Sanchez vs. Medicard Phil. Inc.

FACTS:

Sometime in 1987 Medicard Inc. appointed petitioner Sanchez as its special corporate agent and they gave him a commission based on the "cash brought in." In 1988, through petitioner's efforts, Medicard and Unilab executed a Health Care Program Contract. Unilab paid Medicard P4,148,005.00 representing the premium for one (1) year. Medicard then handed petitioner 18% of said amount or P746,640.90 representing his commission. Again, through petitioner's initiative, the agency contract between Medicard and Unilab was renewed for another year. Prior to the expiration of the renewed contract, Medicard proposed an increase of the premium which Unilab rejected "for the reason that it was too high,". In a letter dated October 3, 1990, Unilab confirmed its decision not to renew the health program. Meanwhile, in order not to prejudice its personnel by the termination of their health insurance, Unilab negotiated with Dr. Montoya and other officers of Medicard, to discuss new ways in order to continue the insurance coverage. Under the new scheme, Unilab shall pay Medicard only the amount corresponding to the actual hospitalization expenses incurred by each personnel plus 15% service fee. Medicard did not give petitioner any commission under the new scheme. Aggrieved, Petitioner demanded from Medicard payment of P338,000.00 as his commission plus damages, but the latter refused to heed his demand.

ISSUE: 

whether or not the contract of agency has been revoked by Medicard, hence, petitioner is not entitled to a commission.

HELD: 

Yes the Contract of Agency has been revoked, thus the petitioner is not entitled to any commission. It is dictum that in order for an agent to be entitled to a commission, he must be the procuring cause of the sale, which simply means that the measures employed by him and the efforts he exerted must result in a sale.  Based on the facts, it may be recalled that through petitioner's efforts, Medicard was able to enter into a Contract with Unilab, two times, However before the expiration of the renewed contract, Unilab rejected the proposal. Medicard then requested petitioner to reduce his commission should the contract be renewed on its third year, but he was obstinate. It is clear that since petitioner refused to reduce his commission, Medicard directly negotiated with Unilab, thus revoking its agency contract with petitioner. Such revocation is authorized by Article 1924 of the Civil Code which provides: "The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons."

Moreover, as found by the lower courts, petitioner did not render services to Medicard, his principal, to entitle him to a commission. There is no indication from the records that he exerted any effort in order that Unilab and Medicard, after the expiration of the Health Care Program Contract, can renew it for the third time. In fact, his refusal to reduce his commission constrained Medicard to negotiate directly with Unilab. We find no reason in law or in equity to rule that he is entitled to a commission.