Yu v.

Pacleb, et.al., February 24, 2009

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 Decision2 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

FACTS:
 The Respondent Pacleb and his late first wife, Angelita Chan, owns a parcel of land in
Langcaan, Dasmariñas Cavite.
 The Langcaan property was subjected to 3 consecutive documents purporting to transfer of
its ownership.
o 1st- DoAS between Angelita Chan, together with Pacleb, and Rebecca Del Rosario
o 2nd- DoAS between Del Rosario and Javier
o 3rd – CtS between Javier and petitioner Spouses in the amount of P900,000. (P200K
as down payment, P400K upon execution of contract, remaining P300K 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.
 With Javier failing to do what is obliged of him (to have Ramon, tenant of the land, vacate
the property and pay for disturbance compensation), the Spouses 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.
 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.
 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 29, 1996, respondent filed the instant case for removal of cloud from title with
damages to cancel entry from the title of the Langcaan Property.
 On December 27, 2002, the trial court dismissed respondent’s case and held that
petitioner spouses are purchasers in good faith. On appeal, the CA reversed and set aside
the decision of the trial court.
 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.

ISSUE: WoN the ruling of the RTC is binding upon the respondents despite not being a party
thereto.

RULING: NO. The action filed before the RTC and the judgement rendered by the same are in
personam, hence, binding only upon parties properly impleaded therein.

The Supreme Court, citing the case of Domagas vs. Jensen, had the occasion to distinguish
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.

Action in personam- 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.

Action quasi in rem - 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.
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. 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.
United Alloy Philippines Corp., et.al., v. UCPB, January 30, 2017
Challenged in this Petition for Review on Certiorari2 is the August 17, 2007 Decision3 of the
Court of Appeals, Cagayan de Oro City Station (CA CDO) in CA-G.R. SP No. 67079 dismissing
petitioner United Alloy Philippines Corporation's (UniAlloy) Petition for Certiorari and
Mandamus filed therewith.
FACTS:
 UniAlloy is a domestic corporation engaged in the business of manufacturing and trading on
wholesale basis of alloy products, such as ferrochrome, ferrosilicon and ferromanganese. It
has its principal office and business address at Phividec Industrial Area, Tagaloan, Misamis
Oriental
 Respondent UCPB, on the other hand, is a banking corporation while respondent Robert T.
Chua (Chua) is one of its Vice-Presidents. Respondent Jakob Van Der Sluis is a Dutch
citizen and was the Chairman of UniAlloy. Respondent Philippine Deposit Insurance
Corporation is the assignee-in-interest of UCPB as regards the loan account of UniAlloy.
 United Alloy Philippines Corporation (UNIALLOY) applied for and was granted a credit
accommodation by herein respondent United Coconut Planters Bank. (UCPB) in the amount
of PhP50,000,000.00, as evidenced by a Credit Agreement.
 Part of UNIALLOY's obligation under the Credit Agreement was secured by a Surety
Agreement. Six (6) Promissory Notes, were later executed by UNIALLOY in UCPB's favor.
In addition, as part of the consideration for the credit accommodation, UNIALLOY and
UCPB also entered into a "lease-purchase" contract wherein the former assured the latter that
it will purchase several real properties which UCPB co-owns with the Development Bank of
the Philippines.
 UNIALLOY failed to pay its loan obligations. As a result, UCPB filed against UNIALLOY,
the spouses Chua, Yang and Van Der Sluis an action for Sum of Money with Prayer for
Preliminary Attachment before the RTC of MAKATI.
 UNIALLOY contended that Van Der Sluis, in cahoots with UCPB Vice-President Robert
Chua, committed fraud, manipulation and misrepresentation to obtain the subject loan for
their own benefit. UNIALLOY prayed, among others, that three (3) of the six (6) Promissory
Notes it executed be annulled or reformed or that it be released from liability thereon. It
prompted UNIALLOY to file a complaint for Annulment and/or Reformation of Contract
with Damages, with Prayer for a Writ of Preliminary Injunction or Temporary Restraining
Order before the RTC of CAGAYAN DE ORO.
 UNIALLOY filed with the RTC of Makati an omnibus motion praying for the suspension of
the proceedings of the collection case in the said court on the ground of pendency of the
certiorari petition it filed with this Court (Separate case for Annulment and/or Reformation of
Contract with Damages). However, the RTC of MAKATI denied UNIALLOY's motion
(suspension of proceedings in the collection case) in its Order dated August 19, 2002.
 In the meantime, UCPB and its co-defendants also filed a Motion to Dismiss UNIALLOY’s
complaint for annulment of contract on the grounds of improper venue, forum shopping, litis
pendentia, and harassment or nuisance suit. The RTC of CDO dismissed UNIALLOY’s
 complaint for annulment of contract, directing UNIALLOY to turn over to UCPB the
property subject of their lease-purchase agreement.
 UNIALLOY then filed a petition for certiorari and mandamus with the CA questioning the
Orders of the RTC of CDO and prayed for writ of preliminary injuction. The CA granted
UNIALLOY’s prayer for the issuance of a writ of preliminary injunction. This prompted the
UCPB to file a petition for certiorari with the SC which restrained the CA from enforcing its
Resolution granting the issuance of the writ of preliminary injunction.
 Meanwhile, the RTC of MAKATI denied UNIALLOY’s motion for suspension.
Subsequently, the RTC of Makati rendered Judgment in the collection case in favor of
UCPB. The CA affirmed. Hence, this petition.
ISSUE: WoN UNIALLOY’s motion for suspension was properly denied by the RTC of
MAKATI.
RULING: YES.
November 23, 2015, the 2nd Division of this Court already came up with a Decision in G.R. No.
179257 which affirmed the RTC of CDO dismissal of UNIALLOY's complaint for Annulment
and/or Reformation of Contract with Damages.
In that case the SC ruled that:
“The RTC (of CDO) was correct in dismissing UniAlloy's Complaint on the ground of
improper venue. In general, personal actions must be commenced and tried (i) where the
plaintiff or any of the principal plaintiffs resides, (ii) where the defendant or any of the
principal defendants resides, or (III) in the case of a resident defendant where he may be
found, at the election of the plaintiff. Nevertheless, the parties may agree in writing to
limit the venue of future actions between them to a specified place.
In the case at bench, paragraph 18 of the LPA expressly provides that "[a]ny legal action
arising out of or in connection with this Agreement shall be brought exclusively in the
proper courts of Makati City, Metro Manila." Hence, UniAlloy should have filed its
complaint before the RTC of Makati City, and not with the RTC of Cagayan de Oro City.
Its Complaint unequivocally sought to declare "as null and void the unilateral rescission
made by defendant UCPB of its subsisting Lease Purchase Agreement with UniAlloy.
What UCPB unilaterally rescinded is the LPA and without it there can be no unilateral
rescission to speak of. Hence, the LPA is the subject matter or at least one of the subject
matters of the Complaint. Moreover, and to paraphrase the aforecited paragraph 18 of the
LPA, as long as the controversy arises out of or is connected therewith, any legal action
should be filed exclusively before the proper courts of Makati City. Thus, even assuming
that the LPA is not the main subject matter, considering that what is being sought to be
annulled is an act connected and inseparably related thereto, the Complaint should have
been filed before the proper courts in Makati City.”
Contrary to petitioners' position, there is no longer any possibility that the Decision of the
RTC of CDO may conflict with the disposition of the present case because UNIALLOY's
complaint for annulment of contract has already been dismissed with finality. This Court
will, thus, proceed to resolve the merits of the instant case.