Gaoiran vs. Court of Appeals

A judicial reconstitution of a certificate of title is void, and the court rendering the order of reconstitution had no jurisdiction over the subject matter, if the certificate of title was not actually lost or destroyed but is in fact in the possession of another person. The fact of loss or destruction of the owner's duplicate certificate of title is crucial in clothing the trial court with jurisdiction over judicial reconstitution proceedings; without such loss, there is nothing to reconstitute.

The case involves a 275-square meter parcel of land in Barangay Poblacion San Miguel & San Pedro, City of Laoag, covered by Transfer Certificate of Title No. T-34540 issued under the name of respondent Perlita S. Pablo, married to Timoteo Pablo. The dispute arose in the context of Presidential Decree No. 1529, which codifies the laws relative to registration of property, particularly Section 109 thereof, which provides the procedure for the notice and replacement of a lost duplicate certificate of title. The petitioner claimed to have purchased the property from Timoteo, who represented that he was authorized by his wife to sell it, and who surrendered the owner's duplicate copy of the title to petitioner in exchange for the purchase price.

The property at the center of the dispute is a 275-square meter parcel of land situated in Barangay Poblacion San Miguel & San Pedro, City of Laoag, covered by Transfer Certificate of Title No. T-34540 issued under the name of respondent Perlita S. Pablo, married to Timoteo Pablo. On September 22, 2009, petitioner Esperanza P. Gaoiran's friends introduced her to a certain Timoteo H. Pablo, Jr., who was allegedly looking for a buyer of a land registered under the name of his wife, Perlita. Timoteo offered for sale the subject property to petitioner and her husband, representing that he was authorized by his wife to sell the same. On the same day, petitioner delivered the purchase price of P500,000.00 to Timoteo, and in exchange, Timoteo surrendered the first owner's duplicate copy of TCT T-34540 to petitioner and undertook to deliver a deed of absolute sale signed by his wife on or before October 22, 2009. Timoteo, however, did not make good on his promise.

Demands were made by petitioner upon Timoteo to return the amount of P500,000.00 or to deliver the appropriate deed of conveyance, but to no avail. This prompted petitioner to institute before the Office of the City Prosecutor of Laoag City a complaint for Estafa against Timoteo. Finding probable cause, an Information for Estafa was filed before the RTC of Laoag City, Branch 14, docketed as Criminal Case No. 14608.

On June 8, 2012, petitioner executed an affidavit of possession with notice of lis pendens and brought the same to the Register of Deeds of Laoag City for annotation of an adverse claim in TCT T-34540. However, the RD-Laoag advised her that the complaint, being criminal and not civil in nature, could not be annotated in the original certificate of title. Meanwhile, on the claim that the owner's duplicate copy of the subject property's title was missing, respondent Mary Nyre Dawn Alcantara, representing herself as the niece of respondent Perlita and the latter's trustee of TCT T-34540, filed before the RTC of Laoag City on June 25, 2012 a petition praying that the owner's duplicate copy of TCT T-34540 that had been lost be declared null and void, and praying for the issuance of a second owner's duplicate copy. In support of the petition, Mary submitted an affidavit of loss on June 14, 2012, duly notifying the Register of Deeds of the lost title, which had been annotated at the back of TCT T-34540. Perlita also executed an affidavit stating that she had entrusted the owner's duplicate copy of TCT T-34540 to Mary as her administrator and overseer, but the same was lost in the latter's possession.

Finding sufficient, competent, and credible evidence in support of the petition for issuance of a new owner's duplicate certificate of title, the RTC of Laoag City, Branch 12, in a Decision dated August 28, 2012, ordered the issuance of a second owner's duplicate copy of TCT T-34540 and declared the lost owner's duplicate copy as null and void. On May 17, 2013, petitioner instituted before the CA a petition for annulment of judgment seeking to annul the August 28, 2012 RTC Decision. Petitioner averred that it was only on April 10, 2013, upon her inquiry with the RD-Laoag about the status of the title, that she discovered that a second owner's duplicate copy of TCT T-34540 was issued in favor of Perlita pursuant to an affidavit of loss executed by Mary on June 14, 2012. Petitioner contended that the reconstituted title was obtained by the respondents by means of fraud and deceit, and that the RTC had no jurisdiction to issue a new title as the first owner's duplicate copy of TCT T-34540 was never lost and was in her possession all along. The alleged lost TCT was in fact offered in evidence by petitioner before the CA, and private respondents did not contest the genuineness and authenticity of the same.

