TOPIC: Modes of Extinguishing Agency

CASE NAME: Consejo Infante vs. Jose Cunanan

G.R. No. L-5180

FACTS:
Consejo Infante, owner of 2 parcels of land, contracted the services of Jose Cunanan and Juan
Mijares to sell the above mentioned property for a price, subject to the condition that the purchaser
would assume the mortgage existing thereon, with agreement to pay 5% commission on the purchase
price plus whatever overprice they may obtain for the property.

Jose Cunanan and Juan Mijares found one Pio S. Neche who was willing to buy the property
under the terms agreed upon, but when they introduced him to Consejo, the latter informed them
that she was no longer interested in selling the property and made them sign a document stating
therein that the written authority she had given was already cancelled. However, she dealt directly
with Pio S. Neche selling to him the property. Jose Cunanan and Jun Mijares demanded payment of
their commission of 5% but she refused to do so.

ISSUE:
WON, the contract of agency was extinguished by the cancellation of the authority and
respondents were not entitled to receive commission.

RULING:
No, the right to withdraw the authority of an agent by the principal is an authorized right under
the law but such right cannot be considered if there’s a showing of bad faith on the part of the
principal. Infante had changed mind even if the agents have found a buyer willing to close the deal, is
a matter that would not give rise to a legal consequence if agents agree to call off the transaction in
deference to the request of Infante. But the situation varies if one of the parties takes advantage of
the benevolence of the other in a manner that would promote his own selfish interest. This was the
situation in which respondents were placed by Infante. Thus, amounting to bad faith. Infante took
advantage of the services rendered by respondents and induce them to sign the seed of cancellation.
Such act cannot serve as basis to escape payment of the commission agreed upon.