Case Digest (G.R. No. 153674)
Facts:
Avon Cosmetics, Incorporated, Jose Marie Franco, Petitioners, vs. Leticia H. Luna, Respondent, G.R. No. 153674, December 20, 2006, the Supreme Court First Division, Chico‑Nazario, J., writing for the Court.Petitioner Avon acquired Beautifont, Inc. in 1978; respondent Leticia H. Luna had worked for Beautifont since 1972 and continued as a supervisor under Avon. On November 5, 1985, Avon and Luna executed a written Supervisor’s Agreement that (inter alia) permitted supervisors to purchase Avon products at wholesale but contained an exclusivity clause (paragraph 5) requiring supervisors to “sell or offer to sell, display or promote only and exclusively products sold by the Company,” and a termination clause (paragraph 6) permitting either party to terminate “at will, with or without cause, at any time upon notice to the other.”
In late 1988 Luna became a Group Franchise Director of Sandre Philippines, Inc. and began selling its vitamin products, including to Avon employees. On September 23, 1988 Luna obtained a legal opinion concluding that parts of the Supervisor’s Agreement (including paragraph 5 and paragraph 6) were contrary to law and public policy; she circulated that opinion to colleagues. On October 11, 1988 Avon, through its President Jose Mari Franco, notified Luna that her Supervisor’s Agreement was terminated for violating paragraph 5.
Aggrieved, Luna filed a complaint for damages with the Regional Trial Court (RTC) of Makati, Branch 138 (Civil Case No. 88‑2595). After trial, the RTC rendered judgment on January 26, 1996 in Luna’s favor, awarding moral damages of P100,000, attorney’s fees of P20,000, and costs. Avon filed a timely appeal; the RTC transmitted the records to the Court of Appeals which, in CA‑G.R. CV No. 52550, affirmed the RTC’s decision in a May 20, 2002 judgment. Avon then filed a Petition for Review on Certiorari under Rule 45 with the Supreme Court, challenging (1) the Court of Appeals’ declaration that paragraph 5 is...(Pro-only)
Issues:
- Are the issues raised on appeal questions of law that the Court may decide without re‑examining factual findings?
- Is paragraph 5 (the exclusivity clause) of the Supervisor’s Agreement void as against public policy and an unreasonable restraint of trade?
- Is paragraph 6 (the termination‑at‑will clause) of the Supervisor’s Agreement void as against public policy or otherwise unenforceable such that Avon could not validly terminate Luna?
- Were the awards of moral damages and attorney’s fees to respondent proper, and is petitioner e...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
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Doctrine:
- (Pro-only)