Republic v. PSB
REITERATIONFacts
1. The Antecedents: Philippine Savings Bank (PSB), a thrift banking institution, acquired a 48.30-square meter property in Novaliches, Quezon City, through foreclosure after the mortgagor, Herald Gallano, defaulted on a loan. The property's title, Transfer Certificate of Title (TCT) No. 004-2017004229, carried a statutory lien under Section 7 of Republic Act No. 26 (RA 26) because the original title (RT-114554) had been administratively reconstituted on August 12, 2003. This lien was a reservation in favor of any party whose interest was noted on the lost original title but not carried over to the reconstituted one. 2. Procedural History: On June 25, 2018—nearly 13 years after the two-year lien period expired on August 12, 2005—PSB filed a Petition for Cancellation of Encumbrance with the Regional Trial Court (RTC) of Quezon City. The RTC granted the petition on January 31, 2020, ordering the Register of Deeds to cancel the lien. The Office of the Solicitor General (OSG) appealed, arguing that the RTC lacked jurisdiction because the petition was not published in the Official Gazette as required for in rem proceedings. The Court of Appeals (CA) affirmed the RTC, ruling that publication is not required for petitions filed after the two-year period. 3. The Petition: The Republic, through the OSG, filed a Petition for Review on Certiorari under Rule 45, contending that publication is an indispensable jurisdictional requirement under Section 9 of RA 26, regardless of when the petition is filed, because the proceeding is in rem and affects the whole world.
Issue(s)
Whether publication in the Official Gazette is an indispensable requirement for the Regional Trial Court to acquire jurisdiction over a Petition for Cancellation of Encumbrance under Section 9 of Republic Act No. 26 when filed more than two years after the administrative reconstitution of a title.
Ruling
The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals.
Ratio Decidendi
On Issue 1: The Supreme Court held that publication is not required when the petition (or motion) for cancellation is filed after the two-year period stipulated in Section 9 of Republic Act No. 26 (RA 26). The Court emphasized that Section 9 provides both a general rule and an exception. The general rule mandates publication and a hearing for petitions filed within the two-year window to protect potential claimants. However, the proviso in Section 9 explicitly states that after the expiration of two years, if no petition has been filed by any interested party under Section 8, the court shall, on ex parte motion, order the cancellation of the encumbrance. By using the term 'ex parte motion,' the legislature clearly intended to dispense with the stringent requirements of publication and notice to the whole world, as the two-year period already provided ample opportunity for claimants to assert their rights. Applying the ruling in Republic v. Bella (G.R. No. 260831), the Court noted that the lapse of the two-year period without any adverse claims justifies a simplified procedure to provide certainty and finality to the title. In this case, since PSB filed its petition 13 years after the reconstitution and no Section 8 claims were ever filed, the ex parte procedure was legally sufficient. Consequently, the lack of publication did not deprive the Regional Trial Court of jurisdiction to order the cancellation of the lien.
Main Doctrine
The Supreme Court clarifies the procedural dichotomy in Section 9 of Republic Act No. 26 (RA 26). The general rule requires publication and notice for petitions to cancel the Section 7 encumbrance if filed within two years of the administrative reconstitution. However, the proviso in Section 9 creates an exception: if two years have elapsed without any party asserting a right under Section 8, the court is mandated to order the cancellation upon a mere ex parte motion. This exception dispenses with the publication requirement, as the lapse of time without a claim serves as the basis for clearing the title of the provisional reservation.