Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-13505 February 4, 1919

GEO. W. !"W!LT, plaintiff-appellant, vs. L! CORPOR!C#ON E LOS P! RES !GUST#NOS RECOLETOS, ET !L., defendants-appellees. C. C. Cohn and Thos. D. Aitken for appellant. Crossfield & O'Brien for appellee. STREET, J.$ In the year !"#, $eodorica Endencia, an un%arried &o%an, resident in the Province of Mindoro, e'ecuted a contract &hereby she obli(ated herself to convey to )eo. *. +ay&alt, a tract of land situated in the barrio of Man(arin, %unicipality of Bulalacao, no& ,an -ose, in said province. It &as a(reed that a deed should be e'ecuted as soon as the title to the land should be perfected by proceedin(s in the Court of .and Re(istration and a $orrens certificate should be produced therefore in the na%e of $eodorica Endencia. A decree reco(ni/in( the ri(ht of $eodorica as o&ner &as entered in said court in Au(ust !"0, but the $orrens certificate &as not issued until later. $he parties, ho&ever, %et i%%ediately upon the enterin( of this decree and %ade a ne& contract &ith a vie& to carryin( their ori(inal a(ree%ent into effect. $his ne& contract &as e'ecuted in the for% of a deed of conveyance and bears date of Au(ust 0, !"0. $he stipulated price &as fi'ed at P1,""", and the area of the land enclosed in the boundaries defined in the contract &as stated to be 12# hectares and a fraction. $he second contract &as not i%%ediately carried into effect for the reason that the $orrens certificate &as not yet obtainable and in fact said certificate &as not issued until the period of perfor%ance conte%plated in the contract had e'pired. Accordin(ly, upon 3ctober 4, !"5, the parties entered into still another a(ree%ent, supersedin( the old, by &hich $eodorica Endencia a(reed upon receivin( the $orrens title to the land in 6uestion, to deliver the sa%e to the 7on(8on( and ,han(hai Ban8 in Manila, to be for&arded to the Croc8er National Ban8 in ,an 9rancisco, &here it &as to be delivered to the plaintiff upon pay%ent of a balance of P4, "". $he $orrens certificate &as in ti%e issued to $eodorica Endencia, but in the course of the proceedin(s relative to the re(istration of the land, it &as found by official survey that the area of the tract inclosed in the boundaries stated in the contract &as about .#15 hectares of 12# hectares as stated in the contract. In vie& of this develop%ent $eodorica Endencia beca%e reluctant to transfer the &hole tract to the purchaser, assertin( that she never

intended to sell so lar(e an a%ount of land and that she had been %isinfor%ed as to its area. $his attitude of hers led to liti(ation in &hich +ay&alt finally succeeded, upon appeal to the ,upre%e Court, in obtainin( a decree for specific perfor%ance: and $eodorica Endencia &as ordered to convey the entire tract of land to +ay&alt pursuant to the contract of 3ctober 4, !"5, &hich contract &as declared to be in full force and effect. $his decree appears to have beco%e finally effective in the early part of the year ! 1. $he defendant, .a Corporacion de los Padres Recoletos, is a reli(ious corporation, &ith its do%icile in the city of Manila. ,aid corporation &as for%erly the o&ner of a lar(e tract of land, 8no&n as the ,an -ose Estate, on the island of Mindoro, &hich &as sold to the )overn%ent of the Philippine Islands in the year !"!. $he sa%e corporation &as at this ti%e also the o&ner of another estate on the sa%e island i%%ediately ad;acent to the land &hich $eodorica Endencia had sold to )eo. *. +ay&alt: and for %any years the Recoletos 9athers had %aintained lar(e herds of cattle on the far%s referred to. $heir representative, char(ed &ith %ana(e%ent of these far%s, &as father Isidoro ,an/, hi%self a %e%bers of the order. 9ather ,an/ had lon( been &ell ac6uainted &ith $eodorica Endencia and e'erted over her an influence and ascendency due to his reli(ious character as &ell as to the personal friendship &hich e'isted bet&een the%. $eodorica appears to be a &o%an of little personal force, easily sub;ect to influence, and upon all the i%portant %atters of business &as accusto%ed to see8, and &as (iven, the advice of father ,an/ and other %e%bers of his order &ith &ho% she ca%e in contact. 9ather ,an/ &as fully a&are of the e'istence of the contract of !"# by &hich $eodorica Endencia a(reed to sell her land to the plaintiff as &ell as of the later i%portant develop%ents connected &ith the history of that contract and the contract substituted successively for it: and in particular 9ather ,an/, as &ell as other %e%bers of the defendant corporation, 8ne& of the e'istence of the contract of 3ctober 4, !"5, &hich, as &e have already seen finally fi'ed the ri(hts of the parties to the property in 6uestion. *hen the $orrens certificate &as finally issued in !"! in favor of $eodorica Endencia, she delivered it for safe8eepin( to the defendant corporation, and it &as then ta8en to Manila &here it re%ained in the custody and under the control of P. -uan .abar(a the procurador and chief official of the defendant corporation, until the deliver thereof to the plaintiff &as %ade co%pulsory by reason of the decree of the ,upre%e Court in ! 