FIRST DIVISION

[G.R. No. 85494. May 7, 1991.]

CHOITHRAM JETHMAL RAMNANI and/or NIRMLA V. RAMNANI
AND MOTI G. RAMNANI, petitioners, vs. COURT OF APPEALS,
SPOUSES ISHWAR JETHMAL RAMNANI, SONYA JETHMAL
RAMNANI and OVERSEAS HOLDING CO., LTD., respondents.
[G.R. No. 85496. May 7, 1991.]
SPOUSES ISHWAR JETHMAL RAMNANI and SONYA JETHMAL
RAMNANI, petitioners, vs. THE HONORABLE COURT OF APPEALS,
ORTIGAS & CO., LTD. PARTNERSHIP, and OVERSEAS HOLDING
CO., LTD., respondents.

Quasha, Asperilla, Ancheta, Pea and Nolasco for petitioners in G.R. No. 85496.
Salonga, Andres, Hernandez & Allado for petitioners in G.R. No. 85494.
Rama Law Oce for petitioners in G.R. No. 85494, in collaboration with Salonga,
Andres, Hernandez & Allado.
Eulogio R. Rodriguez for Ortigas & Co., Ltd.
SYLLABUS
1.
REMEDIAL LAW; EVIDENCE; ENTRUSTING MONEY AND VALUABLES WITHOUT
RECEIPT TO CLOSE FAMILY MEMBERS, NOT UNUSUAL. The environmental
circumstances of this case buttress the claim of Ishwar that he did entrust the
amount of US$150,000.00 to his brother, Choithram, which the latter invested in
the real property business subject of this litigation in his capacity as attorney-in-fact
of Ishwar. True it is that there is no receipt whatever in the possession of Ishwar to
evidence the same, but it is not unusual among brothers and close family members
to entrust money and valuables to each other without any formalities or receipt due
to the special relationship of trust between them.
2.
ID.; CIVIL PROCEDURE; DEFAULT; FAILURE TO FILE COMMENT OR ANSWER.
Overseas was impleaded as respondent in the cases and required to le comment
or answer to the dierent pleadings led by petitioner. No comment or answer was
led by Overseas despite due notice, thus it is and must be considered to be in
default and to have lost the right to contest the representations of spouses Ishwar
to declare the aforesaid alleged mortgage null and void.

3.
CIVIL LAW; MORTGAGE; NULLITY OF MORTGAGE SHOWN BY
CIRCUMSTANCES IN CASE AT BAR. This purported mortgage of the subject
properties in litigation appears to be fraudulent and simulated. The stated amount
of $3 Million for which it was mortgaged is much more than the value of the
mortgaged properties and its improvements. The alleged mortgagee-company
(Overseas) was organized only on June 26, 1989 but the mortgage was executed
much earlier, on June 20, 1989, that is six (6) days before Overseas was organized.
Overseas is a "shelf" company worth only $100.00. In the manifestation of spouses
Ishwar dated April 1, 1991, the Court was informed that this matter was brought to
the attention of the Central Bank (CB) for investigation, and that in a letter of
March 20, 1991, the CB informed counsel for spouses Ishwar that said alleged
foreign loan of Choithram, et al. from Overseas has not been previously
approved/registered with the CB. Obviously, this is another ploy of Choithram, et al.
to place these properties beyond the reach of spouses Ishwar should they obtain a
favorable judgment in this case. The Court nds and so declares that this alleged
mortgage should be as it is hereby declared null and void.
4.
ID.; AGENCY; NOTICE OF REVOCATION OF POWER OF ATTORNEY IN
NEWSPAPER, SUFFICIENT WARNING TO THIRD PARTY. The problem is
compounded in that respondent Ortigas is caught in the web of this bitter ght. It
had all the time been dealing with Choithram as attorney-in-fact of Ishwar.
However, evidence had been adduced that notice in writing had been served not
only on Choithram, but also on Ortigas, of the revocation of Choithram's power of
attorney by Ishwar's lawyer, on May 24, 1971. A publication of said notice was
made in the April 2, 1971 issue of The Manila Times for the information of the
general public. Such notice of revocation in a newspaper of general circulation is
sucient warning to third persons including Ortigas. A notice of revocation was also
registered with the Securities and Exchange Commission on March 29, 1971.
5.
ID.; ID.; ID.; THIRD PARTY'S FAULT RENDERS HIM GUILTY TO PRINCIPAL.
Indeed in the letter of Choithram to Ishwar of June 25, 1971, Choithram was
pleading that Ishwar execute another power of attorney to be shown to Ortigas who
apparently learned of the revocation of Choithram's power of attorney. Despite said
notices, Ortigas nevertheless acceded to the representation of Choithram, as alleged
attorney-in-fact of Ishwar, to assign the rights of petitioner Ishwar to Nirmla. While
the primary blame should be laid at the doorstep of Choithram, Ortigas is not
entirely without fault. It should have required Choithram to secure another power
of attorney from Ishwar. For recklessly believing the pretension of Choithram that
his power of attorney was still good, it must, therefore, share in the latter's liability
to Ishwar.
6.
ID.; TRUST; IMPLIED TRUST; CREATED WHERE THERE WAS FRAUDULENT
TRANSFER OF PROPERTY. The allegations of the amended complaint above
reproduced clearly spelled out that the transfer of the property to Nirmla was
fraudulent and that it should be considered to be held in trust by Nirmla for spouses
Ishwar. As above-discussed, this allegation is well-taken and the transfer of the
property to Nirmla should be considered to have created an implied trust by Nirmla
as trustee of the property for the benefit of spouses Ishwar.

