IN RE:  PETITION FOR CANCELLATION OF RECONSTITUTED TRANSFER CERTIFICATE OF TITLE NO. RT-13661 (N.A.) AND NEW TRANSFER CERTIFICATE OF TITLE NO. T-50056; FOR RECONSTITUTION OF TRA…

This case involves the jurisdiction of the Court of First
Instance, sitting as a land registration court, to resolve a petition to cancel
a fraudulently reconstituted title.

On December 9, 1967 the Court of First Instance of Negros Occidental, Bacolod City
branch issued an order directing the register of deeds to reconstitute the
original and owner’s duplicate of an unnumbered transfer certificate of title
covering Lot No. 133 of the Binalbagan cadastre.

That order was issued on the basis of the ex parte verified petition of Roman Mirasol,
Jr. who claimed to be the purchaser of Lot No. 133.  He filed the petition for reconstitution in
Cadastral Case No. 16, LRC (GLRO) Record No. 139 involving Lot No. 133, a
nine-hectare land located at Barrio Enclaro, Binalbagan, Negros
Occidental.

Pursuant to that order, the register of deeds issued Transfer
Certificate of Title (TCT) No. RT-13661 (N.A.) in the names
of Abelardo Gasataya, 1/6
share; Andres Gasataya, 1/6 share, and Agripino Reyes, 4/6 share.

Later, TCT No. RT-13661 was cancelled by
TCT. No. T-49998 as a result of the registration of the declarations of heirship, covering the shares of Agripino
Reyes and Andres Gasataya, and of the sale made by Abelardo Gasataya.  TCT No. T-49998 was
issued in the names of Bruno Reyes, Felipe Javier, Jr., Abelardo Gasataya, Victoria
Gasataya, Rosario Javier, Consuelo Cuachon, Carmen Bautista, and Socorro, Emilio, Gilda,
Rogelio and Carlos, all surnamed Gabile.

On February 15, 1968, by reason of the deeds of sale executed in favor of Mirasol by the registered owners, TCT No. T-49998
was cancelled and TCT No. T-50056 was issued to him.  (See pars. 1 to 6 of petition of Luzon Surety
admitted by Mirasol, pp. 8-10, 14, Record on Appeal).

On March 13, 1968
Luzon Surety Co., Inc. filed a petition also with the Court of First Instance
of Negros Occidental at Bacolod City
and in that same Cadastral Case No. 16 covering Lot No. 133 of the Binalbagan cadastre. 
Luzon Surety prayed for the cancellation of the reconstituted title, TCT
No. RT-13661, and the title issued to Mirasol.  It alleged
that fraud and bad faith vitiated the reconstitution proceeding, the
declarations of heirship, and the issuance of a new
title to Mirasol, as shown in the following
circumstances:

(a)  That Lot No. 133 was covered by TCT No. 4131,
which is on file in the registry of deeds and which indicates the following
deceased persons as the co-owners of the lot: 
Raymundo Montelibano,
2/6 share; Abelardo Gasataya,
1/6 share; Adela Gasataya,
1/6 share; Andres Gasataya, 1/6 share, and Vicente Gasataya, 1/6 share.

(b)  That
TCT No. 4131 was cancelled by TCT No. 4837 which indicates the following
persons as the co-owners of Lot No. 133; Raymundo Montelibano, 4/6 share; Abelardo Gasataya, 1/6 share, and Andres Gasataya,
1/6 share.  The original and owner’ s duplicate of TCT No. 4837 were lost or destroyed
during the war.

(c)  That Agripino Reyes
and Bruno Reyes appear to be fictitious persons.

(d)  That Luzon Surety acquired in 1941 the 4/6
share of Raymundo Montelibano
at an execution sale conducted pursuant to a judgment in its favor in Civil
Case No. 54713 of the Court of First Instance of Manila, entitled “Luzon
Surety Co., vs. Angel Locsin, Sabas
Locsin, and Raymundo Montelibano“.

(e)  That since 1941 Luzon Surety has been in
possession of Lot No. 133.

(f)   That Mirasol at the
time he filed his petition for reconstitution offered verbally and in writing
to purchase Lot No. 133 from Luzon Surety.

Luzon Surety further prayed that TCT No. 4837 be reconstituted
and that, after the reconstitution, a new title be issued in the names of Luzon
Surety Co., Inc., 4/6 share, and Roman Mirasol, Jr.,
2/6 share.

