Case Summary (G.R. No. L-49395)
Factual Background
On November 3, 1969, E.R. Squibb & Sons Philippine Corporation and Green Valley Poultry & Allied Products, Inc. executed a letter appointing Green Valley as a non-exclusive distributor for Squibb veterinary products and prescribing a discount and pricing structure, specified territorial exclusivity for Central Luzon and Northern Luzon including Cagayan Valley, a P20,000 bond requirement, and a payment term of sixty days from invoice with prohibition against post-dated checks. Squibb delivered goods to Green Valley pursuant to that arrangement. Green Valley received the goods but did not remit payment to Squibb within the terms claimed by Squibb.
Trial Court Proceedings
Squibb filed suit to collect for goods delivered and unpaid. The trial court rendered judgment in favor of Squibb ordering the defendant to pay P48,374.74 plus P96.00 with interest at six percent per annum from the filing of the action, awarded attorney’s fees in the amount of P5,000.00, and taxed costs against the defendant.
Court of Appeals' Ruling
The defunct Court of Appeals affirmed the trial court’s judgment. The Court of Appeals sustained Squibb’s claim that the parties’ agreement constituted a contract obligating Green Valley to pay for the delivered goods according to the credit term invoked by Squibb.
The Parties' Contentions
Green Valley Poultry & Allied Products, Inc. advanced that the letter agreement created a consignment or agency to sell, not a sale; that it never purchased the goods and was obligated only to turn over proceeds less commission or to return unsold goods; and that because it sold goods on credit and had not collected from its purchasers the action by Squibb was premature. E.R. Squibb & Sons Philippine Corporation maintained that the agreement was a contract of sale and that Green Valley was therefore bound to pay for the goods upon expiration of the sixty-day credit period.
Supreme Court's Analysis
The Court declined to rest its decision on categorizing the contract strictly as sale or agency. The Court reasoned that liability was clear under either characterization. Adopting the respondent’s alternative theory that the contract might be an agency, the Court applied the rule governing commission agents and credit sales without authority.
Legal Basis and Reasoning
The Court invoked Art. 1905, Civil Code, which provides that a commission agent cannot, without the express or implied consent
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Parties and Posture
- Green Valley Poultry & Allied Products, Inc. was the petitioner before the Supreme Court.
- The Intermediate Appellate Court and E.R. Squibb & Sons Philippine Corporation were the respondents.
- The petition sought review of a decision of the defunct Court of Appeals affirming a trial court judgment for the respondent claimant.
- The Supreme Court dismissed the petition and affirmed the judgment of the Court of Appeals with costs against the petitioner.
Facts
- On November 3, 1969, E.R. Squibb & Sons Philippine Corporation and Green Valley Poultry & Allied Products, Inc. executed a letter agreement appointing Green Valley as a non-exclusive distributor.
- The agreement set a discount structure described as "Feed Store Price (Catalogue) Less 10%," "Wholesale Price Less 10%," and "Distributor Price."
- The agreement contained exceptions including special commission rules for Afsillin Improved and narrow-spectrum injectable antibiotics and special commission rules for deals and special offers.
- The agreement limited Green Valley's territory to Central Luzon and Northern Luzon including Cagayan Valley and prohibited transfers outside those areas.
- The agreement required Green Valley to accept turn-over orders, to post a bond of P20,000.00, and to make payment for purchases within sixty days from invoice with no post-dated checks allowed.
- Squibb delivered goods to Green Valley and later sued to recover unpaid amounts for goods delivered.
Procedural History
- The trial court rendered judgment in favor of E.R. Squibb & Sons Philippine Corporation ordering Green Valley Poultry & Allied Products, Inc. to pay P48,374.74 plus P96.00 with interest at six percent per annum from filing, plus attorney's fees of P5,000.00 and costs.
- The defunct Court of Appeals affirmed the trial court judgment.
- Green Valley filed a petition for review in the Supreme Court which the Court dismissed, thereby affirming th