7.
REMEDIAL LAW; PROVISIONAL REMEDY; PRELIMINARY INJUNCTION;
ISSUANCE. The motion to dissolve the writ of preliminary injunction led by
Choithram, et al. should be denied. Its issuance by this Court is proper and
warranted under the circumstances of the case. Under Section 3(c), Rule 58 of the
Rules of Court, a writ of preliminary injunction may be granted at any time after
commencement of the action and before judgment when it is established: "(c) that
the defendant is doing, threatens, or is about to do, or is procuring or suering to be
done, some act probably in violation of plainti's rights respecting the subject of the
action, and tending to render the judgment ineffectual."
8.
ID.; ID.; ID.; PURPOSE. The purpose of the provisional remedy of
preliminary injunction is to preserve the status quo of the things subject of the
litigation and to protect the rights of the spouses Ishwar respecting the subject of
the action during the pendency of the suit, and not to obstruct the administration of
justice or prejudice the adverse party. In this case for damages, should Choithram,
et al. continue to commit acts of disposition of the properties subject of the
litigation, an award of damages to spouses Ishwar would thereby be rendered
ineffectual and meaningless.
9.
ID.; ID.; ATTACHMENT; WARRANTED WHERE THERE IS AN INTENT TO
DEFRAUD CREDITORS; CASE AT BAR. Section 1, Rule 57 of the Rules of Court
provides that at the commencement of an action or at any time thereafter, the
plainti or any proper party may have the property of the adverse party attached as
security for the satisfaction of any judgment that may be recovered, in, among
others, the following cases: "(d) In an action against a party who has been guilty of
a fraud in contracting the debt or incurring the obligation upon which the action is
brought, or in concealing or disposing of the property for the taking, detention or
conversion of which the action is brought; (e) In an action against a party who has
removed or disposed of his property, or is about to do so, with intent to defraud his
creditors; . . ." Verily, the acts of Choithram, et al. of disposing the properties subject
of the litigation disclose a scheme to defraud spouses Ishwar so they may not be
able to recover at all, given a judgment in their favor, thus requiring the issuance of
the writ of attachment in this instance.
10.
COMMERCIAL LAW; CORPORATION LAW; INDUSTRIAL PARTY WHILE GUILTY
OF FRAUDULENT SCHEME SHARES EQUALLY WITH CAPITALIST PARTNER; CASE AT
BAR. Nevertheless, under the peculiar circumstances of this case and despite the
fact that Choithram, et al., have committed acts which demonstrate their bad faith
and scheme to defraud spouses Ishwar and Sonya of their rightful share in the
properties in litigation, the Court cannot ignore the fact that Choithram must have
been motivated by a strong conviction that as the industrial partner in the
acquisition of said assets he has as much claim to said properties as Ishwar, the
capitalist partner in the joint venture. Through the industry and genius of
Choithram, Ishwar's property was developed and improved into what it is now a
valuable asset worth millions of pesos. As of the last estimate in 1985, while the
case was pending before the trial court, the market value of the properties is no less
than P22,304,000.00. It should be worth much more today. We have a situation
where two brothers engaged in a business venture. One furnished the capital, the

other contributed his industry and talent. Justice and equity dictate that the two
share equally the fruit of their joint investment and eorts. Perhaps this Solomonic
solution may pave the way towards their reconciliation. Both would stand to gain.
No one would end up the loser. After all, blood is thicker than water.
11.
CIVIL LAW; DAMAGES; AWARD OF MORAL & EXEMPLARY DAMAGES IN CASE
AT BAR. However, the Court cannot just close its eyes to the devious
machinations and schemes that Choithram employed in attempting to dispose of, if
not dissipate, the properties to deprive spouses Ishwar of any possible means to
recover any award the Court may grant in their favor. Since Choithram, et al. acted
with evident bad faith and malice, they should pay moral and exemplary damages
as well as attorney's fees to spouses Ishwar.
DECISION
GANCAYCO, J :
p

This case involves the bitter quarrel of two brothers over two (2) parcels of land and
its improvements now worth a fortune. The bone of contention is the apparently
conicting factual ndings of the trial court and the appellate court, the resolution
of which will materially affect the result of the contest.

The following facts are not disputed.

