Pozon vs. Lopez

A judgment in an action for specific performance is in personam and binds only the parties properly impleaded therein; it cannot confer ownership or bind non-parties who were never given the opportunity to be heard. Additionally, an ejectment judgment resolves only the issue of physical possession and any adjudication of ownership therein is merely provisional and not conclusive.

Respondent Diana Jeanne Lopez, assisted by business associate Rodolfo Cuenca, purchased a parcel of land with improvement at 2149 Paraiso St., Dasmariñas Village, Makati City from Enrique Zobel sometime in 1980. After the sale, Lopez took possession and occupied the property. Lopez and Cuenca then engaged the Beltran Cuasay Law Office to handle documentation of the sale and to organize a corporation, Paraiso Realty Corporation, which was to be owned by Lopez and through which the property would be transferred from Zobel. The Law Office, through Atty. Oscar Beltran, Sr. and Liserio Evangelista, instead organized Paraiso with themselves and their nominees as exclusive stockholders, completely excluding Lopez from ownership.

Sometime in 1980, respondent Diana Jeanne Lopez, assisted by business associate Rodolfo Cuenca, purchased from Enrique Zobel a parcel of land with improvement located at 2149 Paraiso St., Dasmariñas Village, Makati City. The sale was brokered by George Raymundo. After the sale, Lopez immediately took possession and occupied the property. Lopez and Cuenca then engaged the Beltran Cuasay Law Office to handle the documentation of the sale and the transfer of title from Zobel to Lopez, and specifically instructed the Law Office to organize a corporation named Paraiso Realty Corporation, which was to be owned by Lopez, with the end in view of reflecting that Paraiso acquired the subject property from Zobel. Atty. Oscar Beltran, Sr. and Liserio Evangelista closely coordinated with Cuenca and Lopez for this purpose.

Contrary to Lopez's instructions, the Law Office, acting through Beltran, Sr. and Evangelista, organized Paraiso but made themselves and their nominees the exclusive stockholders, totally excluding Lopez from ownership. The Law Office made it appear that the subject property was acquired by Raymundo, instead of Paraiso, from Zobel. Raymundo then purportedly sold and transferred the title to Paraiso. Subsequently, Evangelista, acting on behalf of Paraiso, prepared a Deed of Absolute Sale over the subject property to one Lino Nepomuceno, said to be another collaborator of Beltran, Sr. Nepomuceno later sold the subject property to Tradex Realty Development Corporation, resulting in the issuance of TCT No. 143835 in Tradex's name. Lopez claimed that all stockholders of Tradex—Cesar Diomampo, Salter Han, Indah Ana Mohammad, and Romeo De Guzman—were intimate colleagues of Beltran, Sr. Lopez discovered this chain of events only when she sought the assistance of her counsel.

Sometime in 1987, Lopez was informed that petitioners Sps. Pozon wanted to inspect the subject property. She then discovered that the title was in the name of Tradex and was never transferred to her. She also learned that Raymundo was brokering the sale of the property to Sps. Pozon on behalf of Tradex. Lopez told Raymundo and Sps. Pozon that she owned the property and that it was not for sale, and she refused them entry for inspection. Despite Lopez's warning, Tradex, through Diomampo, sold the subject property to Sps. Pozon. Tradex could not deliver possession because Lopez remained in possession, prompting Sps. Pozon to file an action for Specific Performance with Damages, docketed as Civil Case No. 17358, before the RTC of Makati City, Branch 147. Lopez was not impleaded as a party in that case.

On May 16, 1996, Lopez filed a Petition for Quieting of Title with Damages before the RTC of Makati City, Branch 142, against Sps. Pozon, Tradex, the Estate of Beltran, the Register of Deeds, Raymundo, Cuasay, Diomampo, and Evangelista. She sought to declare void TCT No. 151522 issued to Tradex and, in a Supplemental Complaint, also sought the declaration of nullity of TCT No. 212133 subsequently issued in the name of Sps. Pozon. Sps. Pozon, in their Amended Answer, claimed that Lopez had no cause of action, that they had verified the title was in Tradex's name with no encumbrance, and that Lopez's cause of action had already prescribed because she did not intervene in Civil Case No. 17358 despite knowledge of its pendency. After trial, the RTC, Branch 142 declared Lopez as the true, lawful, and sole owner of the subject property, finding that Sps. Pozon were purchasers in bad faith based on Eveline Pozon's own testimony as an adverse witness—she never met any director or officer of Tradex, relied solely on Raymundo who had no power of attorney or board resolution, made checks payable to Raymundo's son, inspected the property only by climbing a ladder to view the backyard, and was warned by Lopez herself during a meeting in Hong Kong that she owned the property and was not moving out.

