On dealing with real estate brokers

The real estate industry will always be in demand. As said by American entrepreneur Robert Kiyosaki, “Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.”

Dealing with stakeholders of this industry usually means transacting with them through licensed real estate brokers.

In this regard, in Medrano v. Court of Appeals, the Supreme Court held that the occupation of a licensed real estate broker is to bring parties together, in matters of trade, commerce, or navigation. He negotiates contracts relative to properties with the custody of which he has no concern and is commissioned by either or both the contracting parties.

Considering the substantial values involved in sales of real property, however, it may go without saying that potential buyers and sellers should remain vigilant in their negotiations, even when transacting through licensed brokers. Arriola v. People highlights this food for thought.

In this case, private complainant Ingeborg De Venecia Del Rosario bought a lot, which was adjacent to another lot owned by Paciencia Candelaria. Accused Luis Arriola, a real estate broker, informed Del Rosario that Candelaria’s lot was also for sale.

Moreover, he showed Del Rosario supporting documents, such as supposed authorization letters from Candelaria to sell the lot, and transact for and receive the purchase price in her behalf, and a certified true copy of the title.

Del Rosario agreed to buy Candelaria’s lot. To this end, she paid the purchase price and signed a deed of absolute sale prepared by Arriola and purportedly signed by Candelaria and a nun as the witness. She repeatedly requested the original notarized deed and the certified true copy of the title, but was only sent copies of the deed and tax receipts.

Consequently, Del Rosario demanded Candelaria to return her money if he could not give her the copy of the title. Arriola issued in favor of Del Rosario a check covering the purchase price paid, which, however, was dishonored upon presentment for having been drawn from a closed account. Del Rosario failed in her attempts to reach Arriola, but was able to reach Candelaria, who informed her that she neither sold the lot nor authorized Arriola to sell it.

Arriola issued another check in favor of Del Rosario, which was dishonored upon presentment, this time because of insufficient funds. Del Rosario then filed against Arriola a complaint for Estafa under Section 315, Paragraph 2 (a) of the Revised Penal Code (RPC).

After trial on the merits of this case, the Regional Trial Court (RTC) convicted Arriola of the crime charged. Upon appeal, the Court of Appeals affirmed the RTC’s decision, particularly that all elements of Estafa by deceit were present and that subsequent payment did not exculpate Arriola from criminal liability.

The Supreme Court likewise sustained Arriola’s conviction.

At the outset, the crime charged against Arriola is committed when among others, prior to or simultaneously with the commission of fraud against another, false pretenses were employed with regard to the power, influence, qualifications, property, credit, agency, business, or transactions possessed.

In this regard, according to the Supreme Court, fraud, in its general sense, comprises of anything calculated to deceive, and which involves a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. Meanwhile, deceit is the false representation of a matter of fact, whether by words or conduct, by, among others, false or misleading allegations.

The evidence presented in this case clearly showed the deceit and false pretenses committed by Arriola. For instance, the alleged authorization letter in favor of Arriola merely authorized him to receive payments relating to the purchase of Candelaria’s lot. This cannot be impliedly construed as an authority to sell land, which latter authority must be expressly written in a special power of attorney. Failure to state this authority in writing renders the sale void.

Moreover, Candelaria could not have been in the Philippines to sign the authorization letter or appear before the notary public for the signing of the deed of sale, as she had been residing in Australia that time. This could be further supported by ensuing phone calls between Del Rosario and her lawyer, and Candelaria.