• Improper Remedy / Grave Abuse of Discretion: Petitioner insisted that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the petition for annulment of judgment, because the existence of the owner's duplicate copy of TCT T-34540 in her possession rendered the RTC devoid of any jurisdiction to entertain Mary's petition for issuance of a second owner's duplicate copy.
• Nature of the Petition: Petitioner argued that the petition for annulment of judgment she filed before the CA was not an attack upon TCT T-34540, the main purpose of which was the annulment of the August 28, 2012 RTC Decision granting the reconstitution of TCT T-34540, despite the fact that the first owner's duplicate copy thereof was never lost; the cancellation of the reconstituted title was only a necessary consequence of the annulment of the assailed RTC Decision.
• Lack of Jurisdiction: Petitioner argued that since the first owner's duplicate copy of TCT T-34540 was not in fact lost, the CA committed grave abuse of discretion in not annulling the August 28, 2012 RTC Decision on the ground of lack of jurisdiction.

• Improper Remedy: Respondents countered that the petition for certiorari should be dismissed for being an improper remedy because the proper recourse to assail the dismissal of the Rule 47 petition filed with the CA is through a petition for review on certiorari under Rule 45 of the Rules of Court, it being a continuation of the original action filed before the CA.
• Late Filing: Respondents argued that even if the Court treats the petition as one under Rule 45, it must still be dismissed for late filing, and by reason of which, the assailed CA Decision and Resolution already attained finality.
• Absence of Exceptional Circumstances: Respondents averred that the instant case is devoid of highly exceptional circumstances as to warrant the invocation of liberal application of the rules.
• No Grave Abuse of Discretion: Respondents argued that even assuming that a Rule 65 petition may be availed of, it must still fail since the CA committed no grave abuse of discretion in dismissing the petition for annulment of judgment filed therewith.

• Procedural Remedy: Whether the CA committed grave abuse of discretion in dismissing the petition for annulment of judgment.
• Jurisdiction over Reconstitution: Whether the RTC had jurisdiction to issue a second owner's duplicate certificate of title when the original owner's duplicate copy was not lost but was in the possession of another person.

• Procedural Remedy: Yes, the CA committed grave abuse of discretion in dismissing the petition for annulment of judgment. The Court gave due course to the petition despite the procedural lapse of availing Rule 65 instead of Rule 45, in the interest of justice and to prevent further prolonging the proceedings, especially considering that petitioner presented a good cause for the proper and just determination of her case.
• Jurisdiction over Reconstitution: No, the RTC did not have jurisdiction over the reconstitution proceeding. Under Section 109 of PD 1529, for an order of reconstitution to be issued, it must be clearly shown that the certificate of title had been lost or destroyed; if a certificate of title has not been lost but is in fact in the possession of another person, then the reconstituted title is void and the court that rendered the decision had no jurisdiction.

• Procedural Remedy: The Court acknowledged that petitioner availed of the wrong mode of appeal when she filed a petition for certiorari under Rule 65 to assail the CA Decision and Resolution. Citing Mandy Commodities, Inc. vs. The International Commercial Bank of China, the Court noted that a party aggrieved by the decision of the CA in a petition for annulment of judgment should file an ordinary appeal under Rule 45, not a petition for certiorari under Rule 65. However, the Court recognized that the acceptance of a petition for certiorari, as well as the grant of due course thereto, is addressed to the sound discretion of the Court. The Court relaxed the rigid application of the rules of procedure to afford the parties the opportunity to fully ventilate their cases on the merits, as the ends of justice would be better served if the parties were given the chance to argue their causes and defenses. The Court gave due course to the petition in the interest of justice and to prevent further prolonging the proceedings, especially considering that petitioner presented a good cause for the proper and just determination of her case.
• Jurisdiction over Reconstitution: The Court found that the CA erred in denying petitioner's petition for annulment of judgment, holding that the same was a subtle experiment to collaterally dispute the owner's duplicate certificate of title issued in favor of Perlita in the reconstitution proceeding before the RTC. The Court cited Spouses Ibias vs. Macabeo and Alonso vs. Cebu Country Club, Inc. in describing reconstitution as the re-issuance of a lost duplicate certificate of title in its original form and condition, which does not determine or resolve the ownership of the land covered by the lost or destroyed title. Under Section 109 of PD 1529, for an order of reconstitution to be issued, it must be clearly shown that the certificate of title had been lost or destroyed. The Court cited Strait Times, Inc. vs. Court of Appeals, Serra Serra vs. Court of Appeals, Spouses Paulino vs. Court of Appeals, and Billote vs. Solis in reiterating the rule that if a certificate of title has not been lost but is in fact in the possession of another person, then the reconstituted title is void and the court that rendered the decision had no jurisdiction. In this case, petitioner clearly alleged that the owner's duplicate copy of TCT T-34540 was not really lost, as the same was surrendered to her by Timoteo and was in her possession all along. The alleged lost TCT was in fact offered in evidence by petitioner before the CA, and private respondents did not contest the genuineness and authenticity of the same. Thus, with evidence that the first owner's duplicate copy of TCT No. T-34540 was not lost but was actually in the possession of another, the RTC decision was null and void for lack of jurisdiction. The Court also addressed the CA's reliance on The Heirs of the Late Sps. Luciano P. Lim vs. The Presiding Judge of the Regional Trial Court of Quezon City, finding such reliance misplaced. In Sps. Lim, the Court affirmed the CA's dismissal of the petition for annulment of judgment not because the petition was a wrong recourse but because the petitioners therein were not real parties-in-interest to dispute the reconstitution, as the property claimed by them was entirely different and not even a part of the property covered by the reconstituted title. In contrast, in the instant case, the property covered by the reconstituted title is the same property covered by the first owner's duplicate copy of TCT T-34540 which petitioner presented in evidence before the CA. Moreover, in Sps. Lim, both parties raised issues of ownership and spuriousness of their respective titles, whereas in the instant case, the parties did not impugn their respective titles to the property in question; petitioner never questioned Perlita's ownership of the subject property, and neither did respondents challenge the genuineness and authenticity of the first owner's duplicate copy of TCT T-34540 submitted by petitioner. What petitioner sought was the annulment of the RTC Decision reconstituting TCT T-34540 on the ground that the first owner's duplicate copy thereof was never lost but was in fact in her possession all along.

