[No. 13505. February 4, 1919.

]
GEO. W. DAYWALT, plaintiff and appellant, vs. LA
CORPORACIN DE LOS PADRES AGUSTINOS
RECOLETOS ET AL., defendants and appellees.
1. CONTRACTS DAMAGES FOR BREACH LIABILITY OF
THIRD PARTY.Whatever may be the character of the
liability, if any, which a stranger to a contract may incur
by advising or assisting one of the parties to evade
performance, he cannot become more extensively liable in
damages for the nonperformance of the contract than the
party in whose behalf he intermeddles.
2. ID. ID. MEASURE OF DAMAGES FOR BREACH OF
CONTRACT.The damages recoverable upon breach of
contract are, primarily, the ordinary, natural and in a
sense the necessary damage resulting from the breach.
Other damages, known as special damages, are
recoverable where it appears that the particular
conditions which made such damages a probable
consequence of the breach were known to the delinquent
party at the time the contract was made. This proposition
must be understood with the qualification that, if the
damages are in the legal sense remote or speculative,
knowledge of the special conditions which render such
damages possible will not make them recoverable. Special
damages of this character cannot be recovered unless
made the subject of special stipulation.
3. ID. ID. ID. DAMAGES FOR BREACH OF CONTRACT
FOR SALE OF LAND.The damages ordinarily
recoverable against a vendor

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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

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.

APPEAL from a judgment of the Court of First Instance of

Manila. Ostrand, J.
The facts are stated in the opinion of the court.
C. C. Cohn and Thos. D. Aitken for appellant.
Crossfield & O'Brien for appellee.
STREET, J.:
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 perf ected by
proceedings in the Court of Land Registration and a
Torrens certificate should be procured therefor in the name
of Teodorica Endencia. A decree recognizing the right ,of
Teodorica as owner was entered in said court in August
1906, but the Torrens certificate was not issued until later.
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. This new
contract was executed in the form of a deed of conveyance
and bears date of August 16, 1906. The stipulated price
was fixed at P4,000, and the area of the land enclosed in
the boundaries defined in the contract was stated to be 452
hectares and a fraction.
The second contract was not immediately carried into
effect for the reason that the Torrens certificate was not yet
obtainable and in fact said certificate was not issued until
the period of performance contemplated in the contract had
expired. Accordingly, upon October 3, 1908, the parties
entered into still another agreement, superseding the old,
by which Teodorica Endencia agreed, upon
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

receiving the Torrens title to the land in question, to

deliver the same to the Hongkong and Shanghai Bank in
Manila, to be forwarded to the Crocker National Bank in
San Francisco, where it was to be delivered to the plaintiff
upon payment of a balance of P3,100.
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 f ound by official survey
that the area of the tract inclosed in the boundaries stated
in the contract was about 1,248 hectares instead of 452
hectares as stated in the contract. In view of this
development 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. This
decree appears to have
become finally effective in the early
1
part of the year 1914.
The defendant, La Corporacin de los Padres Recoletos,
is a religious corporation, with its domicile in the city of
Manila. Said corporation was formerly the owner of a large
tract of land, known as the San Jose Estate, on the island
of Mindoro, which was sold to the Government of the
Philippine Islands in the year 1909. The same corporation
was at this time also the owner of another estate on the
same island immediately adjacent to the land which
Teoderica 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. Their
representative, charged with the management of these
farms, was
____________
1

Daywalt vs. Endencia, R. G. No. 7331, decided November 16, 1912,

not published.
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

father Isidoro Sanz, himself a member of the order. Father

Sanz had long been well acquainted with Teodorica
Endencia and exerted over her an influence and
ascendency due to his religious character as well as to the
personal friendship which existed between them. Teodorica
appears to be a woman of little personal force, easily
subject to influence, and upon all the important matters of
business was accustomed to seek, and was given, the advice
of Father Sanz and other members of his order with whom
she came in contact.
Father Sanz was fully aware of the existence of the
contract of 1902 by which Teodorica Endencia agreed to sell
her land to the plaintiff as well as of the later important
developments connected with the history of that contract
and the contract substituted successively for it and in
particular Father Sanz, as well as other members of the
defendant corporation, knew of the existence of the contract
of October 3, 1908, which, as we have already seen, finally
fixed the rights of the parties to the property in question.
When the Torrens certificate was finally issued in 1909 in
favor of Teodorica Endencia, she delivered it for
safekeeping to the defendant corporation, and it was then
taken to Manila where it remained in the custody and
under the control of P. Juan Labarga the procurador and
chief official of the defendant corporation, until the delivery
thereof to the plaintiff was made compulsory by reason of
the decree of the Supreme Court in 1914.
When the defendant corporation sold the San Jose
Estate, it was necessary to bring the cattle off of that
property and, in the first half of 1909, some 2,368 head
were removed to the estate of the corporation immediately
adjacent to the property which the plaintiff had purchased
from Teodorica Endencia. As Teodorica still retained
possession of said property Father Sanz entered into an
arrangement with her whereby large numbers of cattle
belonging to the def endant corporation were pastured
upon said land during a period extending from June 1,
1909, to May 1, 1914.
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

