6. Victorias Milling Co., Inc. vs.

Court of Appeals, 128 SCAD 1, 333 SCRA 663,

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against SLDR No. 1214M because STM had already withdrawn all the sugar covered by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agent as it had withdrawn the 2,000 bags against SLDR No. 1214M “for and in behalf”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:
WON CSC was an agent of STM
RULING:
NO. The Court ruled that private respondent CSC was a buyer of the SLDFR form, and
not an agent of STM. Private respondent CSC was not subject to STM's control. The
question of whether 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.That the
authorization given to CSC contained the phrase "for and in our (STM's) behalf" did not
establish an agency. Ultimately, what is decisive is the intention of the parties. That no
agency was meant to be established by the CSC and STM is clearly shown by CSC's
communication to petitioner that SLDR No. 1214M had been "sold and endorsed" to it.
The use of the words "sold and endorsed" means that STM and CSC intended a
contract of sale, and not an agency. Hence, on this score, no error was committed by
the respondent appellate court when it held that CSC was not STM's agent and could
independently sue petitioner.

7. COMMUNICATION MATERIALS AND DESIGN, INC., ASPAC MULTI-TRADE,

INC., (formerly ASPAC-ITEC PHILIPPINES, INC.) and FRANCISCO S.
AGUIRRE, petitioners,
vs.
THE COURT OF APPEALS, ITEC INTERNATIONAL, INC., and ITEC,
INC., respondents.
FACTS:
Petitioners COMMUNICATION MATERIALS AND DESIGN, INC., (CMDI) and ASPAC
MULTI-TRADE INC., (ASPAC) are both domestic corporations.. Private Respondents
ITEC, INC. and/or ITEC, INTERNATIONAL, INC. (ITEC) are corporations duly
organized and existing under the laws of the State of Alabama, USA. There is no
dispute that ITEC is a foreign corporation not licensed to do business in the Philippines.

ITEC entered into a contract with ASPAC referred to as “Representative Agreement”.

Pursuant to the contract, ITEC engaged ASPAC as its “exclusive representative” in the
Philippines for the sale of ITEC’s products, in consideration of which, ASPAC was paid
a stipulated commission. Through a “License Agreement” entered into by the same
parties later on, ASPAC was able to incorporate and use the name “ITEC” in its own
name. Thus , ASPAC Multi-Trade, Inc. became legally and publicly known as ASPAC-
ITEC (Philippines).

One year into the second term of the parties’ Representative Agreement, ITEC decided
to terminate the same, because petitioner ASPAC allegedly violated its contractual
commitment as stipulated in their agreements. ITEC charges the petitioners and
another Philippine Corporation, DIGITAL BASE COMMUNICATIONS, INC. (DIGITAL),
the President of which is likewise petitioner Aguirre, of using knowledge and information
of ITEC’s products specifications to develop their own line of equipment and product
support, which are similar, if not identical to ITEC’s own, and offering them to ITEC’s
former customer.

The complaint was filed with the RTC-Makati by ITEC, INC. After conducting hearings
on the prayer for preliminary injunction, the court a quo issued its Order: (1) denying
the motion to dismiss for being devoid of legal merit with a rejection of both grounds
relied upon by the defendants in their motion to dismiss, and (2) directing the issuance
of a writ of preliminary injunction on the same day. Petitioners elevated the case to CA
but was also dismissed. A MR was filed but denied, hence this Petition.

ISSUE:
whether or not ASPAC is a representative of private respondent ITEC
RULING:

Yes. A perusal of the agreements between petitioner ASPAC and the respondents
shows that there are provisions which are highly restrictive in nature, such as to reduce
petitioner ASPAC to a mere extension or instrument of the private respondent. When
ITEC entered into the disputed contracts with ASPAC and TESSI, they were carrying
out the purposes for which it was created, i.e., to market electronics and
communications products. The terms and conditions of the contracts as well as ITEC's
conduct indicate that they established within our country a continuous business, and not
merely one of a temporary character. Notwithstanding such finding that ITEC is doing
business in the country, petitioner is nonetheless estopped from raising this fact to bar
ITEC from instituting this injunction case against it.

The purpose of the law in requiring that foreign corporations doing business in the
Philippines be licensed to do so and that they appoint an agent for service of process is
to subject the foreign corporation doing business in the Philippines to the jurisdiction of
its courts. The object is not to prevent the foreign corporation from performing single
acts, but to prevent it from acquiring a domicile for the purpose of business without
taking steps necessary to render it amenable to suit in the local courts. The implication
of the law is that it was never the purpose of the legislature to exclude a foreign
corporation which happens to obtain an isolated order for business from the Philippines,
and thus, in effect, to permit persons to avoid their contracts made with such foreign
corporations.