Ishwar, Choithram and Navalrai, all surnamed Jethmal Ramnani, are brothers of the
full blood. Ishwar and his spouse Sonya had their main business based in New York.
Realizing the diculty of managing their investments in the Philippines they
executed a general power of attorney on January 24, 1966 appointing Navalrai and
Choithram as attorneys-in-fact, empowering them to manage and conduct their
business concern in the Philippines. 1
On February 1, 1966 and on May 16, 1966, Choithram, in his capacity as aforesaid
attorney-in-fact of Ishwar, entered into two agreements for the purchase of two
parcels of land located in Barrio Ugong, Pasig, Rizal, from Ortigas & Company, Ltd.
Partnership (Ortigas for short) with a total area of approximately 10,048 square
meters. 2 Per agreement, Choithram paid the down payment and installments on
the lot with his personal checks. A building was constructed thereon by Choithram
in 1966 and this was occupied and rented by Jethmal Industries and a wardrobe
shop called Eppie's Creation. Three other buildings were built thereon by Choithram
through a loan of P100,000.00 obtained from the Merchants Bank as well as the
income derived from the rst building. The buildings were leased out by Choithram
as attorney-in-fact of Ishwar. Two of these buildings were later burned.
LibLex

Sometime in 1970 Ishwar asked Choithram to account for the income and expenses
relative to these properties during the period 1967 to 1970. Choithram failed and

refused to render such accounting. As a consequence, on February 4, 1971, Ishwar

revoked the general power of attorney. Choithram and Ortigas were duly notied of
such revocation on April 1, 1971 and May 24, 1971, respectively. 3 Said notice was
also registered with the Securities and Exchange Commission on March 29, 1971 4
and was published in the April 2, 1971 issue of The Manila Times for the information
of the general public. 5
Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all rights
and interests of Ishwar and Sonya in favor of his daughter-in-law, Nirmla Ramnani,
on February 19, 1973. Her husband is Moti, son of Choithram. Upon complete
payment of the lots, Ortigas executed the corresponding deeds of sale in favor of
Nirmla. 6 Transfer Certicates of Title Nos. 403150 and 403152 of the Register of
Deeds of Rizal were issued in her favor.
Thus, on October 6, 1982, Ishwar and Sonya (spouses Ishwar for short) led a
complaint in the Court of First Instance of Rizal against Choitram and/or spouses
Nirmla and Moti (Choithram, et al. for brevity) and Ortigas for reconveyance of said
properties or payment of its value and damages. An amended complaint for
damages was thereafter filed by said spouses.
After the issues were joined and the trial on the merits, a decision was rendered by
the trial court on December 3, 1985 dismissing the complaint and counterclaim. A
motion for reconsideration thereof led by spouses Ishwar was denied on March 3,
1986.
An appeal therefrom was interposed by spouses Ishwar to the Court of Appeals
wherein in due course a decision was promulgated on March 14, 1988, the
dispositive part of which reads as follows:
"WHEREFORE, judgment is hereby rendered reversing and setting aside the
appealed decision of the lower court dated December 3, 1985 and the Order
dated March 3, 1986 which denied plaintis-appellants' Motion for
Reconsideration from aforesaid decision. A new decision is hereby rendered
sentencing defendants-appellees Choithram, Jethmal Ramnani, Nirmla V.
Ramnani, Moti C. Ramnani, and Ortigas and Company Limited Partnership to
pay, jointly and severally, plaintiffs-appellants the following:
1.
Actual or compensatory damages to the extent of the fair market
value of the properties in question and all improvements thereon covered by
Transfer Certicate of Title No. 403150 and Transfer Certicate of Title No.
403152 of the Registry of Deeds of Rizal, prevailing at the time of the
satisfaction of the judgment but in no case shall such damages be less than
the value of said properties as appraised by Asian Appraisal, Inc. in its
Appraisal Report dated August 1985 (Exhibits T to T-14, inclusive).
prcd

2.
All rental incomes paid or ought to be paid for the use and occupancy
of the properties in question and all improvements thereon consisting of
buildings, and to be computed as follows:
a)

On Building C occupied by Eppie's Creation and Jethmal

Industries from 1967 to 1973, inclusive, based on the 1967 to 1973

monthly rentals paid by Eppie's Creation;
b)
Also on Building C above, occupied by Jethmal Industries
and Lavine from 1974 to 1978, the rental incomes based on then
rates prevailing as shown under Exhibit 'P'; and from 1979 to 1981,
based on then prevailing rates as indicated under Exhibit 'Q';
c)
On Building A occupied by Transworld Knitting Mills from
1972 to 1978, the rental incomes based upon then prevailing rates
shown under Exhibit 'P', and from 1979 to 1981, based on prevailing
rates per Exhibit 'Q';
d)
On the two-Bays Buildings occupied by Sigma-Mariwasa
from 1972 to 1978, the rentals based on the Lease Contract, Exhibit
'P', and from 1979 to 1980, the rentals based on the Lease Contract,
Exhibit 'Q',
and thereafter commencing 1982, to account for and turn over the rental
incomes paid or ought to be paid for the use and occupancy of the
properties and all improvements totalling 10,048 sq. m., based on the rate
per square meter prevailing in 1981 as indicated annually cumulative up to
1984. Then, commencing 1985 and up to the satisfaction of the judgment,
rentals shall be computed at ten percent (10%) annually of the fair market
values of the properties as appraised by the Asian Appraisal, Inc. in August
1985 (Exhibits T to T-14, inclusive.)
3.

