Sevilla vs.

Court of Appeals
160 SCRA 171

FACTS:
On the strength of a contract, Tourist World Service Inc. (TWS) leased the premises
belonging to Mrs. Segundina Noguera for the formers 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.

ISSUE:
Whether or not there was an employer-employee relationship between TWS and Sevilla

RULING:
NONE. It was a principal-agent relationship. 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 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 employers 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
companys 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.