In Rexlon Realty Group, Inc. v. Court of Appeals, the Supreme Court held that a new owner’s duplicate certificate of title is void if the original was not actually lost but was intentionally misrepresented as such to the court. This misrepresentation constitutes a critical defect that deprives the court of jurisdiction, making any subsequent titles issued based on the fraudulent claim also void. This ruling protects property rights by ensuring that land titles cannot be easily replaced based on false pretenses, thus maintaining the integrity of the land registration system.

The Tale of Two Titles: When a ‘Lost’ Deed Leads to Legal Chaos

The case began when Alex L. David, the registered owner of two parcels of land, petitioned the Regional Trial Court (RTC) of Cavite for new owner’s duplicate copies of Transfer Certificates of Title (TCT) Nos. T-72537 and T-72538. David claimed that the original owner’s duplicate copies were lost. However, Rexlon Realty Group, Inc. (Rexlon) countered, stating that David had already transferred ownership of the land to them through an “Absolute Deed of Sale”. Rexlon argued that David’s misrepresentation about the lost titles constituted fraud and deprived the RTC of jurisdiction. Paramount Development Corporation of the Philippines (Paramount) was later included as a respondent because David had sold the same properties to them after Rexlon’s initial purchase agreement.

The Court of Appeals dismissed Rexlon’s petition, arguing that the trial court’s decision concerned only the issuance of new owner’s duplicate copies and did not address the validity of the sale to Rexlon. Dissatisfied, Rexlon elevated the case to the Supreme Court, asserting that the appellate court erred in failing to annul the trial court’s decision due to fraud and lack of jurisdiction. The central legal question before the Supreme Court was whether David’s misrepresentation regarding the lost titles amounted to extrinsic fraud or a jurisdictional defect that would invalidate the issuance of the new owner’s duplicate certificates of title and subsequent transfer to Paramount.

The Supreme Court focused on Section 2, Rule 47 of the 1997 Revised Rules of Civil Procedure, which specifies extrinsic fraud and lack of jurisdiction as grounds to annul a judgment of a lower court. The court emphasized that David’s claim of lost titles was a misrepresentation. The “Absolute Deed of Sale”, where David’s signature was uncontested, stated that David had received full payment and was obligated to transfer title to Rexlon. This acknowledgment contradicted his statement to the RTC that the titles were lost and not delivered to anyone to secure any obligation. Here, a critical element of the case revolves around a fundamental concept within property law: the necessity of truthful representation.

Delving into the definition of extrinsic fraud, the Supreme Court explained that it involves actions that prevent a party from fully presenting its case in court. Although David’s misrepresentation did not strictly constitute extrinsic fraud, as it did not prevent Rexlon from participating in the proceedings, it did indicate a lack of jurisdiction. Referencing prior cases such as Strait Times, Inc. v. Court of Appeals and Demetriou v. Court of Appeals, the Court reiterated that if an owner’s duplicate copy of a certificate of title is not lost but is held by another person, the court lacks jurisdiction to order a replacement title. The authenticity of Rexlon’s possession of the original TCTs and the Absolute Deed of Sale cemented the absence of actual loss, rendering the trial court’s decision void for lack of jurisdiction. This builds on the principle that the power of the court is contingent upon the accuracy of information presented.

The Court then addressed whether it could rule on the validity of the titles issued to Paramount. The Court ruled that because Paramount was included as a respondent in Rexlon’s amended petition for annulment, and had implicitly consented to putting the validity of its titles at issue, a determination on this matter was necessary. The failure to include Paramount initially would constitute a waiver of claim; therefore, a resolution regarding its ownership was deemed appropriate. To not decide would have been contrary to the spirit of a “just, speedy, and inexpensive disposition” of cases, furthering judicial bureaucracy. Ultimately, the Supreme Court determined that because the new owner’s duplicate titles were issued without jurisdiction, any subsequent transfers based on those titles, including the transfer to Paramount, were also void.

In its final determination, the Court clarified that it was annulling the RTC’s decision due to lack of jurisdiction, and that the underlying dispute over ownership between Rexlon and David would need to be resolved in a separate proceeding. It underscored the limitation of the RTC’s role as a land registration court, which lacks the power to determine actual ownership in a petition for the issuance of a new owner’s duplicate copy. This reinforces that possession of a lost duplicate title does not inherently confer ownership, and that the certificate of title merely serves as evidence of ownership.

FAQs

What was the key issue in this case?	The central issue was whether a court had jurisdiction to issue new owner’s duplicate certificates of title when the original certificates were not actually lost but were in the possession of another party due to a sale agreement.
What did the Supreme Court decide?	The Supreme Court ruled that the trial court lacked jurisdiction to issue the new owner’s duplicate titles because the original titles were not lost, making the subsequent titles issued to Paramount void as well.
What is extrinsic fraud, and how does it relate to this case?	Extrinsic fraud involves acts preventing a party from fully presenting their case in court. While the Court acknowledged the fraud, the deciding factor was the lack of jurisdiction given the false premise of ‘lost’ titles.
Why was Paramount Development Corporation included in the case?	Paramount was included because it had purchased the properties from David based on the fraudulently obtained replacement titles. Including Paramount ensured complete relief could be accorded to all parties involved.
What happens to the ownership dispute between Rexlon and David?	The Supreme Court directed that the actual ownership dispute between Rexlon and David must be resolved in a separate, more appropriate legal proceeding.
What is the significance of the “Absolute Deed of Sale”?	The “Absolute Deed of Sale” was critical because it proved that David had already transferred his rights and title to Rexlon, contradicting his claim that the titles were lost and not delivered to anyone.
What legal principle was reinforced by this ruling?	The ruling reinforced the principle that a court’s jurisdiction depends on accurate information, and that misrepresentation about lost titles can invalidate any resulting decisions or titles.
Can a certificate of title, by itself, establish ownership?	No, the Supreme Court clarified that a certificate of title is merely evidence of ownership and does not, by itself, grant ownership of the land.
What is the practical effect of this ruling on future cases?	The practical effect is that courts must exercise greater scrutiny in petitions for replacement titles, especially when there is evidence suggesting the original titles are not genuinely lost.
What is the difference between the role of the RTC acting as a general court and a land registration court?	When the RTC acts as a general court, it can adjudicate actual ownership. However, when acting as a land registration court, it has limited jurisdiction. As a land registration court it cannot rule on the question of who the actual owner is of the land.

In conclusion, the Supreme Court’s decision underscores the critical importance of truthful representation in land registration proceedings. Misleading the court about the loss of a title can have severe consequences, rendering any subsequently issued titles void and necessitating a separate legal action to resolve ownership disputes. This ruling serves as a potent reminder of the legal framework that ensures accuracy within the land registration process, and protects legitimate property interests from misrepresentation and fraud.

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: Rexlon Realty Group, Inc. v. Court of Appeals, G.R. No. 128412, March 15, 2002