Domingo v.

Domingo

G.R. no L-30573

October 29, 1971

Facts: On June 2, 1956, Vicente Domingo granted Gregorio Domingo, A real estate broker, the
exclusive agency to sell his lot with an area of about 88,477sq.m. at the rate of 2 pesos per square meter
with a commission of 5% on the total price, if the property is sold during the 30-day duration of the
agency or if the property is sold by Vicente within 3 months within termination of the agency. The said
agency contract was in triplicate, one copy was given to Vicente, while the original and another copy
were retained by Gregorio.

On June 3, 1956 Gregorio authorized the intervenor Purisima to look for a buyer, promising him
one half of the 5% commission. Thereafter, Purisima introduced Oscar De Leon to Gregorio as a
prospective buyer. Upon demand of Vicente, Oscar issued to him a check in the amount of 1,000.00
pesos as earnest money.

Oscar gave Gregorio as a gift or propina the sum of 1,000 pesos for succeeding for persuading
Vicente to sell his lot at 1.20 pesos per square meter. This gift of 1,000 pesos was not disclosed by
Gregorio to Vicente. Neither did Oscar pay Vicente an additional amount of 1,000 pesos by way of
earnest money.

Unfortunately, the sale was not executed due to Oscar’s failure to obtain the money for purchasing the
lot. Then, Gregorio went to Vicente and read a portion alleging that Vicente was still committed to pay
him 5% commission.

After a while Gregorio discovered that a deed sale was executed to another person which was the wife
of Oscar.

Issue:

Whether or not the non-disclosure of the gift or propina received by Gregorio constitutes a
breach of loyalty in agency

Held:

Yes. The Supreme Court held that the law 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
relevant to the agency, so much so that the law as amended does not countenanced any stipulation
exempting the agent from such an obligation and considers such an exemption as void.
 Hence, by taking such profit or gift or propina from the vendee, the agent thereby assumes a
position wholly inconsistent with that of being agent to his principal, who has a right to treat him,
insofar as his commission is concerned, as if no agency had existed. The fact that the principal may have
been benefited by the valuable services of the said agent does not exculpate the agent who has only
himself to blame for such a result by reason of his treachery or perfidy.