7/31/2019 G.R. No.

172172
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Republic  of  the  Philippines

SUPREME  COURT
Manila

FIRST  DIVISION

G.R.  No.  172172                              February  24,  2009

SPS.  ERNESTO  V.  YU  and  ELSIE  ONG  YU,  Petitioners,  

vs.
BALTAZAR  N.  PACLEB,  (Substituted  by  ANTONIETA  S  PACLEB,  LORNA  PACLEB-­GUERRERO,  FLORENCIO
C.  PACLEB,  and  MYRLA  C.  PACLEB),  Respondents.

D  E  C  I  S  I  O  N

PUNO,  C.J.:

Before  the  Court  is  a  Petition  filed  under  Rule  45  of  the  Rules  of  Court  assailing:  (i)  the  Decision1  dated  August  31,
2005  of  the  Court  of  Appeals  in  CA-­G.R.  CV  No.  78629  setting  aside  the  Decision 2  dated  December  27,  2002  of  the
Regional  Trial  Court  in  Civil  Case  No.  1325-­96;;  and  (ii)  the  Resolution3  dated  April  3,  2006  of  the  Court  of  Appeals
denying  reconsideration  of  the  said  decision.

The  facts  are  well  established.

Respondent  Baltazar  N.  Pacleb  and  his  late  first  wife,  Angelita  Chan,  are  the  registered  owners  of  an  18,000-­square
meter  parcel  of  land  in  Barrio  Langcaan,  Dasmariñas,  Cavite,  covered  by  Transfer  Certificate  of  Title  (TCT)  No.  T-­
1183754  (Langcaan  Property).

In  1992,  the  Langcaan  Property  became  the  subject  of  three  (3)  documents  purporting  to  transfer  its  ownership.  On
February  27,  1992,  a  Deed  of  Absolute  Sale 5  was  entered  into  between  Spouses  Baltazar  N.  Pacleb  and  Angelita
Chan  and  Rebecca  Del  Rosario.  On  May  7,  1992,  a  Deed  of  Absolute  Sale 6  was  entered  into  between  Rebecca  Del
Rosario  and  Ruperto  L.  Javier  (Javier).  On  November  10,  1992,  a  Contract  to  Sell7  was  entered  into  between  Javier
and  petitioner  spouses  Ernesto  V.  Yu  and  Elsie  Ong  Yu.  In  their  contract,  petitioner  spouses  Yu  agreed  to  pay  Javier
a   total   consideration   of   ₱900,000.   Six   hundred   thousand   pesos   (₱600,000)   (consisting   of   ₱200,000   as   previous
payment   and   ₱400,000   to   be   paid   upon   execution   of   the   contract)   was   acknowledged   as   received   by   Javier   and
₱300,000  remained  as  balance.  Javier  undertook  to  deliver  possession  of  the  Langcaan  Property  and  to  sign  a  deed
of  absolute  sale  within  thirty  (30)  days  from  execution  of  the  contract.

All  the  aforementioned  sales  were  not  registered.

On  April  23,  1993,  petitioner  spouses  Yu  filed  with  the  Regional  Trial  Court  of  Imus,  Cavite,  a  Complaint 8  for  specific
performance  and  damages  against  Javier,  docketed  as  Civil  Case  No.  741-­93,  to  compel  the  latter  to  deliver  to  them
ownership   and   possession,   as   well   as   title   to   the   Langcaan   Property.   In   their   Complaint,   they   alleged   that   Javier
represented  to  them  that  the  Langcaan  Property  was  not  tenanted.  However,  after  they  already  paid  ₱200,000  as
initial   payment   and   entered   into   an  Agreement   dated   September   11,   1992   for   the   sale   of   the   Langcaan   Property,
they  discovered  it  was  tenanted  by  Ramon  C.  Pacleb  (Ramon).9  Petitioner  spouses  demanded  the  cancellation  of
their   agreement   and   the   return   of   their   initial   payment.   Thereafter,   petitioner   spouses   and   Javier   verified   from
Ramon   if   he   was   willing   to   vacate   the   property   and   the   latter   was   agreeable.   Javier   then   promised   to   make
arrangements  with  Ramon  to  vacate  the  property  and  to  pay  the  latter  his  disturbance  compensation.  Hence,  they
proceeded   to   enter   into   a   Contract   to   Sell   canceling   the  Agreement   mentioned.   However,   Javier   failed   to   comply
with  his  obligations.

