Araneta v Paterno

August 22, 1952

GREGORIO ARANETA, INC.
vs.
PAZ TUASON DE PATERNO and JOSE VIDAL
TUASON, J.:
SUMMARY: Gregorio Araneta Inc filed an action to compel Paz Tuason to deliver to it, a clear title to the lots described in Exhibit A free
from all liens and encumbrances, and a deed of cancellation of the mortgage. Paz Tuason argues that the Deed of Absolute Sale
(Exhibit A) executed between her and Gregorio Araneta Inc. is not valid as it is in violation of Article 1459 which provides that an agent
cannot buy property under his management. She avers that Jose Araneta, Araneta Inc’s President is her agent; that Gregorio Araneta
Inc. and Jose Araneta are identical invoking the principle of equity to disregard the fiction of corporate entity; and thus, Gregorio
Araneta Inc. cannot validly purchase her property. SC: Jose Araneta is not Tuason’s agent but is a broker. (Hindi talaga sinabi na
broker siya expressly pero yung [broker] sa doctrine ay si Jose.)
DOCTRINE: [A broker] is “nothing more than a go-between or middleman between the defendant and the purchaser, bringing them
together to make the contract themselves. There was no confidence to be betrayed [since the broker] was not authorized to make a
binding contract for the [purported principal]. He was not to sell and he did not sell the property. He was to look for a buyer and the
owner herself was to make, and did make, the sale. He was not to fix the price of the sale because the price had been already fixed in
his commission. He was not to make the terms of payment because these, too, were clearly specified in his commission. In fine, [the
broker] was left no power or discretion whatsoever, which he could abuse to his advantage and to the owner's prejudice.