Mirasol, who was served with a copy of
the petition and who claimed to be a purchaser in good faith and for value of
Lot No. 133, filed a motion to dismiss the petition on the ground of lack of
jurisdiction.  He contended that the
issues raised by Luzon Surety could not be resolved by the lower court in the
exercise of its limited jurisdiction as a land registration court.  He disputed the title of Luzon Surety over the
four-sixths portion of Cadastral Lot No. 133 (p. 16, Record on Appeal).

Luzon Surety contended that the lower court has jurisdiction over
its petition under Republic Act No. 26 which governs the reconstitution of lost
or destroyed Torrens titles.

The lower court in its order of April 20, 1968 dismissed the petition without prejudice to
the right of Luzon Surety to file an ordinary action to impugn the validity of
the transfer to Mirasol of the four-sixths
share.  In its subsequent order, denying
the motion for reconsideration, the lower court specified that Luzon Surety
should file its action in the Himamaylan branch of
the lower court.

Luzon Surety interposed this appeal on questions of law.  It argues that the lower court erred (1) in
holding that its petition involves the issues of ownership and (2) in
indicating that it should file its action in the Himamaylan
branch.  It insists that its petition is
simply for the cancellation of a fraudulently reconstituted title and that such
petition is within the competence of the Bacolod branch of the lower court
which had ordered the issuance of the reconstituted title.

In reality, the petition of Luzon Surety is predicated, not on
Republic Act No. 26, but on section 112 of the Land Registration Law which
reads:

“AMENDMENT
AND ALTERATION OF CERTIFICATES OF TITLE

“SEC. 112.  No erasure, alteration, or amendment shall be
made upon the registration book after the entry of a certificate of title or of
a memorandum thereon and the attestation of the same by the clerk or any
register of deeds, except by order of the court.  Any registered owner or other person in
interest may at any time apply by petition to the court, upon the ground that
registered interests of any description, whether vested, contingent, expectant,
or inchoate, have terminated and ceased; or that new interests have arisen or been created which do not appear upon the
certificate; or that any error, omission, or mistake was made in entering a certificate or any memorandum
thereon, or on any duplicate certificate; or that the name of any person on the
certificate has been changed; or that the registered owner has been married;
or, if registered as married, that the marriage has been terminated; or that a corporation which owned
registered land and has
been dissolved has not conveyed the same within three years after its
dissolution; or upon any other reasonable ground; and the court shall have
jurisdiction to hear and determine the petition after notice to all parties in
interest, and may order the entry of a
new certificate the entry or cancellation of a memorandum upon certificate, or
grant any other relief upon such terms and conditions, requiring
security if necessary, as it may deem proper: 
Provided, however, That this section shall not be construed
to give the court authority to open the original decree of registration, and
that nothing shall be done or ordered by the court which shall impair the title
or other interest of a purchaser holding a certificate for value and in good
faith, or his heirs or assigns, without his or their written consent.

“Any petition filed under this section and all petitions and
motions filed under the provisions of this Act after original registration
shall be filed and entitled in the original case in which the decree or
registration was entered.”

For a more facile understanding of a prolix statute like section
112, a breakdown or paraphrasing of its provisions may be useful.  Section 112 requires a court order for any alteration
or amendment of a certificate of title. 
A petition may be filed by the registered
owner or any interested person in the original registration case for the
amendment or alteration of a certificate of title due to any of the following
circumstances:

1.  When registered interests of any description,
whether vested, contingent, expectant, or inchoate, have terminated and ceased.

2.  When new interests have arisen or been created
which do not appear upon the certificate.

3.  When any error, omission, or mistake was made
in entering a certificate or any memorandum thereon, or on any duplicate
certificate.

4.  When the name of any person on the certificate
has been changed.

5.  When the registered owner has been married,
or, registered as married, the marriage has been terminated.

6.  When a corporation, which owned registered
land and has been dissolved, has not conveyed the same within three years after
its dissolution.

7.  When there is a reasonable ground for the
amendment or alteration of the title.

Section 112 provides that, after notice to all the interested
parties, the court may (a) order the issuance of a new certificate, (b) order
the entry or cancellation of a memorandum upon a certificate, or (c) grant any
other relief upon such terms and conditions, requiring a bond if necessary, as
it may deem proper.

Under section 112, the Court of First Instance, sitting as a land
registration court, has no jurisdiction or authority to reopen the original
decree of registration.  The court cannot
“impair the title or other interest of a purchaser holding a certificate
for value and in good faith, or his heirs or assigns, without his or their
written consent” (Santos vs. Cruz, L-28612, August 30, 1973, 52 SCRA 330).

In the instant case, Luzon Surety raised in issue the validity of
the issuance to Mirasol of a new certificate of
title.  Its position is that Mirasol could not acquire from other persons its two-thirds
share in Lot No. 133 because it is the owner of that portion.