Javier   did   not   appear   in   the   proceedings   and   was   declared   in   default.   On   September   8,   1994,   the   trial   court
rendered  a  Decision,10  the  dispositive  portion  of  which  reads:

WHEREFORE,  judgment  is  hereby  rendered  for  the  plaintiff  and  against  the  defendant  based  on  the  sale  of  subject
parcel  of  land  to  the  former  who  is  entitled  thereby  to  the  ownership  and  possession  thereof  from  the  said  defendant
who   is   further   directed   to   pay   damages   of   Thirty   Thousand   Pesos   (₱30,000.00)   including   attorney’s   fees   and
expenses  incurred  by  the  plaintiff  in  this  case  as  a  consequence.

The   defendant   is   further   directed   to   deliver   the   certificate   of   title   of   the   land   to   the   plaintiff   who   is   entitled   to   it   as
transferee  and  new  owner  thereof  upon  payment  by  the  plaintiff  of  his  balance  of  the  purchase  price  in  the  sum  of
Three  Hundred  Thousand  Pesos  (₱300,000.00)  with  legal  interest  from  date.

SO  ORDERED.

The  said  Decision  and  its  Certificate  of  Finality11  were  annotated  on  TCT  No.  T-­118375  as  Entry  No.  2676-­75 12  and
Entry  No.  2677-­75,13  respectively.

On  March  10,  1995,  petitioner  spouses  and  Ramon  and  the  latter’s  wife,  Corazon  Bodino,  executed  a  "Kusangloob
na   Pagsasauli   ng   Lupang   Sakahan   at   Pagpapahayag   ng   Pagtalikod   sa   Karapatan."14   Under   the   said   agreement,
petitioner  spouses  paid  Ramon  the  amount  of  ₱500,000  in  exchange  for  the  waiver  of  his  tenancy  rights  over  the
Langcaan  Property.

On  October  12,  1995,  respondent  filed  a  Complaint15   for   annulment   of   deed   of   sale   and   other   documents   arising
from  it,  docketed  as  Civil  Case  No.  1199-­95.  He  alleged  that  the  deed  of  sale  purportedly  executed  between  him  and
his   late   first   wife   and   Rebecca   Del   Rosario   was   spurious   as   their   signatures   thereon   were   forgeries.   Respondent
moved  to  have  summons  served  upon  Rebecca  Del  Rosario  by  publication  since  the  latter’s  address  could  not  be
found.  The  trial  court,  however,  denied  his  motion.16  Respondent  then  moved  to  dismiss  the  case,  and  the  trial  court
granted  the  motion  in  its  Order17  dated  April  11,  1996,  dismissing  the  case  without  prejudice.

Meanwhile,  on  November  23,  1995,  petitioner  spouses  filed  an  action  for  forcible  entry  against  respondent  with  the
Municipal  Trial  Court  (MTC).  They  alleged  that  they  had  prior  physical  possession  of  the  Langcaan  Property  through
their   trustee,   Ramon,   until   the   latter   was   ousted   by   respondent   in   September   1995.   The   MTC   ruled   in   favor   of
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petitioner  spouses,  which  decision  was  affirmed  by  the  Regional  Trial  Court.18  However,  the  Court  of  Appeals  set
aside  the  decisions  of  the  lower  courts  and  found  that  it  was  respondent  who  had  prior  physical  possession  of  the
property  as  shown  by  his  payment  of  real  estate  taxes  thereon.19

