DOMINGO vs. DOMINGO GR No. L-30573 | Oct. 29, 1971| Makasiar | Petitio !or Revie" o!

#$ Decisio 1 Petitio ers% Vicente Domingo represented by his heirs Res&o 'e ts% Gregorio Domingo [Vicente Domingos agent & broker] I terve or% Teofilo Purisima [Gregorio Domingos subagent] ()ick *)++ar,%
Facts: Gregorio Domingo Vicente Domingos broker and agent recei!ed P" ### from $scar de %eon as gift or propina& $scar ga!e him said amount after Gregorio succeeded in persuading Vicente to accept his offer to buy the lot for P"&'# instead of P'& Held: (n agent )ho takes a secret profit in the nature of a bonus gratuity or personal benefit from the !endee )ithout re!ealing the same to his principal the !endor is guilty of a breach of his loyalty to the principal and forfeits his right to collect the commission from his principal e!en if the principal does not suffer any in*ury by reason of such breach of fidelity or that he obtained better results or that the agency is a gratuitous one or that usage or custom allo)s it& The fact that the principal may ha!e been benefited by the !aluable ser!ices of the said agent does not e+culpate the agent )ho has only himself to blame for such a result by reason of his treachery or perfidy& (s a necessary conse,uence of such breach of trust Gregorio Domingo must forfeit his right to the commission and must return the part of the commission he recei!ed from his principal&

-acts% Vicente Domingo granted to Gregorio Domingo a real estate broker the e+clusi!e agency to sell his %ot -o& ../ Piedad 0state in a document& 1aid lot has an area of .. 233 s,& m& (ccording to the document said lot must be sold for P' per s,& m& Gregorio is entitled to 45 commission on the total price if the property is sold6 by Vicente or by anyone else during the /#-day duration of the agency or by Vicente )ithin / months from the termination of the agency to a purchaser to )hom it )as submitted by Gregorio during the effecti!ity of the agency )ith notice to Vicente& This contract is in triplicate )ith the original and another copy being retained by Gregorio& The last copy )as gi!en to Vicente& 1ubse,uently Gregorio authori7ed Teofilo Purisima to look for a buyer )ithout notifying Vicente& Gregorio promised Teofilo 8 of the 45 commission& Teofilo introduced $scar de %eon to Gregorio as a porspecti!e buyer& $scar submitted a )ritten offer )hich )as !ery much lo)er than the P' per s,& m& price& Vicente directed Gregorio to tell $scar to raise his offer& (fter se!eral conferences bet)een Gregorio and $scar $scar raised his offer to P"&'# per s,& m& or P"#9 ### in total& Vicente agreed to said offer& :pon Vicentes demand $scar issued a P" ### check to him as earnest money& Vicente then ad!anced P/## to Gregorio&

1ubse,uently Vicente asked for an additional P" ### as earnest money )hich $scar promised to deli!er to Vicente& The )ritten agreement 0+hibit = bet)een the parties )as amended& $scar )ill !acate on or about 1eptember "4 "94> his house and lot at Den!er 1t& ?= )hich is part of the purchase price %ater on it )as again amended to state that $scar )ill !acate his house and lot on Dec& " "94> because his )ife )as pregnant at that time& $scar ga!e Gregorio P" ### as a gift or propina for succeeding in persuading Vicente to sell his lot at P"&'# per s,& m& gregorio did not disclose said gift or propina to Vicente& <oreo!er $scar did not pay Vicente the additional P" ### Vicente asked from him as earnest money& The deed of sale )as not e+ecuted since $scar ga!e up on the negotiation )hen he did not recei!e his money from his brother in the :1 )hich he communicated to Gregorio& Gregorio did not see $scar for se!eral )eeks thus sensing that something fishy might be going on& 1o he )ent to Vicentes house )here he read a portion of the agreement to the effect that Vicente )as still )illing to pay him 45 commission P4 24#& Thereafter Gregorio )ent to the @egister of Deeds of ?= )here he disco!ered that a Deed of sale )as e+ecuted by (mparo de %eon $scars )ife o!er their house and lot in fa!or of Vicente& (fter disco!ering that Vicente sold his lot to $scars )ife Gregorio demanded in )riting the payment of his commission& Gregorio also conferred )ith $scar& $scar told him that Vicente )ent to him and asked him to eliminate Gregorio in the transaction and that he )ould sell his property to him for P"#2 ###& An his reply Vicente stated that Gregorio is not entitled to the 45 commission because he sold the property not to GregorioBs buyer $scar de %eon but to another buyer (mparo Dia7 )ife of $scar de %eon& =(6 e+clusi!e agency contract is genuine& The sale of the lot to (mparo de %eon is practically a sale to $scar& Iss)e% C$- Gregorios act of accepting the gift or propina from $scar constitutes a fraud )hich )ould cause the forfeiture of his 45 commission [./*] Ratio% Gregorio Domingo as the broker recei!ed a gift or propina from the prospecti!e buyer $scar de %eon )ithout the kno)ledge and consent of his principal Vicente Domingo& 0is acce&ta ce o! sai' s)1sta tia2 +o etar, 3i!t corr)&te' 4is ')t, to serve t4e i terests o 2, o! 4is &ri ci&a2 a ' ) 'er+i e' 4is 2o,a2t, to 4is &ri ci&a2 )ho ga!e him partial ad!ance of P/### on his commission& (s a conse,uence instead of e+erting his best to persuade his prospecti!e buyer to purchase the property on the most ad!antageous terms

