Camitan vs. Fidelity Investment Corporation

A judicial admission by counsel is conclusive on the client and may be contradicted only by palpable mistake or no admission; neither honest mistake nor counsel's nervousness suffices. Consequently, where the genuine owner's duplicate is in another's possession, the land registration court lacks jurisdiction to issue a replacement, and its judgment is void and subject to attack at any time.

Petitioners Faustina Camitan and Damaso Lopez, together with Alipio Camitan, were the registered co-owners named in TCT No. T-(12110) T-4342 covering a 30,000-square-meter parcel in Maunong, Calamba, Laguna. Respondent Fidelity Investment Corporation claimed to have acquired the same property from the registered owners under a Deed of Absolute Sale dated December 16, 1967 and to have possessed the owner's duplicate copy since that sale. The controversy is governed by Section 109 of P.D. No. 1529, which authorizes the issuance of a replacement owner's duplicate after notice and hearing, and by the limited jurisdiction of a land registration court, which cannot adjudicate ownership in such proceedings.

Petitioners Faustina Camitan and Damaso Lopez, together with Alipio Camitan, were the registered co-owners of a 30,000-square-meter parcel of land located at Maunong, Calamba, Laguna, covered by TCT No. T-(12110) T-4342 and declared for tax purposes under Tax Declaration No. 14187. They paid the realty taxes on the property until 1993. In 1993, they filed a petition before the RTC of Calamba, Laguna, Branch 37, docketed as SLRC Case No. 1198-93-C, for the issuance of another duplicate copy of the TCT. They alleged that the owner's duplicate copy had been lost and could not be found despite diligent efforts; that a certification dated June 21, 1993 from the Register of Deeds of Calamba, Laguna showed no legal claims annotated at the back of the TCT; that they filed an affidavit of loss with the Register of Deeds; that they secured a certified true copy of the original TCT with the affidavit of loss annotated; that a mortgage annotated on the last page of the original certificate had already been paid; that the Register of Deeds could not cancel the mortgage until the owner's duplicate copy was presented to the bank; and that they were in possession of the subject property.

Fidelity Investment Corporation claimed a contrary interest. According to Fidelity, on December 16, 1967, it purchased the property covered by the TCT from the registered owners under a Deed of Absolute Sale of the same date. Upon execution of the deed and full payment of the purchase price, the vendors delivered to Fidelity their owner's duplicate copy of the TCT, which Fidelity had possessed since then. Fidelity also alleged that it had been in actual physical possession and continuous occupation of the property and had paid the real estate taxes due thereon.

Sometime in March 1995, upon verification with the Register of Deeds of Calamba, Laguna, Fidelity learned for the first time of the issuance of a second owner's duplicate copy, recorded under Entry No. 357701 dated May 26, 1994 and annotated on the TCT. Fidelity caused the sale in its favor to be annotated on the TCT on March 28, 1995 as Entry No. 384954. On April 26, 1995, Fidelity filed a Notice of Adverse Claim with the Register of Deeds, annotated as Entry No. 387483.

Fidelity then filed a petition for annulment of judgment and cancellation of title before the CA. It argued that the RTC order was null and void because the RTC had no jurisdiction, the owner's duplicate copy having been in Fidelity's possession all along, and because the respondents therein had no standing on account of the Deed of Absolute Sale they had executed in Fidelity's favor. Fidelity also claimed that petitioners perjured themselves before the RTC when they stated that the duplicate copy was lost and that they gave notice to all interested persons, because they failed to notify Fidelity despite knowledge of its possession of the property. Petitioners denied committing falsehoods and claimed that the RTC had jurisdiction. They submitted that Fidelity's long, unexplained, and questionable silence regarding its alleged possession of the owner's duplicate copy and the Deed of Absolute Sale, and its non-registration and non-titling of the property for about 27 years since the purported sale, were tainted with malice and bad faith, subjecting Fidelity to estoppel and laches.

