GAITE v.

FONACIER
 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 and all the roads built,
equipment, etc. for a certain consideration.
 A balance has to be paid.
o “The balance of SIXTY-FIVE THOUSAND PESOS (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.”
o To secure the balance, Fonacier delivered to Gaite a surety bond. In addition, Fonacier also delivered a
2nd security bond with an Insurance company as an additional surety (but it provided that the liability
of the surety company would attach only when there had been an actual sale of iron ore by the Larap
Mines & Smelting Co. for an amount of not less than P65,000.00, and that, furthermore, the liability of
said surety company would automatically expire on December 8, 1955)
 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.
 Defendants: obligation with a condition daw!
 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.

SC: Is the obligation to pay the balance one with a period or one with a suspensive condition?
 Only a SUSPENSIVE PERIOD! What characterizes a conditional obligation is the fact that its efficacy or obligatory
force (vs. demandability) is subordinated to the happening of a future OR uncertain event, so that if the
condition doesn’t happen the parties would stand as if the conditional obligation had never existed
 It can be gleaned from the obligation that a condition was NEVER the intention
o Use of certain words like “will be paid”  only its maturity or demandability is deffered. Gaite didn’t
assume any risk of not being paid
o It would be anomalous for it to be a condition since it is a contract of sale (spei-hope vs. rei spate-false
hope)
o If we follow petitioners position  condition upon will of debtor VOID
 If uncertain WON condition or period: the rules of interpretation would incline the scales in favor of the greater
reciprocity of interest since sale is essentially onerous
 The only rational view that can be taken is that the sale of the ore to Fonacier was a sale on credit, and not an
aleatory contract where the transferor, Gaite, would assume the risk of not being paid at all;
 We agree with the 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  note article 1198: lost of
benefit of the period! In this case, debtor impliedly impaired the guarantees
 Sub-issue: WON the lower court erred in not holding that there were lesser tons of iron ore in the stockpiles
sold to Fonacier.
o 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.
o 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 v. heirs of TOMAS
 Paula Cruz and heirs entered inth a contract of lease/purchase with Gonzales for ½ of a parel of land. The ff are
pertinent provisons:
o ‘1. The terms of this Contract is for a period of one year upon the signing thereof. After the period of
this Contract, the LESSEE shall purchase the property on the agreeable price of One Million Pesos
(P1,000,000.00) payable within Two (2) Years period with an interest of 12% per annum
o ‘2. The LESSEE shall pay by way of annual rental an amount equivalent to (P2,500.00) Pesos per hectare
o ‘9. The LESSORS hereby commit themselves and shall undertake to obtain a separate and distinct
T.C.T. over the herein leased portion to the LESSEE within a reasonable period of time which shall not
in any case exceed four (4) years, after which a new Contract shall be executed by the herein parties
 After 1 year, Gonzales didn’t exercise option to purchase immediately, but still remained in possession without
paying any further rentals
 Defendants tried to rescind the contract and ask Gonzales to vacate
 MAIN ISSUE: WON paragraph 9 is a condition precedent before the defendant is to pay the down payment to
purchase the land
 RTC: ‘Paragraph 9 of the contract clearly indicates that the lessors-plaintiffs shall obtain a Transfer Certificate of
Title in the name of the lessee within 4 years before a new contract is to be entered into under the same terms
and conditions as the original Contract of Lease/Purchase
o Can’t rescind contract! (only the injured party can in reciprocal obligations and that is Gonzales)
 CA: The transfer of title to the property in the appellee’s name cannot be interpreted as a condition precedent
to the payment of the agreed purchase price because such interpretation not only runs counter [to] the explicit
provisions of the contract but also is contrary to the normal course of things anent the sale of real properties.

