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SAN MIGUEL, CELESTINO, assisted by husband, ANTERO CELESTINO, represented by their Attorney-in-Fact
This case involves a parcel of land originally claimed by Severina San Miguel (petitioners' predecessor-in-interest,
hereafter, "Severina"). The land is situated in Panapan, Bacoor, Cavite with an area of six hundred thirty two square
meters (632 sq. m.), more or less.
The said property was subdivided into three (3) lots [LRC Psu-1312 (108sqm); LRC Psu-1313-Lot1 (299sqm); and
LRC Psu-1313 Lot2 (225sqm)] caused by Dominador without Severina's knowledge.
On Sept. 25, 1974, Resps. filed a petition to before CFI Cavite to issue title (Lots 1&2 of LRC Psu-1313) in their
names which was granted but Pets. appealed decision alleging that the land registration proceedings were
fraudulently concealed by Dominador from her. The Court resolved issue declaring said title null and void. ROD
Cavite issued TCT No. T-223511 in the names of Severina and her heirs (Pets.). Trial Court issued writ of
possession and an alias writ of demolition in favor of Pets. but they decided not to pursue the same and entered into
a compromise with resps. According to the compromise, Pets. were to sell the subject lots to Resps. for one and a
half million pesos (P1.5 M) with the delivery of Transfer Certificate of Title No. T-223511 (hereafter, "the certificate of
title") conditioned upon the purchase of another lot 11 which was not yet titled at an additional sum of three hundred
thousand pesos (P300,000.00). Basis: ["5. Na ang Lot 1 at Lot 2, plano LRC Psu-1313 na binabanggit sa itaas

na ipinagkasundo ng mga tagapagmana ni Severina San Miguel na kilala sa kasulatang ito sa taguring
LAPINA (representing Severina's heirs), na ilipat sa pangalan nina SAN MIGUEL (representing Dominador's
heirs) alang alang sa halagang ISANG MILYON AT LIMANG DAANG LIBONG PISO (P1,500,000.00) na
babayaran nina SAN MIGUEL kina LAPINA; "6. Na si LAPINA at SAN MIGUEL ay nagkakasundo na ang lote
na sakop ng plano LRC-Psu-1312, may sukat na 108 metro cuadrado ay ipagbibili na rin kina SAN MIGUEL
sa halagang TATLONG DAANG LIBONG PISO (P300,000.00)]
On the same day, on August 6, 1993, pursuant to the kasunduan, Pets. and Resps. executed a deed of sale
designated as "kasulatan sa bilihan ng lupa." On November 16, 1993, Resps. filed a motion praying that Pets.
deliver the owner's copy of the certificate of title to them. In time, Pets. opposed the motion stressing that under
the kasunduan, the certificate of title would only be surrendered upon Resps. payment of the amount of three
hundred thousand pesos (P300,000.00) within two months from August 6, 1993, which was not complied with.
Resps. admitted non-payment of three hundred thousand pesos (P300,000.00) for the reason that Pets. have not
presented any proof of ownership over the untitled parcel of land covered by LRC-Psu-1312. Apparently, the parcel
of land is declared in the name of a third party, a certain Emiliano Eugenio. However, Pets. countered that under
the kasunduan, Resps. has admitted their ownership over the parcel of land ["7. Na kinikilala ni SAN MIGUEL na

ang tunay na may-ari ng nasabing lote na sakop ng plano LRC Psu-1312 ay sina LAPINA at sila na ang
magpapatitulo nito at sina LAPINA ay walang pananagutan sa pagpapatitulo nito at sa paghahabol ng sino
mang tao;"], hence dispensing with the requirement to produce actual proof of title over it. RTC rendered judgment
in favor of Resps. and affirmed by CA. Pets. submit that CA erred and committed GAD when it held that the
kasunduan had no effect on the "kasulatan sa bilihan ng lupa"

WON Resps. may be compelled to pay the three hundred thousand pesos (P300,000.00) as agreed upon in
the kasunduan (as a pre-requisite for the release of the certificate of title), despite Pets. lack of evidence of
ownership over the parcel of land (LRC-Psu-1312)

The condition cannot be honored. Article 1183 of the Civil Code 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, x x x"
Hence, the non-payment of the three hundred thousand pesos(P300,000.00) is not a valid justification for refusal to
deliver the certificate of title.
Besides, we note that the certificate of title covers Lots 1 and 2 of LRC Psu-1313, which were fully paid for by

Dominador, et al. [RTC decision affirmed by CA which was also affirmed by SC: On January 23, 1995, the trial
"x x x . . . Considering that the Lots 1 and 2 covered by TCT No. T-223511 had already been paid since August
6, 1993 by the plaintiffs-vendees Dominador San Miguel, et al. (Vide, Kasulatan sa Bilihan ng Lupa, Rollo, pp.
174-176), herein defendants-vendors-Heirs of Severina San Miguel is hereby ordered (sic) to deliver the
aforesaid title to the former (Dominador San Miguel, et al.) within thirty (30) days from receipt of this order. In
case the defendants-vendors-Heirs of Severina San Miguel fail and refuse to do the same, then the Register of
Deeds of Cavite is ordered to immediately cancel TCT No. T-223511 in the name of Severina San Miguel and
issue another one in the name of plaintiffs Dominador San Miguel, et al.] Therefore, Pets. are bound to deliver
the certificate of title covering the lots.


