Sevilla v. Court of Appeals

G.R. Nos. L-41182-3, 15 April 1988

FACTS:

Mrs. Noguera entered into a contract of lease w/ TWSI, signed by Mr. Canilao in its behalf, to be used as branch office of the latter. Petitioner Mrs. Sevilla also signed as someone solidarily liable with TWSI for the prompt payment of the monthly rental. The said branch was run by Mrs. Sevilla and is also an independent agent selling tickets of various airlines, in which she receives commission of 7%. She gives 3% of which to TWSI.

TWSI was informed that Mrs. Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since the branch office was anyhow losing, the Tourist World Service considered closing down its branch office. Mr. Canilao went over to the branch office, and, finding the premises locked, and, being unable to contact petitioner, he padlocked the premises to protect the interest of TWSI.

A complaint was filed by petitioner when neither she nor any of her employees could enter the locked premises. She contends that she and TWSI entered into a Joint Venture business. Hence, she has a right on the premises.

ISSUE:

Whether there is a contract of agency between TWSI and petitioner.

RULING:

When the petitioner, Lina Sevilla, agreed to manage the TWSI’s Ermita office, she must have done 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, TWSI. As compensation, she received 4% of the proceeds in the concept of commissions. But unlike simple grants of a power of attorney, the agency that we hereby declare to be compatible with the intent of the parties, cannot be revoked at will. The reason is that it is one coupled with an interest, the agency having been created for the mutual interest of the agent and the principal.

It appears that Lina Sevilla is a bona fide travel agent herself, and as such, she had acquired an interest in the business entrusted to her. Moreover, she had assumed a personal obligation for the operation thereof, holding herself solidarily liable for the payment of rentals. She continued the business, using her own name, after Tourist World had stopped further operations. Her interest, obviously, is not limited to the commissions she earned as a result of her business transactions, but one that extends to the very subject matter of the power of management delegated to her. It is an agency that, as we said, cannot be revoked at the pleasure of the principal.

*Case digest by Meriam Rika R. Wong, JD-IV, Andres Bonifacio College, SY 2019 – 2020

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