JOSE A. ARCHES, PETITIONER-APPELLANT VS. AURORA BILLANES, OPPOSITOR-APPELLEE.

In a decision rendered on
December 24, 1935, the Court of First Instance of Capiz declared Jose A. Arches owner of a portion of Lot No.
3150 of the Panay cadastre containing an area of 2,250
square meters and ordered that Original Certificate of Title No. 17104 covering
said lot be cancelled and a now certificate be issued annotating on the back
thereof the portion adjudicated to Arches. Subsequently, Original Certificate of
Title No. 17104 was cancelled and in lieu thereof Transfer Certificate of Title
No. 3906 was issued on June 26,
1939 in
the names of Tiburcio Espi
and Modesta Marcelino at the
back of which the interest of Arches was annotated pursuant to the aforesaid
decision.

Then, the following transfers
took place concerning Lot No. 3150; on December 29, 1915, spouses Tiburcio Espi and Modesta Marcelino sold the lot to
Felicisima Aguilos; on March
15, 1946, Felicisima Aguilos
sold” it to spouses Amado Bibit and Petra Obligar; and on
January 2, 1947, the latter spouses in turn sold the lot to Aurora Billanes. Since the original of Transfer Certificate of
Title No. 3906 was destroyed during the last war and only the owner’s duplicate
thereof was existing, said title was administratively
reconstituted by the Register of Deeds of Capiz on
January 16,
1947 on
the basis of said duplicate resulting in the issuance of Transfer Certificate of
Title No. RT-34(a) (8906). On the same date, the
various documents of sale made over Lot No. 3150 were simultaneously registered
resulting in the issuance of separate certificates of title to each and every
transferee, the last one being Aurora Billanes. The
title issued to the latter is Transfer Certificate of Title No. 123, free from
all liens and encumbrances.

On December 1, 1959, Jose A.
Arches who came to know for the first time the reconstitution made of Transfer
Certificate of Title No. 3906 in 1947, as well as the issuance of transfer
certificates of title in favor of the subsequent transferees, filed a petition
before the Court of First Instance of Capiz praying
for the annotation of his interest in Lot No. 3150 not only on Transfer
Certificate of Title No. RT-34(a) (3906), as reconstituted, but also on all the
titles issued subsequent thereto by the Register of Deeds of Capiz, on the ground that such interest which appears on the
original of Transfer Certificate of Title No. 3906 has been improperly omitted
on the reconstituted title and on the other titles issued subsequent thereto to
his prejudice, he being the owner of a portion of Lot No. 3150 covered by them.

Aurora Billanes filed an opposition to this petition alleging,
among other things, that when she bought Lot No. 3150 from spouses Amado Bibit and Petra Obligar on January 2,
1947, she
examined the owner’s duplicate of Transfer Certificate of Title No. 3906
covering the same and found no lien or encumbrances annotated thereon. It is on
the basis of this duplicate that she bought said lot and the reconstitution of
the original title was made by the Register of Deeds of Capiz.

After setting the hearing of the
petition on September I, 1961, the court a quo without any hearing on the
merits, issued an order dismissing the petition for lack of sufficient legal
basis. But the dismissal was made “without prejudice to the-petitioner’s right
to take recourse to a more appropriate remedy.”

Petitioner took the present
appeal which was certified to this Court on the ground that the only issue
involved is one of law.

The order of the court a
quo which is now the subject of this appeal reads as follows:

“Lot No. 3150, Panay Cadastre, is registered under the
Torrens system. It appears that the only
copy of the various certificates of title issued thereon, which has survived
through the last world war, is the Owner’s Duplicate Certificate of Transfer
Certificate of Title No. 3906, now on file in the Office of the Register of
Deeds of Capiz, which was issued as appearing from the
face thereof, on June 26, 1939. On the basis of the said existing copy, the said
title was administratively reconstituted on January
16, 1947
in accordance with Republic Act No. 26, and the reconstituted title bears No. RT-34(a) (3906).

Now comes the petitioner herein claiming to have a lien on the
property aforementioned and claiming further that said lien was registered
before the war. Petitioner also prays that his said lien be made to appear as
annotated on the title as requested.

It appearing that the Owner’s
Duplicate Certificate of Transfer Certificate of Title No. 3906 does not bear
any annotation with reference to the aforementioned lien, the Court cannot see
its way dear to ordering the said lien annotated on the copy as reconstituted
from the Owner’s Duplicate Certificate.

Therefore, the within petition is
hereby dismissed without prejudice to the petitioner’s right to take recourse to
an appropriate remedy.”

It should be noted that Lot No.
3150, a portion of which was acquired by petitioner, was originally covered by
Original Certificate of Title No. 17104, which was later cancelled and
substituted by Transfer Certificate of Title No. 3906. It should also be noted
that on both originals of said titles the interest of petitioner was annotated
as directed by the Court of First Instance of Capiz in
its decision rendered in Civil Case No. 3286, but no such annotation was made on
the owner’s duplicate of Transfer Certificate of Title No. 3906 which was issued
in the names of spouses Tiburcio Espi and Modesta Marcelino. And since this owner’s duplicate has been the
basis of the different transfers made on Lot No. 3150 up to the time it was sold
to oppositor Aurora Billanes
and the reconstitution of the original of Title No. 3906 was also made on the
basis of said duplicate, the resultant effect was that the title as
reconstituted [RT-34(a) (3906)], as well as the transfer certificates of title
issued to the different transferees of the same lot, do not bear any annotation
concerning the interest adjudicated in favor of petitioner. In other words, it
may be stated that on the basis of the pleadings submitted, the persons who
subsequently bought Lot No. 3150 from spouses Tiburcio
Espi and Modesta Marcelino in whose names the original of Certificate of
Title No. 3906 was issued, down to herein oppositor
Aurora Billanes, bought the lot with the knowledge
that the same was free from any lien or encumbrance. They did not have any
knowledge of the interest now claimed by petitioner except only when he filed
the present petition on December 1,
1959
praying for the annotation of his interest on the title as British Traders his.
Co., Ltd. vs. Comm. of Int. Revenue reconstituted as well as on the titles
issued subsequent thereto, a matter which could have been avoided had petitioner
been more solicitous in securing the annotation of his interest not only on the
original title but on the owner’s duplicate as well. It is for this reason that
the Court a quo considered the petition improper though reserving to him
the right to take any other action that may be appropriate to protect his
interest.

We do not find error in this
regard. Since there are third parties who claim to have acquired the property in
good faith and for value, there seems to be no other more appropriate recourse
than to take a separate action in court in order that the parties concerned may
have an opportunity to defend their interests. Republic Act No. 26 which
provides for reconstitution of titles does not afford such an opportunity for
the proceedings therein authorized are merely summary in nature and do not cover
controversial issues. These have to be threshed out in a separate action.

WHEREFORE, the order appealed from is
affirmed. Costs against petitioner.

Bengzon, C.J., Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, Makalintal, Bengzon, J.P. and Zaldivar, JJ., concur.