Short answer. He must report the credit and name the buyers. Under Article 1906, a commission agent who sells on credit with the principal's authority shall so inform the principal, with a statement of the names of the buyers. If he fails to do so, the sale is deemed to have been made for cash.
What the law says
Should the commission agent, with authority of the principal, sell on credit, he shall so inform the principal, with a statement of the names of the buyers.
Civil Code, Article 1906 — Authorized Credit Sale. Read the full provision →
Credit sales must be reported, with the buyers named
When a commission agent is allowed to sell the principal's goods on credit, the law requires him to keep the principal informed of that fact and of who owes the money. Article 1906 provides that should the commission agent, with authority of the principal, sell on credit, he shall so inform the principal, with a statement of the names of the buyers. So a credit sale is not something the agent may keep to himself. He must report two things: that the sale was on credit, and the identity of the buyers.
The penalty: the sale is treated as for cash
The article backs the reporting duty with a sharp consequence. Should he fail to do so, the sale shall be deemed to have been made for cash insofar as the principal is concerned. So if the agent sells on credit but does not report it and name the buyers, the law treats the sale, as between agent and principal, as if it had been a cash sale. The practical effect is severe for the agent: the principal is entitled to be paid as though the money had come in immediately, and the risk of the buyer's non-payment shifts onto the agent who failed to report.
Why the law does this
The rule aligns the agent's incentives with honest, prompt reporting. A commission agent authorised to sell on credit is extending the principal's money on trust to buyers the principal may not know; the principal must be told at once who they are, so he can decide whether he is content with the credit and can act if a buyer defaults. If the agent could sell on credit silently, the principal would be exposed to unknown debtors and unable to protect himself. Deeming the sale a cash sale when the agent fails to report puts the loss where the fault is — on the agent who withheld the information.
If your goods were sold on credit
If you authorised your commission agent to sell on credit, expect — and insist on — a prompt report that names the buyers, not just a figure. If you did not get it, this article works in your favour: you may treat the sale as a cash sale and require the agent to pay you as if the money had been collected, leaving him to chase the buyer. So keep track of what you authorised and what the agent actually reported, and by when.