;ust a guess& <y photo+ of the case does not ha!e the " st ' pages&

desired by his principal Gregorio Domingo succeeded in persuading his principal to accept the counter-offer of the prospecti!e buyer to purchase the property at P"&'# per s,& m& 54e ')ties a ' 2ia1i2ities o! a 1roker to 4is e+&2o,er are esse tia22, t4ose "4ic4 a a3e t o"es to 4is &ri ci&a2. $ a3e t "4o takes a secret &ro!it i t4e at)re o! a 1o )s, 3rat)it, or &erso a2 1e e!it !ro+ t4e ve 'ee, "it4o)t revea2i 3 t4e sa+e to 4is &ri ci&a2, t4e ve 'or, is 3)i2t, o! a 1reac4 o! 4is 2o,a2t, to t4e &ri ci&a2 a ' !or!eits 4is ri34t to co22ect t4e co++issio !ro+ 4is &ri ci&a2, eve i! t4e &ri ci&a2 'oes ot s)!!er a , i 6)r, 1, reaso o! s)c4 1reac4 o! !i'e2it,, or t4at 4e o1tai e' 1etter res)2ts or t4at t4e a3e c, is a 3rat)ito)s o e, or t4at )sa3e or c)sto+ a22o"s it. @ationale6 pre!ent the possibility of any )rong not to remedy or repair an actual damage agent thereby assumes a position )holly inconsistent )ith that of being an agent for hisprincipal )ho has a right to treat him insofar as his commission is concerned as if no agency had e+isted 54e !act t4at t4e &ri ci&a2 +a, 4ave 1ee 1e e!ite' 1, t4e va2)a12e services o! t4e sai' a3e t 'oes ot e7c)2&ate t4e a3e t "4o 4as o 2, 4i+se2! to 12a+e !or s)c4 a res)2t 1, reaso o! 4is treac4er, or &er!i',. $s a ecessar, co se8)e ce o! s)c4 1reac4 o! tr)st, Gre3orio Do+i 3o +)st !or!eit 4is ri34t to t4e co++issio a ' +)st ret)r t4e &art o! t4e co++issio 4e receive' !ro+ 4is &ri ci&a2.

amended does not countenance any stipulation e+empting the agent from such an obligation and considers such an e+emption as !oid& The duty of an agent is likened to that of a trustee& This is not a technical or arbitrary rule but a rule founded on the highest and truest principle of morality as )ell as of the strictest *ustice& Situations where the duty mandated by Art 1891 does not apply agent or broker acted only as a middleman )ith the task of merely bringing together the !endor and !endee )ho themsel!es thereafter )ill negotiate on the terms and conditions of the transaction agent or broker had informed the principal of the gift or bonus or profit he recei!ed from the purchaser and his principal did not ob*ect Teo ilo Purisima!s entitlement to his share in the "# commission Teofilo can only reco!er from Gregorio his 8 share of )hate!er amounts Gregorio Domingo recei!ed by !irtue of the transaction as his sub-agency contract )as )ith Gregorio Domingo alone and not )ith Vicente Domingo )ho )as not e!en a)are of such sub-agency& 1ince Gregorio already recei!ed a total of P" /## from $scar and Vicente P>4# of )hich should be paid by Gregorio to Teofilo& Dis&ositive% =( decision re!ersed&

Decisive Provisions (rticle ".9"' and "9#9/ == The modification contained in the first paragraph $rtic2e 1991 consists in changing the phrase Dto payD to Dto deli!erD )hich latter term is more comprehensi!e than the former& Paragraph ' of (rticle ".9" is a ne) addition designed to stress the highest loyalty that is re,uired to an agent E condemning as !oid any stipulation e+empting the agent from the duty and liability imposed on him in paragraph one thereof& $rtic2e 1909 demand the utmost good faith fidelity honesty candor and fairness on the part of the agent the real estate broker in this case to his principal the !endor& The la) imposes upon the agent the absolute obligation to make a full disclosure or complete account to his principal of all his transactions and other material facts rele!ant to the agency so much so that the la) as
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0!ery agent is bound to render an account of his transactions and to deli!er to the principal )hate!er he may ha!e recei!ed by !irtue of the agency e!en though it may not be o)ing to the principal& 0!ery stipulation e+empting the agent from the obligation to render an account shall be !oid&
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The agent is responsible not only for fraud but also for negligence )hich shall be *udged )ith more or less rigor by the courts according to )hether the agency )as or )as not for a compensation&