ERNESTO V. YU and ELSIE O. YU, Petitioners, vs.

BALTAZAR PACLEB,
Respondent.
ERNESTO
V.
YU
and
ELSIE
O.
YU, Petitioners,
vs.BALTAZAR
PACLEB, Respondent.
NATURE OF THE CASE: This petition was filed to set aside the decision made
by the Court of Appeals in ruling that the respondent has the better right
over the subject property and is the true owner thereof.
FACTS: Respondent Baltazar Pacleb and his late first wife, Angelita Chan, are
the owners of parcel of land in Langcaan, Dasmarinas, Cavite covered by a
transfer certificate of title.
Sometime in September 1992, Ruperto Javier offered the said land to
spouses Ernesto and Elsie Yu. Javier claimed that he purchased the property
from Rebecca Del Rosario who bought it from spouses Baltazar Pacleb and
Angelita Chan. Despite the alleged sales being unregistered, the spouses Yu
accepted the offer and made a down payment and entered into an
Agreement for the sale of the property. After giving the amount, the spouses
Yu discovered that a portion of the property was tenanted by Ramon Pacleb,
one of the respondent's sons. The petitioners then demanded the
cancellation of their agreement and the return of their initial payment.
Javier then made arrangements with Ramon to vacate the property and to
pay Ramon for his disturbance compensation. With that, Javier and the
spouses YU proceeded to enter into a Contract to Sell. But, Javier failed to
comply with his obligations. So, on April 23, 1993, the petitioners filed with
the RTC a Complaint for specific performance and damages against Javier to
compel Javier to deliver to them ownership and possession, and the title to
the property.
However, Javier did not appear in the proceedings and was declared
in default, so, the trial court rendered a decision in favor of the petitioners.
The decision and its Certificate of Finality were annotated in the title of the
property.
On March 10, 1995, the petitioners and Ramon and his wife entered
into an agreement that the spouses will pay Ramon P500,000 in exchange
for the waiver of his tenancy rights over the land.
On October 12, 1995, the respondent filed a Complaint for annulment
of deed of sale and other documents arising from it claiming that the deed of
sale supposedly executed between him and his late first wife and Del Rosario
was spurious and the signatures were forged. He also moved for the
summons to be served upon Del Rosario via publication since her address
cannot be found, but was denied. So, respondent moved to dismiss the case
which was granted by the trial court.
On November 23, 1995, the petitioners filed an action for forcible
entry against the respondent with the MTC. They contend that they had prior

physical possession over the property through their trustee Ramon Pacleb,
until the respondent ousted them in September 1995. The MTC and the RTC
ruled in favor of the petitioners, but the Court of Appeals set aside the
decisions of the lower courts. The CA decided that it was the respondent who
had prior physical possession of the property which was shown by his
payment of real estate taxes thereon.
On May 29, 1996, respondent filed an instant case for removal of
cloud from title with damages alleging that the deed of sale between him
and his late first wife could not have been executed on the date appearing
thereon. He claimed that he was residing in the US at that time and that his
late first wife died 20 years ago.
On May 28, 1997, while the case was still pending, the respondent
died, hence, he was substituted by his surviving spouse and some of his
children.
On December 27, 2002, the respondent's case was dismissed and the
petitioners were held to be purchasers in good faith. The trial court also held
that the petitioners' action for specific performance against Javier was
already final, and the trial court also ordered the respondents' heirs and all
other persons claiming under them to surrender the possession of the
property to the petitioners. Upon appeal by the respondent, the CA reversed
the trial court's decision. Hence, this petition.
ISSUE: WON the action for specific performance filed by the petitioners
against Javier is not merely an action in personam, but an action in rem, and
is thus, conclusive and binding upon respondent even if he was not a party
thereto since it involves a question of possession and ownership of real
property.
HELD: The action for specific performance and damages filed by petitioners
against Javier to compel him to perform his obligations under their Contract
to Sell is an action in personam.
The purpose of the action is to compel Javier to accept the full payment of
the purchase price, and to execute a deed of absolute sale over the property
in favor of the petitioners. The obligations of Javier mentioned attach to
Javier alone and do not burden the property. Thus, the complaint filed by the
petitioners is an action in personam and is binding only upon the parties
properly impleaded therein and duly heard or given an opportunity to be
heard. So, the action cannot bind the respondent since he was not a party
therein and considering the fact that his signature and that of his late first
wife were forged in the deed of sale. Hence, the petition is denied and the
Court affirms the ruling of the CA finding the respondent having a better
right over the property as the true owner thereof.