Agency, Trusts, Partnerships, and Joint Ventures Digest

Sumaway, Christine Joyce L (2B)

Dañon v Brimo
42 Phil 133 (1921)
GR 15823

Relevant Issue/s:

W/N the agent was entitled to commissions even if the sale of the factory was not
concluded through his efforts? NO.

Salient Facts:

Danon (agent) was hired by Brimo (principal) to sell its factory known as Holland
American Oil Co for 1.2 Million. The agent would be entitled to a commission of 5%
provided the sale was consummated. The agent immediately went to see Mr Prieto, a
prospected buyer, but the sale was never consummated since the agent refused to sell
to a Filipino Company. Thus, the principal endeavored to procure another buyer, Leas,
but the agent still refused to sell. So Sellner (second agent) went ahead and closed the
sale with Leas.

The agent filed a case to recover the reasonable value of his services rendered.

Ruling of the Supreme Court (Held):

Firstly, the sale was never consummated nor was he the efficient agent or
procuring cause of the sale since his "services" did not in any way contribute towards
bringing about the sale of the factory in question. Secondly, where no time for the
continuance of the contract is fixed by its terms either party is at liberty to terminate it at
will, subject only to the ordinary requirements of good faith. In this case, no definite
period was fixed by the defendant within which the agent might effect the sale of its
factory. Nor was the agent given by the defendant the exclusive agency of such sale.
Therefore, the agent cannot complain of the defendant's conduct in selling the property
through another agent before the plaintiff's efforts were crowned with success. "One who
has employed a broker can himself sell the property to a purchaser whom he has
procured, without any aid from the broker.”

My critique and analysis:

This case is in line with the general rule that a broker is entitled to his
commission provided that the sale is consummated. In this case, Danon refused to
consummate the sale on the ground that the first prospected buyer was a Filipino
Company. So when the sale was consummated with a different company and
through a different agent, Danon was not entitled to the commissions since the
sale was not concluded through his efforts.

Further, when a contract of agency does not set a period for its
continuance, the agency may be revoked at will, subject only to the ordinary
requirements of good faith. A broker or agent must be given enough time to
perform the obligation. The principal cannot just revoke the agency in bad faith in
an attempt to unfairly deprive the agent of his well earned commissions. The
principal in this case acted in good faith in not giving the agent his commissions
since the agent was given enough time to search for a buyer, the agent was not an
exclusive agent of the principal, and the sale was not consummated through the
agent’s efforts.