(5)
GREEN VALLEY V. IAC
In an agency to sell, the agent is liable to pay the
principal for goods sold by the agent without the
principal’s consent.
The commission agent
cannot without the express
or implied consent of the principal, sell on credit.
Should he do so, the principal may demand from him
payment in cash, but the commission agent shall be
entitled to any interest or benefit, which may result
from such sale.
FACTS: In 1969, GREEN VALEY POULTRY AND ALLIED
PRODUCTS entered into a letter agreement with SQUIBB
& SONS PHILIPPINE CORPORATION. The details of the
agreement state that Green Valley will be the non-
exclusive distributor of the products of Squibb Veterinary
Products. As its distributor Green Valley is entitled to
10% discount on Squibb’s whole sale price and catalogue
price. Green Valley is also limited to selling Squibb’s
products to central and northern Luzon. Payment for
purchases from Squibb will be due 60 days from date of
invoice
, etc.
For goods delivered to Green Valley but
unpaid
, Squibb filed a suit to collect. Squibb argues that
their relationship with Green Valley is a mere contract of
sale as evidenced by the stipulation that Green Valley
was obligated to pay for the goods received upon the
expiration of the 60-day credit period. Green Valley
counters that the relationship between itself and Squibb
is that of an agency to sell.
ISSUE: W/N Green Valley is an agent of Squibb.
RULING: Whether viewed as an agency to sell or as a
contract of sale GREEN VALLEY is liable to Squibb for the
unpaid products. If it is a contract of sale then the Green
Valley is liable by just merely enforcing the clear words
of the contract. If it is an agency then Green Valley is
liable because it sold on credit without authority from its
principal. The Civil Code says:
Art. 1905 – The commission agent
cannot without the
express or implied consent of the principal, sell on
credit. Should he do so, the principal may demand from
him payment in cash, but the commission agent shall be
entitled to any interest or benefit, which may result from
such sale.
(6)
INTERNATIONAL FILMS (CHINA) V. LYRIC FILM
A subagent is not obliged to fulfill more than the
contents of the mandate and to answer for the
damages caused to the principal by his failure to do
so.
FACTS: Bernard Gabelman was the Philippine agent of
International Films by virtue of a power of attorney in
1933. In the same year, International Films, through its
agent, leased the film entitled, “Monte Carlo Madness,”
to Lyric Film to be shown in different theaters. One of
the conditions was that Lyric Film would answer for the
loss of the film whatever the cause.
After the last showing of the film, Gabelman requested
Albo, chief of the film department of Lyric Film, to
permit him to deposit the film in the latter’s vault under
Gabelman’s responsibility, since this would not be
covered by the insurance, which Lyric Film carries.
