GILCHRIST V CUDDY

FACTS:
Cuddy was the owner of the film Zigomar
April 24: He rented it to C. S. Gilchrist for a week for P125 to exhibit the film in his theaters
A few days to the date of delivery, Cuddy sent the money back to Gilchrist because
Cuddy rented the film to Espejo and his partner Zaldarriaga P350 for the week knowing that it
was rented to someone else and that Cuddy accepted it because he was paying about three
times as much as he had contracted with Gilchrist but they didn't know the identity of the other
party (he breached the contract in order to enter w/ Espejo)
Gilchrist filed for injunction against these parties
Trial Court and CA: granted - there is a contract between Gilchrist and Cuddy
ISSUE: W/N Espejo and his partner Zaldarriaga should be liable for damages though they do not
know the identity of Gilchrist

HELD: YES. judgment is affirmed

That Cuddy was liable in an action for damages for the breach of that contract, there can be no
doubt.
the mere right to compete could not justify the appellants in intentionally inducing Cuddy to
take away the appellee's contractual rights
Everyone has a right to enjoy the fruits and advantages of his own enterprise, industry,
skill and credit. He has no 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(loss without injury), unless
some superior right by contract or otherwise is interfered with
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.
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
damages to another when there is fault or negligence, shall be obliged to repair the
damage do 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 damages
An injunction is a "special remedy" which was there issued by the authority and under the seal
of a court of equity, and limited, as in order cases where equitable relief is sought, to cases
where there is no "plain, adequate, and complete remedy at law," which "will not be granted
while the rights between the parties are undetermined, except in extraordinary cases where
material and irreparable injury will be done," which cannot be compensated in damages, and
where there will be no adequate remedy, and which will not, as a rule, be granted, to take
property out of the possession of one party and put it into that of another whose title has not
been established by law
irreparable injury
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
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 decree of accuracy the damages which
Gilchrist would likely suffer from such an event would be quite difficult if not impossible
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
the remedy by injunction cannot be used to restrain a legitimate competition, though such
competition would involve the violation of a contract

Separate Opinion:
MORELAND, J., concurring:
The court seems to be of the opinion that the action is one for a permanent injunction;
whereas, under my view of the case, it is one for specific performance.
The very nature of the case demonstrates that a permanent injunction is out of the
question. The only thing that plaintiff desired was to be permitted to use the film for the
week beginning the 26th of May. With the termination of that week his rights expired.
After that time Cuddy was perfectly free to turn the film over to the defendants Espejo
and Zaldarriaga for exhibition at any time.
No damages are claimed by reason of the issuance of the mandatory injunction under
which the film was delivered to plaintiff and used by him during the week beginning the
26th of May.
Daywalt vs. La Corporation de los Padres Agustinos Recoletos (Art 1314)
Facts: Teodorica Endencia obligated herself to sell a parcel of land to the plaintiff. It was agreed that
the final deed of sale will be executed when the land was registered in Endencias name.
Subsequently, the Torrens Title for the land was issued in her favor but in the course of the
proceedings for registration it was found that the land involved in the sale contained a greater area
than what Endencia originally thought and she became reluctant to consummate the sale of the land
to the plaintiff. This reluctance was due to the advice of the defendant which exercised a great moral
influence over her. However, in advising Endencia that she was not bound by her contract with the
plaintiff, the defendant was not actuated with improper motives but did so in good faith believing that,
under the circumstances, Endencia was not really bound by her contract with the plaintiff. In view of
Endencias refusal to make the conveyance, the plaintiff instituted a complaint for specific
performance against her and, upon appeal, the Supreme Court held that she was bound by the
contract and she was ordered to make the conveyance of the land in question to the plaintiff. The
plaintiff then instituted an action against the defendant to recover the following damages: (a) The
amount of Pesos 24,000.00 for the use and occupation of the land in question by reason of the
pasturing of cattle therein during the period that the land was not conveyed by Endencia to the
plaintiff; (b) The amount of Pesos 500,000.00 for plaintiffs failure to sell the land in question to a
sugar growing and milling enterprise, the successful launching of which depended on the ability of
Daywalt to get possession of the land and the Torrens Title. The lower court held that the defendant
was liable to the plaintiff for the use and occupation of the land in question and condemned the
defendant to pay the plaintiff Pesos 2,497.00 as damages. The Supreme Court affirmed this

adjudication of the lower court. With respect to the claim of Pesos 500,000.00 damages, the Supreme
Court.
Held: The most that can be said with reference to the conduct of Teodorica Endencia is that she
refused to carry out a contract for the sale of certain land and resisted to the last an action for specific
performance in court. The result was that the plaintiff was prevented during a period of several years
from exerting that control over the property which he was entitled to exert and was meanwhile unable
to dispose of the property advantageously. The extent of the liability for the breach of a contract must
be determined in the light of the situation in existence at the time the contract is made; and the
damages ordinarily recoverable in all events limited to such as might be reasonably foreseen in the
light of the facts then known to the contracting parties. Where the purchaser desires to protect
himself, in the contingency of the failure of the vendor promptly to give possession, from the
possibility of incurring other damages than such as are incident to the normal value of the use and
occupation, he should cause to be inserted in the contract a clause providing for stipulated amount to
be paid upon failure of the vendor to give possession; and no case has been called to our attention
where, in the absence of such a stipulation, damages have been held to be recoverable by the
purchase in excess of the normal value of use and occupation.
The damages recoverable in case of the breach of a contract are two sorts, namely, (1) the ordinary,
natural, and in a sense, necessary damage; and (2) special damages. Ordinary damages is found in
all breaches of contract where there are no special circumstances to distinguish the case especially
from other contracts. The consideration paid for an unperformed promise is an instance of this sort of
damage. In all such cases the damages recoverable are such as naturally and generally would result
from such a breach, according to the usual course of things. In cases involving only ordinary
damage, it is conclusively presumed from the immediateness and inevitableness of the damage, and
the recovery of such damage follows as a necessary legal consequence of the breach. Ordinary
damage is assumed as a matter of law to be within the contemplation of the parties. Special
damage, on the other hand, is such as follows less directly from the breach than ordinary damage. It
is only found in cases where some external condition, apart from the actual terms of the contract
exists or intervenes, as it were, to give a turn to affairs and to increase damage in a way that the
promissor, without actual notice of the external condition, could not reasonably be expected to
foresee.
Plaintiffs right chiefly as against Teodorica Endencia; and what has been said suffices in our opinion
to demonstrate that the damages laid under the second cause of action in the complaint could not be
recovered from her, first, because the damages in question are special damages which were not
within contemplation of the parties when the contract was made, and secondly, because said
damages are too remote to be subject of recovery. This conclusion is also necessarily fatal to the right
of the plaintiff to recover such damages from the defendant corporation for, as already suggested, by
advising Teodorica Endencia not to perform the contract, said corporation could in no event render
itself more extensively liable than the principal in the contract. Our conclusion is that the judgment of
the trial court should be affirmed, and it is so ordered, with costs against the appellant.
SO PING BUN V CA