G.R. No.

L-34338, Nov 21, 1984 - 133 SCRA 333

Lourdes Valerio Lim, petitioner, v. People of the Philippines, respondent
Relova, J.

Facts:
 Lourdes Valerio Lim, a businesswoman, was convicted of estafa for failing to fully remit the proceeds from the sale of
615 kilos of tobacco belonging to Maria de Guzman Vda. de Ayroso.
 The agreement, documented in Exhibit "A", specified that Lim would sell the tobacco at P1.30 per kilo and return the
proceeds to Ayroso as soon as it was sold.
 Lim paid Ayroso P240.00 in several installments but failed to pay the remaining balance, leading Ayroso to file a
complaint for estafa.

RTC Ruling:
 Lim was sentenced to imprisonment ranging from four months and one day to two years and four months, ordered to
indemnify Ayroso P559.50, with subsidiary imprisonment in case of insolvency, and to pay the costs.

Court of Appeals Ruling:

 The appellate court affirmed the lower court's decision but modified the penalty, sentencing Lim to an indeterminate
penalty of one month and one day of arresto mayor as minimum to one year and one day of prision correccional as
maximum, to indemnify the complainant P550.50 without subsidiary imprisonment, and to pay the costs of suit.

Issue:
1. Whether the obligation in Exhibit "A" was immediately demandable as soon as the tobacco was sold.
2. If Article 1197 of the New Civil Code, allowing courts to fix the duration of obligations without a specified period,
applies.
3. Whether or not the agreement constituted a contract of agency to sell rather than a contract of sale.

Supreme Court Ruling:

Yes. The Supreme Court held that the agreement constituted a contract of agency to sell rather than a contract of sale.

The Supreme Court applied the doctrine distinguishing between a contract of agency to sell and a contract of sale,
particularly about the fulfillment of obligations when a period is specified for the performance.

In the case at hand, the Court scrutinized the agreement (Exhibit "A") between Lourdes Valerio Lim (petitioner) and Maria
de Guzman Vda. de Ayroso (complainant) to determine the nature of their transaction concerning the tobacco sale.

The Court found that the agreement did not transfer ownership of the tobacco to Lim but instead constituted her as an
agent with the obligation to sell the tobacco at a specified price (P1.30 per kilo) and to turn over the proceeds to Ayroso
"as soon as it was sold."

The Court noted that the agreement explicitly required the proceeds to be delivered to Ayroso immediately upon the sale
of the tobacco, indicating that the obligation was demandable as soon as the tobacco was disposed of.

Consequently, Article 1197 of the New Civil Code, which allows courts to fix the duration of the obligation if it does not
specify a period, was deemed inapplicable by the Court because the agreement stipulated when the obligation was to be
performed.

Furthermore, the Court rejected Lim's contention that the agreement was a contract of sale and upheld the finding that it
was a contract of agency to sell. The Court reasoned that the essence of an agency to sell is the delivery of goods by the
owner (Ayroso) to an agent (Lim) for sale to a third party, with the agent obligated to return the goods or the proceeds of
the sale to the owner.

The agreement's stipulations and the circumstances of the transaction supported this interpretation, demonstrating Lim's
role as an agent rather than a buyer of the tobacco.
Thus, the Supreme Court dismissed the petition for review on certiorari for lack of merit, affirming the lower court's
decision.