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. The
trial court came to the conclusion that the defendant
corporation was liable for damages by reason of the use and
occupation of the premises in the manner stated and fixed
the amount to be recovered at P2,497. The plaintiff
appealed and has assigned error to this part of the
judgment of the court below, insisting that damages should
have been awarded in a much larger sum and at least to
the full extent of P24,000, the amount claimed in the
complaint.
As the def endant did not appeal, the propriety of
allowing damages f or the use and occupation of the land to
the extent of P2,497, the mount awarded, is not now in
question and the only thing here to be considered, in
connection with this branch of the case, is whether the
damages allowed under this head should be increased. The
trial court rightly ignored the fact that the defendant
corporation had paid Teodorica Endencia f or use and
occupation of the same land during the period in question
at the rate of P425 per annum, inasmuch as the final
decree of this court in the action for specific performance is
conclusive against her right, and as the defendant
corporation had notice of the rights of the plaintiff under
his contract of purchase, it can not be permitted that the
corporation should escape liability in this action by proving
payment of rent to a person other than, the true owner.
With ref erence to the rate at which compensation
should be estimated the trial court came to the following
conclusion:
"As to the rate of the compensation, the plaintiff contends that the
defendant corporation maintained at least one thousand head of
cattle on the land and that the pasturage was of the value of forty
centavos per head monthly, or P4,800 annually, for the whole
tract. The court can not accept this view. It is rather improbable
that 1,248 hec
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

tares of wild Mindoro land would furnish sufficient pasturage for

one thousand head of cattle during the entire year, and,
considering the locality, the rate of forty centavos per head
monthly seems too high. The evidence shows that after having
recovered possession of the land the plaintiff rented it to the
defendant corporation for fifty centavos per hectare annually, the
tenant to pay the taxes on the land, and this appears to be a
reasonable rent. There is ,no reason to suppose that the land was
worth more for grazing purposes during the period from 1909 to
1913, than it was at the later period. Upon this basis the plaintiff
is entitled to damages in. the sum of P2,497, and is under no
obligation to reimburse the defendants for the land taxes paid by
either f them during the period the land was occupied by the
defendant corporation. It may be mentioned in this connection
that the Lontok tract adjoining the land in question and
containing over three thousand hectares appears to have been
leased for only P1,000 a year, plus the taxes."

From this it will be seen that the trial court estimated the
rental value of the land for grazing purposes at 50 centavos
per hectare per annum, and roughly adopted the period of
four years as the time for which compensation at that rate
should be made. As the. court had already found that the
defendant was liable for these damages from June, 1, 1909,
to May 1, 1914, or a period of four years and eleven
months, there seems some ground for the contention made
in the appellant's first assignment of error that the court's
computation was erroneous, even accepting the rule upon
which the damages were assessed, as it is manifest that at
the rate of 50 centavos per hectare per annum, the
damages for f our years and eleven months would be
P3,090.
Notwithstanding this circumstance, we are of the
opinion that the damages assessed are sufficient to
compensate the plaintiff for the use and occupation of the
land during the whole time it was used. There is evidence
in the record strongly tending to show that the wrongful
use of the
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

