ROSA LIM vs. CA

FACTS:

Lim, who arrived from Cebu, received from Suarez 2 pieces of jewelry: a diamond ring and a bracelet to be sold on commission basis. Lim returned the bracelet to Suarez, but failed to return the diamond ring or to turn over the proceeds thereof if sold. Suarez wrote a demand letter asking for the return of the ring or the proceeds of the sale thereof. Lim, however, alleges that she had returned both the ring and the bracelet, hence she no longer has any liability.

Lim has a different version of the facts. She denies the transaction was for her to sell the 2 pieces of jewelry on commission basis. She told Suarez that she would consider buying the pieces of jewelry for her own use. Lim took the pieces of jewelry and asked Suarez to prepare the necessary papers for her to sign because she was not yet prepared to buy it. The document was prepared, and Lim signed it, but she claims that she didn’t agree to the terms of the receipt regarding the sale on commission basis. Her ‘proof’ is that she signed the document on the upper portion and not at the bottom where a space is provided for the signature of the persons receiving the jewelry.

ISSUE:

Was the real transaction between Lim & Suarez a real contract of agency to sell on commission basis as set out in the receipt or a sale on credit?

HELD:

The transaction between them was a contract of agency to sell on commission basis. Lim’s signature indeed appears on the upper portion of the receipt below, but this fact doesn’t have the effect of altering the terms of the transaction form a contract of agency to sell on commission basis to a contract of sale. The moment she affixed her signature thereon, Lim became bound by all the terms stipulated in the receipt.

Contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However there are some provisions in law w/c require certain formalities for particular contracts. The 1^st is when the form is required for the validity of the contract; the 2^nd is when it is required to make the contract effective as against 3^rd parties; and the 3^rd is for the purpose of proving the existence of the contract, e.g. those included in the Statute of Frauds. A contract of agency to sell on commission basis doesn’t belong to any of these 3 categories, hence it is valid and enforceable in whatever form they may be entered into.

There is only 1 type of legal instrument where the law strictly prescribes the location of the signature of the parties thereto. This is in case of notarial wills. But in the case at bar, the parties didn’t execute a notarial will but a simple contract of agency to sell on commission basis, thus making the position of Lim’s signature immaterial.