Florentino v.
Encarnacion petitioners-appellants filed their Reply to the Opposition reiterating their
G.R. No. L-27696, 30 September 1977
FACTS:
On May 22, 1964, the petitioners-appellants and the petitioner-appellee filed
with CFI an application for the registration under Act 496 of a parcel of
agricultural land located at Cabugao, Ilocos Sur. The application alleged
among other things that the applicants are the common and pro-indiviso
owners in fee simple of the said land with the improvements existing
thereon; that to the best of the knowledge and belief; there is no mortgage,
hen or encumbrance of any kind whatsoever affecting said land, nor any
other person having any estate or interest thereon, legal or equitable,
remainder, reservation at in expectancy; that said applicants had acquired
the aforesaid land thru and by inheritance from their predecessors in
interest, their aunt, Doña Encarnacion Florentino, and Angel Encarnacion
acquire their respective shares of the land thru purchase from the original
heirs, Jesus, Caridad, Lourdes and Dolores, all surnamed Singson, on one
hand and from Asuncion Florentino on the other. After due notice and
publication, the Court set the application for hearing. Only the Director of
Lands filed an opposition but was later withdrawn so an order of general
default was issued. Upon application of the applicants, the Clerk of Court
was commissioned and authorized to receive the evidence of the applicants
and ordered to submit the same for the Court’s proper resolution.
Exhibit O-1 embodied in the deed of extrajudicial partition (Exhibit O), which
states that with respect to the land situated in Barrio Lubong, Dacquel,
Cabugao, Ilocos Sur, the fruits thereof shall serve to defray the religious
expenses, was the source of contention in this case (Spanish text).
Florentino wanted to include ExhibitO-1 on the title but the Encarnacion
supposed and subsequently withdrawn their application on their shares,
which was opposed by the former.
The Court after hearing the motion for withdrawal and the opposition issued
an order and for the purpose of ascertaining and implifying that the products
of the land made subject matter of this land registration case had been used
in answering for the payment of expenses for the religious functions
specified in the Deed of Extrajudicial Partition which was no registered in the
office of the Register of Deeds from time immemorial; and that the applicants
knew of thisarrangement and the Deed of Extrajudicial Partition of August
24,1947, was not signed by Angel Encarnacion or Salvador Encarnacion,
Jr.-CFI: The self-imposed arrangement in favor of the Church is a simple
donation, but is void since the done has not accepted the donation and
Salvador Encarnacion, Jr. and Angel Encarnacion had not made any oral or
written grant at all so the court allowed the religious expenses to be made
and entered on the undivided shares, interests and participations of all the
applicants in this case, except that of Salvador Encarnacion, Sr., Salvador
Encarnacion, Jr. and Angel Encarnacion.”-the
previous arguments, and also attacking the jurisdiction of the registration
court to pass upon the validity or invalidity of the agreement Exhibit O-1,
alleging that such is litigable only in an ordinary action and not proper in a
land registration proceeding.
The Motion for Reconsideration and of New Trial was denied for lack of
merit, but the court modified in highlighting that the donee Church has not
showed its clear acceptance of the donation, and is the real party of this
case, not the petitioners-appellants.
ISSUE:
Whether or Not the court erred in concluding that the stipulation is just an
arrangement stipulation.
RULING:
YES, the court erred in concluding that the stipulation is just an arrangement
stipulation. It cannot be revoked unilaterally.
The contract must bind both parties, based on the principles (1) that
obligation wising from contracts has the force of law between the contracting
parties; and (2) that they must be mutuality between the parties band on
their essential equality, to which is repugnant to have one party bound by the
contract leaving the other free therefrom. The stipulation (Exhibit O-1) is part
of an extrajudicial partition (Exh. O) duly agreed and signed by the parties,
hence the same must bind the contracting parties thereto and its validity or
compliance cannot be left to the will of one of them. The said stipulation is a
Stipulation pour autrui. A stipulation pour autrui is a stipulation in favor of a
third person conferring a clear and deliberate favor upon him, and which
stipulation is merely a part of a contract entered into by the parties, neither of
whom acted as agent of the third person, and such third person may
demand its fulfillment provided that he communicates his acceptance to the
obligor before it is revoked.
Coquia v. Fieldmen’s Insurance Co.
