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FIRST DIVISION [G.R. No. 74431. November 6, 1989.] PURITA MIRANDA VESTIL and AGUSTIN VESTIL, petitioners, vs.

INTERMEDIATE APPELLATE COURT, DAVID UY and TERESITA UY, respondents.

3.ID.; ID.; ID.; BASIS THEREOF. According to Manresa, the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause. 4.ID.; DAMAGES; ACTUAL DAMAGES; MEDICAL AND HOSPITALIZATION EXPENSES, REDUCED. We sustain the findings of the Court of Appeals and approve the monetary awards except only as to the medical and hospitalization expenses, which are reduced to P2,026.69, as prayed for in the complaint. While there is no recompense that can bring back to the private respondents the child they have lost, their pain should at least be assuaged by the civil damages to which they are entitled.

Pablo P. Garcia for petitioners. Roberto R. Palmares for private respondents.

SYLLABUS 1.REMEDIAL LAW; EVIDENCE; WEIGHT AND SUFFICIENCY; DEATH CERTIFICATE NOT CONCLUSIVE PROOF OF CAUSE OF DEATH BUT ONLY OF FACT OF DEATH. The Court finds that the link between the dog bites and the certified cause of death has been satisfactorily established. We also reiterate our ruling in Sison v. Sun Life Assurance Company of Canada, that the death certificate is not conclusive proof of the cause of death but only of the fact of death. Indeed, the evidence of the child's hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the death certificate stated a different cause of death. 2.CIVIL LAW; QUASI-DELICTS; ARTICLE 2183 OF CIVIL CODE; POSSESSOR LIABLE EVEN IF ANIMAL SHOULD "ESCAPE OR BE LOST" AND BE REMOVED FROM HIS CONTROL; THAT DOG WAS TAME AND WAS MERELY PROVOKED BY CHILD INTO BITING HER, IMMATERIAL. Article 2183 of the Civil Code holds the possessor liable even if the animal should "escape or be lost" and so be removed from his control. And it does not matter either that as the petitioners also contend, the dog was tame and was merely provoked by the child into biting her. The law does not speak only of vicious animals but covers even tame ones as long as they cause injury. As for the alleged provocation, the petitioners forget that Theness was only three years old at the time she was attacked and can hardly be faulted for whatever she might have done to the animal. CRUZ, J p:

DECISION

Little Theness Tan Uy was dead at the age of three. Her parents said she died because she was bitten by a dog of the petitioners, but the latter denied this, claiming they had nothing to do with the dog. The Uys sued the Vestils, who were sustained by the trial court. On appeal, the decision of the court a quo was reversed in favor of the Uys. The Vestils are now before vs. They ask us to set aside the judgment of the respondent court and to reinstate that of the trial court. prcd On July 29, 1975, Theness was bitten by a dog while she was playing with a child of the petitioners in the house of the late Vicente Miranda, the father of Purita Vestil, at F. Ramos Street in Cebu City. She was rushed to the Cebu General Hospital, where she was treated for "multiple lacerated wounds on the forehead" 1 and administered an anti-rabies vaccine by Dr. Antonio Tautjo. She was discharged after nine days but was re-admitted one week later due to "vomiting of saliva." 2 The following day, on August 15, 1975, the child died. The cause of death was certified as broncho-pneumonia. 3 Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of "Andoy," the dog that bit and eventually

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killed their daughter. The Vestils rejected the charge, insisting that the dog belonged to the deceased Vicente Miranda, that it was a tame animal, and that in any case no one had witnessed it bite Theness. After trial, Judge Jose R. Ramolete of the Court of First Instance of Cebu sustained the defendants and dismissed the complaint. 4 The respondent court arrived at a different conclusion when the case was appealed. 5 It found that the Vestils were in possession of the house and the dog and so should be responsible under Article 2183 of the Civil Code for the injuries caused by the dog. It also held that the child had died as a result of the dog bites and not for causes independent thereof as submitted by the appellees. Accordingly, the Vestils were ordered to pay the Uys damages in the amount of P30,000.00 for the death of Theness, P12,000.00 for medical and hospitalization expenses, and P2,000.00 as attorney's fees. In the proceedings now before us, Purita Vestil insists that she is not the owner of the house or of the dog left by her father as his estate has not yet been partitioned and there are other heirs to the property. Pursuing the logic of the Uys, she claims, even her sister living in Canada would be held responsible for the acts of the dog simply because she is one of Miranda's heirs. However, that is hardly the point. What must be determined is the possession of the dog that admittedly was staying in the house in question, regardless of the ownership of the dog or of the house. Article 2183 reads as follows: The possessor of an animal or whoever may make use of the same is responsible for the damage which it may cause, although it may escape or be lost. This responsibility shall cease only in case the damage should come from force majeure or from the fault of the person who has suffered damage. Thus, in Afialda v. Hisole, 6 a person hired as caretaker of a carabao gored him to death and his heirs thereupon sued the owner of the animal for damages. The complaint was dismissed on the ground that it was the caretaker's duty to prevent the carabao from causing injury to any one, including himself. Purita Vestil's testimony that she was not in possession of Miranda's house is hardly credible. She said that the occupants of the house left by her father were related to him ("one way or the other") and maintained themselves out of a common fund or by some kind of arrangement (on which, however, she did not

elaborate). 7 She mentioned as many as ten of such relatives who had stayed in the house at one time or another although they did not appear to be close kin. 8 She at least implied that they did not pay any rent, presumably because of their relation with Vicente Miranda notwithstanding that she herself did not seem to know them very well. Cdpr There is contrary evidence that the occupants of the house were boarders (or more of boarders than relatives) who paid the petitioners for providing them with meals and accommodations. It also appears that Purita Vestil had hired a maid, Dolores Jumao-as, who did the cooking and cleaning in the said house for its occupants. 9 Her mother, Pacita, who was a nursemaid of Purita herself, categorically declared that the petitioners were maintaining boarders in the house where Theness was bitten by a dog. 10 Another witness, Marcial Lao, testified that he was indeed a boarder and that the Vestils were maintaining the house for business purposes. 11 And although Purita denied paying the water bills for the house, the private respondents submitted documentary evidence of her application for water connection with the Cebu Water District, which strongly suggested that she was administering the house in question. 12 While it is true that she is not really the owner of the house, which was still part of Vicente Miranda's estate, there is no doubt that she and her husband were its possessors at the time of the incident in question. She was the only heir residing in Cebu City and the most logical person to take care of the property, which was only six kilometers from her own house. 13 Moreover, there is evidence showing that she and her family regularly went to the house, once or twice weekly, according to at least one witness, 14 and used it virtually as a second house. Interestingly, her own daughter was playing in the house with Theness when the little girl was bitten by the dog. 15 The dog itself remained in the house even after the death of Vicente Miranda in 1973 and until 1975, when the incident in question occurred. It is also noteworthy that the petitioners offered to assist the Uys with their hospitalization expenses although Purita said she knew them only casually. 16 The petitioners also argue that even assuming that they were the possessors of the dog that bit Theness, there was no clear showing that she died as a result thereof. On the contrary, the death certificate 17 declared that she died of broncho-pneumonia, which had nothing to do with the dog bites for which she had been previously hospitalized. The Court need not involve itself in an extended scientific discussion of the causal connection between the dog bites and the certified cause of death except to note that, first, Theness developed hydrophobia, a symptom of rabies, as a

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result of the dog bites, and second, that asphyxia broncho-pneumonia, which ultimately caused her death, was a complication of rabies. That Theness became afraid of water after she was bitten by the dog is established by the following testimony of Dr. Tautjo: LLphil COURT:I think there was mention of rabies in the report in the second admission? A:Now, the child was continuously vomiting just before I referred to Dr. Co earlier in the morning and then the father, because the child was asking for water, the father tried to give the child water and this child went under the bed, she did not like to drink the water and there was fright in her eyeballs. For this reason, because I was in danger there was rabies, I called Dr. Co. Q:In other words, the child had hydrophobia?

