GREEN VALLEY POULTRY & ALLIED PRODUCTS, INC. VS.

IAC (GR
NO. L-49395, DECEMBER 26, 1984)

FACTS: Squibb filed a suit against Green Valley for sum of

money. The Court rendered favorable decision on Squibb which
was affirmed by the Court of Appeals.

The antecedent facts may be summarized as follows:

On November 3, 1969 the parties entered into a letter of

agreement whereby Green Valley would be a non-exclusive
distributer for Squibb products. Squibb delivered the goods to
Green Valley and upon collection it failed to pay.

Green Valley contested that the contract with Squibb was

a mere agency to sell; that it never purchased good from Squibb;
the goods received were on consignment only with the obligation to
turn over the proceeds less its commission, or to return the goods if
unsold, and since it had sold the goods but had not been able to
collect from the purchasers.

On the other hand, Squibb claimed that the contract was

one of sale the latter was obligated to pay for the goods received
upon the expiration of the 60 day credit period.

ISSUE: WHETHER OR NOT THE CONTRACT WAS SALE OR

AGENCY?

HELD: Art. 1905 of the Civil Code clearly provides that , 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 his payment in case, but the commission agent shall
be entitled to any interest or benefit which may result from such
sale. The Court did not categorically identified whether the
contract was sale or agency. The liability of Green Valley is
indubitable adopting Green Valleys theory that the contract is an
agency to sell, it is liable because it sold on credit without authority
from its principal.

Meaning

Indubitable certainly true; not able to be doubted

Antecedent the significant events, conditions and traits of ones

earlier life.

- the preceding event, condition or cause.