TUAZON v.

HEIRS OF BARTOLOME RAMOS

G.R. No. 156262 |July 14, 2005 | Panganiban, J.

Petitioner/s: MARIA TUAZON, ALEJANDRO P. TUAZON, MELECIO P.
TUAZON, Spouses ANASTACIO and MARY T. BUENA-VENTURA

As per the allegations on the fictitious sales, they sold such

properties to meet their financial difficulties and was done prior the
suit.
Bartolome Ramos passed away before pretrial and was substituted
by his heirs.

Respondents: HEIRS OF BARTOLOME RAMOS

ISSUE/S:
Doctrine: The declarations of the agent alone are generally insufficient to
establish the fact or extent of his authority;
Elements of Agency; (1) The parties consent, express or implied, to
establish the relationship; (2) The object, which is the execution of a juridical
act in relation to a third (3) The representation, by which the one who acts
as an agent does so, not for oneself, but as a representative; (4) The
limitation that the agent acts within the scope of his or her authority.
FACTS:

1. WoN there was a contract of agency NO, there was no contract of

agency.
2. WoN CA erred in rendering judgment against the petitioners despite
the failure of respondents to include in their action Evangeline Santos, an
indispensable party to the suit NO. No they did not.
RATIO:
FOR THE FIRST ISSUE:

Sps. Leonilo and Maria Tuazon purchased a total of 8,326 cavans of

rice from deceased Bartolome Ramos. Only 4,437 cavans have been
paid leaving 3889 cavans unpaid (P1,211,919.00)
Sps. Tuazon issued several Traders Royal Bank Checks to pay for
the deficiency but bounced because of insufficient funds. Sps.
Tuazon knew that they had no money to support the checks.
Respondents claimed that Sps. Tuazon conspired with their codefendants so as to defraud them as creditors through fictitious sales
of the Sps. Properties.
o Simulated sales of 3 lots, residential lot, house and Stake
Toyota in favor of Sps. Buenaventura.
o Melecio Tuazon (son of Sps. Tuazon) simulated sale of the
Toyota Willys to Alejandro Tuazon (the pther son of Sps.
Tuazon)
Defendants denied having purchased rice (there was no sales
invoice, receipts or any evidence to prove such) and alleged that
Madalena Ramos (wife of deceased), who owned and traded the
merchandise was her agent.
o Also argued that Evangeline Santos was the buyer of the
rice and issued checks to Maria Tuazon as payments
therefor.
o Checks were received by Maria and turned over to Ramos in
good faith and with no knowledge that these were not
funded.
o Petitioners insist that Santos should be an indispensable
party since she was the true buyer.

In a contract of agency, one binds oneself to render some service or

to do something in representation or on behalf of another, with the
latters consent or authority.
The following are the elements of agency:
(1) The parties consent, express or implied, to establish the
relationship;
(2) The object, which is the execution of a juridical act in relation to a
third
(3) The representation, by which the one who acts as an agent
does so, not for oneself, but as a representative;
(4) The limitation that the agent acts within the scope of his or her
authority.

As the basis of agency is representation, there must be, on the

principals part, an actual intention to appoint, an intention
naturally inferable from the principals words or actions.
There must be an intention on the agents to accept the
appointment and act upon it. Absent such mutual intent, there is
generally no agency.
The Court found that Petitioners were the rice buyers themselves --they were not mere agents of respondents in their rice dealership.

Petitioners raise the fact of agency as an affirmative

defense, yet fail to prove its existence.
o The law makes no presumption of agency. Proving its
existence, nature and extent is incumbent upon the person
alleging it
The Court noted that if they were mere agents of respondents,
petitioners should have brought the suit against Santos for and on
behalf of their alleged principal, in accordance with Section 2 of Rule
3 of the Rules on Civil Procedure. Their filing a suit against her in
their own names negates their claim that they acted as mere agents
in selling the rice obtained from Bartolome Ramos.
o

FOR THE SECOND ISSUE:

Indispensable parties are defined as parties in interest without

whom no final determination can be had.
As indorser, Petitioner Maria Tuazon warranted that upon due
presentment, the checks were to be accepted or paid, or both,
according to their tenor; and that in case they were
After an instrument is dishonored by nonpayment, indorsers
become principal debtors whose liability becomes identical to that
of the original obligor.
The holder of a negotiable instrument need not even proceed against
the maker before suing the indorser. Clearly, Evangeline Santosas
the drawer of the checksis not an indispensable party in an action
against Maria Tuazon, the indorser of the checks.
The instant case was originally one for the collection of the purchase
price of the rice bought by Maria Tuazon from respondents
predecessor.
In this case, it is clear that there is no privity of contract between
respondents and Santos. Hence, a final determination of the rights
and interest of the parties may be made without any need to implead
her.