• Conclusiveness of Prior Judgments: Petitioners Sps. Pozon argued that the CA erred in disregarding two previously decided cases resolved in their favor—Civil Case No. 17358 (Specific Performance Case) and Civil Case No. 69262 (Ejectment Case)—which they claimed were conclusive upon the court a quo with respect to their ownership over the subject property.
• Insufficiency of Evidence: Petitioners Sps. Pozon alleged that the CA's conclusions were not substantiated by the evidence, contending that respondent Lopez purportedly failed to establish by preponderance of evidence her claim of ownership over the subject property. They acknowledged that this argument essentially involved questions of fact.

• Conclusiveness of Prior Judgments: Whether the CA erred in disregarding the previous rulings of the Supreme Court on the same subject matter, specifically the Specific Performance Case (Civil Case No. 17358) and the Ejectment Case (Civil Case No. 69262), which petitioners Sps. Pozon claimed were conclusive as to their ownership over the subject property.
• Sufficiency of Evidence: Whether the conclusions made by the CA are substantiated by the evidence and can be legally sustained, particularly the finding that respondent Lopez established her equitable title over the subject property and that petitioners Sps. Pozon were not purchasers in good faith.

• Conclusiveness of Prior Judgments: No. The prior cases cited by petitioners are not conclusive as to the issue of ownership over the subject property. The Specific Performance Case was an action in personam in which respondent Lopez was never impleaded, and the Ejectment Case resolved only the issue of physical possession, not ownership.
• Sufficiency of Evidence: No. The Court found no manifest or patent error in the CA's findings. Respondent Lopez established her equitable title through documentary and testimonial evidence, and petitioners Sps. Pozon were correctly found to be purchasers in bad faith.

• Conclusiveness of Prior Judgments: The Specific Performance Case (Civil Case No. 17358) was an action for specific performance praying for the execution of a deed of conveyance in connection with a contract to sell, which is an action in personam. Being a judgment in personam, it is binding only upon the parties properly impleaded therein and duly heard or given the opportunity to be heard. Since respondent Lopez was not impleaded in that case, the judgment cannot bind her or affect her claim of ownership. Moreover, the issue of ownership was never discussed or resolved in the Specific Performance Case; petitioners' prayer was limited to nullification of the sale by Tradex to J.H. Pajara Construction Corporation and to compelling Tradex to execute a deed of conveyance. The Court relied on Spouses Yu vs. Pacleb, which held that an action for specific performance praying for execution of an instrument in connection with a contract to sell is an action in personam binding only on the parties impleaded. As for the Ejectment Case (Civil Case No. 69262), the only issue for resolution is physical or material possession. Where ownership is raised, courts may pass upon it only to determine who has the better right to possess, and such adjudication is not final and binding. Ironically, the Court's own Decision in the Ejectment Case expressly stated that Lopez may secure relief from the quieting of title case pending before RTC, Branch 142.

• Sufficiency of Evidence: Petitioners Sps. Pozon themselves acknowledged that their arguments essentially involve questions of fact. The Court reiterated that questions of fact cannot be raised in an appeal via certiorari and are not proper for its consideration, as the Court is not a trier of facts. While the Court may review evidence if the inference drawn by the appellate court is manifestly mistaken, no such manifest error was found in the CA's assailed Decision. The CA's findings that Lopez established equitable title and that Sps. Pozon were not purchasers in good faith were well-founded. Lopez provided strong evidence including official receipts for association dues and garbage dues, Dasmariñas Village Association records, water bills, tax declarations and receipts, Cuenca's corroborating testimony, and a Letter dated May 21, 1993 signed by Beltran, Jr. and Diomampo acknowledging Lopez's ownership. Critically, petitioners Sps. Pozon themselves made a judicial admission in their Memorandum dated March 15, 1990 in the Specific Performance Case, stating that "the defendant Tradex did not actually own the property although it is registered in its name." Furthermore, the Court's own Resolution dated September 18, 1996 in the Specific Performance Case had already noted that Sps. Pozon were informed of Lopez's occupancy, could not inspect the premises except from atop a ladder, initially expressed misgivings, and that Edilberto Pozon met Lopez in Hong Kong where she told him she owned the property and was not moving out.

