On the 19th of September, 2018, the President and CEO of the MLD Corporation

Mr. Mah-Lan Dy signed Credit Policy Insurance (CPI) No. 2018-006. The CPI dictates, to
wit:

“This Credit Policy is issued for clarity and uniform implementation of Lending
Units (LU) in handling real estate property/ies offered as collateral in case/s of
discrepancy/ies in the title and/or technical description of the property.

1. In case of discrepancy in the title and/or technical description of the

property offered as collateral, LU shall request Property Valuation & Credit
Information Department (PVCID) to conduct trace backs until the cause of the
discrepancy is established.

2. Upon receipt of the PVCID report, LU shall assess and determine the
discrepancy. The following steps shall be done depending on the nature of
discrepancy:

Nature of Discrepancy Conditions for Acceptance of Property as

Collateral

Discrepancy in the technical description in As a post-release requirement, the

the Transfer Certificate of Title (TCT) Borrower shall cause the correction of the
which can be traced back to the Original technical description through appropriate
Survey Plan court proceedings not later than six (6)
months from date of approval.

Discrepancy in the name of the registered As a pre-release requirement, the

owner per title vis-à-vis his/her official Borrower shall cause the correction of the
name per birth certificate. name through appropriate court
proceedings.

For discrepancies which cannot be traced  As a Pre-Release requirement, the

back to the Original Survey Plan (i.e. the
discrepancy is mere typographical error in
the title)
Minor Discrepancy (such as misspelled
name), in the TCT in the name of the
registered owner vis-à-vis that reflected in
the Deed of Sale or other acquisition
documents.
Borrower shall present the Official
Receipt representing payment of
entry fee for the annotation of
Affidavit of Discrepancy on the
Title.
 As a Post-Release requirement, the
Borrower shall cause for the
annotation of Affidavit of
Discrepancy on the title not later
than ninety (90) days from date of
loan approval.
 As a Pre-Release requirement, the
Borrower shall present the Official
Receipt representing payment of
entry fee for the annotation of
Affidavit of Discrepancy on the
title.
 As a Post-Release requirement, the
Borrower shall cause for the
annotation of Affidavit of
Discrepancy on the title not later
 than ninety (90) days from date of
loan approval.
Major Discrepancy in the name of the As Pre-Release requirement, the Borrower
registered owner vis-à-vis that reflected in shall present the Corrected Title.
the Deed of Sale or other acquisition
documents (e.g. difference in the names
appearing in the TCT vis-à-vis the Deed of
Sale)

This issuance shall take effect on SEP. 19, 2018.

For strict compliance. Thank you.”

Subsequently, the MLD’s Cauayan City, Isabela Field Legal Services Unit Head
Atty. Ati Han sent a Memorandum addressed to Atty. Virginia Manibog (Counsel General
of MLD) on the 17th of October, 2018. The said Memorandum sought to clarify the
procedures to be undertaken in case/s where discrepancies or errors exist in the entries or
technical descriptions in Transfer Certificate of Titles (TCTs) offered or held as collaterals
with the LBP, in relation to the guidelines set by CPI No. 2018-006.

The Memorandum contained the following comments and inquiries as to the

implementation of CPI No. 2018-006:

“Tabulated in CPI No. 2018-006 is the nature of discrepancies with the

corresponding conditions for acceptance as collateral. As indicated therein, if the
discrepancy in the technical description in the transfer certificate of titles (TCTs) is merely
typographical, i.e. – error in typing the entry from the duly approved technical description
issued by DENR, the requirement is for the borrower to execute an Affidavit of Discrepancy
and register the same with the concerned Registry of Deeds. The same rule likewise applies
if the discrepancy in the name is said to be minor, i.e – when the name is misspelled in the
TCT, an Affidavit of Discrepancy will suffice. However, if the name of the registered owner
differs from what is indicated in the birth certificate; or when the discrepancy in the
technical description is not merely typographical error; or when there is major
discrepancy in the name of the registered owner versus the one reflected in the Deed of
Sale, the requirement is for the borrower to cause correction of the error through
appropriate court proceedings.

With the foregoing, we hereby register our observations and comments on the cited
provisions.

As a rule, a certificate of title, once registered, cannot be altered, modified, or

cancelled except in direct proceeding in accordance with law (Sec. 48, PD 1529).
Nevertheless, the same law provides the manner on how to amend or alter certificates of
title as follows:

Section 108. Amendment and alteration of certificates. No erasure, alteration, or

amendment shall be made upon the registration book after the entry of a certificate
of title or of a memorandum thereon and the attestation of the same be Register of
Deeds, except by order of the proper Court of First Instance. A registered owner
of other person having an interest in registered property, or, in proper cases, the
Register of Deeds with the approval of the Commissioner of Land Registration,
 may apply by petition to the court upon the ground that the registered interests of
any description, whether vested, contingent, expectant or inchoate appearing on
the certificate, have terminated and ceased; or that new interest not appearing
upon the certificate have arisen or been created; or that an omission or error was
made in entering a certificate or any memorandum thereon, or, on any duplicate
certificate; or that the same or any person on the certificate has been changed; or
that the registered owner has married, or, if registered as married, that the
marriage has been terminated and no right or interests of heirs or creditors will
thereby be affected; or that a corporation which owned registered land and has
been dissolved has not convened the same within three years after its dissolution;
or upon any other reasonable ground; and the court may hear and determine the
petition after notice to all parties in interest, and may order the entry or
cancellation of a new certificate, the entry or cancellation of a memorandum upon
a certificate, or grant any other relief upon such terms and conditions, requiring
security or bond if necessary, as it may consider proper; Provided, however, That
this section shall not be construed to give the court authority to reopen the
judgment or decree of registration, and that nothing shall be done or ordered by
the court which shall impair the title or other interest of a purchaser holding a
certificate for value and in good faith, or his heirs and assigns, without his or their
written consent. Where the owner's duplicate certificate is not presented, a similar
petition may be filed as provided in the preceding section.