Moral damages in the sum of P200,000.00;

4.

Exemplary damages in the sum of P100,000.00;

5.

Attorney's fees equivalent to 10% of the award herein made;

6.
Legal interest on the total amount awarded computed from rst
demand in 1967 and until the full amount is paid and satisfied;.
and
7.

The cost of suit." 7

Acting on a motion for reconsideration led by Choithram, et al. and Ortigas, the
appellate court promulgated an amended decision on October 17, 1988 granting the
motion for reconsideration of Ortigas by arming the dismissal of the case by the
lower court as against Ortigas but denying the motion for reconsideration of
Choithram, et al. 8
Choithram, et al. thereafter led a petition for review of said judgment of the
appellate court alleging the following grounds:
LLpr

"1.
The Court of Appeals gravely abused its discretion in making a factual
nding not supported by and contrary to the evidence presented at the Trial
Court.

2.
The Court of Appeals acted in excess of jurisdiction in awarding
damages based on the value of the real properties in question where the
cause of action of private respondents is recovery of a sum of money.
ARGUMENTS
I
THE COURT OF APPEALS ACTED IN GRAVE ABUSE OF ITS DISCRETION IN
MAKING A FACTUAL FINDING THAT PRIVATE RESPONDENT ISHWAR
REMITTED THE AMOUNT OF US$150,000.00 TO PETITIONER CHOITHRAM IN
THE ABSENCE OF PROOF OF SUCH REMITTANCE.
II
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND
MANIFEST PARTIALITY IN DISREGARDING THE TRIAL COURT'S FINDINGS
BASED ON THE DIRECT DOCUMENTARY AND TESTIMONIAL EVIDENCE
PRESENTED BY CHOITHRAM IN THE TRIAL COURT ESTABLISHING THAT THE
PROPERTIES WERE PURCHASED WITH PERSONAL FUNDS OF PETITIONER
CHOITHRAM AND NOT WITH MONEY ALLEGEDLY REMITTED BY
RESPONDENT ISHWAR.
III
THE COURT OF APPEALS ACTED IN EXCESS OF JURISDICTION IN
AWARDING DAMAGES BASED ON THE VALUE OF THE PROPERTIES AND
THE FRUITS OF THE IMPROVEMENTS THEREON." 9

Similarly, spouses Ishwar led a petition for review of said amended decision of the
appellate court exculpating Ortigas of liability based on the following assigned errors

"I
THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR AND HAS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD
WITH LAW AND/OR WITH APPLICABLE DECISIONS OF THIS HONORABLE
COURT
A)
IN PROMULGATING THE QUESTIONED AMENDED
DECISION (ANNEX 'A') RELIEVING RESPONDENT ORTIGAS FROM
LIABILITY AND DISMISSING PETITIONERS' AMENDED COMPLAINT IN
CIVIL CASE NO. 534-P, AS AGAINST SAID RESPONDENT ORTIGAS;
B)
IN HOLDING IN SAID AMENDED DECISION THAT AT ANY
RATE NO ONE EVER TESTIFIED THAT ORTIGAS WAS A SUBSCRIBER
TO THE MANILA TIMES PUBLICATION OR THAT ANY OF ITS OFFICERS
READ THE NOTICE AS PUBLISHED IN THE MANILA TIMES, THEREBY
ERRONEOUSLY CONCLUDING THAT FOR RESPONDENT ORTIGAS TO
BE CONSTRUCTIVELY BOUND BY THE PUBLISHED NOTICE OF
REVOCATION, ORTIGAS AND/OR ANY OF ITS OFFICERS MUST BE A

SUBSCRIBER AND/OR THAT ANY OF ITS OFFICERS SHOULD READ

THE NOTICE AS ACTUALLY PUBLISHED;
C)
IN HOLDING IN SAID AMENDED DECISION THAT
ORTIGAS COULD NOT BE HELD LIABLE JOINTLY AND SEVERALLY
WITH THE DEFENDANTS-APPELLEES CHOITHRAM, MOTI AND NIRMLA
RAMNANI, AS ORTIGAS RELIED ON THE WORD OF CHOITHRAM THAT
ALL ALONG HE WAS ACTING FOR AND IN BEHALF OF HIS BROTHER
ISHWAR WHEN IT TRANSFERRED THE RIGHTS OF THE LATTER TO
NIRMLA V. RAMNANI;
LibLex

