Woodhouse Vs Halili, 93 Phil 526 (1953)

False Representatiom ; Damages, for dolo incident.—Plaintiff is entitled under the terms of the
agreement to 30 per cent of the net profits of the business. Against this amount of damages, the
damage the defendant suffered by plaintiff's misrepresentation that he had the exclusive franchise,
must be set off. (Art. 1101, Span. Civ. Code.) When the defendant learned, in Los Angeles, California,
that plaintiff did not have the exclusive franchise which he pretended be had and which he had agreed
to transfer to the partnership, his spontaneous reaction was to reduce the plaintiff's share from 30 per
cent to 15 per cent only, to which reduction plaintiff appears to have readily given his assent. Held: By
the misrepresentation of the plaintiff, he obtained a very high percentage (30%) of share in the profits.
Upon learning of the misrepresentation, defendant reduced plaintiff's share to 15 per cent, to which
defendant assented. The court can do no better than follow such appraisal of the damages as the parties
themselves had adopted.

The causal fraud which may be a ground for the annulment of a contract, and the incidental deceit
which only renders the party who employs it liable for damages. In order that fraud may vitiate consent,
it must be the causal (dolo causante), not merely the incidental (dole in- cidente), inducement to the
making of the contract (art. 1270, Span. Civ. Code; Hill vs, Yeloso, 31 Phil., 160). In the case at bar,
inasmuch as the principal consideration, the main cause that induced. defendant to enter into the
partnership agreement with plaintiff, was the ability of plaintiff to get the exclusive franchise to bottle
and distribute for the defendant or for the partnership, the false representation made by the plaintiff
was not the casual consideration, or the principal inducement, that led the defendant to enter into the
partnership agreement.