FERNANDO A.

GAITE, plaintiff-appellee,
vs.
ISABELO FONACIER, GEORGE KRAKOWER, LARAP MINES & SMELTING CO., INC.,
SEGUNDINA VIVAS, FRNACISCO DANTE, PACIFICO ESCANDOR and FERNANDO TY,
defendants-appellants.

FACTS

The case involves a dispute between defendant-appellant Isabelo Fonacier and

plaintiff-appellee Fernando A. Gaite over a mining agreement. Fonacier initially granted Gaite
the authority to exploit and develop certain mining claims, but later revoked it through a
"Revocation of Power of Attorney and Contract." In this document, Gaite transferred various
rights and interests to Fonacier, including the 24,000 tons of iron ore extracted from the mining
claims, in consideration for a total payment of P75,000. A surety bond was provided to secure
the payment, and a subsequent contract ceded mining rights to Larap Mines & Smelting Co.,
Inc. The key issues revolved around the due date of the P65,000 balance, with the lower court
determining that it became due and demandable when the surety bond expired on December 8,
1955. Additionally, the court addressed the quantity of iron ore in dispute. Judgment was
rendered in favor of Gaite, ordering defendants to pay him P65,000 with interest. Appellants
raised issues regarding the nature of the obligation and the quantity of iron ore, leading to their
appeal to the Supreme Court.

ISSUE

Whether or not the obligation of the defendants to pay the P65,000 balance became due
and demandable when the surety bond expired on December 8, 1955, is the specific issue in
this case.

RULING

In this case, the court upheld the lower court's ruling that the shipment or local sale of
iron ore was not a condition precedent, but rather a suspensive period or term for payment,
emphasizing that the contract language indicated the existence of the obligation with only its
maturity deferred. The court rejected appellants' argument and affirmed that appellants forfeited
the right to demand further time for payment when they failed to renew the surety bond, as
required by Article 1198 of the Civil Code. Additionally, the court addressed the issue of
short-delivery, finding no substantial difference in the estimated quantity of iron ore, thus
denying appellants' claim for damages. The decision affirmed the lower court's judgment in favor
of appellee Gaite, concluding that Gaite acted within his rights in demanding payment.

DOCTRINE

Doubts should be settled in favor of the greater reciprocity of interests, as provided by

Article 1378 of the Civil Code.