Republic Cement & Building Materials v. Jose K.E.L. Dy

Summary

This case involves a deed of sale where Jose Dy purchased a thermal power plant from Republic Cement for PHP10,500,000.00 with an obligation to remove it by December 31, 2007, subject to forfeiture of the purchase price upon failure. When the Danao City government refused to issue the required demolition permit due to expropriation plans, Dy sought reformation or annulment of the removal clause. The Supreme Court affirmed the Court of Appeals' decision releasing Dy from his obligation under Article 1266 of the Civil Code, finding legal impossibility of performance without his fault. The Court ordered Republic Cement to reimburse the full purchase price plus 6% annual interest to prevent unjust enrichment under Article 22 of the Civil Code, as Dy never took possession or profited from the thermal plant despite paying the full amount.