114.

Heirs of Severina San Miguel vs CA

Article. 1409. The following contracts are inexistent and void from the beginning: x x x.(5) Those which contemplate
an impossible service.

FACTS:

Respondent, Dominador San Miguel, filed a petition with the CFI to issue title over lots in dispute which was a parcel
of land originally claimed by Severina San Miguel. Severina filed with the Court of First Instance of Cavite a petition
for review of the decision alleging that the land registration proceedings were fraudulently concealed by Dominador
from her.

To solve this problem, the heirs of Severina did not pursue the writs of possession and demolition, and instead
entered into a compromise with Dominador. According to the compromise, the heirs were to sell the land for P1.5M
with the TCT conditioned upon the purchase of another lot, which was not yet titled, at an additional sum of P300K.
It was agreed that the 300K shall be fulfilled by Dominado 2 months from the date of the execution of sale. 3 months
after, Dominador filed a complaint with the trial court a motion to deliver the owners copy of TCT, and admitted that
he did not pay the P300K for the reason that the petitioner failed to adduced proof of ownership.In time, petitioners
opposed stressing the condition in the compromise agreement. Since Dominador, et al. have not paid the amount of
three hundred thousand pesos (P300,000.00), then they were justified in withholding release of the certificate of
title.

Ruling of RTC: The court ruled in favor of the respondent. The respondent vendors are ordered to surrender to the
petitioners vendees.

Ruling of CA: The Court of Appeals promulgated a decision denying the appeal, and affirming the decision of the trial
court.

ISSUE: WoN respondent shall be compelled to pay the P300K despite the petitioner’s lack of evidence of ownership.

HELD: SC held in the negative. The respondent cannot be compelled to pay the P300k deposit. Severina’s heirs
anchor their claim on the compromise agreement, stressing on their freedom to stipulate and the binding effect of
contracts. This argument is misplaced. In Nool v. Court of Appeals, we held that if the sellers cannot deliver the
object of the sale to the buyers, such contract may be deemed to be inoperative. By analogy, such a contract may fall
under Article 1405, No. 5 of the Civil Code, to wit:
Article 1409. The following contracts are inexistent and void from the beginning: x x x.
(5) Those which contemplate an impossible service. x x x
Severina’s heirs insist that delivery of the certificate of title is predicated on a condition—payment of three hundred
thousand pesos (P300,000.00) to cover the sale of Lot 3 of LRC Psu 1312. We find this argument not meritorious. The
condition cannot be honored for reasons afore-discussed.To insist that Dominador pay the price of the untitled lot,
would result in Severina’s Heirs’ unjust enrichment. If the sellers can’t deliver the object of the sale to the buyer, such
contract may be deemed inoperative. Article 1183 also provides that: ” Impossible conditions, those contrary to good
customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the
obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be
valid.”

Hence, the non-payment of the P300k is not a valid justification for refusal to deliver the certificate of title.