By Resolution dated May 27, 1997, the CA gave due course to the petition for annulment of judgment and set a preliminary conference, directing Fidelity to bring the owner's duplicate copy of the TCT. At the preliminary conference, Fidelity's counsel presented what was claimed to be the owner's duplicate copy. Counsel for private respondents examined the certificate of title and admitted that it was the genuine owner's copy. Fidelity's counsel then manifested that they were no longer presenting other evidence. Counsel for private respondents prayed that an additional issue—the validity of the deed of sale in favor of Fidelity—be resolved; Fidelity's counsel objected on the ground of irrelevancy but, to expedite proceedings, agreed to have private respondents amplify their position in their memorandum.

In their Memorandum, private respondents retracted their counsel's admission on the genuineness of the owner's duplicate copy presented by Fidelity, citing honest mistake and negligence owing to his excitement and nervousness in appearing before the CA. They pointed to alleged irreconcilable discrepancies between the copy annexed to the petition and the exhibit presented by Fidelity during the preliminary conference, and reiterated the issue on the validity of the purported deed of sale. Fidelity countered that there were no discrepancies between the owner's duplicate copy it presented and the original copy on file with the Register of Deeds, that private respondents were bound by the judicial admission made by their counsel, and that the issue on the validity of the deed of sale should not be included. The CA found that the genuine owner's duplicate copy was in Fidelity's possession, as admitted by private respondents through counsel.

• Palpable Mistake: Petitioners argued that despite the judicial admission, the court could still consider other evidence; they retracted the admission in their Memorandum and claimed counsel was honestly mistaken and negligent due to excitement and nervousness in appearing before the CA. They contended that this amounted to palpable mistake.
• Discrepancies in the TCT: Petitioners pointed to alleged discrepancies between the certificate of title on file with the Register of Deeds and the owner's duplicate copy submitted by Fidelity during the preliminary conference.
• RTC Petition Circumstances: Petitioners cited the circumstances alleged in their RTC petition—that the TCT remained in their names, the property was declared for tax purposes in their names, they paid realty taxes, no one claimed the property per the Register of Deeds certification, Fidelity's delay in registering its claim, and the validity of the Deed of Absolute Sale—to support their position.

• Lack of Jurisdiction: Fidelity argued that the RTC order was null and void because the RTC had no jurisdiction, the owner's duplicate copy having been in Fidelity's possession all along.
• Lack of Standing and Perjury: Fidelity claimed petitioners had no standing to file the petition because of the Deed of Absolute Sale they executed in its favor, and that they perjured themselves when they stated the duplicate was lost and that notice was given to all interested persons, because they failed to notify Fidelity despite knowledge of its possession.
• Judicial Admission: Fidelity countered that there were no discrepancies between the owner's duplicate copy it presented and the original on file, and that private respondents were bound by their counsel's judicial admission.
• Ownership Issue Irrelevant: Fidelity objected to the inclusion of the issue on the validity of the deed of sale over the property.

• Palpable Mistake in Judicial Admission: Whether the CA erred in not considering the judicial admission of petitioners' counsel during the hearing in CA-G.R. SP No. 37291 as a palpable mistake.
• Jurisdiction to Issue Replacement Owner's Duplicate: Whether the RTC had jurisdiction to issue a new owner's duplicate copy of the TCT where the genuine owner's duplicate copy was in Fidelity's possession.
• Ownership in Land Registration Proceedings: Whether the RTC, acting as a land registration court, could pass upon the question of ownership over the property in the petition for issuance of a new owner's duplicate copy.

• Palpable Mistake in Judicial Admission: No. The admission was conclusive and could be contradicted only by palpable mistake or no admission; honest mistake and negligence due to counsel's excitement and nervousness did not suffice.
• Jurisdiction to Issue Replacement Owner's Duplicate: No. If the owner's duplicate copy has not been lost but is in the possession of another, the reconstituted title is void because the court never acquired jurisdiction, and the decision may be attacked at any time.
• Ownership in Land Registration Proceedings: No. A land registration court has limited jurisdiction and cannot pass upon actual ownership in a petition for issuance of a new owner's duplicate; ownership must be litigated in a separate suit.

