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Eurotech Industrial Technologies, Inc. v. Edwin Cuizon and Erwin Cuizon

G.R. No. 167552 April 23, 2007Chico-Nazario, J.

FACTS:

Eurotech is engaged in the business of importation and distribution of various European industrial
equipment, it has as one of its customers Impact Systems Sales which is a sole proprietorship owned by
Erwin Cuizon.

Eurotech sold to Impact Systems various products allegedly amounting to P91,338.00. Cuizons sought to
buy from Eurotech 1 unit of sludge pump valued at P250,000.00 with Cuizons making a down payment
of P50,000.00. When the sludge pump arrived from the United Kingdom, Eurotechre fused to deliver the
same to Cuizons without their having fully settled their indebtedness toEurotech. Thus, Edwin Cuizon
and Alberto de Jesus, general manager of Eurotech, executed a Deed of Assignment of receivables in
favor of Eurotech.

Cuizons, despite the existence of the Deed of Assignment, proceeded to collect from Toledo Power
Company the amount of P365,135.29. Eurotech made several demands upon Cuizons to pay their
obligations. As a result, Cuizons were able to make partial payments to Eurotech. Cuizons’ total
obligations stood at P295,000.00 excluding interests and attorney’s fees.

Edwin Cuizon alleged that he is not a real party in interest in this case. According to him, he was acting
as mere agent of his principal, which was the Impact Systems, in his transaction with Eurotech and the
latter was very much aware of this fact.

ISSUE:

WON Edwin exceeded his authority when he signed the Deed of Assignment thereby binding himself
personally to pay the obligations to Eurotech

HELD:

No.
Edwin insists that he was a mere agent of Impact Systems which is owned by Erwin and that his status as
such is known even to Eurotech as it is alleged in the Complaint that he is being sued in his capacity as
the sales manager of the said business venture. Likewise, Edwin points to the Deed of Assignment which
clearly states that he was acting as a representative of Impact Systems in said transaction.

Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts,
unless he expressly binds himself or exceeds the limits of his authority without giving such party
sufficient notice of his powers.

In a contract of agency, a person binds himself to render some service or to do something in


representation or on behalf of another with the latter’s consent. Its purpose is to extend the personality
of the principal or the party for whom another acts and from whom he or she derives the authority to
act. The basis of agency is representation, that is, the agent acts for and on behalf of the principal on
matters within the scope of his authority and said acts have the same legal effect as if they were
personally executed by the principal.

elements of the contract of agency: (1) consent, express or implied, of the parties to establish the
relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the
agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority

An agent, who acts as such, is not personally liable to the party with whom he contracts. There are
2instances when an agent becomes personally liable to a third person. The first is when he expressly
binds himself to the obligation and the second is when he exceeds his authority. In the last instance, the
agent can be held liable if he does not give the third party sufficient notice of his powers. Edwin does
not fall within any of the exceptions contained in Art. 1897.

In the absence of an agreement to the contrary, a managing agent may enter into any contracts that
he deems reasonably necessary or requisite for the protection of the interests of his principal entrusted
to his management.

Edwin Cuizon acted well-within his authority when he signed the Deed of Assignment. Eurotech refused
to deliver the 1 unit of sludge pump unless it received, in full, the payment for Impact Systems’
indebtedness. Impact Systems desperately needed the sludge pump for its business since after it paid
the amount of P50,000.00 as down payment it still persisted in negotiating with Eurotech which
culminated in the execution of the Deed of Assignment of its receivables from Toledo Power Company.
The significant amount of time spent on the negotiation for the sale of the sludge pump underscores
Impact Systems’ perseverance to get hold of the said equipment. Edwin’s participation in the Deed of
Assignment was “reasonably necessary” or was required in order for him to protect the business of his
principal.

G.R. No. 167552 April 23, 2007

EUROTECH INDUSTRIAL TECHNOLOGIES, INC., Petitioner,


vs.
EDWIN CUIZON and ERWIN CUIZON, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us is a petition for review by certiorari assailing the Decision1 of the Court of Appeals dated
10 August 2004 and its Resolution2 dated 17 March 2005 in CA-G.R. SP No. 71397 entitled,
"Eurotech Industrial Technologies, Inc. v. Hon. Antonio T. Echavez." The assailed Decision and
Resolution affirmed the Order3 dated 29 January 2002 rendered by Judge Antonio T. Echavez
ordering the dropping of respondent EDWIN Cuizon (EDWIN) as a party defendant in Civil Case No.
CEB-19672.

