Tuazon, et al v.

Heirs of Bartolome Santos

G.R. No. 156262
July 14, 2005
FACTS: This case involves Spouses Tuazon who purchased 8,326 cavans of rice from Bartolome
Ramos (deceased). Only 4,437 cavans were paid that represented value of 1,211,919 PHP or
3,889 cavans. In payment of the obligation, petitioner issued checks that were subsequently
dishonored for insufficiency of funds. According to respondents, spouses Tuazon executed 2
fictitious deeds of sale of their property in order for them not to answer to their debt to the
damage of respondents. Petitioners averred that the were not the ones who purchased the rice but
one Evangeline Santos who issued the checks and that Maria Tuazon merely acted as an agent
who turned the checks to Magdalena Ramos (wife of deceased). The trial court acquitted the
Tuazons in all criminal cases but these case appeals the civil liability.
ISSUE: Whether the CA erred in rendering that Evangeline Santos is not an indispensable party
to the suit
HELD: No, the CA did not err. Respondents cause of action is founded on petitioners failure to
pay the purchase price of the rice as the questioned checks were indorsed in favor of respondents
in accordance with Section 31 and 63 of the NIL. Santos, being the draw of the check, is
immaterial to this case. Maria Tuazon warranted that upon due presentment the checks were to
be accepted according to their tenor and that should they be dishonored, she would pay the
amount. After an instrument is dishonored by non-payment, indorser ceases to be merely
secondarily liable and become principal debts whose liability is identical to that or original
obligor. The holder of the negotiable instrument need not even proceed against the maker before
suing the indorser. Clearly, Evangeline Santosas drawer of the checksis NOT an
indispensable party in an action against Maria Tuazon who is the indorser.