Spouses Orlando A. Rayos v. The Court of Appeals

Summary

This case involves a complex property transaction where Spouses Rayos sold their mortgaged property to Spouses Miranda through a contract to sell with assumption of mortgage. When PSB disapproved Miranda's loan assumption application, Miranda continued paying installments for Rayos' account. As the final payment approached, Rayos paid it himself, fearing Miranda's default, leading PSB to refuse Miranda's subsequent tender of payment. The Supreme Court clarified that the agreement was a contract to sell, not a contract of sale, with ownership retained until full payment. The Court distinguished this from a breach of contract, explaining that non-payment of the suspensive condition merely prevented the obligation to convey title from arising. However, since Rayos remained willing to accept the late payment of P29,223.67 and execute the deed of absolute sale, the Court ordered specific performance upon Miranda's payment of the amount Rayos had advanced. The decision demonstrates the legal distinction between contracts to sell and contracts of sale, particularly regarding suspensive conditions and the effects of non-fulfillment on contractual obligations.