566 Phil. 603
NACHURA, J.:
[Maxicare] is a domestic corporation engaged in selling health insurance plans whose Chairman Dr. Roberto K. Macasaet, Chief Operating Officer Virgilio del Valle, and Sales/Marketing Manager Josephine Cabrera were impleaded as defendants-appellants.After trial, the RTC found Maxicare liable for breach of contract and ordered it to pay Estrada actual damages in the amount equivalent to 10% of P20,169,335.00, representing her commission for the total premiums paid by Meralco to Maxicare from the year 1991 to 1996, plus legal interest computed from the filing of the complaint on March 18, 1993, and attorney’s fees in the amount of P100,000.00.
On September 15, 1990, [Maxicare] allegedly engaged the services of Carmela Estrada who was doing business under the name of CARA HEALTH [SERVICES] to promote and sell the prepaid group practice health care delivery program called MAXICARE Plan with the position of Independent Account Executive. [Maxicare] formally appointed [Estrada] as its “General Agent,” evidenced by a letter-agreement dated February 16, 1991. The letter agreement provided for plaintiff-appellee’s [Estrada’s] compensation in the form of commission, viz.:CommissionPlaintiff-appellee [Estrada] submitted proposals and made representations to the officers of MERALCO regarding the MAXICARE Plan but when MERALCO decided to subscribe to the MAXICARE Plan, [Maxicare] directly negotiated with MERALCO regarding the terms and conditions of the agreement and left plaintiff-appellee [Estrada] out of the discussions on the terms and conditions.
In consideration of the performance of your functions and duties as specified in this letter-agreement, [Maxicare] shall pay you a commission equivalent to 15 to 18% from individual, family, group accounts; 2.5 to 10% on tailored fit plans; and 10% on standard plans of commissionable amount on corporate accounts from all membership dues collected and remitted by you to [Maxicare].
[Maxicare] alleged that it followed a “franchising system” in dealing with its agents whereby an agent had to first secure permission from [Maxicare] to list a prospective company as client. [Estrada] alleged that it did apply with [Maxicare] for the MERALCO account and other accounts, and in fact, its franchise to solicit corporate accounts, MERALCO account included, was renewed on February 11, 1991.
On November 28, 1991, MERALCO eventually subscribed to the MAXICARE Plan and signed a Service Agreement directly with [Maxicare] for medical coverage of its qualified members, i.e.: 1) the enrolled dependent/s of regular MERALCO executives; 2) retired executives and their dependents who have opted to enroll and/or continue their MAXICARE membership up to age 65; and 3) regular MERALCO female executives (exclusively for maternity benefits). Its duration was for one (1) year from December 1, 1991 to November 30, 1992. The contract was renewed twice for a term of three (3) years each, the first started on December 1, 1992 while the second took effect on December 1, 1995.
The premium amounts paid by MERALCO to [Maxicare] were alleged to be the following: a) P215,788.00 in December 1991; b) P3,450,564.00 in 1992; c) P4,223,710.00 in 1993; d) P4,782,873.00 in 1994; e) P5,102,108.00 in 1995; and P2,394,292.00 in May 1996. As of May 1996, the total amount of premium paid by MERALCO to [Maxicare] was P20,169,335.00.
On March 24, 1992, plaintiff-appellee [Estrada], through counsel, demanded from [Maxicare] that it be paid commissions for the MERALCO account and nine (9) other accounts. In reply, [Maxicare], through counsel, denied [Estrada’s] claims for commission for the MERALCO and other accounts because [Maxicare] directly negotiated with MERALCO and the other accounts(,) and that no agent was given the go signal to intervene in the negotiations for the terms and conditions and the signing of the service agreement with MERALCO and the other accounts so that if ever [Maxicare] was indebted to [Estrada], it was only for P1,555.00 and P43.l2 as commissions on the accounts of Overseas Freighters Co. and Mr. Enrique Acosta, respectively.
[Estrada] filed a complaint on March 18, 1993 against [Maxicare] and its officers with the Regional Trial Court (RTC) of Makati City, docketed as Civil Case No. 93-935, raffled to Branch 135.
Defendants-appellants [Maxicare] and its officers filed their Answer with Counterclaim on September 13, 1993 and their Amended Answer with Counterclaim on September 28, 1993, alleging that: plaintiff-appellee [Estrada] had no cause of action; the cause of action, if any, should be is against [Maxicare] only and not against its officers; CARA HEALTH’s appointment as agent under the February 16, 1991 letter-agreement to promote the MAXICARE Plan was for a period of one (1) year only; said agency was not renewed after the expiration of the one (1) year period; [Estrada] did not intervene in the negotiations of the contract with MERALCO which was directly negotiated by MERALCO with [Maxicare] and [Estrada’s] alleged other clients/accounts were not accredited with [Maxicare] as required, since the agency contract on the MAXICARE health plans were not renewed. By way of counterclaim, defendants-appellants [Maxicare] and its officers claimed P100,000.00 in moral damages for each of the officers of [Maxicare] impleaded as defendant, P100,000.00 in exemplary damages, P100,000.00 in attorney’s fees, and P10,000.00 in litigation expenses.[3]
We are in complete accord with the trial and appellate courts’ ruling. Estrada is entitled to commissions for the premiums paid under the service agreement between Meralco and Maxicare from 1991 to 1996.
