G.R. No. 126673 August 28, 1998
STRAIT TIMES INC. represented by RAFAEL M. IRIARTE, petitioner, vs. COURT OF APPEALS and REGINO PEÑALOSA, respondents.

FACTS

Private Respondent Regino Peñalosa filed a verified petition before the Regional Trial Court (RTC) of Tacloban City for the issuance of new owner’s duplicate certificates of title, alleging that he lost the owner’s duplicates of TCT Nos. T-3767 and T-28301. The RTC granted the petition, declaring the lost titles null and void if they reappear and ordering the Register of Deeds to issue new owner’s duplicates. This Order became final and executory on June 7, 1994. Petitioner Strait Times, Inc., represented by Atty. Rafael M. Iriarte, claims it bought the lot covered by TCT No. T-28301 from Conrado Callera, who purchased it from Peñalosa. Atty. Iriarte had been in possession of the lot and the owner’s duplicate of TCT No. T-28301 since August 14, 1984. After the RTC Order became final, petitioner filed a petition for its annulment before the Court of Appeals on the ground of extrinsic fraud, alleging that the trial court was misled by the application which falsely stated the title was lost when it was actually in petitioner’s possession. The Court of Appeals dismissed the petition, ruling that petitioner failed to prove extrinsic fraud and was constructively notified of the proceedings. The appellate court also noted discrepancies, such as the deed of sale referencing a title issued only in 1986, and that the alleged sale was not brought to the Register of Deeds’ attention until 1994.

ISSUE

1. Whether there was extrinsic fraud on the part of private respondent in obtaining the new owner’s duplicate of title.
2. Whether the RTC had jurisdiction to issue the Order for the issuance of a new owner’s duplicate certificate of title.

RULING

1. No extrinsic fraud. The Supreme Court ruled that the alleged fraud—private respondent’s testimony that the owner’s duplicate certificate was lost—was intrinsic, not extrinsic. Extrinsic fraud refers to acts committed outside the trial that prevent a party from having a fair submission of the controversy, such as keeping a party away from court or concealing the existence of a suit. The use of perjured testimony during trial is intrinsic fraud, as it does not preclude the adverse party from participating in the proceedings or rebutting the evidence. Petitioner’s failure to present its case was due to its own inaction in not timely registering its deed of sale, which would have allowed it to oppose the petition.
2. The RTC had no jurisdiction. The Supreme Court held that a trial court does not acquire jurisdiction over a petition for the issuance of a new owner’s duplicate certificate of title if the original is not actually lost but is in the possession of another. Citing Demetriou v. Court of Appeals and subsequent cases, the Court emphasized that such a petition is a special proceeding where jurisdiction hinges on the fact of loss. Since petitioner alleged and the records suggested the original title was in its possession, the RTC had no jurisdiction to order the issuance of a new duplicate. Consequently, the reconstituted certificate is void. However, the Court clarified that the nullity of the reconstituted certificate does not automatically vest title upon the holder of the original; the issue of ownership must be litigated in appropriate proceedings. The petition was granted, and the assailed Court of Appeals Decision and Resolution were reversed and set aside. The Order of the RTC dated May 16, 1994, insofar as it directed the issuance of a new owner’s duplicate of TCT No. T-28301, was declared void.