SPS.

ERNESTO and ELSIE YU vs BALTAZAR PACLEB

G.R. No. 172172. February 24, 2009
PUNO, C.J.:

SUMMARY OF DOCTRINE: The character of a proceeding is determined by its aim and object. 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. An action in personam is a proceeding to enforce personal rights and obligations
brought against the person and is based on the jurisdiction of the person while an action quasi in rem is a
proceeding to subject the defendant’s interests therein to the obligation or loan burdening the property and
deals with the status, ownership and liability of the property.

FACTS:
Respondent Baltazar N. Pacleb and his late first wife, Angelita Chan, are registered owners of
Langcaan Property. On 1992, they allegedly executed an Absolute Sale with Angelita Chan and Rebecca
Del Rosario who entered another Deed of Absolute Sale with Ruperto L. Javier who then transacted the
same property in a Contract to Sell with petitioner spouses Ernesto and Elsie Yu. Javier undertook to deliver
possession of the Langcaan property and to sign a Deed of Absolute Sale 30 days from execution of the
contract. These aforementioned sales were not registered. On 1993, Spouses Yu filed a complaint for
Specific Performance and Damages against Javier compelling the latter to deliver the ownership and
possession, as well as title to the Langcaan Property. They contended that they had no knowledge that the
property was tenanted by Ramon Pacleb and was only assured there was agreement to vacate the same.
Javier did not appear in the proceedings hence the case was decided in default.
On 1995, respondent Pacleb filed a complaint for the Annulment of Deed of Sale contending that the
sale executed with Del Rosario was spurious as their signatures were forged and the action was dismissed.
On 1996, respondent Pacleb 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 as he was residing in the US at that time and that his late first wife died. On 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. Upon appeal by the
respondent, the CA reversed the trial court's decision. Petitioner spouses then argue that the decision of the
court 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 action for specific performance is not merely an action in personam, but an action quasi
in rem.

RULING:
NO. The action in the case at bar, being one for specific performance and damages to compel Javier of
his undertakings under the Contract to Sell - to accept full payment and execute the absolute sale, is an
action in personam and does not burden the Langcaan Property. Thus, it only binds parties impleaded
therein and was duly heard or given an opportunity to be heard who is Javier. Hence, the case does not bind
respondent Pacleb since he was not a party therein neither a privy thereto as their signatures were forged.
With this, it was held that respondent as a true owner has a better right over the Langcaan Property.
Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by the
aim, object or purpose of the same. An action in personam is said to be one which has for its object a
judgment against the person. The purpose of which is to impose some responsibility or liability directly
upon the person of the defendant. It 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. On the other hand, an action quasi in rem is one which has for its object the
property of a person in order to discharge him of the claims assailed. The purpose of which is to subject the
interest of the defendant 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.

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