- Whether the Court of Appeals committed serious error in affirming Estrada’s entitlement to commissions for the execution of the service agreement between Meralco and Maxicare.
- Corollarily, whether Estrada is entitled to commissions for the two (2) consecutive renewals of the service agreement effective on December 1, 1992[5] and December 1, 1995.[6]
There is no dispute as to the role that plaintiff-appellee [Estrada] played in selling [Maxicare’s] health insurance plan to Meralco. Plaintiff-appellee [Estrada’s] efforts consisted in being the first to offer the Maxicare plan to Meralco, using her connections with some of Meralco Executives, inviting said executives to dinner meetings, making submissions and representations regarding the health plan, sending follow-up letters, etc.Under the foregoing circumstances, we are hard pressed to disturb the findings of the RTC, which the CA affirmed.
These efforts were recognized by Meralco as shown by the certification issued by its Manpower Planning and Research Staff Head Ruben A. Sapitula on September 5, 1991, to wit:“This is to certify that Ms. Carmela Estrada has initiated talks with us since November 1990 with regards (sic) to the HMO requirements of both our rank and file employees, managers and executives, and that it was favorably recommended and the same be approved by the Meralco Management Committee.”x x x x
This Court finds that plaintiff-appellee [Estrada’s] efforts were instrumental in introducing the Meralco account to [Maxicare] in regard to the latter’s Maxicare health insurance plans. Plaintiff-appellee [Estrada] was the efficient “intervening cause” in bringing about the service agreement with Meralco. As pointed out by the trial court in its October 8, 1999 Decision, to wit:“xxx Had not [Estrada] introduced Maxicare Plans to her bosom friends, Messrs. Lopez and Guingona of Meralco, PHPI would still be an anonymity. xxx”[10]
Sometime in 1989, Meralco received a proposal from Philippine Health-Care Providers, Inc. (Maxicare) through the initiative and efforts of Ms. Carmela Estrada, who introduced Maxicare to Meralco. Prior to this time, we did not know that Maxicare is a major health care provider in the country. We have since negotiated and signed up with Maxicare to provide a health maintenance plan for dependents of Meralco executives, effective December 1, 1991 to November 30, 1992.At the very least, Estrada penetrated the Meralco market, initially closed to Maxicare, and laid the groundwork for a business relationship. The only reason Estrada was not able to participate in the collection and remittance of premium dues to Maxicare was because she was prevented from doing so by the acts of Maxicare, its officers, and employees.
[O]ne who is engaged, for others, on a commission, negotiating contracts relative to property with the custody of which he has no concern; the negotiator between the other parties, never acting in his own name but in the name of those who employed him. [A] broker is one whose occupation is to bring the parties together, in matter of trade, commerce or navigation.[15]In relation thereto, we have held that the term “procuring cause” in describing a broker’s activity, refers to a cause originating a series of events which, without break in their continuity, result in the accomplishment of the prime objective of the employment of the broker—producing a purchaser ready, willing and able to buy on the owner’s terms.[17] To be regarded as the “procuring cause” of a sale as to be entitled to a commission, a broker’s efforts must have been the foundation on which the negotiations resulting in a sale began.[18] Verily, Estrada was instrumental in the sale of the Maxicare health plans to Meralco. Without her intervention, no sale could have been consummated.
An agent receives a commission upon the successful conclusion of a sale. On the other hand, a broker earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually made.[16]
As provided for in Section 4 of Rule 129 of the Rules of Court, the general rule that a judicial admission is conclusive upon the party making it and does not require proof admits of two exceptions: 1) when it is shown that the admission was made through palpable mistake, and 2) when it is shown that no such admission was in fact made. The latter exception allows one to contradict an admission by denying that he made such an admission.In this case, the letter, although part of Estrada’s Complaint, is not, ipso facto, an admission of the statements contained therein, especially since the bone of contention relates to Estrada’s entitlement to commissions for the sale of health plans she claims to have brokered. It is more than obvious from the entirety of the records that Estrada has unequivocally and consistently declared that her involvement as broker is the proximate cause which consummated the sale between Meralco and Maxicare.For instance, if a party invokes an “admission” by an adverse party, but cites the admission “out of context,” then the one making the admission may show that he made no “such” admission, or that his admission was taken out of context.
This may be interpreted as to mean “not in the sense in which the admission is made to appear.” That is the reason for the modifier “such.”[21]
Rule 10.02 – A lawyer shall not knowingly misquote or misrepresent the contents of a paper, the language or the argument of opposing counsel, or the text of a decision or authority, or knowingly cite as law a provision already rendered inoperative by repeal or amendment, or assert as a fact that which has not been proved.Third. Finally, we likewise affirm the uniform ruling of the RTC and CA that Estrada is entitled to 10% of the total amount of premiums paid[25] by Meralco to Maxicare as of May 1996. Maxicare’s argument that assuming Estrada is entitled to commissions, such entitlement only covers the initial year of the service agreement and should not include the premiums paid for the succeeding renewals thereof, fails to impress. Considering that we have sustained the lower courts’ factual finding of Estrada’s close, proximate and causal connection to the sale of health plans, we are not wont to disturb Estrada’s complete entitlement to commission for the total premiums paid until May 1996 in the amount of P20,169,335.00.