Case Digest (G.R. No. L-11827) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Fernando A. Gaite vs. Isabelo Fonacier et al., decided on July 31, 1961 under the 1935 Constitution, Isabelo Fonacier held eleven iron lode mineral claims in Camarines Norte. By Deed of Assignment dated September 29, 1952 (Exh. 3), Fonacier appointed Gaite as his attorney-in-fact to develop these claims on a royalty basis of P0.50 per ton. On March 19, 1954, Gaite transferred this right to his single-proprietorship, Larap Iron Mines, and extracted an estimated 24,000 metric tons of ore after making extensive improvements. On December 8, 1954, Fonacier revoked Gaite’s authority by executing a “Revocation of Power of Attorney and Contract” (Exh. A), under which Gaite assigned all improvements and the extracted ore to Fonacier for P75,000—P10,000 paid at signing and P65,000 payable “out of the first letter of credit covering the first shipment of iron ores and/or the first amount derived from the local sale.” To secure the P65,000 balance, Fonacier provided two surety bonds: one... Case Digest (G.R. No. L-11827) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Proceedings
- Plaintiff-Appellee: Fernando A. Gaite; Defendants-Appellants: Isabelo Fonacier, George Krakower, Larap Mines & Smelting Co., Inc., Segundina Vivas, Francisco Dante, Pacifico Escandor, Fernando Ty.
- Case filed in the Court of First Instance of Manila; appeal to the Supreme Court due to aggregate claims exceeding ₱200,000.
- Underlying Transactions
- September 29, 1952 – Fonacier grants Gaite a power of attorney to explore the “Dawahan Group” iron lode claims on a royalty basis (≥ ₱0.50/ton).
- March 19, 1954 – Gaite assigns exploitation rights to his proprietorship, Larap Iron Mines, under the same royalty terms.
- Gaite develops the claims, installs roads and facilities, and extracts an estimated 24,000 metric tons of ore.
- Revocation and Sale Agreements
- December 8, 1954 – Fonacier revokes Gaite’s power of attorney; Gaite transfers all his interests (roads, improvements, the Larap name, and 24,000 tons of extracted ore) to Fonacier for ₱75,000 (₱10,000 paid upfront; ₱65,000 to be paid from the first letter of credit or local sale proceeds).
- Securities: Exhibit A-1 (Fonacier/principal; Larap Mines & stockholders as sureties) and Exhibit B (adds Far Eastern Surety & Insurance Co.; liability to attach only upon actual sale and expires December 8, 1955).
- Simultaneously, Fonacier grants Larap Mines & Smelting Co., Inc. full mining development rights for royalties.
- Default and Litigation
- No sale/shipment occurred before Exhibit B’s expiration (Dec. 8, 1955); ₱65,000 unpaid.
- Gaite demands payment; defendants invoke the unsatisfied “first sale” condition.
- Trial limited to (a) due date of the ₱65,000 obligation and (b) actual existence of 24,000 tons of ore. Lower court ruled in Gaite’s favor; defendants appealed.
Issues:
- Nature of the obligation to pay the ₱65,000 balance:
- Was it subject to a suspensive condition (payment only upon sale/shipment)?
- Or merely a suspensive period (deferred due date)?
- Effect of bond expiration on the right to defer payment:
- Did failure to renew or replace Exhibit B forfeit defendants’ right to the period?
- Existence and quantity of the ore:
- Were there approximately 24,000 tons in the stockpiles?
- If less, could appellants claim damages for short-delivery?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)