I.

ESSENTIAL CHARACTERISTICS CASE 2 OF 4

VICTORIAS MILLING CO vs. CA June 19, 2000
G.R. No. 117356 J. Quisumbing

DOCTRINE:
On the part of the principal, there must be an actual intention to appoint or an intention naturally
inferable from his words or actions; and on the part of the agent, there must be an intention to
accept the appointment and act on it, and in the absence of such intent, there is no agency.

IMPORTANT RULING RELATED TO THE PROVISION/DOCTRINE:

CONTROL is that which most clearly distinguishes agency from other legal concepts

FACTS:
1. St. Therese Merchandising (STM) regularly bought sugar from Victorias Milling Co, Inc
(VMC)
a. Several shipping list/delivery receipts (SLDRs) were issued to STM as proofs
of purchase
2. Oct 16: (SLDR 1214M) direct sale of 25,000 bags with 50kg per bag at P 638 per bag
3. Oct 25: STM sold its rights in SLDR 1214M to private respondent Consolidated Sugar
Corp (CSC) for P 14.75 M
a. CSC wrote VMC that it had been authorized by STM to withdraw the sugar
covered by SLDR 1214M
4. Oct 27: STM issued 16 checks in P 31.9 M with VMC as payee
a. VMC issued official receipt acknowledging receipt of checks in payment for
25k bags of sugar covering SLDR 1214M and SLDR 1213.
i. HOWEVER, after 2k bags had been released, VMC refused to allow
further withdrawals, alleging that STM had already withdrawn all
the sugar covered by the cleared checks
5. CSC’s complaint: that STM had fully paid petitioner
a. Petitioner’s defense: he was an unpaid seller for the 23,000 bags
i. SLDRs were not docs of title but mere delivery receipts issued
pursuant to a series of transactions entered into between VMC and
STM and thus did not authorize transfer of rights and interests
ii. That CSC did not pay for SLDR and was actually STM’s co-
conspirator to defraud VMC

ISSUES: W/N CSC is an agent of STM. [NO]

RULING:
1. AGENCY IS A FACT TO BE PROVEN AND NOT A PRESUMPTION; WHAT IS
DECISIVE IS THE INTENTION OF THE PARTIES
a. VMC failed to sufficiently establish the existence of an agency relation
i. CSC had informed VMC that SLDR 1214M had been sold and
endorsed to STM
b. CSC WAS A BUYER OF THE SLDR FORM AND NOT AN AGENT OF STM
i. CSC was not subject to STM’s control.
ii. Intent of the parties > contents/statement in the contract