On  May  29,  1996,  respondent  filed  the  instant  case  for  removal  of  cloud  from  title  with  damages  to  cancel  Entry  No.
2676-­75  and  Entry  No.  2677-­75,  the  annotated  Decision  in  Civil  Case  No.  741-­93  and  its  Certificate  of  Finality,  from
the  title  of  the  Langcaan  Property.20  Respondent  alleged  that  the  deed  of  sale  between  him  and  his  late  first  wife
and  Rebecca  Del  Rosario,  who  is  not  known  to  them,  could  not  have  been  possibly  executed  on  February  27,  1992,
the  date  appearing  thereon.  He  alleged  that  on  said  date,  he  was  residing  in  the  United  States21  and  his  late  first
wife,  Angelita  Chan,  died  twenty  (20)  years  ago.22 1avvphi1

On   May   28,   1997,   during   the   pendency   of   the   instant   case   before   the   trial   court,   respondent   died   without   having
testified   on   the   merits   of   his   case.   Hence,   he   was   substituted   by   his   surviving   spouse,  Antonieta   S.   Pacleb,   and
Lorna  Pacleb-­Guerrero,  Florencio  C.  Pacleb  and  Myrla  C.  Pacleb  representing  the  children  with  the  first  wife.23

On  December  27,  2002,  the  trial  court  dismissed  respondent’s  case  and  held  that  petitioner  spouses  are  purchasers
in   good   faith.24   The   trial   court   ratiocinated   that   the   dismissal   of   respondent’s   complaint   for   annulment   of   the
successive  sales  at  his  instance  "sealed  the  regularity  of  the  purchase"25  by  petitioner  spouses  and  that  he  "in  effect
admits  that  the  said  sale…was  valid  and  in  order."26  Further,  the  trial  court  held  that  the  Decision  in  Civil  Case  No.
741-­93  on  petitioner  spouses’  action  for  specific  performance  against  Javier  is  already  final  and  can  no  longer  be
altered.  Accordingly,  the  trial  court  ordered  the  cancellation  of  TCT  No.  T-­118375  in  the  name  of  respondent  and  the
issuance  of  a  new  title  in  the  name  of  petitioner  spouses.  The  trial  court  also  ordered  the  heirs  of  respondent  and  all
persons  claiming  under  them  to  surrender  possession  of  the  Langcaan  Property  to  petitioner  spouses.

On  appeal  by  respondent,  the  Court  of  Appeals  reversed  and  set  aside  the  decision  of  the  trial  court. 27  The  Court  of
Appeals  ruled  that  petitioner  spouses  are  not  purchasers  in  good  faith  and  that  the  Decision  in  Civil  Case  No.  741-­
93   did   not   transfer   ownership   of   the   Langcaan   Property   to   them.   Accordingly,   the   appellate   court   ordered   the
cancellation  of  the  annotation  of  the  Decision  in  Civil  Case  No.  741-­93  on  the  title  of  the  Langcaan  Property.  The
Court  of  Appeals  denied  reconsideration  of  said  decision.28

Hence,  this  Petition.

Two  issues  are  involved  in  the  instant  petition.  The  first  is  whether  petitioner  spouses  are  innocent  purchasers  for
value   and   in   good   faith.   The   second   is   whether   ownership   over   the   Langcaan   Property   was   properly   vested   in
petitioner  spouses  by  virtue  of  the  Decision  in  Civil  Case  No.  741-­93.

Petitioner   spouses   argue   that   they   are   purchasers   in   good   faith.   Further,   they   contend   that   the   Court   of  Appeals
erred  in  finding  that:  "Ramon  told  him  [Ernesto  V.  Yu]  that  the  property  is  owned  by  his  father,  Baltazar,  and  that  he
is   the   mere   caretaker   thereof"29   since   Ramon   clarified   that   his   father   was   the   former   owner   of   the   Langcaan
Property.  In  support  of  their  stance,  they  cite  the  following  testimony  of  petitioner  Ernesto  V.  Yu:

Atty.  Abalos:   Mr.   Witness,   you   testified   during   the   direct   that   you   acquired   the   subject   property   from   one   Ruperto
Javier,  when  for  the  first  time  have  you  come  to  know  Mr.  Ruperto  Javier?