SC: proper interpretation of paragraph 9

 Alleging that petitioner has not purchased the property after the lapse of one year, respondents seek to rescind
the Contract and to recover the property. Petitioner, on the other hand, argues that he could not be compelled
to purchase the property, because respondents have not complied with paragraph nine, which obligates them
to obtain a separate and distinct title in their names. He contends that paragraph nine was a condition
precedent to the purchase of the property.
 Proper interpretation: respondents were obligated to procure a TCT in their names before he could be obliged
to purchase the property in question.
o Medyo iffy ownership e. There is possibility they could not be the only heirs. AKA HINDI PA SA KANILA
BINEBENTA NA
o the clear intent of the ninth paragraph was for respondents to obtain a separate and distinct TCT in
their names  no one can give what one does not have
o They can sell hereditary interest tho but the INTENT was to purchase that specific land
 To repeat, petitioner can be compelled to perform his obligation under the first paragraph, only after
respondents have complied with the ninth. Unless and until respondents have done so, the first paragraph
cannot be enforced against petitioner.
 Verily, the petitioner’s obligation to purchase has not yet ripened and cannot be enforced until and unless
respondents can prove their title to the property subject of the Contract.
 ALSO MAIN ISSUE: 9th clause was a CONDITION PRECEDENT
o Condition: every future and uncertain event upon which an obligation or provision is made to depend
 if it doesn’t happen, CAN’T be obliged to purchase
 In this case, the obligation of the petitioner to buy the land cannot be enforced unless respondents comply with
the suspensive condition that they acquire first a separate and distinct TCT in their names. (clause 9 modifies
clause 1)!
 Respondents cannot recint contract because they have not caused the transfer of the TCT to their names 
there can be no recission of an obligation as yet non-existent, because the suspensive condition has not
happened
ROMERO v. CA
 Romero was looking for a land in Manila to put up a warehouse so Flores offered his land in Paranaque. They
entered into a deed of conditional sale with the following conditions
o “1. That the sum of FIFTY THOUSAND PESOS (P50,000.00) ONLY Philippine Currency, is to be paid upon
signing and execution of this instrument. 

o “ 2. The balance of the purchase price in the amount of ONE MILLION FIVE HUNDRED ELEVEN
THOUSAND SIX HUNDRED PESOS (P1,511,600.00) ONLY shall be paid 45 days after the removal of all
squatters from the above described property.
o “3. Upon full payment of the overall purchase price as aforesaid, VENDOR without necessity of demand
shall immediately sign, execute, acknowledged (sic) and deliver the corresponding deed of absolute
sale in favor of the VENDEE free from all liens and encumbrances and all Real Estate taxes are all paid
and updated. 

o “It is hereby agreed, covenanted and stipulated by and between the parties hereto that if after 60 days
from the date of the signing of this contract the VENDOR shall not be able to remove the squatters
from the property being purchased, the downpayment made by the buyer shall be
returned/reimbursed by the VENDOR to the VENDEE.

 Flores eventually tried to return the 50k since she could not get rid of the squatters, BUT Romero, thru his atty.,
refused it. Flores said that she decided to retain property, given that 60 days have elapsed from the contract
signing and there are still squatters
 Romero: there was already a perfected contract which was already partially executed!
o Even offered to kick out the squatters himself
o Told Flores she can’t ask for recission kasi she’s not the injured party!
 RTC: Flores no right to rescind and ordered her to cause squatter ejectment and execute deed of absolute sale
upon payment
 CA: ruled for Flores

SC:
 A perfected contract of sale may be either absolute or conditional BUT in determining the character, don’t look
at the name as much as its substance
 The term “condition” in the context of a perfected contract of sale pertains, in reality, to the compliance by one
party of an undertaking the fulfillment of which would beckon, in turn, the demandability of the reciprocal
prestation of the other party.
 A sale is at once perfected when a person (the seller) obligates himself, for a price certain, to deliver and to
transfer ownership of a specified thing or right to another (the buyer) over which the latter agrees.

o From moment of perfection = bound to fulfill it!
 The ejectment of the squatters is a condition the operative act of which sets into motion the period of
compliance by petitioner of his own obligation, i.e., to pay the balance of the purchase price. Private
respondent’s failure “to remove the squatters from the property” within the stipulated period gives
petitioner the right to either refuse to proceed with the agreement or waive that condition in consonance
with Article 1545 of the Civil Code.
 In this case: it is not a potestative condition dependent on his will which may be void in accordance with 1182,
BUT a MIXED condition (dependent of will of 3rd persons and of the vendor)
o If potestative = only condition is void! And not the obligation
 In contracts of sale (1545) allows obligeee to choose between proceeding with the agreement or waving the
performance of the condition  ROMERO has chosen to not apply the condition anymore!
o In any case only Romero can rescind since he is the injured party
 Wrt the 50 k downpayment: petitioner having opted to proceed with the sale, neither may petitioner demand
its reimbursement from private respondent nor may private respondent subject it to forfeiture.
PARKS v. PROVINCE OF TARLAC
 Cirer and Hill donated perpetually a parcel of land to the mun. of tarlac under certain specific conditions in the
public document
o Later on these same people sold the land to parks
 Parks alleged that the conditions of the donation had not been complied with + invoking the sale of the land to
him => prayed he be declared absolute owner
 LC: dismissed complaint
o Title already transferred to the mun. of tarlac
o Assuming it was revoked  it should have been consented to by the done or have been judicially
decreed
SC:
 The condition: one of the parcels donated was to be used absolutely and exclusively for the erection of a central
school and the other for a public park, the work to commence in both cases within the period of six months
from the date of the ratification by the parties of the document evidencing the donation
 True na hindi na complied with but it is NOT a condition precedent (suspensive condition)
o A condition precedent is that the acquisition of the right is not effected while said condition is not
complied with or is not deemed complied with. Nothing is acquired and there is only an expectancy of
right
o when a condition is imposed, the compliance of which cannot be effected except when the right is
deemed acquired, such condition cannot be a condition precedent
o if it were suspensive = Donor would be the owner until condition is complied with!
 in this case  construction could not be complied with except after giving effect to the donation (how can you
work on the land if it is not yours = invasion of title!)
 Parks: supposing that it is a condition subsequent, noncompliance is sufficient cause for the revocation of the
donation
o But period has already prescribed (statute of limitations)
 5 years for the revocation by the subsequent birth of children
 1 year for the revocation by reason of ingratitude
 10 years (onerous donation)

