Gonzalo Puyat and Sons, Inc. v.

Arco
Amusement Co.
72 Phil. 402
FACTS: Gonzalo Puyat and Sons was the exclusive agent of an American Piano Company, the Starr
Piano Company of Richmond, Indiana, U.S.A. The Arco Amusement entered into a contract with Puyat and Sons,
whereby the latter would order, on behalf of the Arco Amusement Company, certain sound equipment. It was
also agreed that the company would pay Puyat and Sons a 10% commission, plus all expenses.
Puyat and Sons cabled the U.S. company for the price without discount. The price given was P1,700. Puyat
and Sons, with the approval of the Amusement Company, placed the order when it came. Puyat and Sons received
P1,700 from the company plus 10%. Puyat and Sons however did NOT reveal to the Amusement Company
that the former was always given a DISCOUNT by the U.S. Company. When the amusement Company discovered
that the P1,700 was only the list price, and not the net price, it sued Puyat and Sons for reimbursement of the
difference, on the ground that the latter was only its AGENT in obtaining the equipment. Puyat and Sons
however countered that the contract was not an agency to buy, but was one of sale.

Issue: Is the contract between them a sale, or an agency to buy?

Ruling: The contract between them is a SALE, and not an agency to buy; therefore, Puyat and Sons will not
be required to reimburse the difference. It is clear from the facts that had there been a change of price upwards
or a mistake, Puyat and Sons would have been required to give the equipment to the Arco Amusement Co. at
only the agreed amount of P1,700 plus 10%. It follows therefore that Puyat and Sons could not have been an
agent of the Amusement Company, for a true agent is entitled to indemnity for damages incurred in carrying
out the agency without fault, that Puyat and Sons was to receive a 10% commission, this does not necessarily
make it an agent of the Amusement Company. The provision only meant that the Amusement Company bound
itself to pay an additional price. This stipulation is not incompatible with the contract of purchase and sale.
Moreover, since it is an admitted fact that Puyat and Sons was the agent of the U.S. Company, it is out
of the ordinary for it to be also the agent of the Amusement Company. Seldom is the seller also the agent of the
buyer.

SALE
1) The buyer acquires ownership for himself.
2) The buyer who obtains a discount does not have to reveal such fact to its own buyer.
(See Gonzalo Puyat and Sons, Inc. v. Arco Amusement Co., 72 Phil. 402).
3) The buyer pays the price.
Art. 1868