1. *hen the defendant corporation sold the ,an -ose Estate, it &as necessary to brin( the cattle off of that property: and, in the first half of !"!, so%e #,405 head &ere re%oved to the estate of the corporation i%%ediately ad;acent to the property &hich the plaintiff had purchased fro% $eodorica Endencia. As $eodorica still retained possession of said property 9ather ,an/ entered into an arran(e%ent &ith her &hereby lar(e nu%bers of cattle belon(in( to the defendant corporation &ere pastured upon said land durin( a period e'tendin( fro% -une , !"!, to May , ! 1. <nder the first cause stated in the co%plaint in the present action the plaintiff see8s to recover fro% the defendant corporation the su% of P#1,""", as da%a(es for the use and

occupation of the land in 6uestion by reason of the pasturin( of cattle thereon durin( the period stated. $he trial court ca%e to the conclusion that the defendant corporation &as liable for da%a(es by reason of the use and occupation of the pre%ises in the %anner stated: and fi'ed the a%ount to be recovered at P#,1!=. $he plaintiff appealed and has assi(ned error to this part of the ;ud(%ent of the court belo&, insistin( that da%a(es should have been a&arded in a %uch lar(er su% and at least to the full e'tent of P#1,""", the a%ount clai%ed in the co%plaint. As the defendant did not appeal, the property of allo&in( da%a(es for the use and occupation of the land to the e'tent o P#,1!=, the a%ount a&arded, is not no& in 6uestion an the only thin( here to be considered, in connection &ith this branch of the case, is &hether the da%a(es allo&ed under this head should be increased. $he trial court ri(htly i(nored the fact that the defendant corporation had paid $eodorica Endencia of ruse and occupation of the sa%e land durin( the period in 6uestion at the rate of P1#2 per annu%, inas%uch as the final decree of this court in the action for specific perfor%ance is conclusive a(ainst her ri(ht, and as the defendant corporation had notice of the ri(hts of the plaintiff under this contract of purchase, it can not be per%itted that the corporation should escape liability in this action by provin( pay%ent of rent to a person other than the true o&ner. *ith reference to the rate of &hich co%pensation should be esti%ated the trial court ca%e to the follo&in( conclusion> As to the rate of the co%pensation, the plaintiff contends that the defendant corporation %aintained at leas one thousand head of cattle on the land and that the pastura(e &as of the value of forty centavos per head %onthly, or P1,5"" annually, for the &hole tract. $he court can not accept this vie&. It is rather i%probable that ,#15 hectares of &ild Mindoro land &ould furnish sufficient pastura(e for one thousand head of cattle durin( the entire year, and, considerin( the locality, the rate of forty centavos per head %onthly see%s too hi(h. $he evidence sho&s that after havin( recovered possession of the land the plaintiff rented it to the defendant corporation for fifty centavos per hectares annually, the tenant to pay the ta'es on the land, and this appears to be a reasonable rent. $here is no reason to suppose that the land &as &orth %ore for (ra/in( purposes durin( the period fro% !"! to ! 4, than it &as at the later period. <pon this basis the plaintiff is entitled to da%a(es in the su% of p#,1!=, and is under no obli(ation to rei%burse the defendants for the land ta'es paid by either of the% durin( the period the land &as occupied by the defendant corporation. It %ay be %entioned in this connection that the .onto8 tract ad;oinin( the land in 6uestion and containin( over three thousand hectares appears to have been leased for only P ,""" a year, plus the ta'es. 9ro% this it &ill be seen that the trial court esti%ated the rental value of the land for (ra/in( purposes at 2" centavos per hectare per annu%, and rou(hly adopted the period of four years as the ti%e for &hich co%pensation at that rate should be %ade. As the court had already found that the defendant &as liable for these da%a(es fro% -une, , !"!, to

May , ! 1, or a period of four years and eleven %onths, there see%s so%e (round for the contention %ade in the appellant?s first assi(n%ent of error that the court?s co%putation &as erroneous, even acceptin( the rule upon &hich the da%a(es &ere assessed, as it is %anifest that at the rate of 2" centavos per hectare per annu%, the da%a(es for four years and eleven %onths &ould be P4,"!". Not&ithstandin( this circu%stance, &e are of the opinion that the da%a(es assessed are sufficient to co%pensate the plaintiff for the use and occupation of the land durin( the &hole ti%e it &as used. $here is evidence in the record stron(ly tendin( to sho& that the &ron(ful use of the land by the defendant &as not continuous throu(hout the year but &as confined %ostly to the reason &hen the fora(e obtainable on the land of the defendant corporation &as