On the other hand, Mirasol pleaded that
it was a purchaser in good faith and for value. 
Hence, there is positively a controversy between Luzon Surety and Mirasol as to the ownership of the two-thirds portion of
Lot No. 133.

Luzon Surety has taken a simplistic view of the case.  Its theory is that since the fraudulently
reconstituted title was issued by the lower court, sitting as a land
registration court in a reconstitution proceeding under Republic Act No. 26,
the said title should be annulled by the same court in the exercise of its limited jurisdiction as a land
registration court.

That theory is not well-taken. 
The instant case is not a simple case of annulling the fraudulently
reconstituted title, a “bastard” title according to Luzon
Surety.  It is a more complicated
case.  It is actually a case wherein it
is necessary to determine who is the true owner of two-thirds
of Cadastral Lot No. 133.  Is it
Luzon Surety by reason of the 1941 execution sale or is it Mirasol
by reason of his purchase of the said share from the supposed registered owners
(impostors according to Luzon Surety)?

Luzon Surety has not cited any specific provision of Republic Act
No. 26 or any ruling under Act No. 496 that sustains its theory that such a
question may be decided by the land registration court.  A long catena of decided cases holds that
such a question should be ventilated in an ordinary action and should be
decided by the lower court in the exercise of its general jurisdiction.  (Lamera
vs. Callanga, L-30847, November 26, 1973, 54 SCRA 20
and other cases).

We hold that that controversy cannot be resolved by the lower
court in the summary proceeding under section 112.  It has to be adjudicated in an ordinary
action.  It is settled that while under
section 112 any registered owner or interested person may, on certain grounds,
apply by petition to the land registration court for a new certificate of title
or for the entry or cancellation of a memorandum thereon, such relief can only
be granted if there is no adverse claim or serious objection on the part of any
interested party.  If there is an
opposition, the case becomes controversial. 
It should be threshed out in an ordinary action or in the case where the
incident properly belongs (Abella vs. Hon. Rodriguez,
116 Phil. 1277, 1280).

Relief under section 112 can only be granted if there is unanimity
among the parties, meaning that there is no serious controversy among the
interested parties as to the title of the party seeking relief under that
section (Enriquez vs. Atienza, 100 Phil. 1072).

If the objective of Luzon Surety was merely to
annul the fraudulently reconstituted title, TCT No. RT-13661, then its
contention that a separate action would not be necessary might be
plausible.  But that is not the situation
in this case.

Here, Luzon Surety claims to be the owner of two-thirds of Lot
No. 133.  That claim is controverted by Mirasol who has a
title for the entire Lot No. 133.  The
resolution of that claim should be made in an adversary litigation where proper
pleadings can be filed and the evidence can be presented at a full-dress trial
(Vicente vs. De los Santos, L-20351, February 27,
1969, 27 SCRA 1).

The alternative contention of Luzon Surety is that the ordinary
action to annul the reconstituted
as well as Mirasol’s
title to two-thirds of the disputed lot should be filed in the Bacolod City
branch of the lower court rather then in its Himamaylan
branch.

As already noted, the disputed lot is located at Binalbagan which is within the territorial jurisdiction of
the Himamaylan branch.  It is a fact that Mirasol
filed his petition for reconstitution in Bacolod City
although he was a resident of Binalbagan and the land
involved is within the territorial jurisdiction of the Himamaylan
branch.

Luzon Surety invokes the rule that the jurisdiction to annul a
judgment of a branch of the Court of First Instance belongs solely to that
branch (J. M. Tuason vs. Torres, L-24717, December 4,
1967, 21 SCRA 1169; Sterling Investment Corporation vs. Ruiz, L-30694, October
31, 1969, 30 SCRA 318).  It argues that
as the order of reconstitution, which it seeks to annul, was issued by the Bacolod branch, then it can file
its separate action to annul the order in that same branch.

What Luzon Surety is really aiming at in its second assignment of
error is for this Court to change the venue of its separate action to annul the
titles in question.  Although not
articulated in its briefs, Luzon Surety would prefer to file the separate
action in Bacolod
City because it is more accessible
than Himamaylan.

We rule that Luzon Surety has the option
to file its separate action either in Bacolod
City or in Himamaylan (See Cuenco
vs. Court of Appeals, L-24742, October
26, 1973, 53 SCRA 360, 379, 381, citing Sec. 5[4], Art. X, Constitution).

With that slight modification, the lower court’s order of
dismissal is affirmed.  No costs.

SO ORDERED.

Fernando, (Chairman), Barredo,
Antonio, and Concepcion,
Jr., JJ., concur.