The generative facts of the case are as follows:

the pertinent part of which states:

1.) That ASSIGNOR5 has an outstanding receivables from Toledo Power Corporation in the
amount of THREE HUNDRED SIXTY FIVE THOUSAND (P365,000.00) PESOS as payment
for the purchase of one unit of Selwood Spate 100D Sludge Pump;

2.) That said ASSIGNOR does hereby ASSIGN, TRANSFER, and CONVEY unto the
ASSIGNEE6 the said receivables from Toledo Power Corporation in the amount of THREE
HUNDRED SIXTY FIVE THOUSAND (P365,000.00) PESOS which receivables the
ASSIGNOR is the lawful recipient;

3.) That the ASSIGNEE does hereby accept this assignment.7

Following the execution of the Deed of Assignment, petitioner delivered to respondents the sludge
pump as shown by Invoice No. 12034 dated 30 June 1995.8

Allegedly unbeknownst to petitioner, respondents, despite the existence of the Deed of Assignment,
proceeded to collect from Toledo Power Company the amount of P365,135.29 as evidenced by
Check Voucher No. 09339prepared by said power company and an official receipt dated 15 August
1995 issued by Impact Systems.10Alarmed by this development, petitioner made several demands
upon respondents to pay their obligations. As a result, respondents were able to make partial
payments to petitioner. On 7 October 1996, petitioner’s counsel sent respondents a final demand
letter wherein it was stated that as of 11 June 1996, respondents’ total obligations stood
at P295,000.00 excluding interests and attorney’s fees.11 Because of respondents’ failure to abide by
said final demand letter, petitioner instituted a complaint for sum of money, damages, with
application for preliminary attachment against herein respondents before the Regional Trial Court of
Cebu City.12

On 8 January 1997, the trial court granted petitioner’s prayer for the issuance of writ of preliminary
attachment.13

On 25 June 1997, respondent EDWIN filed his Answer14 wherein he admitted petitioner’s allegations
with respect to the sale transactions entered into by Impact Systems and petitioner between January
and April 1995.15 He, however, disputed the total amount of Impact Systems’ indebtedness to
petitioner which, according to him, amounted to only P220,000.00.16

By way of special and affirmative defenses, respondent EDWIN alleged that he is not a real party in
interest in this case. According to him, he was acting as mere agent of his principal, which was the
Impact Systems, in his transaction with petitioner and the latter was very much aware of this fact. In
support of this argument, petitioner points to paragraphs 1.2 and 1.3 of petitioner’s Complaint stating

1.2. Defendant Erwin H. Cuizon, is of legal age, married, a resident of Cebu City. He is the
proprietor of a single proprietorship business known as Impact Systems Sales ("Impact
Systems" for brevity), with office located at 46-A del Rosario Street, Cebu City, where he
may be served summons and other processes of the Honorable Court.

1.3. Defendant Edwin B. Cuizon is of legal age, Filipino, married, a resident of Cebu City. He
is the Sales Manager of Impact Systems and is sued in this action in such capacity.17

On 26 June 1998, petitioner filed a Motion to Declare Defendant ERWIN in Default with Motion for
Summary Judgment. The trial court granted petitioner’s motion to declare respondent ERWIN in
default "for his failure to answer within the prescribed period despite the opportunity granted"18 but it
denied petitioner’s motion for summary judgment in its Order of 31 August 2001 and scheduled the
pre-trial of the case on 16 October 2001.19However, the conduct of the pre-trial conference was
deferred pending the resolution by the trial court of the special and affirmative defenses raised by
respondent EDWIN.20

After the filing of respondent EDWIN’s Memorandum21 in support of his special and affirmative
defenses and petitioner’s opposition22 thereto, the trial court rendered its assailed Order dated 29
January 2002 dropping respondent EDWIN as a party defendant in this case. According to the trial
court –