land by the defendant was not continuous throughout the

year but was confined mostly to the season when the f
orage obtainable on the land of the defendant corporation
was not sufficient to maintain its cattle, for which reason it
became necessary to allow them to go over to pasture on
the land in question and it is not clear that the whole of
the land was used f or pasturage at any time.
Considerations of this character probably led the trial court
to adopt four years as roughly being the period during
which compensation should be allowed. But whether this
was advertently done or not, we see no sufficient reason, in
the uncertainty of the record with reference to the number
of the cattle grazed and the period when the land was used,
for substituting our guess for the estimate made by the
trial court. In the second cause of action stated in the
complaint
the plaintiff seeks to recover f rom the def endant
corporation the sum of P500,000, as damages, on the
ground that said corporation, for its own selfish purposes,
unlawfully induced Teodorica Endencia to refrain from the
performance of her contract f or the sale of the land in
question and to withhold delivery to the plaintiff of the
Torrens title, and further, maliciously and without
reasonable cause, maintained her in her defense to the
action of specific performance which was finally decided in
favor of the plaintiff in this court. The cause of action here
stated is based on a liability derived from the wrongful
interference of the defendant in the performance of the
contract between the plaintiff and Teodorica Endencia and
the large damages laid in the complaint were, according to
the proof submitted by the plaintiff, incurred as a result of
a combination of circumstances of the following nature: In
1911, it appears, the plaintiff, as the owner of the land
which he had bought from Teodorica Endencia entered into
a contract (Exhibit C) with S. B. Wakefield, of San
Francisco, for the sale and disposal of said lands to a sugar
growing and milling enterprise, the successful launching of
which depended on the ability of
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

Daywalt to get possession of the land and the Torrens

certificate of title. In order to accomplish this end, the
plaintiff returned to the Philippine Islands, communicated
his arrangement to the defendant, and made repeated
efforts to secure the registered title for delivery in
compliance with said agreement with Wakefield. Teodorica
Endencia seems to have yielded her consent to the
consummation of her contract, but the Torrens title was
then in the possession of Padre Juan Labarga in Manila,
who refused to deliver the document. Teodorica also was in
the end prevailed upon to stand out against the perf
ormance of her contract with the plaintiff with the result
that the plaintiff was kept out of possession until the
Wakefield project for the establishment of a large sugar
growing and milling enterprise fell through. In the light of
what has happened in recent years in the sugar industry,
we feel justified in saying that the project above referred to,
if carried into effect, must inevitably have proved a great
success.
The determination of the issue presented in this second
cause of action requires a consideration of two points. The
first is 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. The
second is whether the damages which the plaintiff seeks to
recover under this head are too remote and speculative to
be the subject of recovery.
As preliminary to a consideration of the first of these
questions, we deem it well to dispose of the contention that
the members of the defendant corporation, in advising and
prompting Teodorica Endencia not to comply with the
contract of sale, were actuated by improper and malicious
motives. The trial court found that this contention was not
sustained, observing that while it was true that the
circumstances pointed to an entire sympathy on the part
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

of the defendant corporation with the efforts of Teodorica

Endencia to defeat the plaintiff's claim to the land, the fact

that its officials may have advised her not to carry the
contract into effect would not constitute actionable
interference with such contract. It may be added that when
one considers the hardship that the ultimate performance
of that contract entailed on the vendor, and the doubt in
which the issue was involvedto the extent that the
decision of the Court of the First Instance was unfavorable
to the plaintiff and the Supreme Court itself was divided
the attitude of the defendant corporation, as exhibited in
the conduct of its procurador, Juan Labarga, and other
members of the order of the Recollect Fathers, is not
difficult to understand. To our mind a fair conclusion on
this feature of the case is that father Juan Labarga and his
associates believed in good faith that the contract could not
be enf orced and that Teodorica would be wronged if it
should be carried into effect. Any advice or assistance
which they may have given was, therefore, prompted by no
mean or improper motive. It is not, in our opinion, to be
denied that Teodorica would have surrendered the
documents of title and given possession of the land but for
the influence and promptings of members of the defendant
corporation. But we do not credit the idea that they were in
any degree influenced to the giving of such advice by the
desire to secure to themselves the paltry privilege of
grazing their cattle upon the land in question to the
prejudice of the just rights of the plaintiff.
The attorney for the plaintiff maintains that, by
interfering in the performance of the contract in question
and obstructing the plaintiff in his efforts to secure the
certificate of title to the land, the defendant corporation
made itself a coparticipant with Teodorica Endencia in the
breach of said contract and inasmuch as father Juan
Labarga, at the time of said unlawful intervention between
the contracting parties, was fully aware of the existence of
the contract (Exhibit C) which the plaintiff had made with
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

S. B. Wakefield, of San Francisco, it is insisted that the

defendant corporation is liable for the loss consequent upon
the failure of the project outlined in said contract.

