DOMINGO vs. DOMINGO GR No. L-30573 | Oct.

29, 1971| Makasiar |Petition for Review of CA Facts: Gregorio Domingo, Vicente Domingos broker and agent, received P1,000 from Oscar de Leon as gift or propina. Oscar gave him said amount after Gregorio succeeded inpersuading Vicente to accept his offer to buy the lot for P1.20instead of P2. Held: 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. 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. Facts: Vicente Domingo granted toGregorio Domingo, a real estate broker, the exclusive agency to sell his Lot No. 883,Piedad Estate in a document. Said lot has an area of 88,477 sq. m. According to the document, said lotmust 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 persq. m. price. Vicente directed Gregorio to tell Oscar to raise his offer. After several conferences between Gregorio and Oscar, Oscar raised his offer toP1.20 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 P1,000 as earnest money, which Oscar promised to deliver to Vicente. The written agreement, Exhibit C,between the parties was amended. Oscar will vacate on or about September 15, 1956 his house and lot at Denver St., QC, which is part of the purchase price Later on, it was again amended to state that Oscar will vacate his house and lot on Dec.1, 1956 because his 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 propinato 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 house 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 Gregorio's buyer, Oscar de Leon, butto another buyer, Amparo Diaz, wife of Oscar de Leon. CA: exclusive agency contract isgenuine. The sale of the lot to Amparo deLeon is practically a sale to Oscar. Issue: WON Gregorios act of accepting the gift orpropina from Oscar constitutes a fraud whichwould cause the forfeiture of his 5% commission Held: YES! Gregorio Domingo as the broker, received a gift or propina from the prospective buyer Oscar de Leon, without the knowledge and consent of his principal, Vicente Domingo. His acceptance of said substantial monetary gift corrupted his duty to serve the interests only of his principal and undermined his loyalty to his principal, who gave him partial advance of P3000 on his commission. As a consequence, instead of exerting his best to persuade his prospective buyer to purchase the property on the most advantageous terms desired by his principal, Gregorio Domingo, succeeded in persuading his principal to accept the counter-offer of the prospective buyer to purchase the property at P1.20 per sq. m. The duties and liabilities of a broker to his employer are essentially those which an agent owes to his principal. 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. Rationale: prevent the possibility of any wrong not to remedy or repair an actual damage agent thereby assumes a position wholly inconsistent with that of being an agent for 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. 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. Decisive Provisions Article 1891 and 1909 CC. The modification contained in the first paragraph Article 1891 consists in changing the phrase "to pay" to "to deliver", which latter term is more comprehensive than the former. Paragraph 2 of Article 1891is a new addition designed to stress the highest loyalty that is condemning as void any stipulationexempting the agent from the duty andliability imposed on him in paragraph one thereof. Article 1909 demand the utmost good faith, fidelity, honesty, candor and fairness on the part of the agent, the real estate broker in this case, to his principal, the vendor. The law imposes upon the agent the absolute obligation to make a full disclosure or complete account to hisprincipal of all his transactions and othermaterial facts relevant to the agency, somuch 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. The duty of an

agent is likened to that of a trustee. This is not a technical or arbitrary rule but a rule founded on the highest and truest principle of morality as well as of the strictest justice. Situations where the duty mandated by Art 1891 does not apply agent or broker acted only as a middleman with the task of merely bringing together the vendor and vendee, who 2. Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. Every stipulation exempting the agent from the obligation to render an account shall be void. 3. The agent is responsible not only for fraud, but also for negligence, which shall be judged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. CA decision reversed.

