Demanding commission for services rendered lawful

Persida Acosta

Persida Acosta

Dear PAO,
When I was working abroad, I authorized my cousin to sell my car and instructed him to keep the money until I come home. Upon my arrival, I asked my cousin for my money. He agreed to return my money but not all of it. According to him, he has the right to receive commission and to deduct it from the proceeds of the sale. May I ask if his demands are proper? We did not agree on any commission when I authorized him to sell my car.

Dear Cross,
Based on your narration, your cousin has two demands. First, he demands commission for his services in selling your car. Second, he demands that this amount be deducted from the proceeds of the sale of your car. These matters will be discussed in succession.

His demand for commission for his services in selling your car has a legal basis. When somebody authorizes a person to act on his behalf and the latter binds himself to render some service or to do something in representation or on behalf of his principal, a contract of agency is born (Art. 1868, Civil Code). Under the law, agency is presumed to be for compensation, unless there is proof to the contrary. (Art. 1875, Civil Code). Hence, the default rule is that an agent is entitled to receive payment for services he rendered for his principal. This right may only be denied if it can be shown otherwise, meaning that it is agreed that his service is free or gratuitous.

In your case, your cousin acted as your agent when he effected the sale of your car.
Moreover, it appears to be undisputed that he arranged and facilitated the sale.

Finally, the fact that you did not agree on any commission means that it was not discussed but it does not necessarily mean there is an agreement that his service is free. Taking the foregoing into consideration, your cousin has a basis in claiming compensation for his services.

Absent any agreement on the amount of compensation, the same will be based on quantum meruit, which means “as much as one deserves.” The doctrine of quantum meruit is based on the equitable principle that it is unjust for a person to retain benefit without paying for it. It prevents undue enrichment at the expense of another. Being an equitable principle, it is applied in cases where no express contract was entered into and no specific statutory provision is applicable (Sazon vs. Vasquez-Menancio, 666 SCRA 707).

Nevertheless, having the right to receive commission does not mean that the same can be checked off on the proceeds of the sale against the will of the principal-owner. An 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, including those not owing to the principal (Art. 1891, Civil Code). He is obliged to turn over the effects or objects of the agency to his principal and he cannot take interest in it against the will of his principal. At most, an agent is only given the right to retain in pledge the object of the agency in case he made advances or incurred damages in executing the agency without his fault or negligence, and the principal refuses to reimburse or pay him (Art. 1914, Civil Code). The claim for compensation is neither an advance nor damages. Hence, your cousin’s second demand to deduct his compensation from the proceeds of the sale against your will is not proper.

We hope you find the foregoing sufficient. Bear in mind that this opinion is based on the facts you narrated and our appreciation of the same. Our opinion may vary should actual facts and circumstances change.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to


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