G.R. No. 260831 , February 26, 2025
REPUBLIC OF THE PHILIPPINES, PETITIONER, vs. PATRICIO B. BELLA, RESPONDENT.

FACTS

The case involves a Transfer Certificate of Title (TCT) that was administratively reconstituted on October 18, 1960. At the back of this reconstituted title, two annotations were made. The First Annotation was a mandatory encumbrance inscribed pursuant to Section 7 of Republic Act (R.A.) No. 26. This annotation serves as a reservation in favor of any person whose right or interest was duly noted in the original title at the time it was lost or destroyed but was not carried over to the reconstituted title. The Regional Trial Court ordered the cancellation of both annotations. The ponencia (main decision) partially granted the petition, modifying the trial court’s decision by ruling that the First Annotation may already be cancelled based on the express language of R.A. No. 26 .

ISSUE

Whether the mandatory encumbrance (First Annotation) on an administratively reconstituted certificate of title, made pursuant to Section 7 of R.A. No. 26 , may already be cancelled.

RULING

Yes, the First Annotation may already be cancelled. The concurring opinion agrees with the ponencia’s ruling. Section 9 of R.A. No. 26 provides the mechanism for removing the Section 7 encumbrance. It establishes a general rule requiring a petition, publication, and hearing. However, it also provides an exception: if two years have expired from the date of the reconstitution of the title and no petition has been filed under Section 8 by a person claiming an omitted interest, the court shall, upon an ex parte motion by the registered owner, order the register of deeds to cancel the encumbrance. In this case, both requisites for the exception are present: (1) more than two years have lapsed since the reconstitution on October 18, 1960, and (2) no petition under Section 8 has been filed since 1960 by any party claiming an interest annotated in the lost original but omitted from the reconstituted title. Therefore, notice to adverse parties is dispensed with, and the petition is sufficient to cancel the First Annotation. The concurring opinion further observes that this encumbrance operates similarly to the two-year lien under Rule 74, Section 4 of the Rules of Court for extrajudicial settlements, which also lapses after the prescribed period to ensure stability of titles.