The Supreme Court held that a reconstituted title obtained through fraudulent means is void. This ruling emphasizes the importance of truthfulness and accuracy when filing affidavits for the reconstitution of lost or misplaced certificates of title. Failure to disclose critical information or misrepresenting facts can lead to the cancellation of the reconstituted title and the reinstatement of the original, safeguarding the rights of legitimate property owners.

Lost and Found (Fraudulently): Can a False Affidavit Revive a Dead Title?

The case of Spouses Ernesto Ibias, Sr. and Gonigonda Ibias v. Benita Perez Macabeo revolves around a dispute over land ownership in Manila. Benita Perez Macabeo, one of the heirs of Albina Natividad Y. Perez and Marcelo Ibias, filed a complaint against Spouses Ernesto and Gonigonda Ibias for annulment of title. The core issue stemmed from Ernesto’s affidavit claiming the loss of the owner’s duplicate of Transfer Certificate of Title (TCT) No. 24605, which led to the reconstitution of the title under the Spouses Ibias’ name as TCT No. 245124. Benita argued that Ernesto knew the original title was in her possession, making his affidavit and subsequent reconstitution fraudulent. The legal question before the court was whether the reconstituted title obtained through this affidavit of loss was valid, given the circumstances surrounding its issuance.

The Regional Trial Court (RTC) ruled in favor of Benita, finding that Ernesto’s assertions were inconsistent with the facts. The RTC noted that Ernesto had written a letter to Benita requesting the title, indicating his knowledge of its whereabouts. The RTC also found that Ernesto falsely declared himself and his brother as the only heirs in a Deed of Extrajudicial Settlement. The Court of Appeals (CA) affirmed the RTC’s decision, emphasizing that Ernesto knew Benita possessed the original TCT. The CA highlighted the strained relations between the parties as a motive for Ernesto’s actions, concluding that the affidavit of loss was executed in bad faith. Furthermore, the appellate court noted the inconsistencies in Ernesto’s claims regarding the heirs and his implicit recognition of Benita’s rights to the property.

The Supreme Court, in its decision, underscored the importance of accuracy in reconstitution proceedings, citing Alonso v. Cebu Country Club, Inc., which clarifies that “[t]he reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its original form and condition” and does not resolve ownership. The court emphasized that Section 109 of Presidential Decree No. 1529 (PD 1529), governing lost duplicate certificates, applies only when the title is genuinely lost. The provision states:

Section 109. Notice and replacement of lost duplicate certificate. -In case of loss or theft of an owner’s duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered.

The Supreme Court reiterated that if the certificate is not lost but held by another, the reconstituted title is void. The Court pointed to Section 7 of Republic Act (RA) No. 6732, which amended Section 19 of RA No. 26, which provides that if a lost title is recovered and is not in the name of the person who obtained the reconstituted title, the court shall order the cancellation of the reconstituted title.

SEC. 19. If the certificate of title considered lost or destroyed, and subsequently found or recovered, is not in the name of the same person in whose favor the reconstituted certificate of title has been issued, the Register of Deeds or the party concerned should bring the matter to the attention of the proper Regional Trial Court, which, after due notice and hearing, shall order the cancellation of the reconstituted certificate of title and render, with respect to the memoranda of new liens and encumbrances, if any, made in the reconstituted certificate of title, after its reconstitution, such judgment as justice and equity may require

Section 11 of RA No. 6732 further clarifies that a reconstituted title obtained through fraud is void from the beginning. Because the original TCT was in Benita’s possession, the Supreme Court found no justification for issuing a reconstituted title to the Spouses Ibias.

Ernesto’s decision to pursue reconstitution under Section 109 of PD 1529, rather than seeking surrender of the title under Section 107, was a critical misstep. Section 107 provides a remedy when a party withholds the duplicate certificate. It reads:

Section 107. Surrender of withhold duplicate certificates. – Where it is necessary to issue a new certificate of title pursuant to any involuntary instrument which divests the title of the registered owner against his consent or where a voluntary instrument cannot be registered by reason of the refusal or failure of the holder to surrender the owner’s duplicate certificate of title, the party in interest may file a petition in court to compel surrender of the same to the Register of Deeds.

By choosing to claim the title was lost instead of acknowledging it was held by Benita, Ernesto foreclosed the opportunity for a fair resolution. This decision highlights the critical distinction between a genuinely lost title and one that is merely being withheld.

This case serves as a crucial reminder of the legal consequences of misrepresenting facts in reconstitution proceedings. The integrity of the Torrens system relies on the truthfulness of affidavits and the good faith of applicants. Any deviation from these principles can lead to the invalidation of the reconstituted title and significant legal repercussions. The court’s decision reinforces the principle that fraud vitiates everything, including titles obtained through reconstitution. The ruling protects the rights of legitimate property owners and maintains the integrity of the land registration system.

FAQs

What was the key issue in this case?	The key issue was whether a reconstituted title, obtained through an affidavit falsely claiming the loss of the original title, is valid when the original title was actually in the possession of another party.
What did the Supreme Court decide?	The Supreme Court decided that the reconstituted title was invalid because it was obtained through fraudulent means. The court ordered the cancellation of the reconstituted title and the reinstatement of the original title.
Why was the affidavit of loss considered fraudulent?	The affidavit of loss was considered fraudulent because Ernesto Ibias knew that the original title was not lost but was in the possession of Benita Perez Macabeo. This was evidenced by his letter requesting the title from her.
What is the effect of obtaining a reconstituted title through fraud?	A reconstituted title obtained through fraud is considered void from the beginning (ab initio). This means it has no legal effect, and the original title remains valid.
What is Section 109 of PD 1529?	Section 109 of Presidential Decree No. 1529 outlines the procedure for replacing a lost owner’s duplicate certificate of title. It requires the owner to send a notice under oath to the Register of Deeds about the loss.
What is the significance of Republic Act No. 6732 in this case?	Republic Act No. 6732, which amended RA No. 26, provides that if a lost title is recovered and is not in the name of the person who obtained the reconstituted title, the court shall order the cancellation of the reconstituted title.
What is Section 107 of PD 1529?	Section 107 of PD 1529 provides a remedy when a party withholds the duplicate certificate. It allows filing a petition in court to compel surrender of the title to the Register of Deeds.
What happens if a reconstituted title is canceled?	If a reconstituted title is canceled, the original title is reinstated, and the rights of the legitimate property owners are protected.

The Supreme Court’s decision in this case serves as a reminder to exercise due diligence and honesty in all land registration processes. The failure to adhere to these principles can have significant legal repercussions, including the cancellation of titles and potential legal liabilities. The ruling protects the rights of legitimate property owners and preserves the integrity of the land registration system.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses Ernesto Ibias, Sr. and Gonigonda Ibias v. Benita Perez Macabeo, G.R. No. 205004, August 17, 2016