FLORENTINO RALLOS, ET AL. vs. TEODORO R.

YANGCO
G.R. No. 6906 ; September 27, 1911
DOCTRINE:
It is the duty of the principal on the termination of the relationship of principal and agent
to give due and timely notice to parties concerned. Failing to do so, he is responsible to
them for whatever goods may have been in good faith and without negligence sent to
the agent without knowledge, actual or constructive, of the termination of such
relationship.
FACTS:
1. Yangco sent to Florentino Rallos a letter offering a consignment agreement. In
the letter, he assigned Mr. Florentino Collantes to perform in his name and on his
behalf all acts necessary for carrying out his plans.
2. Accepting this invitation, the plaintiffs proceeded to do a considerable business
with Yangco through Collantes, as his factor, sending to him as agent for the
defendant a good deal of produce to be sold on commission. Later, the plaintiffs
sent to Collantes, as agent for the defendant, 218 bundles of tobacco in the leaf
to be sold on commission, as had been other produce previously. Collantes
received said tobacco and sold it for the sum of P1,744. The charges for such
sale were P206.96 leaving in the hands of Collantes the sum of P1,537.08
belonging to the plaintiffs. This sum was, apparently, converted to his own use.
3. It appears, however, that prior to the sending of said tobacco Yangco had
severed his relations with Collantes and that the latter was no longer acting as
his factor. This fact was not known to the plaintiffs.
4. Yangco refused to pay the said sum upon demand of the plaintiffs, placing such
refusal upon the ground that at the time the said tobacco was received and sold
by Collantes he was acting personally and not as agent of the defendant.
ISSUE:
Whether the plaintiffs, acting in good faith and without knowledge, having sent produce
to sell on commission to the former agent of the defendant, can recover of the
defendant under the circumstances above set forth.
DECISION:
Yes, the plaintiffs may recover from Yangco.
Having advertised the fact that Collantes was his agent and having given them a special
invitation to deal with such agent, it was the duty of the defendant on the termination of
the relationship of principal and agent to give due and timely notice thereof to the
plaintiffs. Failing to do so, he is responsible to them for whatever goods may have been
in good faith and without negligence sent to the agent without knowledge, actual or
constructive, of the termination of such relationship.