### Facts:
In 1963, Tek Hua Trading Co., managed by So Pek Giok, entered into lease agreements with Dee C. Chuan & Sons Inc. (DCCSI) for premises in Binondo, Manila. After the contracts expired, the lease continued on a month-to-month basis. Tek Hua Trading Co. dissolved in 1976, and its former members, including Manuel C. Tiong, established Tek Hua Enterprising Corp. Following So Pek Giok’s death in 1986, his grandson, So Ping Bun, utilized the leased premises for his own business, Trendsetter Marketing. In 1989 and 1990, DCCSI communicated rent increases and offered new lease contracts, which Tek Hua did not respond to, nor were the contracts signed.
March 1, 1991, Tiong, looking to revive his textile business, notified So Ping Bun to vacate the premises. Despite this, in March 1992, So Ping Bun secured lease contracts with DCCSI for Trendsetter Marketing. Tek Hua Enterprising Corp. filed a suit to annul these contracts and sought damages. The trial court ruled in favor of Tek Hua, annulling the lease contracts to Trendsetter, issued a permanent injunction, ordered payment of attorney’s fees by So Ping Bun, but dismissed claims for actual, moral, or exemplary damages and counterclaims. This decision was largely affirmed by the Court of Appeals, with a modification on the amount of attorney’s fees awarded.
### Issues:
1. Whether the appellate court erred in finding So Ping Bun guilty of tortious interference with a contract.
2. Whether the appellate court erred in awarding attorney’s fees to private respondents.
### Court’s Decision:
The Supreme Court denied the petition, affirming the decision of the Court of Appeals with a modification on the awarded attorney’s fees. The Court discussed the principles of torts and damages, emphasizing on tort interference characterized by the existence of a valid contract, third-party knowledge of the contract, and interference without legal justification. The Court found that So Ping Bun’s actions constituted tortious interference as they deprived Tek Hua of its property rights. However, the absence of malice in So Ping Bun’s conduct led the Court to deny damages yet held him liable for causing breach of contract. The Court also adjusted the awarded attorney’s fees from PHP 200,000 to PHP 100,000, deeming the original amount excessive.
### Doctrine:
The case established that tortious interference requires the presence of a valid contract, knowledge of the contract by the third party, and interference without legal justification. Moreover, the intention behind such interference, whether for personal gain or due to wrongful motives, significantly affects the liability for damages.
### Class Notes:
1. **Tortious Interference**: Existence of a contract, knowledge of the contract by a third party, and interference without justification.
2. **Damages**: Distinguished between actual loss (damage) and the compensation for the loss (damages).
3. **Legal Justification in Interference**: Motivation to benefit oneself doesn’t justify interference unless devoid of wrongful motives.
4. **Attorney’s Fees as Damages**: These can be awarded when the defendant’s act compels the plaintiff to litigate or incur expenses to protect interests, adjusted based on fairness and the benefits derived from a favorable judgment.
### Historical Background:
This case underscores the complexities of property rights and contractual agreements in business operations, depicting how transitions in business ownership and management, alongside personal relationships, can lead to legal disputes involving tortious interference and the breach of lease agreements. It reflects the evolving nature of business dynamics in the Philippines, particularly in the highly commercial district of Binondo, Manila.
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