Q:For the record, I am manifesting that this book shown the witness is known as CURRENT DIANOSIS & TREATMENT, 1968 by Henry Brainerd, Sheldon Margen and Milton Chaton. Now, I invite your attention, doctor, to page 751 of this book under the title "Rabies." There is on this page, "Prognosis" as a result of rabies and it says: Once the symptoms have appeared death inevitably occurs after 2-3 days as a result of cardiac or respiratory failure or generalized paralysis. After a positive diagnosis of rabies or after a bite by a suspected animal if the animal cannot be observed or if the bite is on the head, give rabies vaccine (duck embryo). Do you believe in this statement? A:Yes. Q:Would you say therefore that persons who have rabies may die of respiratory failure which leave in the form of broncho-pneumonia? A:Broncho-pneumonia can be a complication of rabies. 19 On the strength of the foregoing testimony, the Court finds that the link between the dog bites and the certified cause of death has been satisfactorily established. We also reiterate our ruling in Sison v. Sun Life Assurance Company of Canada, 20 that the death certificate is not conclusive proof of the cause of death but only of the fact of death. Indeed, the evidence of the child's hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the death certificate stated a different cause of death. The petitioner's contention that they could not be expected to exercise remote control of the dog is not acceptable. In fact, Article 2183 of the Civil Code holds the possessor liable even if the animal should "escape or be lost" and so be removed from his control. And it does not matter either that as the petitioners also contend, the dog was tame and was merely provoked by the child into biting her. The law does not speak only of vicious animals but covers even tame ones as long as they cause injury. As for the alleged provocation, the petitioners

A:Yes, sir. 18 As for the link between rabies and broncho-pneumonia, the doctor had the following to say under oath: A:Now, as I said before, broncho-pneumonia can result from physical, chemical and bacterial means . . . It can be the result of infection, now, so if you have any other disease which can lower your resistance you can also get pneumonia. xxx xxx xxx Q:Would you say that a person who has rabies may die of complication which is broncho-pneumonia? A:Yes.

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forget that Theness was only three years old at the time she was attacked and can hardly be faulted for whatever she might have done to the animal. LexLib It is worth observing that the above defenses of the petitioners are an implied rejection of their original posture that there was no proof that it was the dog in their father's house that bit Theness. According to Manresa, the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause. 21 We sustain the findings of the Court of Appeals and approve the monetary awards except only as to the medical and hospitalization expenses, which are reduced to P2,026.69, as prayed for in the complaint. While there is no recompense that can bring back to the private respondents the child they have lost, their pain should at least be assuaged by the civil damages to which they are entitled. WHEREFORE, the challenged decision is AFFIRMED as above modified. The petition is DENIED, with costs against the petitioners. It is so ordered. Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

William F. Mueller, for appellee.

SYLLABUS 1.MASTER AND SERVANT; WORKMEN'S COMPENSATION ACT; INJURIES SUFFERED BY EMPLOYEE IN THE COURSE OF THE EMPLOYMENT. The employer is not an insurer "against all accidental injuries which might happen to an employee while in the course of the employment", and as a general rule an employee is not entitled to recover from personal injuries resulting from an accident that befalls him while going to or returning from his place of employment, because such an accident does not arise out of and in the course of his employment. This does not imply that an employee can never recover for injuries suffered while on his way to or from work. That depends on the nature of his employment.

DECISION

VICKERS, J p: This is an appeal by the plaintiffs from a decision of Judge Pedro Concepcion of the Court of First Instance of Manila dismissing the complaint, without a special finding as to costs. The appellants make the following assignments of error: "I.El Juzgado a quo incurrio en error al considerar que los hechos probados por los demandantes caen fuera de las disposiciones del artculo 2 de dicha Ley No. 3428 tal como ha sido enmendada por la Ley No. 3812 de la Legislatura Filipina; "II.Erro tambin al sobreseer de una manera definitiva la demanda; "III.Incurrio finalmente en error al no conceder la compensacion reclamada en la demanda a que tienen derecho los demandantes, segn las disposiciones de dicha Ley."

EN BANC [G.R. No. 36858. March 6, 1933.] JUSTA AFABLE and the minors POTENCIANO MADLANGBAYAN and ROSA MADLANGBAYAN, by JUSTA AFABLE, as guardian ad litem, plaintiffsappellants, vs. SINGER SEWING MACHINE COMPANY, defendant-appellee.

Bernabe Butalid and Teofilo Mendoza, for appellants.

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It appears from the evidence that Leopoldo Madlangbayan was a collector for the Singer Sewing Machine Company in the district of San Francisco del Monte, outside of the limits of the City of Manila, and he was supposed to be residing in his district according to the records of the company. His compensation was a commission of eight per cent on all collections made by him. On the afternoon of Sunday, November 16, 1930, Leopoldo Madlangbayan while riding a bicycle was run over and fatally injured at the corner of O'Donnell and Zurbaran streets in the City of Manila by a truck driven by Vitaliano Sumoay. It appears that Madlangbayan had moved to Teodora Alonso Street in Manila without notifying the company, and that at the time of his death he was returning home after making some collections in San Francisco del Monte. According to the practice of the company, if collectors made collections on Sunday they were required to deliver the amount collected to the company the next morning. On November 21, 1930, Vitaliano Sumoay, the driver of the truck which caused the death of Leopoldo Madlangbayan, was convicted for the crime of homicide through reckless negligence, and was sentenced to imprisonment for one year and one day, and to indemnify the heirs of Leopoldo Madlangbayan in the sum of P1,000. On February 19, 1931, the widow and children of Leopoldo Madlangbayan brought the present action to recover from the defendant corporation under Act No. 3428, as amended by Act No. 3812, P100 for burial expenses and P1,745.12 for compensation. Plaintiffs' complaint was subsequently amended, and they sought to recover under sections 8 and 10 of Act No. 3428 fifty per cent of P16.78 for 208 weeks or P1,745.12, plus P100 for burial expenses. In its answer to the plaintiffs' last amended complaint, the defendant denied all the allegations thereof, and as special defenses alleged that prior to the filing of this complaint the plaintiffs had obtained a judgment against Vitaliano Sumoay for the damages caused by him; that Leopoldo Madlangbayan at the time that he sustained the injuries resulting in his death was violating an ordinance of the City of Manila which prohibits work on Sunday; and that Act No. 3428, as amended, is unconstitutional and void because it denies the defendant the equal protection of the law, and impairs the obligation of the contract between the defendant and Leopoldo Madlangbayan, and deprives the Courts of First Instance of their probate jurisdiction over the estate of deceased persons and nullifies Chapters XXIX, XXX, XXXI, XXXII, XXXIII, and XXXIV of the Code of Civil Procedure and related articles of the Civil Code. As the deceased Leopoldo Madlangbayan was killed on November 16, 1930, and Act No. 3812 was not approved until December 8,

