DR. CARLOS L. SEVILLA VS.

COURT OF APPEALS
GR Nos. L-41182-3
Apr 15, 1988

FACTS:

A contract by and between Noguera and Tourist World Service (TWS), represented by Canilao, wherein
TWS leased the premises belonging to Noguera as branch office of TWS. When the branch office was
opened, it was run by appellant Sevilla payable to TWS by any airline for any fare brought in on the efforts
of Mrs. Sevilla, 4% was to go to Sevilla and 3% was to be withheld by the TWS. Later, TWS was informed
that Sevilla was connected with rival firm, and since the branch office was losing, TWS considered closing
down its office. On January 3, 1962, the contract with appellee for the use of the branch office premises
was terminated and while the effectivity thereof was January 31, 1962, the appellees no longer used it.
Because of this, Canilao, the secretary of TWS, went over to the branch office, and finding the premises
locked, he padlocked the premises. When neither appellant Sevilla nor any of his employees could enter,
a complaint was filed by the appellants against the appellees. TWS insisted that Sevilla was a mere
employee, being the “branch manager” of its branch office and that she had no say on the lease executed
with the private respondent, Noguera.

ISSUE: Whether ER-EE relationship exists between Sevilla and TWS.

HELD:

The records show that petitioner, Sevilla, was not subject to control by the private respondent TWS. In
the first place, under the contract of lease, she had bound herself in solidum as and for rental payments,
an arrangement that would belie claims of a master-servant relationship. That does not make her an
employee of TWS, since a true employee cannot be made to part with his own money in pursuance of his
employer’s business, or otherwise, assume any liability thereof. In the second place, when the branch
office was opened, the same was run by the appellant Sevilla payable to TWS by any airline for any fare
brought in on the effort of Sevilla. Thus, it cannot be said that Sevilla was under the control of TWS. Sevilla
in pursuing the business, relied on her own capabilities. It is further admitted that Sevilla was not in the
company’s payroll. For her efforts, she retained 4% in commissions from airline bookings, the remaining
3% going to TWS. Unlike an employee, who earns a fixed salary, she earned compensation in fluctuating
amount depending on her booking successes. The fact that Sevilla had been designated “branch manager”
does not make her a TWS employee. It appears that Sevilla is a bona fide travel agent herself, and she
acquired an interest in the business entrusted to her. She also had assumed personal obligation for the
operation thereof, holding herself solidary liable for the payment of rentals.
Wherefore, TWS and Canilao are jointly and severally liable to indemnify the petitioner, Sevilla.