Sevilla v. The Court of Appeals

G.R. Nos. L-41182-3. April 15, 1988

FACTS:

In 1960, the Tourist World Services Inc. (TWS) and Sevilla entered into  a lease contract for the use as branch office. In the said contract, both parties were held solidarily liable for the prompt payment of the monthly rental agreed on. When the branch office was opened, it was run by appellant Sevilla wherein any airline fare brought in on her efforts, 4% of that would go to her and 3% was to be withheld by TWS.

The TWS  appears to have been informed that Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the TWS considered closing down its office. The premises were locked and neither  the appellant Sevilla nor any of her employees could enter, a complaint was filed by the herein appellants against the appellees with a prayer for the issuance of mandatory preliminary injunction.

In the appeal, Lina Sevilla claims she was not an employee of the TWS to the end that her relationship with TWS was one of a joint business venture. She declares that she did not receive any salary from TWS and only earned commissions. Sevilla likewise claimed that she shared in the expenses maintaining the office and TWS shouldered the rental in consideration for the 3% split in the commissions procured.

TWS contend that the appellant was an employee of the appellee Tourist World Service, Inc. and as such was designated manager and she had no say on the lease executed.

ISSUE:

Whether or not appellant Sevilla was in a joint venture with TWS or at least its agent coupled with an interest which could not be terminated or revoked unilaterally by TWS.

HELD:

It is the Court’s considered opinion, that when the petitioner, Lina Sevilla, agreed to (wo)man the private respondent, Tourist World Service, Inc.’s Ermita office, she must have done so pursuant to a contract of agency. It is the essence of this contract that the agent renders services “in representation or on behalf of another.”  In the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of her principal, Tourist World Service, Inc. As compensation, she received 4% of the proceeds in the concept of commissions. And as we said, Sevilla herself, based on her letter of November 28, 1961, presumed her principal’s authority as owner of the business undertaking. We are convinced, considering the circumstances and from the respondent Court’s recital of facts, that the parties had contemplated a principal-agent relationship, rather than a joint management or a partnership.

The agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for the mutual interest of the agent and the principal. Accordingly, the revocation complained of should entitle the petitioner, Lina Sevilla, to damages.

And apparently, Sevilla herself did not recognize the existence of such a relation. In her letter of November 28, 1961, she expressly “concedes your [Tourist World Service, Inc.’s] right to stop the operation of your branch office,”  in effect, accepting Tourist World Service, Inc.’s control over the manner in which the business was run. A joint venture, including a partnership, presupposes generally a parity of standing between the joint co-venturers or partners, in which each party has an equal proprietary interest in the capital or property contributed  and where each party exercises equal rights in the conduct of the business. Furthermore, the parties did not hold themselves out as partners, and the building itself was embellished with the electric sign “Tourist World Service, Inc.,”  in lieu of a distinct partnership name.

DISPOSITIVE PORTION:

WHEREFORE, the Decision promulgated on January 23, 1975 as well as the Resolution issued on July 31, 1975, by the respondent Court of Appeals is hereby REVERSED and SET ASIDE. The private respondent, Tourist World Service, Inc., and Eliseo Canilao, are ORDERED jointly and severally to indemnify the petitioner, Lina Sevilla, the sum of P25,000.00 as and for moral damages, the sum of P10,000.00, as and for exemplary damages, and the sum of P5,000.00, as and for nominal and/or temperate damages.

DOCTRINE:

The agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for the mutual interest of the agent and the principal.