JOSEFA VS.
ZHANDONG TRADING CORPORATION ISSUE
417 SCRA 269
G.R. NO. 150903 DECEMBER 8, 2003
FACTS
Respondent Zhandong delivered to petitioner Josefa, who was introduced to it as a client by Mr. Tan, the
total volume of 313 crates of boards valued at P4,558,100.00 payable within 60 days from delivery. Instead of paying
respondent, petitioner remitted his payments to Tan who in turn delivered various checks to respondent, who accepted
them upon Tans assurance that said checks came from petitioner. When a number of the checks bounced, Tan
issued his own checks and those of his mother, but Tan later stopped payments. Respondent demanded payment from
Tan and petitioner but was ignored; hence he filed the instant complaint.
In his answer petitioner averred that he had already paid all his obligations to respondent through Tan.
Furthermore, he claimed he is not privy to the agreements between Tan and respondent, and hence, in case his
payments were not remitted to respondent, then it was not his (petitioner) fault and that respondent should bear the
consequences.
RULING
WON petitioner is liable for
payment of the boards to
respondent when he did not
negotiate the transaction with it,
rather through Tan as intermediary.
No. The transaction was negotiated between Tan and petitioner who only
received the goods delivered by respondent. Petitioner was not privy to the
arrangement between Tan and respondent. Petitioner has fully paid for the
goods to Tan with whom he had arranged the transaction.
Contracts take effect only between the parties, their successors in interest,
heirs, and assigns. When there is no privity of contract, there is likewise no
obligation or liability and thus, no cause of action arises. Petitioner, being not
privy to the transaction between Tan and respondent, should not be made
liable for the failure of Tan to deliver the payment to respondent.
Therefore, respondent should recover the payment from Tan.