G.R. No.

L-9356

February 18, 1915

C. S. GILCHRIST, plaintiff-appellee,
vs.
E. A. CUDDY, ET AL., defendants.
JOSE FERNANDEZ ESPEJO and MARIANO ZALDARRIAGA, appellants.

The right on the part of Gilchrist to enter into a contract with Cuddy for the lease
of the film must be fully recognized and admitted by all. That Cuddy was liable in
an action for damages for the breach of that contract, there can be no doubt.
Decision of Lower Courts

CFI granted the injunction restraining the defendants from exhibiting the
film in question.

TOPIC: Quasi Delict; Elements

Background of the Case:
This is an appeal by the defendants (Espejo and Zaldarriaga) from a judgement of
the CFI which dismissed their cross-complaint upon the merits for damages
against the plaintiff (Gilchrist) for the alleged wrongful issuance of a mandatory
and preliminary injunction. (Plaintiff-appellee Gilchrist applied and was granted a
mandatory injunction against Cuddy for breach of contract and a preliminary
injunction against Espejo and Zaldarriaga for wrongful interference)
FACTS:
Respondent Cuddy was the owner of the cinematographic film Zigomar.
Petitioner Gilchrist was an owner of a cinematograph theater in Iloilo. They
entered into a contract whereby Cuddy leased to Gilchrist the film Zigomar for
exhibition in the latters theatre for the week beginning May 26, 1913 for P125. A
few days prior to this, Cuddy returned the money paid by Gilchrist, saying that he
had made other arrangements with his film. The other arrangement was the rental
to defendants Espejo and his partner for P350 for the week. Cuddy willfully
violated his contract with Gilchrist because the defendants Espejo had offered him
more for the same period.
Q: Did the appellants (Espejo and his partner) know that they were
inducing Cuddy to violate his contract with a third party when they
induced him to accept the P350?
Espejo admitted that he knew that Cuddy was the owner of the film. He received a
letter from his agents in Manila dated April 26, assuring him that he could not get
the film for about six weeks. The arrangement between Cuddy and the appellants
for the exhibition of the film by the latter on the 26th of May were perfected after
April 26, so that the six weeks would include and extend beyond May 26. The
appellants must necessarily have known at the time they made their offer to
Cuddy that the latter had booked or contracted the film for six weeks from April
26. Therefore, the inevitable conclusion is that the appellants knowingly induced
Cuddy to violate his contract with another person. But there is no specific
finding that the appellants knew the identity of the other party. So we
must assume that they did not know that Gilchrist was the person who
had contracted for the film.

ISSUES and RULING:

1. Were the appellants (Espejo and his partner) likewise liable for
interfering with the contract between Gilchrist and Cuddy, they not
knowing at the time the identity of one of the contracting parties?
Yes. They are liable for the wrongful interference.
The appellants (Espejo) claim that they had a right to do what they did. The
ground upon which the appellants base this contention is, that there was no valid
and binding contract between Cuddy and Gilchrist and that, therefore, they had
a right to compete with Gilchrist for the lease of the film, the right to compete
being a justification for their acts. If there had been no contract between Cuddy
and Gilchrist this defense would be tenable, but the mere right to compete
could not justify the appellants in intentionally inducing Cuddy to take
away the appellee's (Gilchrist) contractual rights.
Chief Justice Wells in Walker vs. Cronin (107 Mass., 555), said:
"Everyone has a right to enjoy the fruits and advantages of his own
enterprise, industry, skill and credit. He has no right to be free from
malicious and wanton interference, disturbance or annoyance.
If disturbance or loss comes as a result of competition, or the exercise of
like rights by others, it is damnum absque injuria, unless some
superior right by contract or otherwise is interfered with."
In Read vs. Friendly Society of Operative Stonemasons ([1902] 2 K. B.,
88), Darling, J., said:
"I think the plaintiff has a cause of action against the defendants, unless
the court is satisfied that, when they interfered with the contractual rights
of plaintiff, the defendants had a sufficient justification for their
interference; . . . for it is not a justification that `they acted bona fide in
the best interests of the society of masons,' i. e., in their own interests.
Nor is it enough that `they were not actuated by improper motives.' I think
their sufficient justification for interference with plaintiff's right must be an
equal or superior right in themselves, and that no one can legally excuse