G.R. No. L-23276, 29 November 1968
FACTS:
The Fieldmen’s Company (company) issued a common carrier accident
insurance policy to Manila Yellow Taxicab Co. Inc. (insured). In the policy it
stipulated that accident arising from a motor vehicle shall be insured with
respect to the death or bodily injured driver, conductor and/or inspector
riding in the motor vehicle.
Carlito Coquia met an accident while driving resulting in his death. The
insured asked the company for the insurance of Carlito. The company
refused to give insurance to the said insured, the paaboutts of Carlito filed a
complaint about a sum of money for the insurance of their dead child. The
company contends that parents had no contractual relation with the
company, thus they are not the proper parties in the said case.
ISSUE:
Whether or not the policy in question belong to such class of contracts pour
autrui.
RULING:
Yes.Pursuant to these stipulations, the Company “will indemnify any
authorized Driver  who is driving the Motor Vehicle” of the Insured and, in the
event of death of said driver, the Company shall, likewise, “indemnify his
personal representatives.” In fact, the Company “may, at its option, make
indemnity payable directly  to the claimants or heirs of claimants … it being
the true intention of this Policy to protect … the liabilities of the
Insured towards the passengers of the Motor Vehicle and the Public” — in
other words, third parties.
Thus, the policy under consideration is typical of contracts  pour autrui, this
character being made more manifest by the fact that the deceased driver
paid fifty per cent (50%) of the corresponding premiums, which were
deducted from his weekly commissions. Under these conditions, it is clear
that the Coquias — who, admittedly, are the sole heirs of the deceased —
have a direct cause of action against the Company, and, since they could
have maintained this action by themselves, without the assistance of the
Insured, it goes without saying that they could and did properly join the latter
in filing the complaint herein.
Constantino v. Espiritu
G.R. No. L-22404, 31 May 1971
FACTS:
The deed of absolute sale as the binding contract between appellant and
appellee conveyed the two storey house in favor of the appellee. The
appellee is entrusted of the properties of the appellant’s illegitimate son. The
appellee mortgaged the said property to Republic Savings Bank for the
payment of the appellee’s loan and thereafter the appellee offered them for
sale. The appellant then prayed for the issuance of a writ of execution
restraining the appellee and her agents to further alienate or disposed of the
said property. The appellant wanted to execute a deed of absolute sale in
favor of his son who is the beneficiary.
ISSUE:
Whether or not the contract between appellant and appellee was a contract
pour autrui.
RULING:
Yes. It appears then that, upon the facts alleged by appellant, the contract
between him and appellee was a contract pour autrui, although couched in
the form of a deed of absolute sale, and that appellant’s action was, in effect,
one for specific performance. That one of the parties to a contract is entitled
to bring an action for its enforcement or to prevent its breach is too clear to
need any extensive discussion. Upon the other hand, that the contract
involved contained a stipulation pour autrui amplifies this settled rule only in
the sense that the third person for whose benefit the contract was entered
into
may also demand its fulfillment provided he had communicated his
acceptance thereof to the obligor before the stipulation in his favor is
revoked.
It appears that the amended complaint submitted by appellant to the lower
court impleaded the beneficiary under the contract as a party co-plaintiff, it
seems clear that the three parties concerned therewith would, as a result, be
before the court and the latter’s adjudication would be complete and binding
upon them.
Daywalt v. Corp.
G.R. No. L-13505, 4 February 1919
FACTS:
Teoderica Endencia obligated herself to convey to Geo W. Daywalt a tract of
land. The deed should be executed as soon as the tittle of the land is
perfected. There was a decree recognizing Teoderica as the owner of land
but the Torrens certificate was not issued until later. The parties met
immediately upon the entering of the decree and made a new contract.
There was a development of Teoderica’s land as the Torrens title was issued
and in view of this development she became reluctant to transfer the whole
tract of land asserting that she never intended to sell the large amount of
land and that she was misinformed by the area of the land.
After the Torrens title was issued to Teoderica she gave it to the defendant
company for safekeeping in which the defendant did so. 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.
ISSUE:
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. 
RULING:
The Supreme Court held that the members of the defendant’s corporation, in
advising and prompting Teodorica Endencia not to comply with the contract
of sale, were actuated by improper and malicious motives.
