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Paolo Go

Daywalt vs. Corporacion de


PP. Agustinos Recoletos
(1919)
DOCTRINE: Interference by third persons
Art. 1314. Any third person who induces
another to violate his contract shall be liable
for damages to the other contracting party.
In this case though, the SC ruled that the
stranger to the contract cannot become
more extensively liable in damages for the
non-performance of the contract that the
party in whose behalf he intermeddles.
FACTS
1902 - Teodorica Endencia executed a
contract whereby she obligated herself to
convey to Geo Daywalt a tract of land in
Mindoro. (To be executed as soon as a
Torrens certificate should be procured in
the name of Teodorica Endencia.
1906 2nd agreement which made a new
contract with a view to carrying their
original agreement into effect. (Deed of
conveyance and area of land in this
contract was stated to be 452 hectares)
1908 3rd agreement which superseded
the 2nd , Endencia upon receiving the
Torrens title would deliver it to HSBC
Manila to be forwarded to Crocker
National Bank in San Francisco, so they
would deliver it to Daywalt.
Upon receiving the Torrens certificate,
Endencia was reluctung to transfer the
whole tract to Daywalt after having found
out that area of the tract inclosed in the
bounderies stated in the contract was
1240 hectares instead of 452.
1914 Daywalt obtained a decree for
specific performance in the SC which
ruled in his favor to transfer the whole
tract of land to him.
Defendant La Corporacion De los Padres
Recoletos, is a religious corporation. They
previously owned a tract of land adjacent
to the land sold by Endencia.
When the Torrens title was issued,
Endencia gave it to the corporation for
safe keeping. The corporation eventually
surrendered it when the SC decision in
Daywalts favor was decreed.
1909-1914, the corporation had to
transfer their cattle to the tract of land
Endencia sold to Daywalt. (They
previously had an agreement with
Endencia)

Daywalt sued the corporation for


damages for the period 1909-1914 and
was awarded P2497.
Daywalt was not satisfied with the amount
and appealed asking for P24,000 and
P500000 in damages saying that the
corporation, for its own selfish
purposes, unlawfully induced
Endencia to refrain from the
performance of her contract and to
withhold delivery of the Torrens title.

ISSUES:
1. WON 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 an
effort to resist an action for specific
performance. YES
2. WON the damages which Daywalt seeks
are too remote and speculative to be the
subject of recovery. YES
Ratio:
1.) Yes, by inducing Endencia not to
perform the contract the Corporation
can be held liable but not more
extensively liable than Endencia who is
the principal in the contract.
a. SC believes that the corporation
believed in good faith that the
contract between Daywalt and
Endencia could not be inforced.
(No malice in their part BUT,
malice in the sense of ill-will or
spite is NOT essential.)
b. Taken from Gilchrist vs. Cuddy:
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.
c. Article 1902 of the CC : 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.
d. The stranger to the contract
cannot
become
more
extensively liable in damages
for the non-performance of the
contract that the party in whose
behalf he intermeddles.

Paolo Go
2.) Yes, the damages in question are
special damages which were not within
contemplation of the parties when the
contract was made and too remote to
be the subject or recovery.
a. As to Endencia, 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.
b. The kind of damage contemplated
is special (found in cases 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 reasonable be expected to
foresee)