Several years ago, my cousin introduced me to his friend who needed money. With the assurance that the loan will be secured by a mortgage and the title will be surrendered to me, I agreed to lend money. Unfortunately, my cousin’s friend failed to pay the loan and is still outstanding up to this day. Recently, I received information that my cousin’s friend filed a petition in court and secured a new title over the land she mortgaged to me. She claimed that the land title was lost. Is the land title I am holding now considered invalid? What should I do to protect my interest?
From your narration, it appears that your debtor filed a petition for issuance of a new duplicate certificate of title in lieu of her allegedly lost title. This remedy is provided by Section 109 of the Property Registration Code in case of loss or theft of an owner’s duplicate certificate of title. Should the court grant the petition, a new title will be issued which will contain a memorandum of the fact that it is issued in place of the lost duplicate certificate. The new title will then be entitled to like faith and credit as the original duplicate in all respects (Section 109, Presidential Decree No. 1529).
Note that the law requires that the title must be lost or stolen in order to avail of the remedy. In one case, the Supreme Court declared that the word lost as used in the law should be interpreted in its ordinary sense following the rule in statutory construction that words and phrases used in a statute, should be given their plain, ordinary and common usage meaning, in the absence of legislative intent to the contrary. Thus, the remedy is available only when the title is actually lost and not when the certificate of title is merely in possession of a third person with the knowledge of the owner (Alcazar vs. Arante, 687 SCRA 507).
It is the actual loss of the title that becomes a legal ground for the court to issue a new title. Consequently, a new title secured when the owner’s title has not been lost, but is in fact in the possession of another person strips the court of jurisdiction and renders the new certificate of title void. Such court decision to issue a new title may be attacked anytime (Strait Times, Inc. vs. Court of Appeals,294 SCRA 714). As the new title is void, it will not supersede the old title it supposedly replaced. Hence, between the two titles, the old title will prevail.
Applying the foregoing to your case, the fact that your debtor was able to secure a new title will not invalidate or defeat the title she gave you to secure her loan. The title in your possession is superior to the new title she secured which is void.
In order to protect your interest, you may file a case to question or annul the decision of the concerned court that ordered the issuance of the new title. Moreover, it is highly advisable to register or annotate your mortgage lien on the title of the property, if it is not yet registered. The act of registration serves as a constructive notice to all persons of your claim on the property, and is the operative act that binds the land insofar as third persons are concerned.
We hope we were able to sufficiently address your concern. Please bear in mind that this opinion is based on the facts you narrated and our appreciation of the same. Our opinion may vary if facts are changed or elaborated.
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