Osmeña: Statute of fraud

Antonio V. Osmeña
Estatements

TITLE to realty is a legal concept, which confers upon the rightful holder a lawful claim to all the requisites or elements that constitute ownership. Title legally conferred sanctions not only exclusive possession to an owner, but also recourse to legal power to defend his title holdings.

Transfers by delivery give rise to many disputes. There being no written record of transaction, false statements have led to gross frauds and forcible possession.

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As a result, the “statute of frauds” was eventually adopted, which prevented fraud by declaring that no transfer should be enforceable unless in writing. From this statute flows the present system of transferring title by means of written instruments; the deed, mortgage, lease, etc. However, although the statute of frauds in substance has been enacted into law, there are still numerous cases of illegal transfer of properties through forgery of legal documents.

Title examiners, as well as those who facilitate conveyance of titles, operating in Cebu will tell you of the numerous cases of titles recovered due to frauds. The term title must be considered as including not only the full fee, but any other interest in real property.

Under strict legal rule, title to real property can be transferred in two ways: by operation of law and by purchase or as a gift. As landed property has become more valuable and ownership of real estate more diverse, it is increasingly important to provide safeguards to protect the true owner from loss of title by claim, error or fraud.

Unfortunately, there is no cooperative aid from public and private agencies in the transfer of title by the rightful and true owner in the present Torrens System of titling.

Under the provisions of the law, the initial registration is by means of a judicial proceeding, resulting in an order or judgment of a court. But the law permits the transfer of a registered title to be made by a registrar or other public official without notice to anyone. This provision is upon the assumption that the transfer is merely the performance of a ministerial act.

The question has been raised whether such an official, not being clothed with any judicial authority, is not in reality performing a judicial function in interpreting an instrument and passing upon it sufficiency. The registration of the title in the name of the new owner is conclusive and binding upon all the world. Of course, one would not be allowed to profit by his fraud, if a forgery or other fraud has been committed, but the registered title may again be transferred, and one taking it in good faith would have an indefeasible title.

In cases of this kind, injured parties must look to the assurance funds (although that is not enough); they cannot recover their property. However, in cases where it is legally possible to recover the title, it is neither easy nor speedy.

It can be expensive, too.

To illustrate, the 400-square meter lot at Buena Hills Subdivision that I own was illegally transferred to another individual without my knowledge. Forged documents were submitted to the registrar to effect transfer of the title.

The new title was eventually split into two titles and mortgaged to the bank.

Cases like this should require the registrar to send notices to all parties to prove the authenticity of the documents submitted in relation to the transfer of title.

Congress needs to accept that no system of title searching is perfect. As previously indicated, errors may creep in, or forgeries and other things that cannot be guarded against may cause loss.

To remedy this situation, title insurance has come into use in the larger cities of developing countries. Like all other insurance, title insurance is a distribution of loss
among all insured. Unfortunately, there is little public demand to legislate a model Land Title Registration Law.

In many countries, real estate owners and dealers are alive and receptive to good ideas, but they are not using the Torrens system which the Philippines has adopted.

Although there are defects in the system of title examination and insurance, it evidently possesses more attractions than the one advocated by Torrens Law adherence.

Hopefully, Congress will introduce some modifications to remove its present objections on the Torrens System, not only to prevent fraud but to correct the tedious procedure for registration of titles.