G.R. No. L-41182-3. April 16, 1988.
DR. CARLOS L. SEVILLA and LINA O. SEVILLA, petitioners-appellants, vs. THE COURT OF APPEALS, TOURIST WORLD SERVICE, INC., ELISEO S.CANILAO, and SEGUNDINA NOGUERA, respondents-appellees.

FACTS

Petitioner Lina O. Sevilla entered into an arrangement with respondent Tourist World Service, Inc. (TWS), represented by Eliseo Canilao, to operate a TWS branch office on A. Mabini Street. The premises were leased from respondent Segundina Noguera, with Sevilla signing the lease contract and holding herself solidarily liable for the rent. Sevilla managed the branch, earning commissions from airline bookings, sharing 4% for herself and remitting 3% to TWS. She did not receive a salary. In late 1961, TWS, alleging the branch was losing money and that Sevilla was connected with a rival firm, decided to close it. The corporate board passed resolutions abolishing the branch manager position and authorizing the retrieval of company properties. Subsequently, on June 4, 1962, the corporate secretary padlocked the office premises, preventing Sevilla from entering.
Sevilla filed a complaint for damages with a prayer for a preliminary mandatory injunction. The trial court dismissed the complaint and her subsequent re-filed case, holding that her relationship with TWS was merely that of an employee-employer. The Court of Appeals affirmed this dismissal. Sevilla appealed to the Supreme Court, arguing the arrangement was a joint venture and that the padlocking constituted a wrongful, forcible dispossession.

ISSUE

The primary issue is whether the relationship between Lina Sevilla and Tourist World Service, Inc. was that of employer-employee or a joint business venture, which determination is crucial in assessing the legality of TWS’s act of padlocking the office and its consequent liability for damages.

RULING

The Supreme Court reversed the Court of Appeals. It ruled that the relationship between Sevilla and TWS was not one of employment but a joint business venture, akin to a partnership. The Court emphasized that Sevilla contributed her industry and clientele to the common fund, shared in the profits (the 4% commission), and held herself solidarily liable for the lease obligations—key indicators of a partnership under Article 1767 of the Civil Code. She was not under the control of TWS regarding the means and methods of her work, nor did she receive a fixed salary, negating an employer-employee relationship.
Consequently, TWS had no unilateral right to exclude Sevilla from the premises they jointly used. The act of padlocking the office without judicial authority constituted an arbitrary and forcible taking of the law into one’s own hands, in violation of Articles 19 and 21 of the Civil Code on human relations. TWS and its agent, Eliseo Canilao, were held jointly and severally liable for damages. The Court awarded moral damages for the besmirched reputation and wounded feelings, exemplary damages to deter similar acts, and nominal/temperate damages for the violation of Sevilla’s rights. Respondent Noguera was absolved as there was no evidence of her participation in the padlocking incident.