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    Gaite Vs Fonacier-OBLICON

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    Czarina Lea D. Morado
    1) Fonacier owned mining claims and appointed Gaite as his attorney to develop the claims. Gaite then assigned development rights to his own company. 2) Fonacier later revoked Gaite's authority. They executed an agreement where Gaite transferred his rights back for P75,000, with P10,000 paid up front and P65,000 to be paid from future ore sales. 3) Payment of the P65,000 was secured by surety bonds, one of which expired. The Supreme Court ruled that Fonacier forfeited the right to the payment period by failing to renew the expired bond, impairing Gaite's security.

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    Gaite Vs Fonacier-OBLICON

    Uploaded by

    Czarina Lea D. Morado
    1K views1 page
    1) Fonacier owned mining claims and appointed Gaite as his attorney to develop the claims. Gaite then assigned development rights to his own company. 2) Fonacier later revoked Gaite's authority. They executed an agreement where Gaite transferred his rights back for P75,000, with P10,000 paid up front and P65,000 to be paid from future ore sales. 3) Payment of the P65,000 was secured by surety bonds, one of which expired. The Supreme Court ruled that Fonacier forfeited the right to the payment period by failing to renew the expired bond, impairing Gaite's security.

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    Case Digest for Oblicon

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    Gaite vs Fonacier-OBLICON

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    1) Fonacier owned mining claims and appointed Gaite as his attorney to develop the claims. Gaite then assigned development rights to his own company. 2) Fonacier later revoked Gaite's authority. They executed an agreement where Gaite transferred his rights back for P75,000, with P10,000 paid up front and P65,000 to be paid from future ore sales. 3) Payment of the P65,000 was secured by surety bonds, one of which expired. The Supreme Court ruled that Fonacier forfeited the right to the payment period by failing to renew the expired bond, impairing Gaite's security.

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    1K views1 page

    Gaite Vs Fonacier-OBLICON

    Uploaded by

    Czarina Lea D. Morado
    1) Fonacier owned mining claims and appointed Gaite as his attorney to develop the claims. Gaite then assigned development rights to his own company. 2) Fonacier later revoked Gaite's authority. They executed an agreement where Gaite transferred his rights back for P75,000, with P10,000 paid up front and P65,000 to be paid from future ore sales. 3) Payment of the P65,000 was secured by surety bonds, one of which expired. The Supreme Court ruled that Fonacier forfeited the right to the payment period by failing to renew the expired bond, impairing Gaite's security.

    Copyright:

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    Download as docx, pdf, or txt
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    Article 1198-Obligations and Contracts Gaite vs. Fonacier G.R. No.

    L-11827 July 31, 1961

    Facts: Fonacier was the owner and/or holder of 11 iron lode mineral claims, known as the Dawahan Group. By a "Deed of Assignment" dated September 29, 1952, Fonacier constituted and appointed Gaite as his true and lawful attorney-in-fact to enter into a contract with any individual or juridical person for the exploration and development of the mining claims. On March 19, 1954, Gaite in turn executed a general assignment conveying the development and exploitation of said mining claims into the Larap Iron Mines, a single proprietorship owned solely by and belonging to him, on the same royalty basis provided by the Deed of Assignment". Fonacier decided to revoke the authority granted by him to Gaite to exploit and develop the mining claims in question, and Gaite assented thereto subject to certain conditions. As a result, a "Revocation of Power of Attorney and Contract" was executed on December 8, 1954, wherein Gaite transferred to Fonacier, all his rights and interests on development and exploitation of said mining claims, in consideration of the sum of P75,000.00, P10,000.00 of which was paid upon the signing of the agreement, and b. The balance of P65,000.00 will be paid from and out of the first letter of credit covering the first shipment of iron ores and of the first amount derived from the local sale of iron ore made by the Larap Mines & Smelting Co. Inc., its assigns, administrators, or successors in interests. Payment of P65, 000.00 was secured by two surety bonds: One from Larap Mines and its stockholders and the other from Far Eastern Surety and Insurance Co. Issue: Whether or not Fonacier and his sureties are entitled to take full advantage of the period granted them for making the payment. Held: SC agreed with the court below that the appellant have forfeited the right court below that the appellants have forfeited the right to compel Gaite to wait for the sale of the ore before receiving payment of the balance of P65,000.00, because of their failure to renew the bond of the Far Eastern Surety Company or else replace it with an equivalent guarantee. The expiration of the bonding company's undertaking on December 8, 1955 substantially reduced the security of the vendor's rights as creditor for the unpaid P65,000.00, a security that Gaite considered essential and upon which he had insisted when he executed the deed of sale of the ore to Fonacier (Exhibit "A"). The case squarely comes under paragraphs 2 and 3 of Article 1198 of the Civil Code of the Philippines: "ART. 1198. The debtor shall lose every right to make use of the period: (1) . . . (2) When he does not furnish to the creditor the guaranties or securities which he has promised. (3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through fortuitous event they disappear, unless he immediately gives new ones equally satisfactory. Appellants' failure to renew or extend the surety company's bond upon its expiration plainly impaired the securities given to the creditor (appellee Gaite), unless immediately renewed or replaced.

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