Title
LTO: Chattel Mortgage Required for Motor Vehicle Registration
Law
Lto Memorandum Circular No. 678-2006
Decision Date
Feb 10, 2006
LTO Memorandum Circular No. 678-2006 mandates that the registration of mortgaged motor vehicles requires the presentation of a registered chattel mortgage, with strict enforcement and penalties for non-compliance by LTO personnel.

Questions (EXECUTIVE ORDER NO. 19)

To require strict compliance with the rule that chattel mortgages (or their releases) must be registered with the Office of the Register of Deeds before the LTO effects any registration transaction involving a mortgaged motor vehicle.

The chattel mortgage or the release thereof must first be registered with the Office of the Register of Deeds before any registration transaction is effected.

That some district offices were registering mortgaged motor vehicles without requiring presentation of the chattel mortgage registered with the Office of the Register of Deeds.

Yes. The circular states that the procedure in the Motor Vehicle Manual of Operations on Motor Vehicle Registration is still in effect.

They must enforce the requirement that the chattel mortgage (or release) must be registered with the Register of Deeds and presented before effecting the LTO registration transaction.

They may be subject to appropriate administrative, civil, or criminal sanctions as may be allowed by pertinent laws, rules, and regulations.

Yes. It explicitly includes failure “whether deliberately or not.”

That LTO personnel are mandated to follow the Register of Deeds registration and presentation requirement as a condition precedent before any LTO registration transaction involving a mortgaged vehicle.

It should not effect the registration transaction, because the chattel mortgage must first be registered with the Register of Deeds and presented before LTO registration is processed.

Yes. It states that “a chattel mortgage or release thereof” shall first be registered with the Office of the Register of Deeds before any registration transaction is effected.

Those district office personnel and other LTO staff responsible for processing motor vehicle registration transactions that involve mortgaged motor vehicles.

It makes Register of Deeds registration (and presentation) a prerequisite—before LTO can register the mortgaged motor vehicle or related transaction.

Because it commands “Strict compliance is hereby enjoined,” indicating a mandatory requirement for LTO offices and personnel.

That beyond administrative action, there may also be possible civil and/or criminal liability under existing legal frameworks if personnel violate the requirement.


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