not sufficient to %aintain its cattle, for &hich reason it beca%e necessary to allo& the% to (o over to pasture on the land in 6uestion: and it is not clear that the &hole of the land &as used for pastura(e at any ti%e. Considerations of this character probably led the trial court to adopt four years as rou(hly bein( the period durin( &hich co%pensation should be allo&ed. But &hether this &as advertently done or not, &e see no sufficient reason, in the uncertainty of the record &ith reference to the nu%ber of the cattle (ra/ed and the period &hen the land &as used, for substitutin( our (uess for the esti%ate %ade by the trial court. In the second cause of action stated in the co%plaint the plaintiff see8s to recover fro% the defendant corporation the su% of P2"",""", as da%a(es, on the (round that said corporation, for its o&n selfish purposes, unla&fully induced $eodorica Endencia to refrain fro% the perfor%ance of her contract for the sale of the land in 6uestion and to &ithhold delivery to the plaintiff of the $orrens title, and further, %aliciously and &ithout reasonable cause, %aintained her in her defense to the action of specific perfor%ance &hich &as finally decided in favor of the plaintiff in this court. $he cause of action here stated is based on liability derived fro% the &ron(ful interference of the defendant in the perfor%ance of the contract bet&een the plaintiff and $eodorica Endencia: and the lar(e da%a(es laid in the co%plaint &ere, accordin( to the proof sub%itted by the plaintiff, incurred as a result of a co%bination of circu%stances of the follo&in( nature> In ! , it appears, the plaintiff, as the o&ner of the land &hich he had bou(ht fro% $eodorica Endencia entered into a contract @E'hibit CA &ith ,. B. *a8efield, of ,an 9rancisco, for the sale and disposal of said lands to a su(ar (ro&in( and %illin( enterprise, the successful launchin( of &hich depended on the ability of +ay&alt to (et possession of the land and the $orrens certificate of title. In order to acco%plish this end, the plaintiff returned to the Philippine Islands, co%%unicated his arran(e%ent to the defendant,, and %ade repeated efforts to secure the re(istered title for delivery in co%pliance &ith said a(ree%ent &ith *a8efield. $eodorica Endencia see%s to have yielded her consent to the consu%%ation of her contract, but the $orrens title &as then in the possession of Padre -uan .abar(a in Manila, &ho refused to deliver the docu%ent. $eodorica also &as in the end contract &ith the plaintiff, &ith the result that the plaintiff &as 8ept out of possession until the *a8efield pro;ect for the establish%ent of a lar(e su(ar (ro&in( and %illin( enterprise fell throu(h. In the li(ht of &hat has happened in recent years in the su(ar industry, &e feel ;ustified in sayin( that the pro;ect above referred to, if carried into effect, %ust inevitably have proved a (reat success.

$he deter%ination of the issue presented in this second cause of action re6uires a consideration of t&o points. $he first is &hether a person &ho is not a party to a contract for the sale of land %a8es hi%self liable for da%a(es to the vendee, beyond the value of the use and occupation, by colludin( &ith the vendor and %aintainin( hi% in the effort to resist an action for specific perfor%ance. $he second is &hether the da%a(es &hich the plaintiff see8s to recover under this head are too re%ote and speculative to be the sub;ect of recovery. As preli%inary to a consideration of the first of these 6uestions, &e dee% it &ell it dispose of the contention that the %e%bers of the defendants corporation, in advisin( and pro%ptin( $eodorica Endencia not to co%ply &ith the contract of sale, &ere actuated by i%proper and %alicious %otives. $he trial court found that this contention &as not sustained, observin( that &hile it &as true that the circu%stances pointed to an entire sy%pathy on the part of the defendant corporation &ith the efforts of $eodorica Endencia to defeat the plaintiff?s clai% to the land, the fact that its officials %ay have advised her not to carry the contract into effect &ould not constitute actionable interference &ith such contract. It %ay be added that &hen one considers the hardship that the ulti%ate perfor%ance of that contract entailed on the vendor, and the doubt in &hich the issue &as involved B to the e'tent that the decision of the Court of the 9irst Instance &as unfavorable to the plaintiff and the ,upre%e Court itself &as divided B the attitude of the defendant corporation, as e'hibited in the conduct of its procurador, -uan .abar(a, and other %e%bers of the order of the Recollect 9athers, is not difficult to understand. $o our %ind a fair conclusion on this feature of the case is that father -uan .abar(a and his associates believed in (ood faith that the contract cold not be enforced and that $eodorica &ould be &ron(ed if it should be carried into effect. Any advice or assistance &hich they %ay have (iven &as, therefore, pro%pted by no %ean or i%proper %otive. It is not, in our