[ G.R. No. 9356. February 18, 1915 ] 29 Phil. 542
[ G.R. No. 9356. February 18, 1915 ]
C. S. GILCHRIST, PLAINTIFF AND APPELLEE, VS. E. A. CUDDY ET AL., DEFENDANTS. JOSE FERNANDEZ ESPEJO AND MARIANO ZALDARRIAGA, APPELLANTS. D E C I S I O N
TRENT, J.:
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, directing the defendant, E. A. Cuddy, to send to the appellee a certain cinematograph film called “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 imposible 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. Rep., 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 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, so that the six weeks would include and extend beyond May 26. The appellants must necessarily have known at the time they made their offer to Cuddy that the latter had booked or contracted the film for six weeks from April 26. Therefore, the inevitable conclusion is that the appellants knowingly induced Cuddy to violate his contract with another person. But there is no specific finding that the appellants knew the identity of the other party. So we must assume that they did not know that Gilchrist was the person who had contracted for the film. 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 beginning May 26, and could have also subleased it to other theater owners in the nearby towns and, by so doing, could have cleared, during the life of their contract with Cuddy, the amount claimed as damages. 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 damnum absque injuria, unless some superior right by contract or otherwise is interfered with.” In Read vs. Friendly Society of Operative Stonemasons ([1902] 2 K. B., 88), Darling, J., said: “I think the plaintiff has a cause of action against the defendants, unless the court is satisfied that, when they interfered with the contractual rights of plaintiff, the defendants had a sufficient justification for their interference; * * * for it is not a justification that ’they acted bona fide in the best interests of the society of masons,’ i. e., in their own interests. Nor is it enough that ’they were not actuated by improper motives.’ I think their sufficient justification for interference with plaintiff’s right must be an equal or superior right in themselves, and that no one can legally excuse himself to a man, of whose contract he has procured the breach, on the ground that he acted on a wrong understanding of his own rights, or without malice, or bona fide, or in the best interests of himself, or even that he acted as an altruist, seeking only the good of another and careless of his own advantage.” (Quoted with approval in Beekman vs. Marsters, 195 Mass., 205.) 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 tortfeasor 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, believeing, as we do, that the indiscriminate use of injuctions 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, how- ever, 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 III., 322), the supreme court of Illinois approved a definition of the term “irreparable injury” in the following language: “By ‘irreparable injury’ is not meant such injury as is beyond the possibility of repair, or beyond possible compensation in damages, nor necessarily great injury or great damage, but that species of injury, whether great or small, that ought not to be submitted to on the one hand or inflicted on the other; and, because it is so large on the one hand, or so small on the other, is of such constant and frequent recurrence that no fair or reasonable redress can be had therefor in a court of law.” (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 kinematograph, 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 motion-picture theaters depends in no small degree upon the excellence of the photographs, and it is quite common for the proprietor of the theater to secure an especially attractive exhibit as his “feature film” and advertise it as such in order to attract the public. This feature film is depended upon to secure a larger attendance 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 Go. vs. Mechanics’ Clothing Co. (128 Fed., 800); Sperry & Hutchinson 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 petitioner’s plant for an indefinite time. The court held that although 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.f 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.