• Reconstitution of Title — Reconstitution of a certificate of title is the re-issuance of a lost duplicate certificate of title in its original form and condition; it does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered thereby. The purpose of reconstitution is to have the title reproduced in exactly the same way it has been when the loss or destruction occurred. In this case, the Court applied this doctrine to hold that reconstitution presupposes the existence of an original certificate of title which was lost or destroyed; if there was no loss or destruction, there is actually nothing to reconstitute.
• Loss of Owner's Duplicate Certificate as Jurisdictional Fact — The fact of loss or destruction of the owner's duplicate certificate of title is crucial in clothing the trial court with jurisdiction over judicial reconstitution proceedings. If a certificate of title has not been lost but is in fact in the possession of another person, then the reconstituted title is void and the court that rendered the decision had no jurisdiction. It is the fact of the loss or existence of the owner's duplicate certificate, and not whether the process prescribed by applicable law was successfully complied with, that determines the presence or lack of jurisdiction of the trial court. The Court applied this doctrine to hold that since the first owner's duplicate copy of TCT T-34540 was not lost but was in petitioner's possession, the RTC did not validly acquire jurisdiction over the reconstitution proceeding.
• Lack of Jurisdiction as Ground for Annulment of Judgment — Under Section 2, Rule 47 of the Rules of Court, the only grounds for annulment of judgment are extrinsic fraud and lack of jurisdiction. Lack of jurisdiction refers to either lack of jurisdiction over the person of the defending party or over the subject matter of the claim. Where there is want of jurisdiction over a subject matter, the judgment is rendered null and void. A void judgment is in legal effect no judgment, by which no rights are divested, from which no right can be obtained, which neither binds nor bars any one, and under which all acts performed and all claims flowing out are void. The Court applied this doctrine in annulling the RTC Decision for lack of jurisdiction over the reconstitution proceeding.
• Collateral Attack on Certificate of Title — A certificate of title cannot be subject to collateral attack and can be altered, modified, or cancelled only in a direct proceeding in accordance with law. The Court distinguished this case from Sps. Lim, where the parties raised issues of ownership and spuriousness of their respective titles, which constituted a collateral attack. In the instant case, the parties did not impugn their respective titles; petitioner never questioned Perlita's ownership, and respondents did not challenge the genuineness and authenticity of the first owner's duplicate copy. What petitioner sought was the annulment of the RTC Decision on the ground of lack of jurisdiction, which required only showing that the owner's duplicate copy was not lost.

• "The reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its original form and condition. It does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself does not vest ownership of the land or estate covered thereby." — This passage, quoted from Spouses Ibias v. Macabeo and Alonso v. Cebu Country Club, Inc., defines the nature and purpose of reconstitution of title, which is central to the Court's analysis of the RTC's jurisdiction.
• "From the foregoing, it appears that for an order of reconstitution to be issued, it must be clearly shown that the certificate of title had been lost or destroyed. If a certificate of title has not been lost, but is in fact in the possession of another person, then the reconstituted title is void and the court that rendered the decision had no jurisdiction." — This passage states the controlling rule on the jurisdictional requirement of loss or destruction of the certificate of title in reconstitution proceedings, which is the ratio decidendi of the case.
• "Indubitably, the fact of loss or destruction of the owner's duplicate certificate of title is crucial in clothing the RTC with jurisdiction over the judicial reconstitution proceedings." — This passage emphasizes the jurisdictional significance of the fact of loss or destruction of the owner's duplicate certificate, which is the core principle applied in the case.
• "since the owner's duplicate certificate of title has not been lost, but was in the possession of William, the trial court did not acquire jurisdiction over the petition for the issuance of a new owner's duplicate certificate of title. Hence, the CA was correct in declaring the decision of the RTC as well as the second owner's duplicate certificate of title issued pursuant thereto a nullity. It is, therefore, the fact of the loss or existence of the owner's duplicate certificate, and not whether the process prescribed by applicable law was successfully complied with, that determines the presence or lack of jurisdiction of the trial court." — This passage, quoted from Billote v. Solis, articulates the rule that the fact of loss or existence of the owner's duplicate certificate, not procedural compliance, determines the trial court's jurisdiction.