opinion, to be denied that $eodorica &ould have surrendered the docu%ents of title and (iven possession of the land but for the influence and pro%ptin(s of %e%bers of the defendants corporation. But &e do not credit the idea that they &ere in any de(ree influenced to the (ivin( of such advice by the desire to secure to the%selves the paltry privile(e of (ra/in( their cattle upon the land in 6uestion to the pre;udice of the ;ust ri(hts of the plaintiff. $he attorney for the plaintiff %aintains that, by interferin( in the perfor%ance of the contract in 6uestion and obstructin( the plaintiff in his efforts to secure the certificate of tittle to the land, the defendant corporation %ade itself a co-participant &ith $eodorica Endencia in the breach of said contract: and inas%uch as father -uan .abar(a, at the ti%e of said unla&ful intervention bet&een the contractin( parties, &as fully a&are of the e'istence of the contract @E'hibit CA &hich the plaintiff had %ade &ith ,. B. *a8efield, of ,an 9rancisco, it is insisted that the defendant corporation is liable for the loss conse6uent upon the failure of the pro;ect outlined in said contract. In this connection reliance is placed by the plaintiff upon certain A%erican and En(lish decisions in &hich it is held that a person &ho is a stran(er to contract %ay, by an un;ustifiable interference in the perfor%ance thereof, render hi%self liable for the da%a(es conse6uent upon non-perfor%ance. It is said that the doctrine of these cases &as

reco(ni/ed by this court in )ilchrist vs. Cuddy @#! Phil. Rep., 21#A: and &e have been earnestly pressed to e'tend the rule there enunciated to the situation here presente. ,o%e&hat %ore than half a century a(o the En(lish Court of the Cueen?s Bench sa& its &ay clear to per%it an action for da%a(es to be %aintained a(ainst a stran(er to a contract &ron(fully interferin( in its perfor%ance. $he leadin( case on this sub;ect is .u%ley vs. )ye @D 524E, # El. F Bl., # 0A. It there appeared that the plaintiff, as %ana(er of a theatre, had entered into a contract &ith Miss -ohanna *a(ner, an opera sin(er,, &hereby she bound herself for a period to sin( in the plaintiff?s theatre and no&here else. $he defendant, 8no&in( of the e'istence of this contract, and, as the declaration alle(ed, G%aliciously intendin( to in;ure the plaintiff,G enticed and produced Miss *a(ner to leave the plaintiff?s e%ploy%ent. It &as held that the plaintiff &as entitled to recover da%a(es. $he ri(ht &hich &as here reco(ni/ed had its ori(in in a rule, lon( fa%iliar to the courts of the co%%on la&, to the effect that any person &ho entices a servant fro% his e%ploy%ent is liable in da%a(es to the %aster. $he %aster?s interest in the service rendered by his e%ployee is here considered as a distinct sub;ect of ;uridical ri(ht. It bein( thus accepted that it is a le(al &ron( to brea8 up a relation of personal service, the 6uestion no& arose &hether it is ille(al for one person to interfere &ith any contract relation subsistin( bet&een others. Prior to the decision of .u%ley vs. )ye DsupraE it had been supposed that the liability here under consideration &as li%ited to the cases of the entice%ent of %enial servants, apprentices, and others to &ho% the En(lish ,tatutes of .aborers &ere applicable. But in the case cited the %a;ority of the ;ud(es concurred in the opinion that the principle e'tended to all cases of hirin(. $his doctrine &as follo&ed by the Court of Appeal in Bo&en vs. 7all @D 55 E, 0 C. B., +iv., 444A: and in $e%perton vs. Russell @D 5!4E, C. B., = 2A, it &as held that the ri(ht of action for %aliciously procurin( a breach of contract is not confined to contracts for personal services, but e'tends to contracts in (eneral. In that case the contract &hich the defendant had procured to be breached &as a contract for the supply of buildin( %aterial. Malice in so%e for% is (enerally supposed to be an essential in(redient in cases of interference &ith contract relations. But upon the authorities it is enou(h if the &ron(doer, havin( 8no&led(e of the e'istence of the contract relations, in bad faith sets about to brea8 it up. *hether his %otive is to benefit hi%self or (ratify his spite by &or8in( %ischief to the e%ployer is i%%aterial. Malice in the sense of ill-&ill or spite is not essential. <pon the 6uestion as to &hat constitutes le(al ;ustification, a (ood illustration &as put in the leadin( case. If a party enters into contract to (o for another upon a ;ourney to a re%ote and unhealthful cli%ate, and a third person, &ith a bona fide purpose of benefitin( the one &ho is under contract to (o, dissuades hi% fro% the step, no action &ill lie. But if the advice is not disinterested and the persuasion is used for Gthe indirect purpose of benefitin( the defendant at the e'pense of the plaintiff,G the inter%edler is liable if his advice is ta8en and the contract bro8en. $he doctrine e%bodied in the cases ;ust cited has so%eti%es been found useful, in the co%plicated relations of %odern industry, as a %eans of restrainin( the activities of labor