• Palpable Mistake in Judicial Admission: Rule 129, Sec. 4, Rules of Court defines a judicial admission as one made by a party in the course of the proceedings in the same case, dispensing with proof of the matter admitted; it may be contradicted only by a showing of palpable mistake or that no admission was made. Counsel for petitioners admitted the genuineness of the owner's duplicate copy presented by Fidelity during the preliminary conference. The transcript showed that counsel had ample opportunity to examine the document, retract the admission, and point out the alleged discrepancies, but he chose not to contest it. The alleged discrepancies were more imagined than real. The claim of honest mistake and negligence due to counsel's excitement and nervousness did not amount to palpable mistake. Counsel's acts within the scope of his implied authority bind the client; the exception—where counsel's mistake is so great and serious that the client is deprived of his day in court or property without due process—was not present.
• Jurisdiction to Issue Replacement Owner's Duplicate: Section 109 of P.D. No. 1529 authorizes issuance of a replacement owner's duplicate only in case of loss or theft. With proof that the genuine owner's duplicate was in Fidelity's possession, the RTC Decision dated April 8, 1994 was properly annulled. If an owner's duplicate copy has not been lost but is in the possession of another, the reconstituted title is void because the court never acquired jurisdiction, and the decision may be attacked at any time.
• Ownership in Land Registration Proceedings: The circumstances cited by petitioners—the TCT and tax declarations in their names, payment of realty taxes, the Register of Deeds certification, Fidelity's delay in registering its claim, and the validity of the Deed of Absolute Sale—all pertain to ownership. In a petition for issuance of a new owner's duplicate in lieu of one allegedly lost, the RTC acts only as a land registration court with limited jurisdiction and cannot pass upon actual ownership. Ownership must be threshed out in a separate suit with a full-blown hearing. Possession of a lost owner's duplicate is not necessarily ownership; registration under the Torrens System does not create or vest title, and the certificate is merely evidence of title.

• Judicial Admission — Under Rule 129, Sec. 4, an admission, verbal or written, made by a party in the course of proceedings in the same case, dispenses with proof of the matter admitted and may be contradicted only by showing palpable mistake or that no admission was made. In this case, counsel's admission of the genuineness of Fidelity's owner's duplicate was conclusive; the later retraction failed.
• Palpable Mistake Exception — A judicial admission may be refuted only upon a proper showing of palpable mistake. Honest mistake, negligence, excitement, or nervousness of counsel do not amount to palpable mistake. The alleged discrepancies were found to be imagined rather than real, so the admission stood.
• Binding Effect of Counsel's Acts and Mistakes — Counsel has implied authority to do acts necessary or incidental to the prosecution and management of the suit; acts within that authority are regarded as the client's acts. Counsel's mistake or negligence generally binds the client. The exception is where the mistake is so great and serious that the client is deprived of his day in court or of his property without due process. No such exceptional circumstance was present.
• Limited Jurisdiction of Land Registration Court — In a petition for issuance of a new owner's duplicate in lieu of one allegedly lost, the RTC acts only as a land registration court with limited jurisdiction and cannot pass upon actual ownership. Ownership must be resolved in a separate suit. Petitioners' ownership arguments were therefore outside the land registration proceeding.
• Void Reconstituted Title Where Owner's Duplicate Not Lost — If an owner's duplicate copy of a certificate of title has not been lost but is in the possession of another, the reconstituted title is void because the court never acquired jurisdiction; the decision may be attacked at any time. Fidelity's possession of the genuine owner's duplicate rendered the RTC issuance void.
• Torrens Registration Does Not Vest Ownership — Registration under the Torrens System does not create or vest title; it is not a mode of acquiring ownership. The certificate of title is merely evidence of title. Possession of the owner's duplicate and registration do not equate to ownership.

