Before a mortgage can be validly instituted, the essential requisites enumerated in Article 2085 of the Civil Code of the Philippines must be complied with:
That they be constituted to secure the fulfillment of a principal obligation;
That the mortgagor be the absolute owner of the thing mortgaged;
That the persons constituting the mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose.
Third persons who are not parties to the principal obligation may secure the latter by mortgaging their own property.”
You can mortgage your lot in Pampanga to secure the loan that you will obtain for the
business that you are planning to put up.
To be able to do so, a Deed of Mortgage must be executed between you and the person with whom you will mortgage your lot.
In addition to the aforementioned requirements, the Deed of Mortgage should also be recorded or registered in the Registry of Deeds in Pampanga. (Article 2185, Civil Code of the Philippines).
You have to present the deed of mortgage and your owner’s duplicate certificate of title to the said office.
Upon presentation, the Registry of Deeds will enter on the original certificate of title and to your duplicate certificate of title a memorandum on the said mortgage, stating therein the date and time of filing and the file number assigned to the deed.
The date of the deed and the reference to the volume and page of the book in which it is registered shall likewise be noted (Sec. 61, Presidential Decree [P.D.] No.1529).
The registration of the mortgage will operate as a notice to the whole world of its existence and serve as a warning that whoever deals with the property on which it is constituted should respect the same. However, its non-registration will not affect the validity of mortgage between you and the mortgagee.
Once you have fulfilled the obligation which is secured by your lot, an instrument or document indicating such fact must be executed and registered with the Registry of Deeds.
Its registration will have the effect of cancellation of the mortgage which is annotated in the original certificate of title and your owner’s duplicate certificate of title (Sec. 62, P. D. No.1529).
Finally, please be reminded that this opinion is solely based on your narration of facts and our appreciation of the same. The opinion may vary if other facts are added or elaborated.
We hope that we were able to address your concern.