14. Quiroga v.

Parsons Hardware, 38 Phil 501, August 23, 1918

FACTS:

On Jan 24, 1911, plaintiff and the respondent entered into a contract making the latter an “agent” of the
former. The contract stipulates that Don Andres Quiroga, here in petitioner, grants exclusive rights to sell his
beds in the Visayan region to J. Parsons. The contract only stipulates that J.Parsons should pay Quiroga within
6 months upon the delivery of beds.

Subsequently, Quiroga files a case against Parsons for allegedly violating the following stipulations: 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. With the exception of the obligation on the part of
the defendant to order the beds by the dozen and in no other manner, none of the obligations imputed to the
defendant in the two causes of action are expressly set forth in the contract.But the plaintiff alleged that the
defendant was his agent for the sale of his beds in Iloilo, and that said obligations are implied in a contract of
commercial agency. The whole question, therefore, reduced itself to a determination as to whether the
defendant, by reason of the contract hereinbefore transcribed, was a purchaser or an agent of the plaintiff for
the sale of his beds.

ISSUE:

Whether or not the contract entered into between the plaintiff and defendant is a contract of agency.

RULING:

NO. 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
plaintiff’s request, or in cash, if the defendant so preferred.

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.