unions and industrial societies &hen i%properly en(a(ed in the pro%otion of stri8es. An illustration of the application of the doctrine in 6uestion in a case of this 8ind is found in ,outh *ales Miners 9ederation vs. )la%or(an Coal Co. @D !"2EA, A. C., #4!A. It there appeared that certain %iners e%ployed in the plaintiff?s collieries, actin( under the order of the e'ecutive council of the defendant federation, violated their contract &ith the plaintiff by abstainin( fro% &or8 on certain days. $he federation and council acted &ithout any actual %alice or ill-&ill to&ards the plaintiff, and the only ob;ect of the order in 6uestion &as that the price of coal %i(ht thereby be 8ept up, a factor &hich affected the %iner?s &a(e scale. It &as held that no sufficient ;ustification &as sho&n and that the federation &as liable. In the <nited ,tates, the rule established in En(land by .u%ley vs. )ye DsupraE and subse6uent cases is co%%only accepted, thou(h in a fe& of the ,tates the broad idea that a stran(er to a contract can be held liable upon its is re;ected, and in these ;urisdictions the doctrine, if accepted at all, is li%ited to the situation &here the contract is strictly for personal service. @Boyson vs. $horn, !5 Cal., 2=5: Cha%bers F Marshall vs. Bald&in ! Hy., # : Bourlier vs. Macauley, ! Hy., 42: )lencoe .and F )ravel Co. vs. 7udson Bros. Co%. Co., 45 Mo., 14!.A It should be observed in this connection that, accordin( to the En(lish and A%erican authorities, no 6uestion can be %ade as to the liability to one &ho interferes &ith a contract e'istin( bet&een others by %eans &hich, under 8no&n le(al cannons, can be deno%inated an unla&ful %eans. $hus, if perfor%ance is prevented by force, inti%idation, coercion, or threats, or by false or defa%atory state%ents, or by nuisance or riot, the person usin( such unla&ful %eans is, under all the authorities, liable for the da%a(e &hich ensues. And in ;urisdictions &here the doctrine of .u%ley vs. )ye DsupraE is re;ected, no liability can arise fro% a %eddleso%e and %alicious interference &ith a contract relation unless so%e such unla&ful %eans as those ;ust indicated are used. @,ee cases last above cited.A $his brin(s us to the decision %ade by this court in )ilchrist vs. Cuddy @#! Phil. Rep., 21#A. It there appeared that one Cuddy, the o&ner of a cine%ato(raphic fil%, let it under a rental contract to the plaintiff )ilchrist for a specified period of ti%e. In violation of the ter%s of this a(ree%ent, Cuddy proceeded to turn over the fil% also under a rental contract, to the defendants Espe;o and Ialdarria(a. )ilchrist thereupon restored to the Court of 9irst Instance and produced an in;unction restrainin( the defendants fro% e'hibitin( the fil% in 6uestion in their theater durin( the period specified in the contract of Cuddy &ith )ilchrist. <pon appeal to this court it &as in effect held that the in;unction &as not i%properly (ranted, althou(h the defendants did not, at the ti%e their contract &as %ade, 8no& the identity of the plaintiff as the person holdin( the prior contract but did 8no& of the e'istence of a contract in favor of so%eone. It &as also said arguendo, that the defendants &ould have been liable in da%a(es under article !"# of the Civil Code, if the action had been brou(ht by the plaintiff to recover da%a(es. $he force of the opinion is, &e thin8, so%e&hat &ea8ened by the criticis% contain in the concurrin( opinion, &here it is said that the 6uestion of breach of contract by induce%ent &as not really involved in the case. $a8in( the decision upon the point &hich &as rally decided, it

is authority for the proposition that one &ho buys so%ethin( &hich he 8no&s has been sold to so%e other person can be restrained fro% usin( that thin( to the pre;udice of the person havin( the prior and better ri(ht. $ranslated into ter%s applicable to the case at bar, the decision in )ilchrist vs. Cuddy @#! Phil. Rep., 21#A, indicates that the defendant corporation, havin( notice of the sale of the land in 6uestion to +ay&alt, %i(ht have been en;oined by the latter fro% usin( the property for (ra/in( its cattle thereon. $hat the defendant corporation is also liable in this action for the da%a(e resultin( to the plaintiff fro% the &ron(ful use and occupation of the property has also been already deter%ined. But it &ill be observed that in order to sustain this liability it is not necessary to resort to any subtle e'e(esis relative to the liability of a stran(er to a contract for unla&ful interference in the perfor%ance thereof. It is enou(h that defendant use the property &ith notice that the plaintiff had a prior and better ri(ht. Article !"