Pacific Ace Finance Ltd (PAFIN) vs.

Eiji Yanagisawa
Facts:
Eiji Yanagisawa (Eiji), a Japanese national, and Evelyn Castaneda (Evelyn), a Filipino contracted
marriage on July 12, 1989. On August 3, 1995, Evelyn purchased a townhouse unit in Paranaque,
Metro Manila with the issued TCT stating “Evelyn Castaneda married to Ejie Yanagisawa.”
In 1996, Eiji filed a complaint for the declaration of nullity of his marriage with Evelyn on the ground
of bigamy at the Makati RTC. During the pendency of the case, Eiji filed a Motion for the Issuance
of a Restraining Order against Evelyn and an Application for a Writ of Preliminary Injunction to
enjoin her from disposing or encumbering all of the properties registered in her name. The Makati
RTC rendered an order barring Evelyn from disposing of her properties.
Sometime in March 1997, Evelyn obtained a loan of P500,000 from petitioner PAFIN. To secure
the loan, Evelyn executed a real estate mortgage (REM) on her Paranaque Townhouse unit. At
the time of the mortgage, Eiji’s case for nullity of marriage was pending before the CA.
Upon learning that Evelyn violated the Makati RTC’s order, Eiji filed for the annulment of the REM
at the Paranaque RTC against Evelyn and PAFIN. For its defense, PAFIN denied prior knowledge
on the 1996 order against Evelyn but admitted to not verifying with the registry of deeds. Evelyn
asserted the she paid for the property with her own funds and has exclusive ownership thereof.
Makati RTC: Dissolved the marriage between Eiji and Evelyn and ordered liquidation of their
properties. (at the time of the mortgage)
Paranaque RTC: Ruled that a foreign national cannot possibly own mortgaged property. Without
ownership, or any other law or contract binding the defendants to him, Eiji has no cause of action
that may be asserted against them.
Eiji appealed the Paranaque RTC’s decision arguing that his inability to own real estate in the
Philippines does not deprive him of interest in the property as the property may still be sold. He
also emphasized Evelyn’s commitment that she would not dispose or encumber any of her
properties.
CA: Annulled the REM executed by Evelyn in favor of PAFIN.
PAFIN filed a petition for review asserting that decision of the Paranaque RTC was essential for
the determination of the validity of the REM.
Issue:
WON, the Paranaque RTC’s decision should be upheld.
Held: No. The Makati RTC had acquired jurisdiction over the said question and should have not
been interfered with by the Paranaque RTC. In this case, the issue of ownership and liquidation
of properties acquired during the cohabitation of Eiji and Evelyn was submitted for the resolution
of the Makati RTC, and was pending appeal before the CA. The doctrine of judicial stability or
non-interference dictates that the Makati RTC had acquired jurisdiction over the said questions
regarding the properties and thus it was improper for Paranaque to have reviewed a co-equal
court.
Furthermore, it was improper for the Paranaque RTC to rule on the ownership issue because in
this case, Eiji was not trying to claim ownership of the Paranaque townhouse unit. Instead, he
had only invoked his right to rely on Evelyn’s commitment not to dispose or encumber her
properties during the pendency of the bigamy case.
Wherefore, the petition is denied for lack of merit. CA decision is affirmed.