A study of Annex "G" to the complaint shows that in the Deed of Assignment, defendant Edwin B.
Cuizon acted in behalf of or represented [Impact] Systems Sales; that [Impact] Systems Sale is a
single proprietorship entity and the complaint shows that defendant Erwin H. Cuizon is the
proprietor; that plaintiff corporation is represented by its general manager Alberto de Jesus in the
contract which is dated June 28, 1995. A study of Annex "H" to the complaint reveals that [Impact]
Systems Sales which is owned solely by defendant Erwin H. Cuizon, made a down payment
of P50,000.00 that Annex "H" is dated June 30, 1995 or two days after the execution of Annex "G",
thereby showing that [Impact] Systems Sales ratified the act of Edwin B. Cuizon; the records further
show that plaintiff knew that [Impact] Systems Sales, the principal, ratified the act of Edwin B.
Cuizon, the agent, when it accepted the down payment of P50,000.00. Plaintiff, therefore, cannot
say that it was deceived by defendant Edwin B. Cuizon, since in the instant case the principal has
ratified the act of its agent and plaintiff knew about said ratification. Plaintiff could not say that the
subject contract was entered into by Edwin B. Cuizon in excess of his powers since [Impact]
Systems Sales made a down payment of P50,000.00 two days later.

In view of the Foregoing, the Court directs that defendant Edwin B. Cuizon be dropped as party
defendant.23

Aggrieved by the adverse ruling of the trial court, petitioner brought the matter to the Court of
Appeals which, however, affirmed the 29 January 2002 Order of the court a quo. The dispositive
portion of the now assailed Decision of the Court of Appeals states:

WHEREFORE, finding no viable legal ground to reverse or modify the conclusions reached by the
public respondent in his Order dated January 29, 2002, it is hereby AFFIRMED.24

Petitioner’s motion for reconsideration was denied by the appellate court in its Resolution
promulgated on 17 March 2005. Hence, the present petition raising, as sole ground for its allowance,
the following:

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT


RESPONDENT EDWIN CUIZON, AS AGENT OF IMPACT SYSTEMS SALES/ERWIN CUIZON, IS
NOT PERSONALLY LIABLE, BECAUSE HE HAS NEITHER ACTED BEYOND THE SCOPE OF HIS
AGENCY NOR DID HE PARTICIPATE IN THE PERPETUATION OF A FRAUD.25

To support its argument, petitioner points to Article 1897 of the New Civil Code which states:

Art. 1897. The agent who acts as such is not personally liable to the party with whom he contracts,
unless he expressly binds himself or exceeds the limits of his authority without giving such party
sufficient notice of his powers.

Petitioner contends that the Court of Appeals failed to appreciate the effect of ERWIN’s act of
collecting the receivables from the Toledo Power Corporation notwithstanding the existence of the
Deed of Assignment signed by EDWIN on behalf of Impact Systems. While said collection did not
revoke the agency relations of respondents, petitioner insists that ERWIN’s action repudiated
EDWIN’s power to sign the Deed of Assignment. As EDWIN did not sufficiently notify it of the extent
of his powers as an agent, petitioner claims that he should be made personally liable for the
obligations of his principal.26

Petitioner also contends that it fell victim to the fraudulent scheme of respondents who induced it into
selling the one unit of sludge pump to Impact Systems and signing the Deed of Assignment.
Petitioner directs the attention of this Court to the fact that respondents are bound not only by their
principal and agent relationship but are in fact full-blooded brothers whose successive contravening
acts bore the obvious signs of conspiracy to defraud petitioner.27

In his Comment,28 respondent EDWIN again posits the argument that he is not a real party in interest
in this case and it was proper for the trial court to have him dropped as a defendant. He insists that
he was a mere agent of Impact Systems which is owned by ERWIN and that his status as such is
known even to petitioner as it is alleged in the Complaint that he is being sued in his capacity as the
sales manager of the said business venture. Likewise, respondent EDWIN points to the Deed of
Assignment which clearly states that he was acting as a representative of Impact Systems in said
transaction.

We do not find merit in the petition.