1930, it is apparent that the law which is applicable is Act No. 3428, section 2 of which reads as follows: "When any employee receives a personal injury from any accident due to and in the pursuance of the employment, or contracts any illness directly caused by such employment or the result of the nature of such employment, his employer shall pay compensation in the sums and to the persons hereinafter specified." The accident which caused the death of the employee was not due to and in pursuance of his employment. At the time that he was run over by the truck Leopoldo Madlangbayan was not in the pursuance of his employment with the defendant corporation, but was on his way home after he had finished his work for the day and had left the territory where he was authorized to make collections for the defendant. The employer is not an insurer "against all accidental injuries which might happen to an employee while in the course of the employment", and as a general rule an employee is not entitled to recover from personal injuries resulting from an accident that befalls him while going to or returning from his place of employment, because such an accident does not arise out of and in the course of his employment. The phrase "due to and in the pursuance of" used in section 2 of Act No. 3428 was changed in Act No. 3812 to "arising out of and in the course of". Discussing this phrase, the Supreme Court of Illinois in the case of Mueller Construction Co. vs. Industrial Board (288 Ill., 148; 118 N. E., 1028; 1 W. C. L., 943), said: "The words 'arising out of' refer to the origin or cause of the accident, and are descriptive of its character, while the words 'in the course of' refer to the time, place, and circumstances under which the accident takes place. (Fitzgerald vs. Clarke & Sons, 1 B. W. C. C., 197; Dietzen Co. vs. Industrial Board, 279 Ill., 11; 116 N. E., 684.) By the use of these words it was not the intention of the legislature to make the employer an insurer against all accidental injuries which might happen to an employee while in the course of the employment, but only for such injuries arising from or growing out of the risks peculiar to the nature of the work in the scope of the workman's employment or incidental to such employment, and accidents in which it is possible to trace the injury to some risk or hazard to which the employee is exposed in a special degree by reason of such employment. Risks to which all persons similarly situated are equally exposed

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and not traceable in some special degree to the particular employment are excluded." Although some courts have held otherwise, we think the better rule is as we have stated it. We do not of course mean to imply that an employee can never recover for injuries suffered while on his way to or from work. That depends on the nature of his employment. In the case at bar, if the deceased had been killed while going from house to house in San Francisco del Monte in the pursuance of his employment, the plaintiffs would undoubtedly have the right, prima facie, to recover. The appellants cite the syllabus in Stacy's case (225 Mass., 174), in support of their contention, but an examination of that case shows that it differs materially from the case at bar. Stacy was drowned by reason of breaking through the ice of Colburn's Pond while on his way home from work. Up to the time of his death he had been employed in the ice-house, in the work of storing ice which was cut from the pond. The ice-house was situated at the southerly end of the pond and the deceased lived directly north from the ice-house, across the pond. He followed the reasonable and customary way of leaving his employer's premises. The path around the pond was not used in winter. He was on his employer's premises when he met his death and was leaving those premises by a reasonable way. There was no other convenient way of going home. The pond was the premises of his employer, under his employer's control. It was as a result of the working operations of his employer that he met his death. The court said. "The finding that the pond was in the control of the employer and that crossing over it upon the ice was the 'reasonable and customary way' for the deceased to reach his home, and that he and other employees who lived in the same direction 'crossed by this way regularly', warranted the further finding that the injury occurred in the course of the employment." The court added: "It also could have been found that the death of the employee was due to his employment as a contributing proximate cause, incidental to the nature of the work in which he was engaged. There was evidence from which the board could have found that Stacy's death occurred by reason of the special hazard incident to the work which it was his duty to perform." The court said that Stacy's case was clearly distinguishable from Fumiciello's case (219 Mass., 488): Fumiciello was employed by Lathrop & Shea, who were doing some contract work for the Boston & Albany Railroad Company near Middlefield. He lived about one mile west where he was employed, and it was necessary for him to pass over the tracks of the Boston & Albany Railroad Company to go from his work to his home. While returning home at the close of the day's work, Fumiciello entered upon the railroad track where he was struck by a train and killed. The question for decision was

whether the injury arose out of and in the course of his employment. The court said: "It is plain that if, as the record states, it was necessary for him to pass over the railroad location, it formed no part of the employers' plant; nor was it in any way connected therewith or in their control as was the common stairway used by employees in Sundine's Case, 218 Mass., 1. The contract of employment did not provide for transportation or that the employee should be paid for the time taken in going and returning to his place of employment, and when the day's work had ended the employee was free to do as he pleased. If he had chosen to use the public ways and had been injured by a defect or passing vehicle the administrator could not recover against the employer because there would be no causal connection between the conditions of employment and the injuries suffered." This subject is considered at length in Workmen's Compensation Law by Schneider, Second Edition, pp. 745 et seq. In the case at bar the deceased was going from work in his own conveyance. "An employee quit work, mounted his motorcycle and started for home. When riding down the street he collided with an automobile driven by another employee. He sustained injuries which resulted in his death. In holding that the accident did not arise out of or in the course of the employment, the court said: 'To come within the term "injury received in the course of employment" it must be shown that the injury originated in the work, and, further, that it was received by the employee while engaged in or about the furtherance of the affairs of the employer. If it be conceded that the injury originated in the work, it would still be necessary, in our opinion, to show that the employee was engaged in the furtherance of his employer's business.' (Indemnity Co. vs. Dinkins [Tex. Civ. App.], 211 S. W., 949 [1919]; 18 N. C. C. A., 1034; 4 W. C. L. J., 294; In re Peter S. Winchester, 2nd A. R. U. S. C. C., 262; In re Julius Rosenberg, 2nd A. R. U. S. C. C., 263; Kirby Lumber Co. vs. Scurlock, Tex. Civ. App.[1921], 229 S. W., 975.)" "An employee who was paid by the hour was furnished a bicycle for his work, and while riding home one evening on the main road he was run into and killed by a motor lorry. It was held that, since it was no part of his duty to ride home on the bicycle the accident did not

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arise in the course of his employment. (Edwards vs. Wingham Agriculture & Imp. Co. [1913], W. C. & Ins. Rep., 642; 109 L. T. Rep., 50; 82 L. J. K. B., 998; 6 B. W. C. C., 511; 4 N. C. C. A., 115; Cook vs. Owners of 'Montreal,' 108 L. T. Rep., 164; 29 T. L. Rep., 233; 6 B. W. C. C., 220 [1913], 4 N. C. C. A., 115.)" "An employee had quit work and left the premises. He was sitting in his buggy waiting for his son, when the horse took fright and ran away. It was held that the injury sustained in the runaway did not arise out of or in the course of employment. (In re McCall, Ohio I. C. No. 121401, Nov. 4, 1915; Hilding vs. Dept. of Labor & Ind. [Wash.], 298 Pac., 321 [1931].)" Furthermore, it appears that the deceased had never notified the defendant corporation of his removal from San Francisco del Monte to Manila, and that the company did not know that he was living in Manila on the day of the accident; that the defendant company did not require its employees to work on Sunday, or furnish or require its agents to use bicycles. These are additional reasons for holding that the accident was not due to and in pursuance of the employment of the deceased. If the deceased saw fit to change his residence from San Francisco del Monte to Manila and to make use of a bicycle in going back and forth, he did so at his own risk, as the defendant company did not furnish him a bicycle or require him to use one; and if he made collections on Sunday, he did not do so in pursuance of his employment, and his employer is not liable for any injury sustained by him. For the foregoing reasons, the decision appealed from is affirmed, with the costs against the appellants. Villamor, Villa-Real, Hull and Imperial, JJ., concur.

