A titled property was mortgaged to me. My friends told me to have the mortgage annotated on the title, so I went to the Registry of Deeds. To my surprise, the office informed me that a huge fire ravaged their records so they could no longer annotate my mortgage. What should I do to protect my claim?
At the outset, it must be clarified that a mortgage on real property is valid even though the mortgage is not registered. The Civil Code of the Philippines expressly states that the mortgage is binding between the parties even if the instrument is not recorded (Article 2125). But in order to bind third persons or those who are not privies to the contract, the mortgage must be registered.
Our Property Registration Decree specifically provides that “the act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned” (Section 51, Presidential Decree or PD 1529). It is the registration of the instrument that serves as constructive notice to all persons of any conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting land (Section 52, PD 1529).
The registration is done by filing the instrument or document that creates or transfers an interest in the property with the Register of Deeds. The Register of Deeds would then enter a brief memorandum of the instrument upon the original of the certificate of title and on the owner’s duplicate certificate, and sign it (Sections 54 & 61, PD 1529). It is the filing of the instrument, with the corresponding entry of a memorandum on both certificates of title, the one with the Register of Deeds and the duplicate certificate given to the owner, which completes the registration.
In your case, considering that the original of the certificate of title was destroyed by fire, the deed of mortgage cannot be registered because the inscription of a memorandum required by law can no longer be made. In order to register your mortgage, it is necessary to first restore the original of the certificate of title through reconstitution.
Generally, reconstitution of title is undertaken by filing a petition in the proper Regional Trial Court which shall state that the certificate of title had been lost or destroyed, if such be the fact, the location, area and boundaries of the property, the names and addresses of all persons who have a claim or encumbrance on the property together with a statement of their claims, and a statement that no deeds or other instruments affecting the property have been registered (Section 110, PD No. 1529 in relation to Section 12, Republic Act (RA) No. 26).
You may, however, inquire with the Register of Deeds where the property is located if it is possible to reconstitute the destroyed certificate of title through administrative means, that is, without filing a petition in court. Administrative reconstitution of title is a special remedy provided by law in case of substantial loss or destruction of land titles because of fire, flood or other force majeure as determined by the Land Registration Authority (LRA).
It may be availed of where the number of certificates of titles lost or damaged is at least ten percent (10 percent) of the total number in the possession of the Office of the Register of Deeds, and the number of certificates of titles lost or damaged be at least five hundred (500) (Section 110, PD 1529 as amended by Republic Act 6732).
In either case, you may personally file the petition for reconstitution of title as both modes allow not only the registered owner or his assigns, but also other persons having an interest in the property. A person holding a mortgage on the property certainly has a lien or interest therein.
We hope you find the foregoing sufficient. Please bear in mind that this opinion is based on the facts you presented and our appreciation of the same. Our opinion may vary if actual facts and circumstances change.
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