Gregorio Domingo acted as the broker for Vicente Domingo to sell a property. Gregorio received a gift from Oscar, the prospective buyer, without informing Vicente. This violated Gregorio's duty of loyalty to his principal, Vicente. While Vicente benefited by selling the property for a higher price, Gregorio is not entitled to commission due to his breach of trust. As the agent failed to disclose the gift, he forfeited his right to commission and must return any money received from Vicente. The court found that an agent who receives a secret profit without the principal's consent violates their fiduciary duty and loses their right to commission, even if the principal benefitted.
Gregorio Domingo acted as the broker for Vicente Domingo to sell a property. Gregorio received a gift from Oscar, the prospective buyer, without informing Vicente. This violated Gregorio's duty of loyalty to his principal, Vicente. While Vicente benefited by selling the property for a higher price, Gregorio is not entitled to commission due to his breach of trust. As the agent failed to disclose the gift, he forfeited his right to commission and must return any money received from Vicente. The court found that an agent who receives a secret profit without the principal's consent violates their fiduciary duty and loses their right to commission, even if the principal benefitted.
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Gregorio Domingo acted as the broker for Vicente Domingo to sell a property. Gregorio received a gift from Oscar, the prospective buyer, without informing Vicente. This violated Gregorio's duty of loyalty to his principal, Vicente. While Vicente benefited by selling the property for a higher price, Gregorio is not entitled to commission due to his breach of trust. As the agent failed to disclose the gift, he forfeited his right to commission and must return any money received from Vicente. The court found that an agent who receives a secret profit without the principal's consent violates their fiduciary duty and loses their right to commission, even if the principal benefitted.
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GR No. L-30573 | Oct. 29, 1971| Makasiar | which was very much lower than the P2 per Petition for Review of CA Decision1 sq. m. price. Petitioners: Vicente Domingo represented by Vicente directed Gregorio to tell his heirs Oscar to raise his offer. Respondents: Gregorio Domingo [Vicente After several conferences between Domingo’s agent & broker] Gregorio and Oscar, Oscar raised his offer to Intervenor: Teofilo Purisima [Gregorio P1.20 per sq. m. or P109,000 in total. Domingo’s sub-agent] Vicente agreed to said offer. Upon Vicente’s demand, Oscar Quick Summary: issued a P1,000 check to him as earnest Facts: Gregorio Domingo, Vicente Domingo’s broker and agent, received P1,000 from Oscar de Leon as gift or propina. money. Vicente, then, advanced P300 to Oscar gave him said amount after Gregorio succeeded in Gregorio. persuading Vicente to accept his offer to buy the lot for P1.20 Subsequently, Vicente asked for an instead of P2. Held: An agent who takes a secret profit in the nature of a additional P1,000 as earnest money, which bonus, gratuity or personal benefit from the vendee, without Oscar promised to deliver to Vicente. revealing the same to his principal, the vendor, is guilty of a The written agreement, Exhibit C, breach of his loyalty to the principal and forfeits his right to collect the commission from his principal, even if the principal between the parties was amended. does not suffer any injury by reason of such breach of fidelity, Oscar will vacate on or about or that he obtained better results or that the agency is a September 15, 1956 his house and lot at gratuitous one, or that usage or custom allows it. The fact that Denver St., QC, which is part of the the principal may have been benefited by the valuable services of the said agent does not exculpate the agent who purchase price has only himself to blame for such a result by reason of his Later on, it was again amended to state that treachery or perfidy. As a necessary consequence of such Oscar will vacate his house and lot on Dec. breach of trust, Gregorio Domingo must forfeit his right to the 1, 1956 because his wife was pregnant at commission and must return the part of the commission he received from his principal. that time. Oscar gave Gregorio P1,000 as a Facts: gift or propina for succeeding in persuading Vicente Domingo granted to Vicente to sell his lot at P1.20 per sq. m. Gregorio Domingo, a real estate broker, the gregorio did not disclose said gift or propina exclusive agency to sell his Lot No. 883, to Vicente. Piedad Estate in a document. Said lot has an Moreover, Oscar did not pay area of 88,477 sq. m. Vicente the additional P1,000 Vicente asked According to the document, said lot from him as earnest money. must be sold for P2 per sq. m. Gregorio is The deed of sale was not executed entitled to 5% commission on the total price since Oscar gave up on the negotiation if the property is sold: when he did not receive his money from his by Vicente or by anyone else brother in the US, which he communicated during the 30-day duration of the agency to Gregorio. or Gregorio did not see Oscar for by Vicente within 3 months from several weeks thus sensing that something the termination of the agency to a fishy might be going on. purchaser to whom it was submitted by So, he went to Vicente’s house where he Gregorio during the effectivity of the read a portion of the agreement to the agency with notice to Vicente. effect that Vicente was still willing to pay This contract is in triplicate with the original him 5% commission, P5,450. and another copy being retained by Thereafter, Gregorio