In a contract of agency, a person binds himself to render some service or to do something in
representation or on behalf of another with the latter’s consent.29 The underlying principle of the
contract of agency is to accomplish results by using the services of others – to do a great variety of
things like selling, buying, manufacturing, and transporting.30 Its purpose is to extend the personality
of the principal or the party for whom another acts and from whom he or she derives the authority to
act.31 It is said that the basis of agency is representation, that is, the agent acts for and on behalf of
the principal on matters within the scope of his authority and said acts have the same legal effect as
if they were personally executed by the principal.32 By this legal fiction, the actual or real absence of
the principal is converted into his legal or juridical presence – qui facit per alium facit per se.33

The elements of the contract of agency are: (1) consent, express or implied, of the parties to
establish the relationship; (2) the object is the execution of a juridical act in relation to a third person;
(3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his
authority.34

In this case, the parties do not dispute the existence of the agency relationship between respondents
ERWIN as principal and EDWIN as agent. The only cause of the present dispute is whether
respondent EDWIN exceeded his authority when he signed the Deed of Assignment thereby binding
himself personally to pay the obligations to petitioner. Petitioner firmly believes that respondent
EDWIN acted beyond the authority granted by his principal and he should therefore bear the effect
of his deed pursuant to Article 1897 of the New Civil Code.

We disagree.

Article 1897 reinforces the familiar doctrine that an agent, who acts as such, is not personally liable
to the party with whom he contracts. The same provision, however, presents two instances when an
agent becomes personally liable to a third person. The first is when he expressly binds himself to the
obligation and the second is when he exceeds his authority. In the last instance, the agent can be
held liable if he does not give the third party sufficient notice of his powers. We hold that respondent
EDWIN does not fall within any of the exceptions contained in this provision.

The Deed of Assignment clearly states that respondent EDWIN signed thereon as the sales
manager of Impact Systems. As discussed elsewhere, the position of manager is unique in that it
presupposes the grant of broad powers with which to conduct the business of the principal, thus:

The powers of an agent are particularly broad in the case of one acting as a general agent or
manager; such a position presupposes a degree of confidence reposed and investiture with liberal
powers for the exercise of judgment and discretion in transactions and concerns which are incidental
or appurtenant to the business entrusted to his care and management. In the absence of an
agreement to the contrary, a managing agent may enter into any contracts that he deems
reasonably necessary or requisite for the protection of the interests of his principal entrusted to his
management. x x x.35

Applying the foregoing to the present case, we hold that Edwin Cuizon acted well-within his authority
when he signed the Deed of Assignment. To recall, petitioner refused to deliver the one unit of
sludge pump unless it received, in full, the payment for Impact Systems’ indebtedness.36 We may
very well assume that Impact Systems desperately needed the sludge pump for its business since
after it paid the amount of fifty thousand pesos (P50,000.00) as down payment on 3 March 1995,37 it
still persisted in negotiating with petitioner which culminated in the execution of the Deed of
Assignment of its receivables from Toledo Power Company on 28 June 1995.38The significant
amount of time spent on the negotiation for the sale of the sludge pump underscores Impact
Systems’ perseverance to get hold of the said equipment. There is, therefore, no doubt in our mind
that respondent EDWIN’s participation in the Deed of Assignment was "reasonably necessary" or
was required in order for him to protect the business of his principal. Had he not acted in the way he
did, the business of his principal would have been adversely affected and he would have violated his
fiduciary relation with his principal.

We likewise take note of the fact that in this case, petitioner is seeking to recover both from
respondents ERWIN, the principal, and EDWIN, the agent. It is well to state here that Article 1897 of
the New Civil Code upon which petitioner anchors its claim against respondent EDWIN "does not
hold that in case of excess of authority, both the agent and the principal are liable to the other
contracting party."39 To reiterate, the first part of Article 1897 declares that the principal is liable in
cases when the agent acted within the bounds of his authority. Under this, the agent is completely
absolved of any liability. The second part of the said provision presents the situations when the
agent himself becomes liable to a third party when he expressly binds himself or he exceeds the
limits of his authority without giving notice of his powers to the third person. However, it must be
pointed out that in case of excess of authority by the agent, like what petitioner claims exists here,
the law does not say that a third person can recover from both the principal and the agent.40

As we declare that respondent EDWIN acted within his authority as an agent, who did not acquire
any right nor incur any liability arising from the Deed of Assignment, it follows that he is not a real
party in interest who should be impleaded in this case. A real party in interest is one who "stands to
be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit."41 In
this respect, we sustain his exclusion as a defendant in the suit before the court a quo.