All petitions or motions filed under this Section as well as under any other
provision of this Decree after original registration shall be filed and entitled in the
original case in which the decree or registration was entered.

Based on the provision, the proceeding for the amendment and alteration of a
certificate of title under Section 108 of P.D. No. 1529 is applicable in seven instances or
situations, namely: (a) when registered interests of any description, whether vested,
contingent, expectant, or inchoate, have terminated and ceased; (b) when new interests
have arisen or been created which do not appear upon the certificate; (c) when any error,
omission or mistake was made in entering a certificate or any memorandum thereon or
on any duplicate certificate; (d) when the name of any person on the certificate has been
changed; (e) when the registered owner has been married, or, registered as married, the
marriage has been terminated and no right or interest of heirs or creditors will thereby be
affected; (f) when a corporation, which owned registered land and has been dissolved, has
not conveyed the same within three years after its dissolution; and (g) when there is
reasonable ground for the amendment or alteration of title (Paz Vs. Republic, G.R. No.
157367, Nov. 23, 2011).

Hence, when an error, omission, or mistake was made in entering a certificate of

title, the registered owner or any person having interest in the property is entitled to avail
of the remedy provided in the cited law by initiating the action through the filing of a
petition in the proper court of the place where the property is located. The provision is
without distinction, it states that “no erasure, alteration, or amendment shall be made
upon the registration book after the entry of a certificate of title or of a memorandum
thereon and the attestation of the same by the Register of Deeds, except by order of the
proper Court of First Instance”. Please note that the law does not qualify whether the
error or omission is minor or major, the wording is for all erasures, alterations or
amendments; neither that it provides for other remedies except by order of the proper
court.

Taking in to account the foregoing, our question now is: Should we sustain the
application of the said CPI such that if we are confronted with typographical errors in the
technical description, e.g. – lot number, plan number, location, bearings, distances, owner
description, metes and bounds, area; and in case we document the mortgage, what then
will we indicate as description of the property in the mortgage contract? Or say if we
 initiate extrajudicial foreclosure, what will be stated in the petition or in the notice of sale?
Is it the data indicated in the TCT or the one stated in the Affidavit of Discrepancy? These
questions are very material since it must be stressed that a Notice of Sheriff’s Sale, to be
valid, must contain the correct title number and the correct technical description of the
property to be sold (Batongbakal Vs. CA, G.R. No. 106953, August 19, 1993). Also, in
Security Corporation Vs. Spouses Mercado (G.R. No. 192934, June 27, 2017), the court
took the occasion to elaborate the importance of a correct description of the properties in
a Notice of Sale, i.e. – in order to properly inform the prospective bidders as to the nature
of the property being sold which necessarily includes the location and correct lot number.

As ruled in the cases mentioned, an incorrect lot number or location of the property
which is the subject of foreclosure sale affects the validity of the sale. Moreover, in both
cases, the court declared that the foreclosure is void because of the noted omission/errors.

If this is the prevailing rule, shall we therefore totally adhere to the provisions of
CPI No. 2018-006 especially in requiring an Affidavit of Discrepancy to correct
typographical errors in TCTs?

Thank you very much and we hope for your immediate response.”

Upon receipt of the Memorandum, Atty. Manibog transmitted the same to MLD’s newly-
hired corporate lawyer for proper disposition. Specifically, Atty. Manibog required the
compliance of the following:

1.) Is CPI No. 2018-006 in conformity with the relevant Philippines laws? Justify with
legal bases; and
2.) Provide the necessary Legal Opinion in response the queries posed in the
Memorandum sent by our Field Unit.

Assume that you are the newly-hired company attorney. Prepare the Legal Opinion
required by Atty. Manibog. This is due on the 26th of January, 2019.

INSTRUCTIONS

For proper identification of your work:

1. indicate your name on the last page of the Legal Opinion;

2. designate yourself as “MLD Legal Officer”;
3. Sign it;
4. Put a date beside your signature;.

Also, print your Legal Opinion on Legal Size paper (8.5” x 13”).

FOLLOW THE INSTRUCTIONS CAREFULLY. OTHERWISE, YOUR WORK WILL

NOT BE GIVEN ANY CREDIT.

ADDITIONAL ASSIGNMENT FOR NEXT MEETING:

1.) Read Articles 19, 20, and 21 of the Civil Code of the Philippines;
2.) 2004 Rules on Notarial Practice: a.) Rule 1; b.) Rule 2, Sections 1, 2, 3, 4, 6, 7, 12 and
14; c.) Rule 3, Sections 1, 11 and 12; and d.) Rule 4, Sections 1, 3, and 4.
3.) Efficient Use of Paper Rule;
4.) Rules of Court of the Philippines, as amended, provisions on “Motions”.