AGENCY, TRUST AND PARTNERSHIP | VICTORIA MILLING V. CA 333 SCRA 663

VICTORIA MILLING V. CA

333 SCRA 663

 

TOPIC/DOCTRINE

The question of whether a contract is one of sale or agency depends on the intention of the parties as gathered from the whole scope and effect of the language employed.

 

FACTS

St. Therese Merchandising (STM) regularly bought sugar from Victorias Milling Co (VMC). In the course of their dealings, VMC issued several Shipping List/Delivery Receipts (SLDRs) to STM as proof of purchases. Among these was SLDR No. 1214M. SLDR No. 1214M, dated October 16, 1989, covers 25,000 bags of sugar. Each bag contained 50 kg and priced at P638.00 per bag. The transaction covered was a “direct sale”.

On October 25, 1989, STM sold to private respondent Consolidated Sugar Corporation (CSC) its rights in the same SLDR for P14,750,000.00. CSC issued checks in payment. That same day, CSC wrote petitioner that it had been authorized by STM to withdraw the sugar covered by the said SLDR. Enclosed in the letter were a copy of SLDR No. 1214M and a letter of authority from STM authorizing CSC to “withdraw for and in our behalf the refined sugar covered by the SLDR” On Oct. 27, 1989, STM issued checks to VMC as payment for 50,000 bags, covering SLDR No. 1214M. CSC surrendered the SLDR No. 1214M and to VMC’s NAWACO Warehouse and was allowed to withdraw sugar. But only 2,000 bags had been released because VMC refused to release the other 23,000 bags.

Therefore, CSC informed VMC that SLDR No. 1214M had been “sold and endorsed” to it. But VMC replied that it could not allow any further withdrawals of sugar against SLDR No. 1214M because STM had already withdrawn all the sugar covered by the cleared checks. VMC also claimed that CSC was only representing itself as STM’s agent as it had withdrawn the 2,000 bags against SLDR No. 1214M “for and in behalf” of STM. Hence, CSC filed a complaint for specific performance against Teresita Ng Sy (doing business under STM’s name) and VMC. However, the suit against Sy was discontinued because later became a witness. RTC ruled in favor of CSC and ordered VMC to deliver the 23,000 bags left. CA concurred. Hence this appeal.

 

ISSUE

Is CSC an agent of STM and hence, estopped to sue upon SLDR No. 1214M as assignee.

 

RULING

No.

The court held that the question of whether a contract is one of sale or agency depends on the intention of the parties as gathered from the whole scope and effect of the language employed.

Here, the court held that it appears plain that private respondent CSC was a buyer of the SLDFR form, and not an agent of STM. Private respondent CSC was not subject to STM’s control. That the authorization given to CSC contained the phrase “for and in our (STM’s) behalf” did not establish an agency. Ultimately, what is decisive is the intention of the parties. That no agency was meant to be established by the CSC and STM is clearly shown by CSC’s communication to petitioner that SLDR No. 1214M had been “sold and endorsed” to it. The use of the words “sold and endorsed” means that STM and CSC intended a contract of sale, and not an agency. Hence, on this score, no error was committed by the respondent appellate court when it held that CSC was not STM’s agent and could independently sue petitioner.

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