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VICTORIAS MILLING CO., INC v. CA G.R. No. 117356. June 19, 2000

This document summarizes a Supreme Court case from 2000 between Victorias Milling Co. and Consolidated Sugar Corporation. It discusses that St. Therese Merchandising regularly bought sugar from Victorias Milling and was issued a Shipping List/Delivery Receipt for 25,000 bags. St. Therese then sold its rights to the sugar covered by the receipt to Consolidated Sugar. When Consolidated Sugar tried to withdraw the remaining 23,000 bags, Victorias Milling refused, claiming the sugar had already been withdrawn. The Supreme Court ruled that Consolidated Sugar was an assignee, not an agent of St. Therese Merchandising, and was entitled to the sugar that had already been

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46 views2 pages

VICTORIAS MILLING CO., INC v. CA G.R. No. 117356. June 19, 2000

This document summarizes a Supreme Court case from 2000 between Victorias Milling Co. and Consolidated Sugar Corporation. It discusses that St. Therese Merchandising regularly bought sugar from Victorias Milling and was issued a Shipping List/Delivery Receipt for 25,000 bags. St. Therese then sold its rights to the sugar covered by the receipt to Consolidated Sugar. When Consolidated Sugar tried to withdraw the remaining 23,000 bags, Victorias Milling refused, claiming the sugar had already been withdrawn. The Supreme Court ruled that Consolidated Sugar was an assignee, not an agent of St. Therese Merchandising, and was entitled to the sugar that had already been

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VICTORIAS MILLING CO., INC v. CA G.R. No. 117356.

June 19, 2000

VICTORIAS MILLING CO., INC., petitioner, vs. COURT OF APPEALS and CONSOLIDATED SUGAR
CORPORATION, respondents.

- St. Therese Merchandising (STM) regularly bought sugar from petitioner Victorias Milling Co., Inc.,
(VMC)
- petitioner issued several Shipping List/Delivery Receipts (SLDRs) to STM as proof of purchases
- among these was SLDR No. 1214M, subject of this case
- SLDR No. 1214M covers 25,000 bags of sugar  each bag contained 50 kilograms and priced at
P638.00 per bag as “per sales order VMC Marketing No. 042 dated October 16, 1989” covering
transactions of “direct sale”
- also contained an additional note  “subject to availability of stock at NAWACO (warehouse)”
- On October 25, 1989, STM sold to private respondent Consolidated Sugar Corporation (CSC) its rights
in SLDR No. 1214M for P14,750,000.00
- CSC issued one check dated October 25, 1989 and 3 checks postdated November 13, 1989 in payment
- same day  CSC wrote petitioner that it had been authorized by STM to withdraw the sugar covered by
SLDR No. 1214M  enclosed in the letter: copy of SLDR No. 1214M and a letter of authority from STM
authorizing CSC “to withdraw for and in our behalf the refined sugar covered by Shipping
List/Delivery Receipt-Refined Sugar (SDR) No. 1214 dated October 16, 1989 in the total quantity of
25,000 bags”
- On October 27, 1989, STM issued 16 checks in the total amount of P31,900,000.00 with petitioner as
payee  petitioner issued OR as acknowledgement receipt of the said checks in payment of 50,000 bags
(Aside from SLDR No. 1214M, said checks also covered SLDR No. 1213)
- CSC surrendered SLDR No. 1214M to the petitioner’s NAWACO warehouse and was allowed to
withdraw sugar
- after 2,000 bags had been released, petitioner refused to allow further withdrawals of sugar against
SLDR No. 1214M for the remaining 23K bags
- upon inquiry, petitioner replied that it could not allow any further withdrawals of sugar against SLDR No.
1214M because STM had already withdrawn all the sugar covered by the cleared checks
- CSC demanded release of 23K
- after 7 days, petitioner refused again and noted that CSC had represented itself to be STM’s agent as it
had withdrawn the 2,000 bags against SLDR No. 1214M “for and in behalf” of STM

