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G.R. No. 120554

TodayisTuesday,August23,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION

G.R.No.120554September21,1999
SOPINGBUN,petitioner,
vs.
COURTOFAPPEALS,TEKHUAENTERPRISESCORP.andMANUELC.TIONG,respondents.

QUISUMBING,J.:
ThispetitionforcertiorarichallengestheDecision1oftheCourtofAppealsdatedOctober10,1994,andtheResolution2
dated June 5, 1995, in CAG.R. CV No. 38784. The appellate court affirmed the decision of the Regional Trial Court of
Manila,Branch35,exceptfortheawardofattorney'sfees,asfollows:

WHEREFORE,foregoingconsidered,theappealofrespondentappellantSoPingBunforlackofmerit
isDISMISSED.TheappealeddecisiondatedApril20,1992ofthecourtaquoismodifiedbyreducing
the attorney's fees awarded to plaintiff Tek Hua Enterprising Corporation from P500,000.00 to
P200,000.00.3
Thefactsareasfollows:
In1963,TekHuaTradingCo,throughitsmanagingpartner,SoPekGiok,enteredintoleaseagreementswithlessor
DeeC.Chuan&SonsInc.(DCCSI).Subjectsoffour(4)leasecontractswerepremiseslocatedatNos.930,930
Int., 924B and 924C, Soler Street, Binondo, Manila. Tek Hua used the areas to store its textiles. The contracts
eachhadaoneyearterm.Theyprovidedthatshouldthelesseecontinuetooccupythepremisesaftertheterm,the
leaseshallbeonamonthtomonthbasis.
Whenthecontractsexpired,thepartiesdidnotrenewthecontracts,butTekHuacontinuedtooccupythepremises.
In1976,TekHuaTradingCo.wasdissolved.Later,theoriginalmembersofTekHuaTradingCo.includingManuel
C.Tiong,formedTekHuaEnterprisingCorp.,hereinrespondentcorporation.
SoPekGiok,managingpartnerofTekHuaTrading,diedin1986.SoPekGiok'sgrandson,petitionerSoPingBun,
occupiedthewarehouseforhisowntextilebusiness,TrendsetterMarketing.
On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25%
increaseinrenteffectiveSeptember1,1989.Therentincreasewaslateronreducedto20%effectiveJanuary1,
1990, upon other lessees' demand. Again on December 1, 1990, the lessor implemented a 30% rent increase.
Enclosed in these letters were new lease contracts for signing. DCCSI warned that failure of the lessee to
accomplishthecontractsshallbedeemedaslackofinterestonthelessee'spart,andagreementtothetermination
ofthelease.Privaterespondentsdidnotansweranyoftheseletters.Still,theleasecontractswerenotrescinded.
OnMarch1,1991,privaterespondentTiongsentalettertopetitionerwhichreadsasfollows:
March1,1991
Mr.SoPingBun
930SolerStreet
Binondo,Manila
DearMr.So,
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Duetomyclosed(sic)businessassociate(sic)forthreedecadeswithyourlategrandfatherMr.SoPek
Giokandlatefather,Mr.SoChongBon,IallowedyoutemporarilytousethewarehouseofTekHua
EnterprisingCorp.forseveralyearstogenerateyourpersonalbusiness.
Since I decided to go back into textile business, I need a warehouse immediately for my stocks.
Therefore,pleasebeadvisedtovacateallyourstocksinTekHuaEnterprisingCorp.Warehouse.You
areherebygiven14daystovacatethepremisesunlessyouhavegoodreasonsthatyouhavetheright
tostay.Otherwise,Iwillbeconstrainedtotakemeasuretoprotectmyinterest.
Pleasegivethisurgentmatteryourpreferentialattentiontoavoidinconvenienceonyourpart.
Verytrulyyours,
(Sgd)ManuelC.Tiong
MANUELC.TIONG
President4
Petitionerrefusedtovacate.OnMarch4,1992,petitionerrequestedformalcontractsofleasewithDCCSIinfavor
Trendsetter Marketing. So Ping Bun claimed that after the death of his grandfather, So Pek Giok, he had been
occupyingthepremisesforhistextilebusinessandreligiouslypaidrent.DCCSIaccededtopetitioner'srequest.The
leasecontractsinfavorofTrendsetterwereexecuted.
Inthesuitforinjunction,privaterespondentspressedforthenullificationoftheleasecontractsbetweenDCCSIand
petitioner.Theyalsoclaimeddamages.
Aftertrial,thetrialcourtruled:
WHEREFORE,judgmentisrendered:
1.AnnullingthefourContractsofLease(ExhibitsA,A1toA3,inclusive)all
dated March 11, 1991, between defendant So Ping Bun, doing business
underthenameandstyleof"TrendsetterMarketing",anddefendantDeeC.
Chuan&Sons,Inc.overthepremiseslocatedatNos.924B,924C,930and
930,Int.,respectively,SolerStreet,BinondoManila
2.MakingpermanentthewritofpreliminaryinjunctionissuedbythisCourton
June21,1991
3. Ordering defendant So Ping Bun to pay the aggrieved party, plaintiff Tek
HuaEnterprisingCorporation,thesumofP500,000.00,forattorney'sfees
4. Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is
concerned,andtherespectivecounterclaimsofthedefendant
5.OrderingdefendantSoPingBuntopaythecostsofthislawsuit
This judgment is without prejudice to the rights of plaintiff Tek Hua Enterprising Corporation and
defendant Dee C. Chuan & Sons, Inc. to negotiate for the renewal of their lease contracts over the
premises located at Nos. 930, 930Int., 924B and 924C Soler Street, Binondo, Manila, under such
terms and conditions as they agree upon, provided they are not contrary to law, public policy, public
order,andmorals.
SOORDERED.5
Petitioner'smotionforreconsiderationoftheabovedecisionwasdenied.
OnappealbySoPingBun,theCourtofAppealsupheldthetrialcourt.Onmotionforreconsideration,theappellate
court modified the decision by reducing the award of attorney's fees from five hundred thousand (P500,000.00)
pesostotwohundredthousand(P200,000.00)pesos.
PetitionerisnowbeforetheCourtraisingthefollowingissues:
I. WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL
COURT'S DECISION FINDING SO PING BUN GUILTY OF TORTUOUS
INTERFERENCEOFCONTRACT?
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II. WHETHER THE APPELLATE COURT ERRED IN AWARDING ATTORNEY'S

