Consolidation of ownership by mortgagee after expiration of redemption period terminates co-ownership. A co-owner who redeems a property with her own funds after such consolidation becomes the sole owner thereof.


Tan Tiong Tick, married to Tan Ong Hun was the registered owner of a parcel of land and its improvements in Binondo Manila. They had six children George Laurel, Teodora, Rosa, Rosita, Mauro Umali, and D. Annie Tan.

The land was mortgaged to China Bank to secure payment for several obligations. Tan Tiong Tick and Tan Ong Hun died without paying their obligations.

China Bank foreclosed on the mortgage. Two weeks before the redemption period expired, China Bank and the Heirs of Tan Tiong Tick entered into a settlement. It provided that the heirs were given right to repurchase even after the redemption period but before August 3, 1973.

The heirs failed to redeem before the legal redemption period so China Bank consolidated its ownership and was issued a new TCT. However, D. Annie Tan exercised the right to repurchase pursuant to the settlement using her personal funds. But the title to the land was registered in the name of all the heirs.

D. Annie Tan filed an action to reconvey the property to her and damages. RTC ruled that the property was co-owned by the heirs. CA affirmed.


Whether or not co-ownership among the heirs was dissolved by the foreclosure and consolidation of title by the bank after the redemption period has expired?


Yes. 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.

The records show, however, that when the petitioner purchased the disputed property on August 30, 1974, any co-ownership among the brothers and sisters no longer existed. The period to redeem had expired more than one year earlier, on July 6, 1973. The respondent China Bank consolidated its ownership and a new title was issued in the bank's name. When the heirs allowed the one year redemption period to expire without redeeming their parents' former property and permitted the consolidation of ownership and the issuance of a new title, the co-ownership was extinguished.

Since D. Annie Tan used her personal fund to repurchase the property, she is the lawful sole owner. The respondent China Banking Corporation is ordered to execute the deed of sale over the disputed property in favor of the petitioner alone.