Angara, Abello, Concepcion, Regala & Cruz Law Offices for petitioner. Alejandro M. Villamil for private respondent.

SYLLABUS 1.CIVIL LAW; PRESCRIPTION OF ACTIONS; RULE IN CASE OF ACTION FOUNDED ON QUASI-DELICT. The public respondent's conclusion that the cause of action in Civil Case No. D-9629 is founded on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in four (4) years is supported by the allegations in the complaint, more particularly paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption." 2.ID.; SPECIAL CONTRACTS; SALE; WARRANTY AGAINST HIDDEN DEFECTS; REMEDIES OF VENDEE IN RESPECT THERETO. The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the Civil Code which provides: "Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages in either case." The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. Under the law on obligations, responsibility arising from fraud is demandable in all obligations and any waiver of an action for future fraud is void. Responsibility arising from negligence is also demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. Those guilty of fraud, negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. 3.ID.; QUASI-DELICT; LIABILITY THERETO MAY STILL EXIST DESPITE THE PRESENCE OF CONTRACTUAL RELATION. The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and an action based thereon may be brought by the vendee. While it may be true that the preexisting contract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the act which breaks the contract may also be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, (23 SCRA 1117 [1968]) this Court stated: "We have repeatedly held, however, that the

FIRST DIVISION [G.R. No. 110295. October 18, 1993.] COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS (Fifth Division) and MS. LYDIA GERONIMO, respondents.

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existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, involving an airplane passenger who, despite his first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground or tort on the latter's part, for, although the relation between the passenger and a carrier is 'contractual both in origin and nature . . . the act that breaks the contract may also be a tort.'" Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. 4.ID.; ID.; BASIS OF LIABILITIES OF MANUFACTURER OR SELLER OF INJURYCAUSING PRODUCTS; RULE. Under American law, the liabilities of the manufacturer or seller of injury-causing products may be based on negligence, breach of warranty, tort, or other grounds such as fraud, deceit, or misrepresentation. Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treatises as culpa aquiliana, culpa extracontractual or cuasi-delitos) is homologous but not identical to tort under the common law, which includes not only negligence, but also intentional criminal acts, such as assault and battery, false imprisonment, and deceit.

DECISION

On 7 May 1990, Lydia L. Geronimo, the herein private respondent, filed a complaint for damages against petitioner with the Regional Trial Court (RTC) of Dagupan City. 1 The case was docketed as Civil Case No. D-9629. She alleges in her complaint that she was the proprietress of Kindergarten Wonderland Canteen located in Dagupan City, an enterprise engaged in the sale of soft drinks (including Coke and Sprite) and other goods to the students of Kindergarten Wonderland and to the public; on or about 12 August 1989, some parents of the students complained to her that the Coke and Sprite soft drinks sold by her contained fiber-like matter and other foreign substances or particles; she then went over her stock of soft drinks and discovered the presence of some fiber-like substances in the contents of some unopened Coke bottles and a plastic matter in the contents of an unopened Sprite bottle; she brought the said bottles to the Regional Health Office of the Department of Health at San Fernando, La Union, for examination; subsequently, she received a letter from the Department of Health informing her that the samples she submitted "are adulterated;" as a consequence of the discovery of the foreign substances in the beverages, her sales of soft drinks severely plummeted from the usual 10 cases per day to as low as 2 to 3 cases per day resulting in losses of from P200.00 to P300.00 per day, and not long after that she had to close shop on 12 December 1989; she became jobless and destitute; she demanded from the petitioner the payment of damages but was rebuffed by it. She prayed for judgment ordering the petitioner to pay her P5,000.00 as actual damages, P72,000.00 as compensatory damages, P500,000.00 as moral damages, P10,000.00 as exemplary damages, the amount equal to 30% of the damages awarded as attorney's fees, and the costs. 2 The petitioner moved to dismiss 3 the complaint on the grounds of failure to exhaust administrative remedies and prescription. Anent the latter ground, the petitioner argued that since the complaint is for breach of warranty under Article 1561 of the Civil Code, it should have been brought within six months from the delivery of the goods pursuant Article 1571 of the said Code. In her Comment 4 thereto, private respondent alleged that the complaint is one for damages which does not involve an administrative action and that her cause of action is based on an injury to plaintiff's right which can be brought within four years pursuant to Article 1146 of the Civil Code; hence, the complaint was seasonably filed. Subsequent related pleadings were thereafter filed by the parties. 5 In its Order of 23 January 1991, 6 the trial court granted the motion to dismiss. It ruled that the doctrine of exhaustion of administrative remedies does not apply as the existing administrative remedy is not adequate. It also stated that the complaint is based on a contract, and not on quasi-delict, as there exists a pre-existing contractual relation between the parties; thus, on the basis of

DAVIDE, JR., J p: This case concerns the proprietress of a school canteen which had to close down as a consequence of the big drop in its sales of soft drinks triggered by the discovery of foreign substances in certain beverages sold by it. The interesting issue posed is whether the subsequent action for damages by the proprietress against the soft drinks manufacturer should be treated as one for breach of implied warranty against hidden defects or merchantability, as claimed by the manufacturer, the petitioner herein, which must therefore be filed within six months from the delivery of the thing sold pursuant to Article 1571 of the Civil Code, or one for quasi-delict, as held by the public respondent, which can be filed within four years pursuant to Article 1146 of the same Code. prLL

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Article 1571, in relation to Article 1562, the complaint should have been filed within six months from the delivery of the thing sold. Her motion for the reconsideration of the order having been denied by the trial court in its Order of 17 April 1991, 7 the private respondent came to this Court via a petition for review on certiorari which we referred to the public respondent "for proper determination and disposition." 8 The public respondent docketed the case as CA-G.R. SP No. 25391. In a decision promulgated on 28 January 1992, 9 the public respondent annulled the questioned orders of the RTC and directed it to conduct further proceedings in Civil Case No. D-9629. In holding for the private respondent, it ruled that: "Petitioner's complaint being one for quasi-delict, and not for breach of warranty as respondent contends, the applicable prescriptive period is four years. It should be stressed that the allegations in the complaint plainly show that it is an action for damages arising from respondent's act of 'recklessly and negligently manufacturing adulterated food items intended to be sold for public consumption' (p. 25, rollo). It is a truism in legal procedure that what determines the nature of an action are the facts alleged in the complaint and not those averred as a defense in the defendant's answer (I Moran 126; Calo v. Roldan, 76 Phil. 445; Alger Electric, Inc. v. CA, 135 SCRA 340). Secondly, despite the literal wording of Article 2176 of the Civil Code, the existence of contractual relations between the parties does not absolutely preclude an action by one against the other for quasi-delict arising from negligence in the performance of a contract. In Singson v. Court of Appeals (23 SCRA 1117), the Supreme Court ruled: 'It has been repeatedly held: that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages

therefor . . . Thus in Air France vs. Carrascoso, . . . (it was held that) although the relation between a passenger and a carrier is "contractual both in origin and nature the act that breaks the contract may also be a tort.'

