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D. Annie Tan v.

CA, China Banking Corporation, George Laurel Tan, Teodora Tan Ong, Rosa Tan, and Maura
Umali Tan
Gutierrez, Jr., J.
April 24, 1989
G.R. No. 79899


Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and partly
for the benefit and convenience of the redemptioner, to afford him a way out of what might be a
disagreeable or inconvenient association into which he has thrust. It is intended to minimize co-ownership.
The law grants a co-owner the exercise of the said right of redemption when the shares of the other owners
are sold to "a third person." A third person, within the meaning of this Article, is anyone who is not a coowner.
(In this case, there was no co-ownership existing between the petitioner and her siblings at the time she
bought the property from the bank.)



Property in dispute is the 178 sq. meter of land and improvements owned by the parents of petitioner and
her 5 siblings who are the respondents in the case. Their father mortgaged the same to China Bank, but upon
his demise, it remained unpaid so the mortgage was foreclosed. The bank bought the said property in a
public auction and the Tan family wasnt able to redeem it within the one year period so that the bank
consolidated its title over the property, and was issued a new title. However, it later amicably settled with
the Tan children and gave them the right to repurchase the property for P180K on Aug. 3, 1973 until August
31, 1974, as confirmed in a letter of the bank signed by the parties. A day before the end of the period,
petitioner paid the full amount, but because of a bank officials prompting, it was made, not in her behalf,
but for all the heirs so that she had to share the property. She sued her siblings and the bank to reconvey the
property to her, but the trial court and the Court of Appeals said that since she and her siblings were coowners, her payment redounded to the co-ownership. This was reversed by the Supreme Court which ruled
that though they were co-owners during the redemption period, after it expired and at the time petitioner
made the payment, no more co-ownership exists between them. This is supported by the evidence showing
that there is no more inheritance to divide because the rest of their inheritance already doled out. The Court
also found that petitioners assent to the co-ownership was coerced by the bank manager so that her
conformity was null and void. The bank manager cannot impose a co-ownership upon her and her siblings
for it is discouraged by the law. Ultimately, the Court ruled in her favour and the bank was ordered to
execute a deed of sale over the property in her favour.

Tan Tiong Tick, married to Tan Ong Hun, was the registered owner of a 178 square meter parcel of
land and its improvements. He had six children and one of them was the petitioner.
On February 6, 1963, in order to secure payment of various obligations with China Bank for short,
Mr. and Mrs. Tan Tiong Tick mortgaged the disputed property to the bank. Tan Tiong Tick died on
December 22, 1969 without having paid his obligations.
The bank foreclosed the mortgage and it bought the property in the public auction. Tans wife and
children sued the bank and prayed for the nullity of the real estate mortgage executed by the
spouses Tan and the foreclosure sale conducted by the Sheriff.
The one year period redemption period expired without the property having been redeemed and so
the bank consolidated its ownership over it and was issued a new title. The bank and the Tan family
later amicably settled on Aug. 3, 1973 and they were given time to redeem the property until August
31, 1974, as evinced by a letter-agreement of the bank signed by some of the Tan siblings.
A day before Aug. 31, Annie issued a managers check worth P180K, but upon the insistence of a
bank official, the deed of sale returning the property was executed, not in her favor, but in favor of

all the heirs, her siblings, so that she had to share.

She sued the bank and her siblings, asking for the property to be reconveyed to her and for
damages, but the lower court only ordered her siblings to reimburse her for what she paid.
- The Court of Appeals affirmed the decision.
1. Whether or not there was co-ownership relationship between her and her siblings at the time
when she made the payment (NO)
a) Since the lot and its improvement were mortgaged by the deceased parents, there can be no question that
a co-ownership existed among the heirs during the period given by law to redeem the foreclosed property.
Redemption by one during this period would have inured to the benefit of all.
b) It had already expired and the bank already acquired a new title after consolidating its ownership over the
c) The non-existence of a common inheritance is supported by evidence showing that there was no more
inheritance to divide.


2. Whether or not the heirs may be considered as debtors in common, substituting for their parents in
liquidating the latters obligations (NO)
a) Upon the foreclosure of the mortgaged property and its purchase by China Bank as the highest bidder, the
proceeds of the auction sale were applied to the various debts of the Tan spouses. The obligation having
been extinguished, there was no more common debt and no legal subrogation arising when one pays the
debts properly accruing to several others.
b) Respondent China Bank contends that the letter agreement dated August 3, 1973 called for the
reconveyance of the land and improvements to all the heirs "in equal undivided shares."
There is no such stipulation in the letter. There is reference to a verbal agreement to reconvey to the "heirs
of your late father" but no requirement that everybody must share in the purchase or the offer would be
c) It shows that Mr. Dee tried to impose this requirement when he rejected Annies offer to buy the property
for herself alone. This was a case of vitiated consent as seen when he gave her only two choices agreeing
to his requirement or losing the family property forever to strangers. He also could not create a coownership relationship and impose a creditor-debtor relationship between the siblings.
(See summary and doctrine)
d) As can be seen on the back of the check which she issued, the annotation which says that the funds were
contributed by all the heirs was made by a bank representative. Even the banks legal counsel said that the
letter agreement
3. Whether or not her siblings contributed to the petitioner to raise the P180K (NO)
a) The courts cannot look with favor at parties who, by their silence, delay and inaction, knowingly induce
another to spend time, effort and expense in protecting their interests over the property by paying the buy
back money only to spring from ambush and claim title or interest over the property when the land and
building value have become higher.
b) At the time, Annie was already estranged from her siblings. There is no reason for her to collect the
money of the heirs and pay it to the bank because she is neither a son nor the eldest. When she even called
for a meeting to discuss how to redeem the property before the deadline, no one came.
c) Based on equity, considering how she spent her small fortune to recover her parents patrimony, she alone
deserves to be entitled to the property.


Petition granted. China Bank ordered to execute the deed of sale over the disputed property.

Prepared by: Eunice V. Guadalope