G.R. No. 131714 - Vaca vs. Court of Appeals

Case Summary (G.R. No. 131714)

Procedural History — Trial and Amendments

Petitioner filed an expropriation complaint on 13 July 2001 naming, among others, the Genatos. After receiving an internal DPWH report (14 June 2002) asserting that the subject lot was government land and that the Genatos’ TCT was of dubious origin, petitioner filed an Amended Complaint (24 June 2002) limiting the expropriation coverage to the area identified by DPWH. Petitioner also filed a Manifestation and Motion (18 July 2002) to have the lot declared of uncertain ownership or subject to conflicting claims. The RTC admitted the Amended Complaint and, by Order dated 10 December 2002, declared the property to be subject to conflicting claims and deferred release of the deposited zonal-valuation funds.

Trial Court’s Restriction on Evidence

While petitioner attempted to present evidence to prove government ownership, the Genatos objected, invoking Section 48 of P.D. 1529 and asserting that petitioner’s proofs would constitute a collateral attack on their Torrens title. The RTC, after receiving memoranda, issued an Order (12 July 2005) holding that the validity of TCT No. RT-11603 (383648) could be challenged only in a direct proceeding and therefore barred petitioner from presenting evidence in the expropriation case as a collateral attack in violation of Section 48. Petitioner’s motion for reconsideration was denied (Order, 17 November 2005).

Appellate Proceedings and Relief Sought

Petitioner sought relief from the Court of Appeals by filing a petition for certiorari (9 February 2006), challenging the RTC’s bar on presenting evidence and seeking injunctive relief. The Court of Appeals upheld the RTC’s application of Section 48 of P.D. 1529, reasoning that Torrens title protection precluded a collateral attack during the expropriation proceedings, and dismissed petitioner’s certiorari petition (Decision, 29 September 2008). Petitioner’s motion for reconsideration at the CA was denied (Resolution, 27 April 2009), leading to the present petition for review.

Legal Issue Presented

The sole issue before the Supreme Court was whether petitioner (the condemnor) may be barred from presenting evidence in the expropriation proceeding to assail the validity of the respondents’ Torrens title (TCT No. RT-11603) — in other words, whether Section 9, Rule 67 permits the trial court to receive evidence on ownership in the expropriation case notwithstanding Section 48 of P.D. 1529’s prohibition on collateral attacks.

Supreme Court’s Holding — Permissible Scope of Inquiry

The Supreme Court ruled that petitioner may present evidence to assert government ownership of the subject lot, but limited this allowance to the purpose of determining entitlement to just compensation. The Court explained that Rule 67, Section 9 authorizes the expropriation court to address uncertain ownership or conflicting claims insofar as necessary to adjudicate who should receive the compensation award. This power derives from the close relationship between ownership questions and the compensatory function of an expropriation suit: the condemnor must know to whom payment should be made.

Interpretation of Section 9, Rule 67 and Precedent

The Court relied on earlier jurisprudence (including Republic v. Court of First Instance of Pampanga and Republic v. Rural Bank of Kabacan, Inc.) recognizing that when ownership is uncertain, the expropriation court may entertain conflicting claims and receive evidence to determine who is entitled to compensation. The Court emphasized that such ownership determinations in expropriation cases are provisional and tailored to the limited purpose of awarding just compensation; they are not final adjudications conclusive against later direct proceedings challenging title.

Reconciliation with Section 48, P.D. 1529 — Collateral Attack Doctrine

The Supreme Court held that allowing limited inquiry under Rule 67 does not contravene Section 48 of P.D. 1529. Section 48 forbids collateral attacks on Torrens titles, and the Court reiterated the established distinction between direct and collateral attacks: a direct attack seeks to annul or set aside the judgment that produced the title, while a collateral attack seeks to impugn the title in a proceeding pursuing a different primary reli

Case Syllabus (G.R. No. 131714)

Procedural Posture

Petition for Review on Certiorari dated 19 June 2009 filed with the Supreme Court challenging the Decision and Resolution of the Court of Appeals in C.A. G.R. SP No. 93227 which affirmed orders of the Regional Trial Court (RTC), Branch 105, Quezon City in Civil Case No. Q-01-44595.
The RTC had barred petitioner (Republic of the Philippines, represented by DPWH) from presenting evidence to prove its claim of ownership over the subject property on the ground that such presentation would constitute a collateral attack on private respondents' Transfer Certificate of Title (TCT) No. RT-11603 (383648).
The Court of Appeals affirmed the RTC's application of Section 48 of P.D. No. 1529 and dismissed petitioner's certiorari petition on 29 September 2008; petition for reconsideration denied by CA Resolution dated 27 April 2009.
The Supreme Court rendered decision on 17 April 2013 granting the Petition for Review on Certiorari, holding that petitioner may be allowed to present evidence for the limited purpose of determining who is entitled to just compensation, and reversed and set aside the CA and RTC decisions and remanded the case to the RTC.

