GREEN VALLEY POULTRY & ALLIED PRODUCTS, INC., petitioner vs.

THE INTERMEDIATE
APPELLATE COURT and E.R. SQUIBB & SONS PHILIPPINE CORPORATION, respondents.
G.R. No. L-49395 December 26, 1984

Doctrine: In an agency to sell, the agent is liable to pay the principal for goods sold by the agent without
the principals consent. 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 him payment in cash, but the
commission agent shall be entitled to any interest or benefit, which may result from such sale.

FACTS: In 1969, GREEN VALEY POULTRY AND ALLIED PRODUCTS entered into a letter agreement with
SQUIBB & SONS PHILIPPINE CORPORATION. The details of the agreement state that Green Valley will be
the nonexclusive distributor of the products of Squibb Veterinary Products. As its distributor, Green Valley
is entitled to 10% discount on Squibbs whole sale price and catalogue price. Green Valley is also limited
to selling Squibbs products to central and northern Luzon. Payment for purchases from Squibb will be
due 60 days from date of invoice, etc. For goods delivered to Green Valley but unpaid, Squibb filed a suit
to collect. Squibb argues that their relationship with Green Valley is a mere contract of sale as evidenced
by the stipulation that Green Valley was obligated to pay for the goods received upon the expiration of
the 60-day credit period. Green Valley counters that the relationship between itself and Squibb is that of
an agency to sell; hence it is not liable to Squibb.

Trial court and CA ruled in favor of Squibb, it ruled that the agreement between the parties was a sales
contract.

ISSUE: Whether Green Valley is liable to Squibb. YES

Whether Green Valley is an agent of Squibb. NO (Court did not answer categorically but it upheld the
ruling of CA)

RULING: The court stated that the court do not have to categorize the contract. Whether viewed as an
agency to sell or as a contract of sale GREEN VALLEY is liable to Squibb for the unpaid products. If it is a
contract of sale then the Green Valley is liable by just merely enforcing the clear words of the contract. If
it is an agency then Green Valley is liable because it sold on credit without authority from its principal. The
Civil Code says:

Art. 1905 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 him payment in cash, but the commission agent
shall be entitled to any interest or benefit, which may result from such sale.