Topic : Interference by Third Persons

GEO W. DAYWALT
vs.
LA CORPORACION DE LOS PADRES AGUSTINOS RECOLETOS, ET AL.,
GR No. 13505 February 4, 1919

Facts

In the year 1902, Teodorica Endencia, an unmarried woman, resident in the Province of
Mindoro, executed a contract whereby she obligated herself to convey to Geo. W. Daywalt, a
tract of land situated in the barrio of Mangarin, municipality of Bulalacao, now San Jose, in said
province.

It was agreed that a deed should be executed as soon as the title to the land should be
perfected by proceedings in the Court of Land Registration and a Torrens certificate should be
produced therefore in the name of Teodorica Endencia.

The parties, however, met immediately upon the entering of this decree and made a
new contract with a view to carrying their original agreement into effect.

The Torrens certificate was in time issued to Teodorica Endencia, but in the course of
the proceedings relative to the registration of the land, it was found by official survey that the
area of the tract inclosed in the boundaries stated in the contract was about 1.248 hectares of
452 hectares as stated in the contract. This development made Teodorica Endencia became
reluctant to transfer the whole tract to the purchaser, asserting that she never intended to sell
so large an amount of land and that she had been misinformed as to its area.

This attitude of hers led to litigation in which Daywalt finally succeeded, upon appeal to
the Supreme Court, in obtaining a decree for specific performance; and Teodorica Endencia was
ordered to convey the entire tract of land to Daywalt pursuant to the contract of October 3,
1908, which contract was declared to be in full force and effect.

The defendant, La Corporacion de los Padres Recoletos, is a religious corporation, with

its domicile in the city of Manila. The same corporation was at this time also the owner of
another estate on the same island immediately adjacent to the land which Teodorica Endencia
had sold to Geo. W. Daywalt; and for many years the Recoletos Fathers had maintained large
herds of cattle on the farms referred to.

Father Isidoro Sanz, is a member of the said corporation and his advices together with
other members influenced Teoderica’s decision to rescind the said conveyance.
 Under the first cause stated in the complaint in the present action, the plaintiff seeks to
recover from the defendant corporation the sum of P24,000, as damages for the use and
occupation of the land in question by reason of the pasturing of cattle thereon during the
period stated.

Issues

Whether a person who is not a party to a contract for the sale of land makes himself
liable for damages to the vendee, beyond the value of the use and occupation, by colluding
with the vendor and maintaining him in the effort to resist an action for specific performance.

Whether the damages which the plaintiff seeks to recover under this head are too
remote and speculative to be the subject of recovery.

Ruling

The Supreme Court held that the members of the defendants corporation, in advising
and prompting Teodorica Endencia not to comply with the contract of sale, were actuated by
improper and malicious motives.

Article 1257 of the Civil Code declares that contracts are binding only between the
parties and their privies. In conformity with this it has been held that a stranger to a contract
has no right of action for the nonfulfillment of the contract except in the case especially
contemplated in the second paragraph of the same article.

In the case at bar, as Teodorica Endencia was the party directly bound by the contract, it
is obvious that the liability of the defendant corporation, even admitting that it has made itself
coparticipant in the breach of the contract, can in no even exceed hers. This leads us to
consider at this point the extent of the liability of Teodorica Endencia to the plaintiff by reason
of her failure to surrender the certificate of title and to place the plaintiff in possession.

The damages ordinarily and normally recoverable against a vendor for failure to deliver
land which he has contracted to deliver is the value of the use and occupation of the land for
the time during which it is wrongfully withheld.

The discussion contained in the opinion of the court in that case leads to the conclusion
that 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 case involving only ordinary damage no discussion is ever
indulged as to whether that damage was contemplated or not. This 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 case where some external condition, apart from the actual
terms to the contract exists or intervenes, as it were, to give a turn to affairs and to increase
damage in a way that the promisor, without actual notice of that external condition, could not
reasonably be expected to foresee.

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
the 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 not to perform the contract, said corporation could in no event render itself more
extensively liable than the principle in the contract.

Case Digest by: Rose Mae L. Pango –JDI