W/N CA erred in not ruling that CSC was an agent
Victorias Milling Co.,Inc. v. Court of Appeals
G.R. No. 117356, 19 June 2000
FACTS:
St. Therese Merchandising (STM) regularly bought
sugar from Victorias Milling Co (VMC). In the
course of their dealings, VMC issued several
Shipping List/Delivery Receipts (SLDRs) to STM as
proof of purchases. Among these was SLDR No.
1214M. SLDR No. 1214M, dated October 16, 1989,
covers 25,000 bags of sugar. Each bag contained
50 kg and priced at P638.00 per bag. The
transaction covered was a “direct sale”.
On October 25, 1989, STM sold to private
respondent Consolidated Sugar Corporation (CSC)
its rights in the same SLDR for P14,750,000.00.
CSC issued checks in payment. That same day,
CSC wrote petitioner that it had been authorized by
STM to withdraw the sugar covered by the said
SLDR. Enclosed in the letter were a copy of SLDR
No. 1214M and a letter of authority from STM
authorizing CSC to “withdraw for and in our behalf
the refined sugar covered by the SLDR” On Oct.
27, 1989, STM issued checks to VMC as payment
for 50,000 bags, covering SLDR No. 1214M. CSC
surrendered the SLDR No. 1214M and to VMC’s
NAWACO Warehouse and was allowed to withdraw
sugar. But only 2,000 bags had been released
because VMC refused to release the other 23,000
bags.
Therefore, CSC informed VMC that SLDR No.
1214M had been “sold and endorsed” to it. But
VMC replied that it could not allow any further
withdrawals of sugar against SLDR No. 1214M
because STM had already withdrawn all the sugar
covered by the cleared checks. VMC also claimed
that CSC was only representing itself as STM’s
agent as it had withdrawn the 2,000 bags against
SLDR No. 1214M “for and in behalf” of STM.
Hence, CSC filed a complaint for specific
performance against Teresita Ng Sy (doing
business under STM’s name) and VMC. However,
the suit against Sy was discontinued because later
became a witness. RTC ruled in favor of CSC and
ordered VMC to deliver the 23,000 bags left. CA
concurred. Hence this appeal.
ISSUE:
of STM and hence, estopped to sue upon SLDR
No. 1214M as assignee.
RULING:
NO. CSC was not an agent of STM. VMC heavily
relies on STM’s letter of authority that said CSC is
authorized to withdraw sugar “for and in our behalf”.
It is clear from Art. 1868 that the: basis of agency is
representation. On the part of the principal, there
must be an actual intention to appoint or an
intention naturally inferable from his words or
actions, and on the part of the agent, there must be
an intention to accept the appointment and act on
it, and in the absence of such intent, there is
generally NO agency. One factor, which most
clearly distinguishes agency from other legal
concepts, is control; one person – the agent –
agrees to act under the control or direction of
another – the principal. Indeed, the very word
“agency” has come to connote control by the
principal.
The control factor, more than any other, has
caused the courts to put contracts between
principal and agent in a separate category. Where
the relation of agency is dependent upon the acts
of the parties, the law makes no presumption of
agency and it is always a fact to be proved, with the
burden of proof resting upon the persons alleging
the agency, to show not only the fact of its
existence but also its nature and extent. It appears
that CSC was a buyer and not an agent of STM.
CSC was not subject to STM’s control. The terms
“for and in our behalf” should not be eyed as
pointing to the existence of an agency relation.
Whether or not a contract is one of sale or agency
depends on the intention of the parties as gathered
from the whole scope and effect of the language
employed. Ultimately, what is decisive is the
intention of the parties.
(In fact, CSC even informed VMC that the SLDR
was sold and endorsed to it.)
Agency distinguished from sale.
In an agency to sell, the agent, in dealing with the
thing received, is bound to act according to the
instructions of his principal, while in a sale, the
buyer can deal with the thing as he pleases, being
the owner. The elementary notion of sale is the
transfer of title to a thing from one to another, while
the essence of agency involves the idea of an
appointment of one to act for another. Agency is a
relationship which often results in a sale, but the
sale is a subsequent step in the transaction. (Teller,
op. cit., p. 26; see Commissioner of Internal
Revenue vs. Manila Machinery & Supply Co., 135
SCRA 8 [1985].) An authorization given to another
containing the phrase “for and in our behalf’’ does
not necessarily establish an agency, as ultimately
what is decisive is the intention of the parties. Thus,
the use of the words “sold and endorsed’’ may
mean that the parties intended a contract of sale,
and not a contract of agency.