WHEREFORE, premises considered, the present petition is DENIED and the Decision dated 10
August 2004 and Resolution dated 17 March 2005 of the Court of Appeals in CA-G.R. SP No.
71397, affirming the Order dated 29 January 2002 of the Regional Trial Court, Branch 8, Cebu City,
is AFFIRMED.

Let the records of this case be remanded to the Regional Trial Court, Branch 8, Cebu City, for the
continuation of the proceedings against respondent Erwin Cuizon.
G.R. No. L-42847 April 29, 1977

THE PEOPLE OF THE PHILIPPINES, petitioner,


vs.
CECILIA QUE YABUT and HON. JESUS DE VEGA, as Judge of the Court of First Instance of
Bulacan, Branch II, respondents.

G.R. No. L-42902 April 29, 1977

THE PEOPLE OF THE PHILIPPINES,petitioner,


vs.
GEMINIANO YABUT, JR., respondent.

Provincial Fiscal Pascual Kliatchko and Office of the Solicitor General, for petitioner.

Z oilo P. Perlas as private prosecutor.

Geminiano F. Yabut for private respondents.

MARTIN, J.:

Two novel questions of law are presented to Us in these petitions to review on certiorari the quashal
orders of the Court of First Instance of Bulacan, sitting at Malolos, first, the rule on venue or
jurisdiction in a case of estafa for postdating or issuing a check without insufficient funds,
and second, whether the new law on checks punishes the postdating or issuance thereof in payment
of a pre-existing obligation.

Private respondent Cecilia Que Yabut in L-42847 was accused of estafa by means of false
pretenses before the Court of First Instance of Bulacan, presided over by respondent Judge Jesus
de Vega. The information, docketed as criminal case 1404, charges:

That during the period from February 22, to February 26, 1975, in the Municipality of
Malolos, Province of Bulcan, Philippines, and within the jurisdiction of this Honorable
Court, the said accused Cecilia Que Yabut, as treasurer of the Yabut Transit Line, by
means of false pretenses and pretending to have sufficient funds in the Merchants
Banking Corporation, located and doing business in Caloocan City, prepared issued
and make out Check Nos. CB-19035 B, CB-190396 and CB-190397, dated February
22, 1975, February 24, 1975 and February 26, 1975, in the total sum of P6,568.94,
drawn against the Merchants Banking Corporation, payable to Freeway Tires Supply,
owned and operated by Alicia P. Andan, in payment of articles and merchandise
delivered to and received by said accused, gave and delivered the said checks to the
said Freeway Tires Supply, the said accused Cecilia Que Yabut well knowing that at
the time there was no or insufficient funds in the said Merchants Banking
Corporation, and upon presentation of the said checks to the bank, the checks were
dishonored and inspite of repeated demands by the owner of the Freeway Tires
Supply to deposit the necessary funds to cover the checks within the reglementary
period enjoined by law, failed and refused to do so, to the damage and prejudice of
Alicia P. Andan, owner and operator of the Freeway Tires Supply, in the total amount
of P6,568.94.
Instead of entering a plea, respondent Cecilia Que Yabut filed a motion to quash on September 1,
1975, contending that the acts charged do not constitute the offense as there is no allegation that
the postdated checks were issued and delivered to the complainant prior to or simultaneously with
the delivery of the merchandise, the crime of estafa not being indictable ,when checks are postdated
or issued in payment of pre-existing obligation; and the venue was improperly laid in Malolos,
Bulacan, because the postdated checks were issued and delivered to, and received by, the
complainant in the City of Caloocan, where she (respondent Que Yabut) holds office.

An opposition was interposed by the People, maintaining that the new law on checks (Rep. Act
4885, amending Art. 315, par. 2 (d), Revised Penal Code), penalizes the postdating or issuance
thereof in payment of pre-existing obligation and that the Malolos court can exercise jurisdiction over
the case, since the last ingredient of the offense, i.e., damage, transpired in Bulacan (residence of
complainant) after the dishonor of the checks for lack of funds.

