Hahn v.

CA 09
G.R. No. 114074 22 January 1997

FACTS: Petitioner Alfred Hahn executed in favor of private respondent Bayerische Motoren Werke
Aktiengesellschaft (BMW) a Deed of Assignment with Special Power of Attorney. The parties continued
business relations as has been usual in the past without a formal contract. Petitioner received from
BMW a letter in which, BMW expressed dissatisfaction with various aspects of petitioner’s business.
Nonetheless, BMW expressed willingness to continue business relations with petitioner on the basis of a
“standard BMW importer” contract – if not acceptable to petitioner, BMW would have to terminate
petitioner’s exclusive dealership. Petitioner claims that such termination is a breach of the Deed of
Assignment. He insisted that as long as the assignment of its trademark and device subsisted, he
remained BMW’s exclusive dealer in the Philippines because the assignment was made in consideration
of the exclusive dealership. BMW withdrew its offer of a “standard importer contract” and terminated
the dealer relationship it had with petitioner. BMW proposed that Hahn and CMC jointly import and
distribute BMW cars and parts. Petitioner found the proposal unacceptable and filed a complaint for
specific performance and damages. BMW contends that the trial court does not have jurisdiction since
it was a foreign corporation and Hahn is not its agent – latter undertook to assemble and sell BMW
cars and products without the participation of BMW and sold other products. Hahn submits the
contrary view. The trial court deferred resolution on the Motion to Dismiss and the CA held that the trial
court had no jurisdiction – Hahn acted in his own name and for his own account and independently of
BMW – that petitioner was a mere indentor or broker and not an agent.

ISSUE: W/N petitioner Hahn is acting as an agent on behalf of BMW.

HELD: Yes. The decision of the CA is REVERSED.

There is nothing to support the CA’s finding that Hahn solicited orders alone and for his own
account and without “interference from, let alone direction of, BMW.” To the contrary, Hahn claimed he
took orders for BMW cars and transmitted them to BMW, and that BMW controlled other factors of
such sale. And that 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 merely received a commission for each sale.
He likewise performed after-sale services, including warranty services, for which he received
reimbursement from BMW. This arrangement shows an agency.

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.

Hahn said that he had to follow BMW specifications as exclusive dealer of BMW in the
Philippines. According to him, BMW periodically inspected the service centers to see to it that BMW
standards were maintained. Indeed, it would seem from BMW’s letter to Hahn that it was for Hahn’s
alleged failure to maintain BMW standards that BMW was terminating Hahn’s dealership.

In addition, BMW held out Hahn as its exclusive distributor in the Philippines, even as it
announced in the Asian region that Hahn was the “official BMW agent” in the Philippines.