VICTORIAS MILLING CO. vs. COURT OF APPEALS withdraw sugar “for and in our behalf”. It is clear from Art.

1868 that the: basis of agency is representation. On

FACTS: the part of the principal, there must be an actual

St. Therese Merchandising (STM) regularly intention to appoint or an intention naturally inferable

bought sugar from Victorias Milling Co (VMC). In the from his words or actions, and on the part of the

course of their dealings, VMC issued several Shipping agent, there must be an intention to accept the

List/Delivery Receipts (SLDRs) to STM as proof of appointment and act on it, and in the absence of such

purchases. Among these was SLDR No. 1214M.SLDR intent, there is generally NO agency. One factor, which

No. 1214M, dated October 16, 1989, covers 25,000 bags most clearly distinguishes agency from other legal

of sugar. Each bag contained 50 kg and priced at P638.00 concepts, is control; one person – the agent – agrees to

per bag. The transaction covered was a “direct sale”. act under the control or direction of another – the principal.
Indeed, the very word “agency” has come to connote

On October 25, 1989, STM sold to private control by the principal. The control factor, more than any

respondent Consolidated Sugar Corporation (CSC) its other, has caused the courts to put contracts between

rights in the same SLDR for P14,750,000.00. CSC issued principal and agent in a separate category. Where the

checks in payment. That same day, CSC wrote petitioner relation of agency is dependent upon the acts of the

that it had been authorized by STM to withdraw the sugar parties, the law makes no presumption of agency and it is

covered by the said SLDR. Enclosed in the letter were a always a fact to be proved, with the burden of proof resting

copy of SLDR No. 1214M and a letter of authority from upon the persons alleging the agency, to show not only
STM authorizing CSC to “withdraw for and in our the fact of its existence but also its nature and extent. It
behalf the refined sugar covered by the SLDR” 
On Oct. appears that CSC was a buyer and not an agent of STM.

27, 1989, STM issued checks to VMC as payment for CSC was not subject to STM’s control. The terms “for and
50,000 bags, covering SLDR No. 1214M.
CSC in our behalf” should not be eyed as pointing to the

surrendered the SLDR No. 1214M and to VMC’s existence of an agency relation. Whether or not a

NAWACO Warehouse and was allowed to withdraw contract is one of sale or agency depends on the

sugar. But only 2,000 bags had been released because intention of the parties as gathered from the whole

VMC refused to release the other 23,000 bags. scope and effect of the language employed.
Ultimately, what is decisive is the intention of the

Therefore, CSC informed VMC that SLDR No. parties. (In fact, CSC even informed VMC that the SLDR

1214M had been “sold and endorsed” to it. But VMC was sold and endorsed to it.)

replied that it could not allow any further withdrawals of Agency distinguished from sale.

sugar against SLDR No. 1214M because STM had

In an agency to sell, the agent, in dealing with the thing
already withdrawn all the sugar covered by the cleared
received, is bound to act according to the instructions of
checks. VMC also claimed that CSC was only
his principal, while in a sale, the buyer can deal with the
representing itself as STM’s agent as it had withdrawn the
thing as he pleases, being the owner. The elementary
2,000 bags against SLDR No. 1214M “for and in behalf”
notion of sale is the transfer of title to a thing from one to
of STM. Hence, CSC filed a complaint for specific
another, while the essence of agency involves the idea of
performance against Teresita Ng Sy (doing business
an appointment of one to act for another. Agency is a
under STM's name) and VMC. However, the suit against
relationship which often results in a sale, but the sale is a
Sy was discontinued because later became a witness.
subsequent step in the transaction. (Teller, op. cit., p. 26;
RTC ruled in favor of CSC and ordered VMC to deliver the
see Commissioner of Internal Revenue vs. Manila
23,000 bags left. CA concurred. Hence this appeal.
Machinery & Supply Co., 135 SCRA 8 [1985].) An
ISSUES:
authorization given to another containing the phrase “for
W/N CA erred in not ruling that CSC was an agent of STM
and in our behalf’’ does not necessarily establish an
and hence, estopped to sue upon SLDR No. 1214M as
agency, as ultimately what is decisive is the intention of
assignee.
the parties. Thus, the use of the words “sold and
HELD:
endorsed’’ may mean that the parties intended a contract
NO. CSC was not an agent of STM. VMC heavily relies on
of sale, and not a contract of agency.
STM’s letter of authority that said CSC is authorized to