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Unformatted text preview: ar’s wife) and not to Oscar.
TC: Vicente was ordered to pay Gregorio his commission
CA: Affirmed the judgment of the trial court
Whether the failure on the part of Gregorio to disclose to Vicente the payment to him by Oscar de Leon of
the amount of One Thousand Pesos (P1,000.00) as gift or "propina" for having persuaded Vicente to reduce
the purchase price from P2.00 to P1.20 / sqm, so constitutes fraud as to cause a forfeiture of his
commission on the sale price.
Held: YES. Gregorio’s right to the commission must be forfeited due to breach of trust and he must return
the part of the commission he received from his principal.
Paragraph 2 of Article 1891 is a new addition designed to stress the highest loyalty that is required to an
agent — condemning as void any stipulation exempting the agent from the duty and liability imposed on him
in paragraph one thereof. The aforecited provisions 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 his 22 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. 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. 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 ob...
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- Fall '14