G.R. No. 79899 April 24, 1989
D. ANNIE TAN, petitioner, vs. COURT OF APPEALS, CHINA BANKING CORPORATION, GEORGE LAUREL TAN, TEODORA TAN ONG, ROSA TAN, ROSITA TAN, and MAURO UMALI TAN, respondents.

FACTS

Tan Tiong Tick and his wife mortgaged a property to China Banking Corporation. Upon Tan Tiong Tick’s death, the bank foreclosed the mortgage and acquired the property at auction. The heirs, including petitioner D. Annie Tan and her siblings, failed to redeem the property within the statutory period. Subsequently, the heirs and China Bank entered into an agreement dated August 3, 1973, granting the heirs the right to repurchase the property for P180,000 on or before August 31, 1974. As the deadline approached, the other heirs made no concrete efforts to raise funds. On August 30, 1974, D. Annie Tan alone tendered a manager’s check for the full repurchase amount to the bank. However, the bank official insisted on executing the deed of sale in favor of all six heirs collectively. D. Annie Tan then filed an action seeking reconveyance of the entire property to her alone.

ISSUE

Whether D. Annie Tan, by exclusively providing the repurchase price, acquired sole ownership of the property, or whether the repurchase merely restored the property to the co-ownership of all the heirs.

RULING

The Supreme Court ruled in favor of D. Annie Tan, granting her sole ownership. The legal logic centers on the nature of the right granted by the August 3, 1973 agreement and the principle of waiver. The Court clarified that the agreement created an option to buy, not a right of legal redemption. This option was a personal privilege granted collectively to the heirs, which any of them could exercise. The other heirs, by their inaction and failure to contribute funds despite the clear deadline, impliedly waived their individual rights under this option. There was no evidence of a collective effort or a pooling of resources; D. Annie Tan secured the funds independently through her own business connections.
Consequently, when she exercised the option with her exclusive capital, the benefit accrued solely to her. The lower courts erred in applying the principle that a repurchase by one co-owner inures to the benefit of all. That principle governs cases of legal redemption under the Civil Code, not the exercise of a contractual option to buy. Since the other heirs effectively relinquished their opportunity, they could not claim a share in the property acquired solely through D. Annie Tan’s initiative and funds. The Court found the equities also favored the petitioner, who undertook significant efforts and expenses to preserve the property. The bank was ordered to execute the deed of sale in her favor alone.