In this connection reliance is placed by the plaintiff upon

certain American and English decisions in which it is held
that a person who is a stranger to a contract may, by an
unjustifiable interference in the performance thereof,
render himself liable f or the damages consequent upon
nonperformance. It is said that the doctrine of these cases
was recognized by this court in Gilchrist vs. Cuddy (29
Phil. Rep., 542) and we have been earnestly pressed to
extend the rule there enunciated to the situation here
presented. Somewhat more than half a century ago the
English Court of the Queen's Bench saw its way clear to
permit an action for damages to be maintained against a
stranger to a contract wrongfully interfering in its
performance. The leading case on this subject is Lumley vs.
Gye ([1853], 2 El. & Bl., 216). It there appeared that the
plaintiff, as manager of a theatre, had entered into a
contract with Miss Johanna Wagner, an opera singer,
whereby she bound herself for a period to sing in the
plaintiff's theatre and nowhere else. The defendant,
knowing of the existence of this contract, and, as the
declaration alleged, "maliciously intending to injure the
plaintiff," enticed and procured Miss Wagner to leave the
plaintiff's employment. It was held that the plaintiff was
entitled to recover damages. The right which was here
recognized had its origin in a rule, long familiar to the
courts of the common law, to the effect that any person who
entices a servant from his employment is liable in damages
to the master. The master's interest in the service rendered
by his employee is here considered as a distinct subject of
juridical right. It being thus accepted that it is a legal
wrong to break up a relation of personal service, the
question now arose whether it is illegal for one person to
interfere with any contract relation subsisting between
others. Prior to the decision of Lumley vs. Gye [supra] it
had been supposed that the liability here
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

under consideration was limited to the cases of the

enticement of menial servants, apprentices, and others to
whom the English Statutes of Laborers were applicable.
But in the case cited the majority of the judges concurred

in the opinion that the principle extended to all cases of

hiring. This doctrine was f ollowed by the Court of Appeal
in Bowen vs. Hall ([1881], 6 Q. B., Div., 333) and in
Temperton vs. Russell ([1893], 1 Q. B., 715), it was held
that the right of action for maliciously procuring a breach
of contract is not confined to contracts f or personal
services, but extends to contracts in general. In that case
the contract which the defendant had procured to be
breached was a contract for the supply of building material.
Malice in some form is generally supposed to be an
essential ingredient in cases of interf erence with contract
relations. But upon the authorities it is enough if the
wrongdoer, having knowledge of the existence of the
contract relation, in bad faith sets about to break it. up.
Whether his motive is to benefit himself or gratify his spite
by working mischief to the employer is immaterial. Malice
in the sense of illwill or spite is not essential.
Upon the question as to what constitutes legal
justification, a good illustration was put in the leading
case. If a party enters into contract to go for another upon a
journey to a remote and unhealthful climate, and a third
person, with a bona fide purpose of benefiting the one who
is under contract to go, dissuades him from the step, no
action will lie.. But if the advice is not disinterested and
the persuasion is used for "the indirect purpose of
benefiting the defendant at the expense of the plaintiff,"
the intermedler is liable if his advice is taken and the
contract broken.
The doctrine embodied in the cases just cited has
sometimes been found useful, in the complicated relations
of modern industry, as a means of restraining the activities
of labor unions and industrial societies when improperly
engaged in the promotion of strikes. An illustration of the
application of the doctrine in question in a case of this kind
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

is found in South Wales Miners Federation vs. Glamorgan

Coal Co. ([1905], A. C., 239). It there appeared that certain
miners employed in the plaintiff's collieries, acting under
the order of the executive council of the defendant
federation, violated their contract with the plaintiff by

abstaining from work on certain days. The federation and

council acted without any actual malice or illwill towards
the plaintiff, and the only object of the order in question
was that the price of coal might thereby be kept up, a factor
which affected the miner's wage scale. It was held that no
sufficient justification was shown and that the federation
was liable.
In the United States, the rule established in England by
Lumley vs. Gye [supra] and subsequent cases is commonly
accepted, though in a few of the States the broad idea that
a stranger to a contract can be held liable Upon it is
rejected, and in these jurisdictions the doctrine, if accepted
at all, is limited to the situation where the contract is
strictly for personal service. (Boyson vs. Thorn, 98 Cal.,
578 Chambers & Marshall vs. Baldwin 91 Ky., 121
Bourlier vs. Macauley, 91 Ky., 135 Glencoe Land & Gravel
Co. vs. Hudson Bros. Com. Co., 138 Mo. 439.)
It should be observed in this connection that, according
to the English and American authorities, no question can
be made as to the liability of one who interf eres with a
contract existing between others by means which, under
known legal canons, can be denominated an unlawful
means. Thus, if performance is prevented by force,
intimidation, coercion, or threats, or by false or defamatory
statements, or by nuisance or riot, the person using such
unlawful means is, under all the authorities, liable for the
damage which ensues. And in jurisdictions where the
doctrine of Lumley vs. Gye [supra] is rejected, no liability
can arise from a meddlesome and malicious interference
with a contract relation unless some such unlawful means
as those just indicated are used. (See cases last above
cited.)
This brings us to the decision made by this court in
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

