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G.R. No. 117356. June 19, 2000.
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* SECOND DIVISION.
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more than any other, has caused the courts to put contracts
between principal and agent in a separate category.
Same; 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, and the
use of the words „sold and endorsed‰ means that the parties
intended a contract of sale, and not an agency.·It appears plain to
us that private respondent CSC was a buyer of the SLDFR form,
and not an agent of STM. Private respondent CSC was not subject
to STMÊs 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
(STMÊs) 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 CSCÊs
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
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held that CSC was not STMÊs agent and could independently sue
petitioner.
Compensation; Where the articles had been fully paid for, the
vendor and the assignee of vendee are not mutually creditors and
debtors of each other and compensation could not take place
pursuant to Article 1279 of the Civil Code.·On the second issue,
proceeding from the theory that the transactions entered into
between petitioner and STM are but serial parts of one account,
petitioner insists that its debt has been offset by its claim for STMÊs
unpaid purchases, pursuant to Article 1279 of the Civil Code.
However, the trial court found, and the Court of Appeals concurred,
that the purchase of sugar covered by SLDR No. 1214M was a
separate and independent transaction; it was not a serial part of a
single transaction or of one account contrary to petitionerÊs
insistence. Evidence on record shows, without being rebutted, that
petitioner had been paid for the sugar purchased under SLDR No.
1214M. Petitioner clearly had the obligation to deliver said
commodity to STM or its assignee. Since said sugar had been fully
paid for, petitioner and CSC, as assignee of STM, were not mutually
creditors and debtors of each other. No reversible error could
thereby be imputed to respondent appellate court when it refused to
apply Article 1279 of the Civil Code to the present case.
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QUISUMBING, J.:
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1 Records, p. 60.
2 Ibid.
3 Ibid.
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4 Supra Note 1, at 9.
5 Id. at 11.
6 Id. at 12.
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9 CA Rollo, p. 134.
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by SLDR No. 1213 and 1214. Said checks appear to have been
honored and duly credited to the account of Victorias Milling
Company because on October 27, 1989 Victorias Milling Company
issued official receipt no. 34734 in favor of St. Therese
Merchandising for the amount of P31,900,000.00 (Exhibits B and B-
1). The testimony of Teresita Ng Go is further supported by Exhibit
F, which is a computer printout of defendant Victorias Milling
Company showing the quantity and value of the purchases made by
St. Therese Merchandising, the SLDR no. issued to cover the
purchase, the official receipt no. and the status of payment. It is
clear in Exhibit ÂFÊ that with respect to the sugar covered by SLDR
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No. 1214 the same has been fully paid as indicated by the word
ÂclearedÊ appearing under the column of Âstatus of payment.Ê
„On the other hand, the claim of defendant Victorias Milling
Company that the purchase price of the 25,000 bags of sugar
purchased by St. Therese Merchandising covered by SLDR No. 1214
has not been fully paid is supported only by the testimony of
Arnulfo Caintic, witness for defendant Victorias Milling Company.
The Court notes that the testimony of Arnulfo Caintic is merely a
sweeping barren assertion that the purchase price has not been
fully paid and is not corroborated by any positive evidence. There is
an insinuation by Arnulfo Caintic in his testimony that the
postdated checks issued by the buyer in payment of the purchase
price were dishonored. However, said witness failed to present in
Court any dishonored check or any replacement check. Said witness
likewise failed to present any bank record showing that the checks
issued by the buyer, Teresita Ng Go, in payment of the purchase
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price of the sugar covered by SLDR No. 1214 were dishonored.‰
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10 Id. at 131-132.
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11 Rollo, p. 89.
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1990, pp. 16, 18, and 36]) presented by plaintiff-appellee was to the
effect that it had withdrawn only 2,000 bags of sugar from SLDR
No. 1214M, after which it was not allowed to withdraw anymore.
Documentary evidence (Exhibit I, Id., p. 78, Exhibit K, Id., p. 80)
show that plaintiff-appellee had sent demand letters to defendant-
appellant asking the latter to allow it to withdraw the remaining
23,000 bags of sugar from SLDR No. 1214M. Defendant-appellant,
on the other hand, alleged that sugar delivery to the STM
corresponded only to the value of cleared checks; and that all sugar
corresponded to cleared checks had been withdrawn. Defendant-
appellant did not rebut plaintiff-appelleeÊs assertions. It did not
present evidence to show how many bags of sugar had been
withdrawn against SLDR No. 1214M, precisely because of its theory
that all sales in
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12 Id. at 95.
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13 Id. at 93-94.
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14 Id. at 24.
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tice, and due process. Nonetheless, the Court of Appeals
opted to address this issue, hence, now a matter for our
consideration.
Petitioner heavily relies upon STMÊs letter of authority
allowing CSC to withdraw sugar against SLDR No. 1214M
to show that the latter was STMÊs agent. The pertinent
portion of said letter reads:
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15 Spouses Felipe and Irma Buñag v. Court of Appeals, 303 SCRA 591,
596 (1999); Roman Catholic Archbishop of Manila v. Court of Appeals,
269 SCRA 145, 153; 336 Phil. 138, 149 (1997) citing Gevero v.
Intermediate Appellate Court, 189 SCRA 201, 208 (1990).
16 Records, p. 68.
17 Bordador v. Luz, 283 SCRA 374, 382 (1997).
18 Connell v. McLoughlin, 28 Or. 230; 42 P. 218.
19 Halladay v. Underwood, 90 Ill. App. 130.
20 Internal Trust Co. v. Bridges, 57 F. 753.
21 Security Co, v. Graybeal, 85 Iowa 543, 52 N.W. 497.
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gathered from
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the whole scope and effect of the language
employed. That the authorization given to CSC contained
the phrase „for and in our (STMÊs) behalf‰ did not establish
an agency. Ultimately,
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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 CSCÊs
communication to petitioner that
27
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 STMÊs agent and could
independently sue petitioner.
On the second issue, proceeding from the theory that the
transactions entered into between petitioner and STM are
but serial parts of one account, petitioner insists that its
debt has been offset by its claim for STMÊs unpaid 28
purchases, pursuant to Article 1279 of the Civil Code.
However, the trial court found, and the Court of Appeals
concurred, that the purchase
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(1) That each one of the obligors be bound principally and that he be
at the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same
quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy,
commenced by third persons and communicated in due time to
the debtor.‰
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29 Supra Note 1.
30 CIVIL CODE, art. 1308; Rizal Commercial Banking Corp. v. Court
of Appeals, 178 SCRA 739, 744 (1989); Escano v. Court of Appeals, 100
SCRA 197, 202 (1980).
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31
valid and must be upheld. Having transferred title to the
sugar in question, petitioner is now obliged to deliver it to
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Petition denied.
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31 CIVIL CODE, art. 1306; Legarda Koh v. Ongsiaco, 36 Phil. 185, 193
(1917); Icaza, et al. v. Ortega, 5 Phil. 166, 169 (1905).
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