Case Summary (G.R. No. L-41182-3)
Procedural History
The lease agreement for the Mabini office was executed on October 19, 1960, naming Noguera as lessor, TWS as lessee, and Lina Sevilla as co-obligor for rent. After discovering that Lina Sevilla accepted engagement with a rival firm in November 1961, TWS’s board resolved on December 2, 1961 to abolish the Ermita branch office. The lease was formally terminated January 3, 1962 (effective January 31), but the premises were padlocked by Canilao on June 4, 1962. Initial complaints and counterclaims were dismissed without prejudice; after refiling, the trial court and the Court of Appeals both ruled against the Sevillas.
Factual Findings
Lina Sevilla managed the branch office independently, soliciting airline bookings and retaining 4% of commissions (with 3% to TWS). She was not on TWS’s payroll, contributed office furnishings and staff salary, and guaranteed rental payments under the lease. TWS claimed she was a mere employee (“branch manager”) subject to its control. After lease termination, the office telephone remained disconnected and the premises padlocked without notice to Lina Sevilla or her counsel.
Legal Issues
- Whether Lina Sevilla’s relationship with TWS was employer–employee, joint venture, partnership, or agency.
- Whether TWS lawfully disconnected telephone service.
- Whether TWS and Canilao lawfully padlocked the premises without notice.
- Whether Noguera is liable for forcible dispossession.
Nature of the Relationship
The right-of-control test and economic indicators (payroll inclusion, fixed salary) establish employment. Lina Sevilla was neither subject to control over means and ends nor included in TWS’s payroll; she bore liability for rents and earned variable commissions. Titles (“branch manager”) are not determinative. Joint venture or partnership requires equal proprietary interest and mutual management, which the parties did not exhibit.
Principal-Agent Relationship Coupled with Interest
The parties’ arrangement most closely fits an agency: Sevilla acted “for and on behalf” of TWS in soliciting fares, earned commissions, and had a personal stake by guaranteeing rent. She held an irrevocable power of management coupled with interest, since revocation would deprive her of both commission rights and the business subject matter.
Unlawful Padlocking and Disconnection
TWS, as lessee, lacked authority to cancel the lease and padlock the premises without notice to Sevilla, who was explicitly named in the lease. The failure to restore telephone service—whether directly disconnected or condoned—further paralyzed her business. These acts violated Articles 19–21 of the Civil Code by willfully ca
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Facts
- On October 19, 1960, Mrs. Segundina Noguera (lessor) executed a lease (Exhibit A/Exhibit 2) with Tourist World Service, Inc. (TWS), represented by Eliseo S. Canilao, and a third-party guarantor, Lina O. Sevilla, solidarily liable for prompt payment of monthly rent on premises at A. Mabini St., Manila.
- Upon opening the branch office, Lina Sevilla ran its operations, earning a 7% commission on airline fares she procured—retaining 4% and remitting 3% to TWS.
- On November 24, 1961, TWS received information that Sevilla was connected with a rival firm; the branch was reportedly unprofitable.
- On December 2, 1961, TWS’s board passed two resolutions: (1) abolishing the branch manager’s office and (2) authorizing the corporate secretary to take possession of branch properties.
- On January 3, 1962, TWS terminated the lease with effectivity January 31, 1962; it ceased using the office, though Sevilla continued operations as of November 1961.
- Unable to reach Sevilla, corporate secretary Gabino Canilao padlocked the premises on June 4, 1962, to “protect TWS’s interests.”
- Sevilla and Dr. Carlos L. Sevilla filed a complaint for a mandatory injunction; respondents counter-claimed. The trial court dismissed both actions without prejudice, reinstated Noguera’s counterclaim, then later dismissed all claims for lack of merit.
Procedural History
- Trial Court (Branch XIX, CFI Manila): Dismissed plaintiffs’ complaint and counterclaims of respondents for lack of merit.
- Court of Appeals: Affirmed the lower court’s dismissal.
- Supreme Court: Certiorari petition by appellants granted; appeal presents six assignments of error focusing on characterization of Sevilla’s relationship with TWS, padlocking, telephone disconnection, and liability of Noguera.
Issues
- Whether Tourist World Service, Inc. unilaterally disconnected the branch office telephone lines.
- Whether the padlocking of the premises by TWS was actionable.
- Whether the true lessee was TWS alone or TWS together with Lina Sevilla.