G.R. No. 121940; December 4, 2001
JESUS SAN AGUSTIN, petitioner, vs. HON. COURT OF APPEALS and MAXIMO MENEZ, JR., respondents.

FACTS

The Government Service Insurance System (GSIS) sold a residential lot to Macaria Vda. de Caiquep in 1974. The Transfer Certificate of Title (TCT) issued contained an encumbrance prohibiting its sale, conveyance, or encumbrance within five years from the vesting of absolute ownership. A day after the TCT was issued, Macaria sold the same lot to Maximo Menez, Jr. This 1974 deed of sale was not registered immediately due to the five-year prohibition. Menez later lost the owner’s duplicate certificate of title. After an unsuccessful search for the registered owner, Menez filed a petition in 1992 for the issuance of a new owner’s duplicate copy. The petition was published, and after a hearing where no oppositors appeared, the Regional Trial Court granted it.
Petitioner Jesus San Agustin, claiming to be the heir and present occupant of the property, received a copy of the decision and filed a motion to reopen. He argued he was an interested party entitled to personal notice given his possession and tax payments. He also contended the 1974 sale between Macaria and Menez was void for violating the five-year prohibition, making Menez without any right to seek replacement of the title.

ISSUE

The primary issues are: (1) whether San Agustin, as a possessor and claimant, was entitled to personal notice in the summary proceeding for the issuance of a new owner’s duplicate copy; and (2) whether the sale between Macaria and Menez is null and void for violating the contractual prohibition against alienation within five years.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the procedural issue, the Court held that a petition for the issuance of a new owner’s duplicate copy, being a summary proceeding under Section 109 of Presidential Decree No. 1529, requires only notice by publication. Personal notice to all persons claiming an interest is not required. The law aims for a speedy remedy, and the published notice sufficiently protects the rights of parties in interest who are expected to vigilant. San Agustin’s claim of possession and heirship did not entitle him to personal service beyond the statutory publication.
On the substantive issue, the Court ruled the sale was not void. The five-year prohibition in the GSIS deed was a contractual condition between GSIS and the original vendee, Macaria. Its violation merely gives GSIS, as the vendor, a cause of action to cancel the sale and recover the property. It does not automatically render a subsequent sale null and void ab initio. The contract between Macaria and Menez remains valid as between themselves. The prohibition is not a legal prohibition grounded in public policy, unlike the alienation restrictions on homestead or free patent lands under the Public Land Act. Therefore, the sale transferred rights to Menez, giving him sufficient interest to file the petition for replacement of the lost title.