G.R. No. L-29313. January 21, 1977.
IN RE: PETITION FOR CANCELLATION OF RECONSTITUTED TRANSFER CERTIFICATE OF TITLE NO. RT-13661 (N.A.) AND NEW TRANSFER CERTIFICATE OF TITLE NO. T-50056; FOR RECONSTITUTION OF TRANSFER CERTIFICATE OF TITLE NO. 4837, ALL OF THE REGISTER OF DEEDS OF NEGROS OCCIDENTAL; AND FOR ISSUANCE OF NEW CERTIFICATE OF TITLE TO: LUZON SURETY COMPANY, INC., petitioner-appellant, vs. ROMAN MIRASOL, JR., oppositor-appellee.

FACTS

Roman Mirasol, Jr. filed an ex parte petition for reconstitution of a lost title for Lot No. 133 of the Binalbagan cadastre in the Court of First Instance (CFI) of Negros Occidental, Bacolod City branch. The court granted the petition, leading to the issuance of TCT No. RT-13661. Through subsequent transactions, this title was eventually cancelled and TCT No. T-50056 was issued in Mirasol’s name. Luzon Surety Company, Inc. later filed a petition in the same cadastral case and CFI branch, seeking to cancel Mirasol’s reconstituted title and the derivative titles. Luzon Surety alleged fraud, claiming it had acquired a 4/6 interest in the lot via an execution sale in 1941 and had been in possession since, and that the persons in Mirasol’s chain of title were fictitious.
Mirasol moved to dismiss Luzon Surety’s petition, arguing the land registration court lacked jurisdiction to resolve the contentious issues of ownership and fraud raised. The lower court dismissed Luzon Surety’s petition without prejudice, ruling it should file an ordinary action to impugn the titles, and indicated the proper venue was the CFI branch in Himamaylan, where the land is situated. Luzon Surety appealed, contending its petition for cancellation of a fraudulent reconstitution was within the Bacolod branch’s competence and that venue for any separate action should lie in Bacolod City.

ISSUE

Whether the Court of First Instance, acting as a land registration court, has jurisdiction to resolve Luzon Surety’s petition which involves a serious controversy over ownership and allegations of fraud.

RULING

No. The Supreme Court affirmed the dismissal, holding that the lower court, in its limited capacity as a land registration court, lacked jurisdiction. The Court explained that while Luzon Surety invoked Section 112 of the Land Registration Act (allowing amendments to certificates of title), relief under this provision is only summary and non-controversial in nature. It requires unanimity among parties or the absence of any serious adverse claim.
Here, Mirasol, holding a title for the entire lot, actively opposed Luzon Surety’s claim to a 4/6 share based on an execution sale and long-term possession. This created a substantial dispute over ownership that could not be resolved summarily. The allegations of fraud and the conflicting claims of title necessitated a full-blown adversarial trial where proper pleadings could be filed and evidence thoroughly examined. Therefore, the correct remedy for Luzon Surety was to institute an ordinary civil action, as directed by the lower court.
On the ancillary issue of venue, the Supreme Court modified the lower court’s order. It ruled that Luzon Surety had the option to file the separate ordinary action either in Himamaylan (where the property is located) or in Bacolod City. The Court recognized that while the Himamaylan branch had territorial jurisdiction, the Bacolod branch, which issued the contested reconstitution order, also potentially had jurisdiction over an action to annul its