ACE FINANCE LTD. (PAFIN) V. EIJI* YANAGISAWA
G.R. No. 175303, [April 11, 2012]
DOCTRINE:
An undertaking not to dispose of a property pending litigation, made in open court and embodied in a court order, and duly annotated on the title of the said property, creates a right in favor of the person relying thereon. The latter may seek the annulment of actions that are done in violation of such undertaking.
FACTS:
Respondent Eiji Yanagisawa (Eiji), a Japanesenational, and Evelyn F. Castañeda (Evelyn), a Filipina, contracted marriage on July 12, 1989 in the City Hall of Manila.
On August 23, 1995, Evelyn purchased a 152 square-meter townhouse unit located at Bo. Sto. Niño, Parañaque, Metro Manila (Parañaque townhouse unit). The Registry of Deeds for Parañaque issued Transfer Certificate of Title (TCT) No. 99791 to “Evelyn P. Castañeda, Filipino, married to Ejie Yanagisawa, Japanese citizen[,] both of legal age.”
In 1996, Eiji filed a complaint for the declaration of nullity of his marriage with Evelyn on the ground of bigamy (nullity of marriage case). 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 a Preliminary Injunction. He asked that Evelyn be enjoined from disposing or encumbering all of the properties registered in her name. At the hearing on the said motion, Evelyn and her lawyer voluntarily undertook not to dispose of the properties registered in her name during the pendency of the case, thus rendering Eiji’s application and motion moot. Said undertaking was annotated on the title of the Parañaque townhouse unit or TCT No. 99791.
Sometime in March 1997, Evelyn obtained a loan of P500,000.00 from petitioner Pacific Ace Finance Ltd. (PAFIN). To secure the loan, Evelyn executed a real estate mortgage (REM) in favor of PAFIN over the Parañaque townhouse unit covered by TCT No. 99791. The instrument was submitted to the Register of Deeds of Parañaque City for annotation on the same date.
At the time of the mortgage, Eiji’s appeal in the nullity of marriage case was pending before the CA. The Makati RTC had dissolved Eiji and Evelyn’s marriage, and had ordered the liquidation of their registered properties, including the Parañaque townhouse unit, with its proceeds to be divided between the parties. The Decision of the Makati RTC did not lift or dissolve its Order on Evelyn’s commitment not to dispose of or encumber the properties registered in her name.
Eiji learned of the REM upon its annotation on TCT No. 99791. Deeming the mortgage as a violation of the Makati RTC’s Order, Eiji filed a complaint for the annulment of REM (annulment of mortgage case) against Evelyn and PAFIN.
For its defense, PAFIN denied prior knowledge of the October 2, 1996 Order against Evelyn. It admitted, however, that it did not conduct any verification of the title with the Registry of Deeds of Parañaque City “because x x x Evelyn was a good, friendly and trusted neighbor.” PAFIN maintained that Eiji has no personality to seek the annulment of the REM because a foreign national cannot own real properties located within the Philippines.
Evelyn also denied having knowledge of the October 2, 1996 Order. Evelyn asserted that she paid for the property with her own funds and that she has exclusive ownership thereof.
Petitioner seeks a reversal of the CA Decision, which allegedly affirmed the Makati RTC ruling that Eiji is a co-owner of the mortgaged property. PAFIN insists that the CA sustained a violation of the constitution with its declaration that an alien can have an interest in real property located in the Philippines.
ISSUE/S:
1. Whether a real property in the Philippines can be part of the community property of a Filipina and her foreigner spouse;
2. Whether a real property registered solely in the name of the Filipina wife is paraphernal or conjugal;
3. Who is entitled to the real property mentioned above when the marriage is declared void?
4. Whether the Parañaque RTC can rule on the issue of ownership, even as the same issue was already ruled upon by the Makati RTC and is pending appeal in the CA.
HELD:
The petition has no merit.
RATIO:
Contrary to petitioner’s stance, the CA did notmake any disposition as to who between Eiji and Evelyn owns the Parañaque townhouse unit. It simply ruled that the Makati RTC had acquired jurisdiction over the said question and should not have been interfered with by the Parañaque RTC. The CA only clarified that it was improper for the Parañaque RTC to have reviewed the ruling of a co-equal court.
Petitioner maintains that it was imperative for the Parañaque RTC to rule on the ownership issue because it was essential for the determination of the validity of the REM.
The Court disagrees. A review of the complaint shows that Eiji did not claim ownership of the Parañaque townhouse unit or his right to consent to the REM as his bases for seeking its annulment. Instead, Eiji invoked his right to rely on Evelyn’s commitment not to dispose of or encumber the property (as confirmed in the October 2, 1996 Order of the Makati RTC), and the annotation of the said commitment on TCT No. 99791.
It was Evelyn and PAFIN that raised Eiji’s incapacity to own real property as their defense to the suit. They maintained that Eiji, as an alien incapacitated to own real estate in the Philippines, need not consent to the REM contract for its validity. But this argument is beside the point and is not a proper defense to the right asserted by Eiji. This defense does not negate Eiji’s right to rely on the October 2, 1996 Order of the Makati RTC and to hold third persons, who deal with the registered property, to the annotations entered on the title. Thus, the RTC erred in dismissing the complaint based on this defense.
Petitioner did not question the rest of the appellate court’s ruling, which held that Evelyn and PAFIN executed the REM in complete disregard and violation of the October 2, 1996 Order of the Makati RTC and the annotation on TCT No. 99791. It did not dispute the legal effect of the October 2, 1996 Order on Evelyn’s capacity to encumber the Parañaque townhouse unit nor the CA’s finding that petitioner is a mortgagee in bad faith.
The October 2, 1996 Order, embodying Evelyn’s commitment not to dispose of or encumber the property, is akin to an injunction order against the disposition or encumbrance of the property. Jurisprudence holds that all acts done in violation of a standing injunction order are voidable as to the party enjoined and third parties who are not in good faith. The party, in whose favor the injunction is issued, has a cause of action to seek the annulment of the offending actions.
In view of the foregoing discussion, we find no need to discuss the other issues raised by the petitioner.
