ANDRES QUIROGA V. PARSONS HARDWARE CO.
at a higher price; (b) Not having an establishment in Iloilo to conduct the agency;
August 23, 1918 | Avancena, J. | Syllabus topic
DIGEST MADE BY:
DAVE U.
CLUE: Quiroga Beds
PETITIONER: Andres Quiroga
RESPONDENTS: Parsons Hardware Co.
DOCTRINE:
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, is that the plaintiff was to furnish the defendant with the beds which the latter
might order, at the price stipulated, and that the defendant was to pay the price in the
manner stipulated.
RECIT- READY SUMMARY:
Quiroga and Parsons entered into a contract where the latter shall become the
exclusive right to sell Quiroga beds in the Visayan Islands. However, Quiroga imputes
that Parsons violated the contract by: (a) Selling beds at a higher price; (b) Not having
an establishment in Iloilo to conduct the agency; (c) Not keeping beds in open
exhibition; (d) Not paying for advertising expenses; and (e) Not ordering beds by the
dozen. Of the imputations however, only the last imputation was provided for by the
contract while the others were not stipulated. Quiroga argued that since there was a
contract of agency between them, such obligations were necessarily implied. Issue in
this case is WON the contract entered between the parties is a contract of agency and
not of sale.
From the essential clauses of the contract, it can be gleaned that the agreement is a
contract of purchase and sale and not of agency. Under the agreement, Quiroga was
bound to supply beds to Parsons while Parsons was bound to pay the agreed upon
price within 60 days from the date of shipment. These features exclude the legal
conception of an agency where the agent received the thing to sell, delivers to the
principal the price he obtains from the sale of the thing, and if he does not succeed in
selling it, he returns it. In this case, Parsons is still obliged to pay Quiroga a price of the
beds regardless of whether the beds were sold or not.
FACTS:
1. Quiroga and Parsons entered into a contract where the latter shall become the
exclusive right to sell Quiroga beds in the Visayan Islands. Under the contract, the
following stipulations were made among others: (a) Parsons shall have an
allowance of a 25% discount on the invoice as sales commission; (b) Parsons shall
order beds by the dozen; (c) Parsons shall pay Quiroga for the beds received within
a period of 60 days from the date of shipment; (d) Expenses on transportation and
shipping shall be borne by Quiroga while freight, insurance and unloading of cargo
shall be borne by Parsons; (e) If Mr. Quiroga shall ask for payment at an earlier
date, payment shall be promptly made at a 2% deduction; (f) Mr. Quiroga shall be
bound to give notice to Parsons in case of price alterations within 15 days; and (g)
Parsons shall not sell any beds other than Quiroga beds.
2. However, Quiroga imputes that Parsons violated the contract by: (a) Selling beds
(c) Not keeping beds in open exhibition; (d) Not paying for advertising expenses;
and (e) Not ordering beds by the dozen.
3. Of the imputations however, only the last imputation was provided for by the
contract while the others were not stipulated. Quiroga argued that since there was
a contract of agency between them, such obligations were necessarily implied.
ISSUE/S:
1. WON the contract entered between the parties is a contract of agency and not of
sale.
RULING:
For the foregoing reasons, the court is of the opinion that the contract by and between
the plaintiff and the defendant was one of purchase and sale, and that the obligations
the breach of which is alleged as a cause of action are not imposed upon the defendant,
either by agreement or by law.
RATIO:
1. NO
● 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, is that the plaintiff was to furnish the defendant with the beds which
the latter might order, at the price stipulated, and that the defendant was to pay
the price in the manner stipulated.
● From the essential clauses of the contract, it can be gleaned that the agreement
is a contract of purchase and sale and not of agency. Under the agreement,
Quiroga was bound to supply beds to Parsons while Parsons was bound to pay
the agreed upon price (price of the beds being 25% off the price of the beds in
Manila) within 60 days from the date of shipment.
● These features exclude the legal conception of an agency where the agent
received the thing to sell, delivers to the principal the price he obtains from the
sale of the thing, and if he does not succeed in selling it, he returns it.
● By virtue of the contract between the plaintiff and the defendant, the latter, on
receiving the beds, was necessarily obliged to pay their price within the term fixed,
without any other consideration and regardless as to whether he had or had not
sold the beds.
● In the case of the Parsons’ obligation to order by the dozen, the effect of its breach
would only entitle the Quiroga to disregard the orders. But if the plaintiff consents
to fill them, he waives his right and cannot complain for having acted thus at his
own free will.