A:  I  first  came  to  know  him  in  the  year  1992  when  he  was  accompanied  by  Mr.  Kalagayan.  He  showed  me
some  papers  to  the  office.

Q:  Do  you  know  the  exact  date  Mr.  Witness?

A:  I  forgot  the  exact  date,  ma’am.

Q:  More  or  less  can  you  estimate  what  month?

A:  Sometime  in  February  or  March  1992.

Q:   When   you   said   that   the   subject   property   was   offered   to   you   for   sale,   what   did   you   do   Mr.   Witness,   in
preparation  for  a  transaction?

A:  I  asked  my  lawyer  Atty.  Florencio  Paredes  to  check  and  verify  the  Deed  of  Sale.

Q:  And  after  Atty.  Florencio  Paredes  verified  the  document  you  decided  to  buy  the  property?

A:  No,  ma’am.  We  visited  the  place.

Q:  When  was  that?

A:  I  could  not  remember  the  exact  date  but  I  visited  the  place  and  I  met  the  son,  Ramon  Pacleb.  I  went  there
in  order  to  verify  if  the  property  is  existing.  When  I  verified  that  the  property  is  existing  Mr.  Javier  visited  me
again  to  follow-­up  what  decision  I  have  but  I  told  him  that  I  will  wait  for  my  lawyer’s  advi[c]e.

Q:  Mr.  Witness,  what  particular  instruction  did  you  give  to  your  lawyer?

A:  To  verify  the  title  and  the  documents.

Court:  Documents  for  the  title?

A:  Yes,  Your  Honor.

Atty.  Abalos:  When  you  were  able  to  get  the  title  in  whose  name  the  title  was  registered?

A:  It  was  registered  in  the  name  of  the  older  Pacleb.

Court:  By  the  way  Mr.  Witness,  when  you  said  you  met  Ramon  Pacleb  the  son  of  the  owner  of  the  property,
was  he  residing  there  or  he  was  (sic)  just  went  there?  When  you  visited  the  property  did  you  find  him  to  be
residing  in  that  property?

A:  No,  Your  Honor.

Atty.  Abalos:  You  mean  to  say  Mr.  Witness,  you  just  met  Mr.  Ramon  Pacleb  in  the  place  at  the  time  you  went
there?

A:  No,  ma’am.  He  went  to  my  office  with  Mr.  Kalagayan.  He  was  introduced  to  me  at  the  Kelly  Hardware.  I  do
not  know  Mr.  Ruperto  Javier.  He  told  me  that  there  is  a  property  that  [is]  tenanted  and  occupied  by  the  son
Ramon  Pacleb  after  that  I  went  with  them  to  visit  the  place.  On  (sic)  there  he  introduced  me  [to]  Mr.  Ramon
Pacleb  the  caretaker  of  the  property  and  I  told  them  that  I  will  still  look  at  the  property  and  he  gave  me  some

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documents  and  that  (sic)  documents  I  gave  it  to  my  lawyer  for  verification.

Q:  You  said  that  Mr.  Ruperto  Javier  went  to  your  office  with  Mr.  Kalagayan,  so  the  first  time  you  visited  the
property  you  did  not  see  Mr.  Ramon  Pacleb  there?

A:  No,  ma’am.  When  I  went  there  I  met  Ramon  Pacleb  the  caretaker  and  he  was  the  one  who  showed  the
place  to  us.

Q:  Mr.  Witness,  since  you  visited  the  place  you  were  able  to  see  the  allege[d]  caretaker  Mr.  Ramon  Pacleb,
did  you  ask  him  regarding  the  property  or  the  whereabouts  of  the  registered  owner,  did  you  ask  him?

A:  When  Ruperto  introduced  me  to  Mr.  Ramon  Pacleb  he  told  me  that  he  is  the  son  of  the  owner  and  he  is  the
caretaker  and  his  father  is  in  the  States.  He  showed  me  the  place,  I  verified  and  I  saw  the  monuments  and  I
told  him  I  will  come  back  to  check  the  papers  and  if  it  is  okay  I  will  bring  with  me  the  surveyor.