Judge Jesus de Vega quashed the information, as prayed for by respondent Que Yabut, on
November 10, 1975 for the reason "that the proper venue in this case is Caloocan City and not
Bulacan." Whether estafa lies for postdating or issuing a check in payment of a pre-existing
obligation was not by respondent Judge.

The People's motion for reconsideration of this dismissal order was denied on January 12, 1976.

The other private respondent, Germiniano Yabut, Jr. (L-42902), husband of respondent Cecilia Que
Yabut, stood charged in criminal case 1405-M before the Court of First Instance of Bulacan,
presided over by Judge Edgardo L. Paras, of the crime of estafa under Art. 315, par. 2 (d) of the
Revised Penal Code in that:

(D)uring the period from February 23 to April 9, 1975, in the municipality of Malolos,
Province of Bulacan, Philippines, and within the jurisdiction of this Honorable Court,
the said accused Geminiano Yabut, Jr., as presided of the Yabut Transit Line, by
means of false pretenses and pretending to have sufficient funds in the Merchants
Banking Corporation and Manufacturers Bank and Trust Company, located and
doing business in Caloocan City, prepared, issued and make out Check Nos. CB-
192042 B, CB-192043 B, 423123, CB-191988 B, 423124, CB-192044 B, CB-192045
B, CB-193737 B, CB-193738 B, CB-193739 B, CB-199953 B, CB-199954 B, CB-
199955 B, and CB-199956 B, dated February 23, 26, 27, March 1, 3, 10, 11, 12, April
4, 7, 8 and 9, 1975 in the total sum of P37,206.00,drawn against the Merchants
Banking Corporation and Manufacturers Bank and Trust Company, payable to the
Free Tires Supply and Free Caltex Station, owned and operated by Alicia P. Andan,
in payment articles and merchandise delivered to and received by said accused,
gave and delivered the said checks to said Freeway Tires Supply and Freeway
Caltex Station, the said accused Geminiano Yabut, Jr. well knowing that at the time
there was no or insufficient funds in the said Merchants Banking Corporation and
Manufacturers Bank and Trust Company, and upon presentation of the said checks
to the bank, the checks were dishonored and inspite of repeated demands by the
owner of the Freeway Tires Supply and Freeway Caltex Station to deposit the
necessary funds to cover the cheeks within the reglementary period enjoined by law,
failed and refused to do so, to the damage and Prejudice of Alicia P. Andan, owner
and operator of the Freeway Tires Supply and Freeway Caltex Station in the total
sum of P37,206.00.

Like his wife, respondent Geminiano Jr. moved to quash the information on two grounds: (1) the
facts recited do not constitute an offense because the checks were issued in payment of a pre-
existing obligation; and (2) the venue was improperly laid, considering that the postdated checks
were issued and delivered to and received by the complainant in City of Caloocan, where
respondent holds office.

On October 13, 1975, Judge Paras quashed the information because "(t)he elements of the crime
(issuance of the rubber check, attempted encashment, and refusal to honor) alleged in the
Information all took place within the territorial jurisdiction, not of Bulacan, but of Caloocan City."

The People moved for reconsideration, but on February 9, 1976, the motion was denied.

Hence, the two petitions for review on certiorari were filed by the People of the Philippines.

We find both petitions to be impressed with merits.

1. Estafa by postdating or issuing a bad check under Art. 315, par. 2 (d) of the Revised Penal Code
may be a transitory or continuing offense. 1 Its basic elements of deceit and damage 2 may
independently arise in separate places. In the event of such occurrence, the institution of the criminal
action in either place is legally allowed. Section 14(a), Rule 110 of the Revised Rules of Court provides:
"In all criminal prosecutions the action shall be instituted and tried in the Court of the municipality or
province wherein the offense was committed or any one of the essential ingredients thereof took place."
The theory is that a person indicted with a transitory offense may be validly tried in any jurisdiction where
the offense was in part committed. 3 However, if all the acts material and essential to the crime and
requisite of its consummation occurred in one municipality or province, the court of that municipality or
province has the sole jurisdiction to try the case.

