FACTS:

On or about November 25, 1902, Maria Aniversario (plaintiff-appellant) gave Florencio Ternate (defendant-appellee) the sum of 510 pesos. Aniversario alleged that this sum was given to Ternate to purchase a horse in San Juan de Bocboc, thus creating an agency contract. She claimed Ternate failed to purchase the horse or return the money despite repeated demands.

Ternate, however, contended that he received the 510 pesos on the same date as payment for a white horse he had already sold and delivered to Aniversario. He denied receiving the money for the purpose of purchasing a horse on her behalf.

A key piece of evidence was a receipt (Exhibit A) dated November 25, 1902, signed by Ternate, which stated: “Received from Doña Maria Aniversario the sum of five hundred and ten (510) pesos, in payment of the price of a white horse purchased at San Juan de Bocboc.” Aniversario admitted understanding the contents of this receipt.

Another piece of evidence (Exhibit 1) showed the registration of a white horse from San Juan de Bocboc in the municipal registry under the name of Roman Ilustre (Aniversario’s son) on October 2, 1902, with an entry of transfer to Ternate on the same date.

The Court of First Instance of Manila absolved Ternate, finding that the evidence supported his contention. Aniversario appealed, arguing that the lower court erred in interpreting Exhibit A, in its findings regarding the horse’s registration and transfer, and in concluding that she failed to prove her case.

ISSUE:

Whether the contract between Maria Aniversario and Florencio Ternate was one of agency, where Ternate was to purchase a horse for Aniversario, or a contract of sale, where Aniversario paid Ternate for a horse he had already acquired and sold to her.

RULING:

The Supreme Court affirmed the judgment of the lower court, ruling in favor of Florencio Ternate.

The Court held that the clear and literal terms of the receipt (Exhibit A) must be observed, in accordance with Article 1281 of the Civil Code. The receipt plainly stated that the 510 pesos was received “in payment of the price of a white horse purchased at San Juan de Bocboc,” which unequivocally indicates a contract of sale, not an agency to purchase.

This interpretation was further corroborated by:
1. The testimony of Agustin Bizcocho, Aniversario’s own witness, who stated that Ternate had declared he had bought a horse and would sell it to Aniversario, who then paid the 510 pesos.
2. Exhibit 1, detailing the registration and transfer of a white horse to Ternate, which supported his claim of having acquired the horse prior to the transaction.
3. The suspicious delay of Aniversario in raising this claim. Aniversario and Ternate were business partners from 1901 to 1905, had repeatedly liquidated accounts, and even filed actions for final liquidation. It was deemed unusual that the 510 pesos, if truly a debt from an agency agreement, was never included in any of these prior liquidations or actions but was only sought in 1906, four years after the alleged breach.

Based on the preponderance of evidence, particularly the unambiguous wording of the receipt, the Court concluded that the 510 pesos was received by Ternate as payment for a horse he sold to Aniversario, and not as an agent to purchase a horse for her.

The judgment appealed from was affirmed, with costs against the appellant.