DOMINGO vs.

DOMINGO

FACTS:

Vicente M. Domingo granted Gregorio Domingo, a real estate broker, the exclusive agency to sell his lot at
the rate of P2.00 per square meter (or for P176,954.00) with a commission of 5% on the total price, if the property is
sold by Vicente or by anyone else during the 30-day duration of the agency or if the property is sold by Vicente within
three months from the termination of the agency to a purchaser to whom it was submitted by Gregorio during the
continuance of the agency with notice to Vicente. The said agency contract was in triplicate, one copy was given to
Vicente, while the original and another copy were retained by Gregorio.

Gregorio authorized the intervenor Teofilo P. Purisima to look for a buyer, promising him one-half of the 5%
commission.Thereafter, Teofilo Purisima introduced Oscar de Leon to Gregorio as a prospective buyer.

Oscar de Leon submitted a written offer which was very much lower than the price of P2.00 per square
meter. Vicente directed Gregorio to tell Oscar de Leon to raise his offer. After several conferences between Gregorio
and Oscar de Leon, the latter raised his offer to P109,000.00 on June 20 and Vicente agreed.

Upon demand of Vicente, Oscar de Leon issued to him a check in the amount of P1,000.00 as earnest
money, after which Vicente advanced to Gregorio the sum of P300.00. Oscar de Leon confirmed his former offer to
pay for the property at P1.20 per square meter in another letter. Subsequently, Vicente asked for an additional
amount of P1,000.00 as earnest money, which Oscar de Leon promised to deliver to him.

Pursuant to his promise to Gregorio, Oscar gave him as a gift or propina the sum of 1,000.00 for succeeding
in persuading Vicente to sell his lot at P1.20 per square meter or a total in round figure of P109,000.00. This gift of
P1,000.00 was not disclosed by Gregorio to Vicente. Neither did Oscar pay Vicente the additional amount of
P1,000.00 by way of earnest money.

When the deed of sale was not executed on August 1, 1956 as stipulated nor on August 16, 1956 as
extended by Vicente, Oscar told Gregorio that he did not receive his money from his brother in the United States, for
which reason he was giving up the negotiation including the amount of P 1,000 given as earnest money to Vicente
and the P 1,000 given to Gregorio as propina or gift.

When Oscar did not see him after several weeks, Gregorio sensed something fishy. So, he went to Vicente
and read a portion to the effect that Vicente was still committed to pay him 5% commission. Vicente grabbed the
original of the document and tore it to pieces. From his meeting with Vicente, Gregorio proceeded to the office of the
Register of Deeds of Quezon City, where he discovered a deed of sale executed on September 17, 1956 by Amparo
Diaz.

Upon thus learning that Vicente sold his property to the same buyer, Oscar de Leon and his wife, he
demanded in writing payment of his commission on the sale price of P109,000.00.

Vicente stated that Gregorio is not entitled to the 5% commission because he sold the property not to
Gregorio's buyer, Oscar de Leon, but to another buyer, Amparo Diaz, wife of Oscar de Leon.

ISSUE:

Whether Gregorio was entitled to receive the 5% commission

HELD: NO.

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 countenance any stipulation exempting the agent from such an
obligation and considers such an exemption as void.

Hence, an agent who takes a secret profit in the nature of a bonus, gratuity or personal benefit from the
vendee, without revealing the same to his principal, the vendor, is guilty of a breach of his loyalty to the principal and
forfeits his right to collect the commission from his principal, even if the principal does not suffer any injury 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 allows it; because the rule is to prevent the possibility of any wrong, not to remedy or repair an actual
damage. By taking such profit or bonus or gift or propina from the vendee, the agent thereby assumes a position
wholly inconsistent with that of being an agent for hisprincipal, 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.

Note: DOUBLE AGENCY

The duty embodied in Article 1891 of the New Civil Code will not apply if the agent or broker acted only as a
middleman with the task of merely bringing together the vendor and vendee, who themselves thereafter will negotiate
on the terms and conditions of the transaction. Neither would the rule apply if the 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 therto.

Herein defendant-appellee Gregorio Domingo was not merely a middleman of the petitioner-appellant
Vicente Domingo and the buyer Oscar de Leon. He was the broker and agent of said petitioner-appellant only. And
therein petitioner-appellant was not aware of the gift of One Thousand Pesos (P1,000.00) received by Gregorio
Domingo from the prospective buyer; much less did he consent to his agent's accepting such a gift.