- Petitioner
- Lim Tiu
- Respondent
- Ruiz y Rementeria
- Citation
- G.R. No. 5676
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Johnson, J.
- Decided
- March 2, 1910
Summary
This 1910 Supreme Court case established that third parties who contract with and pay an undisclosed agent in good faith are not liable to the principal. Plaintiffs sought payment for merchandise sold through their agent Domingo Tim Bun Liu to defendants, who had paid Domingo through barter and cash settlements over several months. The Court applied both Civil Code Article 1717 and Commercial Code Article 246, ruling that since defendants reasonably believed they were dealing with Domingo personally and had no notice of the agency relationship, their payment to him discharged their obligation. The decision protects good faith commercial transactions and clarifies the liability rules for undisclosed agency relationships in Philippine commercial law.