G.R. No.
L-11827 July 31, 1961  When by his own acts he has impaired said
GAITE vs. FONACIER
FACTS:
Fonacier, owner of 11 iron lode mineral claims
(Dawahan Group) in Camarines Norte, constituted a
"Deed of Assignment”, and appointed Gaite as his true
and lawful attorney-in-fact to enter into a contract for
its exploration and development on a royalty basis.
Gaite executed a general assignment to the Larap Iron
Mines owned solely by him. However, Fonacier decided
to revoke the authority granted which he assented.
Said revocation included the transfer to Fonacier the
rights and interests over the "24,000 tons of iron ore,
more or less" already extracted for a certain
consideration.
A balance has to be paid. To secure it, Fonacier
delivered to Gaite a surety bond. When it expired, no
payment had been made by Fonacier on the theory
that they had lost right to make use of the period
when their bond expired.
Gaite filed a complaint in court for its payment. The
lower court ruled the obligation was one with a term
and that the obligation became due and demandable
under Article 1198 of the New Civil Code.
Hence, the defendants jointly filed an appeal.
ISSUES:
1. WON the lower court erred in holding that the
obligation of Fonacier to pay Gaite is one with
a period or term and that the term has already
expired.
2. WON the lower court erred in not holding that
there were lesser tons of iron ore in the
stockpiles sold to Fonacier.
HELD:
On Issue No. 1
No.
If the suspensive condition does not take place, the
parties would stand as if the conditional obligation had
never existed. The parties did not intend such state.
The words of the contract expressed that obligation to
pay and intended Gaite to be paid.
The sale of the ore to Fonacier was a sale on credit,
not an aleatory contract. For their failure to renew the
bond, the appellant have forfeited the right to compel
Gaite to wait for the sale of the ore before receiving
payment of the balance.
Under paragraphs 2 and 3 of Article 1198 of the Civil
Code of the Philippines, the debtor shall lose every
right to make use of the period:
 When he does not furnish to the creditor
the guaranties or securities which he has
promised.
guaranties or securities after their
establishment, and when through fortuitous
event they disappear, unless he immediately
gives new ones equally satisfactory.
Gaite's acceptance of the surety company's bond with
full knowledge it would automatically expire within a
year was not a waiver of its renewal after the
expiration date. The balance became due and
payable thereafter.
On Issue No. 2
No.
This is a case of a sale of a specific mass of fungible
goods for a single price or a lump sum. The quantity of
"24,000 tons of iron ore, more or less," stated in the
contract is a mere estimate by the parties. A
reasonable percentage of error should be allowed
because neither of the parties had actually measured
of weighed the mass.
In addition, no provision was made in their contract for
the measuring or weighing of the ore sold in order to
complete or perfect the sale, nor was the price agreed
upon by the parties based upon any such
measurement. When Gaite complied with his
promise to deliver, the appellants, in turn, are
bound to pay the lump price.
GONZALES vs. HEIRS OF THOMAS AND PAULA
CRUZ G.R. No. 131784, September 16, 1999
FACTS: Petitioner Gonzales entered into a Contract
of Lease/Purchase with the heirs of Thomas and Paula
Cruz. Based on the said contract, the petitioner was
given an option to purchase the leased property after
the expiration of the one-year lease. The option was
subject to a condition contained in par. 9 of the
Contract which provided that: “The LESSORS (heirs) x
x x shall undertake to obtain a separate and distinct
TCT over the leased portion to the LESSEE within a
reasonable period of time which shall not in any case
exceed 4 years, x x x”. After the expiration of the
lease, petitioner Gonzales did not exercise his option to
purchase the property. He remained in possession
without paying the purchase price. Alleging breach of
the provisions of the Contract, the heirs filed a
complaint for the recovery of possession of the
property. For his part, the petitioner defended that
there was no breach since the heirs had not yet
registered the leased property in their names in
accordance with par. 9 of the Contract.
ISSUES: Whether or not the obligation was subject to
a condition
Held: YES.
 The clear intent of the 9th par. was for respondents
to obtain a separate and distinct TCT in their
 names. This was necessary to enable them to show
their ownership of the stipulated portion of the land
and their concomitant right to dispose of it. It is a
well-settled principle in law that no one can give
what one does not have – nemo dat quod non
habet.

 Accordingly, one can sell only what one owns or is

authorized to sell, and the buyer can acquire no
more that what the seller can transfer legally.
Because the 9th clause required respondents to
obtain a separate and distinct TCT in their names
and not in the name of petitioner, it logically follows
that such under taking was a condition precedent to
the latter’s obligation to purchase and pay for the
land.

 Put differently, petitioner’s obligation to purchase

the land is a conditional one and is governed by
Article 1181 of the Civil Code. Condition has been
defined as “every future and uncertain event upon
which an obligation or provision is made to
depend”. Without it, the sale of the property under
the Contract cannot be perfected, and the petitioner
cannot be obliged to purchase the property. The
obligatory force of a conditional obligation is
subordinated to the happening of a future and
uncertain event, so that if that event does not take
place, the parties would stand as if the conditional
obligation had never existed.