6% per annum, not 12%, in accordance with previous rulings on interest rates. However, 12% still applies until June 30, 2013, after which the new 6% rate applies prospectively. This case involves brokerage services rather than loans, so the 6% rate for interest awarded in disputes applies instead of the 12% imposed by lower courts.

    Copyright:

    © All Rights Reserved
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    157 views2 pages

    Ignacio v. Ragasa - Interests

    Uploaded by

    Jc
    The Supreme Court ruled that the petitioner is not entitled to brokerage fees because the petitioner sought the SC to review evidence, which is not allowed. The Court agreed with the petitioner that interest should be at 6% per annum, not 12%, in accordance with previous rulings on interest rates. However, 12% still applies until June 30, 2013, after which the new 6% rate applies prospectively. This case involves brokerage services rather than loans, so the 6% rate for interest awarded in disputes applies instead of the 12% imposed by lower courts.

    Copyright:

    © All Rights Reserved
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    of 2

    Ignacio v.

    Ragasa
    G.R. No. 227896 Jan 29, 2020
    Peralta, C.J.,
    Topic: Interests

    Facts: On Jan 11, 2000, petitioners engaged, on an exclusive basis, the services of the respondents,
    who are both licensed real estate brokers, to look for and negotiate with a person or entity for a
    joint venture project involving petitioners' undeveloped lands in Mindanao Ave, Quezon City and
    the developed subdivision sites in Las Piñas City, Parañaque City, and Bacoor.  The contract was
    embodied in the Authority to Look and Negotiate for a Joint Venture Partner, effective for six
    months from January 10, 2000, or until July 10, 2000. The said Authority provided that the
    petitioners will pay the respondents a commission equivalent to five percent (5%) of the price of
    the properties. On Jan 13, 2000, respondents met with Mr. Porfirio Yusingbo, Jr. (Yusingbo), the
    General Manager of Woodridge Properties, Inc. (Woodridge),and they presented to him the
    different subdivisions and project sites available for investment. After inspecting the properties,
    Yusingbo expressed Woodridge's interest in acquiring and developing the Krause Park and Teresa
    Park properties. As a result, Woodridge sent respondents a formal proposal dated Jan 21, 2000 for
    a joint venture agreement with the petitioners covering the Teresa Park. The proposal was sent by
    the respondents to the petitioners via facsimile. On Jan 25, 2000, the petitioners met with the
    representatives of Woodridge to discuss the prices of the properties, and Woodridge likewise
    intimated that it would develop both the Krause Park and the Teresa Park. On Feb 4, 2000,
    respondents met again with Yusingbo and Mr. Elmer Loredo (Loredo), Woodridge's broker, to
    discuss Woodridge's proposal for bulk purchase covering the Teresa Park, including the terms of
    payment. On Feb 9, 2000, respondents presented Woodridge's offer to petitioner Roberto Ignacio.
    They discussed the projected cash inflows and the advantages of the scheme. Petitioner Ignacio
    said he wanted to sell the lots in batches at a lower volume, instead of in bulk. Respondents
    communicated the offer to Woodridge and the latter intimated that it would make a revised offer.
    On Mar 9, 2000,  Woodridge, however, changed its offer from direct acquisition to joint venture,
    covering 200 lots in Teresa Park, and sent the proposal to the respondents, who, in turn, relayed it
    to the petitioners. In a meeting on Ma 13, 2000, petitioners and respondents discussed the
    proposal for joint venture. Petitioners commented that Woodridge's offer was low, but
    respondents reassured them that they could negotiate for a better price. After this March 13, 2000
    meeting, however, petitioners stopped communicating with the respondents. Several attempts
    were made by the respondents to contact the petitioners to follow-up on the proposal of
    Woodridge, but to no avail. Sometime thereafter, respondents learned that the petitioners
    continued to negotiate with Woodridge, and this led to the execution of two joint venture
    agreements between the petitioners and Woodridge, covering the Krause Park. The two joint
    venture agreements were notarized on March 7, 2000 and October 16, 2000.   For the Teresa Park
    four joint venture agreements were executed between the petitioners and Woodridge, and these
    were notarized on Dec 6, 2000, Mar 12, 2001, Sept 25, 2001, and Oct 1, 2002.   Aside from the joint
    venture agreements, several deeds of sale were also executed between the petitioners and
    Woodridge, and these are dated Sept 24, 2001 and Aug 25, 2003.  Per respondents' estimate,
    petitioners earned P26,068,000.00 and P22,497,000.00 for the sale of the Krause Park and Teresa
    Park projects, respectively. Respondents demanded payment of their commission from the
    petitioners, contending that the joint venture agreements and the sales over the Krause Park and
    Teresa Park were products of their successful negotiation with Woodridge. Petitioners, however,
    refused to pay despite demand.  Thus, respondents filed a complaint for sum of money, damages,
    attorney's fees, and litigation expenses before the RTC of Parañaque City.  In their
    Answer, petitioners denied that they have an obligation to pay the respondents. Petitioners
    contend that the respondents offered their services as exclusive real estate brokers, but they were
    never engaged. Petitioners further state that they were not looking for an exclusive agency and
    they entertained brokers on a "first come, first served" basis. Petitioners, likewise, contend that
    they were not agreeable with the respondents' proposal to sell the lots below the prevailing
    market value with no escalation clause, and that the sale of the Krause Park and the Teresa Park
    was made through the joint efforts of their consultants, Engr. Julius Aragon and Florence
    Cabansag. No sales transaction was realized on account of the respondents. RTC favored
    respondents. CA affirmed RTC’s decision in toto.

    Issue: Is the petitioner entitled to the fees? Is the petitioner correct on which rates should prevail?

    Ruling: No, the petitioner is not entitled to fee because petitioners seeks the SC to review the
    evidence, which is not allowed under the Rules of Procedure. As to the interests, we agree with
    the petitioners that the interest rate should be at the prevailing rate of 6% per annum, and not
    12% per annum. In Nacar v. Gallery Frames, et al., We modified the guidelines laid down in the
    case of Eastern Shipping Lines, Inc. v. Court of Appeals to embody BSP-MB Circular No. 799. And, in
    addition to the above, judgments that have become final and executory prior to July 1, 2013, shall
    not be disturbed, and shall continue to be implemented applying the rate of interest fixed therein.
    It should be noted, however, that the rate of 6% per annum could only be applied prospectively
    and not retroactively. Consequently, the 12% per annum legal interest shall apply only until June
    30, 2013. Starting July 1, 2013, the rate of 6% per annum shall be the prevailing rate of interest
    when applicable. Thus, the need to determine whether the obligation involved herein is a loan and
    forbearance of money nonetheless exists. The term "forbearance," within the context of usury
    law, has been described as a contractual obligation of a lender or creditor to refrain, during a given
    period of time, from requiring the borrower or debtor to repay the loan or debt then due and
    payable. Forbearance of money, goods or credits, therefore, refers to arrangements other than
    loan agreements, where a person acquiesces to the temporary use of his money, goods or credits
    pending the happening of certain events or fulfilment of certain conditions. Consequently, if those
    conditions are breached, said person is entitled not only to the return of the principal amount
    paid, but also to compensation for the use of his money which would be the same rate of legal
    interest applicable to a loan since the use or deprivation of funds therein is similar to a loan. This
    case, however, does not involve an acquiescence to the temporary use of a party's money but the
    performance of a brokerage service. Thus, the matter of interest award arising from the dispute in
    this case falls under the paragraph II, subparagraph 2, of the above-quoted modified guidelines,
    which necessitates the imposition of interest at the rate of 6%,instead of the 12% imposed by the
    courts below.

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