Case Citation: G.R. No.

6906

Date: September 27, 1911

Petitioners: FLORENTINO RALLOS, ET AL.

Respondents: TEODORO R. YANGCO

Antecedent Facts: In November, 1907, the defendant sent to the plaintiff Florentino Rallos a
letter of invitation of which was accepted by the latter together with the other
plaintiffs to do a considerable business with the defendant through Mr.
Florentino 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
the said Collantes, as agent for the defendant, 218 bundles of tobacco in the
leaf to be sold on commission, as had been other produce previously. The
said 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 said Collantes
the sum of P1,537.08 belonging to the plaintiffs. This sum was, apparently,
converted to his own use by said agent. However, prior to the sending of said
tobacco the defendant 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; and it is conceded in the case that no notice of any kind was given
by the defendant to the plaintiffs of the termination of the relations between
the defendant and his agent. The defendant 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. This action was brought to recover said
sum.

MTC/RTC Ruling: The Court of First of Cebu Instance rendered judgment in favor of the plaintiff.
hence this appeal.

Issue: Whether or not 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

SC Ruling: YES, the defendant is liable. 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.

For these reasons the judgment appealed from is confirmed, without special
finding as to costs.