Green Valley Poultry & Allied Products, Inc. vs.

Intermediate Appellate Court

GR No. L-49395. 26 December 1984
Facts:
- Squibb and Green Valley entered into a letter agreement where it is
stipulated that:
o GV is the non-exclusive distributor of the products of Squibb
Veterinary Products.
o GV, as distributor, is entitled to 10% discount on Squibbs whole
sale price and catalogue price.
o GV is limited to selling Squibbs products to central and northern
Luzon.
o Payment for purchases from Squibb will be due 60 days from the
date of invoice.
- For goods delivered to GV but unpaid, Squibb filed suit to collect.
- RTC & CA: in favor of Squibb.
- Squibb argues that their relationship with GV is a mere contract of sale
evidenced by the stipulation that GV was obligated to pay for the
goods after the 60-day period.
- GV counters that their relationship is that of an agency to sell, thus
theres no obligation to turn over the proceeds or goods if not sold, and
since it had sold the goods but not been able to collect from the
purchases, the action was premature.
Issue:
- WON the agreement was an agency to sell and if so, relieves GV of
liability
Held:
- No. Petition dismissed.
Ruling:
- GV is liable for the unpaid products regardless of the type of contract.
[But RTC and CA decided it was a contract of sale]
- If it is a contract of sale, then GV is liable by just merely enforcing the
clear words of the contract.
- Adopting GVs theory that it is an agency to sell, GV is liable because it
sold on credit without authority from its principal.
o Art. 1905: - the commission agent cannot without the express or
implied consent of the principal, sell on credit. Should he do so,
the principal may demand from him payment in cash, but the
commission agent shall be entitled to any interest or benefit,
which may result from such sale.