463 SCRA 408


Respondents  alleged  that  on  a  relevant  date,  spouses  Tuazon  purchased from their predecessor-in-interest cavans of rice.  That on the total number of cavans, only a certain portion  has been paid for.  In payment thereof, checks have been issued but on presentment, the checks were dishonored.  Respondents  alleged  that  since  spouses  anticipated  the  forthcoming  suit against them, they made fictitious sales over their properties.  As defense, the spouses averred that it was the wife of Bartolome who effected the sale and that Maria was merely her agent in selling the rice.  The true buyer of the cavans was Santos.  The spouses further averred that when Ramos got the check from Santos, she took it in good faith and didn't knew that the same were unfunded. 


First, there is no contract of agency.

If  it  was  truly  the  intention  of  the  parties  to  have  a  contract  of  agency, then when the spouses sued Santos on a separate civil action, they should have instituted the same on behalf and for the respondents.  They didn't do so.    The filing in their own names negate their claim that they acted as
mere agents in selling the rice.

Second, the spouses are liable on the check.

As  indorser,  Tuazon  warranted  that  upon  due  presentment,  according  to their  tenor,  and  that  in  case  they  were  dishonored,  she  would  pay  the corresponding  amount.    After  the  instrument  is  dishonored  by  non-payment,  indorsers  cease  to  be  merely  secondarily  liable.    They  became
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.      Santos   is   not   an indispensable party to the suit against the spouses.