# of the Civil Code declares that any person &ho by an act or o%ission, characteri/ed by fault or ne(li(ence, causes da%a(e to another shall be liable for the da%a(e so done. I(norin( so %uch of this article as relates to liability for ne(li(ence, &e ta8e the rule to be that a person is liable for da%a(e done to another by any culpable act: and by Gculpable actG &e %ean any act &hich is bla%e&orthy &hen ;ud(ed by accepted le(al standards. $he idea thus e'pressed is undoubtedly broad enou(h to include any rational conception of liability for the tortious acts li8ely to be developed in any society. $hus considered, it cannot be said that the doctrine of .u%ley vs. )ye DsupraE and related cases is repu(nant to the principles of the civil la&. Nevertheless, it %ust be ad%itted that the codes and ;urisprudence of the civil la& furnish a so%e&hat uncon(enial field in &hich to propa(ate the idea that a stran(er to a contract %ay sued for the breach thereof. Article #2= of the Civil Code declares that contracts are bindin( only bet&een the parties and their privies. In confor%ity &ith this it has been held that a stran(er to a contract has no ri(ht of action for the nonfulfill%ent of the contract e'cept in the case especially conte%plated in the second para(raph of the sa%e article. @<y $a% and <y Jet vs. .eonard, 4" Phil. Rep., 1= .A As observed by this court in Manila Railroad Co. vs. Co%paKia $ransatlantica, R. ). No. 4 5 @45 Phil. Rep., 5=2A, a contract, &hen effectually entered into bet&een certain parties, deter%ines not only the character and e'tent of the liability of the contractin( parties but also the person or entity by &ho% the obli(ation is e'i(ible. $he sa%e idea should apparently be applicable &ith respect to the person a(ainst &ho% the obli(ation of the contract %ay be enforced: for it is evident that there %ust be a certain %utuality in the obli(ation, and if the stran(er to a contract is not per%itted to sue to enforce it, he cannot consistently be held liable upon it. If the t&o anta(onistic ideas &hich &e have ;ust brou(ht into ;u'taposition are capable of reconciliation, the process %ust be acco%plished by distin(uishin( clearly bet&een the ri(ht of action arisin( fro% the i%proper interference &ith the contract by a stran(er thereto, considered as an independent act (enerate of civil liability, and the ri(ht of action ex contractu a(ainst a party to the contract resultin( fro% the breach thereof. 7o&ever,

&e do not propose here to pursue the %atter further, inas%uch as, for reasons presently to be stated, &e are of the opinion that neither the doctrine of .u%ley vs. )ye DsupraE nor the application %ade of it by this court in )ilchrist vs. Cuddy @#! Phil. Rep., 21#A, affords any basis for the recovery of the da%a(es &hich the plaintiff is supposed to have suffered by reason of his inability to co%ply &ith the ter%s of the *a8efield contract. *hatever %ay be the character of the liability &hich a stran(er to a contract %ay incur by advisin( or assistin( one of the parties to evade perfor%ance, there is one proposition upon &hich all %ust a(ree. $his is, that the stran(er cannot beco%e %ore e'tensively liable in da%a(es for the nonperfor%ance of the contract than the party in &hose behalf he inter%eddles. $o hold the stran(er liable for da%a(es in e'cess of those that could be recovered a(ainst the i%%ediate party to the contract &ould lead to results at once (rotes6ue and un;ust. In the case at bar, as $eodorica Endencia &as the party directly bound by the contract, it is obvious that the liability of the defendant corporation, even ad%ittin( that it has %ade itself coparticipant in the breach of the contract, can in no even e'ceed hers. $his leads us to consider at this point the e'tent of the liability of $eodorica Endencia to the plaintiff by reason of her failure to surrender the certificate of title and to place the plaintiff in possession. It should in the first place be noted that the liability of $eodorica Endencia for da%a(es resultin( fro% the breach of her contract &ith +ay&alt &as a proper sub;ect for ad;udication in the action for specific perfor%ance &hich +ay&alt instituted a(ainst her in !"! and &hich &as liti(ated by hi% to a successful conclusion in this court, but &ithout obtainin( any special ad;udication &ith reference to da%a(es. Inde%nification for da%a(es resultin( fro% the breach of a contract is a ri(ht inseparably anne'ed to every action for the fulfill%ent of the obli(ation @art. #1, Civil CodeA: and its is clear that if da%a(es are not sou(ht or recovered in the action to enforce perfor%ance they cannot be recovered in an independent action. As to $eodorica Endencia, therefore, it should be considered that the ri(ht of action to recover da%a(es for the breach of the contract in 6uestion &as e'hausted in the prior suit. 7o&ever, her attorneys have not seen fit to interpose the defense of res judicata in her behalf: and as the defendant corporation &as not a party to that action, and such defense could not in any event be of any avail to it, &e proceed to consider the 6uestion of the liability of $eodorica Endencia for da%a(es &ithout refernce to this point. $he %ost that can be said &ith refernce to the conduct of $eodorica 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 perfor%ance in court. $he result &as that the plaintiff &as prevented durin( a period of several years fro% e'ertin( that control over the property &hich he &as entitled to e'ert and &as %ean&hile unable to dispose of the property advanta(eously. No&, &hat is the %easure of da%a(es for the &ron(ful detention of real property by the vender after the ti%e has co%e for hi% to place the purchaser in possessionL $he da%a(es ordinarily and nor%ally recoverable a(ainst a vendor for failure to deliver land &hich he has contracted to deliver is the value of the use and occupation of the land for the ti%e durin( &hich it is &ron(fully &ithheld. And of course &here the purchaser