went to the Gregorio. The last copy was given to Register of Deeds of QC, where he Vicente. discovered that a Deed of sale was Subsequently, Gregorio authorized executed by Amparo de Leon, Oscar’s wife, Teofilo Purisima to look for a buyer without over their house and lot in favor of Vicente. notifying Vicente. Gregorio promised Teofilo After discovering that Vicente sold ½ of the 5% commission. his lot to Oscar’s wife, Gregorio demanded Teofilo introduced Oscar de Leon to in writing the payment of his commission. Gregorio as a porspective buyer. Gregorio also conferred with Oscar. Oscar told him that Vicente went to him and asked him to eliminate Gregorio in the 1 transaction and that he would sell his Just a guess. My photox of the case does not property to him for P104,000. have the 1st 2 pages. In his reply, Vicente stated that The fact that the principal may Gregorio is not entitled to the 5% have been benefited by the valuable commission because he sold the property services of the said agent does not not to Gregorio's buyer, Oscar de Leon, but exculpate the agent who has only to another buyer, Amparo Diaz, wife of himself to blame for such a result by Oscar de Leon. reason of his treachery or perfidy. CA: exclusive agency contract is As a necessary consequence of genuine. The sale of the lot to Amparo de such breach of trust, Gregorio Domingo Leon is practically a sale to Oscar. must forfeit his right to the commission and must return the part Issue: of the commission he received from his WON Gregorio’s act of accepting the gift or principal. propina from Oscar constitutes a fraud which would cause the forfeiture of his 5% commission Decisive Provisions [YES] Article 18912 and 19093 CC The modification contained in the Ratio: first paragraph Article 1891 consists in Gregorio Domingo as the broker, changing the phrase "to pay" to "to deliver", received a gift or propina from the which latter term is more comprehensive prospective buyer Oscar de Leon, without than the former. Paragraph 2 of Article 1891 the knowledge and consent of his principal, is a new addition designed to stress the Vicente Domingo. His acceptance of said highest loyalty that is required to an agent substantial monetary gift corrupted his — condemning as void any stipulation duty to serve the interests only of his exempting the agent from the duty and principal and undermined his loyalty to liability imposed on him in paragraph one his principal, who gave him partial thereof. advance of P3000 on his commission. As a Article 1909 demand the utmost consequence, instead of exerting his best to good faith, fidelity, honesty, candor and persuade his prospective buyer to purchase fairness on the part of the agent, the real the property on the most advantageous estate broker in this case, to his principal, terms desired by his principal, Gregorio the vendor. The law imposes upon the agent Domingo, succeeded in persuading his the absolute obligation to make a full principal to accept the counter-offer of the disclosure or complete account to his prospective buyer to purchase the property principal of all his transactions and other at P1.20 per sq. m. material facts relevant to the agency, so The duties and liabilities of a much so that the law as amended does not broker to his employer are essentially countenance any stipulation exempting the those which an agent owes to his agent from such an obligation and considers principal. such an exemption as void. The duty of an An agent who takes a secret agent is likened to that of a trustee. This is profit in the nature of a bonus, gratuity not a technical or arbitrary rule but a rule or personal benefit from the vendee, founded on the highest and truest principle without revealing the same to his of morality as well as of the strictest justice. principal, the vendor, is guilty of a breach of his loyalty to the principal Situations where the duty mandated by Art and forfeits his right to collect the 1891 does not apply commission from his principal, even if agent or broker acted only as a the principal does not suffer any injury middleman with the task of merely bringing by reason of such breach of fidelity, or together the vendor and vendee, who that he obtained better results or that the agency is a gratuitous one, or that usage or custom allows it. 2 Every agent is bound to render an account of his Rationale: prevent the possibility of transactions and to deliver to the principal whatever he may any wrong not to remedy or repair an have received by virtue of the agency, even though it may not be owing to the principal. actual damage Every stipulation exempting the agent from the obligation to agent thereby assumes a position render an account shall be void. wholly inconsistent with that of being an 3 agent for hisprincipal, who has a right to The agent is responsible not only for fraud, but also for treat him, insofar as his commission is negligence, which shall be judged with more or less rigor by the courts, according to whether the agency was or was not concerned, as if no agency had existed for a compensation. themselves thereafter will negotiate on the terms and conditions of the transaction agent or broker had informed the principal of the gift or bonus or profit he received from the purchaser and his principal did not object
Teofilo Purisima’s entitlement to his share
in the 5% commission Teofilo can only recover from Gregorio his ½ share of whatever amounts Gregorio Domingo received by virtue of the transaction as his sub-agency contract was with Gregorio Domingo alone and not with Vicente Domingo, who was not even aware of such sub-agency. Since Gregorio already received a total of P1,300 from Oscar and Vicente, P650 of which should be paid by Gregorio to Teofilo.