Significantly, in American jurisprudence, from which Our law on Sales was taken, the authorities are one in saying that the availability of an action for breach of warranty does not bar an action for torts in a sale of defective goods." 10 Its motion for the reconsideration of the decision having been denied by the public respondent in its Resolution of 14 May 1993, 11 the petitioner took this recourse under Rule 45 of the Revised Rules of Court. It alleges in its petition that: "I THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN RULING THAT ARTICLE 2176, THE GENERAL PROVISION ON QUASIDELICTS, IS APPLICABLE IN THIS CASE WHEN THE ALLEGATIONS OF THE COMPLAINT CLEARLY SHOW THAT PRIVATE RESPONDENT'S CAUSE OF ACTION IS BASED ON BREACH OF A SELLER'S IMPLIED WARRANTIES UNDER OUR LAW ON SALES. II COROLLARILY, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN OVERRULING PETITIONER'S ARGUMENT THAT PRIVATE RESPONDENT'S CAUSE OF ACTION HAD PRESCRIBED UNDER ARTICLE 1571 OF THE CIVIL CODE." 12 The petitioner insists that a cursory reading of the complaint will reveal that the primary legal basis for private respondent's cause of action is not Article 2176 of the Civil Code on quasi-delict for the complaint does not ascribe any tortious or wrongful conduct on its part but Articles 1561 and 1562 thereof on breach of a seller's implied warranties under the law on sales. It contends that the existence of a contractual relation between the parties (arising from

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the contract of sale) bars the application of the law on quasi-delicts and that since private respondent's cause of action arose from the breach of implied warranties, the complaint should have been filed within six months from delivery of the soft drinks pursuant to Article 1571 of the Civil Code. prcd In her Comment the private respondent argues that in case of breach of the seller's implied warranties, the vendee may, under Article 1567 of the Civil Code, elect between withdrawing from the contract or demanding a proportionate reduction of the price, with damages in either case. She asserts that Civil Case No. D-9629 is neither an action for rescission nor for proportionate reduction of the price, but for damages arising from a quasidelict and that the public respondent was correct in ruling that the existence of a contract did not preclude the action for quasi-delict. As to the issue of prescription, the private respondent insists that since her cause of action is based on a quasi-delict, the prescriptive period therefor is four (4) years in accordance with Article 1144 of the Civil Code and thus the filing of the complaint was well within the said period. prLL We find no merit in the petition. The public respondent's conclusion that the cause of action in Civil Case No. D-9629 is founded on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in four (4) years is supported by the allegations in the complaint, more particularly paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption." The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the Civil Code which provides: "ART. 1567.In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages in either case." 13 The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. 14 Under the law on obligations, responsibility arising from fraud is demandable in all obligations and any waiver of an action for future fraud is void. Responsibility arising from negligence is also demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. 15 Those guilty of fraud,

negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. 16 The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and an action based thereon may be brought by the vendee. While it may be true that the pre-existing contract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the act which breaks the contract may also be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, 17 this Court stated: "We have repeatedly held, however, that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. 1 8 Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, 19 involving an airplane passenger who, despite his first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between the passenger and a carrier is 'contractual both in origin and nature . . . the act that breaks the contract may also be a tort.' " Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. 20 Under American law, the liabilities of the manufacturer or seller of injurycausing products may be based on negligence, 21 breach of warranty, 22 tort, 23 or other grounds such as fraud, deceit, or misrepresentation. 24 Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treatises as culpa aquiliana, culpa extra-contractual or cuasi-delitos) 25 is homologous but not identical to tort under the common law, 26 which includes not only negligence, but also intentional criminal acts, such as assault and battery, false imprisonment, and deceit. 27 It must be made clear that our affirmance of the decision of the public respondent should by no means be understood as suggesting that the private respondent's claims for moral damages have sufficient factual and legal basis.

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IN VIEW OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit, with costs against the petitioner. SO ORDERED. Cruz, Bellosillo and Quiason, JJ ., concur. Grio-Aquino, J ., is on leave.

4.ID.; WHEN INJUNCTION ISSUES. Courts usually grant an injunction 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 tortfeasor that the latter is 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. 5.ID., ID.; FACTS OF THIS CASE. The defendants induced the owner of a cinematograph film to break his contract of lease with a theater owner and lease the film to them, with the avowed purpose of exhibiting it in another theater in the same city. As the profits of the lessee depended upon the patronage of the public and hence the task of estimating his damages with accuracy would be quite difficult if not impossible: Held, That injunction against further interference with the contract was properly issued. 6.APPEAL; REVIEW OF EVIDENCE. In order that this court may review the evidence on appeal, it is necessary that all the evidence be brought up. This is the duty of the appellant. and upon his failure to perform it, we decline to review the evidence, but rely entirely upon the pleadings and findings of fact of the trial court and examine only assigned errors of law. This rule is subject to some exceptions, but the present case is not within any of them. 7.EVIDENCE; JUDICIAL NOTICE; CINEMATOGRAPH. Judicial notice taken of the general character of a cinematograph or motion picture theater.

FIRST DIVISION [G.R. No. 9356. February 18, 1915.] C. S. GILCHRIST, plaintiff-appellee, vs. E. A. CUDDY ET AL., defendants. JOSE FERNANDEZ ESPEJO and MARIANO ZALDARRIAGA, appellants.

C. Lozano, for appellants. Bruce, Lawrence, Ross & Block, for appellee.

SYLLABUS 1.DAMAGES; INTERFERENCE WITH CONTRACTS BY STRANGERS The interference with lawful contracts by strangers thereto gives rise to an action for damages in favor of the injured person. The law does not require that the responsible person have known the identity of the injured person. 2.INJUNCTION; WHEN IT ISSUES; GENERAL DOCTRINE. The general doctrine as to when injunction issues, as stated in Devesa vs. Arbes (13 Phil. Rep., 273), affirmed. 3.ID.; INTERFERENCE WITH CONTRACTS BY STRANGERS. The interference with lawful contracts by strangers thereto does not of itself give the injured person a remedy by injunction. DECISION

TRENT, J p: An appeal by the defendants, Jose Fernandez Espejo and Mariano Zaldarriaga, from a judgment of the Court of First Instance of Iloilo, dismissing their cross-complaint upon the merits for damages against the plaintiff for the alleged wrongful issuance of a mandatory and a preliminary injunction. Upon the application of the appellee an ex parte mandatory injunction was issued on the 22d of May, 1913, direct ing the defendant, E. A. Cuddy, to send to the appellee a certain cinematograph film called