RTC Makati -- CSC complaint for specific performance against petitioner and Teresita Ng Sy (doing
business under the name of St. Therese Merchandising)
- alleged that STM had fully paid petitioner for the sugar covered by SLDR No. 1214M, no justification for
refusal to release
- summons not served to Ng Sy
- during trial  discovered that Teresita Ng Go who testified for CSC was the same Teresita Ng Sy who
could not be reached through summons – CSC did not bother to pursue its case against her, but instead
used her as its witness. CSC’s complaint alleged that

Petitioner’s primary defense a quo -- unpaid seller for the 23,000 bag and could no longer authorize
further delivery of sugar to CSC since STM had already drawn in full all the sugar corresponding to the
amount of its cleared checks
- contended that it had no privity of contract with CSC
- SLDR issued -- not documents of title, but mere delivery receipts issued pursuant to a series of
transactions entered into between it and STM and SLDRs prescribed delivery of the sugar to the party
specified therein and did not authorize the transfer of said party’s rights and interests
- CSC did not pay for the SLDR and was actually STM’s co-conspirator to defraud it through a
misrepresentation that CSC was an innocent purchaser for value and in good faith
RTC found, and the Court of Appeals concurred, that CSC was not an agent of STM and could
independently sue petitioner
-- the purchase of sugar covered by SLDR No. 1214M was a separate and independent transaction  it
was not a serial part of a single transaction or of one account contrary to petitioner’s insistence
- evidence on record shows, without being rebutted, that petitioner had been paid for the sugar
purchased under SLDR No. 1214M
- Petitioner clearly had the obligation to deliver said commodity to STM or its assignee
- Since said sugar had been fully paid for, petitioner and CSC, as assignee of STM, were not
mutually creditors and debtors of each other
- in addition, the claim of petitioner that the purchase price of the 25,000 bags of sugar purchased by STM
covered by SLDR No. 1214 has not been fully paid  not supported by evidence

ISSUE: w/n CSC is an agent of STM and thus estopped to sue upon SLDR No. 1214M as assignee
HELD: NO. CSC not an agent of STM, but an assignee – contract of sale and not of agency
- private respondent CSC was a buyer of the SLDFR form, and not an agent of STM -- CA correct
 no agency was meant to be established by the CSC and STM --- clearly shown by CSC’s
communication to petitioner that SLDR No. 1214M had been “sold and endorsed” to it  The use of the
words “sold and endorsed” means that STM and CSC intended a contract of sale, and not an
agency.
- Private respondent CSC was not subject to STM’s control
- The question of whether a contract is one of sale or agency depends on the intention of the
parties as gathered from the whole scope and effect of the language employed
- the authorization given to CSC containing the phrase “for and in our (STM’s) behalf” did not establish
an agency  what is decisive is the intention of the parties

Secondary Issues:
1. application of law on compensation to the transaction under SLDR No. 1214M so as to preclude
petitioner from offsetting its credits on the other SLDRS - NO

2. the sale of sugar under SLDR No. 1214M was a conditional sale or a contract to sell and hence
freed petitioner from further obligations – NO, but COS
“It is understood and agreed that by payment by buyer/trader of refined sugar and/or receipt of
this document by the buyer/trader personally or through a representative, title to refined sugar is
transferred to buyer/trader and delivery to him/it is deemed effected and completed (stress
supplied) and buyer/trader assumes full responsibility therefore . . .”
 these terms and conditions clearly show that petitioner transferred title to the sugar to the buyer or his
assignee upon payment of the purchase price

3. application of “clean hands doctrine” to preclude CSC from seeking judicial relief
- no clear and convincing evidence to allegations of fraud
- STM and private respondent CSC have entered into a conspiracy to defraud it of its sugar
- that STM’s selling price to CSC was below its purchasing price
- CSC’s refusal to pursue its case against Teresita Ng Go
- the authority given by Ng Go to other persons to withdraw sugar against SLDR No. 1214M after she
had sold her rights under said SLDR to CSC

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