• Actions In Personam vs. Quasi In Rem — A proceeding in personam is one to enforce personal rights and obligations brought against the person, based on jurisdiction over the person; its purpose is to impose some responsibility or liability directly upon the defendant. A proceeding quasi in rem is brought against persons seeking to subject the property of such persons to the discharge of claims; it deals with the status, ownership, or liability of particular property but operates only as between the particular parties to the proceedings. Judgments in actions quasi in rem are binding only upon the parties who joined in the action. The Court applied this doctrine to hold that the Specific Performance Case was an action in personam, binding only on the parties impleaded therein, and could not bind respondent Lopez who was not a party.

• Nature of Ejectment Proceedings — The only issue for resolution in an ejectment case is physical or material possession. Where the parties raise the issue of ownership, courts may pass upon it only for the purpose of determining who has the better right to possess. The adjudication of ownership in an ejectment case is not final and binding, but merely provisional for the purpose of resolving the issue of possession. The Court applied this doctrine to hold that the Ejectment Case resolved in favor of Sps. Pozon did not conclusively determine ownership.

• Prohibition on Questions of Fact in Rule 45 Petitions — Questions of fact cannot be raised in an appeal via certiorari before the Supreme Court. A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence, including the credibility of witnesses and the existence and relevancy of surrounding circumstances. The Court may, in the interest of justice, review evidence if the inference drawn by the appellate court is manifestly mistaken, but no such error was found here.

• "the right of ownership over the subject property was not at all an issue in the Specific Performance Case" — This statement underscores that the prior specific performance judgment did not adjudicate ownership and therefore cannot operate as conclusive on that question in the quieting of title case.

• "Being a judgment in personam, the judgment is binding ONLY upon the parties properly impleaded therein." — This formulation, drawn from Spouses Yu vs. Pacleb, articulates the controlling rule that in personam judgments cannot bind non-parties, which is central to the Court's rejection of petitioners' conclusiveness argument.

• "it may be secured from the action for quieting of title pending before another branch of the RTC" — This quotation from the Court's own Decision in the Ejectment Case ironically defeats petitioners' argument, as the Court itself had pointed respondent Lopez to the very quieting of title case now under review as the proper forum for resolving ownership.

• "the defendant Tradex did not actually own the property although it is registered in its name." — This judicial admission by petitioners Sps. Pozon themselves in their Memorandum in the Specific Performance Case was relied upon by the CA and affirmed by the Court as evidence that petitioners knew Tradex did not own the property, undermining any claim of good faith.

• Spouses Yu vs. Pacleb, 599 Phil. 354 (2009) — Controlling precedent followed. The Court applied its holding that an action for specific performance praying for execution of an instrument in connection with a contract to sell is an action in personam, binding only upon parties properly impleaded, to the facts of the present case where respondent Lopez was not impleaded in the Specific Performance Case.
• Lopez vs. Sps. Pozon and Court of Appeals, 469 Phil. 808 (2004) — The Court's own prior Decision in the Ejectment Case. Petitioners invoked it to support their claim of ownership, but the Court used it against them by citing its own language directing Lopez to seek relief in the quieting of title case.
• Spouses Santiago vs. Northbay Knitting, Inc., G.R. No. 217296, October 11, 2017, 842 SCRA 502 — Cited for the doctrine that in ejectment cases, ownership may be adjudicated only for purposes of determining who has the better right to possess, and such adjudication is not final and binding.

• Rule 45, Rules of Court — Governs the Petition for Review on Certiorari filed by petitioners Sps. Pozon. The Court applied the established principle that questions of fact are not proper in a Rule 45 petition, as the Court is not a trier of facts.

Carpio (Chairperson), Perlas-Bernabe, J. Reyes, Jr., and Lazaro-Javier, JJ., concurred.