SEVILLA v.

CA

FACTS:

Based on the strength of a contract, Tourist World Service Inc. (TWS) leased the premises
belonging to Mrs. Segundina Noguera for the former’s use as a branch office. Lina Sevilla bound
herself solidarily liable with TWS for the prompt payment of the monthly rentals thereon. 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 Sevilla, 4% was to go to Sevilla and 3% was to be withheld
by TWS.

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. Two resolutions of the TWS board of directors were passed to abolish the office
of the manager and vice president of the branch office and authorizing the corporate secretary to
receive the properties in the said branch office.

Subsequently, the corporate secretary went to the branch office, and finding the premises locked
and being unable to contact Sevilla, padlocked the premises to protect the interests of TWS.

When neither Sevilla nor her employees could enter the locked premises, she filed a complaint
against TWS with a prayer for the issuance of a mandatory preliminary injunction.

The trial court dismissed the case holding that TWS, being the true lessee, was within its
prerogative to terminate the lease and padlock the premises. It likewise found that Sevilla was a
mere employee of TWS and as such, was bound by the acts
of her employer.

The CA affirmed. Hence this petition.

ISSUES

1. Whether or not there was an employer-employee relationship between TWS and Sevilla?
2. Whether or not the padlocking of the premises by TWS without the knowledge and consent of
Sevilla entitled the latter to the relief of damages prayed for?

HELD

1. NO. It was a principal-agent relationship. In this jurisdiction, there has been no uniform test to
determine the existence of an employer-employee relation. In general, We have relied on the so-
called right of control test “where the person for whom the services are performed reserves a
right to control not only the end to be achieved but also the means to be used in reaching such
end.” In addition, the existing economic conditions prevailing between the parties, like the
inclusion of the employee in the payrolls, are also considered in determining the existence of an
employer-employee relationship.

• Sevilla was not subject to control by TWS either as to the result of the enterprise or as to the
means used in connection therewith.

• Under the contract of lease, Sevilla bound herself in solidum for the rental payments; an
arrangement that would belie the claims of a master-servant relationship for a true employee
cannot be made to part with his own money in pursuance of his employer’s business, or
otherwise assume liability thereof.

• Sevilla was not in the company’s payroll. She retained 4% in commissions from airline
bookings, the remaining 3% going to TWS. Unlike an employee who usually earns a fixed
salary, she earned compensation in fluctuating amounts depending on her booking successes.

• The fact that Sevilla has been designated “branch manager” does not make her, ergo, TWS’
employee. Employment is determined by the right of control test and certain economic
parameters. Titles are weak indicators.

• When Sevilla agreed to man TWS’ Ermita branch office, she did 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, TWS.

2. YES. For its unwarranted revocation of the contact of agency, TWS should be sentenced to
pay damages.

• Sevilla had acquired a personal stake in the business itself, and necessarily, in the equipment
pertaining thereto’

• Sevilla was not a stranger to that contract of lease having been explicitly named therein as third
party in charge of rental payments. She could not be ousted from possession summarily as one
would eject an interloper.

• 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.