New Durawood Co., Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: This case concerns the jurisdiction of a court to issue a new owner's duplicate of a Torrens certificate of title when the existing owner's copy has not been lost or destroyed. The underlying dispute arose when New Durawood Co., Inc. filed a petition for the judicial reconstitution of lost owner's duplicate certificates of title (TCT Nos. 140486, 156454, and 140485). Subsequently, New Durawood discovered that the original titles on file with the Register of Deeds had been cancelled and new titles were issued in the name of Durawood Construction and Lumber Supply, Inc. Procedural History: New Durawood Co., Inc. filed a petition for judicial reconstitution of lost owner's duplicate certificates of title in the Regional Trial Court (RTC) of Antipolo, Rizal. The RTC, finding the petition sufficient, issued an order declaring the lost owner's duplicate copies null and void and directing the issuance of new copies. Subsequently, New Durawood discovered the cancellation of its original titles and the issuance of new ones to Durawood Construction and Lumber Supply, Inc. New Durawood then filed a suit in the Court of Appeals (CA) seeking the annulment of the RTC's order and the cancellation of the new certificates. The CA dismissed New Durawood's petition, affirming the RTC's order. This led to the present petition for review before the Supreme Court. The Petition: Petitioner New Durawood Co., Inc. seeks review under Rule 45 of the Rules of Court, arguing that the Court of Appeals gravely abused its authority by not declaring the RTC's order null and void for want of jurisdiction and for fraud. Petitioner contends that the RTC lacked jurisdiction because the owner's duplicate certificates were not actually lost, but in the possession of its board chairman. Petitioner also argues that the reconstitution proceeding was obtained through fraud due to insufficient allegations in the petition and the nature of the affidavit of loss. The core of the petition is that the RTC did not acquire jurisdiction to issue new duplicate titles when the originals were not lost, rendering the subsequent issuance of new titles void.
Issue(s)
Whether the Court of Appeals gravely abused its authority in not declaring the order of respondent Judge Caballes in LRC Case No. 91-924 null and void for want of jurisdiction and in not declaring that the reconstitution of the owner's duplicate transfer certificates of title Nos. N-140486, N-140485 and 156454 was obtained through fraud; and whether the reconstitution was obtained through fraud. Which law governs the issuance of new owner's duplicate certificates of title in lieu of lost ones? Did the respondent trial court have jurisdiction to order the issuance of the new owner's duplicate certificates?
Ruling
The Supreme Court granted the petition, set aside and reversed the assailed decision of the Court of Appeals, annulled the proceedings in LRC Case No. 91-924, and declared the RTC order dated April 15, 1991, as well as the reconstituted Transfer Certificates of Title issued pursuant thereto (TCT Nos. 200100, 200101, and 200102 in the name of private respondent) NULL and VOID.
Ratio Decidendi
On the abuse of authority and fraud in obtaining reconstitution: While the Court of Appeals confined its discussion to fraud and ruled that extrinsic fraud was not proven, the Supreme Court found the appellate court's interpretation of corporate law flawed. The Court noted that the board resolution authorizing the branch manager, Gaw, to file the petition lacked a quorum, and thus Gaw had no express authority. The doctrine of apparent authority was inapplicable to Gaw as a mere branch manager. The Court concluded that Gaw's surreptitious filing of the petition without authority enabled respondent corporation to acquire the titles contrary to law. However, the Court emphasized that the issue of jurisdiction was paramount and, having found a lack of jurisdiction, the judgment necessarily fell, rendering the fraud issue secondary to the jurisdictional defect. On the governing law for issuance of new owner's duplicate certificates: The Court clarified that Section 109 of P.D. 1529 (amending R.A. 496) governs petitions for the issuance of new owner's duplicate certificates of title that are lost, stolen, or destroyed. Conversely, R.A. No. 26 applies only to the reconstitution of lost or destroyed original certificates of title on file with the Register of Deeds, as expressly provided under Section 110 of P.D. 1529. The procedure under R.A. 26, which involves publication and notice to adjoining owners and interested parties, is distinct from the procedure under P.D. 1529 for lost owner's duplicates, which requires due notice under oath to the Register of Deeds and a court hearing. On the jurisdiction of the respondent trial court: The Court held that the RTC did not acquire jurisdiction to order the issuance of new owner's duplicate certificates because the original owner's duplicate certificates were not actually lost or destroyed; they were in the possession of the petitioner's chairman. Citing Demetriou vs. Court of Appeals, the Court reiterated that if a certificate of title has not been lost but is in the possession of another person, the reconstituted title is void, and the court rendering the decision has not acquired jurisdiction. Therefore, the newly issued duplicates were null and void.
Main Doctrine
A court does not acquire jurisdiction to order the issuance of a new owner's duplicate of a Torrens certificate of title if the existing owner's copy has not been lost or destroyed. Such a reconstituted title is void.