G.R. No. L-11491, 23 August 1918, 38 Phil 501

FACTS:

On January 24, 1911, herein plaintiff-appellant Andress Quiroga and J. Parsons, both merchants, entered into a contract, for the exclusive sale of “Quiroga” Beds in the Visayan Islands. It was agreed, among others, that Andres Quiroga grants the exclusive right to sell his beds in the Visayan Islands to J.Parsons, subject to some conditions provided in the contract. Likewise, it was agreed that.

In compensation for the expenses of advertisement which, for the benefit of both contracting parties, Mr. Parsons may find himself obliged to make, Mr. Quiroga assumes the obligation to offer and give the preference to Mr. Parsons in case anyone should apply for the exclusive agency for any island not comprised with the Visayan group; and that, Mr. Parsons may sell, or establish branches of his agency forte sale of “Quiroga” beds in all the towns of the Archipelago where there are no exclusive agents, and shall immediately report such action to Mr. Quiroga for his approval.

Plaintiff filed a complaint, alleging that the defendant violated the following obligations: not to sell the beds at higher prices than those of the invoices; to have an open establishment in Iloilo; itself to conduct the agency; to keep the beds on public exhibition, and to pay for the advertisement expenses for the same; and to order the beds by the dozen and in no other manner. He alleged that the defendant washes agent for the sale of his beds in Iloilo, and that said obligations are implied in a contract of commercial agency.

ISSUE:

Whether the defendant, by reason of the contract hereinbefore transcribed, was an agent of the plaintiff for the sale of his beds.

RULING:

No. In order to classify a contract, due regard must be given to its essential clauses.

In the contract in question, there was the obligation on the part of the plaintiff to supply the beds, and, on the part of the defendant, to pay their price. These features exclude the legal conception of an agency or order to sell whereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers tithe principal the price he obtains from the sale of the thing to a third person, and if he does not succeeding selling it, he returns it.

By virtue of the contract between the plaintiff and the defendant, the latter, on receiving the beds, was necessarily obliged to pay their price within the term fixed, without any other consideration and regardless as to whether he had or had not sold the beds.

In respect to the defendant’s obligation to order by the dozen, the only one expressly imposed by the contract, the effect of its breach would only entitle the plaintiff to disregard the orders which the defendant might place under other conditions; but if the plaintiff consents to fill them, he waives his right and cannot complain for having acted thus at his own free will.

*Case digest by Paul Jason G. Acasio, JD-IV, Andres Bonifacio Law School, SY 2019-2020