D)
IN IGNORING THE EVIDENCE DULY PRESENTED AND
ADMITTED DURING THE TRIAL THAT ORTIGAS WAS PROPERLY
NOTIFIED OF THE NOTICE OF REVOCATION OF THE GENERAL POWER
OF ATTORNEY GIVEN TO CHOITHRAM, EVIDENCED BY THE
PUBLICATION IN THE MANILA TIMES ISSUE OF APRIL 2, 1971 (EXH. F)
WHICH CONSTITUTES NOTICE TO THE WHOLE WORLD; THE RECEIPT
OF THE NOTICE OF SUCH REVOCATION WHICH WAS SENT TO
ORTIGAS ON MAY 22, 1971 BY ATTY. MARIANO P. MARCOS AND
RECEIVED BY ORTIGAS ON MAY 24, 1971 (EXH. G) AND THE FILING
OF THE NOTICE WITH THE SECURITIES AND EXCHANGE COMMISSION
ON MARCH 29, 1971 (EXH. H);
E)
IN DISCARDING ITS FINDINGS CONTAINED IN ITS
DECISION OF 14 MARCH 1988 (ANNEX B) THAT ORTIGAS WAS DULY
NOTIFIED OF THE REVOCATION OF THE POWER OF ATTORNEY OF
CHOITHRAM, HENCE ORTIGAS ACTED IN BAD FAITH IN EXECUTING
THE DEED OF SALE TO THE PROPERTIES IN QUESTION IN FAVOR OF
NIRMLA V. RAMNANI;

F)
IN SUSTAINING RESPONDENT ORTIGAS VACUOUS
REHASHED ARGUMENTS IN ITS MOTION FOR RECONSIDERATION
THAT IT WOULD NOT GAIN ONE CENTAVO MORE FROM CHOITHRAM
FOR THE SALE OF SAID LOTS AND THE SUBSEQUENT TRANSFER OF
THE SAME TO THE LATTER'S DAUGHTER-IN-LAW, AND THAT IT WAS
IN GOOD FAITH WHEN IT TRANSFERRED ISHWAR'S RIGHTS TO THE
LOTS IN QUESTION.
II
THE RESPONDENT HONORABLE COURT OF APPEALS HAS SO FAR
DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDING WHEN IT HELD IN THE QUESTIONED AMENDED DECISION OF
17 NOVEMBER 1988 (ANNEX A) THAT RESPONDENT ORTIGAS & CO., LTD.,
IS NOT JOINTLY AND SEVERALLY LIABLE WITH DEFENDANTS-APPELLEES
CHOITHRAM, MOTI AND NIRMLA RAMNANI IN SPITE OF ITS ORIGINAL
DECISION OF 14 MARCH 1988 THAT ORTIGAS WAS DULY NOTIFIED OF THE
REVOCATION OF THE POWER OF ATTORNEY OF CHOITHRAM RAMNANI." 10

The center of controversy is the testimony of Ishwar that during the latter part of
1965, he sent the amount of US$150,000.00 to Choithram in two bank drafts of
US$65,000.00 and US$85,000.00 for the purpose of investing the same in real
estate in the Philippines. The trial court considered this lone testimony unworthy of
faith and credit. On the other hand, the appellate court found that the trial court
misapprehended the facts in complete disregard of the evidence, documentary and
testimonial.
cdphil

Another crucial issue is the claim of Choithram that because he was then a British
citizen, as a temporary arrangement, he arranged the purchase of the properties in
the name of Ishwar who was an American citizen and who was then qualied to
purchase property in the Philippines under the then Parity Amendment. The trial
court believed this account but it was debunked by the appellate court.
As to the issue of whether of not spouses Ishwar actually sent US$150,000.00 to
Choithram precisely to be used in the real estate business, the trial court made the
following disquisition
"After a careful, considered and conscientious examination of the evidence
adduced in the case at bar, plainti Ishwar Jethmal Ramnani's main evidence,
which centers on the alleged payment by sending through registered mail
from New York two (2) US$ drafts of $85,000.00 and $65,000.00 in the
latter part of 1965 (TSN 28 Feb. 1984, p. 10-11). The sending of these
moneys were before the execution of that General Power of Attorney, which
was dated in New York, on January 24, 1966. Because of these alleged
remittances of US$150,000.00 and the subsequent acquisition of the
properties in question, plaintis averred that they constituted a trust in
favor of defendant Choithram Jethmal Ramnani. This Court can be in full
agreement if the plaintis were only able to prove preponderantly these
remittances . The entire record of this case is bereft of even a shred of proof
to that eect. It is completely barren. His uncorroborated testimony that he
remitted these amounts in the 'later part of 1965' does not engender
enough faith and credence. Inadequacy of details of such remittance on the
two (2) US dollar drafts in such big amounts is completely not positive,
credible, probable and entirely not in accord with human experience. This is
a classic situation, plaintis not exhibiting any commercial document or any
document and/or paper as regard to these alleged remittances. Plainti
Ishwar Ramnani is not an ordinary businessman in the strict sense of the
word. Remember his main business is based in New York, and he should
know better how to send these alleged remittances. Worst, plaintis did not
present even a scum of proof, that defendant Choithram Ramnani received
the alleged two US dollar drafts. Signicantly, he does not know even the
bank where these two (2) US dollar drafts were purchased. Indeed, plainti
Ishwar Ramnani's lone testimony is unworthy of faith and credit and,
therefore, deserves scant consideration, and since the plaintis' theory is
built or based on such testimony, their cause of action collapses or falls with
it.
LLpr

Further, the rate of exchange that time in 1966 was P4.00 to $1.00. The alleged
two US dollar drafts amounted to $150,000.00 or about P600,000.00. Assuming the

cash price of the two (2) lots was only P530,000.00 (ALTHOUGH he said: ' Based on
my knowledge I have no evidence,' when asked if he even knows the cash price of
the two lots). If he were really the true and bonade investor and purchaser for
prot as he asserted, he could have paid the price in full in cash directly and
obtained the title in his name and not thru 'Contracts To Sell' in installments paying
interest and thru an attorney-in-fact (TSN of May 2, 1984, pp. 10-11) and, again,
plainti Ishwar Ramnani told this Court that he does not know whether or not his
late father-in-law borrowed the two US dollar drafts from the Swiss Bank or
whether or not his late father-in-law had any debit memo from the Swiss Bank
(TSN of May 2, 1984, pp. 9-10). 11
On the other hand, the appellate court, in giving credence to the version of Ishwar,
had this to say
"While it is true, that generally the ndings of fact of the trial court are
binding upon the appellate courts, said rule admits of exceptions such as
when (1) the conclusion is a nding grounded entirely on speculations,
surmises and conjectures; (2) when the inferences made is manifestly
mistaken, absurd and impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of facts
and when the court, in making its ndings, went beyond the issues of the
case and the same are contrary to the admissions of both appellant and
appellee (Ramos vs. Court of Appeals, 63 SCRA 33; Philippine American Life
Assurance Co. vs. Santamaria, 31 SCRA 798; Aldaba vs. Court of Appeals,
24 SCRA 189).
The evidence on record shows that the trial court acted under a
misapprehension of facts and the inferences made on the evidence palpably
a mistake.
The trial court's observation that 'the entire records of the case is bereft of
even a shred of proof' that plaintis-appellants have remitted to defendantappellee Choithram Ramnani the amount of US$150,000 00 for investment
in real estate in the Philippines, is not borne by the evidence on record and
shows the trial court's misapprehension of the facts if not a complete
disregard of the evidence, both documentary and testimonial.
Plainti-appellant Ishwar Jethmal Ramnani testifying in his own behalf,
declared that during the latter part of 1965, he sent the amount of
US$150,000 .00 to his brother Choithram in two bank drafts of
US$65,000.00 and US$85,000.00 for the purpose of investing the same in
real estate in the Philippines. His testimony is as follows:
'ATTY. MARAPAO:
Mr. Witness, you said that your attorney-in-fact paid in your behalf. Can
you tell this Honorable Court where your attorney-in-fact got the
money to pay this property?
'ATTY. CRUZ:

Wait. It is now clear it becomes incompetent or hearsay.

'COURT:
Witness can answer.
'A

I paid through my attorney-in-fact. I am the one who gave him the

money.

'ATTY. MARAPAO:
'Q

You gave him the money?

'A

That's right.

'Q

How much money did you give him?

'A

US$150,000.00.

'Q

How was it given then?

'A

Through Bank drafts. US$65,000.00 and US$85,000.00 bank drafts.

The total amount which is $150,000.00 (TSN, 28 February 1984, p.
10; emphasis supplied.)
xxx xxx xxx

'ATTY. CRUZ:
'Q

The two bank drafts which you sent I assume you bought that from
some banks in New York?

'A

No, sir.

'Q

But there is no question those two bank drafts were for the purpose
of paying down payment and installment of the two parcels of land?

'A

Down payment, installment and to put up the building.

'Q

I thought you said that the buildings were constructed . . . subject to

our continuing objection from rentals of first building.

'ATTY. MARAPAO:
Your Honor, that is misleading.
'COURT;
Witness (may) answer.
'A

Yes, the rst building was immediately put up after the purchase of
the two parcels of land that was in 1966 and the funds were used
for the construction of the building from the US$150,000.00 (TSN, 7

March 1984, page 14, emphasis supplied.)

xxx xxx xxx
'Q

These two bank drafts which you mentioned and the use for it you
sent them by registered mail, did you send them from New York?

'A

That is right.

'Q

And the two bank drafts which were put in the registered mail, the
registered mail was addressed to whom?

'A

Choithram Ramnani.' (TSN, 7 March 1984, pp. 14-15).

On cross-examination, the witness reiterated the remittance of the money to his

brother Choithram, which was sent to him by his father-in-law, Rochiram L.
Mulchaudoni from Switzerland, a man of immense wealth, which even defendantsappellees' witness Navalrai Ramnani admits to be so (tsn., p. 16, S. Oct. 13, 1985).
Thus, on cross-examination, Ishwar testified as follows:
'Q

How did you receive these two bank drafts from the bank the name
of which you cannot remember?

'A

I got it from my father-in-law.

'Q

From where did your father-in-law sent these two bank drafts?

'A

From Switzerland.

'Q

He was in Switzerland.

'A

Probably, they sent out these two drafts from Switzerland.' (TSN, 7
March 1984, pp. 16-17; emphasis supplied.)

This positive and armative testimony of plainti-appellant that he sent the

two (2) bank drafts totalling US$150,000.00 to his brother, is proof of said
remittance. Such positive testimony has greater probative force than
defendant-appellee's denial of receipt of said bank drafts, for a witness who
testies armatively that something did happen should be believed for it is
unlikely that a witness will remember what never happened (Underhill's Cr.
Guidance, 5th Ed., Vol. 1, pp. 10-11).
That is not all. Shortly thereafter, plaintiff-appellant Ishwar Ramnani executed
a General Power of Attorney (Exhibit 'A') dated January 24, 1966 appointing
his brothers, defendants-appellees Navalrai and Choithram as attorney-infact empowering the latter to conduct and manage plaintis-appellants'
business affairs in the Philippines and specifically

'No. 14. To acquire, purchase for us, real estates and

improvements for the purpose of real estate business anywhere in the

Philippines and to develop, subdivide, improve and to resell to buying

public (individual, rm or corporation); to enter in any contract of sale
in our behalf and to enter mortgages between the vendees and the
herein grantors that may be needed to nance the real estate
business being undertaken.'
Pursuant thereto, on February 1, 1966 and May 16, 1966, Choithram
Jethmal Ramnani entered into Agreements (Exhibits 'B' and 'C') with the other
defendant. Ortigas and Company, Ltd., for the purchase of two (2) parcels
of land situated at Barrio Ugong, Pasig, Rizal, with said defendant-appellee
signing the Agreements in his capacity as Attorney-in-fact of Ishwar Jethmal
Ramnani.
Again, on January 5, 1972, almost seven (7) years after Ishwar sent the
US$150,000.00 in 1965, Choithram Ramnani, as attorney-in-fact of Ishwar
entered into a Contract of Lease with Sigma-Mariwasa (Exhibit 'P') thereby
re-arming the ownership of Ishwar over the disputed property and the
trust relationship between the latter as principal and Choithram as attorneyin-fact of Ishwar.
All of these facts indicate that if plainti-appellant Ishwar had not earlier sent
the U5$150,000.00 to his brother, Choithram, there would be no purpose
for him to execute a power of attorney appointing his brothers as his
attorney-in-fact in buying real estate in the Philippines.
Cdpr

As against Choithram's denial that he did not receive the US$150,000.00

remitted by Ishwar and that the Power of Attorney, as well as the
Agreements entered into with Ortigas & Co., were only temporary
arrangements, Ishwar's testimony that he did send the bank drafts to
Choithram and was received by the latter, is the more credible version since
it is natural, reasonable and probable. It is in accord with the common
experience, knowledge and observation of ordinary men (Gardner vs.
Wentors, 18 Iowa 533). And in determining where the superior weight of the
evidence on the issues involved lies, the court may consider the probability
or improbability of the testimony of the witness (Sec. 1, Rule 133, Rules of
Court).
Contrary, therefore, to the trial court's sweeping observation that 'the entire
records of the case is bereft of even a shred of proof' that Choithram
received the alleged bank drafts amounting to US$150,000.00, we have not
only testimonial evidence but also documentary and circumstantial evidence
proving said remittance of the money and the duciary relationship between
the former and Ishwar." 12

The Court agrees. The environmental circumstances of this case buttress the claim
of Ishwar that he did entrust the amount of US$150,000.00 to his brother,
Choithram, which the latter invested in the real property business subject of this
litigation in his capacity as attorney-in-fact of Ishwar.
True it is that there is no receipt whatever in the possession of Ishwar to evidence
the same, but it is not unusual among brothers and close family members to entrust

