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JOSEFA VS.

ZHANDONG TRADING CORPORATION ISSUE RULING


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