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"Zigomar" in compliance with an alleged contract which had been entered into between these two parties, and at the same time an ex parte preliminary injunction was issued restraining the appellants from receiving and exhibiting in their theater the Zigomar until further orders of the court. On the 26th of that month the appellants appeared and moved the court to dissolve the preliminary injunction. This motion was denied, after hearing, on the same day. On June 5 the appellants filed their answer, wherein they denied all of the allegations in the complaint and by way of a cross-complaint asked for damages in the sum of P800 for the wrongful issuance of the preliminary injunction. When the case was called for trial on August 6, the appellee moved for the dismissal of the complaint "for the reason that there is no further necessity for the maintenance of the injunction. "The motion was granted without objection as to Cuddy and denied as to the appellants in order to give them an opportunity to prove that the injunctions were wrongfully issued and the amount of damages suffered by reason thereof. The pertinent part of the trial court's findings of fact in this case is as follows: "It appears in this case that Cuddy was the owner of the film Zigomar and that on the 24th of April he rented it to C. S. Gilchrist for a week for P125, and it was to be delivered on the 26th of May, 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. The other arrangements was the rental to these defendants Espejo and his partner for P350 for the week and the injunction was asked by Gilchrist against these parties from showing it for the week beginning the 26th of May. "It appears from the testimony in this case, conclusively, that Cuddy willfuly 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 the 26th of May 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. There is in evidence in this case on the trial today as well as on the 26th of May, 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. The last of these letters was written on the 26th of April, 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 three times as much as he had contracted with Gilchrist for. Therefore, in the opinion of this court, the defendants failed signally to show the injunction against the defendants was wrongfully procured." The appellants duly excepted to the order of the court denying their motion for new trial on the ground that the evidence was insufficient to justify the decision rendered. There is lacking from the record before us the deposition of the defendant Cuddy, which apparently throws light upon a contract entered into between him and the plaintiff Gilchrist. The contents of this deposition are discussed at length in the brief of the appellants and an endeavor is made to show that no such contract was entered into. The trial court, which had this deposition before it, found that there was a contract between Cuddy and Gilchrist. Not having the deposition in question before- us, it is impossible to say how strongly it militates against this finding of fact. By a series of decisions we have construed sections 143 and 497 (2) of the Code of Civil Procedure to require the production of all the evidence in this court. This is the duty of the appellant and, upon his failure to perform it, we decline to proceed with a review of the evidence In such cases we rely entirely upon the pleadings and the findings of fact of the trial court and examine only such assigned errors as raise questions of law. (Ferrer vs. Neri Abejuela, 9 Phil. Rep., 324; Valle vs. Galera, 10 Phil. Rep., 619; Salvacion vs. Salvacion, 13 Phil Re 366; Breta vs. Smith, Bell & Co., 15 Phil. Rep, 446 Arroyo vs. Yulo, 18 Phil. Rep., 236; Olsen & Co. vs. Matson, Lord & Belser Co., 19 Phil. Rep., 102; Blum vs. Barretto, 19 Phil. Rep., 161; Cuyugan vs. Aguas, 19 Phil Rep., 379; Mapa vs. Chaves, 20 Phil. Rep., 147; Mans vs. Garry, 20 Phil. Rep., 134.) It is true that some of the more recent of these cases make exceptions to the general rule. Thus, in Olsen & Co. vs. Matson, Lord & Belser Co. (19 Phil. Rep., 102), that portion of the evidence before us tended to show that grave injustice might result from a strict reliance upon the findings of fact contained in the judgment appealed from. We, therefore, gave the appellant an opportunity to explain the omission. But we required that such explanation must show a satisfactory reason for the omission, and that the missing portion of the evidence must be submitted within sixty days or cause shown for failing to do so. The other cases making exceptions to the rule are based upon peculiar circumstances which will seldom arise in practice and need not here be set forth, for the reason that

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they are wholly inapplicable to the present case. The appellants would be entitled to indulgence only under the doctrine of the Olsen case. But from that portion of the record before us, we are not inclined to believe that the missing deposition would be sufficient to justify us in reversing the findings of fact of the trial court that the contract in question had been made. There is in the record not only the positive and detailed testimony of Gilchrist to this effect, but there is also a letter of apology from Cuddy to Gilchrist in which the former enters into a lengthy explanation of his reasons for leasing the film to another party. The latter could only have been called forth by a broken contract with Gilchrist to lease the film to him. We, therefore, fail to find any reason for overlooking the omission of the defendants to bring up the missing portion of the evidence and, adhering to the general rule above referred to, proceed to examine the questions of law raised by the appellants. From the above-quoted findings of fact it is clear that Cuddy, a resident of Manila, was the owner of the "Zigomar;" that Gilchrist was the owner of a cinematograph theater in Iloilo; that in accordance with the terms of the contract entered into between Cuddy and Gilchrist the former leased to the latter the "Zigomar" for exhibition in his (Gilchrist's) theater for the week beginning May 26, 1913; and that Cuddy willfully violated his contract in order that he might accept the appellants' offer of P350 for the film for the same period. Did the appellants 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 arrangements between Cuddy and the appellants for the exhibition of the film by the latter on the 26th of May were perfected after April 26, 90 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. The appellants take the position 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 be ginning 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. Taking this view of the case, it will be unnecessary for us to inquire whether the mandatory injunction against Cuddy was properly issued or not. No question is raised with reference to the issuance of that injunction. 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. Were the appellants 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? The appellants 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 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 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 damum 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 the good of another and careless of his own advantage." (Quoted with approval in Beekman vs. Marsters, 195 Mass., 205.)

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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 damage to another when there is fault or negligence, shall be obliged to repair the damage so 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 damage. 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, which specifies the circumstances under which an injunction may issue. Upon the general doctrine of injunction we said in Devesa vs. Arbes (13 Phil. Rep., 273): "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 other 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." We subsequently affirmed the doctrine of the Devesa case in Palafox vs. Madamba (19 Phil. Rep., 444), and we take this occasion of again affirming it, believing, as we do, that the indiscriminate use of injunctions should be discouraged. 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 appellants 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 been a controlling feature in those cases. 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 contracts 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 persons 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.) So we proceed to the determination of the main question of whether or not the preliminary injunction ought to have been issued in this case. 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. (In re Debs, 158 U. S., 564.) If the injury is irreparable, the ordinary process is inadequate. In Wahle vs. Reinbach (76 Ill., 322), the supreme court of Illinois approved a definition of the term "irreparable injury" in the following language: "By 'irreparable injury' is

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not meant such in jury 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." (Quoted with approval in Nashville R. R. Co. vs. McConnell, 82 Fed., 65.) 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 compete by all fair and legitimate means. As remarked in the case of the "ticket scalpers" (82 Fed., 65), the novelty of the facts does not deter 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 motion. (The Encyclopedia Britannica, vol. 6, p. 374.) 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 exhibitions are given. The attendance, and, consequently, the receipts, at one of these cinematograph or motionpicture 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 than 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. It is quite apparent that to estimate with any degree of accuracy the damages which Gilchrist would likely suffer from such an event would be quite difficult if not impossible. 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 applied for and was granted, as we have indicated,

a mandatory injunction against Cuddy requiring him to deliver the Zigomar to Gilchrist, and a preliminary injunction against the appellants restraining them from exhibiting that film in their theater during the week 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, we are not, as we have said, 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, we are of the opinion that the circumstances justified the issuance of that injunction in the discretion of the court. We are not lacking in authority to support our conclusion that the court was justified in issuing the preliminary injunction against the appellants. Upon the precise question as to whether injunction will issue to restrain wrongful interference with contracts by strangers to such contracts, it may be said that courts in the United States 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. Sperry & Hutchinson Co. vs. Mechanics' Clothing Co. (128 Fed., 800); Sperry & Hutchin son Co. vs. Louis Weber & Co. (161 Fed., 219); Sperry & Hutchinson Co. vs. Pommer (199 Fed., 309); were all cases wherein the respondents were inducing retail merchants to break their contracts with the company for the sale of the latters' trading stamps. Injunction issued in each case restraining the respondents from interfering with such contracts. In the case of the Nashville R. R. Co. vs. McConnell (82 Fed., 65), 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 Hamby & Toomer vs. Georgia Iron & Coal. Co. (127 Ga., 792), it appears that the respondents were interfering in a contract for prison labor, and the result would be, if they were successful, the shutting down of the petitioners plant for an indefinite time. The court held that although

