Rexlon Realty Group, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Respondent Alex L. David was the registered owner of two parcels of land in Molino, Bacoor, Cavite, covered by Transfer Certificates of Title (TCT) Nos. T-72537 and T-72538. On August 17, 1989, petitioner Rexlon Realty Group, Inc. (Rexlon) entered into an agreement with David for the purchase of these lands, as evidenced by an Absolute Deed of Sale. Subsequently, David filed a petition with the Regional Trial Court (RTC) of Cavite City, Branch 16, seeking the issuance of new owner's duplicate copies of TCT Nos. T-72537 and T-72538, alleging that the original owner's duplicate copies were lost. Procedural History: The RTC granted David's petition on March 1, 1994, directing the Register of Deeds to issue new duplicate titles. Rexlon then filed a petition for annulment of this RTC decision with the Court of Appeals (CA), alleging fraud, lack of due process, and grave abuse of discretion by the trial court. Rexlon later amended its petition to include Paramount Development Corporation of the Philippines (Paramount) as a respondent, after discovering that David had sold the properties to Paramount, resulting in new titles (TCT Nos. T-525664 and T-525665) being issued in Paramount's name. On November 19, 1996, the CA dismissed Rexlon's petition for annulment. The Petition: Rexlon filed this petition for review, arguing that the CA erred in not annulling the RTC decision. Rexlon contended that David committed fraud by misrepresenting that the owner's duplicate titles were lost when they had been delivered to Rexlon pursuant to a contract of sale. Rexlon also alleged denial of due process due to procedural lapses in the trial court proceedings, specifically the lack of specific notice to Rexlon and alleged flaws in the posting of the general notice. Rexlon sought the annulment of the RTC decision and the new titles issued to Paramount.
Issue(s)
Whether the Court of Appeals erred in failing to annul the decision of the trial court on the ground of fraud and lack of jurisdiction. Whether the issuance of new owner's duplicate certificates of title to David was done without according due process to petitioner Rexlon. Whether the trial court acquired jurisdiction to issue new owner's duplicate certificates of title when the original owner's duplicate copies were not lost but were in the possession of petitioner Rexlon, and the validity of titles issued to Paramount.
Ruling
The petition for review is GRANTED. The assailed Decision of the Court of Appeals is REVERSED and SET ASIDE. The Decision dated March 1, 1994, of the Regional Trial Court of Cavite, Branch 16, in LRC Rec. No. 8843, is ANNULLED. The new owner's duplicate copies of TCT Nos. T-72537 and T-72538 in the name of Alex L. David, as well as the replacement titles, TCT Nos. T-525664 and T-525665 in the name of Paramount Development Corporation of the Philippines, are declared VOID.
Ratio Decidendi
On the issue of fraud and lack of jurisdiction: The Court found that the issuance of new owner's duplicate certificates of title by the trial court in favor of respondent David was tainted with extrinsic fraud. David alleged in his petition that the owner's duplicate copies of TCT Nos. T-72537 and T-72538 were lost while entrusted to a friend for showing to a prospective developer, and that they were not delivered to secure any obligation. However, an "Absolute Deed of Sale" showed that David had sold the properties to petitioner Rexlon for P500,000.00, receipt of which he acknowledged. This contradicted David's claim that the titles were not delivered to secure any obligation, as they were delivered to Rexlon pursuant to the sale. The Court held that David's misrepresentation, while not constituting extrinsic fraud in the strict sense of preventing a party from having a trial, indicated an absence of jurisdiction. The Court reiterated the ruling in Strait Times, Inc. v. Court of Appeals and Demetriou v. Court of Appeals that if an owner's duplicate copy of a certificate of title has not been lost but is in the possession of another person, the reconstituted title is void, and the court has not acquired jurisdiction. The authenticity of Rexlon's owner's duplicate copies and the Absolute Deed of Sale were not disputed, and there was no proof of actual loss, rendering the trial court's decision void. On the issue of due process: The Court found that the procedural requirements for the issuance of new owner's duplicate copies under Section 109 of Presidential Decree No. 1529 were not met in spirit, despite the posting of notices. The Court noted that the RTC, acting as a land registration court, has no jurisdiction to pass upon the question of actual ownership of the land covered by the lost owner's duplicate copy. Possession of a lost owner's duplicate copy is not necessarily equivalent to ownership. The Court emphasized that the trial court's decision was void due to lack of jurisdiction, which inherently implies a denial of due process to any party who would have been able to present their case had the court properly exercised its jurisdiction. The Court clarified that the issue of ownership between Rexlon and David would have to be threshed out in a more appropriate proceeding, but the issuance of the new titles itself was fundamentally flawed. On the issue of jurisdiction and the validity of titles issued to Paramount: The Court ruled that it could pass upon the validity of the titles issued to Paramount. Firstly, Paramount was impleaded in the amended petition for annulment of judgment, and the Court of Appeals could admit related causes of action. Secondly, Paramount participated in the appeal without raising jurisdictional objections, estopping it from later objecting to the Court's power to nullify its titles. Thirdly, for a just, speedy, and inexpensive disposition, the Court must decide the effect of void duplicate copies that served as a basis for the sale and issuance of Paramount's titles, to avoid future litigation. The Court concluded that since the new owner's duplicate copies issued to David were void for lack of jurisdiction, the subsequent titles issued to Paramount based on these void copies were also void.
Main Doctrine
A petition for the issuance of a new owner's duplicate copy of a certificate of title, when the original owner's duplicate copy has not been lost but is in fact in the possession of another person, is void, and the court rendering the decision has not acquired jurisdiction. Consequently, the decision may be attacked at any time.