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ROSA LIM, petitioner, vs.


Facts: Petitioner Rosa Lim received from private respondent Victoria Suarez two pieces of
jewelry to be sold on commission basis. Petitioner returned the bracelet to Vicky Suarez, but
failed to return the diamond ring or to turn over the proceeds thereof if sold. Vicky Suarez filed a
complaint for estafa under Article 315, par. 1(b) of the Revised Penal Code for which the
petitioner herein stands convicted. Petitioner maintains that she cannot be liable for estafa since
she never received the jewelries in trust or on commission basis from Vicky Suarez. The real
agreement between her and the private respondent was a sale on credit with Mrs. Suarez as the
owner-seller and petitioner as the buyer, as indicated by the fact that petitioner did not sign on
the blank space provided for the signature of the person receiving the jewelry but at the upper
portion thereof immediately below the description of the items taken.
Issue: what was the real transaction between Rosa Lim and Vicky Suarez?
Ruling: Rosa Lims signature indeed appears on the upper portion of the receipt immediately
below the description of the items taken. We find that this fact does not have the effect of altering
the terms of the transaction from a contract of agency to sell on commission basis to a contract of
sale. Neither does it indicate absence or vitiation of consent thereto on the part of Rosa Lim
which would make the contract void or voidable. The moment she affixed her signature thereon,
petitioner became bound by all the terms stipulated in the receipt. She, thus, opened herself to all
the legal obligations that may arise from their breach. This is clear from Article 1356 of the New
Civil Code which provides: Contracts shall be obligatory in whatever form they may have been
entered into, provided all the essential requisites for their validity are present. In the case before
us, the parties did not execute a notarial will but a simple contract of agency to sell on
commission basis, thus making the position of petitioners signature thereto immaterial. There are
some provisions of the law which require certain formalities for particular contracts. The first is
when the form is required for the validity of the contract; the second is when it is required to
make the contract effective as against the third parties such as those mentioned in Articles 1357
and 1358; and the third is when the form is required for the purpose of proving the existence of
the contract, such as those provided in the Statute of Frauds in Article 1403. A contract of agency
to sell on commission basis does not belong to any of these three categories, hence, it is valid and
enforceable in whatever form it may be entered into
Orient-Air Services and Hotel Representatives vs. Court of Appeals
Facts: American Airlines, Inc. (hereinafter referred to as American Air), an air carrier offering
passenger and air cargo transportation in the Philippines, and Orient Air Services and Hotel
Representatives (hereinafter referred to as Orient Air), entered into a General Sales Agency
Agreement (hereinafter referred to as the Agreement), whereby the former authorized the latter to
act as its exclusive general sales agent within the Philippines for the sale of air passenger
transportation.Alleging that Orient Air had reneged on its obligations under the Agreement by
failing to promptly remit the net proceeds of American Air by itself undertook the collection of
the proceeds of tickets sold originally by Orient Air and terminated forthwith the.American Air
instituted suit against Orient Air with the Court of First Instance of Manila, Trial Court ruled in
favor of Orient Air ordering American Air to“reinstate defendant as its general sales agent for
passenger transportation in the Philippines in accordance with the said GSA Agreement.” Court
of Appeals affirmed the decision of the Trial Court.
Issue: Whether the CA erred in affirming the decision of the lower court
Ruling:Yes. We refer particularly to the lower court's decision ordering American Air to
"reinstate defendant as its general sales agent for passenger transportation in the Philippines in
accordance with said GSA Agreement."
By affirming this ruling of the trial court, respondent appellate court, in effect, compels
American Air to extend its personality to Orient Air. Such would be violative of the principles
and essence of agency, defined by law as a contract whereby "a person binds himself to render
some service or to do something in representation or on behalf of another, WITH THE
CONSENT OR AUTHORITY OF THE LATTER .17 (emphasis supplied) In an agent-principal
relationship, the personality of the principal is extended through the facility of the agent. In so
doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts which the
latter would have him do. Such a relationship can only be effected with the consent of the
principal, which must not, in any way, be compelled by law or by any court. The Agreement
itself between the parties states that "either party may terminate the Agreement without cause by
giving the other 30 days' notice by letter, telegram or cable." (emphasis supplied) .