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there was no contention that the respondents were insolvent, the trial court did not abuse its discretion in granting a preliminary injunction against the respondents. In Beekman vs. Marsters (195 Mass., 205), the plaintiff had obtained from the Jamestown Hotel Corporation, conducting a hotel within the grounds of the Jamestown Exposition, a contract whereby he was made their exclusive agent for the New England States to solicit patronage for the hotel. The defendant induced the hotel corporation to break their contract with the plaintiff in order to allow him to act also as their agent in the New England States. The court held that an action for damages would not have afforded the plaintiff adequate relief, and that an injunction was proper compelling the defendant to desist from further interference with the plaintiff's exclusive contract with the hotel company. In Citizens' Light, Heat & Power Co. vs. Montgomery Light & Water Power Co. (171 Fed., 553), the court, while admitting that there are some authorities to the contrary, held that the current authority in the United States and England is that: "The violation of a legal right committed knowingly is a cause of action, and that it is a violation of a legal right to interfere with contractual relations recognized by law, if there be no sufficient justification for the interference. (Quinn vs. Leatham, supra, 510; Angle vs. Chicago, etc., Ry. Co., 151 U. S., 1; 14 Sup. Ct., 240; 38 L. Ed., 55; Martens vs. Reilly, 109 Wis., 464, 84 N. W., 840; Rice vs. Manley, 66 N. Y., 82; 23 Am. Rep., 30; Bitterman vs. L. & N. R. R. Co., 207 U. S., 205; 28 Sup. Ct., 91; 52 L. Ed., 171; Beekman vs. Marsters, 195 Mass., 205; 80 N. E., 817; 11 L. R. A. [N. S.], 201; 122 Am. St. Rep., 232; South Wales Miners' Fed. vs. Glamorgan Coal Co., Appeal Cases, 1905, p. 239.)" See also Nims on Unfair Business Competition, pp. 351-371. In 3 Elliott on Contracts, section 2511, it is said: "Injunction is the proper remedy to prevent a wrongful interference with contracts 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 and the defendant were business rivals and the defendant had induced the customers of the complainant to break their contracts with him by agreeing to indemnify them against liability for damages. So, an employee who breaks his contract of employment may be

enjoined from inducing 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 intimidation or obstruct the public thoroughfares." Beekman vs. Marsters, supra, is practically on all fours with the case at bar in that there was only one contract in question and the profits of the injured person depended upon the patronage of the public. Hamby & Toomer vs. Georgia Iron & Coal Co., supra, is also similar to the case at bar in that there was only one contract, the interference of which was stopped by injunction. For the foregoing reasons the judgment is affirmed, with costs, against the appellants. Arellano, C.J., Torres, Carson and Araullo, JJ., concur.

SECOND DIVISION [G.R. No. 120554. September 21, 1999.] SO PING BUN, petitioner, vs. COURT OF APPEALS, TEK HUA ENTERPRISING CORP. and MANUEL C. TIONG, respondents.

Bengson Narciso Cudala Jimenez Gonzales & Liwanag for petitioner. Rafael Arsenio S. Dizon for Dee C. Chuan & Sons, Inc. Saludo Agpalo Fernandez & Aquino for private respondents.

SYNOPSIS Tek Hua Enterprises is the lessee of Dee C. Chuan & Sons, Inc. in the latter's premises in Binondo but it was So Ping Bun who was occupying the same for

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his Trendsetter Marketing. Later, Mr. Manuel Tiong asked So Ping Bun to vacate the premises but the latter refused and entered into formal contracts of lease with DCCSI. In a suit for injunction, private respondents pressed for the nullification of the lease contracts between DCCSI and petitioner, and for damages. The trial court ruled in favor of private respondents and the same was affirmed by the Court of Appeals. There was tort interference in the case at bar as petitioner deprived respondent corporation of the latter's property right. However, nothing on record imputed malice on petitioner; thus, precluding damages. But although the extent of damages was not quantifiable, it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. Hence, the Court confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing.

the appellate court, the three elements of tort interference above-mentioned are present in the instant case. 3.ID.; ID.; JUSTIFICATION WHERE THE DEFENDANT ACTS FOR THE SOLE PURPOSE OF FURTHERING HIS OWN FINANCIAL INTEREST; DISCUSSED. Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. One view is that, as a general rule, justification for interfering with the business relations of another exists where the actor's motive is to benefit himself. Such justification does not exists where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer's interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting one's financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract, and the impulse behind one's conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice on him. 4.ID.; ID.; WHERE LIABILITY NOT QUANTIFIABLE. Section 1314 of the Civil Code categorically provides that, "Any third person who induces another to violate his contract shall be liable for damages to the other contracting party." Here however, the lower courts did not award damages because the extent of damages was not 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. We believe the same conclusion applies in this case. While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the

SYLLABUS 1.CIVIL LAW; DAMAGES; NONTRESPASSORY INVASION OF ANOTHER'S INTEREST IN THE PRIVATE USE AND ENJOYMENT OF ASSET; WHEN PRESENT. Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or compensation awarded for the damage suffered. One becomes liable in an action for damages for a nontrespassory invasion of another's interest in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to 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) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules. 2.ID.; OBLIGATIONS AND CONTRACTS; TORT INTERFERENCE; ELEMENTS; PRESENT. The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse. A duty which the law of torts is concerned with its respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us, petitioner's Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter's property right. Clearly, and as correctly viewed by

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legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioner's interference. 5.ID.; ACTUAL DAMAGES; ATTORNEY'S FEES; WHERE PLAINTIFF COMPELLED TO LITIGATE TO PROTECT HIS INTEREST; BASES OF AWARD THEREOF. 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. One such occasion is when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. But we consistently held that the award of considerable damages should have clear factual and legal bases. In connection with attorney's fees, the award should be commensurate to the benefits that would have been derived from a favorable judgment. Settled is the rule that fairness of the award of damages by the trial court calls for appellate review such that the award if far too excessive can be reduced. This ruling applies with equal force on the award of attorney's fees. In a long line of cases we said, "It is not sound policy to place a penalty on the right to litigate. To compel the defeated party to pay the fees of counsel for his successful opponent would throw wide open the door of temptation to the opposing party and his counsel to swell the fees to undue proportions." Considering that the respondent corporation's lease contract, at the time when the cause of action accrued, ran only on a month-tomonth basis whence before it was on a yearly basis, we find even the reduced amount of attorney's fees ordered by the Court of Appeals still exorbitant in the light of prevailing jurisprudence. Consequently, the amount of two hundred thousand (P200,000.00) Pesos awarded by respondent appellate court should be reduced to one hundred thousand (P100,000.00) pesos as the reasonable award for attorney's fees in favor of private respondent corporation. TIcEDC

"WHEREFORE, foregoing considered, the appeal of respondent-appellant So Ping Bun for lack of merit is DISMISSED. The appealed decision dated April 20, 1992 of the court a quo is modified by reducing the attorney's fees awarded to plaintiff Tek Hua Enterprising Corporation from P500,000.00 to P200,000.00." 3 The facts are as follows: In 1963, Tek Hua Trading Co., through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila. Tek Hua used the areas to store its textiles. The contracts each had a one-year term. They provided that should the lessee continue to occupy the premises after the term, the lease shall be on a month-to-month basis. When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein respondent corporation. So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok's grandson, petitioner So Ping Bun, occupied the warehouse for his own textile business, Trendsetter Marketing.