8. Rosa Lim vs CA, GR No. 102784, Feb 28, 1996

FACTS:
Petitioner Rosa Lim who had come from Cebu received from private respondent Victoria
Suarez the following two 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. The agreement was reflected in a receipt. The prosecution noted the fact that
petitioner returned the bracelet to Vicky Suarez, but failed to return the diamond ring or
to turn over the proceeds thereof if sold. As a result, private complainant, 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, petitioner, thru counsel, wrote a
letter to private respondent's counsel alleging that Rosa Lim had returned both ring and
bracelet to Vicky Suarez, sometime in September, 1987, for which reason, petitioner
had no longer any liability to Mrs. Suarez insofar as the pieces of jewelry were
concerned. Irked, Vicky Suarez filed a complaint for estafa under Article 315, par.
1(b) of the Revised Penal Code for which the petitioner herein stands convicted.
ISSUE: WON there was a contract of agency to sell on commission basis
RULING:
YES. The receipt marked as Exhibit "A" establishes a contract of agency to sell on
commission basis between Vicky Suarez and Rosa Lim. Rosa Lim's signature indeed
appears on the upper portion of the receipt immediately below the description of the
items taken. We find that this fact does not have the effect of altering the terms of the
transaction from a contract of agency to sell on commission basis to a contract of sale.
Neither does it indicate absence or vitiation of consent thereto on the part of Rosa Lim
which would make the contract void or voidable. The moment she affixed her signature
thereon, petitioner became bound by all the terms stipulated in the receipt. She, thus,
opened herself to all the legal obligations that may arise from their breach. However,
there are some provisions of the law which require certain formalities for particular
contracts. The first is when the form is required for the validity of the contract; the
second is when it is required to make the contract effective as against third parties such
as those mentioned in Articles 1357 and 1358; and the third is when the form is required
for the purpose of proving the existence of the contract, such as those provided in the
Statute of Frauds in Article 1403. A contract of agency to sell on commission basis does
not belong to any of these three categories, hence it is valid and enforceable in
whatever form it may be entered into.

9. COSMIC LUMBER CORPORATION, petitioner, vs COURT OF APPEAL and

ISIDRO PEREZ, respondents.
G.R. No. 114311 November 29, 1996
FACTS:

COSMIC LUMBER CORPORATION through its General Manager executed on 28

January 1985 a Special Power of Attorney appointing Paz G. Villamil-Estrada as
attorney-in-fact —

. . . to initiate, institute and file any court action for the ejectment of third persons
and/or squatters of the entire lot 9127 and 443 and covered by TCT Nos. 37648
and 37649, for the said squatters to remove their houses and vacate the
premises in order that the corporation may take material possession of the entire
lot, and for this purpose, to appear at the pre-trial conference and enter into any
stipulation of facts and/or compromise agreement so far as it shall protect the
rights and interest of the corporation in the aforementioned lots. 
Paz G. Villamil-Estrada, by virtue of her power of attorney, instituted an action for the
ejectment of private respondent Isidro Perez and recover the possession of a portion of
Lot No. 443 before the Regional Trial Court of Dagupan, docketed as Civil Case No. D-
7750. Villamil-Estrada entered into a Compromise Agreement with respondent Perez
and was approved by the trial court and judgment was rendered in accordance
therewith.

Although the decision became final and executory it was not executed within the 5-year
period from date of its finality allegedly due to the failure of petitioner to produce the
owner's duplicate copy of Title No. 37649 needed to segregate from Lot No. 443 the
portion sold by the attorney-in-fact, Paz G. Villamil-Estrada, to private respondent under
the compromise agreement. Thus on 25 January 1993 respondent filed a complaint to
revive the judgment. Now, Petitioner, Cosmic Lumber Corp. asserts that it was only
when the summons for the revival of judgment was served upon it that it came to know
of the compromise agreement entered into between, the AIF Paz G. Villamil-Estrada
and respondent Isidro Perez.
Upon learning of the fraudulent transaction, petitioner sought annulment of the decision
of the trial court before respondent Court of Appeals on the ground that the compromise
agreement was void; but was dismissed. Hence, this petition.

ISSUE:
WON the respondent is authorized to enter in a compromise agreement

RULING:
NO. Nowhere in the authorization was Villamil-Estrada granted expressly or impliedly
any power to sell the subject property nor a portion thereof. Neither can a conferment of
the power to sell be validly inferred from the specific authority "to enter into a
compromise agreement" because of the explicit limitation fixed by the grantor that the
compromise entered into shall only be "so far as it shall protect the rights and interest of
the corporation in the aforementioned lots." In the context of the specific investiture of
powers to Villamil-Estrada, alienation by sale of an immovable certainly cannot be
deemed protective of the right of petitioner to physically possess the same, more so
when the land was being sold for a price of P80.00 per square meter, very much less
than its assessed value of P250.00 per square meter, and considering further that
petitioner never received the proceeds of the sale. When the sale of a piece of land or
any interest thereon is through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void. It is therefore clear that by selling to respondent Perez
a portion of petitioner's land through a compromise agreement, Villamil-Estrada acted
without or in obvious authority. The sale ipso jure is consequently void; so is the
compromise agreement.