Rosa Lim (P) vs CA

G.R. No. 102784

February 28, 1996

Facts: Petitioner Rosa Lim who had come from Cebu received from private respondent Victoria
Suarez the following 2 pieces of jewelry; one (1) 3.35 carat diamond ring worth P169,000.00 and
one (1) bracelet worth P170,000.00, to be sold on commission basis. Lim returned the bracelet to
Suarez, but failed to return the diamond ring or to turn over the proceeds thereof if sold. Suarez,
aside from making verbal demands, wrote a demand letter to petitioner asking for the return of said
ring or the proceeds of the sale thereof. In response, Lim, thru counsel, wrote a letter to private
respondent's counsel alleging that she had returned both ring and bracelet to Suarez so Lim had
no longer any liability to Suarez insofar as the pieces of jewelry were concerned. Suarez filed a
complaint for estafa for which the petitioner herein stands convicted.

In Lim’s version, she denied that the transaction was for her to sell the 2 pieces of jewelry on
commission basis. She told Suarez that she would consider buying the pieces of jewelry for her
own use and that she would inform her before she goes back to Cebu. Lim took the pieces of
jewelry and told Suarez to prepare the "necessary paper for me to sign because I was not yet
prepare (d) to buy it.” After the document was prepared, Lim signed it and insists that she signed
the aforesaid document on the upper portion thereof and not at the bottom where a space is
provided for the signature of the person(s) receiving the jewelry to prove that she did not agree to
the terms of the receipt regarding the sale on commission basis.

Before departing for Cebu, petitioner called up Suarez by telephone in order to inform her that she
was no longer interested in the ring and bracelet. Suarez replied that she was busy at the time and
so, she instructed the Lim to give the pieces of jewelry to Aurelia Nadera who would in turn give
them back to the private complainant. Lim did as she was told and gave the two pieces of jewelry
to Nadera as evidenced by a handwritten receipt.

Issue: Was the real transaction between Lim & Suarez a real contract of agency to sell on
commission basis as set out in the receipt or a sale on credit?

Held: Yes. Lim’s signature indeed appears on the upper portion of the receipt below, but this fact
doesn’t have the effect of altering the terms of the transaction form a contract of agency to sell on
commission basis to a contract of sale. The moment she affixed her signature thereon, Lim
became bound by all the terms stipulated in the receipt.

Contracts shall be obligatory in whatever form they may have been entered into, provided all the
essential requisites for their validity are present. However there are some provisions in law w/c
require certain formalities for particular contracts. The 1st is when the form is required for the
validity of the contract; the 2nd is when it is required to make the contract effective as against 3rd
parties; and the 3rd is for the purpose of proving the existence of the contract, e.g. those included
in the Statute of Frauds. A contract of agency to sell on commission basis doesn’t belong to any of
these 3 categories, hence it is valid and enforceable in whatever form they may be entered into.

There is only 1 type of legal instrument where the law strictly prescribes the location of the
signature of the parties thereto. This is in case of notarial wills. But in the case at bar, the parties
didn’t execute a notarial will but a simple contract of agency to sell on commission basis, thus
making the position of Lim’s signature immaterial.