PACIFIC ACE FINANCE LTD VS YANAGISAWA

G,R, No 175303
APRIL 11,2012
Petitioner: PAFIN
Respondent: YANAGISAWA
Ponente: Del Castillo, J.:

FACTS:
On July 12, 1989, respondent Eiji Yanagisawa (EIJI), Japanese, married Evelyn F. Castaneda
(EVELYN), Filipina. During the marriage, Evelyn acquired a townhouse in Paranaque City. In
1998, Eiji filed a nullity of marriage case which was assigned to Makati RTC Branch 146. Eiji
also filed a Motion to prohibit Evelyn from disposing of or encumbering her properties while the
case is pending. In the motion hearing, Evelyn gave a voluntary committed what is asked to Eiji
and Makati RTC. The commitment was annotated in the TCT of the Paranaque townhouse.
Meanwhile, Evelyn loaned from Pacific Ace Finance Ltd. (PAFIN) and executed a Real Estate
Mortgage (REM) over the aforementioned property. Concurrently, Eiji’s appeal in the nullity of
marriage case was pending before the CA. The Makati RTC had granted the nullity of marriage
between Eiji and Evelyn and ordered to liquidate their properties and divide the proceeds
between the parties.
Upon learning of the REM, Eiji filed an annulment of mortgage case against Evelyn and PAFIN.
The Paranaque RTC dismissed the case because as a foreign national, Eiji cannot own the
mortgaged property. Thus, the respondent also cannot ask for the annulment of the REM.
Eiji appealed the Paranaque RTC decision asserting that the Makati RTC has recognized his
rights to the proceeds from the sale of the property. Eiji also noted that Evelyn had made a
commitment that prohibits her from executing the REM. The Court of Appeals (CA) granted
Eiji’s appeal. The CA affirmed Makati RTC’s decision to divide the proceeds of the properties
between the two parties. The CA also decided that the Paranaque RTC’s decision violated the
doctrine of judicial stability therefore nullifying the Paranaque RTC’s Order. Consequently, the
REM was annulled. Thereafter, PAFIN filed this petition for review.
Issue:
Whether or not the Paranaque RTC can rule on the subject of the case even when the same issue
was already filed upon by the Makati RTC and is pending appeal in the CA
Ruling:
No. The court maintained the CA’s ruling that the Paranaque RTC inappropriately interfered
with the decision of Makati RTC, caused confusion, and hampered the administration of justice.
The Court asserted the doctrine of judicial stability which dictates that a court cannot interfere
with the decision of another court over which it has no appellate jurisdiction. The Makati RTC
had already resolved and held jurisdiction over the subject of the case. When the RTC assumed
jurisdiction, it not only interfered with Makati RTC’s jurisdiction but also disregarded judicial
comity and courtesy.