has not paid the purchaser %oney, a deduction %ay be %ade in respect to the interest on the %oney &hich constitutes the purchase price. ,ubstantially the sa%e rule holds &ith respect to the liability of a landlord &ho fails to put his tenant in possession pursuant to contract of lease. $he %easure of da%a(es is the value of the leasehold interest, or use and occupation, less the stipulated rent, &here this has not been paid. $he rule that the %easure of da%a(es for the &ron(ful detention of land is nor%ally to be found in the value of use and occupation is, &e believe, one of the thin(s that %ay be considered certain in the la& @4! cyc., 04": #1 Cyc., "2# ,ed(e&ic8 on +a%a(es, Ninth ed., sec. 52.A B al%ost as &ellsettled, indeed, as the rule that the %easure of da%a(es for the &ron(ful detention of %oney is to be found in the interest. *e reco(ni/e the possibility that %ore e'tensive da%a(es %ay be recovered &here, at the ti%e of the creation of the contractual obli(ation, the vendor, or lessor, is a&are of the use to &hich the purchaser or lessee desires to put the property &hich is the sub;ect of the contract, and the contract is %ade &ith the eyes of the vendor or lessor open to the possibility of the da%a(e &hich %ay result to the other party fro% his o&n failure to (ive possession. $he case before us is not this character, inas%uch as at the ti%e &hen the ri(hts of the parties under the contract &ere deter%ined, nothin( &as 8no&n to any to the% about the ,an 9rancisco capitalist &ho &ould be &illin( to bac8 the pro;ect portrayed in E'hibit C. $he e'tent of the liability for the breach of a contract %ust be deter%ined in the li(ht of the situation in e'istence at the ti%e the contract is %ade: and the da%a(es ordinarily recoverable are in all events li%ited to such as %i(ht be reasonable are in all events li%ited to such as %i(ht be reasonably foreseen in the li(ht of the facts then 8no&n to the contractin( parties. *here the purchaser desires to protect hi%self, in the contin(ency of the failure of the vendor pro%ptly to (ive possession, fro% the possibility of incurrin( other da%a(es than such as the incident to the nor%al value of the use and occupation, he should cause to be inserted in the contract a clause providin( for stipulated a%ount to the paid upon failure of the vendor to (ive possession: and not case has been called to our attention &here, in the absence of such a stipulation, da%a(es have been held to be recoverable by the purchaser in e'cess of the nor%al value of use and occupation. 3n the contrary, the %ost funda%ental conceptions of the la& relative to the assess%ent of da%a(es are inconsistent &ith such idea. $he principles (overnin( this branch of the la& &ere profoundly considered in the case 7adley vs. Ba'endale @! E'ch., 41 A, decided in the En(lish Court of E'che6uer in 521: and a fe& &ords relative to the principles (overnin( &ill here be found instructive. $he decision in that case is considered a leadin( authority in the ;urisprudence of the co%%on la&. $he plaintiffs in that case &ere proprietors of a %ill in )loucester, &hich &as propelled by stea%, and &hich &as en(a(ed in (rindin( and supplyin( %eal and flour to custo%ers. $he shaft of the en(ine (ot bro8en, and it beca%e necessarily that the bro8en shaft be sent to an en(ineer or foundry %an at )reen&ich, to serve as a %odel for castin( or %anufacturin( another that &ould fit into the %achinery. $he bro8en shaft could be delivered at )reen&ich on the second day after its receipts by the carrier it. It &as delivered to the defendants, &ho &ere co%%on carriers en(a(ed in that business bet&een

these points, and &ho had told plaintiffs it &ould be delivered at )reen&ich on the second day after its delivery to the%, if delivered at a (iven hour. $he carriers &ere infor%ed that the %ill &as stopped, but &ere not infor%ed of the special purpose for &hich the bro8en shaft &as desired to for&arded, $hey &ere not told the %ill &ould re%ain idle until the ne& shaft &ould be returned, or that the ne& shaft could not be %anufactured at )reen&ich until the bro8en one arrived to serve as a %odel. $here &as delay beyond the t&o days in deliverin( the bro8en shaft at )reen&ich, and a correspondin( delay in startin( the %ill. No e'planation of the delay &as offered by the carriers. $he suit &as brou(ht to recover da%a(es for the lost profits of the %ill, cause by the delay in deliverin( the