The estafa charged in the two informations involved in the case before Us appears to be transitory or
continuing in nature. Deceit has taken place in Malolos, Bulacan, while the damage in Caloocan
City, where the checks were dishonored by the drawee banks there. Jurisdiction can, therefore, be
entertained by either the Malolos court or the Caloocan court. While the subject checks were written,
signed, or dated in Caloocan City, they were not completely made or drawn there, but in Malolos,
Bulacan, where they were uttered and delivered. That is the place of business and residence of the
payee. The place where the bills were written, signed, or dated does not necessarily fix or determine
the place where they were executed. What is of decisive importance is the delivery thereof. The
delivery of the instrument is the final act essential to its consummation as an obligation. 4 An
undelivered bill or note is inoperative. Until delivery, the contract is revocable. 5 And the issuance as well
as the delivery of the check must be to a person who takes it as a holder, which means "(t)he payee or
indorsee of a bill or note, who is in possession of it, or the bearer thereof." 6 Delivery of the check signifies
transfer of possession, whether actual or constructive, from one person to another with intent to transfer
title thereto. 7 Thus, the penalizing clause of the provision of Art. 315, par. 2 (d) states: "By postdating a
check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his
funds deposited therein were not sufficient to cover the amount of the check." Clearly, therefore, the
element of deceit thru the issuance and delivery of the worthless checks to the complainant took place in
Malolos, Bulcan, conferring upon a court in that locality jurisdiction to try the case.

Modesto Yambao's receipt of the bad checks from Cecilia Que Yabut or Geminiano Yabut Jr. in
Caloocan City cannot, contrary to the holding of the respodent Judges, be licitly taken as delivery of
the checks to the complainant Alicia P. Andan at Caloocan City to fix the venue there. He did not
take delivery of the checks as holder, i.e., as "payee" or "indorse". And there appears to be no
contract of agency between Yambao and Andan so as to bind the latter for the acts of the
former. Alicia P. Andan declared in that sworn testimony before the investigating fiscal that
Yambao is but her "messenger" or "part-time employee." 8 There was no special
fiduciaryrelationship that permeated their dealings. For a contract of agency to exist, the consent of
both parties is essential, the principal consent of both parties is essential, the principal consents
that the other party, the agent, shall act on his behalf, and the agent consents so to act. 9 It must
exist as a fact. The law makes no presumption thereof. The person alleging it has the burden of proof to
show, not only the fact of its existence, but also its nature and extent. 10 This is more imperative when it is
considered that the transaction dealt with involves checks, which are not legal tender, and
the creditor may validly refuse the same as payment of obligation. 11

Furthermore, the place of business of the offended party, the Freeway Tires Supply and Freeway
Caltex Station, is at Malolos, Bulacan, from where the tire and gas purchases were amade by the
two private respondents. As a consequence, payment thereof should be considered effected at
Malolos, Bulacan. "(I)f the undertaking is to deliver a determinate thing, the payment shall be made
wherever the thing might be at the moment the obligation was constituted. 12 The receipt by the two
private respondents at Caloocan City of the tires and gas supplies from Malolos, Bulacan, signifies but
the consummation of the contract between the parties. It was the result of an
obligation previouslycontracted at Malolos, Bulacan. 13 The averments in the informations do not indicate
that the complainant is an ambulant peddler of tires and gas, but maintains a fixed and determinate place
of business at Malolos, Bulacan. Obligations, therefore, contracted as regards her business must
presumptively be at her place of business.

2. In general terms, a prosecution for issuing a worthless check with intent to defraud is in the county
where the check was uttered and delivered. 14 Thus, where a check was drawn in Merced County and
made payable at a Merced County bank, but delivered to a merchant in Sacramento County by the
drawer's agent, the Sacramento County courts and had jurisdiction of a prosecution against the drawer
for uttering a check without funds or credit with intent to defraud. 15 The venue of the offense lies at the
place where the check was executed and delivered to the payee. 16 Since in the instant case it was in
Malolos, Bulacan where the checks were uttered and delivered to complaint Andan, at which place, her
business and residence were also located, the criminal prosecution of estafa may be lodged therein. 17 As
earlier pointed out, the giving of the checks by the two private respondents in Caloocan City to Modesto
Yambo cannot be treated as valid delivery of the checks, because Yambo is a mere "messenger" or "part-
time employee" and not an agent of complaint Alicia P. Andan.