Antecedent Facts — Parties and Property

Petitioner: Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH).
Private respondents: Spouses William and Rebecca Genato, registered owners of the subject parcel.
Subject property: A parcel of land covered by Transfer Certificate of Title No. RT-11603 (383648) with an area of 460 square meters.
Project context: Expropriation complaint filed for parcels affected by the construction of the EDSA-Quezon Avenue Flyover.
Key communication: On 14 June 2002, Engr. Patrick B. Gatan, Project Manager IV of DPWH-NCR, reported that the subject property was "government land" and that the transfer certificate of title of the claimant "is of dubious origin and of fabrication as it encroached or overlapped on a government property."

Pleadings, Amendments, and Relief Sought

Original Complaint filed on 13 July 2001 by petitioner against several defendants, including respondents, for expropriation related to flyover construction.
Amended Complaint filed on 24 June 2002 narrowing coverage to portions conforming to DPWH findings and specifically describing the affected portion as "460 square meters of the aforedescribed property registered in the name of defendants spouses William and Rebecca Genato."
Manifestation and Motion filed 18 July 2002 to have the subject property declared or considered of "uncertain ownership or subject to conflicting claims."
The Amended Complaint and subsequent filings sought transfer in fee simple of the parcels, with titles free from liens and encumbrances, as part of the expropriation relief requested by the Republic.

RTC Proceedings and Orders

RTC admitted petitioner’s Amended Complaint in Order dated 10 December 2002, deferred release of P18,400,000 (equivalent to current zonal valuation) deposited in the bank, and declared the property as the subject of conflicting claims.
While petitioner presented evidence to show government ownership, private respondents objected, contending petitioner's evidence would be a collateral attack on their Torrens title (TCT No. RT-11603 (383648)).
After parties filed Memoranda, RTC issued Order dated 12 July 2005 finding: "the issue of the validity of the TCT No. 11603 (383648) can only be raised in an action expressly instituted for that purpose and not in this instant proceeding. Accordingly, plaintiff is barred from presenting evidence as they constitute collateral attack on the validity of the title to the subject lot in violation of Sec. 48 of P. D. 1529."
Petitioner filed Motion for Reconsideration on 4 August 2005; RTC denied it in Order dated 17 November 2005.
Private respondents filed a Motion on 4 January 2006 for payment of just compensation amounting to P20,700,000 and for release of P18,400,000 deposited in Land Bank—this motion remained pending in RTC at the time of the Supreme Court decision.

Court of Appeals Proceedings and Ruling

Petitioner filed petition for certiorari with CA on 9 February 2006 with prayer for TRO and/or writ of preliminary injunction.
CA emphasized significance of P.D. No. 1529 when property is covered by a Torrens title and held the RTC correctly applied Section 48, P.D. 1529.
CA issued Decision on 29 September 2008 dismissing the petition for certiorari and denying the prayer for issuance of a writ of preliminary injunction.
Petitioner filed motion for reconsideration on 29 October 2008; CA denied it in Resolution dated 27 April 2009.

Issue Presented to the Supreme Court

Whether petitioner may be barred from presenting evidence to assail the validity of respondents' title under TCT No. RT-11603 (383648).

Petitioner's Principal Arguments

Reliance on Section 9, Rule 67 of the Rules of Court: if ownership of property to be expropriated is uncertain, the court in the same expropriation proceeding may adjudicate the matter and order sums awarded as compensation to be paid to clerk of court for benefit of persons adjudged entitled in the same proceeding.
Cited Republic v. Court of First Instance of Pampanga (Republic) to support proposition that a trial court in expropriation proceeding may resolve ownership in same case.
Argued Amended Complaint was filed to reflect that private respondents, though registered owners, should be considered mere claimants and that the RTC issued an Order declaring the property subject of conflicting claims.
Emphasized expropriation suit as an in rem proceeding seeking transfer of titles to plaintiff, making the suit essentially a direct proc