Question
9. Central Sugar Merchandising (CSM) regularly bought sugar from Victorias Milling Company Incorporated (VMCI). In the course of their dealings, upon payment by CSM through
9. Central Sugar Merchandising (CSM) regularly bought sugar from Victorias Milling Company Incorporated (VMCI). In the course of their dealings, upon payment by CSM through checks, VMCI issued several Shipping List Delivery Receipts (SLDR) to CSM as a proof of purchase. An SLDR was issued by VMCI to CSM, which covers 25,000 bags of Sugar priced at 600 per bag. The SLDR contained the following terms and conditions:
"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 and the buyer/trader assumes full responsibility therefor...xxxx"
CSM sold and endorsed to Consolidated Sugar Corporation (CSC) its rights in the said SLDR for P15, 000.00. Pursuant to a letter of authority from CSM, CSC was authorized by CSM to withdraw the 25,000 bags of sugar covered by the said SLDR. Consequently, CSC was allowed by VMCI to withdraw sugar. However, after 2,000 bags had been released to CSC by VMCI, the latter refused to allow further withdrawals of sugar for reasons known only to VMCI . VMCI also noted that CSC had represented itself to be CSM's agent as it had withdrawn the 2,000 bags against the SLDR "for and in behalf" of CSM. Thereafter, CSC filed an action for specific performance against CSM and VMCI to compel them to deliver the 23,000 bags of sugar .
a.) Was there a contract of sale or a contract of agency between CSM and CSC? Reason.
b.) What is the nature of the contract of sugar under the SLDR issued by VMCI, a conditional sale, a contract of sale, or a contract to Sell? Reason.
c.) Will the action of CSC prosper? Reason.
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