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 Register of Deeds 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 P+I aggregates to 500,000, excess shall
be paid to the Assurance Fund; annual report of Treasurer to Secretary of Budget

Who is entitled

- 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
- No negligence attributable to him
- Claimant is barred from filing action to recover said land 4. Action to recover from assurance fund has not
prescribed

Loss/Damage 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 RD or clerk if court

2. Registration of third person 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 Register of Deeds, etc – Register of
Deeds 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.

Petition and motions after original registration

Lost Duplicate Certificate

- Sworn statement that certificate is lost to be filed by person in interest with Register of Deeds
- Petition to court for issuance of new title
- After notice and hearing – court to order issuance of new title with memorandum that it is issued in place of
lost certificate
- If false statement: complex crime of estafa thru falsification of public document

Adverse claim in registered Land

- Whoever claims a better right or interest in a land adverse to the registered owner shall make written
statement alleging his right, how and when acquired with description of land
- Statement to be signed and sworn to
- Entitled to registration as adverse claim – noted on certificate of title If there is petition – speedy hearing,
determine validity of adverse claim
- May be cancelled without court order; effective only for 30 days
- After cancellation, no adverse claim on same ground may be registered by same claimant
o Adverse to registered owner
o Arises after original registration
o Cannot be registered under provisions of land registration act
- To be made on original certificate, to the duplicate is not necessary because no access
- Contracts of lease, contract to sell but prescription and money claims are not allowed
- Purpose: measure designed to protect the interest of a person over a property where registration is not
provided for by the land registration act; serve as notice and warning to persons subsequently dealing on
said land
- Different with lis pendens: permanent; can only be removed after hearing is done but adverse claim is only
for 30 days: lis pendens – notice that property is in litigation; adverse claim; somebody is claiming better
right
- Recent ruling: adverse claim can only be removed upon court order

Petition seeking surrender of duplicate title

- Involuntary and involuntary conveyances – when duplicate cannot be produced, petition in court may be
filed to compel surrender of certificate of title duplicate to Register of Deeds
- After hearing, may order issuance of new certificate and annul the old certificate; new
o certificate shall contain annotation re annulment of old certificate

Amendment and alteration of certificate of title

- A certificate of title cannot be altered, amended except in direct proceeding in court; summary proceeding
- Entries in registration books also not allowed to be altered except by order of the court
- Grounds:
o New interest not appearing on the instrument have been created
o Interest have terminated or ceased
o Omission or error was made in entering certificate
o Name of person on certificate has been changed
o Registered owner has married
o Marriage has terminated
 o Corporation which owner registered land has dissolved and has not conveyed the property within 3
years after its dissolution
- What corrections are permitted in title (which does not include lands included in original; technical
description as long as original decree of registration will not be reopened and rights or interest of persons
not impaired; old survey was incorrect; substitution of name of registered owner)
o Alteration which do not impair rights and
o Alteration which impair rights – with consent of all parties
o Alterations to correct obvious mistakes

Reconstitution of Original Certificate of Title

- As consequence of war – records have been destroyed

- When reconstituted – have same validity as old title
- Can only be done judicially by filing a petition for reconstitution with RTC
- To be published in OG for 2 cons issues and on main entrance of municipality at least 30 days before hearing
- In rem proceedings
- Court to order reconstitution if it deemed fit; issue order to Register of Deeds
- Lack of essential data fatal

Transaction evidenced by lost document-how registered

- Register of Deeds forbidden to effect registration of lost or destroyed documents

- Steps by interested parties:
o Procure authenticated copy of lost or destroyed instrument
o Secure an order from court

CASES

Logarta vs. Mangahis

Civil Law; Property; Adverse Claims; An adverse claim serves as a notice to third persons that any transaction
regarding the disputed land is subject to the outcome of the dispute.—An adverse claim is a type of involuntary
dealing designed to protect the interest of a person over a piece of real property by apprising third persons that
there is a controversy over the ownership of the land. It seeks to preserve and protect the right of the adverse
claimant during the pendency of the controversy, where registration of such interest or right is not otherwise
provided for by the Property Registration Decree. An adverse claim serves as a notice to third persons that any
transaction regarding the disputed land is subject to the outcome of the dispute.

Same; Same; Same; Before a notice of adverse claim is registered, it must be shown that there is no other provision in
law for the registration of the claimant’s alleged right in the property. —Before a notice of adverse claim is
registered, it must be shown that there is no other provision in law for the registration of the claimant’s alleged right
in the property. In Register of Deeds of Quezon City v. Nicandro, 1 SCRA 1334 (1961), the Court held that where the
basis of the adverse claim was a perfected contract of sale which is specifically governed by Section 57 of the Land
Registration Act, or Act No. 496, the filing of an adverse claim was held ineffective for the purpose of protecting the
vendee’s right. Similarly, in L. P. Leviste & Company, Inc. v. Noblejas, 89 SCRA 520 (1979), the Court emphasized that
if the basis of the adverse claim is a perfected contract of sale, the proper procedure is to register the vendee’s right
as prescribed by Sections 51 and 52 of PD 1529, and not under Section 70 which is ineffective for the purpose of
protecting the vendee’s right since it does not have the effect of a conveyance.

