DAYWALT V. LA CORPORACION
The Recoletos maintained a large
FACTS:
Teodorica Endencia, unmarried woman,
executed a contract whereby she obligated
herself to convey to Geo. W. Daywalt, a tract
of land. It was agreed that a deed should be
executed as soon as the title to the land
should be perfected – in the proceedings
before the Court of Land Registration and the
the torrens certificate should be prucured in
the name of Teodorica. A decree of
ownership in favor of Teodorica was entered
in the court but the Torrens title was not
issued. They made another contract carrying
their original agreement into effect. It is in a
form of deed of conveyance executed on
August 1906 with price of 4,000 and the area
of the land. This contract was not immediately
carried into effect because the Torrens
certificate was not yet obtainable. Another
contract was executed between them agreeing
that upon receiving the title to the land, it
should be surrendered to HSB. The torrens
was then issued to Teodorica but in the
course of the proceeding, it was found in the
survey that the area was much larger than
what she have known to be 452 ha. This made
her reluctant to transfer the land to the
purchaser.
Daywalt obtained a decree for specific
performance from the SC ordering Teodorica
to convey the land pursuant to the contract
they have executed, which contract has full
force and effect.
The defendant La Corporacion de los Padres
Recoletos, represented by Father Isidoro
Sanz, was the owner of another estate
adjacent to the land of Teodorica sold to
Daywalt.
herd of cattle on the farms referred to.
Father Sanz was fully aware of the existence
of the contract and the later developments
connected with it. He also knew Teodorica
who appears to be a woman of little
personal force, easily subject to influence,
and upon all the important matter of business,
she was accustomed to seek the advice of
Father Sanz. When the Torrens certificate was
finally issued, she delivered it for safekeeping
to the defendant corporation.
When the necessity for the Corporation to
transfer their cattle to the land, they entered
into an agreement whereby the cattle will be
pastured in the said land as Teodorica is still
in possession of the land.
Plaintiff sought to recover from the
corporation:
a) P24,000 as damages for the use and
occupation of the land in question by
reason of the pasturing of cattle
thereon.
RULING: It is proper for the TC to award
only P2,497 because the 24,000 is too high. It
was shown that the corporation after the
plaintiff recovered the possession of the land
paid fifty centavos per hectare annually and
this is already a reasonable rent. And the
occupation of the corporation to such land is
not continuous but was confined mostly to
the season when the forage obtainable on the
land of the defendant corporation was not
sufficient to maintain its cattle.
b) Plaintiff seeks to recover from the
defendant corporation the sum of
P500,000. As damages on the ground
that said corporation for its own
 selfish purposes, unlawfully induced
Teodorica to refrain from the
performance of her contract and
withhold delivery of the Torrens title
to the plaintiff without reasonable
cause.
The cause of action is based upon the
claim of the plaintiff, as the owner of
the land, who entered into a contract
with Wakefield for the sale of the land
for sugar growing and milling
enterprise, the successful launching of
which depended on the ability of
Daywalt to get possession of the land
and the Torrens certificate of title. To
accomplish this end, Daywalt returned
to the Philippines.
RULING: Two issues were presented:
1. 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.
2. Whether the damages which the
plaintiff seeks to recover under this
are too remote and speculative to be
the subject of recovery.
As to the first issue.
The Corporacion believed in good faith that
the contract could not be enforced and that
Teodorica would be wronged if it should be
carried into effect.
There are two views that governs this case:
1. American and English decisions as
adopted in GILCHRIST V. CUDDY held
that a person who is a stranger to a contract
may, by unjustifiable interference in the
performance thereof, render himself liable for
the damages consequent upon non-
performance. Malice in some form is generally
supposed to be an essential ingredient in cases
of interference 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.
In that case it was held 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.
2. No liability can arise from a
meddlesome and malicious interference with
contract relation unless the 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.
AIRFRANCE V. CARRASCOSO
FACTS:
Air France, issued to Carrascoso a “first class”
round trip airplane ticket from Manila to
Rome. From Manila to Bangkok, Carrascoso
travelled in “frist class”, but at Bangkok the
Manager of the airline forced plaintiff to
vacate the 'first class' seat that he was
occupying because there was a white man
who had a better right to the seat. When
asked to vacate the seat, Carrascoso refused
and told the manager that his seat would be
taken over his dead body. A commotion
ensued which caused many of the Filipinos
nervous. They came across him and pacified
him to give his seat to the white man. The
plaintiff reluctantly gave his first class seat in
the plane.
ISSUE:
Whether Carrascoso is entitled to moral
damages
Air France claims that Carrascoso’s action is
planted upon breach of contract, to authorize
an award for moral damages there must be
an averment of fraud or bad faith, and that
the CA fails to make a finding of bad faith.
Carrascoso’s complaint substantially aver:
First, that there was a contract to furnish
plaintiff a first class passage covering,
amongst others, the Bangkok-Teheran
leg; Second, That said contract was breached
when petitioner failed to furnish first class
transportation at Bangkok; and Third, That
there was bad faith when petitioner's
employee compelled Carrascoso to leave his
first class accommodation berth "after he was
already seated" and to take a seat in the tourist
class, by reason of which he suffered
inconvenience, embarrassments and
humiliations, thereby causing him mental
anguish, serious anxiety, wounded feelings
and social humiliation, resulting in moral
damages. It is true that there is no specific
mention of the term bad faith in the complaint.
But, the inference of bad faith is there; it
may be drawn from the facts and
circumstances set forth therein. The
contract was averred to establish the relation
between the parties. But the stress of the
action is put on wrongful expulsion.
The court quoted the decision of the CA in
justifying the existence of bad faith: The
defendant airline did not prove ‘any better',
nay, any right on the part of the 'white man’
to the 'First class’ seat that the plaintiff was
occupying and for which he paid and was
issued a corresponding 'first class' ticket.
"bad faith" contemplates a "state of mind
affirmatively operating with furtive design or
with some motive of self-interest or ill will or
for ulterior purpose."
A contract to transport passengers is quite
different in kind and degree from any other
contractual relation. The contract of air
carriage, therefore, generates a relation
attended with a public duty. Neglect or
malfeasance of the carrier's employees,
naturally, could give ground for an action for
damages. And this, because, although the
relation of passenger and carrier is
"contractual both in origin and nature"
nevertheless "the act that breaks the contract
may be also a tort".
GILCHRIST V. CUDDY

FACTS:

Appellee – Gilchrist

Gilchrist applied before the CFI a preliminary

injunction directing Cuddy to send to him the
film called Zigomar in compliance with an
alleged contract which had been entered into
between them, at the same time a preliminary
injunction was issued restraining Espejo from
receiving and exhibiting in their theater the
Zigomar until further order of the court. The
Espejo’s moved to dissolve the PI but was
denied, they filed their answer denying the
allegations and asked for P800 for the
wrongful issuance of the preliminary
injunction.

Gilchrist moved for the dismissal of the

complaint for the reason that there is no
further necessity for the maintenance of the
injunction. The court granted the motion as to
Cuddy but denied as to Espejo to prove that
the injunctions were wrongfully issued and the
amount of damages suffered.