DOMINGO v. DOMINGO No. L-30573. October 29, 1971

DOMINGO v. DOMINGO No. L-30573.
October 29, 1971
VICENTE M. DOMINGO,represented by his heirs, ANTONINA RAYMUNDO VDA. DE DOMINGO,

RICARDO, CESAR, AMELIA, VICENTE JR., SALVADOR, IRENE and JOSELITO, all surnamed
DOMINGO, petitioners-appellants, vs. GREGORIO M. DOMINGO,respondent-appellee, TEOFILO
P. PURISIMA, intervenor-respondent.
- 2 June 1956 (written document, triplicate) Vicente Domingo  Gregorio Domingo (real estate
broker) – exclusive agency to sell his lot No. 883 of Piedad Estate with an area of about 88,477
square meters at the rate of P2.00 per square meter (or for P176,954.00) with a commission of
5% on the total price, if:
a. if the property is sold by Vicente or by anyone else during the 30-day duration of the agency
or
b. 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
- next day, Gregorio authorized sub-agent Teofilo Purisisma to look for buyer; promise ½ of the
5% commission
- Purisima introduced Oscar de Leon to Gregorio as prospective buyer
- Oscar submitted written offer  much lower than P2 / sqm  Vicente directed Gregorio to
raise offer
- several conferences – Gregorio and Oscar  offer raised P109,000
- Vicente demand, Oscar issued check of 1K as earnest money  Vicente advanced Gregorio
300 (commission)
- Oscar confirmed in a letter the offer of P1.20 /sqm  Vicente demanded addtl 1k earnest
money
- agreement amended  Oscar to convey house and lot in Denver St. in QC as part of purchase
price, will vacate in Dec 1 1956, Vicente can stay in Piedad Estate til 1 June 1957
- Oscar gave Gregorio a 1K gift or propina (tip) for succeeding to convince Vicente to sell him
the property at lower price  not disclosed by Gregorio; addt 1k earnest money not given to
Vicente
- Deed of Sale not executed at the agreed extended sale
- Oscar to Gregorio – giving up nego, did not receive money from brother in US
- something fishy, went to Vicente, asserting their agreement of commission, tore to pieces by
Vicente
- proceeded to RD of QC, discovered deed of sale by Oscar wife over their house and lot as part
of purchase price of Vicente’s lot
- demanded in writing his commission  replied – not entitled, sold to another buyer, Oscar’s
wife
- Oscar to Gregorio – Vicente went to him to eliminate Gregorion in the transacition
RTC and CA  favored Gregorio and Teofilo. GROUNDS:
a. exclusive agency, same vendee – H and W de Leon
b. G and T efficient cause of consummation of the sale
c. 1K not earnest money but gift/propina
ISSUE: w/n Gregorio entitled for agreed commission of 5% - NO

HELD: NO. Breach of trust
1. Failure of agent to make full disclosure makes him guilty of breach of his loyalty to the
principal
- duties and liabilities of a broker to his employer are essentially those which an agent owes to
his principal
Obligations of an agent.—–Articles 1891 and 1909 of the Civil Code demand the utmost good
faith, fidelity, honesty, candor and fairness on the part of the agent to his principal.
- The agent has an 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.
- Thus, 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 bis principal is guilty of a breach of his loyalty
to the latter and forfeits his right to collect the commission that may be due him, 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.
2. Application to this case

- receipt and acceptance of 1K l monetary gift corrupted Gregorio’s duty to serve the interests
only of his principal and undermined his loyalty to his principal, who gave him a partial advance
of 300 on his commission
- CONSEQUENCE: instead of exerting his best to persuade his prospective buyer to purchase the
property on the most advantageous terms desired by his principal, the broker, herein
defendant-appellee Gregorio Domingo, succeeded in persuading his principal to accept the
counter-offer of the prospective buyer to purchase the property at P1.20 per square meter or
One Hundred Nine Thousand Pesos (P109,000.00) in round figure for the lot of 88,477 square
meters, which is very much lower than the price of P2.00 per square meter or One Hundred
Seventy-Six Thousand Nine Hundred FiftyFour Pesos (P176.954.00) for said lot originally offered
by his principal
3. Duty of fidelity when not applicable.—–The duty embodied in Article 1891 of the Civil Code
does 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 thereto
- in this case, Gregorio not merely middleman  broker and agent of Vicente
- same situation if bought by wife, as there is a need for consent from Oscar
4. Gregorio’s right to commission forfeited; Teofilo can only recover what Gregorio already
received (1.3K) = P650
Plus moral damages

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DOMINGO v. DOMINGO No. L-30573.

October 29, 1971

VICENTE M. DOMINGO,represented by his heirs, ANTONINA RAYMUNDO VDA. DE DOMINGO,

ISSUE: w/n Gregorio entitled for agreed commission of 5% - NO

2. Application to this case

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