The document discusses two court cases related to agency law. The first case involves an agent who failed to disclose a gift from a potential buyer to his principal. The court ruled that this violated the agent's duty of loyalty. The second case involves a passenger whose return flight was cancelled after the validity of his round trip ticket expired. The court ruled the airline was not liable as the passenger was aware the agents lacked authority to confirm the expired ticket.
The document discusses two court cases related to agency law. The first case involves an agent who failed to disclose a gift from a potential buyer to his principal. The court ruled that this violated the agent's duty of loyalty. The second case involves a passenger whose return flight was cancelled after the validity of his round trip ticket expired. The court ruled the airline was not liable as the passenger was aware the agents lacked authority to confirm the expired ticket.
The document discusses two court cases related to agency law. The first case involves an agent who failed to disclose a gift from a potential buyer to his principal. The court ruled that this violated the agent's duty of loyalty. The second case involves a passenger whose return flight was cancelled after the validity of his round trip ticket expired. The court ruled the airline was not liable as the passenger was aware the agents lacked authority to confirm the expired ticket.
The document discusses two court cases related to agency law. The first case involves an agent who failed to disclose a gift from a potential buyer to his principal. The court ruled that this violated the agent's duty of loyalty. The second case involves a passenger whose return flight was cancelled after the validity of his round trip ticket expired. The court ruled the airline was not liable as the passenger was aware the agents lacked authority to confirm the expired ticket.
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
You are on page 1/ 4
VICENTE M. DOMINGO vs. GREGORIO M.
DOMINGO GR No. L-30573, October 29, 1971 Prepared by: Romasanta, Ian Joshua, P.
FACTS:
Vicente Domingo contracted with Gregorio Domingo to make the latter an agent to sell a lot for P2 per square meter. Gregorio will be entitled 5% of the total purchase price. Gregorio then contracted with Teofilo Purisima to look for a buyer, promising him half of the total 5% of the total purchase price he will receive as commission.
Teofilo introduced a prospect buyer named Oscar de Leon who offered a very low price. After a little negotiation, they agreed at P1.20 per square meter for a total of P109,000.
Oscar then issued to Vicente a P1,000 check as earnest money. Vicente advanced P300 to Gregorio. Later on, Vicente asked for another P1,000 earnest money. Oscar, however, did not pay the additional earnest money and instead gave Gregorio P1,000 as a gift for helping him negotiate for a lower price. Gregorio did not inform Vicente about the gift he received.
Subsequently, Oscar informed Gregorio that he could not pay anymore because his brother who promised to give him money, did not arrive.
Gregorio proceeded to the Registry of Deeds and discovered that the property of Vicente was sold to Amparo Diaz, the wife of Oscar. After this, he sent a letter to Vicente demanding his 5% commission. Oscar also admitted to him that Vicente asked to eliminate Gregorio from the transaction.
In his reply to the letter, Vicente insisted that Gregorio is not entitled to the commission.
The lower court ruled that Gregorio is entitled to the commission. Upon appeal, the Court of Appeals affirmed the lower court.
ISSUE/S:
Whether or not Gregorio is entitled to the commission.
RULING:
No. The act of Gregorio in failing to disclose and inform Vicente about the gift he received from the prospect buyer removed his entitlement to the commission. He has to return the amount he received from Vicente.
Article 1891 of the Civil Code states that “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.”
In this case, it never occurred that Vicente was informed by Gregorio.
Being an agent demands utmost good faith, honesty and fidelity to the principal. It is the obligation of the agent to fully disclose to the principal everything that he has received including all the transactions relevant to the agency. A contrary stipulation in the contract is void. An agent who takes a secret profit in the nature of a bonus, gratuity, or personal gift from the buyer without informing his principal is guilty of breach of faith and loyalty even though the principal did not suffer injury by reason of such or benefitted. NICHOLAS CERVANTES vs COURT OF APPEALS GR No. 125138, March 2, 1999 Prepared by: Romasanta, Ian Joshua, P.
FACTS:
Vicente PAL issued to Nicholas Cervantes a round trip plane ticket for Manila-Honolulu-Los Angeles. The ticket expressly stated that it would expire after March 27, 1990.
The petitioner used the ticket 4 days before the expiration of the ticket. After his arrival at Los Angeles, he immediately booked a return flight to Manila and it was confirmed depart on April 2. He then learned that the return flight had a stop-over at San Francisco so he requested PAL to change his boarding flight to San Francisco instead of Los Angeles.
When he arrived at the airport in San Francisco in April 2, he was rejected by a PAL personnel reasoning that the ticket has already expired and therefore invalid.
He filed an action for damages and breach of contract before the RTC but it was subsequently dismissed for lack of merit. Upon appeal, the Court of Appeals upheld the dismissal.
ISSUE/S:
Whether or not there was a breach of contract by PAL because its agents confirmed the April 2 flight.
RULING:
No. The petitioner knew of the expiration of the ticket. He was also aware that there is a need of a request letter to PAL for the extension of the validity of the ticket.
The petitioner contended that the confirmation by the PAL agents in Los Angeles and San Francisco changed the agreement between the parties.
However, Article 1898 of the Civil Code states that “If the agent contracts in the name of the principal, exceeding the scope of his authority, and the principal does not ratify the contract, it shall be void if the party with who the agent contracted is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable if he undertook to secure the principal’s ratification.”
The cited rule contemplates that the acts of an agent beyond the scope of his authority do not bind the principal unless the latter ratifies the same expressly or impliedly. The same provision also provides that if the third person knows that the agent is acting beyond his authority, the principal cannot be held liable for the acts of his agent.
In this case, he was fully aware that the agents’ confirmation was unauthorized. Records show that he knows that for the ticket’s validity to be extended, a request letter addressed to PAL must be sent first. Therefore, he is not entitled to receive any damages.