• "A judicial admission is an admission, verbal or written, made by a party in the course of the proceedings in the same case, which dispenses with the need for proof with respect to the matter or fact admitted. It may be contradicted only by a showing that it was made through palpable mistake or that no such admission was made." — This defines the controlling rule on judicial admissions and the limited exception for palpable mistake, which the Court applied to reject petitioners' retraction.
• "In a catena of cases, we have consistently ruled that if an owner’s duplicate copy of a certificate of title has not been lost but is in fact in the possession of another person, the reconstituted title is void, as the court rendering the decision never acquires jurisdiction. Consequently, the decision may be attacked at any time." — This states the ratio decidendi on jurisdiction: the RTC's issuance of a replacement owner's duplicate was void because the genuine duplicate was in Fidelity's possession.
• "In a petition for the issuance of a new owner’s duplicate copy of a certificate of title in lieu of one allegedly lost, on which this case is rooted, the RTC, acting only as a land registration court with limited jurisdiction, has no jurisdiction to pass upon the question of actual ownership of the land covered by the lost owner’s duplicate copy of the certificate of title." — This defines the limited jurisdiction of the land registration court and explains why petitioners' ownership claims could not be resolved in the replacement proceeding.
• "Registration of real property under the Torrens System does not create or vest title because it is not a mode of acquiring ownership. The certificate of title, by itself, does not vest ownership; it is merely an evidence of title over the particular property described therein." — This is the Court's canonical statement on the Torrens system, used to clarify that possession of the owner's duplicate and registration are not equivalent to ownership.

• Juani vs. Alarcon, G.R. No. 166849, September 5, 2006, 501 SCRA 135, 153-154 — Cited for the exception to the rule that counsel's mistake binds the client: where counsel's mistake is so great and serious that the client is deprived of his day in court or of his property without due process, the client is not bound and the case may be reopened. The Court found the exception inapplicable.
• Feliciano vs. Zaldivar, G.R. No. 162593, September 26, 2006, 503 SCRA 182, 192 — Cited among cases holding that if an owner's duplicate copy of a certificate of title has not been lost but is in the possession of another, the reconstituted title is void because the court never acquired jurisdiction.
• Macabalo-Bravo vs. Macabalo, G.R. No. 144099, September 26, 2005, 471 SCRA 60, 72 — Cited for the same void-title rule and for the limited jurisdiction of the land registration court to pass upon ownership.
• Rexlon Realty Group, Inc. vs. Court of Appeals, G.R. No. 128412, March 15, 2002, 379 SCRA 306, 319 — Cited for the rule that a reconstituted title is void where the owner's duplicate was not lost and for the land registration court's lack of jurisdiction over ownership.
• Heirs of Susana De Guzman Tuazon vs. Court of Appeals, G.R. No. 125758, January 20, 2004, 420 SCRA 219, 227-228 — Cited for the rule that ownership questions must be threshed out in a separate suit with a full-blown hearing.
• Pineda vs. Court of Appeals, G.R. No. 114712, August 25, 2003, 409 SCRA 438, 448-449 — Cited for the principle that registration under the Torrens System does not create or vest title and that the certificate of title is merely evidence of title.

• Section 109, Presidential Decree No. 1529 (Property Registration Decree) — Governs notice and replacement of a lost owner's duplicate certificate of title. It requires due notice under oath to the Register of Deeds, a sworn statement of loss, and a petition by the registered owner or person in interest; the court may, after notice and due hearing, direct issuance of a new duplicate. Petitioners invoked this provision to obtain a replacement, but because the genuine owner's duplicate was in Fidelity's possession and not lost, the RTC's issuance was void for lack of jurisdiction.
• Rule 129, Section 4, Rules of Court — Defines judicial admission and provides that it may be contradicted only by showing palpable mistake or that no admission was made. Counsel's admission of the genuineness of Fidelity's owner's duplicate was conclusive; petitioners' claim of honest mistake and negligence did not satisfy the exception.

Justices Consuelo Ynares-Santiago (Chairperson), Ma. Alicia Austria-Martinez, Renato C. Corona, and Minita V. Chico-Nazario concurred.