himself to a man, of whose contract he has procured the breach, on the

ground that he acted on a wrong understanding of his own rights, or
without malice, or bona fide, or in the best interests of himself, or even
that he acted as an altruist, seeking only good of another and careless of
his own advantage."
It is said that the ground on which the liability of a third party for interfering
with a contract between others rests, is that the interference was
malicious. The contrary view, however, is taken by the Supreme Court of the
United States in the case of Angle vs. Railway Co. (151 U. S., 1). The only motive
for interference by the third party in that case was the desire to make a profit to
the injury of one of the parties of the contract. There was no malice in the case
beyond the desire to make an unlawful gain to the detriment of one of the
contracting parties.
In the case at bar the only motive for the interference with the Gilchrist
Cuddy contract on the part of the appellants was a desire to make a profit by
exhibiting the film in their theater. There was no malice beyond this desire;
but this fact does not relieve them of the legal liability for interfering
with that contract and causing its breach. It is, therefore, clear, under the
above authorities, that they were liable to Gilchrist for the damages caused
by their acts, unless they are relieved from such liability by reason of the fact
that they did not know at the time the identity of the original lessee (Gilchrist) of
the film.
The liability of the appellants arises from unlawful acts and not from
contractual obligations, as they were under no such obligations to induce
Cuddy to violate his contract with Gilchrist. So that if the action of Gilchrist had
been one for damages, it would be governed by chapter 2, title 16, book 4 of the
Civil Code.
Article 1902 of that code provides that:
A person who, by act or omission, causes damages to another when there
is fault or negligence, shall be obliged to repair the damage do done.
There is nothing in this article which requires as a condition precedent to
the liability of a tort-feasor that he must know the identity of a person to
whom he causes damages. In fact, the chapter wherein this article is
found clearly shows that no such knowledge is required in order that the
injured party may recover for the damage suffered.
2. Whether the Injunction was properly granted
Yes, Injunction was proper.
The allowance of this remedy must be justified under section 164 of the
Code of Civil Procedure, which specifies the circumstance under which an
injunction may issue.

An injunction is a "special remedy" adopted in that code (Act No. 190)

from American practice, and originally borrowed from English legal
procedure, which was there issued by the authority and under the seal of
a court of equity, and limited, as in order cases where equitable relief is
sought, to cases where there is no "plain, adequate, and complete remedy
at law," which "will not be granted while the rights between the parties are
undetermined, except in extraordinary cases where material and
irreparable injury will be done," which cannot be compensated in
damages, and where there will be no adequate remedy, and which will
not, as a rule, be granted, to take property out of the possession of one
party and put it into that of another whose title has not been established
by law.
Q: Does the fact that the appellants did not know at the time the identity
of the original lessee of the film militate against Gilchrist's right to a
preliminary injunction, although the appellant's incurred civil liability for
damages for such interference?
There is nothing in section 164 of the Code of Civil Procedure which
indicates, even remotely, that before an injunction may issue restraining
the wrongful interference with contrast by strangers, the strangers must
know the identity of both parties. It would seem that this is not essential,
as injunctions frequently issue against municipal corporations, public
service corporations, public officers, and others to restrain the commission
of acts which would tend to injuriously affect the rights of person whose
identity the respondents could not possibly have known beforehand. This
court has held that in a proper case injunction will issue at the instance of
a private citizen to restrain ultra vires acts of public officials. (Severino vs.
Governor-General, 16 Phil. Rep., 366.)
As a rule, injunctions are denied to those who have an adequate remedy
at law. Where the choice is between the ordinary and the extraordinary processes
of law, and the former are sufficient, the rule will not permit the use of the latter.
If the injury is irreparable, the ordinary process is inadequate. So, apply
extraordinary process.
In Wahle vs.Reinbach, the supreme court of Illinois approved a definition of the
term "irreparable injury" in the following language: "By `irreparable injury' is
not meant such injury as is beyond the possibility of repair, or beyond possible
compensation in damages, nor necessarily great injury or great damage, but that
species of injury, whether great or small, that ought not to be submitted to on the
one hand or inflicted on the other; and, because it is so large on the one hand, or
so small on the other, is of such constant and frequent recurrence that no fair or
reasonable redress can be had therefor in a court of law."
The case at bar is somewhat novel, as the only contract which was broken was
that between Cuddy and Gilchrist, and the profits of the appellee depended upon
the patronage of the public, for which it is conceded the appellants were at liberty,
the novelty of the facts does not prevent the application of equitable principles.

