Go v. Cordero

 Go v. Cordero, 

G.R. No. 164703, 

May 4, 2010

DOCTRINE: Although a third person cannot possibly be sued for breach of contract

because only parties can breach contractual provisions, a contracting party may sue a

third person not for breach but for inducing another to commit such breach by virtue of

Article 1314.

FACTS:

Respondent is the Vice President of a company that ventures in the business of

marketing interisland vessels nad has been vested by Australian-based vessel

distributor Tony Robinson, the sole distributor of AFFA Catamaran in the Philippines.

The agreement between the two involves the commissions the former will receive for

each sale of the vessels. ACG Express Liner of Cebu City, a single proprietorship based

in Visayas, has purchased one high-speed Catamaran and had executed with Cordero

and Robinson, a shipbuilding contract.

Cordero made two trips to the AFFA Shipyard in Australia, and even accompanied Go

and his family to monitor the progress of the building of the vessel

However, Cordero later discovered that Go was dealing directly with Robinson when he

was informed by Dennis Padua of Wartsila Philippines that Go was canvassing for a

second catamaran engine from their company which provided the ship engine for the

first SEACAT. Pn June 1998, Cordero informed Go that such act of dealing directly with

Robinson violated his exclusive distributorship and demanded that they respect the

same, without prejudice to legal action against him and Robinson should they fail to

heed the same

ISSUE:

Are respondents may be held liable for damages to Cordero for his unpaid

commissions and termination of his exclusive distributorship appointment by AFFA?

HELD:

Yes. Go is liable for damages in favor of Cordero. While the Highest Court fails to

see that there indeed was a second purchase of respondents of such a vessel, it would

not absolve Go from being liable to Cordero moral and exemplary damages. While it is

true that a third person cannot possibly be sued for breach of contract because only

parties can breach contractual provisions, a contracting party may sue a third person

not for breach but for inducing another to commit such breach. The Civil Code provides:

Art. 1314. Any third person who induces another to violate his contract shall be

liable for damages to the other contracting party.

The Supreme Court also found that 3 of the elements of a Tort Interference were

present in this case:

(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.

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. Lack of malice, however, precludes damages. But it does not relieve

petitioners of the legal liability for entering into contracts and causing breach of existing

ones. Malice connotes ill will or spite, and speaks not in response to duty. It implies an

intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive