G.R. No. L-47538 – GONZALO PUYAT & SONS, INC., petitioner, vs. ARCO AMUSEMENT COMPANY (formerly known as Teatro Arco), respondent.
LAUREL, J.
Rule Synopsis
Meeting of the minds of the buyer and the seller as to the object and consideration perfects a contract of sale. Where compliance to the obligations arising therefrom may be demanded without consideration as to the compliance of the purported agent (buyer) to the instructions of the purported principal (seller), the contract is not one of agency.
Facts
Gonzalo Puyat and Sons, Inc. (Puyat) was the exclusive agent of Starr Piano Company (Indiana, USA; Starr) in the Philippines. Arco Amusement Company (Arco) sought to purchase musical instruments from Starr via Puyat. Under the agreement between Puyat and Arco, the latter will pay cost, plus 10% commission, and shall bear related costs and taxes. Arco placed and received two orders. However, Arco later learned that Puyat was able to obtain 25% discount from Starr. Arco thus believed that it made overpayments to Puyat.
The buyer filed an action to secure reimbursement of alleged overpayments. The RTC absolved Puyat, holding that the contract between the parties was one of purchase and sale. The CA reversed, finding an agent-principal relationship between the parties. The SC reversed.
Issue
What was the nature of the contract between the parties – purchase and sale, or agency?
Ruling and Discussion
The contract between the parties is one of purchase and sale.
The buyer clearly agreed to the purchase price set by the buyer, this is evidenced by the letters sent by the former to the latter accepting said price. The contract has the force of law between the parties and must be complied with in good faith. As provided for, the seller may hold that buyer liable for the price agreed upon regardless of unfavorable events (e.g. mistake in quotation). This feature is incompatible with the contract of agency whereby the agent is relieved of liability only if it complied with the instructions of the principal.
The 10% commission paid to Puyat does not necessarily mean that it was an agent. The same was merely an additional price that the buyer undertook to pay, and which is not incompatible with the contract of purchase and sale.
Furthermore, since it was already admitted that Puyat was the exclusive agent of Starr Piano, it can no longer be the agent of the buyer. It is out of the ordinary for one to be the agent of both the vendor and the purchaser.
As such, Puyat as a vendor is not bound to reimburse the respondent as vendee for any difference between the cost price and the sales price which represents the profit.
Dispositive
Petition granted. Decision reversed.