Tortious Interference under Philippine Civil Law

In Philippine Civil Law, the concept of tortious interference—while not explicitly defined in the Civil Code—is covered under the broad principles of liability for damages under the title of Human Relations in the Preliminary Title, as well as specific provisions on torts and quasi-delicts. Tortious interference generally refers to wrongful acts that intentionally damage a contractual or business relationship between two parties, leading to economic harm.

1. Overview of Tortious Interference

Tortious interference occurs when a third party intentionally disrupts or causes harm to an existing contractual relationship, business expectancy, or prospective economic advantage.
This form of interference can involve either:
- Interference with contractual relations (when a third party causes a party to breach a valid and existing contract).
- Interference with prospective economic advantage (where a third party’s actions prevent a business relationship or economic expectancy from being realized).

The Civil Code’s provisions on quasi-delicts (Articles 2176-2194) and principles under Human Relations (Articles 19-21) form the legal basis for tortious interference under Philippine law.

2. Legal Framework for Tortious Interference in Philippine Civil Law

Article 19: States the general principle that every person must act with justice, give everyone their due, and observe honesty and good faith in the exercise of their rights and duties. This article can be invoked when tortious interference occurs, as interference with contractual relations or business expectancy would be inconsistent with the duty to act in good faith.
Article 20: Provides that any person who wilfully causes loss or injury to another in a manner that is contrary to law or public policy shall be liable for damages. This is applicable when tortious interference involves an unlawful or wrongful act.
Article 21: Covers cases where a person acts in a way that, while not illegal per se, is still against the norms of morality and public policy, causing damage or injury. This is a “catch-all” provision under Human Relations and is relevant in tortious interference cases involving morally questionable or unfair acts that result in economic harm to another.
Articles 2176-2194 on Quasi-delicts: The principle of quasi-delict in Article 2176 makes any person liable who, by act or omission, causes damage to another by fault or negligence. In tortious interference, while the interference is typically intentional, quasi-delict principles may apply if the interference is due to negligence or fault.

3. Types of Tortious Interference Recognized in Philippine Law

Interference with Contractual Relations: Occurs when a third party intentionally induces a party to breach an existing, valid contract with another party. This interference results in damages to the other party. To establish interference, the plaintiff must prove:
1. Existence of a valid contract between the parties.
2. Knowledge of the contract by the interfering third party.
3. Intentional inducement by the third party, leading to a breach of the contract.
4. Damage resulting from the breach.
Interference with Prospective Advantage or Business Expectancy: Involves interference with relationships that are not yet contractual but are reasonably expected to yield economic benefit. This may cover potential business relationships, client relationships, or employment prospects. For liability, it must be shown that:
1. The plaintiff had a reasonable expectation of an economic benefit.
2. The defendant knew of the prospective relationship or expectancy.
3. There was intentional interference without legitimate justification.
4. The interference caused actual damages to the plaintiff.

4. Defenses to Tortious Interference

Defendants may raise the following defenses to tortious interference claims:

Legitimate Business Interest: If the interference was aimed at protecting a valid business interest, this might be a legitimate defense, especially if the means were lawful and justifiable.
Privilege or Justification: If the interference was done under circumstances that the law considers as privileged or justified (e.g., competition in business if it was fair), it might not be considered wrongful.
Absence of Malice or Wrongful Intent: Tortious interference requires intentional action. If the defendant did not act with wrongful intent or malice, this may absolve them from liability.

5. Damages Recoverable in Tortious Interference Cases

Damages may be awarded in cases of tortious interference, including:

Actual Damages: Compensation for the actual loss or injury caused by the interference. This can include lost profits, lost business opportunities, and other economic losses directly resulting from the interference.
Moral Damages: Under Article 2219, moral damages may be awarded if the interference caused anguish, embarrassment, or social humiliation.
Exemplary Damages: When interference is done with gross negligence or evident bad faith, exemplary damages may be awarded to deter similar conduct in the future (Article 2229).

6. Relevant Jurisprudence and Examples in Philippine Law

Philippine courts have recognized tortious interference in a limited number of cases, generally where the actions are blatantly harmful to the contractual relations or business interests of another.
Case Law Example: In one significant case, a corporation was held liable for inducing an employee of another corporation to breach his employment contract through unfair tactics, causing loss to the original employer.
Application in Commercial Competition: Courts also consider whether the interference aligns with fair competition laws; competition is permitted but must be lawful and fair.

7. Conclusion

Tortious interference under Philippine Civil Law is grounded in the principles of justice, fairness, and good faith. While the Civil Code does not specifically name tortious interference, the provisions on Human Relations (Articles 19-21) and quasi-delict principles (Articles 2176-2194) provide a broad framework to cover intentional acts of interference that result in economic harm. Courts are meticulous in applying these principles, ensuring that liability is imposed only when wrongful interference can be clearly established. The law allows remedies for victims of tortious interference through actual, moral, and even exemplary damages, maintaining a balance between the freedom to contract, fair competition, and protecting parties from wrongful economic harm.