FAUSTINO CO SHU KIAM, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT.

Faustino Co Shu Kiam versus Republic of the Philippines

The Case

This is a petition for review on certiorari brought by Faustino Co Shu Kiam against the Republic of the Philippines, assailing the decision and resolution of the Court of Appeals which reversed the trial court and dismissed his petition for judicial reconstitution of a lost and destroyed transfer certificate of title. The case matters because it is a working lesson on how the hierarchy of sources under Republic Act Number 26 actually operates in practice, and on how the courts must calibrate the strict guidelines laid down in Republic versus Spouses Bercede when the registry itself, together with its records, has been gutted by fire. It teaches when the last resort source may properly be used, and how loss of the prior sources is proved.

Procedural History

Faustino filed his petition for reconstitution of the lost and destroyed original and owner's duplicate copy of the transfer certificate of title before the Regional Trial Court of Malolos, Bulacan, Branch 15. The trial court granted the petition, finding the documents sufficient and holding that the requirements of Sections 12 and 13 of Republic Act Number 26 had been complied with, and that Faustino, as buyer, had the interest to file. The Republic, through the Office of the Solicitor General, appealed to the Court of Appeals. The Court of Appeals reversed and set aside the trial court's decision and dismissed the petition, holding that the trial court failed to observe the guidelines in Republic versus Spouses Bercede, that the documents under paragraphs (a) to (e) of Section 3 had not been shown by clear and convincing evidence to be lost or missing, and that the documents Faustino presented were unclear, unreliable, or inconsistent. Faustino's motion for reconsideration was denied, so he filed the present petition for review on certiorari before the Supreme Court.

Facts

The late spouses Juan Aglipay and Socorro Resurrection Aglipay were the registered owners of a parcel of land in Barrio Bagbaguin, Pandi, Bulacan, with an area of 14,233 square meters, covered by Transfer Certificate of Title Number T-23536. They had bought the property on December 5, 1958 from Tomas Delos Santos through a deed of absolute sale, the Kasulatan, whose dorsal portion certified that the instrument was duly registered, that Transfer Certificate of Title Number 19405 was cancelled, and that Transfer Certificate of Title Number T-23536 was issued. The spouses possessed the property openly and continuously since 1958 and declared it for taxation purposes. When Juan died intestate in 2009, Socorro executed an affidavit of self-adjudication as sole heir.

Two events produced the loss. On March 7, 1987, a fire gutted the building of the Registry of Deeds of Bulacan, destroying the original copy of the title on file, as shown by certifications issued in December 2018 and January 2019. The owner's duplicate copy, meanwhile, had been entrusted by Socorro to her nephew Lauro for safekeeping, and it was lost when typhoon Ondoy submerged his house in 2010, as attested in an affidavit of loss.

On May 3, 2016, Faustino bought the property from Socorro, through Lauro acting under a special power of attorney, by a deed of absolute sale, and he paid all the taxes on the sale. He now occupies the property, but the transfer of the title to his name cannot be completed because both the original and the owner's duplicate copies are gone. He then filed the petition for reconstitution in 2019.

Issues

• Whether or not the Court of Appeals erred in dismissing the petition for reconstitution of Transfer Certificate of Title Number T-23536.

Applicable Provisions

Section 3 of Republic Act Number 26 lists the sources for reconstituting a transfer certificate of title, in order:

Section 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available, in the following order: (a) The owner's duplicate of the certificate of title; (b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title; (c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian thereof; (d) The deed of transfer or other document, on file in the registry of deeds, containing the description of the property, or an authenticated copy thereof, showing that its original had been registered, and pursuant to which the lost or destroyed transfer certificate of title was issued; (e) A document, on file in the registry of deeds, by which the property, the description of which is given in said document, is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been registered; and (f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title.

This is the very hierarchy the Court applies, and the case turns on whether the earlier sources were shown to be unavailable before the later ones were used.

Section 12 of the same law governs the petition and its required allegations:

Section 12. Petitions for reconstitution from sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act, shall be filed with the proper Court of First Instance, by the registered owner, his assigns, or any person having an interest in the property.

This supplies the standing of Faustino as buyer and assigns, and the required contents of his petition.

Section 28 of Rule 132 of the Rules of Court governs proof of lack of record:

Section 28. Proof of lack of record. A written statement signed by an officer having the custody of an official record or by his or her deputy that, after diligent search, no record or entry of a specified tenor is found to exist in the records of his or her office, accompanied by a certificate as above provided, is admissible as evidence that the records of his or her office contain no such record or entry.

This is the basis for accepting the registry certifications as proof that the original copy no longer exists.

Ruling

The Court granted the petition. On the single issue, it held that the Court of Appeals erred in dismissing the petition, because the factual setting of Bercede is not in all fours with this case. Bercede requires that the sources earlier in the list be exhausted and their loss proved by clear and convincing evidence before resorting to the last resort, and that the last resort documents be of the same kind as those in the earlier paragraphs. Here, however, the Court found that Faustino sufficiently proved the loss of the owner's duplicate through the notarized affidavit of loss of Lauro, which carried the presumption of regularity and was never contradicted by clear and convincing evidence. It also found that no co-owner's, mortgagee's, or lessee's duplicate existed, since Socorro was sole heir and no third person came forward to claim an interest.

As to the registry certification, the Court rejected the appellate court's demand that it categorically state that the title existed before the fire. It held that these standards cannot reasonably be expected where the entire records or the building storing them were destroyed by fire, and that presenting the records officer would have been futile. It explained the Meycauayan certification, which said the title could not be located, by the possibility that only post-fire records were transferred when jurisdiction moved in 1995.

Finally, the Court held that the Kasulatan fell squarely under Section 3(d), since its dorsal portion showed registration and the issuance of the new title pursuant thereto, and that the plan and technical description were confirmed as correct by the report of the assistant chief of the Reconstitution Division of the Land Registration Authority. The discrepancy in the name of the original owner was negligible, and the petition complied with the required allegations.

Doctrine

First, the sources in Section 3 of Republic Act Number 26 are ranked, and the owner's duplicate is given primacy because it is an exact reproduction of the original, provided the duplicate itself and not a mere photocopy is presented. Second, the last resort source may be used only after the earlier sources are shown by clear and convincing evidence to be lost or unavailable, and the last resort document must be of the same kind as those earlier listed. Third, the strict certification standards for the registry cannot be demanded where the registry building and all its records were destroyed by fire. Fourth, a notarized affidavit of loss enjoys the presumption of regularity, disputable only by clear and convincing evidence.

Disposition

The petition was granted; the Court of Appeals decision and resolution were reversed and set aside, and the trial court's decision granting the reconstitution of Transfer Certificate of Title Number T-23536 was reinstated.

Remember This

Memorize this line: the hierarchy of sources under Section 3 of Republic Act Number 26 is strict, but the loss of the earlier sources may be proved by a notarized affidavit of loss and a registry certification, and the strict certification standards yield when the registry itself burned. Examiners use this case to test the Bercede guidelines, the clear and convincing evidence standard, and the rule on proof of lack of record.