Short answer. Yes. Article 764 lets the donor revoke a donation when the donee fails to comply with an imposed condition, and expressly allows the action to be exercised against the donee's heirs. Since the clinic was never built, your father may pursue revocation against the donee's heirs, subject to the four-year prescriptive period.
What the law says
The donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter. In this case, the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration laws. This action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee's heirs.
Civil Code, Article 764 — Revocation For Non-Compliance With Conditions. Read the full provision →
Failure to build the clinic is a failure of a condition
Article 764 gives your father this remedy directly: the donation shall be revoked at the instance of the donor, when the donee fails to comply with any of the conditions which the former imposed upon the latter. Building the clinic was the condition your father attached to the donation, and it was never fulfilled. That failure is exactly the trigger this article addresses, giving your father the right to seek revocation regardless of why the condition ultimately went unmet, including the donee's death before construction began.
The action reaches the donee's heirs directly
The article resolves your specific question about pursuing this against the donee's heirs: this action shall prescribe after four years from the noncompliance with the condition, may be transmitted to the heirs of the donor, and may be exercised against the donee's heirs. So the death of the donee does not shield the donation from revocation; the same right your father has against the donee can be exercised against whoever inherited from the donee, including presumably the land itself if it passed to them.
What happens once revocation succeeds
The article also describes the consequence of a successful revocation: the property donated shall be returned to the donor, the alienations made by the donee and the mortgages imposed thereon by him being void, with the limitations established, with regard to third persons, by the Mortgage Law and the Land Registration laws. So if revocation is granted, the land is meant to come back to your father, and any transfers or mortgages the donee made over it are void, though this is limited by protections the Mortgage Law and Land Registration laws extend to certain third persons.
The four-year clock is the key limitation to watch
The right to bring this action is not indefinite: it shall prescribe after four years from the noncompliance with the condition. Since the deadline is tied to when the noncompliance occurred rather than to the donee's death, your father should act promptly to determine when that four-year period began running and confirm the action against the donee's heirs is still timely, since letting the period lapse would extinguish the right to revoke regardless of how clearly the condition was breached.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Edgardo D. Dolar vs. Barangay Lublub (Now P.D. Monfort North) of the Municipality of Dumangas, herein represented by Its Punong Barangay, et al, G.R. No. 152663, November 18, 2005 — read the decision on LawPhil →
- Camarines Sur Teachers and Employees Association, Inc., represented by its President, Dr. Antonio A, G.R. No. 199666, October 7, 2019 — read the decision on LawPhil →
- Socorro T. Clemente, as substituted by Salvador T. Clemente vs. Republic of the Philippines, G.R. No. 220008, February 20, 2019 — read the decision on LawPhil →
- The Secretary of Education vs. Heirs of Rufino Dulay, Sr., et al, G.R. No. 164748, January 27, 2006 — read the decision on LawPhil →