7. RALLOS V. YANGCO  The charges for the sale were P206.

96, leaving Collantes with the sum of

20 PHIL 269 P1,537.08 belonging to the plaintiffs. Apparently, this sum was converted
SEPTEMBER 27, 1911 to agent’s own use.
By: JUSTINE LIMJOCO  However, it appears that prior to the sending of the said tobacco, Yangco
has severed his relations with Collantes, and that the latter was no longer
Petitioners: FLORENTINO RALLOS his agent. This fact was not known by the plaintiffs, and no notice was
Respondents: TEODORO YANGCO given by the defendant.
Ponente: MORELAND, J.  Rallos demanded payment, but Yangco refused to pay. Yangco argued
that when the tobacco was received and sold by Collantes, the latter was
acting personally and not as his agent.
RECIT-READY: (Principal: Yangco, Agent: Collantes, Third Party: Rallos)
Yangco told Rallos that he’s opening a shipping and commission department,
ISSUE
and Rallos was invited to be a consignor. Collantes was given a SPA to act in
Whether or not the plaintiffs, acting in good faith, can recover the sum from the
behalf of Yangco. Acting on the knowledge that Collantes was Yangco’s agent,
defendant.
Rallos sent Collantes all the goods. However, prior to the sending of tobacco,
Yangco already cut ties with Collantes. Subsequently, Collantes kept the sum he
HELD/RATIO
received after selling the tobacco. Rallos demanded payment from Yangco, and
YES.
the latter refused. Supreme Court held that defendant Yangco is liable for not
notifying Rallos the termination of his relationship with Collantes.
 The Supreme Court held that the defendant is liable.
 Having advertised that Collantes was his agent, Yangco had the duty to
DOCTRINE: If the agent had general powers, revocation of the agency does not
give due and timely notice of the termination of the relationship of the
prejudice third persons who acted in good faith and without knowledge of the
principal and agent.
revocation.
 Since he failed to do so, he is responsible for whatever goods may have
been sent to the agent by the plaintiffs in good faith, and without
FACTS
negligence.
 Teodoro Yangco sent to plaintiff Florentino Rallos, among others, a letter
 The plaintiffs had no knowledge, actual or constructive, of the
informing the latter that he has opened a shipping and commission
termination of the relationship.
department in his steamship office for buying and selling leaf tobacco
and other native products under certain conditions. Yangco invited Rallos
to be a consignor in buying and selling leaf tobacco and other native
products.
 Rallos accepted Yangco’s invitation.
 In this letter, Yangco informed Rallos that Florentino Collantes was
conferred a power-of-attorney to act in behalf of Yangco. 
 Accepting this invitation, Rallos proceeded to do business with defendant
Yangco through the said Collantes.
 He sent to Collantes, as agent for the defendant, a good deal of produce
to be sold on commission.
 Rallos sent 218 bundles of tobacco leaf to be sold plus other produce.
 Collantes received the tobacco, and sold it for the sum of P1,744.