Gilchrist v Cuddy
G.R. No. L-9356 | February 18, 1915 | Trent, J.
Plaintiff-appellee: C.S. Gilchrist
Defendants: E.A. Cuddy, et al.
Appellants: Jose Fernandez Espejo, Mariano Zaldarriaga
Topic: Persons specifically liable; persons who interfere with contractual relations
(I included all the issues in the case kahit medyo hindi connected sa topic cos they’re
all in Casis’ book so baka tanungin ni Sir)
Facts
 Cuddy was the owner of the film Zigomar
 On April 24, he rented it to C. S. Gilchrist for a week for P125, and it was to
be delivered on May 26, the week beginning that day.
 A few days prior to this Cuddy sent the money back to Gilchrist, which he
had forwarded to him in Manila, saying that he had made other
arrangements with his film.
o The other arrangements was the rental to these defendants Espejo
and his partner for P350 for the week
o Gilchrist filed an action for injunction against these parties from
showing it for the week beginning May 26
 It appears from the testimony in this case, conclusively, that Cuddy willfully
violated his contract, he being the owner of the picture, with Gilchrist
because the defendants had offered him more for the same period.
 Mr. Espejo at the trial on the permanent injunction on May 26 admitted that
he knew that Cuddy was the owner of the film. He was trying to get it
through his agents Pathe Brothers in Manila. He is the agent of the same
concern in Iloilo.
 In evidence are letters showing that the Pathe Brothers in Manila advised
this man on two different occasions not to contend for this film Zigomar
because the rental price was prohibitive and assured him also that he could
not get the film for about six weeks.
o The last of these letters was written on April 26, which showed
conclusively that he knew they had to get this film from Cuddy and
from this letter that the agent in Manila could not get it, but he made
Cuddy an offer himself and Cuddy accepted it because he was
paying about 3x as much as he had contracted with Gilchrist for.
 An ex parte mandatory injunction was issued, directing Cuddy to send to
Gilchrist the film "Zigomar" and an ex parte preliminary injunction was
issued, restraining Espejo and Zaldarriaga from receiving and exhibiting the
film in their theater until further orders of the court.
o Espejo and Zaldarriaga appeared and moved to dissolve the
preliminary injunction. This motion was denied.
o Espejo and Zaldarriaga filed their answer, wherein they denied all
of the allegations in the complaint and by way of a cross-complaint,
asked for damages for the wrongful issuance of the preliminary
injunction.
o Gilchrist moved for the dismissal of the complaint for the reason
that there was no further necessity for the maintenance of the
injunction. The motion was granted without objection as to Cuddy
and denied as to Espejo and Zaldarriaga in order to give them an
opportunity to prove that the injunctions were wrongfully issued and
the amount of damages suffered by reason thereof.
o The trial court dismissed their crosscomplaint for damages for the
alleged wrongful issuance of a mandatory and a preliminary
injunction. Espejo and Zaldarriaga appealed from this judgment.
 The Court found that Cuddy willfully violated his contract in order that he
might accept the appellants’ offer of P350 for the film for the same period.
Issues + Held
W/N the appellants knew they were inducing Cuddy to violate his contract with
a third party
 The Court found that Espejo received a letter from his agents in Manila
dated April 26, assuring him that he could not get the film for about 6 weeks.
The arrangements between Cuddy and the appellants for the exhibition of
the film by the latter on May 26 were perfected after April 26, such that 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 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 because there was no specific finding that the appellants knew the
identity of the other party, the Court assumed that they did not know that
Gilchrist was the person who had contracted for the film.
 The appellants argued that if the preliminary injunction had not been issued
against them they could have exhibited the film in their theater for a number
of days beginning May 26, and could have also subleased it to other theater
owners in the nearby towns and, by so doing, could have cleared, during the
life of their contract with Cuddy, the amount claimed as damages.
 The Court held that Cuddy was liable to Gilchrist in an action for damages
for the breach of that contract.
W/N the appellants were liable for interfering with the contract between
Gilchrist and Cuddy, not knowing at the time the identity of one of the
contracting parties
 The appellants claim that they had a right to do what they did, on the ground
that there was no valid and binding contract between Cuddy and Gilchrist;
therefore, they had a right to compete with Gilchrist for the lease of the film
 Court: “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
contractual rights. “
 Chief Justice Wells in Walker v Cronin  "Everyone has a right to enjoy the
fruits and advantages of his own enterprise, industry, skill and credit. He has
no right to be protected against competition; but he has a right to be
free from malicious and wanton interference, disturbance or
annoyance. If disturbance or loss come 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."
 Justice Darling in Read v. Friendly Society of Operative Stonemasons
 o "x x 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 x x."
 It is said that the interference must be malicious to create liability, but the
contrary view has been taken by the US SC in Angle v Railway Co where
the only motive by the third party was the desire to make a profit.
 In the case at bar, the appellants’ only motive 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.
o It is, therefore, clear 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 of the film.
 The liability of the appellants arises from unlawful acts and not from
contractual obligations. So that if the action of Gilchrist had been one for
damages, it would be governed by Ch 2, Title 16, Book 4 of the Civil Code.
o Article 1902  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.
o 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.
 But the fact that the appellants' interference with the Gilchrist contract was
actionable did not of itself entitle Gilchrist to sue out an injunction against
them. The allowance of this remedy must be justified under section 164 of
the Code of Civil Procedure.
o Devesa v Arbes  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.
W/N 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
 In the examination of the adjudicated cases, where in injunctions have been
issued to restrain wrongful interference with contracts by strangers to such
contracts, we have been unable to find any case where this precise question
was involved, as in all of those cases which we have examined, the identity
of both of the contracting parties was known to the tort-feasors.
 We might say, however, that this fact does not seem to have a controlling
feature in those cases.
o 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. In a proper case injunction will issue at the
instance of a private citizen to restrain ultra vires acts of public officials.
 As a rule, 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.
o Wahle vs.Reinbach  defined “irreparable injury” as “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 to complete by all fair does not deter the
application of remarked in the case of the "ticket scalpers", the novelty of the
facts does not deter the application of equitable principles.
o General character of a cinematograph or motion-picture theater:
modern form of the play house; by means of an apparatus known
as a 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 motion.
o The subjects which have lent themselves to the art of the
photographer in this manner have increased enormously in recent
years, as well as have the places where such exhibition are given.
o The attendance and 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 Nevertheless, the Court in succeeding cases has used this case as basis for the rules
profits by reason of the fact that the appellants had induced Cuddy to on actions referred to as "tort interference."
rent to them the film Gilchrist had counted upon as his feature film.
o Difficult to estimate with accuracy the damages which Gilchrist
would likely suffer
o 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.
o 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, we are of the
opinion that the circumstances justified the issuance of that
injunction in the discretion of the court.

W/N injunction will issue to restrain wrongful interference with contracts by

strangers to such contracts

 It may be said that courts in the US have usually granted such relief where
the profits of the injured person are derived from his contractual relations
with a large and indefinite number of individuals, thus reducing him to the
necessity of proving in an action against the tort-feasor that the latter was
responsible in each case for the broken contract, or else obliging him to
institute individual suits against each contracting party and so exposing him
to a multiplicity of suits.
 Nashville R. R. Co. vs. McConnell  "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."
 Section 2511, 3 Elliot on Contracts  "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."

For the foregoing reasons the judgment is affirmed, with costs, against the appellants.

Casis: “Thus, Gilchrist v. Cuddy did not involve an action for damages filed against a
person who induced another to break his contract. In fact, it was the alleged
interferors who were seeking damages against the victim of the interference.