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Assurance Fund
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ASSURANCE FUND OUTLINE
VALUEINSTANCES
PAID TO WHOM
REGISTER OF DEEDSNATIONAL TREASURER
CLAIMS AGAINST ASSURANCE FUNDAGAINST WHOM ACTION IS FILED
JUDGMENT
GENERAL FUNDSUBROGATION
UNRECOVERABLE LOSSES
LIMITATION OF ACTION
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ASSURANCE FUND Sec 93
= 0.25[(0.01) X]Where: Xis the Assessed Value of the real estate (lastassessment for taxation purposes); or fair valuation declared by
two disinterested persons (if its not been assessed for taxation
Entry of a certificate of title in the name of theregistered owner
Original registration on the OCT of a building orotherimprovements on the land
Entry of a certificate pursuant to any subsequenttransfer of registered land
PAID TO WHOM
Register of Deeds paid to the NationalTreasurer
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ASSURANCE FUND Sec 94
Received by the REGISTER ofDEEDS and paid to the
NATIONAL TREASURERand
keep it in an ASSURANCE FUND
-may be INVESTED (manner andform authorized by law)
-Condition and Income of the Fund isreported annually to the
COMMISSIONER OF THE
BUDGET
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ASSURANCE FUND Sec 95
RATIONALEFor Torrens system to be given stability,
litigations must terminate at some definitepoint, however, those unjustly deprivedof their rights over real property by reason
of the operation of our registration lawsmust be afforded REMEDIES.
REMEDIES1. Suit for reconveyance of property
2. Action forrecovery of damages againstthe party who registered through fraud
3. Action against the National Treasurer forrecovery of damages from theAssurance Fund, in case ofinsolvency ofthe party
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ASSURANCE FUND Sec 95
CLAIMS AGAINST ASSURANCE FUNDREQUISITES for Recovery from the Fund:
1. The person sustains loss or damage,or is deprived of any estate or interest inland
2. The land was brought under theoperation of the Torrens System afteroriginal registration
3. Through Fraud, Error, Omission, MistakeorMisdescription in a certificate of title or
entry or memorandum in the registrationbook
4. Without negligence on his part5. Barred or precluded from bringing an
action for recovery of such land or estate
or interest therein
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ASSURANCE FUND Sec 95
REQUIREMENTS1. (OCT) Registered owner/ (TCT)
Innocent purchasers in good faithand for value
2. No negligence
INAPPLICABILITY
1. Plaintiff is solely responsible (DBPvs Bautista)
2. Negligence in protecting interest(Torres vs CA, Entrusting Certificate of
Title to another, Joaquin vs Madrid)
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ASSURANCE FUND Sec 95
RECORDED MORTGAGE ISPROTECTED EVEN IF TITLE ISSUBSEQUENTLY NULLIFIED
Blanco v EsquierdoThe bank is an innocent mortgagee for value
because the certificate of title was in the name
of the mortgagor when the land was
mortgaged by her to the bank. As mortgagee,
it had the right to rely on what appeared in thecertificate. The remedy is to bring an action
for damages against those causing the fraud,
and if insolvent, against the Treasurer of the
Philippines for the recovery of damages
against the ASSURANCE FUND.
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AGAINST WHOM ACTION IS
FILED Sec 96
Recover forthe loss or
damage orfor
deprivationof land or ofany estate or
interest
FraudNegligenceOmissionMistake or
misfeasance
Court PersonnelRegister of Deeds
His deputyOther employeesof the Registry inperformance of
their duties
Persons otherthan those
mentioned above
Action Grounds Committed by InstitutedAgainst
REGISTER
OF DEEDS&
NATIONALTREASURER
Above+
Otherperson/s
Defended by: SOLICITOR GENERAL with the aid of the FISCAL
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PD 1529 Sec 96
The PLAINTIFF must:-Allege the basis of action
-Specify the details of loss, damage or
deprivation and market value of the
propertyThe COURT shall:-Consider the report ofLRAAdministrator
NOTE:NO DEPRIVATION, NO RECOVERY
Treasurer of the Phils vs CA
NO RECOVERY if with NEGLIGENCE
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PD 1529 Sec 97 Judgment
Execution shall first issue againstthe defendants other than the Registerof Deeds and National Treasury
Ifunsatisfied (amount due cannot becollected from the land or personal
property of defendants), the damages
shall be assessed against the AssuranceFund
The plaintiff cannot recover more than the
FAIR MARKET VALUE OF THE LAND atthe time he suffered the loss, damage or
deprivation
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ASSURANCE FUND Sec 98-99
GENERAL FUND-Any funds available in the treasury not
appropriated
-Used when the Assurance Fund is
NOT SUFFICIENT
SUBROGATION-The Republic of the Philippines shall
be subrogated to the rights of theplaintiff against any other parties orsecurities wheneverpayment has
been made by the National
Treasurer
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ASSURANCE FUND Sec 100
REGISTER OF DEEDS AS PARTY ININTEREST
Register of Deeds upon authority of
the LRA Administrator is a proper partyto file action for annulment or
amendment of title(Eagle Realty Corp vs Republic)
The government is charged with the duty to
preserve the integrity of the Torrens System
and protect the Assurance Fund
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ASSURANCE FUND Sec 101
UNRECOVERABLE LOSSES
-Those arising fromBREACH OF TRUST, express orimplied (Guaranteed Homes, Inc vs Valdez)
-Those by any MISTAKE INRESURVEY orSUBDIVISION
(unlawful enlargement or expansion)
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ASSURANCE FUND Sec 102
LIMITATION OF ACTIONShould be instituted within six (6)
years from the time the right to bringsuch action FIRST occurred
(Enriquez vs Enriquez)
-Shall survive to the legal representative of the
person sustaining the loss or damage
-if the person entitled to bring the action is aminor or insane or imprisoned or under legal
disability, such person or anyone claiming from ,
by or under him may bring the proper action at
any time within two (2) years after such disabilityhas been removed