My husband and I mortgaged our lot. The mortgagee, however, told us that he will cause our mortgage agreement to be annotated on the title of our land. Is this necessary for the validity of the mortgage? Can we have it removed later on?
To be valid, a contract of mortgage shall comply with the following essential requisites: 1) It is constituted to secure the fulfillment of a principal obligation; 2) The mortgagor is the absolute owner of the thing mortgaged; and 3) The persons constituting the mortgage has the free disposal of his property or he is legally authorized for that purpose (Article 2085, Civil Code of the Philippines [CCP]). In addition to the aforementioned, the law also requires the parties to have the document evidencing their mortgage recorded in the Registry of Property (Article 2125, CCP). The registration of the deed of mortgage in the transfer certificate of title of the land will serve as a notice to the whole world that the land is subject of a mortgage and that whoever enters into a transaction involving the said land shall respect the deed of mortgage (Oswaldo D. Agcaoili, Property Registration Decree and Related Laws (2006), page 474). If the instrument is not recorded, however, the mortgage is nevertheless binding between the parties (Article 2125, CCP).
The mortgage may be registered by presenting the Deed of Mortgage and the owner’s duplicate certificate of title with the Register of Deeds where the land is registered. Upon presentation thereof, the Register of Deeds shall enter upon the original of the certificate of title and also upon the owner’s duplicate certificate a memorandum thereof, the date and time of filing and the file number assigned to the deed, and shall sign the memorandum. He shall also note on the deed the date and time of filing and a reference to the volume and page of the registration book in which it is registered (Section 60, Presidential Decree (PD) No. 1529).
The annotation in your transfer certificate of title shall remain unless you have fully satisfied the obligation guaranteed by your land. In such case, the mortgage may be discharged or canceled by means of an instrument releasing you of your obligation executed by the mortgagee, which shall be filed with the same Register of Deeds. Upon the filing thereof, the Register of Deeds shall make the appropriate memorandum on the certificate of title canceling the annotation on the mortgage (Section 62, PD No. 1529).
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts that you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to firstname.lastname@example.org