bro8en shaft. It &as held that the plaintiff could not recover. $he discussion contained in the opinion of the court in that case leads to the conclusion that the da%a(es recoverable in case of the breach of a contract are t&o sorts, na%ely, @ A the ordinary, natural, and in a sense necessary da%a(e: and @#A special da%a(es. 3rdinary da%a(es is found in all breaches of contract &here the are no special circu%stances to distin(uish the case specially fro% other contracts. $he consideration paid for an unperfor%ed pro%ise is an instance of this sort of da%a(e. In all such cases the da%a(es recoverable are such as naturally and (enerally &ould result fro% such a breach, Gaccordin( to the usual course of thin(s.G In case involvin( only ordinary da%a(e no discussion is ever indul(ed as to &hether that da%a(e &as conte%plated or not. $his is conclusively presu%ed fro% the i%%ediateness and inevitableness of the da%a(e, and the recovery of such da%a(e follo&s as a necessary le(al conse6uence of the breach. 3rdinary da%a(e is assu%ed as a %atter of la& to be &ithin the conte%plation of the parties. ,pecial da%a(e, on the other hand, is such as follo&s less directly fro% the breach than ordinary da%a(e. It is only found in case &here so%e e'ternal condition, apart fro% the actual ter%s to the contract e'ists or intervenes, as it &ere, to (ive a turn to affairs and to increase da%a(e in a &ay that the pro%isor, &ithout actual notice of that e'ternal condition, could not reasonably be e'pected to foresee. Concernin( this sort of da%a(e, 7adley vs. Ba'endale @ 521A DsupraE lays do&n the definite and ;ust rule that before such da%a(e can be recovered the plaintiff %ust sho& that the particular condition &hich %ade the da%a(e a possible and li8ely conse6uence of the breach &as 8no&n to the defendant at the ti%e the contract &as %ade. $he state%ent that special da%a(es %ay be recovered &here the li8elihood of such da%a(es flo&in( fro% the breach of the contract is conte%plated and foreseen by the parties needs to be supple%ented by a proposition &hich, thou(h not enunciated in 7adley vs. Ba'endale, is yet clearly to be dra&n fro% subse6uent cases. $his is that &here the da%a(e &hich a plaintiff see8s to recover as special da%a(e is so far speculative as to be in conte%plation of la& re%ote, notification of the special conditions &hich %a8e that da%a(e possible cannot render the defendant liable therefor. $o brin( da%a(es &hich &ould ordinarily be treated as re%ote &ithin the cate(ory of recoverable special da%a(es, it is necessary that the condition should be %ade the sub;ect of contract in such sense as to beco%e an e'press or i%plied ter% of the en(a(e%ent. 7orne vs.

Midland R. Co. @.. R., 5 C. P., 4 A is a case &here the da%a(e &hich &as sou(ht to be recovered as special da%a(e &as really re%ote, and so%e of the ;ud(es ri(htly places the disallo&ance of the da%a(e on the (round that to %a8e such da%a(e recoverable, it %ust so far have been &ithin the conte%plation of the parties as to for% at least an i%plied ter% of the contract. But others proceeded on the idea that the notice (iven to the defendant &as not sufficiently full and definite. $he result &as the sa%e in either vie&. $he facts in that case &ere as follo&s> $he plaintiffs, shoe %anufacturers at H, &ere under contract to supply by a certain day shoes to a fir% in .ondon for the 9rench (overn%ent. $hey delivered the shoes to a carrier in sufficient ti%e for the (oods to reach .ondon at the ti%e stipulated in the contract and infor%ed the railroad a(ent that the shoes &ould be thro&n bac8 upon their hands if they did not reach the destination in ti%e. $he defendants ne(li(ently failed to for&ard the (ood in due season. $he sale &as therefore lost, and the %ar8et havin( fallen, the plaintiffs had to sell at a loss. In the precedin( discussion &e have considered the plaintiff?s ri(ht chiefly a(ainst $eodorica Endencia: and &hat has been said suffices in our opinion to de%onstrate that the da%a(es laid under the second cause of action in the co%plaint could not be recovered fro% her, first, because the da%a(es laid under the second cause of action in the co%plaint could not be recovered fro% her, first, because the da%a(es in 6uestion are special da%a(es &hich &ere not &ithin conte%plation of the parties &hen the contract &as %ade, and secondly, because said da%a(es are too re%ote to be the sub;ect of recovery. $his conclusion is also necessarily fatal to the ri(ht of the plaintiff to recover such da%a(es fro% the defendant corporation, for, as already su((ested, by advisin( $eodorica not to perfor% the contract, said corporation could in no event render itself %ore e'tensively liable than the principle in the contract. 3ur conclusion is that the ;ud(%ent of the trial court should be affir%ed, and it is so ordered, &ith costs a(ainst the appellant. Arellano C.!. Torres Carson Araullo "alcol# Avance$a and "oir !!. concur.

Foo%&o%e' +ay&alt vs. Endencia, R. ). No. =44 , decided Nove%ber 0, ! #, not published.