IN RE ORIGINAL CERTIFICATE OF TITLE NO. 9758 OF THE REGISTER OF DEEDS OF NUEVA ECIJA. ALEJANDRO TANGUNAN AND PELAGIO TANGUNAN, PETITIONERS AND APPELLANTS, VS. REPUBLIC OF THE PH…

In re Original Certificate of Title No. 9758, Tangunan versus Republic

The Case

This is a petition by Alejandro Tangunan and Pelagio Tangunan, buyers of a parcel of registered land in Nueva Ecija, asking the Court of First Instance of Nueva Ecija, sitting in a cadastral case, to cancel a Government levy annotated on the original certificate of title and to approve and register the deed of sale in their favor. The Republic, through the provincial fiscal, opposed on the ground that prescription does not run against the Government. The case matters because it draws the line between the summary relief available under Section 112 of the Land Registration Act and a truly controversial question that must be litigated in an ordinary action, and because it tells us how a subsisting Government encumbrance is carried over into a new title.

Procedural History

The petitioners filed their petition in Cadastral Case No. 14 in the Court of First Instance of Nueva Ecija. The provincial fiscal opposed it. After hearing, the trial court first ruled that the first relief could not be entertained because prescription does not run against the Government and there was no showing that the writ had been carried out or cancelled, and that on the second relief it had no jurisdiction, the parties being advised to settle the estate judicially or extrajudicially under Section 1 of Rule 74. On motion for reconsideration, the court modified its ruling: it held it had no jurisdiction over the first relief because the incident fell within the exclusive jurisdiction of the court that issued the writ, and that it could grant the second relief under Section 112 of Act No. 496 provided the petitioners put up a bond to protect the interest of the Government. From that order the petitioners appealed to the Supreme Court.

Facts

Original Certificate of Title No. 9758 was issued in the name of several co-owners pro indiviso: Alejandro Rebolledo with three sixths, and Basilio Rebolledo, Claudia Rebolledo, and Bartola Rebolledo with one sixth each. Alejandro Rebolledo had stood as one of the bondsmen in two criminal cases in the Court of First Instance of Manila. He defaulted on his undertaking, the Government asked for forfeiture of the bond, and a writ of execution was annotated on the back of the certificate on April 28, 1933. From 1933 onward neither the Government nor the Sheriff took any further action, and the encumbrance remained annotated.

Claudia Rebolledo died in 1939 and Bartola Rebolledo in 1943, both without heirs or descendants. Alejandro Rebolledo died in 1948 leaving his children Basilio, Federico, and Francisco. Francisco had died in 1940, leaving his children Lucena, Faustino, and Luzviminda, and his widow Tranquilina Ragsac. By April 1950 the land had passed pro indiviso to Basilio with eight eighteenths, Federico with five eighteenths, and the three children of Francisco with five eighteenths, subject to the usufruct of the widow Tranquilina Ragsac.

On April 13, 1950, Basilio, Federico, and Tranquilina Ragsac, the latter for herself and her minor children, contracted to sell the land to the petitioners. It was agreed that partial payment would be made immediately and the balance after the title is cleared of encumbrance and transferred in their names by the Register of Deeds. To comply, the petitioners filed the petition below, asking that the encumbrance be cancelled on the ground that the Government's right to enforce it had prescribed.

Issues

• Whether or not the Court of First Instance of Nueva Ecija may, under Section 112 of Act No. 496, cancel the writ of execution annotated on the certificate of title on the ground that the Government's right to enforce it has prescribed.
• Whether or not the trial court may give course to the deed of sale in favor of the petitioners, and on what condition.

Applicable Provisions

Section 112 of Act No. 496, the Land Registration Act, provides:

Upon the ground that registered interests of any description, whether vested, contingent, expectant, or inchoate, have terminated and ceased, a person in interest may ask the court for any erasure, alteration, or amendment of a certificate of title.

This is the summary remedy the petitioners invoked, and the Court holds it is available only where the parties are agreed or no serious objection is raised.

Ruling

On the first issue, the Court held that the trial court did not err in finding itself without jurisdiction, because the petition involves a controversial issue that takes the case out of the scope of Section 112. Although that section authorizes a person in interest to ask for erasure, alteration, or amendment of a certificate of title upon the ground that registered interests have terminated and ceased, and the petition apparently falls within its scope, the Court ruled that such relief can be granted only if there is unanimity among the parties, or no adverse claim or serious objection on the part of any party in interest. Otherwise the case becomes controversial and must be threshed out in an ordinary case or in the case where the incident properly belongs. The Court cited Jimenez versus De Castro, where cancellation of a Torrens title in the name of a deceased person and issuance of a new one in the name of the heirs under Section 112 was held improper while the surviving spouse claimed ownership, and Government of the Philippines versus Jalandoni, where a serious controversy over ownership was held to require a regular action. Here the Government seriously objected and claimed that prescription does not run against it, so the question of prescription must be determined elsewhere.

On the second issue, the Court held that the requirement of a bond is not necessary, provided the encumbrance is annotated on the back of the new title to be issued to the vendees. Since the encumbrance cannot now be cancelled because its determination belongs elsewhere, the transfer of the land may still be given course under Section 112, because there is no dispute as to the interest involved and the transfer is not objected to.

Doctrine

First, the summary relief under Section 112 of Act No. 496 for erasure, alteration, or amendment of a certificate of title is available only where the parties are unanimous or where there is no adverse claim or serious objection. Once a party in interest raises a serious objection, the matter becomes controversial and must be litigated in an ordinary action or in the case where the incident properly belongs. Second, a subsisting encumbrance in favor of the Government need not be secured by a bond before a transfer is given course; it is enough that the encumbrance be annotated on the back of the new title issued to the vendees, so that the Government's interest is preserved on the face of the register.

Disposition

The order appealed from was modified: the agreement submitted by the petitioners may be given course, and once the sale is executed the Register of Deeds may cancel Original Certificate of Title No. 9758 and issue a new one in the name of the vendees, on condition that the existing encumbrance in favor of the Government be annotated on the back of the new title, with no pronouncement as to costs.

Remember This

The line to memorize is that Section 112 is a summary remedy for uncontested registered interests, and a serious objection converts the matter into a controversial question for an ordinary action. Examiners use this case to test the limits of Section 112 and the rule that a Government encumbrance survives by annotation on the new title.