MANILA MEMORIAL PARK CEMETERY, INC. V. LINSANGAN G.R. No. 94050 November 21. 1991 FACTS: Florencia Baluyot, an Agency Manager of MMPCI, offered to Atty. Pedro Linsangan a lot at the Holy Cross Memorial Park owned by MMPCI for P95,000. The lots former owner was not interested on the lot anymore and so agreed to sell the lot after he has been reimbursed. Atty. Linsangan agreed to the offer, gave Baluyot the reimbursement that would be given to the former owner and down payment that would be paid to MMPCI, with Baluyot only handing him handwritten and typewritten receipts (not O.R.).-However, instead of the old contract with the old owner reformed so that Atty. Linsangan would become the new owner of the lot,Baluyot offered a new contract covering the same lot. Atty. Linsangan protested, but Baluyot assured him that that Atty. Linsangan would still be paying P95,000 instead of the P132,250 price under the new contract. Baluyot even executed a document confirming the previous arrangement between her and Atty. Linsangan so that even if the purchase price under the new contract has increased,Atty. Linsangan would still be paying the old purchase price. Atty. Linsangan signed the new contract with MMPCI and tendered payment in checks in accordance with the old agreement between him and Baluyot.-It turns out that MMPCI was not aware of the arrangement between Baluyot and Atty. Linsangan, and that Baluyot was only authorized under her Agency Management contract to Solicit and remit to MMPCI offers to purchase interment spaces belonging to and sold by MMPCI. So, even if Atty. Linsangan had complied with the agreed payment, MMPCI cancelled the new contract for non-payment of arrearages.-Atty. Linsangan filed complaint for Breach of Contract and Damages against Baluyot and MMPCI.LC: Baluyot was an agent of MMPCI; MMPCI was estopped from denying the agency after having received and encashed the checks issued by Atty. Linsangan and given it by Baluyot.CA: affirmed LC + Baluyots authority was conferred upon her by habit and custom ISSUES 1. WON the SC could review the findings of fact of CA 2. WON Baluyot was an agent of MMPCI 3. WON MMPCI was bound by the contract procured by Atty. Linsangan and solicited by Baluyot 4. WON MMPCI was estopped from denying liability to Atty. LinsanganHELD1. YES Ratio. There are instances when the findings of fact of the trial court and/or Court of Appeals may be reviewed by the SupremeCourt, such as (1) when the conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) when theinference made is manifestly mistaken, absurd or impossible; (3) where there is a grave abuse of discretion; (4) when the judgment isbased on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making itsfindings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when thefindings are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence onwhich they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputedby the respondents; and (10) the findings of fact of the Court of Appeals are premised on the supposed absence of evidence andcontradicted by the evidence on record. 2. YES! By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Thus, the elements of agency are (i) consent, express or implied, of the parties to establish the relationship; (ii) the object is the execution of a juridical act in relation to a third person; (iii) the agent acts as a representative and not for himself; and (iv) the agent acts within the scope of his authority. Reasoning. Baluyot was an agent of MMPCI, having represented the interest of the latter, and having been allowed by MMPCI to represent it in her dealings with its clients/prospective buyers. 3. NO! The acts of the agent beyond the scope of his authority do not bind the principal unless the latter ratifies the same. It also bears emphasis that when the third person knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person was aware of such limits of authority, he is to blame and is not entitled to recover damages from the agent, unless the latter undertook to secure the principals ratification. -on RATIFICATION: Ratification in agency is the adoption or confirmation by one person of an act performed on his behalf by another without authority. The substance of the doctrine is confirmation after conduct, amounting to a substitute for a prior authority. Ordinarily, the principal must have full knowledge at the time of ratification of all the material facts and circumstances relating to the unauthorized act of the person who assumed to act as agent. Thus, if material facts were suppressed or unknown, there can be no valid ratification and this regardless of the purpose or lack thereof in concealing such facts and regardless of the parties between whom the question of ratification may arise. Nevertheless, this principle does not apply if the principals ignorance of the material facts and circumstances was willful, or that the principal chooses to act in ignorance of the facts. However, in the absence of circumstances putting a reasonably prudent man on inquiry, ratification cannot be implied as against the principal who is ignorant of the facts.