DECISION

QUISUMBING, J p: This petition for certiorari challenges the Decision 1 of the Court of Appeals dated October 10, 1994, and the Resolution 2 dated June 5, 1995, in CA-G.R. CV No. 38784. The appellate court affirmed the decision of the Regional Trial Court of Manila, Branch 35, except for the award of attorney's fees, as follows: llcd

On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25% increase in rent effective September 1, 1989. The rent increase was later on reduced to 20% effective January 1, 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 accomplish the contracts shall be deemed as lack of interest on the lessee's part, and agreement to the termination of the lease. Private respondents did not answer any of these letters. Still, the lease contracts were not rescinded. LLjur On March 1, 1991, private respondent Tiong sent a letter to petitioner, which reads as follows:

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March 1, 1991 "Mr. So Ping Bun 930 Soler Street Binondo, Manila Dear Mr. So, Due to my closed (sic) business associate (sic) for three decades with your late grandfather Mr. So Pek Giok and late father, Mr. So Chong Bon, I allowed you temporarily to use the warehouse of Tek Hua Enterprising Corp. for several years to generate your personal business. Since I decided to go back into textile business, I need a warehouse immediately for my stocks. Therefore, please be advised to vacate all your stocks in Tek Hua Enterprising Corp. Warehouse. You are hereby given 14 days to vacate the premises unless you have good reasons that you have the right to stay. Otherwise, I will be constrained to take measure to protect my interest. Please give this urgent matter your preferential attention to avoid inconvenience on your part. cdrep Very truly yours, (Sgd) Manuel C. Tiong MANUEL C. TIONG President" 4 Petitioner refused to vacate. On March 4, 1992, petitioner requested formal contracts of lease with DCCSI in favor of Trendsetter Marketing. So Ping Bun

claimed that after the death of his grandfather, So Pek Giok, he had been occupying the premises for his textile business and religiously paid rent. DCCSI acceded to petitioner's request. The lease contracts in favor of Trendsetter were executed. In the suit for injunction, private respondents pressed for the nullification of the lease contracts between DCCSI and petitioner. They also claimed damages. cda After trial, the trial court ruled: "WHEREFORE, judgment is rendered: 1.Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3, inclusive) all dated March 11, 1991, between defendant So Ping Bun, doing business under the name and style of 'Trendsetter Marketing', and defendant Dee C. Chuan & Sons, Inc. over the premises located at Nos. 924-B, 924-C, 930 and 930, Int., respectively, Soler Street, Binondo Manila; 2.Making permanent the writ of preliminary injunction issued by this Court on June 21, 1991; 3.Ordering defendant So Ping Bun to pay the aggrieved party, plaintiff Tek Hua Enterprising Corporation, the sum of P500,000.00, for attorney's fees; 4.Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is concerned, and the respective counterclaims of the defendant; 5.Ordering defendant So Ping Bun to pay the costs of this lawsuit; 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, 930-

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Int., 924-B and 924-C Soler Street, Binondo, Manila, under such terms and conditions as they agree upon, provided they are not contrary to law, public policy, public order, and morals. LexLib SO ORDERED." 5 Petitioner's motion for reconsideration of the above decision was denied. On appeal by So Ping Bun, the Court of Appeals upheld the trial court. On motion for reconsideration, the appellate court modified the decision by reducing the award of attorney's fees from five hundred thousand (P500,000.00) pesos to two hundred thousand (P200,000.00) pesos. Petitioner is now before the Court raising the following issues: I.WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL COURT'S DECISION FINDING SO PING BUN GUILTY OF TORTUOUS INTERFERENCE OF CONTRACT? II.WHETHER THE APPELLATE COURT ERRED IN AWARDING ATTORNEY'S FEES OF P200,000.00 IN FAVOR OF PRIVATE RESPONDENTS. The foregoing issues involve, essentially, the correct interpretation of the applicable law on tortuous conduct, particularly unlawful interference with contract. We have to begin, obviously, with certain fundamental principles on torts and damages. dctai 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's interest in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to 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) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules. 7

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse. 8 A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other of his private property. 9 This may pertain to a situation where a third person induces a party to renege on or violate his undertaking under a contract. In the case before us, petitioner's Trendsetter Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter's property right. Clearly, and as correctly viewed by the appellate court, the three elements of tort interference above-mentioned are present in the instant case. LexLib Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering his own financial or economic interest. 10 One view is that, as a general rule, justification for interfering with the business relations of another exists where the actor's motive is to benefit himself. Such justification does not exist where his sole motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer's interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. 11 Moreover, justification for protecting one's financial position should not be made to depend on a comparison of his economic interest in the subject matter with that of others. 12 It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful motives. 13 As early as Gilchrist vs. Cuddy, 14 we held that where there was no malice in the interference of a contract, and the impulse behind one's conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler. 15 In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice on him.

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Section 1314 of the Civil Code categorically provides also that, "Any third person who induces another to violate his contract shall be liable for damages to the other contracting party." Petitioner argues that damage is an essential element of tort interference, and since the trial court and the appellate court ruled that private respondents were not entitled to actual, moral or exemplary damages, it follows that he ought to be absolved of any liability, including attorney's fees. prcd It is true that the lower courts did not award damages, but this was only because the extent of damages was not 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. We believe the same conclusion applies in this case. While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioner's interference. cdasia 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 omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. 17 But we have consistently held that the award of considerable damages should have clear factual and legal bases. 18 In connection with attorney's fees, the award should be commensurate to the benefits that would have been derived from a favorable judgment. Settled is the rule that fairness of the award of damages by the trial court calls for appellate review such that the award if far too excessive can be reduced. 19 This ruling applies with equal force on the award of attorney's fees. In a long line of cases we said, "It is not sound policy to place a penalty on the right to litigate. To compel the defeated party to pay the fees of counsel for his successful opponent would throw wide open the door of temptation to the opposing party and his counsel to swell the fees to undue proportions." 20

Considering that the respondent corporation's lease contract, at the time when the cause of action accrued, ran only on a month-to-month basis whence before it was on a yearly basis, we find even the reduced amount of attorney's fees ordered by the Court of Appeals still exorbitant in the light of prevailing jurisprudence. 21 Consequently, the amount of two hundred thousand (P200,000.00) awarded by respondent appellate court should be reduced to one hundred thousand (P100,000.00) pesos as the reasonable award for attorney's fees in favor of private respondent corporation. WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 38784 are hereby AFFIRMED, with MODIFICATION that the award of attorney's fees is reduced from two hundred thousand (P200,000.00) to one hundred thousand (P100,000.00) pesos. No pronouncement as to costs. cdtai SO ORDERED. Bellosillo, Mendoza and Buena, JJ., concur.

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