Petitioner: Carlos Lim, Consolacion Lim, Edmundo Lim, Carlito Lim, Shirley Leodadia Dizon, and Arleen Lim
Respondent: Development Bank of the Philippines
On November 24 - Petitioners ontained a loan of P40,000.00 (Lim Account) from respondent DBP to finance their
cattle raising business. They executed a Promissory Note undertaking to pay the annual amortization with an
interest rate of 9% per annum and penalty charge of 11% per annum.
On December 30, 1970 - pets. obtained another loan from DBP in the amount of P960,000.00 (Diamond L Ranch
Account). They also executed a Promissory Note promising to pay the loan annually from August 22, 1973 until
August 22, 1982 with an interest rate of 12% per annum and a penalty charge of 1/3% per month on the overdue
amortization. To secure the loans, pets. executed a mortgage over real properties (11 titles reg. in ROD South
Cotabato) in favor of DBP. Due to violent confrontations between government troops and Muslim rebels in Mindanao
from 1972 to 1977, petitioners were forced to abandon their cattle ranch. As a result, their business collapsed and
they failed to pay the loan amortizations.
In 1978, petitioners made a partial payment in the amount of P902,800.00, leaving an outstanding loan balance of
P610,498.30, inclusive of charges and unpaid interest, as of September 30, 1978. In 1989, petitioners, represented
by Edmundo Lim (Edmundo), requested from DBP Statements of Account for the Lim Account and the Diamond L
Ranch Account. As of January 31, 1989, the total claims are: Lim Account - P177,075.99; DLR - P5,194,533.37.
Claiming to have already paid P902,800.00, Edmundo requested for an amended statement of account.
On July 3, 1992, DBP advised Edmundo to coordinate with Branch Head Bonifacio Tamayo, Jr. (Tamayo). Tamayo

promised to review the accounts. Tamayo informed Edmundo of the banks new guidelines for the settlement of
outstanding loan accounts under Board Resolution No. 0290-92. Based on these guidelines, petitioners outstanding
loan obligation was computed at P3,500,000.00 plus. Tamayo then proposed that petitioners pay 10%
downpayment and the remaining balance in 36 monthly installments. He also informed Edmundo that the bank
would immediately prepare the Restructuring Agreement upon receipt of the downpayment and that the conditions
for the settlement have been pre-cleared with the banks Regional Credit Committee. On December 15, 1992,
Edmundo paid the downpayment of P362,271.75 and was asked to wait for the draft Restructuring Agreement.
However, on March 16, 1993, Regional Credit Committee rejected the proposed Restructuring Agreement.
Edmundo, in a letter dated May 28, 1993, asked for the restoration of their previous agreement. In a letter dated
August 16, 1993, Tamayo informed Edmundo that the previous Restructuring Agreement was reconsidered and
approved by the Regional Credit Committee but no compliance was made by Edmundo. On September 21, 1993,
Edmundo received Notice that the mortgaged properties were scheduled to be auctioned on that day. To stop the
auction sale, Edmundo asked for an extension until November 15, 1993. In a letter dated January 6, 1994, Tamayo
informed Edmundo that the bank cancelled the Restructuring Agreement due to his failure to comply with the
conditions within a reasonable time. On July 11, 1994, the Ex-Officio Sheriff conducted a public auction sale of the
mortgaged properties for the satisfaction of petitioners total obligations in the amount of P5,902,476.34. DBP was
the highest bidder in the amount of P3,310,176.55. On July 13, 1994, the Ex-Officio Sheriff issued the Sheriffs
Certificate of Extra-Judicial Sale in favor of DBP covering 11 parcels of land. On July 28, 1995, pets. filed an action
for Annulment of Foreclosure and Damages with Prayer for Issuance of a Writ of Preliminary Injunction and/or
Temporary Restraining Order
Petitioner's Argument:
Relying on the Principle of Constructive Fulfillment, petitioners insist that their obligation should be deemed fulfilled
since DBP prevented them from performing their obligation by charging excessive interest and penalties not
stipulated in the Promissory Notes, by failing to promptly provide them with the correct Statements of Account, and
by cancelling the Restructuring Agreement even if they already paid P362,271.75 as downpayment.
Respondent's Argument:
The amounts in the Statements of Account vary because the computations were based on different cut-off dates
and different incentive schemes. It likewise maintains that the Promissory Notes and the Mortgage were not novated
by the proposed Restructuring Agreement.
WON pets.' obligation was extinguished or discharged under the principle of constructive fulfillment
Article 1186 of the Civil Code enunciates the doctrine of constructive fulfillment of suspensive conditions, which
applies when the following three (3) requisites concur, viz: (1) The condition is suspensive; (2) The obligor
actually prevents the fulfillment of the condition; and (3) He acts voluntarily.
Suspensive condition is one the happening of which gives rise to the obligation. It will be irrational for any Bank to
provide a suspensive condition in the Promissory Note or the Restructuring Agreement that will allow the debtorpromissor to be freed from the duty to pay the loan without paying it.
Besides, petitioners have no one to blame but themselves for the cancellation of the Restructuring Agreement. In
fact, when DBPs General Santos Branch forwarded the Restructuring Agreement to the Legal Services Department
of DBP in Makati, petitioners were required to pay the amount of P1,300,672.75, plus a daily interest of P632.15
starting November 16, 1993 up to the date of actual payment of the said amount. This, petitioners failed to do. DBP
therefore had reason to cancel the Restructuring Agreement.
Moreover, since the Restructuring Agreement was cancelled, it could not have novated or extinguished petitioners
loan obligation. And in the absence of a perfected Restructuring Agreement, there was no impediment for DBP to

exercise its right to foreclose the mortgaged properties.