Q:   Could   you   estimate   Mr.   Witness,   more   or   less   what   was   the   month   when   you   were   able   to   talk   to   Mr.
Ramon  Pacleb?

A:  I  am  not  sure  but  it  was  morning  of  February.

Q:  So  it  was  in  February,  Mr.  Witness?

A:  I  am  not  sure  if  February  or  March.

Q:  But  definitely…

A:  Before  I  purchased  the  property  I  checked  the  property.

Q:  But  that  was  definitely  after  Mr.  Ruperto  offered  to  you  for  sale  the  subject  property?

x  x  x

Atty.  Abalos:  Okay,  Mr.  Witness,  you  said  that  you  talked  to  Mr.  Ramon  Pacleb  and  he  told  you  that  his  father
is  the  owner  of  the  property?

A:  He  told  me  that  property  is  their  former  property  and  it  was  owned  by  them.  Now,  he  is  the  tenant  of  the
property.30  (Emphasis  ours)

Petitioner  spouses  conclude  that  based  on  their  personal  inspection  of  the  property  and  the  representations  of  the
registered  tenant  thereon,  they  had  no  reason  to  doubt  the  validity  of  the  deeds  of  absolute  sale  since  these  were
duly  notarized.  Consequently,  the  alleged  forgery  of  Angelita  Chan’s  signature  is  of  no  moment  since  they  had  no
notice  of  any  claim  or  interest  of  some  other  person  in  the  property  despite  their  diligent  inquiry.

We  find  petitioner  spouses’  contentions  without  merit.

At   the   outset,   we   note   that   in   petitioner   Ernesto   V.   Yu’s   testimony,   he   stated   that   he   inspected   the   Langcaan
Property  and  talked  with  the  tenant,  Ramon,  before  he  purchased  the  same.  However,  in  his  Complaint  for  specific
performance   and   damages   which   he   filed   against   Javier,   he   alleged   that   it   was   only   after   he   had   entered   into   an
Agreement  for  the  sale  of  the  property  and  his  initial  payment  of  ₱200,000  that  he  discovered  that  the  property  was
indeed  being  tenanted  by  Ramon  who  lives  in  the  said  farm,  viz.:

8.  Sometime  on  September  11,  1992,  defendant  came  again  to  the  Office  of  plaintiff  reiterating  his  offer  to  sell  said
Lot   No.   6853-­D,   containing   an   area   of   18,000   square   meters,   at   ₱75.00   per   square   meters   (sic).   Defendant
manifested   to   the   plaintiff   that   if   his   offer   is   acceptable   to   the   plaintiff,   he   binds   and   obligates   himself   to   pay   the
capital  gains  of  previous  transactions  with  the  BIR  and  register  subject  Lot  No.  6853-­D  in  his  name  (defendant).  On
these   conditions,   plaintiff   accepted   the   offer   and   made   [the]   initial   payment   of   Two   Hundred   Thousand   Pesos
(₱200,000.00)  to  defendant  by  issuance  and  delivery  of  plaintiff’s  personal  check.

9.  Sometime  on  September  11,  1992,  plaintiff  and  defendant  signed  an  AGREEMENT  on  the  sale  of  Lot  No.  6853-­D
of  the  subdivision  plan  (LRC)  Psd-­282604,  containing  an  area  of  18,000  square  meters,  more  or  less,  located  at  Bo.
Langcaan,   Municipality   of   Dasmarinas,   Province   of   Cavite,   at   a   selling   price   of   ₱75.00   per   square   meter.  A   xerox
copy   of   this   AGREEMENT   signed   by   the   parties   thereto   is   hereto   attached   and   marked   as   ANNEX   "D"   of   this
complaint.

10.  Thereafter,  however,  plaintiff  and  defendant,  with  their  surveyor  discovered  that  subject  Lot  No.  6853-­D  offered
for  sale  to  the  plaintiff  is  indeed  being  tenanted  by  one  RAMON  PACLEB  who  lives  in  the  said  farm.