• Mandy Commodities, Inc. vs. The International Commercial Bank of China, 609 Phil. 355 (2009) — Cited as controlling authority for the rule that a party aggrieved by the decision of the CA in a petition for annulment of judgment should file an ordinary appeal under Rule 45, not a petition for certiorari under Rule 65.
• Spouses Ibias vs. Macabeo, 793 Phil. 389 (2016) — Cited as authority defining reconstitution of title as the re-issuance of a lost duplicate certificate of title in its original form and condition, and for the rule that for an order of reconstitution to be issued, it must be clearly shown that the certificate of title had been lost or destroyed.
• Alonso vs. Cebu Country Club, Inc., 426 Phil. 61 (2002) — Cited as authority for the definition of reconstitution of title.
• Strait Times, Inc. vs. Court of Appeals, 356 Phil. 217 (1998) — Cited as authority for the rule that if a certificate of title has not been lost but is in fact in the possession of another person, then the reconstituted title is void and the court that rendered the decision had no jurisdiction.
• Serra Serra vs. Court of Appeals, 272-A Phil. 467 (1991) — Cited as authority for the same rule on lack of jurisdiction when the certificate of title was not lost.
• Spouses Paulino vs. Court of Appeals, 735 Phil. 448 (2014) — Cited as authority reiterating the rule that when the owner's duplicate certificate of title was not actually lost or destroyed but is in fact in the possession of another person, the reconstituted title is void because the court that rendered the order of reconstitution had no jurisdiction.
• Billote vs. Solis, 760 Phil. 712 (2015) — Cited as authority for the rule that it is the fact of the loss or existence of the owner's duplicate certificate, and not whether the process prescribed by applicable law was successfully complied with, that determines the presence or lack of jurisdiction of the trial court.
• The Heirs of the Late Sps. Luciano P. Lim vs. The Presiding Judge of the Regional Trial Court of Quezon City, 586 Phil. 310 (2008) — Distinguished from the instant case; the Court held that the CA's reliance on this case was misplaced because in Sps. Lim, the petitioners were not real parties-in-interest as the property claimed was entirely different from the property covered by the reconstituted title, and both parties raised issues of ownership and spuriousness of their titles, whereas in the instant case, the same property was involved and the parties did not impugn their respective titles.
• Sebastian vs. Spouses Cruz, 807 Phil. 738 (2017) — Cited as authority for the definition of lack of jurisdiction as a ground for annulment of judgment and the effect of a void judgment.

• Section 2, Rule 47, Rules of Court — Provides that the only grounds for annulment of judgment are extrinsic fraud and lack of jurisdiction. The Court applied this provision in determining that petitioner's ground of lack of jurisdiction was proper for a Rule 47 petition.
• Section 109, Presidential Decree No. 1529 — Provides the procedure for notice and replacement of a lost duplicate certificate of title, requiring that due notice under oath be sent by the owner or someone in his behalf to the Register of Deeds, and that upon petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate. The Court applied this provision in determining that the fact of loss or destruction of the owner's duplicate certificate is crucial in clothing the RTC with jurisdiction over judicial reconstitution proceedings.
• Section 48, Presidential Decree No. 1529 — Cited by the CA in dismissing the petition for annulment of judgment, providing that a certificate of title cannot be subject to collateral attack. The Court effectively distinguished this provision's application, holding that the petition for annulment of judgment was not a collateral attack on the title but a direct challenge to the RTC's jurisdiction.
• Section 1, Rule 65, Rules of Court — Provides that a petition for certiorari under Rule 65 may be resorted to only in the absence of appeal or any plain, speedy, and adequate remedy in the ordinary course of law. The Court applied this provision in determining that petitioner availed of the wrong mode of appeal.

Justices Zalameda, Rosario, and Marquez concurred with the decision. Perlas-Bernabe, S.A.J., was on official business.

N/A — No dissenting opinion was noted in the provided case text.