FEESOFP200,000.00INFAVOROFPRIVATERESPONDENTS.
The foregoing issues involve, essentially, the correct interpretation of the applicable law on tortuous conduct,
particularlyunlawfulinterferencewithcontract.Wehavetobegin,obviously,withcertainfundamentalprincipleson
tortsanddamages.
Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or compensation
awarded for the damage suffered. 6 One becomes liable in an action for damages for a nontrespassory invasion of
another'sinterestintheprivateuseandenjoymentofassetif(a)theotherhaspropertyrightsandprivilegeswithrespectto
the use or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant's conduct is a legal cause of the
invasion,and(d)theinvasioniseitherintentionalandunreasonableorunintentionalandactionableundergeneralnegligence
rules.7

Theelementsoftortinterferenceare:(1)existenceofavalidcontract(2)knowledgeonthepartofthethirdperson
oftheexistenceofcontractand(3)interferenceofthethirdpersoniswithoutlegaljustificationorexcuse.8
Adutywhichthelawoftortsisconcernedwithisrespectforthepropertyofothers,andacauseofactionexdelicto
maybepredicateduponanunlawfulinterferencebyonepersonoftheenjoymentbytheotherofhisprivate
property.9Thismaypertaintoasituationwhereathirdpersoninducesapartytorenegeonorviolatehisundertakingunder
acontract.Inthecasebeforeus,petitioner'sTrendsetterMarketingaskedDCCSItoexecuteleasecontractsinitsfavor,and
as a result petitioner deprived respondent corporation of the latter's property right. Clearly, and as correctly viewed by the
appellatecourt,thethreeelementsoftortinterferenceabovementionedarepresentintheinstantcase.

Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of
furtheringhisownfinancialoreconomicinterest.10Oneviewisthat,asageneralrule,justificationforinterferingwiththe
businessrelationsofanotherexistswheretheactor'smotiveistobenefithimself.Suchjustificationdoesnotexistwherehis
solemotiveistocauseharmtotheother.Addedtothis,someauthoritiesbelievethatitisnotnecessarythattheinterferer's
interestoutweighthatofthepartywhoserightsareinvaded,andthatanindividualactsunderaneconomicinterestthatis
substantial,notmerelydeminimis,suchthatwrongfulandmaliciousmotivesarenegatived,forheactsinselfprotection. 11
Moreoverjustificationforprotectingone'sfinancialpositionshouldnotbemadetodependonacomparisonofhiseconomic
interest in the subject matter with that of others. 12 It is sufficient if the impetus of his conduct lies in a proper business
interestratherthaninwrongfulmotives.13

As early as Gilchrist vs. Cuddy, 14 we held that where there was no malice in the interference of a contract, and the
impulsebehindone'sconductliesinaproperbusinessinterestratherthaninwrongfulmotives,apartycannotbeamalicious
interferer.Wheretheallegedinterfererisfinanciallyinterested,andsuchinterestmotivateshisconduct,itcannotbesaidthat
heisanofficiousormaliciousintermeddler.15

