ASSURANCE FUND

ASSURANCE FUND

• State creates a fund for the compensation of persons injured by divesting/cutting off of rights due to the indefensibility of title; following that act of registration is operative act by which State transfers title; created to relieve innocent persons from harshness of doctrine that certificate of title is conclusive evidence of an indefeasible title to land.

• Upon entry of certificate in name of owner or TCT, ¼ of 1% shall be paid to ROD based on assessed value of land – as contribution to assurance fund; if no assessment yet, sworn declaration of 2 disinterested persons subject to determination by court.

• Money shall be under custody of the National treasurer; invest it until principal plus interest aggregates to 500,000, excess shall be paid to the Assurance Fund; annual report of Treasurer to Secretary of Budget

WHO IS ENTITLED:
1. Claimant must be owner, purchaser or encumbrancer in good faith who suffered actual damage by loss of land; in short – he is deprived of his land or interest therein

2. No negligence attributable to him

3. Claimant is barred from filing action to recover said land

4. Action to recover from assurance fund has not prescribed

LOSS/DAMAGES SHOULD NOT BE DUE TO FOLLOWING REASONS:
1. Breach of trust

2. Mistake in resurvey resulting in expansion of area in certificate of title

LOSS/DAMAGES SHOULD BE DUE TO THE FOLLOWING REASONS:
1. Omission, mistake, misfeasance of ROD or clerk of court

2. Registration of 3rd persons as owner

3. Mistake, omission, misdescription in certificate of title, duplicate or entry in books

4. Cancellation

AGAINST WHOM ACTION IS FILED:
1. Action due to deprivation of land due to mistake, negligence, omission of ROD, etc – ROD and National Treasurer as defendants; Sol-Gen must appear

2. Private persons involved – should also be impleaded

LIABILITY:
1. Satisfy claims from private persons first

2. When unsatisfied – secondary liable is the National Treasurer who shall pay thru assurance fund; thereafter Government shall be subrogated to rights of plaintiff to go against other parties or securities

MEASURE OF DAMAGES:
• Based on amount not greater than fair market value of land

• Amount to be recovered not limited to 500,000 which is maintained as standing fund

• If fund is not sufficient, National Treasurer is authorized to make up for deficiency from other funds available to Treasury even if not appropriated

WHERE AND WHEN TO FILE ACTION AGAINST ASSURANCE FUND:
1. Any court of competent jurisdiction – RTC in city where property lies or resident of plaintiff

2. Action prescribes in 6 years from time plaintiff actually suffered loss

3. If plaintiff is minor, insane or imprisoned – has additional 2 years after disability is removed to file action notwithstanding expiration of regular period