Daywalt v La Corporacion de los Padres Agustinos Recoletos (1919)

With respect to third persons – interference by third persons (Art. 1314)

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. Measure of Damages for Breach of Contract
● The damages recoverable upon breach of contract are:
o Primarily
o The Ordinary
o Natural
o In a sense, the necessary damage resulting from the breach
● 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.
o If the damages are in a 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. Damages for Breach of Contract for Sale of Land – The damages ordinarily
recoverable against a vendor

4. Ruling and the Case

● Teodorica Endencia refused to carry out a contract for the sale of certain
land and resisted to the last an action for specific performance in court.
o Result: 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.
o NOTE: “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 in all events limited to such as might be reasonably
foreseen in the light of the facts then known to the contracting
parties.
o Where the purchaser desires 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 for 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
purchase in excess of the normal value of use and occupation.
● 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.
o “Ordinary damages is found in all breaches of contract where there
are no special circumstances to distinguish the case especially
from other contracts.
o 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”.
o In cases involving only ordinary damage, it 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.
o Ordinary damage is assumed as a matter of law to be within the
contemplation of the parties.
o Special damage, on the other hand, is such as follows less directly
from the breach than ordinary damage​. It is only found in cases
where some external condition, apart from the actual terms of the
contract exists or intervenes, as it were, to give a turn to affairs and
to increase damage in a way that the promissor, without actual
notice of the external condition, could not reasonably be expected
to foresee.

FACTS

1. Teodorica Endencia, unmarried woman, resident in the Province of

Mindoro, obligated herself to sell a parcel of land to Daywalt (plaintiff) in
Mangarin, Bulalacao, Mindoro.
2. It was agreed that the final deed of sale will be executed when the land
was registered in Endencia’s name.
a. Entered in said court in August 1906, but the Torrens certificate
was not issued until later.
b. Endencia and Daywalt made a new contract with a view to carrying
their original agreement into effect.
i. New contract was executed in the form of a deed of
conveyance and bears date of August 16, 1906.
 ii. 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.
3. Subsequently, the Torrens Title for the land was issued in her favor BUT
not immediately carried into effect
a. Not yet obtainable and in fact said certificate was not issued until
the period of performance contemplated in the contract had
expired.
b. Then they made another agreement, superseding the old.
4. BUT it was thereafter found that the land involved in the sale contained a
greater area than what Endencia originally thought and she became
reluctant to consummate the sale of the land to the plaintiff.
a. 1,248 hectares instead of 452 hectares
5. This reluctance was due to the advice of La Corporacion (defendant),
which exercised a great moral influence over her.
a. Defendant is a religious corporation. It is the owner of a large tract
of land as the San Jose Estate on the island of Mindoro, which was
sold to the Government of the Philippine Islands in the 1909.
b. The same corp also owned another estate on the same island
immediately adjacent to the land to which Endencia sold to
Daywalt.
c. Fr. Isidro Sanz, member of the order, rep on the management of
the farms, had been long well aquainted with Endencia and exerted
an influence and ascendency due to his religious character as well
as to the personal friendship which existed between them.
d. Endencia 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 Fr. Sanz
and other members of his order with whom she came in contact.
e. However, in advising Endencia that she was not bound by her
contract with the plaintiff, the defendant was not actuated with
improper motives but did so in good faith.
6. Because of Endencia’s refusal to make the conveyance, Daywalt instituted
a complaint for specific performance against her.
7. The lower court held that the defendant was liable to the plaintiff for the
use and occupation of the land in question and condemned the defendant
to pay the plaintiff Pesos 2,497.00 as damages.

RULING
1. Supreme Court held that she was bound by the contract and she was
ordered to make the conveyance of the land in question to the plaintiff.
2. The plaintiff then instituted an action against the defendant to recover the
following damages:
 a. The amount of P 24,000.00 for the use and occupation of the land
in question to pasture the cattle therein during the period that the
land was not conveyed by Endencia to the plaintiff;
b. The amount of P 500,000.00 for plaintiff’s failure to sell the land in
question to a sugar growing and milling enterprise
i. the successful launching of which depended on the ability
of Daywalt to get possession of the land and the Torrens
Title.
3. The Supreme Court affirmed the lower court on the payment of damages
of the defendant