Unformatted text preview: tained 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. 3 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 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.
The intent with which the agent took a secret profit has been held immaterial where the agent has in fact
entered into a relationship inconsistent with his agency, since the law condemns the corrupting tendency of
the inconsistent relationship. Little vs. Phipps (1911) 94 NE 260.
As a general rule, it is a breach of good faith and loyalty to his principal for an agent, while the agency
exists, so to deal with the subject matter thereof, or with information acquired during the course of the
agency, as to make a profit out of it for himself in excess of his lawful compensation; and if he does so he
may be held as a trustee and may be compelled to account to his principal for all profits, advantages,
rights, or privileges acquired by him in such dealings, whether in performance or in violation of his duties,
and be required to transfer them to his principal upon being reimbursed for his expenditures for the same,
unless the principal has consented to or ratified the transaction knowing that benefit or profit would accrue
or had accrued, to the agent, or unless with such knowledge he has allowed the agent so as to change his
condition that he cannot be put in status quo. The application of this rule is not affected by the fact that the
principal did not suffer any injury by reason of the agent's dealings or that he in fact obtained better results;
nor is it affected by the fact that there is a usage or custom to the contrary or that the agency is a
In the case at bar, defendantappellee Gregorio Domingo as the broker, received a gift or propina in the
amount of One Thousand Pesos (P1,000.00) from the prosp...
View Full Document
This document was uploaded on 03/11/2014.
- Fall '14