CENTRAL PHILIPPINE UNIVERSITY v. CA

 Don ramon lopez years ago executed a deed of. Donation in the name of CPU for several lots with the following
annotations
o The land described shall be utilized by the CPU exclusively for the establishment and use of a medical
college with all its buildings as part of the curriculum; 

o The said college shall not sell, transfer or convey to any third party nor in any way encumber said land;


o The said land shall be called “RAMON LOPEZ 
CAMPUS,” and the said college shall be under obligation

to erect a cornerstone bearing that name. Any net income 
from the land or any of its parks shall be
put in a fund to be 
known as the “RAMON LOPEZ CAMPUS FUND” to be 
used for improvements of
said campus and erection of a 
1 
building thereon.” 

 Heirs filed an action for annulment of donation, reconveyance, and damages against CPU kasi conditions
were not fulfilled (since 1939 daw)
o CPU negotiated with NHA to exchange lands
 CPU: right of action of heirs have prescribed, did not violate conditions, did not sell, transfer, convey to 3 rd
party
 TC: ruled for heirs
 CA: ruled for CPU!
o ruled that annotations were resolutory conditions
o The condition to utilize prop for medical school has no fixed period, so until a period is fixed, CPU
cant be said to have failed  remanded to TC to fix period
SC:
 This is an ONEROUS donation (one executed for a valuable consideration)
 1181 on conditional obligations: the acquisition or extinguishment of rights or things acquired shall depend
upon the happening of the event which constitutes the condition
 when a person donates land to another on the condition that the latter would build upon the land a school,
the condition imposed was not a condition precedent or a suspensive condition but a resolutory one
o the donation had to be valid before the fulfillment of the condition
o if there was no fulfillment or compliance with the condition, the donation may now be revoked
and all rights acquired by the donee will be lost
 re: prescription
o the condition imposed by the donor depended upon the exclusive will of the donee as to when
this condition shall be fulfilled  accepted condition when it accepted donation
o it has been held that its absolute acceptance and the acknowledgment of its obligation provided
in the deed of donation were sufficient to prevent the statute of limitations from barring the action
of private respondents upon the original contract which was the deed of donation
o uncertain when the CoA accrued  GR: from the day the corresponding action could have been
instituted
 in this case: begins with the expiration of a reasonable period and opportunity for
petitioner to fulfill what has been charged upon it by the donor (med school)
 CANNOT be quantified due to uncontrollable factors (laws, etc.)
o Apply art. 1197 if the obligation does not fix a period but from its nature and circumstances it can
be inferred that a period was intended
o In this case: fixing a period would be academic and cause delay in administering the decision. 50
years na eh!!
 Since the deed of donation is gratuitous, doubts referring to incidental circumstances of a gratuitous
contract should be resolved in favor of the least transmission of rights and interests. Records are clear and
facts are undisputed that since the execution of the deed of donation up to the time of filing of the instant
action, petitioner has failed to comply with its obligation as donee.  SLEPT ON OBLIGATION FOR AN
UNREASONABLE LENGTH OF TIME
 Dispositive: just and equitable to to declare donation ineffective

Dissent, Davide
 Is it gratuitous or onerous donation??  inconsistencies in wording
 No conditions to speak of in this case
o “condition” here used in the vulgar sense of obligations
or charges imposed by
the donor on the donee. It is used, not in its technical or strict legal
sense, but in its broadest sense.
o NOT an uncertain event
o In this case: A MODAL DONATION (donor imposes prestation on donee)
o The conditions imposed are the very obligations of the donation (build med school , use prop
for this, etc.)  UNCONDITIONAL OBLIGATIONS
 Reliance in parks MALI  we didn’t say resolutory condition yun
 1197 CAN be applied  don ramon surely contemplated a period. MAY NEED to determine a period