G.R. No. 187677 ; April 17, 2013
Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH), Petitioner, vs. Hon. Rosa Samson-Tatad, as Presiding Judge of the Regional Trial Court, Branch 105, Quezon City, and Spouses William and Rebecca Genato, Respondents.

FACTS

On July 13, 2001, the Republic, through the DPWH, filed a complaint for expropriation against several defendants, including respondent Spouses William and Rebecca Genato, who are the registered owners of a 460-square meter property covered by TCT No. RT-11603 (383648), for the construction of the EDSA-Quezon Avenue Flyover. During the proceedings, the DPWH received a report stating that the subject property was “government land” and that the Genatos’ title was “of dubious origin and of fabrication” as it overlapped with government property. Consequently, on June 24, 2002, the petitioner filed an Amended Complaint seeking to limit the expropriation coverage to an area conforming to the DPWH’s findings. On July 18, 2002, the petitioner filed a Manifestation and Motion to have the property declared as subject to conflicting claims. The RTC admitted the Amended Complaint, deferred the release of the deposited just compensation, and declared the property subject to conflicting claims in an Order dated December 10, 2002. When the petitioner began presenting evidence to show the property belonged to the government, the respondents objected, arguing this constituted a collateral attack on their Torrens title. The RTC, in an Order dated July 12, 2005, barred the petitioner from presenting such evidence, ruling that the validity of the title could only be challenged in a direct action, not in the expropriation proceeding. The RTC denied the petitioner’s motion for reconsideration on November 17, 2005. The Court of Appeals affirmed the RTC’s orders in a Decision dated September 29, 2008, and denied reconsideration on April 27, 2009. Hence, the petitioner elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

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

RULING

No. The Supreme Court ruled that the petitioner may be allowed to present evidence to assert its ownership over the subject property, but for the sole purpose of determining who is entitled to just compensation. The Court clarified that an expropriation proceeding is an action in rem and is a direct, not a collateral, attack on ownership. The principle that a Torrens title cannot be collaterally attacked under Section 48 of P.D. No. 1529 (Property Registration Decree) is not applicable. The Court cited its precedent in Republic v. Court of First Instance of Pampanga, which held that the court hearing the expropriation case has jurisdiction to determine, in the same proceeding, the issue of ownership of the land sought to be condemned. This is supported by Section 9, Rule 67 of the Rules of Court, which provides a procedure for addressing uncertain ownership or conflicting claims in expropriation cases by allowing the court to pay compensation to the clerk of court for the benefit of the person later adjudged entitled. The Court emphasized that the expropriation complaint sought to transfer titles “free from all liens and encumbrances,” making the suit essentially a direct proceeding against the property. Therefore, the RTC and the CA erred in barring the petitioner from presenting evidence. The case was remanded to the RTC for further proceedings to receive evidence on the conflicting claims of ownership to determine the proper recipient of just compensation.