Gilchrist vs. Cuddy (29 Phil. Rep., 542). It there appeared

that one Cuddy, the owner of a cinematographic film, let it
under a rental contract to the plaintiff Gilchrist for a
specified period of time. In violation of the terms of this
agreement, Cuddy proceeded to turn over the film also
under a rental contract, to the defendants Espejo and

Zaldarriaga. Gilchrist thereupon restored to the Court of

First. Instance and procured an injunction restraining the
defendants from exhibiting the film in question in their
theater during the period specified in the contract of Cuddy
with Gilchrist. Upon appeal to this court it was in effect
held that the injunction was not improperly granted,
although the defendants did not, at the time their contract
was made, know the identity of the plaintiff as the person
holding the prior contract but did know of the existence of a
contract in f avor of someone. It was also said arguendo,
that the defendants would have been liable in damages
under article 1902 of the Civil Code, if the action had been
brought by the plaintiff to recover damages. The force of
the opinion is, we think, somewhat weakened by the
criticism contained in the concurring opinion, wherein it is
said that the question of breach of contract by inducement
was not really involved in the case. Taking the decision
upon the point which was really decided, it is authority for
the proposition that one who buys something which he
knows has been sold to some other person can be restrained
from using that thing to the prejudice of the person having
the prior and better right.
Translated into terms applicable to the case at bar, the
decision in Gilchrist vs. Cuddy (29 Phil. Rep., 542),
indicates that the def endant corporation, having notice of
the sale of the land in question to Daywalt, might have
been enjoined by the latter from using the property for
grazing its cattle thereon. That the defendant corporation
is also liable in this action for the damage resulting to the
plaintiff from the wrongful use and occupation of the
property has also been already determined. But it will be
observed
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

that in order to sustain this liability it is not necessary to

resort to any subtle exegesis relative to the liability of a
stranger to a contract for unlawful interference in the
performance thereof. It is enough that defendant used the
property with notice that the plaintiff had a prior and
better right.
Article 1902 of the Civil Code declares that any person

who by an act or omission, characterized by fault or

negligence, causes damage to another shall be liable for the
damage so done. Ignoring so much of this article as relates
to liability f or negligence, we take the rule to be that a
person is liable for damage done to another by any culpable
act and by "culpable act" we mean any act which is
blameworthy when judged by accepted legal standards. The
idea thus expressed is undoubtedly broad enough to include
any rational conception of liability for the tortious acts
likely to be developed in any society. Thus considered, it
cannot be said that the doctrine of Lumley vs. Gye [supra]
and related cases is repugnant to the principles of the civil
law.
Nevertheless, it must be admitted that the codes and
jurisprudence of the civil law furnish a somewhat
uncongenial field in which to propagate the idea that a
stranger to a contract may be sued for the breach thereof.
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. (Uy Tam and Uy Yet
vs. Leonard, 30 Phil. Rep., 471.) As observed by this court
in Manila Railroad Co. vs. Compaa Trasatlntica, R. G.
No. 11318 (38 Phil. Rep., 875), a contract, when effectually
entered into between certain parties, determines not only
the character and extent of the liability of the contracting
parties but also the person or entity by whom the
obligation is exigible. The same idea should. apparently be
ap
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Daywalt vs. Corporacin de PP. Agustinos Recoletos.