11.  In  view  of  the  foregoing  developments,  plaintiff  informed  defendant  that  he  wanted  the  Agreement  be  cancelled
and   for   the   defendant   to   return   the   sum   of   TWO   HUNDRED   THOUSAND   PESOS   (₱200,000.00). 31   (Emphasis
supplied)

This   inconsistency   casts   grave   doubt   as   to   whether   petitioner   spouses   personally   inspected   the   property   before
purchasing  it.

More   importantly,   however,   several   facts   should   have   put   petitioner   spouses   on   inquiry   as   to   the   alleged   rights   of
their  vendor,  Javier,  over  the  Langcaan  Property.

First,  it  should  be  noted  that  the  property  remains  to  be  registered  in  the  name  of  respondent  despite  the  two  (2)
Deeds   of   Absolute   Sale 32   purporting   to   transfer   the   Langcaan   Property   from   respondent   and   his   late   first   wife,
Angelita  Chan,  to  Rebecca  Del  Rosario  then  from  the  latter  to  Javier.  Both  deeds  were  not  even  annotated  in  the
title  of  the  Langcaan  Property.

Second,   a   perusal   of   the   two   deeds   of   absolute   sale   reveals   that   they   were   executed   only   about   two   (2)   months
apart  and  that  they  contain  identical  provisions.

Third,  it  is  undisputed  that  the  Langcaan  Property  is  in  the  possession  of  Ramon,  the  son  of  the  registered  owner.
Regardless   of   the   representations   given   by   the   latter,   this   bare   fact   alone   should   have   made   petitioner   spouses
suspicious   as   to   the   veracity   of   the   alleged   title   of   their   vendor.   Moreover,   as   noted   by   the   Court   of   Appeals,
petitioner  spouses  could  have  easily  verified  the  true  status  of  the  Langcaan  Property  from  Ramon’s  wife,  since  the
latter  is  their  relative,  as  averred  in  paragraph  13  of  their  Answer  in  Civil  Case  No.  1199-­95. 33  The  case  law  is  well
settled,  viz.:

The  law  protects  to  a  greater  degree  a  purchaser  who  buys  from  the  registered  owner  himself.  Corollarily,  it  requires
a  higher  degree  of  prudence  from  one  who  buys  from  a  person  who  is  not  the  registered  owner,  although  the  land
object  of  the  transaction  is  registered.  While  one  who  buys  from  the  registered  owner  does  not  need  to  look  behind
the  certificate  of  title,  one  who  buys  from  one  who  is  not  the  registered  owner  is  expected  to  examine  not  only  the

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certificate  of  title  but  all  factual  circumstances  necessary  for  him  to  determine  if  there  are  any  flaws  in  the  title  of  the
transferor,  or  in  his  capacity  to  transfer  the  land.

This  Court  has  consistently  applied  the  stricter  rule  when  it  comes  to  deciding  the  issue  of  good  faith  of  one  who
buys  from  one  who  is  not  the  registered  owner,  but  who  exhibits  a  certificate  of  title.34  (Emphasis  supplied)

Finally,  as  correctly  pointed  out  by  the  Court  of  Appeals,  the  dismissal  of  Civil  Case  No.  1199-­95  (the  action  to  annul
the  successive  sales  of  the  property)  cannot  serve  to  validate  the  sale  to  petitioner  spouses  since  the  dismissal  was
ordered   because   Rebecca   Del   Rosario   and   Javier   could   no   longer   be   found.   Indeed,   the   dismissal   was   without
prejudice.

Based  on  the  foregoing,  therefore,  petitioner  spouses  cannot  be  considered  as  innocent  purchasers  in  good  faith.

We  now  go  to  the  second  issue.

Petitioner   spouses   argue   that   the   decision   of   the   Regional   Trial   Court   in   Civil   Case   No.   741-­93   as   to   the   rightful
owner  of  the  Langcaan  Property  is  conclusive  and  binding  upon  respondent  even  if  the  latter  was  not  a  party  thereto
since   it   involved   the   question   of   possession   and   ownership   of   real   property,   and   is   thus   not   merely   an   action   in
personam  but  an  action  quasi  in  rem.

