TERMINATION OF THE AGENCY; DUTY OF PRINCIPAL TO
GIVE DUE NOTICE
- The general rule is that, when the relationship of principal and
agent is established, and the principal gives notice of the agency and
holds out the agent as his authorized representative, upon the
termination of the agency it is the duty of the principal to give due
and timely notice thereof, otherwise, he will be held liable to third
parties acting in good faith and properly relying upon such agency.
RALLOS VS. YANGO
FLORENTINO RALLOS, ET AL., plaintiff-appellee,
vs.
TEODORO R. YANGCO, defendant-appellant.
G.R. No. 6906
September 27, 1911
Potente: MORELAND, J.:
NATURE OF CASE
This is an appeal from a judgment of the Court of First Instance of
the Province of Cebu
FACTS
Yangco sent Rallos a letter inviting the latter to be the consignor in
buyingand selling leaf tobacco and other native products. Terms and
conditions were alsocontained in the letter.
Accepting the invitation, Rallos proceeded to do a considerable
business withYangco through the said Collantes, as his factor,
sending to him as agent forYangco a good deal of produce to be sold
on commission.
Rallos sent to the said Collantes, as agent for Yangco, 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 thesum of 1,537.08 belonging to Rallos. This sum
was, apparently, converted to hisown use by said agent.
It appears, however, that prior to the sending of said tobacco Yangco
hadsevered his relations with Collantes and that the latter was no
longer acting as hisfactor. This fact was not known to Rallos; and it
is conceded in the case that nonotice of any kind was given by
Yangco of the termination of the relations betweenYangco and his
agent, Collantes.
Yangco thus refused to pay the said sum upon demand of Rallos,
placingsuch refusal upon the ground that at the time the said tobacco
was received andsold by Collantes, he was acting personally and not
as agent of Yangco.
ISSUE/s of the CASE
Whether or not Yangco as principal is liable brought by the sale of
the produce
ACTION OF THE COURT

Court of First Instance of the Province of Cebu: in favor of the

plaintiffs, in the sum of P1,537.08, with interest at 6 per cent per
annum from the month of July, 1909, with costs.

SC: Affirmed.

COURT RATIONALE ON THE ABOVE CASE

Yes. Yangco, as principal is liable. Having advertised the fact that

Collanteswas his agent and having given special notice to Rallos of
that fact, and having given them a special invitation to deal with
such agent, it was the duty of Yangcoon the termination of the
relationship of the principal and agent to give due andtimely notice
thereof to Rallos. Failing to do so, he is responsible to them
forwhatever goods may have been in good faith and without
negligence sent to theagent without knowledge, actual or
constructive, of the termination of such relationship.

SUPREME COURT RULING

For these reasons the judgment appealed from is confirmed,

without special finding as to costs.