1. Tuazon v.

Heirs of Ramos
GR NO. 156262 DOCTRINE:
July 14, 2005 1. Civ Code Art 1868. In a contract of agency a person binds himself to render some
By: Calaguas service or to do something in representation or on behalf of another, with the
Topic: Agency; Definition, Elements consent or authority of the latter.
Petitioners: Maria Tuazon, Alejandro P. Tuazon, Melecio P. Tuazon, Spouses
Anastacio And Mary T. Buenaventura 2. Elements of Agency (CORL): (1) Consent - expressed or implied; (2) Object -
Respondents: Heirs of Bartolome Ramos execution of juridical act in relation to a 3rd person; (3) Representation - agent acts
Ponente: Panganiban, J. not for oneself but as a representative; (4) Limitation - agent must act within the
scope of their authority
RECIT-READY/SUMMARY:
3. Basis of Agency is Representation - there must be an actual intent to appoint by
- Petitioners bought cavans of rice from Respondent Bartolome Ramos. They were
the principal and actual intent to accept appointment by the agent
unable to pay for some of the cavans of rice upon their delivery so they had to
issue checks for the unpaid cavans as payment. Upon encashment, the checks
4. Agency must be proven by the party alleging its existence
were dishonored and after demands by the Respondents, Petitioners were still
unable to pay.
FACTS
- According to Petitioners, they were only agents of Respondent Bartolome’s wife
> Petitioners bought multiple cavans of rice (8,326 cavans) from Bartolome Ramos
who was the real owner and seller of the cavans of rice and that the real buyer of
(now deceased)
the rice was Evangeline Santos.
- Tuazons left some cavans unpaid (paid only for 4,437 cavans, leaving 3,889
- Petitioners claim that the checks were issued by Santos to Petitioner Maria
cavans unpaid)
Tuazon and that the latter turned over the same to Respondents, without
- The value of the unpaid cavans: Php 1,211,919.00
knowing that these checks were not funded. Petitioners also seek to include
- to pay for the unpaid cavans, Petitioners issued several Trader Bank checks
Santos in the case as an indispensable party since the checks were drawn to her
- The checks bounced upon encashment due to insufficiency of funds and
name and that her bouncing checks were the root of the problem.
the Petitioners failed to provide payment even after demand
- The RTC denied the motion to include Santos in the case.
- Respondents claim that Petitioners allegedly anticipated getting sued and
- Petitioners were sued both Civilly and Criminally but were acquitted from all
committed fictitious sales of their properties to avoid payment
Criminal charges. Petitioners appealed their Civil liability, as well as Santos’ non-
> Petitioners uses as a defense that ONE, it was Bartolome’s wife who owned and
inclusion to the case to the CA but the CA affirmed the RTC since Petitioners failed
sold the cavans, and TWO, that Petitioner Maria Tuazon was merely an agent
to prove the existence of Agency and that Petitioner M. Tuazon indorsed all the
Bartolome’s wife to deal with Evangeline Santos and hence Santos should be an
checks.
indispensable party to the case
- SC sustained RTC and CA on the same grounds as the ruling of the CA. SC defined
- Petitioners claim that Santos was the real buyer and that she issued the
Agency (Civ Code Art 1868) and brokedown its elements to be Consent, Object,
checks TO Petitioner Maria Tuazon as payment
Representation, Limitation. It was declared the the basis of Agency was
- in good faith, Petitioner M. Tuazon turned over the checks to
representation and that this required mutual intent, without which no agency
Ramos not knowing that the checks she received were not
could exist. SC also found that Petitioners sued Santos on their own behalf which
funded
negates their claims. If they were really agents, they should have sued on behalf
- Petitioners also refuted the alleged fictitious sales saying that they were
of their principals.
then making ends meet and the sales were done in good faith
- SC also held that since Petitioner M. Tuazon indorsed the checks, this meant that
- Petitioners claim it cannot be proven that they were the buyers due to the
in the event the checks were dishonored, as indorser, she ceases to be secondarily
lack of sales invoice or official receipts indicating them as the buyers
liable and becomes just as liable as the original obligor. Indorsing instrument
- Claim that as merely agents, they are not liable
means, in case it is dishonored, indorser will pay for its corresponding amount.
> Civil and Criminal cases were filed by Respondents against Petitioners
 - Petitioners were acquitted of Criminal charges but were found Civilly liable > Once an instrument is dishonored, the indorser ceases to be secondarily
> Petitioners then moved to file a 3rd party complaint against Santos since the checks liable and becomes just as primarily liable as the original obligor
were drawn to her name BUT THE RTC DENIED THIS MOTION - hence, the holder of the instrument need not go after the
- Petitioners appealed their Civil liability original maker
> CA sustained RTC’s decision > as per definition, and “Indispensable party” is a party without which no
- accdg. to CA, Petitioners failed to prove the existence of Agency between final determination can be had
them and Respondents
- ruled that there was no need to implead Santos as an indispensable party
to the case since Petitioner M. Tuazon indorsed the all the checks making
her subsequently liable
- Petitioners appeal to SC

ISSUE
(1) Whether Petitioners were agents of respondents (ATP)
(2) Whether Santos should be an indispensable party to the case (Nego)

HELD/RATIO
Wherefore, Petition is denied and assailed decision of the RTC and CA are affirmed
(1) No. Petitioners were not able to prove the existence of agency between
them and Respondents
> SC defined Agency (Art 1868 Civ Code)
> brokedown the elements of agency (CORL)
> declared that the basis of agency is representation and that absent
mutual consent, there can be no agency
> The contract of Agency must be proven by the party alleging its existence
- Generally, the declarations of an existing contract of agency by
the agent is insufficient to prove the existence of agency
- Petitioners failed to provide ample proof of the existence of
agency despite employing this as an affirmative defense
> SC noted that Petitioners also filed a collection suit against Santos on
their own behalf
- if they were really merely agents, they should have filed on
behalf of their principals
- their action negates their claim that they were merely agents of
Petitioners

(2) No. Santos is not an indispensable party to the case

> Because Petitioner M. Tuazon indorsed the checks
- as indorser, she warranted that upon presenting the checks, the
same would be accepted or paid
- but if the same is were dishonored, the indorser would pay the
corresponding amount