In  Domagas  v.  Jensen,35  we  distinguished  between  actions  in  personam  and  actions  quasi  in  rem.

The  settled  rule  is  that  the  aim  and  object  of  an  action  determine  its  character.  Whether  a  proceeding  is  in  rem,  or  in
personam,  or  quasi  in  rem  for  that  matter,  is  determined  by  its  nature  and  purpose,  and  by  these  only.  A  proceeding
in  personam  is  a  proceeding  to  enforce  personal  rights  and  obligations  brought  against  the  person  and  is  based  on
the  jurisdiction  of  the  person,  although  it  may  involve  his  right  to,  or  the  exercise  of  ownership  of,  specific  property,
or   seek   to   compel   him   to   control   or   dispose   of   it   in   accordance   with   the   mandate   of   the   court.   The   purpose   of   a
proceeding  in  personam  is  to  impose,  through  the  judgment  of  a  court,  some  responsibility  or  liability  directly  upon
the  person  of  the  defendant.  Of  this  character  are  suits  to  compel  a  defendant  to  specifically  perform  some  act  or
actions   to   fasten   a   pecuniary   liability   on   him.  An   action   in   personam   is   said   to   be   one   which   has   for   its   object   a
judgment  against  the  person,  as  distinguished  from  a  judgment  against  the  propriety  (sic)  to  determine  its  state.  It
has  been  held  that  an  action  in  personam  is  a  proceeding  to  enforce  personal  rights  or  obligations;;  such  action  is
brought  against  the  person.

x  x  x

On   the   other   hand,   a   proceeding   quasi   in   rem   is   one   brought   against   persons   seeking   to   subject   the   property   of
such  persons  to  the  discharge  of  the  claims  assailed.  In  an  action  quasi  in  rem,  an  individual  is  named  as  defendant
and  the  purpose  of  the  proceeding  is  to  subject  his  interests  therein  to  the  obligation  or  loan  burdening  the  property.
Actions   quasi   in   rem   deal   with   the   status,   ownership   or   liability   of   a   particular   property   but   which   are   intended   to
operate  on  these  questions  only  as  between  the  particular  parties  to  the  proceedings  and  not  to  ascertain  or  cut  off
the  rights  or  interests  of  all  possible  claimants.  The  judgments  therein  are  binding  only  upon  the  parties  who  joined
in  the  action.

Civil  Case  No.  741-­93  is  an  action  for  specific  performance  and  damages  filed  by  petitioner  spouses  against  Javier
to   compel   performance   of   the   latter’s   undertakings   under   their   Contract   to   Sell.  As   correctly   held   by   the   Court   of
Appeals,  its  object  is  to  compel  Javier  to  accept  the  full  payment  of  the  purchase  price,  and  to  execute  a  deed  of
absolute  sale  over  the  Langcaan  Property  in  their  favor.  The  obligations  of  Javier  under  the  contract  to  sell  attach  to
him  alone,  and  do  not  burden  the  Langcaan  Property.36

We  have  held  in  an  unbroken  string  of  cases  that  an  action  for  specific  performance  is  an  action  in  personam.37  In
Cabutihan   v.   Landcenter   Construction   and   Development   Corporation,38   we   ruled   that   an   action   for   specific
performance  praying  for  the  execution  of  a  deed  of  sale  in  connection  with  an  undertaking  in  a  contract,  such  as  the
contract  to  sell,  in  this  instance,  is  an  action  in  personam.

Being  a  judgment  in  personam,  Civil  Case  No.  741-­93  is  binding  only  upon  the  parties  properly  impleaded  therein
and  duly  heard  or  given  an  opportunity  to  be  heard.39  Therefore,  it  cannot  bind  respondent  since  he  was  not  a  party
therein.   Neither   can   respondent   be   considered   as   privy   thereto   since   his   signature   and   that   of   his   late   first   wife,
Angelita  Chan,  were  forged  in  the  deed  of  sale.

