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106 Phil. 867

[ G. R. No. L-13547, December 29, 1959 ]




The defendant Bauang FACOMA (Farmers  Cooperative and Marketing  Association) is appealing  the decision of the Court of First Instance of La Union (Civil Case No. 2025), dated July 11, 1956, ordering it to pay to plaintiff Joaquin T. Ortega the sum of P3,136.10, with legal interest from the date of the filing of the complaint, plus costs.  The appeal was originally taken  to the Court of Appeals,  but by resolution of that  Court dated January 29,  1958, the appeal was sent up  to  us because of its opinion "that the issues involved  are purely legal, to wit: The propriety in not dismissing the case, the non-inclusion of  the ACCFA and the  applicability of Article  1883,  New Civil  Code."

The facts in this case are simple.  On June 6, 1955, plaintiff sold and delivered to defendant  2,643 kilos of fluecured Virginia leaf tobacco valued at P7,136.10.  On June 8 and June 13, 1955, defendant paid plaintiff the amount of  P1,325.00 and P2,675.00, respectively, on account  of  the total purchase price, leaving a  balance of P3,136.10, which the defendant in spite of repeated demands made upon it  has failed  and  refused to pay.   For the collection of this balance, the  present action was filed by plaintiff.

In its answer, defendant admitted  the allegations of the complaint but set up the affirmative defense that the tobacco leaf bought by  it from  plaintiff was shipped  and delivered  to  and  received  by  the  accfa  (Agricultural Credit  and  Cooperative Financing  Administration),  in accordance with an, agency contract entered into between said ACCFA as principal, and the defendant Bauang FACOMA, as agent,  for the purchase of local Virginia leaf tobacco, and  that  final liquidation had not been made between principal and agent.  Shortly after filing  its answer, defendant filed a "Motion to Bring in Third Party Defendant," attaching thereto its "Third Party Complaint" against the ACCFA praying that judgment be rendered against it for all sums that may be adjudged against defendant in favor of the plaintiff.

On May 12, 1956, plaintiff filed an "Opposition to Inclusion  of Third-Party Defendant and Motion for Judgment on the Pleadings."  On May  14, 1956, the trial court, finding the  ACCFA to be  a necessary party in the case, granted the motion to bring it as  a third-party defendant. On June 14, 1956, the ACCFA filed a  motion to strike out the third party complaint mainly  on  the ground  that it was filed without leave of Court.  On June 21, 1956, the trial court, presided  by another Judge, granted the motion and ordered that "the  third-party  complaint be stricken out."  On July 6, 1956, when the case was called for  trial, the parties, plaintiff  and  defendant,  filed the following stipulation  of facts:
"Come now the plaintiff and the  defendant  Bauang  FACOMA, thru its undersigned Attorney and to  this Honorable  Court respectfully submit the following stipulation of facts:
  1. That  the plaintiff admits that  a  Memorandum Agreement was entered into between defendant and  the ACCFA, copy of which is attached hereto at Annex 'A'.

  2. That  the plaintiff admits  that on  March 28, 1956, the  ACCFA revoked said Memorandum of  Agreement, copy of said Memorandum is herewith attached as Annex 'B'

  3. That  the defendant Bauang facoma  admits  that at the time the plaintiff sold  and delivered his  tobacco to the Bauang FACOMA, the plaintiff was not informed  of the Agency existing between the ACCFA and the defendant Bauang FACOMA.

  4. That  the purchase invoice issued to plaintiff  upon his delivery of the tobacco to the Bauang FACOMA does not mention nor disclose the ACCFA as being a party to the sale or in anyway  connected with the transaction, said form having been the standard receipt used by all FACOMA  in 1955.
PREMISES CONSIDERED, it is respectfully prayed that the foregoing stipulation of facts be approved and made the basis of  the decision of this Court as to the affirmative defenses alleged by the defendant."
On  the basis of the pleadings and the stipulation of facts above-reproduced, the trial court  on  July 11,  1956, rendered the appealed decision mentioned at the beginning of this opinion.

In support of its appeal, appellant makes the following assignment of errors:
"I. The lower court  erred in not dismissing the case against defendant.

"II. The lower court erred in not including  the Agricultural Credit and Cooperative  Financing  Administration (ACCFA) as third-party defendant.

