G.R. No. L-10463 and L-10440
Date: October 27, 1916
Case Title: ROCHIRAM DHARAMDAS, ET AL. vs. GOPALDAS HAROOMALL, ET AL. (No. 10463) and GOPALDAS HAROOMALL, ET AL. vs. ROCHIRAM DHARAMDAS, ET AL. (No. 10440)

FACTS:
These are two consolidated cases. In G.R. No. L-10463, the plaintiffs-appellees are the partnership Dharamdas & Watumull. They filed a complaint against the defendants-appellants, an unregistered association doing business under the name “Gopaldas Haroomall.” The complaint alleged three causes of action:

2. Enticement of a Servant: That the defendants, on or about December 6, 1913, induced the plaintiffs’ employee, Veromal Lilliram, to leave his employment in violation of a three-year personal services contract he had with the plaintiffs dated March 3, 1912.
3. Defamation: That the defendants made false and malicious statements about the plaintiffs, accusing them of dishonesty and cheating their employees.

The defendants denied the material allegations and filed a counterclaim. The trial court found for the plaintiffs on all three causes of action, awarding P500 for breach of the May 9 agreement, P500 for enticement of Veromal Lilliram, and P200 for defamation.

In G.R. No. L-10440, the parties are reversed. Here, Gopaldas Haroomall et al. sued Dharamdas & Watumull for the recovery of the value of merchandise delivered on consignment. The trial court ordered the defendants (Dharamdas & Watumull) to return the unsold goods or pay their value.

ISSUE:
1. In G.R. No. L-10463:
a. Whether the May 9, 1913 agreement was a valid contract.
b. Whether the defendants were liable for enticing the employee Veromal Lilliram to breach his contract.
c. Whether the statements made by the defendants constituted actionable defamation.
2. In G.R. No. L-10440:
a. Whether the defendants were obligated to return the unsold consigned merchandise or pay its value.

RULING:
1. On G.R. No. L-10463:
a. Breach of Contract (May 9 Agreement): The Supreme Court affirmed the trial court’s judgment. The agreement was a valid contract where the defendants, for a valuable consideration (a reciprocal promise from the other firms), agreed not to employ the plaintiffs’ servants. The defendants breached this contract by employing and assisting Veromal Lilliram. The stipulated sum of P500 was properly imposed as liquidated damages, not as an unlawful penalty.
b. Enticement of Servant: The Court affirmed the award of P500 for this cause of action. The defendants knowingly and intentionally induced Veromal Lilliram to break his existing contract with the plaintiffs, which constituted an actionable wrong. The fact that the employee’s contract allowed for discharge for cause did not give third parties the right to induce the breach.
c. Defamation: The Supreme Court reversed the trial court’s award of P200 for defamation. The Court found that the alleged defamatory words were not set forth with sufficient particularity in the complaint. Furthermore, the statements, even if made, were not shown to have been communicated to a third party, which is essential for a civil action for defamation. The cause of action for defamation was dismissed.
Judgment: Affirmed, except for the defamation award which was reversed. No costs.

2. On G.R. No. L-10440:
The Supreme Court affirmed the trial court’s judgment. Although the consignment agreement did not specify a time for the return of unsold goods, the defendants were obligated to return them within a reasonable time. The plaintiffs’ demand for return and the defendants’ refusal, followed by the filing of the lawsuit, terminated the consignment contract and created an obligation to return the goods or pay their value. The judgment ordering the return of the unsold merchandise or payment of its value was proper.
Judgment: Affirmed, with costs.