All   told,   we   affirm   the   ruling   of   the   Court   of  Appeals   finding   that,   as   between   respondent   and   petitioner   spouses,
respondent  has  a  better  right  over  the  Langcaan  Property  as  the  true  owner  thereof.

IN   VIEW   WHEREOF,   the   petition   is   DENIED.   The   decision   of   the   Court   of   Appeals   is   affirmed.   Costs   against
petitioners.

SO  ORDERED.

REYNATO  S.  PUNO

Chief  Justice

WE  CONCUR:

ANTONIO  T.  CARPIO

Associate  Justice

RENATO  C.  CORONA TERESITA  J.  LEONARDO-­DE  CASTRO

Associate  Justice Associate  Justice

ARTURO  D.  BRION

Associate  Justice

C  E  R  T  I  F  I  C  A  T  I  O  N

Pursuant  to  Section  13,  Article  VIII  of  the  Constitution,  I  certify  that  the  conclusions  in  the  above  decision  had  been
reached  in  consultation  before  the  case  was  assigned  to  the  writer  of  the  opinion  of  the  Court’s  Division.

REYNATO  S.  PUNO  

Chief  Justice

Footnotes
1  Rollo,  pp.  21-­33;;  penned  by  Justice  Santiago  Javier  Ranada  and  concurred  in  by  Justices  Marina  L.  Buzon

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and  Mario  L.  Guariña  III.
2  Id.  at  42-­47;;  penned  by  Executive  Judge  Dolores  L.  Español,  Regional  Trial  Court  of  Dasmariñas,  Cavite,
Branch  90.

3  Id.  at  35-­41.

4  Exhibit  "A,"  records,  pp.  223-­224.

5  Exhibit  "1,"  id.  at  290-­291.

6  Exhibit  "2,"  id.  at  292-­293.

7  Exhibit  "4,"  id.  at  296-­298.

8  Exhibit  "6,"  id.  at  302-­307.

9  Id.  at  303-­304.

10  Exhibit  "7,"  id.  at  308-­311.

11  Exhibit  "8,"  id.  at  312.

12  Exhibit  "9-­A,"  id.  at  223.

13  Exhibit  "9-­B,"  id.  at  223.

14  Exhibit  "3,"  id.  at  294-­295.

15  Id.  at  39-­41.

16  Order  dated  March  7,  1996,  Exhibit  "6-­C,"  id.  at  209.

17  Exhibit  "6-­B,"  id.  at  208.

18  Rollo,  p.  25.

19  Decision  dated  March  18,  1997,  Exhibit  "D,"  id.  at  91-­95.

20  Complaint,  id.  at  1-­5.

21  Exhibit  "B,"  id.  at  225-­226.

22  Exhibit  "D,"  id.  at  231.

23  Order  dated  January  30,  1998,  id.  at  158-­160.

24  Supra  note  2.

25  Id.  at  44.

26  Id.  at  46.

27  Supra  note  1.

28  Supra  note  3.

29  Supra  note  1  at  28.

30  TSN,  July  3,  2001,  pp.  2-­7.

31  Exhibits  "6-­A"  and  6-­B,"  records,  pp.  303-­304.

32  Supra  notes  5  &  6.

33  Supra  note  1  at  28-­29.

34  Revilla  and  Fajardo  v.  Galindez,  107  Phil.  480,  485  (1960).

35  G.R.  No.  158407,  January  17,  2005,  448  SCRA  663,  673-­674.

36  Supra  note  3  at  40-­41.

37  La  Tondeña  Distillera  v.  Judge  Ponferrada,  332  Phil.  593  (1996)  ;;  Siasoco  v.  Court  of  Appeals,  362  Phil.
525  (1999);;  Jose  v.  Boyon,  G.R.  No.  147369,  October  23,  2003,  414  SCRA  216.

38  432  Phil.  927  (2002).

39  Ching  v.  Court  of  Appeals,  G.R.  No.  59731,  January  11,  1990,  181  SCRA  9,  15-­16.

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