QUIROGA V PARSONS HARDWARE CO.

FACTS:
Mr. Quiroga and Parsons Hardware entered into a contract where the former granted the latter the
exclusive right to sell Quiroga Beds in the Visayas. Payments were to be made at the end of 60 days and
Quiroga provided for a discount of 25% as commission for the sales, among other conditions. Quiroga
alleged that Parsons breached its contractual obligations by selling the beds at a higher price, not having
an open establishment in Iloilo, not maintaining a public exhibition, and for not ordering beds by the
dozen. Only the last imputation was provided by the contract, the others were never stipulated. Quiroga
argued that since theirs was a contract of agency, then such obligations are necessarily implied.

ISSUE:
W/N the contract was a contract of agency or sale

HELD:
The agreement between Quiroga and Parsons was that of a simple purchase and sale not an agency.
Quiroga supplied beds while Parsons had the obligation to pay their purchase price. These are
characteristics of a purchase and sale. In a contract of agency (or order to sell) the agent does not pay its
price yet, and sells the products, remitting to the principal the proceeds thereof. Unsold products must
also be returned to the principal. The provisions on commission and the use of the word agency in the
contract as well as the testimonies in court dont affect its nature. Contracts are what the law defines it
to be, not what the parties call it.