Reasoning. Baluyot acted in excess of the authority granted to her by MMPCI. The original agreement between her and Atty.Linsangan was unknown to MMPCI and thus, MMPCI was not bound by their agreement. As far as they were concerned, the contract price was P132,250 and not P95, 000. As for the ratification, see estoppel. 4. NO! The essential elements of estoppels are (i) conduct of a party amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (ii) intent, or at least expectation, that this conduct shall be acted upon by, or at least influence, the other party; and (iii) knowledge, actual or constructive, of the real facts. -One who claims the benefit of an estoppel on the ground that he has been misled by the representations of another must not have been misled through his own want of reasonable care and circumspection.-Estoppel must be intentional and unequivocal, for when misapplied, it can easily become a most convenient and effective means of injustice. There is no indication that MMPCI let the public nor Atty. Linsangan to believe that Baluyot had the authority to alter the standard contracts of the company. Neither is there any showing that prior to signing of the new contract, MMPCI had any knowledge of Baluyots commitment to Atty. Linsangan.-Even assuming that Atty. Linsangan was misled by MMPCIs actuations, he still cannot invoke the principle of estoppel, as he was clearly negligent in his dealings with Baluyot, and could have easily determined, had he only been cautious and prudent, whether said agent was clothed with the authority to change the terms of the principals written contract. Disposition. WHEREFORE, the instant petition is GRANTED. The Decision of the Court of Appeals dated 22 June 2001 and its Resolution dated 12 December 2001 in CA- G.R. CV No. 49802, as well as the Decision in Civil Case No. 88-1253 of the Regional Trial Court, Makati City Branch 57, are hereby REVERSED and SET ASIDE. The Complaint in Civil Case No. 88-1253 is DISMISSED for lack of cause of action. No pronouncement as to costs.

Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon G.R. No. 167552 April 23, 2007 FACTS: Eurotech is engaged in the business of importation and distribution of various European industrial equipment. It has as one of its customers Impact Systems Sales which is a sole proprietorship owned by Erwin Cuizon. Eurotech sold to Impact Systems various products allegedly amounting to P91,338.00. Cuizons sought to buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons making a down payment of P50,000.00. When the sludge pump arrived from the United Kingdom, Eurotech refused to deliver the same to Cuizons without their having fully settled their indebtedness to Eurotech. Thus, Edwin Cuizon and Alberto de Jesus, general manager of Eurotech, executed a Deed of Assignment of receivables in favor of Eurotech. Cuizons, despite the existence of the Deed of Assignment, proceeded to collect from Toledo Power Company the amount of P365,135.29. Eurotech made several demands upon Cuizons to pay their obligations. As a result, Cuizons were able to make partial payments to Eurotech. Cuizons total obligations stood at P295,000.00 excluding interests and attorneys fees. Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he was acting as mere agent of his principal, which was the Impact Systems, in his transaction with Eurotech and the latter was very much aware of this fact. ISSUE: WON Edwin exceeded his authority when he signed the Deed of Assignment thereby binding himself personally to pay the obligations to Eurotech HELD: No. Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin and that his status as such is known even to Eurotech as it is alleged in the Complaint that he is being sued in his capacity as the sales manager of the said business venture. Likewise, Edwin points to the Deed of Assignment which clearly states that he was acting as a representative of Impact Systems in said transaction. Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. In a contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another with the latters consent. Its purpose is to extend the personality of the principal or the party for whom another acts and from whom he or she derives the authority to act. The basis of agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal. Elements of the contract of agency: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority. An agent, who acts as such, is not personally liable to the party with whom he contracts. There are 2instances when an agent becomes personally liable to a third person. The first is when he expressly binds himself to the obligation and the second is when he exceeds his authority. In the last instance, the agent can be held liable if he does not give the third party sufficient notice of his powers. Edwin does not fall within any of the exceptions contained in Art. 1897. In the absence of an agreement to the contrary, a managing agent may enter into any contracts that he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted to his management. Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. Eurotech refused to deliver the 1 unit of sludge pump unless it received, in full, the payment for Impact Systems indebtedness. Impact Systems desperately needed the sludge pump for its business since after it paid the amount of P50,000.00 as down payment it still persisted in negotiating with Eurotech which culminated in the execution of the Deed of Assignment of its receivables from Toledo Power Company. The significant amount of time spent on the negotiation for the sale of the sludge pump underscores Impact Systems perseverance to get hold of the said equipment. Edwins participation in the Deed of Assignment was reasonably necessary or was required in order for him to protect the business of his principal.