DR. CARLOS L. SEVILLA and LINA O.

SEVILLA
vs.
THE COURT OF APPEALS, TOURIST WORLD SERVICE, INC., ELISEO S.CANILAO, and SEGUNDINA NOGUERA
G.R. No. L-41182-3 April 16, 1988
By Richard Troy A. Colmenares
USA College of Law
Start: 6/27/14 11:04:06 PM
Finish: 6/28/14 12:10:53 AM
[Caveat: This digest is incomplete for it is limited to the employment issue herein raised, without dwelling on the civil aspect of the case].

Nature of the Case
A petition for certiorari to identify if the lower court had jurisdiction over the case, it having ruled that petitioner Lina Sevilla was an employee.

Facts
Parties entered into a lease contract where the property (at Mabini St.) owned by petitioner is to be used as branch office of private
respondent. Private respondent was informed that one of the petitioners was connected with a rival firm and that since the private
respondent was losing, the office should be considered for closing. The private respondent thus issued two board resolutions the first
abolishing the Ermita Branch (office of the manager and vice-president) and the second authorizing its Corporate Secretary to receive
properties on its behalf. The contract for Ermita Branch was thereafter terminated and was no longer in use, so that Corporate Secretary
padlocked the same to protect the interests of her company. Petitioners could not enter the premises, and thus sought for a the issuance of
a mandatory preliminary injunction. Private respondents answered with counter-claims. For apparent lack of interest, the court dismissed the
petition without prejudice. Private respondent moved to reconsider, and was granted the same. Petitioner refilled her case. The court heard
the same in a joint hearing and dismissed the consolidated case for lack of merit. The court ruled: (1) that private respondent was a lessee
had the prerogative to terminate and the right to padlock the leased premises; and (2) that Lina Sevilla was an employee, bound by the acts
of her employer. On appeal, petitioner contends that she entered into a joint business with the private respondent. Private respondent denies
the same, and averred petitioner was an employee (a branch manager). The Court of Appeals affirmed the decision of the lower court.

Issue(s)
(1). Is Lina Sevilla an employee of private respondent?

Held
(1). No. Lina Sevillas relationship is that of principal agent, cognizable by the lower court.

The right of control means "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." xxx In addition xxx, the existing economic conditions prevailing
between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee
relationship.

Lina Sevilla was not subject to control as to the result of the enterprise or as to the means used in connection therewith. Firstly, she
had bound herself under the contract of lease to be in solidum as and for rental payments, an arrangement that would be like
claims of a master-servant relationship. Her participation in the lease can be minimized as one of mere guaranty which does not
make her an employee of private respondent since a true employee cannot be made to part with his own money in pursuance
of his employer's business, or otherwise, assume any liability thereof. In that event, the parties must be bound by some
other relation, but certainly not employment. Secondly, Lina Sevilla run the Ermita Branch when it opened, using her own
means, thus negating control of private respondent over her.

The Court believes that being a branch manager does not imply Lina Sevilla is an employee. What is essential to determine is the
right to control.

On the other hand, the contention that Lina Sevilla entered into a joint venture cannot be sustained. This is apparent in her
submission to the right of private respondent to stop the operation of the Ermita Branch. Thus, the relationship is that of a principal
agent and not of a joint management or partnership, and as such, the contract of agency cannot be revoked at will, for the same
has been created out of mutual interest.