In 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.
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 even 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.
So Ping Bun v. CA
G.R. No. 120554, 21 September 1999
FACTS:
Tek Hua Trading Co, through its managing partner, So Pek Giok, entered
into four (4) lease agreements with lessor Dee C. Chuan & Sons Inc.
(DCCSI) subject to a one-year term and with the condition that should the
lessee continue to occupy the premises after the term, the lease shall be on
a month-to-month basis. When the contracts expired, the parties did not
renew the contracts, but Tek Hua continued to occupy the premises. In
1976, Tek Hua Trading Co. was dissolved but later on formed Tek Hua
Enterprising Corp. So Pek Giok, managing partner of Tek Hua Trading, died
in 1986. So Pek Gioks grandson, petitioner So Ping Bun, occupied the
warehouse for his own textile business, Trendsetter Marketing.
Lessor DCCSI sent letters to Tek Hua Enterprises stating their intention in
increasing the rent and enclosed therein were new lease contracts for
signing. DCCSI warned that failure of the lessee to accomplish the contracts
shall be deemed a lack of interest on the lessees part and agreement to the
termination of the lease. Private respondents did not answer any of these
letters. Still, the lease contracts were not rescinded. Private respondent
Tiong sent a letter to petitioner advising to vacate all the stocks in Tek Hua
Enterprising Corp. Warehouse and giving them 14 days to vacate the
premises but still petitioner refused to vacate. Petitioner requested formal
contracts of the lease with DCCSI in favor of Trendsetter Marketing. So Ping
Bun claimed that after the death of his grandfather, So Pek Giok, he had
been occupying the premises for his textile business and religiously paid
rent. DCCSI acceded to petitioners request. The lease contracts in favor of
Trendsetter were executed. Now private respondents pressed for the
nullification of the lease contracts between DCCSI and petitioner.
ISSUE:
Whether or not So Ping Bun is guilty of tortous interference of a contract.
RULING:
Damage is the loss, hurt, or harm which results from injury, and damages
are the recompense or compensation awarded for the damage suffered.
One becomes liable in an action for damages for a nontrespassory invasion
of anothers interest in the private use and enjoyment of asset if (a) the other
has property rights and privileges with respect to the use or enjoyment
interfered with, (b) the invasion is substantial, (c) the defendants conduct is a
legal cause of the invasion, and (d) the invasion is either intentional and
unreasonable or unintentional and actionable under general negligence
rules.
The elements of tort interference are: (1) existence of a valid contract; (2)
knowledge on the part of the third person of the existence of a contract; and
(3) interference of the third person is without legal justification or excuse.
In the case before us, petitioners Trendsetter Marketing asked DCCSI to
execute lease contracts in its favor, and as a result, petitioner deprived the
respondent corporation of the latters property right. Clearly, the three
elements of tort interference above-mentioned are present in the instant
case.
As a general rule, a justification for interfering with the business relations of
another exists where the actors motive is to benefit himself. Such justification
does not exist where his sole motive is to cause harm to the other. Some
authorities believe that it is not necessary that the interferers interest
outweigh that of the party whose rights are invaded, and that an individual
acts under an economic interest that is substantial, not merely de minimis,
such that wrongful and malicious motives are negatived, for he acts in self-
protection. Moreover, a justification for protecting one’s financial position
should not be made to depend on a comparison of his economic interest in
the subject matter with that of others. It is sufficient if the impetus of his
conduct lies in a proper business interest rather than in wrongful motives
Where there was no malice in the interference of a contract, and the impulse
behind ones conduct lies in a proper business interest rather than in
wrongful motives, a party cannot be a malicious interferer. Where the alleged
interferer is financially interested, and such interest motivates his conduct, it
cannot be said that he is an officious or malicious intermeddler. In the instant
case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease
the warehouse to his enterprise at the expense of the respondent
corporation. Though petitioner took interest in the property of the respondent
corporation and benefited from it, nothing on record imputes deliberate
wrongful motives or malice on him.
Section 1314 of the Civil Code categorically provides also that, Any third
person who induces another to violate his contract shall be liable for
damages to the other contracting party. Petitioner argues that damage is an
essential element of tort interference, and since the trial court and the
appellate court ruled that private respondents were not entitled to actual,
moral or exemplary damages, it follows that he ought to be absolved of any
liability, including attorneys fees.
