QUIROGA v PARSONS

FACTS: Quiroga and Parsons Hardware entered into a contract where the former granted the
latter the exclusive right to sell Quiroga Beds in the Visayas. It provided for a discount of 25% as
commission for the sales, among other conditions. Quiroga alleged that Parsons breached its
contractual obligations by selling the beds at a higher price, not having an open establishment in
Iloilo, not maintaining a public exhibition, and for not ordering beds by the dozen. Only the last
imputation was provided for by the contract, the others were never stipulated. Quiroga argued
that since there was a contract of agency between them, such obligations were necessarily
implied.
ISSUE: W/N the contract between them was one of agency, not sale

HELD: NO. The agreement between Quiroga and Parsons was that of a simple purchase and
salenot an agency. Quiroga supplied beds, while Parsons had the obligation to pay their
purchase price. These are characteristics of a purchase and sale. In a contract of agency (or
order to sell), the agent does not pay its price yet, and sells the products, remitting to the
principal its proceeds. Unsold products must also be returned to the principal. The provisions on
commission and the use of the word agency in the contract as well as the testimonies in court
do not affect its nature. Contracts are what the law defines it to be, not what the parties call it