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ANDRES QUIROGA vs.

PARSONS HARDWARE CO
G.R. No. L-11491
August 23, 1918



FACTS:

On January 24, 1911, plaintiff Andres Quiroga and J. Parsons (to whose rights
and obligations the present defendant Parsons Hardware Co. later subrogated itself)
entered into a contract, where it was stated among others that Quiroga grants in favor
of Parsons the exclusive rights to sell his beds in the Visayan Islands under some
conditions. One of the said conditions provided that Mr. Parsons may sell, or establish
branches of his agency for the 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 while another one passed on to Parsons the
obligation to order by the dozen and in no other manner the beds from Quiroga.

Alleging that the Parsons was his agent for the sale of his beds in Iloilo, Quiroga
filed a complaint against the former for violating the following obligations implied in
what he contended to be a contract of commercial agency: 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.


ISSUE:

The issue in question in this case is whether the contract is a contract of agency
or of sale


DECISION:

In order to classify a contract, due attention must be given to its essential
clauses. In the contract in question, what was essential, as constituting its cause and
subject matter, is that the plaintiff was to furnish the defendant with the beds which
the latter might order, at the price stipulated, and that the defendant was to pay the
price in the manner stipulated. Payment was to be made at the end of sixty days, or
before, at the plaintiffs request, or in cash, if the defendant so preferred, and in these
last two cases an additional discount was to be allowed for prompt payment. These are
precisely the essential features of a contract of purchase and sale. 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 to the principal the price he obtains from the sale of the
thing to a third person, and if he does not succeed in 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 defendants 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.
For the foregoing reasons, we are of opinion that the contract by and between the
plaintiff and the defendant was one of purchase and sale, and that the obligations the
breach of which is alleged as a cause of action are not imposed upon the defendant,
either by agreement or by law.


LAW:

Article 1459 applies to the case which covers the requisites of the contract of
sale where in this case are all present.