In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his
enterpriseattheexpenseofrespondentcorporation.Thoughpetitionertookinterestinthepropertyofrespondent
corporationandbenefitedfromit,nothingonrecordimputesdeliberatewrongfulmotivesormaliceonhim.
Sec.1314oftheCivilCodecategoricallyprovidesalsothat,"Anythirdpersonwhoinducesanothertoviolatehis
contract shall be liable for damages to the other contracting party." Petitioner argues that damage is an essential
elementoftortinterference,andsincethetrialcourtandtheappellatecourtruledthatprivaterespondentswerenot
entitled to actual, moral or exemplary damages, it follows that he ought to be absolved of any liability, including
attorney'sfees.
Itistruethatthelowercourtsdidnotawarddamages,butthiswasonlybecausetheextentofdamageswasnot
quantifiable. We had a similar situation in Gilchrist, where it was difficult or impossible to determine the extent of
damage and there was nothing on record to serve as basis thereof. In that case we refrained from awarding
damages.Webelievethesameconclusionappliesinthiscase.
Whilewedonotencouragetortinterferersseekingtheireconomicinteresttointrudeintoexistingcontractsatthe
expenseofothers,however,wefindthattheconducthereincomplainedofdidnottranscendthelimitsforbiddingan
obligatoryawardfordamagesintheabsenceofanymalice.Thebusinessdesireistheretomakesomegaintothe
detrimentofthecontractingparties.Lackofmalice,however,precludesdamages.Butitdoesnotrelievepetitioner
ofthelegalliabilityforenteringintocontractsandcausingbreachofexistingones.Therespondentappellatecourt
correctlyconfirmedthepermanentinjunctionandnullificationoftheleasecontractsbetweenDCCSIandTrendsetter
Marketing,withoutawardingdamages.Theinjunctionsavedtherespondentsfromfurtherdamageorinjurycaused
bypetitioner'sinterference.
Lastly, the recovery of attorney's fees in the concept of actual or compensatory damages, is allowed under the
circumstances provided for in Article 2208 of the Civil Code. 16 One such occasion is when the defendant's act or
omissionhascompelledtheplaintifftolitigatewiththirdpersonsortoincurexpensestoprotecthisinterest. 17Butwehave
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consistentlyheldthattheawardofconsiderabledamagesshouldhaveclearfactualandlegalbases. 18Inconnectionwith
attorney'sfees,theawardshouldbecommensuratetothebenefitsthatwouldhavebeenderivedfromafavorablejudgment.
Settledistherulethatfairnessoftheawardofdamagesbythetrialcourtcallsforappellatereviewsuchthattheawardiffar
tooexcessivecanbereduced. 19Thisrulingapplieswithequalforceontheawardofattorney'sfees.Inalonglineofcases
we said, "It is not sound policy to place in penalty on the right to litigate. To compel the defeated party to pay the fees of
counselforhissuccessfulopponentwouldthrowwideopenthedooroftemptationtotheopposingpartyandhiscounselto
swellthefeestoundueproportions."20

Consideringthattherespondentcorporation'sleasecontract,atthetimewhenthecauseofactionaccrued,ranonly
onamonthtomonthbasiswhencebeforeitwasonayearlybasis,wefindeventhereducedamountofattorney's
fees ordered by the Court of Appeals still exorbitant in the light of prevailing jurisprudence. 21 Consequently, the
amountoftwohundredthousand(P200,000.00)awardedbyrespondentappellatecourtshouldbereducedtoonehundred
thousand(P100,000.00)pesosasthereasonableawardorattorney'sfeesinfavorofprivaterespondentcorporation.

WHEREFORE,thepetitionisherebyDENIED.TheassailedDecisionandResolutionoftheCourtofAppealsinCA
G.R.CVNo.38784areherebyAFFIRMED,withMODIFICATIONthattheawardofattorney'sfeesisreducedfrom
two hundred thousand (P200,000.00) to one hundred thousand (P100,000.00) pesos. No pronouncement as to
costs.
1wphi1.nt

SOORDERED.
Bellosillo,MendozaandBuena,JJ.,concur.
Footnotes
1Rollo,pp.4155.
2Id.at5758.
3Ibid.
4Rollo,pp.4546.
5Id.at4142.
6Custodiovs.CourtofAppeals,253SCRA483,490(1996).
7RestatementoftheLaw,Torts2d,Sec.822.
830AmJur.,Section19,pp.7172SampaguitaPicturesInc.vs.Varquez,etal.(CourtofAppeals,68O.G.
7666).
974AmJur2dTorts,Section34.Interferencewithpropertyrights,p.631.
1045AmJur2ndInterference,Justification,PrivilegeSection30.Furtheranceofone'sowninterests,p.307.
11Zobyvs.AmericanFidelityCo.242FederalReporter,2dSeries,76,80(1957).
12Ibid.
13Ibid.
1429Phil542,549(1915).
15Kurtzvs.Oremland,33N.J.Super.443,111A.2d100RestatementoftheLaw,Torts,2d,Sec.769.
16Peoplevs.Bergante,286SCRA629,645(1998).
17Art.2208(2),CivilCodeofthePhilippines.
18DelaPazJr.vs.IntermediateAppellateCourt,154SCRA65,76(1987)Rubiovs.CourtofAppeals,141
SCRA488(1986).
19Danaovs.CourtofAppeals,154SCRA446,460(1987).
20PhilippineNationalBankvs.CourtofAppeals,159SCRA433,442(1988).
21MayerSteelPipeCorp.vs.CA,274SCRA432(1997)FortuneExpressvs.CA,G.R.119756,March18,
1999RCBCvs.CA,G.R.133107,March25,1999Urquiagavs.CA,G.R.127833,JanuaryMarch22,1999.
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