G.R. No. 111732 ; February 20, 1996
NEW DURAWOOD CO., INC., petitioner, vs. COURT OF APPEALS, HON. FELIX S. CABALLES, as Judge, RTC of Antipolo, Rizal, Branch 71, WILSON M. GAW, ORLANDO S. BONGAT, DURAWOOD CONSTRUCTION AND LUMBER SUPPLY CO., INC., respondents.

FACTS

On February 14, 1990, a petition for judicial reconstitution of allegedly lost owner’s duplicate copies of three Transfer Certificates of Title (TCTs) was filed in the Regional Trial Court (RTC) of Antipolo by New Durawood Co., Inc., represented by its Branch Manager, Wilson M. Gaw. The petition was supported by an affidavit of loss executed by a stockholder. The RTC, finding the petition sufficient, granted it and ordered the issuance of new owner’s duplicate titles. Subsequently, the original TCTs on file with the Register of Deeds were cancelled and new ones were issued in the name of respondent Durawood Construction and Lumber Supply Co., Inc.
Petitioner New Durawood later discovered these proceedings and the issuance of the new titles. It filed a petition in the Court of Appeals to annul the RTC order, alleging lack of jurisdiction and fraud. Petitioner contended the owner’s duplicate titles were never lost but were in fact in the custody of its board chairman. The Court of Appeals dismissed the petition, prompting this review.

ISSUE

The main issue is whether a court has jurisdiction to order the issuance of a new owner’s duplicate certificate of title under Section 109 of Presidential Decree No. 1529 when the existing owner’s copy has not, in fact, been lost or destroyed.

RULING

The Supreme Court ruled that the trial court had no jurisdiction. The Court clarified that the applicable law for replacing a lost owner’s duplicate title is Section 109 of P.D. No. 1529, not the reconstitution proceedings under Republic Act No. 26 . Section 109 requires a verified petition alleging the certificate’s loss or destruction. Crucially, the Court held that jurisdiction under this provision is not automatically conferred by the mere filing of a petition. The court must first make a factual finding, based on evidence, that the owner’s duplicate is indeed lost or destroyed. If it is proven that the certificate is not actually lost but is being withheld, the court has no authority to order a replacement. In this case, since the petitioner alleged and offered to prove that the titles were not lost but were in the possession of its chairman, the RTC should have determined this factual issue first. By proceeding without resolving this fundamental jurisdictional fact, the RTC acted without jurisdiction. Consequently, its order and the titles issued pursuant thereto are null and void. The Court granted the petition, annulled the proceedings, and declared the reconstituted titles void.