QUIROGA vs.

PARSONS HARDWARE CO (1918) – “Quiroga beds case” Don Andres Quiroga entered into a contract with Parsons Hardware granting Parsons with the exclusive right to sell his beds in the Visayan Islands, and also provided the following conditions: 1. Parsons shall invoice them at the same price Quiroga has fixed for sales in Manila, and in the invoices, shall make an allowance for a discount of 25% of the invoiced prices as commission on the sales. Parsons shall order the beds by the dozen, whether of the same or of difference styles. 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

2. 3.

Quiroga filed a complained for Parsons’ breach of the following obligation: 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 beds by the dozen and in no manner. Was Parsons by reason of the contract, a PURCHASER or an AGENT of the plaintiff for the sale of his beds? PURCHASER. The contract that Quiroga and Parsons had all the essential features of a contract of purchase and sale. Not a single one of the clauses necessarily conveys the idea of an agency. The words “commission on sales” in clause (A) of Article 1 mean nothing else, as stated in the contract itself, than a “mere discount” on the invoice price. The words “agency” only expresses that the defendant was the only one that could sell the Quiroga beds in the Visayan Islands. The breach of obligatons which was alleged as a cause of action are not imposed upon the defendant, either by agreement or by law. A contract is what the law defines it to be, and not what it is called by the contracting parties.

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