7 Domingo v.

Domingo
Facts:
June 1956 - Vicente Domingo granted Gregorio Domingo (broker), exclusive agency to
sell his 88.5K Sq. m. lot in Piedad estate at Php 2 per Sq. m. with a 2% commission on
the total price if the property is sold by Vicente or anyone else during the 30 day
duration of the agency or if it is sold within 3 months to a purchaser submitted by
Grogorio during the agency with notice to Vicente
Contract was in triplicate
June 1956 - Gregorio authorized intervenor Teofilo Purisima to look for a buyer,
promising half the commission - Purisimar introduced Oscar de Leon to Gregorio as a
prospect
De Leon oered an oer much lower than Php 2 per Sq. m. - Vicente instructed
Gregorio to tell De Leon to raise his oer
De Leon raised his oer to Php 109K, which Vicente signed
De Leon issued him a cheque for Php 1K in earnest money
Vicente advanced Php 300 commission to Vicente
De Leon confirmed Php 1.2 per Sq. m. for the price in a letter - Vicente asked for an
additional Php 1K earnest money, De Leon promised to deliver it
De Leon paid Gregorio Php 1K as a gift for persuading Vicente to sell his lot at Php 1.2
per Sq. m. - this gift was never disclosed to Vicente
De Leon pulled out of the sale as money from his brother in the US never arrived, he
gave up the Php 1K earnest money and the Php 1K gift to Gregorio
Vicente tore up the contract, Gregorio discovered a deed of sale of the lot to Diaz, the
wife of De Leon in favour of Vicente as downpayment
Gregorio discovered that Vicente went to De Leon to eliminate Gregorio from the
transaction
Gregorio demanded his 5% commission
Issues:
W.O.N. the Php 1K gift to Gregorio constitutes fraud
Yes
Art. 1909. 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
Article 1891 of the New Civil Code amends Article 1720 of the old Spanish
Civil Code which provides that: Art. 1720. Every agent is bound to give
an account of his transaction and to pay to the principal whatever he may
have received by virtue of the agency, even though what he has received
is not due to the principal"
Provisions demand utmost good faith, fidelity, honesty, candor and
fairness on the part of the agent
An agent who takes a secret profit in the nature of a bonus, gratuity or

personal benefit from the vendee is guilty of breach of loyalty and forfeits
his commission
Gregorio ordered to pay Vicente moral damages and Atty.s fees and
Purisima his share of half of the 5% commission