Gilchrist v Cuddy, Espejo and Zaldarriaga Feb. 18, 1915 Trent, J.

Recit-Ready: Cuddy was the owner of a copy of the movie Zigomar in Manila. He agreed into an agreement with Gilchrist to lease the latter the film for a week, for P125. However, just before the agreed time that the lease was to begin, he breached his contract, sent back the money Gilchrist had forwarded, and did not deliver the film. It turned out that he leased the film to rival theater-owners in Iloilo. The CFI Iloilo issued an injunction ordering Cuddy to deliver the film to Gilchrist and preventing Espejo and Zaldiarraga (E and Z) from exhibiting the film. The latter two challenged the issuance of the injunction. The Court held that E and Z were liable to Gilchrist for inducing Cuddy to breach his contract. This interference was in the form of a tort, and so the fact that they did not know Gilchrists identity as the third person to whom they caused damage was immaterial. The Court then justified the issuance of the injunction because Zigomar, as Gilchrists theaters feature film for the week of May 26, was to be the main draw for his theater. If the film was shown after it had already been shown in another theater, the attendance would be much lower than if he was the first one to show it. Thus, the issuance of the injunction prevented incalculable damages upon Gilchrists theater, and was thus proper. Facts: This is an appeal from a decision of the CFI-Iloilo dismissing Espejo and Zaldiarragas cross-complaint for damages against Gilchrist for wrongful issuance of a mandatory and preliminary injunction. E.A. Cuddy was the owner of a copy of the film Zigomar.1 He had entered into an agreement with C.S. Gilchrist, operator of a cinematograph theater in Iloilo, to rent the copy to Gilchrist for the week beginning May 26th, 1912 for P125. The trial court, through a deposition of Cuddys testimony, found that such a contract indeed existed between Cuddy and Gilchrist. Gilchrist promptly forwarded the money to Manila. A few days before May 26th, Cuddy sent the money back to Gilchrist, saying that he had made other arrangements with the film. The other arrangement was the rental of the film to Jose Fernandez Espejo and Mariano Zaldarriaga for P350. They were also movie theater owners in Iloilo. It appears that Cuddy willfully violated his contract with Gilchrist because they offered him more money for the same period. Espejo said that he tried to get the film through his agents Pathe Brothers in Manila, but the latter advised him not to contend for the rental of the film because the rent was prohibitive, and that he would not be able to get the film for about 6 weeks.

A Serbian ripoff of the Phantom. Had a Z ring instead of a skull ring, and a small Chinese boy as his sidekick.

The court then issued a mandatory injunction directing Cuddy to send to Gilchrist Zigomar in compliance with their contract, and a preliminary injunction was issued restraining Espejo and Zaldarriaga from receiving and exhibiting in their theater Zigomar until further orders of the court. Cuddy, Espejo and Zaldiarraga appealed the order of the court on the ground that there was insufficient evidence to justify the decision, and thus that the injunction against them was wrongfully issued. Issues: 1. WON Espejo and Zaldiarraga knew they were inducing Cuddy to violate his contract with a third party when they induced him to accept the P350? (Yes.) 2. WON Espejo and Zaldiarraga were liable for damages for interfering with the GilchristCuddy contract? (Yes) a. Even if they did not know the identity of one of the parties? (Yes) 3. WON the injunction was properly issued (Yes.) Ratio 1. Espejo knew Cuddy was the owner of the film, and had received the letter from his agents in Manila telling him that he could not get the film for about six weeks, including and extending beyond the week of May 26. The inevitable conclusion is that the appellants did knowingly induce Cuddy to violate his contract. However, it is assumed that they did not know Gilchrist was the one who had contracted for the film. 2. There is no doubt that Cuddy is liable for breach of contract with Cuddy. However, Espejo and Zaldiarraga (E&Z for brevity) claim that there was no valid contract between Gilchrist and Cuddy, and so, in exercising their right to compete, they had a justifiable reason for interfering therein. Thus, their view was the ground on which liability of a third party for interfering with a contract between others rests on the fact that the interference was malicious. The Court disagreed. Citing the US case of Angle v Railway Co., the fact that there was no malice in behind the interference with the contract and causing its breach does not excuse the interferers from legal liability. It is clear, therefore, that they were liable to Gilchrist for the damages caused by their acts. *********************TORTS TIME********************** That is, unless they are relieved from liability by reason of the fact that they did not know at the time the identity of the original lessee Gilchrist. The liability of E & Z arises from unlawful acts, and not from contractual obligations, as they had no such obligation to induce Cuddy to violate his contract with Gilchrist. Thus, an action for damages would arise from good old Art. 1902 of the Civil Code. There is nothing in that article that requires knowledge of the person to whom he causes damage. In fact, the other provisions in that chapter make it clear that no such knowledge is required so that the injured party may recover. ********************************************************* 3. Injunction as a remedy is covered by Section 164 of the Code of Civil Procedure. It is a special remedy borrowed from American practice and rooted in English legal procedure, issued 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 a.

injury will be done, which cannot be compensated in damages, 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. There is nothing in Section 164 that requires that the wrongful interference to a contract be carried out by strangers with knowledge of the identities of both parties. As a rule, injunctions are not issued in favor of those who have an adequate remedy at law. Moreover, if the injury is irreparable, the ordinary process, and not extraordinary processes like injunction, are sufficient. Here, the court took on the novel issue of (brace yourselves) a cinematograph or motionpicture theater. This is a quite modern form of the play house, where, by means of a magical apparatus known as a cinematograph, the functions of which Im assuming every reasonably wellread person in 2012 understands. The attendance at movie theaters depend, in no small degree, upon the quality of the moving pictures exhibited, especially those attractive films which the proprietors of these theaters designate as feature films. The feature films are depended upon to secure a larger attendance for the theater. If the theater fails to exhibit the feature film, it would reduce receipts of the theater. Zigomar was relied upon by Gilchrist as his feature film for the week beginning May 26. Thus, if he was not able to show it, his business would suffer. Neither could he profit by showing the film after it had already been shown in another theater, as interest in the film would have substantially died down. Thus, the injunction issued saved him from the incalculable harm and damages caused by the unwarranted interference of the defendants. It was thus justifiably issued. Judgment affirmed.