It is true that the lower courts did not award damages, but this was only
because the extent of damages was not quantifiable. While we do not
encourage tort interferers seeking their economic interest to intrude into
existing contracts at the expense of others, however, we find that the
conduct herein complained of did not transcend the limits forbidding an
obligatory award for damages in the absence of any malice. The business
desire is there to make some gain to the detriment of the contracting parties.
Lack of malice, however, precludes damages. But it does not relieve
petitioner of the legal liability for entering into contracts and causing a breach
of existing ones. The respondent appellate court correctly confirmed the
permanent injunction and nullification of the lease contracts between DCCSI
and Trendsetter Marketing, without awarding damages. The injunction saved
the respondents from further damage or injury caused by petitioners
interference.
Jose Lagon v. CA and Lapuz
G.R. No. 119107, 18 March 2005
FACTS:
Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through
an intestate court, two parcels of land located at Tacurong, Sultan Kudarat.
A few months after the sale, private respondent Menandro Lapuz filed a
complaint for torts and damages against petitioner before the Regional Trial
Court (RTC) of Sultan Kudarat.
Private respondent claimed that he entered into a contract of lease with the
late Bai Tonina Sepi Mengelen Guiabar over three parcels of land (the
property) in Sultan Kudarat, Maguindanao beginning 1964. One of the
provisions agreed upon was for private respondent to put up commercial
buildings which would, in turn, be leased to new tenants. The rentals to be
paid by those tenants would answer for the rent private respondent was
obligated to pay Bai Tonina Sepi for the lease of the land. The lease contract
ended but since the construction of the commercial buildings had yet to be
completed, the lease contract was allegedly renewed.
When Bai Tonina Sepi died, private respondent started remitting his rent to
the court-appointed administrator of her estate. But when the administrator
advised him to stop collecting rentals from the tenants of the buildings he
constructed, he discovered that petitioner, representing himself as the new
owner of the property, had been collecting rentals from the tenants. He thus
filed a complaint against the latter, accusing petitioner of inducing the heirs
of Bai Tonina Sepi to sell the property to him, thereby violating his leasehold
rights over it.
In his answer to the complaint, petitioner denied that he induced the heirs of
Bai Tonina to sell the property to him, contending that the heirs were in dire
need of money to pay off the obligations of the deceased. He also denied
interfering with private respondents leasehold rights as there was no lease
contract covering the property when he purchased it; that his personal
investigation and inquiry revealed no claims or encumbrances on the subject
lots
ISSUE:
Whether or not the purchase by Lagon of the subject property, during the
supposed existence of the private respondent’s lease contract with the late
Bai Tonina Sepi, constituted tortuous interference for which Lagon should be
held liable for damages.
RULING:
No, the interference of Lagon was with a legal justification (in furtherance of
a personal financial interest) and without bad faith
The elements of Tortuous Interference with contractual relation are: (1)
Existence of a valid contract; (2) Knowledge on the part of the third person of
the existence of the contract; (3) Interference of the third person without
legal justification or excuse.
As regard to the first element, the existence of a valid contract must be duly
established. In the given case the Court ruled that the notarized copy of
lease contract presented in court appeared to be an incontestable proof that
Bai Tonin Sepi and private respondent renewed their contract.  The second
element on the other hand, requires that there be knowledge on the part of
the interferer that the contract exists. In this case, Lagon had no knowledge
of the lease contract as he even conducted his own personal investigation
and inquiry, and unearthed no suspicious circumstance that would have
made a cautious man probe deeper and watch out for any conflicting claim
over the property; that an examination of the entire property title bore no
indication of the leasehold interest of private respondent and that even the
registry of property had no record of the same. As to the third element, a
party may be held liable only when there was no legal justification or excuse
for his action or when his conduct was stirred by a wrongful motive. To
sustain a case for tortuous interference, the other party must have acted with
malice or must have been driven by purely impious reasons to injure the
other. In the case, even assuming that private respondent was able to prove
the renewal of his lease contract with Bai Tonina Sepi, the fact was that he
was unable to prove malice or bad faith on the part of petitioner in
purchasing the property. Therefore, the claim of tortuous interference was
never established.