"III. The lower court erred in basing its decision on Article 1883 of the Civil Code." Appellant invites our attention to  Civil Case No. 1024 for interpleader filed  in  the  Court  of First Instance of La Union, entitled "ACCFA, plaintiff, vs. Pio Bombani,  et al., defendants".
Appellants assures the Tribunal that plaintiff  Joaquin  T.  Ortega in  the present  case,  was  or  is one of the defendants in that Case No. 1024, whose purpose was that all  sellers of  tobacco leaf bought by or for ACCFA  in  the year  1955,  plaintiff Ortega herein among them, litigate for the  distribution and  collection among themselves of the sum of P93,660.72, as the price of said tobacco leaf, placed at their disposal.  The record shows that in accfa's motion to strike out  the  third-party complaint filed against it in the present  Case No. 1025, is included the following  statement:
"Moreover, the claim of  plaintiff which is sought to be the basis of the third-party  complaint is one of those included in Civil Case No.  1024 of this  Court, entitled 'ACCFA vs. Pio Bombani,  et al.' (for Interpleader)  which, if given due course, should render it unnecessary for the  numerous claimants to ventilate their claims  in separate ordinary civil actions.  As the undersigned counsel has manifested) in Civil  Case  No. 1024, interpleader was resorted  to precisely to obviate the multiplicity of suits, delay in  the recovery of the claimants, unnecessary expense en their part and waste of the valuable time of the Court."
Another fact cited by  appellant in support of its appeal is that the P4,000.00 sum total  of the  two installments of P1,325.00 and P2,675.00 delivered to plaintiff on account of the total purchase price of P7,136.10 was actually paid by the ACCFA itself.  From all this, appellant  urges that not  only  was the ACCFA the real  purchaser  of the leaf tobacco involved sold by the plaintiff, but that it was also willing and ready to pay the balance sought to be collected in the  present case.

On the other hand, plaintiff-appellee contends that the appealed decision is based on the fact  that the  defendant admitted  having purchased  and received from the plaintiff the Virginia leaf tobacco involved, valued at P7,136.10; that according to the  stipulation of facts, plaintiff was not  informed  of the relation of principal and agent between the ACCFA and the Bauang FACOMA at the time of the  purchase, and that the invoice covering the purchase which was issued to him neither mentions nor discloses the ACCFA as a party to the purchase; and on Article 1883 of the New Civil Code which provides that if an agent acts in his own name, the principal has no right of action against the persons with whom said agent has contracted, neither have such persons  against the principal, and  that in such case, the agent is  the one bound,  as if the transaction were his own.

Considering  the  facts and circumstances surrounding this case,  we  are inclined to agree with the appellant. Although at the time of the purchase of the  tobacco  in question, the attention  of  the plaintiff was not called  to the existence of the agency agreement between the ACCFA and the  Bauang FACOMA , there is reason to believe  that he actually knew of that agency and that the tobacco leaf was purchased not on account of the Bauang FACOMA , but actually for the ACCFA, which is the agency of the Government charged with the purchase of Virginia leaf tobacco,  in the implementation of the policy of the Government to buy all Virginia leaf tobacco grown locally, for purposes of aiding Virginia tobacco growers and to foster the  tobacco industry.   It is  a fact well known that the FACOMA (Farmers Cooperative and Marketing Association)  as  its name implies, is concerned  mainly, if not exclusively, in  the sale and marketing of the agricultural produce of the farmers.  It is not engaged  in the buy and sell business for  profit. As  already stated, installments on account of the total sales price was paid by the ACCFA, not by the defendant.  Furthermore, the action for interpleader, Civil Case No. 1024 of the Court of First Instance of La Union,  which must have been  filed ahead of the present Case No. 1025 in the same court, judging by its case number, was notice to those persons that sold tobacco leaf in La Union in the year 1955,  including plaintiff herein, that the ACCFA was  the real buyer of said tobacco leaf and that it was ready to pay the amount of said purchases.  Again, the motion by the ACCFA to strike out the  third-party complaint in this present case  with its statement above-reproduced  emphasizes  the policy of the  Government to avoid multiplicity of suits, and the delay and expense involved in separate actions to recover the purchase price of Virginia leaf tobacco by  consolidating all said claims in one single action when possible.

In view of  the foregoing, the appealed decision is hereby set aside and the case  is ordered  remanded to the trial court for further proceedings.  The order of the trial court striking out the third-party complaint  is set aside  and the ACCFA should be included as a party in the  "further proceedings"  contemplated.  No  costs.

Paras, C. J.,  Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia, Barrera, and Gutierrez David,  JJ., concur.