This court takes judicial notice of the general character of a cinematograph

or motion-picture theater. It is a quite modern form of the play house, wherein,
by means of an apparatus known as a cinematograph or cinematograph, a series
of views representing closely successive phases of a moving object, are exhibited
in rapid sequence, giving a picture which, owing to the persistence of vision,
appears to the observer to be in continuous motionThe attendance, and,
consequently, the receipts, at one of these cinematograph or motion-picture
theaters depends in no small degree upon the excellence of the photographs, and
it is quite common for the proprietor of the theater to secure an especially
attractive exhibit as his "feature film" and advertise it as such in order to attract
the public. This feature film is depended upon to secure a larger attendance that if
its place on the program were filled by other films of mediocre quality. It is evident
that the failure to exhibit the feature film will reduce the receipts of the theater.
Hence, Gilchrist was facing the immediate prospect of diminished profits
by reason of the fact that the appellants had induced Cuddy to rent to
them the film Gilchrist had counted upon as his feature film. If he allowed
the appellants to exhibit the film in Iloilo, it would be useless for him to exhibit it
again, as the desire of the public to witness the production would have been
already satisfied.
In this extremity, the appellee (Gilchrist) has applied for and was granted a
mandatory injunction against Cuddy requiring him to deliver the Zigomar to
Gilchrist, and a preliminary injunction against the appellants (Espejo and his
partner) restraining them from exhibiting that film in their theater during the
weeks he (Gilchrist) had a right to exhibit it. These injunctions saved the
plaintiff harmless from damages due to the unwarranted interference of
the defendants, as well as the difficult task which would have been set for the
court of estimating them in case the appellants had been allowed to carry out
their illegal plans.
As to whether or not the mandatory injunction should have been issued,
the court is NOT called upon to determine. So far as the preliminary
injunction issued against the appellants is concerned, which prohibited them from
exhibiting the Zigomar during the week which Gilchrist desired to exhibit it, the
court is of the opinion that the circumstances justified the issuance of
that injunction in the discretion of the court.
In the case of the Nashville R. R. Co. vs. McConnell, the court, among other things,
said:
"One who wrongfully interferes in a contract between others, and, for the
purpose of gain to himself induces one of the parties to break it, is liable
to the party injured thereby; and his continued interference may be
ground for an injunction where the injuries resulting will be
irreparable."

In 3 Elliot on Contracts, section 2511, it is said:

"Injunction is the proper remedy to prevent a wrongful
interference with contract by strangers to such contracts where
the legal remedy is insufficient and the resulting injury is
irreparable. And where there is a malicious interference with lawful and
valid contracts a permanent injunction will ordinarily issue without proof of
express malice. So, an injunction may be issued where the complainant to
break their contracts with him by agreeing to indemnify who breaks his
contracts of employment may be adjoined from including other employees
to break their contracts and enter into new contracts with a new employer
of the servant who first broke his contract. But the remedy by injunction
cannot be used to restrain a legitimate competition, though such
competition would involve the violation of a contract. Nor will equity
ordinarily enjoin employees who have quit the service of their employer
from attempting by proper argument to persuade others from taking their
places so long as they do not resort to force or intimidations on obstruct
the public thoroughfares."
SEPARATE OPINION
MORELAND, J., concurring:
The court seems to be of the opinion that the action is one for a permanent
injunction; whereas, under my view of the case, it is one for specific
performance.
I have presented this concurring opinion in an attempt to prevent confusion, if
any, which might arise from the theory on which the court decides this case. It
seems to me impossible that the action can be one for a permanent
injunction. The very nature of the case demonstrates that a permanent
injunction is out of the question. The only thing that plaintiff desired was to be
permitted to use the film for the week beginning the 26th of May. With
the termination of that week his rights expired. After that time Cuddy was
perfectly free to turn the film over to the defendants Espejo and Zaldarriaga for
exhibition at any time. An injunction permanently prohibiting the
defendants from exhibiting the film in Iloilo would have been
unjustifiable, as it was something that plaintiff did not ask and did not want; and
would have been an invasion of the rights of Cuddy as, after the termination of the
week beginning May 26, he was at liberty, under his contract with plaintiff, to rent
the film to the defendants Espejo and Zaldarriaga and permit its exhibition in Iloilo
at any time. The plaintiff never asked to have defendants permanently enjoined
from exhibiting the film in Iloilo and no party to the action has suggested such
thing.