EN BANC

[G.R. No. 13505. February 4, 1919.]

GEO. W. DAYWALT, plaintiff and appellant, vs. LA

CORPORACION DE LOS PADRES AGUSTINOS RECOLETOS, ET
AL., defendants and appellees.

C.C. Cohn and Thos. D. Aitken for appellant.

Crossfield & O'Brien for appellee.

SYLLABUS

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 for failure to
deliver land which he has contracted to deliver is the value of the use and
occupation of the land for the tune during which it is wrongfully withheld.

DECISION

STREET, J : p

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
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 should be perfected 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 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
found 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 part of the year 1914.1
The defendant, La Corporación 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 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 ascendancy 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
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 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 defendant corporation were pastured upon said
land during a period extending from June 1, 1909, to May 1, 1914.
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 defendant did not appeal, the propriety of allowing damages for
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 for 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
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 owner.
With reference 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
hectares 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 of 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 four 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 land by
the defendant was not continuous throughout the year 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, 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 for
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
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 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 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 Endencia to refrain from the performance of
her contract for 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 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 performance 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
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 the part 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 involved — to
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 enforced 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 co-participant 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 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 for the damages consequent upon
non-performance. 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
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 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 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 followed 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 for 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 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. Malice in the sense of ill-will 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 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 ill-will
towards the plaintiff, and the only object of the order in question was that
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 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.,
1 2 1 ; 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 interferes with a contract existing between others by means which,
under known gal 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 neddlesome 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 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 contracting in favor 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 defendant
corporation, having notice of the sale of the land in question to Daywalt,
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 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 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 for 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. Compañía Trasatlántica,
G.R. 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 applicable 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
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 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 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 reference to damages. Indemnification for
damages resulting from the breach of a contract is a right inseparably
annexed to every action for the fulfillment 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
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. 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
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 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 for the wrongful
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 well settled, indeed, as the rule that the measure of damages
for the wrongful detention of money is to be found 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 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 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
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 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 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 discussion 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 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
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 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 for 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.
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, Avanceña and Moir, JJ.,
concur.

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