HAHN v. CA

HAHN v. CA

G.R. No. 113074; January 22, 1997

Ponente: J. Mendoza

FACTS:
Petitioner Alfred Hahn is a Filipino citizen doing business under the name and style "Hahn-Manila". On the other hand, private respondent (BMW) is a nonresident foreign corporation existing under the laws of the former Federal Republic of Germany, with principal office at Munich, Germany.

On March 7, 1967, petitioner executed in favor of private respondent a "Deed of Assignment with Special Power of Attorney. Per the agreement, the parties "continue[d] business relations as has been usual in the past without a formal contract." 

But on February 16, 1993, in a meeting with a BMW representative and the president of Columbia Motors Corporation (CMC), Jose Alvarez, petitioner was informed that BMW was arranging to grant the exclusive dealership of BMW cars and products to CMC, which had expressed interest in acquiring the same. 

On February 24, 1993, petitioner received confirmation of the information from BMW which, in a letter, expressed dissatisfaction with various aspects of petitioner's business, mentioning among other things, decline in sales, deteriorating services, and inadequate showroom and warehouse facilities, and petitioner's alleged failure to comply with the standards for an exclusive BMW dealer.

Nonetheless, BMW expressed willingness to continue business relations with the petitioner on the basis of a "standard BMW importer" contract, otherwise, it said, if this was not acceptable to petitioner, BMW would have no alternative but to terminate petitioner's exclusive dealership effective June 30, 1993. 

  Because of Hahn's insistence on the former business relations, BMW withdrew on March 26, 1993 its offer of a "standard importer contract" and terminated the exclusive dealer relationship effective June 30, 1993.

On April 29, 1993, BMW proposed that Hahn and CMC jointly import and distribute BMW cars and parts.

Hahn found the proposal unacceptable. On May 14, 1993, he filed a complaint for specific performance and damages against BMW to compel it to continue the exclusive dealership.

ISSUE:
Whether petitioner Alfred Hahn is the agent or distributor in the Philippines of private respondent BMW

HELD:

Alfred Hahn is an agent of BMW.

The Supreme Court held that agency is shown when Hahn claimed he took orders for BMW cars and transmits them to BMW. Then BMW fixes the down payment and pricing charges and will notify Hahn of the scheduled production month for the orders, and reconfirm the orders by signing and returning to Hahn the acceptance sheets. 

The payment is made by the buyer directly to BMW. Title to cars purchased passed directly to the buyer and Hahn never paid for the purchase price of BMW cars sold in the Philippines. Hahn was credited with a commission equal to 14% of the purchase price upon the invoicing of a vehicle order by BMW. Upon confirmation in writing that the vehicles had been registered in the Philippines and serviced by him, Hahn received an additional 3% of the full purchase price. Hahn performed after-sale services, including, warranty services. for which he received reimbursement from BMW. All orders were on invoices and forms of BMW.

Moreover, the Court distinguished an agent from a broker. The court ruled that an agent receives a commission upon the successful conclusion of a sale. On the other hand, a broker earns his pay merely by bringing the buyer and the seller together, even if no sale is eventually made.