plicable with respect to the person against whom the

obligation of the contract may be enforced for it is evident
that there must be a certain mutuality in the obligation,
and if the stranger to a contract is not permitted to sue to
enforce it, he cannot consistently be held liable upon it.
If the two antagonistic ideas which we have just brought
into juxtaposition are capable of reconciliation, the process
must be accomplished by distinguishing clearly between

the right of action arising from the improper interference

with the contract by a stranger thereto, considered as an
independent act generative of civil liability, and the right of
action ex contractu against a party to the contract resulting
from the breach thereof. However, we do not propose here
to pursue the matter further, inasmuch as, for reasons
presently to be stated, we are of the opinion that neither
the doctrine of Lumley vs. Gye [supra] nor the application
made of it by this court in Gilchrist vs. Cuddy (29 Phil.
Rep., 542), affords any basis for the recovery of the
damages which the plaintiff is supposed to have suffered by
reason of his inability to comply with the terms of the
Wakefield contract.
Whatever may be the character of the liability which a
stranger to a contract may incur by advising or assisting
one of the parties to evade performance, there is one
proposition upon which all must agree. This is, that the
stranger cannot become more extensively liable in damages
for the nonperformance of the contract than the party in
whose behalf he intermeddles. To hold the stranger liable
for damages in excess of those that could be recovered
against the immediate party to the contract would lead to
results at once grotesque and unjust. 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 event
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
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PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

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
Teodorica Endencia for damages resulting from the breach
of her contract with Daywalt was a proper subject for
adjudication in the action for specific performance which
Daywalt instituted against her in 1909 and which was
litigated by him to a successful conclusion in this court, but
without obtaining any special adjudication with referrence

to damages. Indemnification for damages resulting from

the breach of a contract is a right inseparably annexed to
every action for the fulfilment of the obligation (art. 1124,
Civil Code) and it is clear that if damages are not sought
or recovered in the action to enforce performance they
cannot be recovered in an independent action. As to
Teodorica Endencia, therefore, it should be considered that
the right of action to recover damages for the breach of the
contract in question was exhausted in the prior suit.
However, her attorneys have not seen fit to interpose the
defense of res judicata in her behalf and as the defendant
corporation was not a party to that action, and such
defense could not in any event be of any avail to it, we
proceed to consider the question of the liability of Teodorica
Endencia for damages without reference to this point.
The most that can be said with reference to the conduct
of Teodorica 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 performance in court. The result was
that the plaintiff was prevented during a period of several
years from exerting that control over the property which he
was entitled to exert and was meanwhile unable to dispose
of the property advantageously. Now, what is the measure
of damages for the wrongful detention of real property by
the vender after the time has come for him to place the
purchaser in possession?
The damages ordinarily and normally recoverable
against a vendor for f ailure to deliver land which he has
contracted
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VOL. 39, FEBRUARY 4, 1919.

603

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

to deliver is the value of the use and occupation of the land

for the time during which it is wrongfully withheld. And of
course where the purchaser has not paid the purchase
money, a deduction may be made in respect to the interest
on the money which constitutes the purchase price.
Substantially the same rule holds with respect to the
liability of a landlord who fails to put his tenant in
possession pursuant to a contract of lease. The measure of
damages is the value of the leasehold interest, or use and
occupation, less the stipulated rent, where this has not

been paid. The rule that the measure of damages f or the

wrongf ul detention of land is normally to be found in the
value of use and occupation is, we believe, one of the things
that may be considered certain in the law (39 Cyc., 1630 24
Cyc., 1052 Sedgewick on Damages, Ninth ed., sec. 185.)
almost as wellsettled, indeed, as the rule that the measure
of damages for the wrongful detention of money is to be f
ound in the interest.
We recognize the possibility that more extensive
damages may be recovered where, at the time of the
creation of the contractual obligation, the vendor, or lessor,
is aware of the use to which the purchaser or lessee desires
to put the property which is the subject of the contract, and
the contract is made with the eyes of the vendor or lessor
open to the possibility of the damage which may result to
the other party from his own failure to give possession. The
case before us is not of this character, inasmuch as at the
time when the rights of the parties under the contract were
determined, nothing was known to any of them about the
San Francisco capitalist who would be willing to back the
project portrayed in Exhibit C.
The extent of the liability for the breach of a contract
must be determined in the light of the situation in
existence at the time the contract is made and the
damages ordinarily recoverable are in all events limited to
such as might be reasonably foreseen in the light of the
facts then known to the contracting parties. Where the
purchaser desires
604

