QUIROGA vs. PARSONS HARDWARE Co. G.R. No.

L-11491, August 23, 1918

FACTS:

On January 24, 1911, a contract was entered into between plaintiff and defendant (to whose rights and obligations the
present defendant later subrogated itself), with the obligation, on the part of the defendant, 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 was his agent for the sale of his beds in
Iloilo, and that said obligations are implied in a contract of commercial agency.

ISSUE:

Whether the contract is a contract of agency or of sale.

RULING:

In order to classify a contract, due regard must be given to its essential clauses. In the contract in question, what was
essential, as constituting its cause and subject matter. There was the obligation on the part of plaintiff to supply the bed,
and, on the part of the defendant, to pay their price. These are precisely the essential features of a contract of purchase
and sale. 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.