3. The next point of inquiry is whether or not the postdating or issuing of a worthless check in
payment of a pre-existing obligation constitutes estafa under Art. 315, par. 2 (d) of the Revised
Penal Code. We feel, however, that due to the absence of concrete evidence on the specific
nature of the obligation assumed or supposedly discharged by the issuance of the bad checks,
resolution of this controversial issue on the basis of the averments in the criminal informations alone
is not yet ripe. As revealed by the pleadings, the parties are at divergence on the character of the
obligation for which the private respondents issued the checks intended as payment thereof. Private
respondents maintain that the obligation is a pre-existing one. The prosecution, on the other hand,
represented to the trial courts in its Opposition to the Motions to Quash: "We will prove by our
evidence that said checks are not in payment of a pre-existing obligation." 18 The deferment of the
resolution becomes more imperative when it is considered that the question raised is one of first
impression and of consequential far-ranging effects on transactions in checks.

4. Ad interim, We hold that the facts charged in the informations against private respondents,
contrary to their claim, constitute estafa under Art. 315, par. 2 (d) of the Revised Penal Code. In
considering a motion to quash based on the ground "(t)hat the facts charged do not constitute an
offense," 19 the point of resolution is whether the facts alleged, if hypothetically admitted, would meet the
essential elements of the offense as defined in the law. 20 The facts alleged in the criminal charge should
be taken as they are. 21 An analysis of the two informations involved in the present case convinces Us
that the facts charged therein substantially constitute the integral elements of the offense as defined in
the law. And the averments in the two informations sufficiently inform the two private respondents of the
nature and cause of the accusations against them, thereby defeating any constitutional objection of lack
of notice. 22
ACCORDINGLY, the appealed orders of the respondent trial courts ordering the quashal of the
estafa informations against the two private respondents in the petitions at bar are hereby reversed
and set aside. The informations, as they are, substantially conform with the crime charged as
defined in the law. Let the arraignment of the private respondents in the criminal cases below be set
at the earliest date and, thereafter, the trial on the merits to proceed immediately. No costs.

SO ORDERED.

Makasiar, and Antonio JJ., concur.

Muñoz Palma, J., concur in the results.

Separate Opinions

TEEHANKEE, J., concurring:

I concur on the ground that the informations expressly allege that the crimes of estafa were
committed by respondents-accused "in the Municipality of Malolos, Province of Bulacan."
Respondents' motions to quash on the ground of improper venue, viz, that the checks issued by
them were issued by them and received by complainant elsewhere (in Caloocan City) must yield to
the express allegations of the informations, bearing in mind that what determines jurisdiction are the
allegations in the information and that venue is sufficiently conferred wherein any one of the
essential ingredients of the offense charged took place.

A quashal motion raising the question of lack of jurisdiction of the offense charged raises a simple
question of law imports on the part of the accused-movant a hypothetical admission of the facts
alleged in the information. (Rule 117 secs. 2 and 6; cf. IV Moran's Rules of Court 1970 ed., pp. 224,
238 and cases cited).

The informations actually charge that estafa was committed in two aspects: by obtaining the goods
by means of false pretenses and pretending to have sufficient funds for the checks issued in
payment of the goods, and by issuing checks without sufficient funds. (Article 315, pars. 2(a) and (d),
Revised Penal Code). The questions of jurisdiction re the first aspects has been duly resolved by
upholding the lower court's jurisdiction under the allegations of the informations. The question raised
as to the second aspect, viz, whether the amendatory Act on checks (Republic Act No. 4885
approved June 17, 1967) now includes the act of issuing a bad check in payment of a pre-existing
obligation in the crime of estafa, has been properly ruled as premature. The question of law raised
thereby cannot now be resolved until the facts, e.g. whether or not the checks were issued in
payment of pre-existing obligations, shall have been duly established at the trial.