Partnership Digester

Sevilla v. CA (1988)
J. Sarmiento

Under what topic: Partnership distinguished from joint venture and agency

Petitioner-appellants: Dr. Carlos L. Sevilla and Lina O. Sevilla

Respondent-appellees: Court of Appeals, Tourist World Services, Inc., Eliseo S. Canilao, and Segundina
Noguera

Synopsis: TWS, upon learning that Sevilla was connected with a rival firm, padlocked the premises of its
branch office and disconnected the telephone lines, which prevented Sevilla and her employees from
entering the said premises. TWS then terminated its lease contact for the use of the branch office. Sevilla
filed a complaint. TWS insisted that Sevilla was a mere employee, being the branch manager, and had no
say on the lease executed with private respondent Noguera.

Doctrine: An agency coupled with an interest cannot be revoked at will. Doing so will subject the
principal to payment of damages.

Facts: is material because if there was EE-ER

 Tourist World Services, Inc. (TWS) leased the
premises belonging to Segundina Noguera to
be used as a branch office of the former. Sevilla
held herself solidarily liable with TWS for the
payment of the rent. When the branch office
was opened, it was run by Sevilla payable to
TWS by any airline for any fare brought in
through the efforts of Sevilla, 4% would go to
Sevilla and 3% was to be withheld by TWS.
 When TWS was informed that Sevilla was
connected with a rival firm, Philippine Travel
Bureau, and since the branch was losing, TWS
considered closing down its office. The
contract of lease was terminated. Canilao, the
corporate secretary of TWS, went over to the
branch and padlocked the premises to protect
the interests of TWS. Sevilla and her
employees could not enter.
relationship, court has no jurisdiction to try
the case. It should have been filed with the
Court of Industrial Relations) and not a joint
business venture. She supports this claim by
declaring that:
(1) she was signatory to the lease contract and
was ‘solidarily’ liable with TWS for the
prompt payment of the rent;
(2) she did not receive any salary from TWS;
and
(3) she earned commissions for her own
passengers, her own bookings and her
own business obtained from airline
companies (She shared the 7%
commission she got from the airline
companies with TWS).
 The CA affirmed the decision of the trial court.
Hence, this petition.

 Sevilla filed for mandatory preliminary Issue/s - Holding:

injunction which the trial court dismissed
without prejudice.
 Sevilla filed an appeal, and one of her claims
was that the trial court erred in holding that
her arrangement with TWS was a mere
employer-employee relation (this distinction
What was the nature of the relationship between
Sevilla and TWS? PRINCIPAL-AGENT relationship.
CA REVERSED.
Ratio:
 It was not an employer-employee relation.
Sevilla was not subject to control by TWS

either as to the result or as to the means used.
Her binding herself to be solidarily liable with
TWS belies the claims of a master-servant
relationship. Furthermore, Sevilla was not in
the company’s payroll.
 It was not a joint venture. A joint venture,
including a partnership, presupposes
generally a 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.
 It is a principal-agent relationship. 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.
Sevilla herself pre-assumed her principal's
authority as owner of the business
undertaking. But unlike simple grants of a
power of attorney, the agency that in this case
cannot be revoked at will because it is one
coupled with an interest, the agency having
been created for mutual interest of the agent
and the principal. It appears that Lina Sevilla is
a bona fide travel agent herself, and as such,
she had acquired an interest in the business
entrusted to her. Moreover, she had assumed
Partnership Digester
a personal obligation for the operation
thereof, holding herself solidarily liable for the
payment of rentals. She continued the
business, using her own name, after Tourist
World had stopped further operations. Her
interest, obviously, is not to the commissions
she earned as a result of her business
transactions, but one that extends to the very
subject matter of the power of management
delegated to her. It is an agency that cannot be
revoked at the pleasure of the principal.
Accordingly, the revocation complained of
should entitle the petitioner, Lina Sevilla, to
damages.
EXTRA: The Court is convinced that there is
some malevolent design to put Sevilla in a bad
light. There was no proof that the branch was
losing and the padlocking was done 6 months
after (rebuttal to the “interest of the company”
argument of TWS).
Dispositive:
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.
Digester’s notes: