G.R. No. 141525 . September 2, 2005.
CARLOS SANCHEZ, Petitioner, vs. MEDICARD PHILIPPINES, INC., DR. NICANOR MONTOYA and CARLOS EJERCITO, Respondents.

FACTS

Petitioner Carlos Sanchez was a special corporate agent for respondent Medicard Philippines, Inc. Through his efforts, Medicard entered into a Health Care Program Contract with United Laboratories (Unilab) in 1988, under which Unilab paid a fixed monthly premium. Sanchez received an 18% commission on the premiums. The contract was renewed for a second year, and Sanchez again received a commission. Prior to the expiration of the renewed contract, Medicard, through Sanchez, proposed a premium increase for a third year. Unilab rejected this proposal as too high.
Medicard’s president, respondent Dr. Nicanor Montoya, then requested Sanchez to reduce his commission to facilitate renewal, but Sanchez refused. Subsequently, Unilab, through its officer respondent Carlos Ejercito, formally notified Medicard that it would not renew the existing premium-based contract. To continue coverage for Unilab personnel, Unilab and Medicard directly negotiated a new “cost plus” scheme, where Unilab would pay actual hospitalization costs plus a service fee. Medicard did not pay Sanchez any commission under this new arrangement.

ISSUE

Whether the Court of Appeals erred in holding that the agency was revoked and that Sanchez is not entitled to a commission for the subsequent “cost plus” contract between Medicard and Unilab.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. An agent is entitled to a commission only if he is the efficient procuring cause of the sale or contract. The legal logic is anchored on the principle that the agent’s efforts must have a proximate and causal connection to the consummated agreement. Here, the third contract was not a renewal of the previous premium-based agreements but a fundamentally new “cost plus” scheme negotiated directly between Medicard and Unilab after Sanchez refused to reduce his commission and after Unilab had already rejected the renewal under the old terms.
The Court held that Medicard’s direct management of the negotiations and dealing with Unilab constituted a revocation of the agency under Article 1924 of the Civil Code. Sanchez was not the procuring cause of the new contract; his efforts did not bring it about. The records showed he exerted no effort to secure the third contract, and his inflexibility regarding his commission constrained Medicard to negotiate directly. Therefore, absent any fraudulent strategy by Medicard solely to deprive him of a commission, and given the ineffectuality of the proposed renewal under the original scheme, Sanchez had no legal or equitable right to a commission for a transaction he did not procure.