CIVIL LAW > XIII. LAND TITLES AND DEEDS > H. ASSURANCE FUND > 3. PARTIES NAMED AS RESPONDENTS IN ACTION TO CLAIM AGAINST THE ASSURANCE FUND

Overview of the Assurance Fund

The Assurance Fund is a statutory mechanism created under the Torrens System of land registration. It serves as an indemnity fund to compensate individuals who, without negligence on their part, have suffered damage due to the wrongful registration or loss of their rightful property caused by the operation of the Torrens System. The fund is maintained by the government through fees collected during the registration of land titles.

Legal Basis

Presidential Decree No. 1529 (Property Registration Decree) - Governs the operation of the Assurance Fund in the Philippines.
Section 95 of PD No. 1529 - Provides the specific mechanism for filing claims against the Assurance Fund and delineates who may be named as respondents in such actions.

Key Principles for Claims Against the Assurance Fund

Grounds for Recovery:
- A party is deprived of land or an interest therein due to fraud, negligence, or mistake in the registration process.
- The deprivation occurs without negligence on the claimant's part.
- Legal remedies against the responsible party are exhausted or unavailable.
Requirements for Filing a Claim:
- A final judgment declaring the loss or damage resulting from the registration process.
- Proof that the claimant is entitled to compensation under the terms of the Assurance Fund.

Parties Named as Respondents

In an action to claim against the Assurance Fund, it is imperative to correctly identify and include the proper respondents. These are typically as follows:

The Register of Deeds:
- The Office of the Register of Deeds is the primary government entity responsible for the issuance of certificates of title. It may be included as a respondent for actions involving alleged errors, fraud, or negligence in the registration process.
The National Government:
- Represented by the Solicitor General, as custodian and administrator of the Assurance Fund.
- The Solicitor General represents the interests of the State, which ultimately disburses compensation from the Assurance Fund.
Third Parties Involved in the Fraud or Error:
- If specific individuals or entities caused the fraudulent registration or deprivation, they must be named as respondents to exhaust remedies against them before resorting to the Assurance Fund.
The Claimant’s Adverse Party:
- If the claimant has unresolved issues with another party (e.g., a fraudulent buyer or seller), that adverse party must also be included as a respondent.

Procedural Considerations

Exhaustion of Remedies:
- Before filing a claim against the Assurance Fund, the claimant must demonstrate that all available remedies against the responsible parties have been pursued. This includes actions for damages or annulment of title.
Role of the Court:
- The action must be filed in a court of competent jurisdiction.
- The court will determine the validity of the claim and the extent of the damage or loss incurred.
Burden of Proof:
- The claimant bears the burden of proving:
  - Their rightful ownership or interest in the land.
  - The fraudulent or erroneous act leading to the deprivation.
  - Exhaustion of remedies against responsible parties.
Extent of Liability:
- The Assurance Fund is liable only for actual damages suffered. Claims for speculative or moral damages are not compensable.

Practical Implications for Litigants

Inclusion of Proper Respondents:
- Failure to include the correct respondents (e.g., the Solicitor General or Register of Deeds) can result in the dismissal of the claim.
Coordination with the Solicitor General:
- As the legal representative of the government, the Solicitor General must be served with summons and relevant pleadings.
Judicial Discretion:
- Courts are meticulous in examining claims against the Assurance Fund, ensuring compliance with procedural and substantive requirements.

Relevant Case Law

Leong v. Register of Deeds (G.R. No. 128096):
- Reiterated the requirement to exhaust remedies against all parties directly responsible for the deprivation before seeking recourse from the Assurance Fund.
Roa v. The Assurance Fund (G.R. No. 155123):
- Clarified that negligence on the part of the claimant forfeits any right to compensation from the fund.
De Guzman v. Register of Deeds (G.R. No. 190326):
- Affirmed the need to establish fraud, error, or negligence as the proximate cause of loss for a claim to prosper.

Conclusion

In claims against the Assurance Fund, it is critical to:

Understand the fund’s purpose and statutory framework.
Correctly identify and name all proper respondents, particularly the Register of Deeds and the Solicitor General.
Satisfy the legal requirements of proving loss and exhausting remedies. Failure to adhere to these principles can result in dismissal of the claim or denial of compensation. As such, meticulous preparation and adherence to procedural rules are essential for a successful claim.