Domingo vs.

Domingo
G.R. No. L-30573, October 29, 1971

FACTS:
Vicente Domingo granted to Gregorio Domingo, a real estate broker, the exclusive
agency to sell hi lot no. 883, Piedad estate in a document. Said lot has an area of 88,477 sq. m.
According to the document, said lot must be sold for P2 per sq. m. Gregorio is entitled to 5%
commission on the total price if the property is sold by Vicente or by anyone else during the 30
day duration of the agency or by Vicente within 3 months from the termination of the agency to a
purchaser to whom it was submitted by Gregorio during the effectivity of the agency with notice
to Vicente. This contract is in triplicate with the original and another copy being retained by
Gregorio. The last copy was given to Vicente.
Subsequently, Gregorio authorized Teofilo Purisima to look for a buyer without notifying
Vicente. Gregorio promised Teofilo of the 5% commission. Teofilo introduced Oscar de Leon
to Gregorio as a prospective buyer. Oscar submitted a written offer which was very much lower
than the P2 per sq. m. price. Vicente directed Gregorio to tell Oscar to raise his offer. After
several conferences between Gregorio and Oscar, Oscar raised his offer to P1.20 per sq. m. or
P109,000 in total. Vicente agreed to said offer. Upon Vicentes demand, Oscar issued a P1,000
check to him as earnest money. Vicente, then, advanced P300 to Gregorio. Subsequently,
Vicente asked for an additional P1,00 as earnest money, which Oscar promised to deliver to
Vicente. The written agreement between the parties was amended stating that Oscar will vacate
on or about September 15, 1956 his house and lot at Denver St., Q.C, which is part of the
purchase price. Later on, it was again amended to state that Oscar will vacate his house and lot
on December 1, 1956 because hi wife was pregnant at that time.
Oscar gave Gregorio p1,000 as a gift or propina for succeeding in persuading Vicente to
sell his lot at P1.20 per sq. m. Gregorio did not disclose said gift or propina to Vicente.
Moreover, Oscar did not pay Vicente the additional P1,000 Vicente asked from him as earnest
money. The deed of sale was not executed since Oscar gave up on the negotiation when he did
not receive his money from his brother in the US, which he communicated to Gregorio.
Gregorio did not see Oscar for several weeks thus sensing that something fishy might be
going on. So, he went to Vicentes hose where he read a portion of the agreement to the effect
that Vicente was still willing to pay him 5% commission, P5,450. Thereafter, Gregorio went to
the Register of Deeds of QC, where he discovered that a Deed of sale was executed by Amparo
de Leon, Oscars wife, over their house and lot in favor of Vicente.
After discovering that Vicente sold his lot to Oscars wife, Gregorio demanded in writing
the payment of his commission. Gregorio also conferred with Oscar. Oscar told him that Vicente
went to him and asked him to eliminate Gregorio in the transaction and that he would sell his
property to him for P104,000.

In his reply, Vicente stated that Gregorio is not entitled to the 5% commission because he
sold the property not to Gregorios buyer, Oscar de Leon, but to another buyer, Amparo Diaz,
wife of Oscar de Leon. Court of Appeals ruled that exclusive agency contract is genuine. The
sale of the lot to Amparo de Leon is practically a sale to Oscar.
ISSUE:
Whether or not Gregorios act of accepting the gift or propina from Oscar constitutes a
fraud which would cause the forfeiture of his 5% commission.
HELD:
YES.
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 the usage or custom allows it.
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. As a necessary consequence of such breach of trust, Gregorio Domingo
must forfeit his right to the commission and must return the part of the commission he received
from his principal.