November 19, 1996
DAR OPINION NO. 101-96
MARO Ester F. Hernandez
Municipal Agrarian Reform Office
Padre Garcia, Batangas
Dear MARO Hernandez:
This has reference to your request for the issuance of a DAR policy guideline on the matter of the annotation of lien at the back of the Emancipation Patents/Certificates of Landownership Award issued to farmer-beneficiaries.
You state that in July 1992, Mr. Natalio De Leon voluntarily offered for sale his parcel of land embraced under TCT No. T-42010 consisting an area of 15.2587 hectares, located at Maugat East, Padre Garcia, Batangas; that the same has been valued by the. LVO-Reg. IV in 1993; that the Register of Deeds in Batangas certified that said title was the subject of real estate mortgage with the Republic Planters Bank in the amount of P8,632,000.00; that CLOAs had been issued to the beneficiaries with the lien or encumbrance annotated in their titles; that the beneficiaries are opposing said annotation since it prevents them from securing a mortgage loan from the bank. Hence, this request.
Please be informed that the carry-over to the EP/CLOA issued to farmer-beneficiaries of liens or encumbrances which have not been discharged or cancelled is a legal requirement and cannot be dispensed with. Section 62 of PD 1529 (the Property Registration Decree) provides that:
"A mortgage or lease of registered land may be discharged or cancelled by means of an instrument executed by the mortgagee or lessee in a form sufficient in law, which shall be filed with the Register of Deeds who shall make the appropriate memorandum upon the certificate of title."
Pursuant to the aforequoted provision, Land Registration Authority Circular No. 54 (specifically paragraph 1, page 9) requires that the liens or encumbrances be carried over to the EP/CLOA presented for registration, unless the appropriate instrument for its cancellation is likewise presented.
While it is admitted that the annotation of such lien/encumbrance on the titles issued to farmer-beneficiaries is unfair as they are not privies to the previous transaction of the mortgagor and mortgagee yet this does not mean that they will have to repay the balance of the mortgage loan.
In view of the afore-cited provision of the Decree, this Office cannot issue a policy guideline on the non-annotation of such lien/encumbrance unless such provision of the law is amended or repealed.
We hope to have enlightened you on the matter.
Very truly yours,
(SGD.) LORENZO R. REYES
OIC-Undersecretary
LAFMA
Copy furnished:
Dir. Martha Carmel C. Salcedo
Policy and Strategic Research Office
DARCO, Diliman, Quezon City