604

PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

to protect himself, in the contingency of the failure of the

vendor promptly to give possession, from the possibility of
incurring other damages than such as are incident to the
normal value of the use and occupation, he should cause to
be inserted in the contract a clause providing f or
stipulated amount to be paid upon failure of the vendor to
give possession and no case has been called to our
attention where, in the absence of such a stipulation,
damages have been held to be recoverable by the purchaser
in excess of the normal value of use and occupation. On the
contrary, the most fundamental conceptions of the law

relative to the assessment of damages are inconsistent with

such idea.
The principles governing this branch of the law were
profoundly considered in the case of Hadley vs. Baxendale
(9 Exch., 341), decided in the English Court of Exchequer
in 1854 and a few words relative to the principles
governing the recovery of damages, as expounded in that
decision, will here be found instructive. The decision in
that case is considered a leading authority in the
jurisprudence of the common law. The plaintiffs in that
case were proprietors of a mill in Gloucester, which was
propelled by steam, and which was engaged in grinding
and supplying meal and flour to customers. The shaft of the
engine got broken, and it became necessary that the broken
shaft be sent to an engineer or foundry man at Greenwich,
to serve as a model for casting or manufacturing another
that would fit into the machinery. The broken shaft could
be delivered at Greenwich on the second day after its
receipt by the carrier It was delivered to the defendants,
who were common carriers engaged in that business
between these points, and who had told plaintiffs it would
be delivered at Greenwich on the second day after its
delivery to them, if delivered at a given hour. The carriers
were informed that the mill was stopped, but were not
informed of the special purpose for which the broken shaft
was desired to be forwarded. They were not told the mill
would remain idle until the new shaft would be returned,
or that the new shaft could not
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VOL. 39, FEBRUARY 4, 1919.

605

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

be manufactured at Greenwich until the broken one

arrived to serve as a model. There was delay beyond the
two days in delivering the broken shaft at Greenwich, and
a corresponding delay in starting the mill. No explanation
of the delay was offered by the carriers. The suit was
brought to recover damages for the lost profits of the mill,
caused by the delay in delivering the broken shaft. It was
held that the plaintiff could not recover.
The discusion 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 specially 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 cases
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. Concerning this sort of damage, Hadley vs.
Baxendale (1854) [supra] lays down the definite and just
rule that before such damage can be recovered the plaintiff
must
606

606

PHILIPPINE REPORTS ANNOTATED

Daywalt vs. Corporacin de PP. Agustinos Recoletos.

show that the particular condition which made the damage

a possible and likely consequence of the breach was known
to the defendant at the time the contract was made.
The statement that special damages may be recovered
where the likelihood of such damages flowing from the
breach of the contract is contemplated and foreseen by the
parties needs to be supplemented by a proposition which,
though not enunciated in Hadley vs. Baxendale, is yet
clearly to be drawn from subsequent cases. This is that
where the damage which a plaintiff seeks to recover as
special damage is so far speculative as to be in
contemplation of law remote, notification of the special

conditions which make that damage possible cannot render

the defendant liable therefor. To bring damages which
would ordinarily be treated as remote within the category
of recoverable special damages, it is necessary that the
condition should be made the subject of contract in such
sense as to become an express or implied term of the
engagement. Horne vs. Midland R. Co. (L. R., 8 C. P., 131)
is a case where the damage which was sought to be
recovered as special damage was really remote, and some
of the judges rightly placed the disallowance of the damage
on the ground that to make such damage recoverable, it
must so far have been within the contemplation of the
parties as to form at least an implied term of the contract.
But others proceeded on the idea that the notice given to
the defendant was not sufficiently full and definite. The
result was the same in either view. The facts in that case
were as follows: The plaintiffs, shoe manufacturers at K,
were under contract to supply by a certain day shoes to a
firm in London for the French government. They delivered
the shoes to a carrier in sufficient time f or the goods to
reach London at the time stipulated in the contract and
informed the railroad agent that the shoes would be thrown
back upon their hands if they did not reach the destination
in time. The defendants negligently failed to forward the
good in due season. The sale was therefore lost, and the
market having fallen, the plaintiffs had to sell at a loss.
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VOL. 39, FEBRUARY 6, 1919.

607

Ahern vs. Julian.

In the preceding discussion we have considered the

plaintiff's right chiefly as against Teodorica Endencia and
what has been said suffices in our opinion to demonstrate
that the damages laid under the 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 principal in the contract.
Our conclusion is that the judgment of the trial court
should be affirmed, and it is so ordered, with costs against
the appellant.
Arellano, C. J., Torres, Carson, Araullo, Malcolm,
Avancea, and Moir, JJ., concur.
Judgment affirmed.
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