Same; Land Registration; Property Registration Decree; The prevailing rule is that voluntary instruments such as
contracts of sale, contracts to sell, and conditional sales are registered by presenting the owner’s duplicate copy of
the title for annotation, pursuant to Sections 51 to 53 of Presidential Decree (PD) No. 1529. —Thus, the prevailing
rule is that voluntary instruments such as contracts of sale, contracts to sell, and conditional sales are registered by
presenting the owner’s duplicate copy of the title for annotation, pursuant to Sections 51 to 53 of PD 1529. The
reason for requiring the production of the owner’s duplicate certificate in the registration of a voluntary instrument
is that, being a willful act of the registered owner, it is to be presumed that he is interested in registering the
instrument and would willingly surrender, present or produce his duplicate certificate of title to the Register of
Deeds in order to accomplish such registration. The exception to this rule is when the registered owner refuses or
fails to surrender his duplicate copy of the title, in which case the claimant may file with the Register of Deeds a
statement setting forth his adverse claim.

Republic vs. Camacho

Civil Law; Land Titles; Reconstitution of Titles; The nature of the proceeding for reconstitution of a certificate of title
under R.A. No. 26 denotes a restoration of the instrument, which is supposed to have been lost or destroyed, in its
original form and condition.―The nature of the proceeding for reconstitution of a certificate of title under R.A. No.
26 denotes a restoration of the instrument, which is supposed to have been lost or destroyed, in its original form
and condition. The purpose of such a proceeding is merely to have the certificate of title reproduced, after proper
proceedings, in the same form it was in when its loss or destruction occurred. The same R.A. No. 26 specifies the
requisites to be met for the trial court to acquire jurisdiction over a petition for reconstitution of a certificate of title.
Failure to comply with any of these jurisdictional requirements for a petition for reconstitution renders the
proceedings null and void. Thus, in obtaining a new title in lieu of the lost or destroyed one, R.A. No. 26 laid down
procedures which must be strictly followed in view of the danger that reconstitution could be the source of
anomalous titles or unscrupulously availed of as an easy substitute for original registration of title proceedings

Same; Same; Same; Notices to owners of adjoining lots and actual occupants of the subject property are not
mandatory and jurisdictional in a petition for judicial reconstitution of destroyed certificate of title when the source
for such reconstitution is the owner’s duplicate copy thereof since the publication, posting and notice requirements
for such a petition are governed by Section 10 in relation to Section 9 of R.A. No. 26.―The CA was correct in invoking
our ruling in Puzon v. Sta. Lucia Realty and Development, Inc., 353 SCRA 699 (2001), that notices to owners of
adjoining lots and actual occupants of the subject property are not mandatory and jurisdictional in a petition for
judicial reconstitution of destroyed certificate of title when the source for such reconstitution is the owner’s
duplicate copy thereof since the publication, posting and notice requirements for such a petition are governed by
Section 10 in relation to Section 9 of R.A. No. 26. Section 10 provides: SEC. 10. Nothing hereinbefore provided shall
prevent any registered owner or person in interest from filing the petition mentioned in section five of this Act
directly with the proper Court of First Instance, based on sources enumerated in sections 2(a), 2(b), 3(a), 3(b), and/or
4(a) of this Act: provided however, That the court shall cause a notice of the petition, before hearing and granting
the same, to be published in the manner stated in section nine hereof: And, provided, further, That certificates of
title reconstituted pursuant to this section shall not be subject to the encumbrance referred to in section seven of
this Act. x x x In sum, Section 10, in relation to Section 9, requires that 30 days before the date of hearing, (1) a
notice be published in two successive issues of the Official Gazette at the expense of the petitioner, and that (2) such
notice be posted at the main entrances of the provincial building and of the municipal hall where the property is
located. The notice shall state the following: (1) the number of the certificate of title, (2) the name of the registered
owner, (3) the names of the interested parties appearing in the reconstituted certificate of title, (4) the location of
the property, and (5) the date on which all persons having an interest in the property, must appear and file such
claims as they may have.

Sebastian vs. Cruz

Civil Law; Land Titles and Deeds; Reconstitution of Titles; Requisites that Must be Complied With for an Order for
Reconstitution to be Issued.—From the foregoing, it appears that the following requisites must be complied with for
an order for reconstitution to be issued: (a) that the certificate of title had been lost or destroyed; (b) that the
documents presented by petitioner are sufficient and proper to warrant reconstitution of the lost or destroyed
certificate of title; (c) that the petitioner is the registered owner of the property or had an interest therein; (d) that
the certificate of title was in force at the time it was lost and destroyed; and (e) that the description, area and
boundaries of the property are substantially the same as those contained in the lost or destroyed certificate of title.
Verily, the reconstitution of a certificate of title denotes restoration in the original form and condition of a lost or
destroyed instrument attesting the title of a person to a piece of land. The purpose of the reconstitution of title is to
have, after observing the procedures prescribed by law, the title reproduced in exactly the same way it has been
when the loss or destruction occurred. RA 26 presupposes that the property whose title is sought to be reconstituted
has already been brought under the provisions of the Torrens System.

Same; Same; Same; The fact of loss or destruction of the owner’s duplicate certificate of title is crucial in clothing the
Regional Trial Court (RTC) with jurisdiction over the judicial reconstitution proceedings.—Indubitably, the fact of loss
or destruction of the owner’s duplicate certificate of title is crucial in clothing the RTC with jurisdiction over the
judicial reconstitution proceedings. In Spouses Paulino v. CA, 725 SCRA 273 (2014), the Court reiterated the rule that
when the owner’s duplicate certificate of title was not actually lost or destroyed, but is in fact in the possession of
another person, the reconstituted title is void because the court that rendered the order of reconstitution had no
jurisdiction over the subject matter of the case.