money and valuables to each other without any formalities or receipt due to the
special relationship of trust between them.
And another proof thereof is the fact that Ishwar, out of frustration when Choithram
failed to account for the realty business despite his demands, revoked the general
power of attorney he extended to Choithram and Navalrai. Thereafter, Choithram
wrote a letter to Ishwar pleading that the power of attorney be renewed or another
authority to the same effect be extended, which reads as follows:
"June 25, 1971
MR. ISWAR JETHMAL
NEW YORK
(1)
Send power of Atty. immediately, because the case has been
postponed for two weeks. The same way as it has been send before in
favour of both names. Send it immediately otherwise everything will be lost
unnecessarily, and then it will take us in litigation. Now that we have gone
ahead with a case and would like to end it immediately otherwise squatters
will take the entire land. Therefore, send it immediately.
(2)
Ortigas also has sued us because we are holding the installments,
because they have refused to give a rebate of P5.00 per meter which they
have to give us as per contract. They have led the law suit that since we
have not paid the installment they should get back the land. The hearing of
this case is in the month of July. Therefore, please send the power
immediately. In one case DADA (Elder Brother) will represent and in another
one, I shall.
(3)
In case if you do not want to give power then make one letter in
favor of Dada and the other one in my favor showing that in any litigation we
can represent you and your wife, and whatever the court decide it will be
acceptable by me. You can ask any lawyer, he will be able to prepare these
letters. After that you can have these letters ratify before P.I. Consulate. It
should be dated April 15, 1971.
LibLex

(4)
Try to send the power because it will be more useful. Make it in any
manner whatever way you have condent in it. But please send it
immediately.
You have cancelled the power. Therefore, you have lost your reputation
everywhere. What can I further write you about it. I have told everybody
that due to certain reasons I have written you to do this, that is why you
have done this. This way your reputation have been kept intact. Otherwise if
I want to do something about it, I can show you that inspite of the power
you have cancelled you can not do anything. You can keep this letter
because my conscience is clear. I do not have anything in my mind.

I should not be writing you this, but because my conscience is clear do you
know that if I had predated papers what could you have done? Or do you
know that I have many paper signed by you and if I had done anything or do

then what can you do about it? It is not necessary to write further about
this. It does not matter if you have cancelled the power At that time if I had
predated and done something about it what could you have done? You do
not know me. I am not after money. I can earn money anytime. It has been
ten months since I have not received a single penny for expenses from
Dada (elder brother). Why there are no expenses? We can not draw a single
penny from knitting (factory). Well I am not going to write you further, nor
there is any need for it. This much I am writing you because of the way you
have conducted yourself. But remember, whenever I have the money I will
not keep it myself. Right now I have not got anything at all.
I am not going to write any further.
Keep your business clean with Naru. Otherwise he will discontinue because
he likes to keep his business very clean." 13

The said letter was in Sindhi language. It was translated to English by the First
Secretary of the Embassy of Pakistan, which translation was veried correct by the
Chairman, Department of Sindhi, University of Karachi. 14
From the foregoing letter what could be gleaned is that
1.
Choithram asked for the issuance of another power of attorney in their favor
so they can continue to represent Ishwar as Ortigas has sued them for unpaid
installments. It also appears therefrom that Ortigas learned of the revocation of the
power of attorney so the request to issue another.
2.
Choithram reassured Ishwar to have condence in him as he was not after
money, and that he was not interested in Ishwar's money.
3.
To demonstrate that he can be relied upon, he said that he could have antedated the sales agreement of the Ortigas lots before the issuance of the powers of
attorney and acquired the same in his name, if he wanted to, but he did not do so.
4.
He said he had not received a single penny for expenses from Dada (their
elder brother Navalrai). Thus, conrming that if he was not given money by Ishwar
to buy the Ortigas lots, he could not have consummated the sale.
5.
It is important to note that in said letter Choithram never claimed ownership
of the property in question. He armed the fact that he bought the same as mere
agent and in behalf of Ishwar. Neither did he mention the alleged temporary
arrangement whereby Ishwar, being an American citizen, shall appear to be the
buyer of the said property, but that after Choithram acquires Philippine citizenship,
its ownership shall be transferred to Choithram.
LLjur

This brings us to this temporary arrangement theory of Choithram.

The appellate court disposed of this matter in this wise
"Choithram's claim that he purchased the two parcels of land for himself in
1966 but placed it in the name of his younger brother, Ishwar, who is an

American citizen, as a 'temporary arrangement,' because as a British subject

he is disqualied under the 1935 Constitution to acquire real property in the
Philippines, which is not so with respect to American citizens in view of the
Ordinance Appended to the Constitution granting them parity rights, there is
nothing in the records showing that Ishwar ever agreed to such a
temporary arrangement.

During the entire period from 1965, when the US$150,000.00 was
transmitted to Choithram, and until Ishwar led a complaint against him in
1982, or over 16 years, Choithram never mentioned of a temporary
arrangement nor can he present any memorandum or writing evidencing
such temporary arrangement, prompting plaintiff-appellant to observe:
'The properties in question which are located in a prime
industrial site in Ugong, Pasig, Metro Manila have a present fair market
value of no less than P22,364,000.00 (Exhibits T to T-14, inclusive),
and yet for such valuable pieces of property, Choithram who now
belatedly claims that he purchased the same for himself did not
document in writing or in a memorandum the alleged temporary
arrangement with Ishwar' (pp. 4-41, Appellant's Brief).
Such verbal allegation of a temporary arrangement is simply improbable and
inconsistent. It has repeatedly been held that important contracts made
without evidence are highly improbable.

The improbability of such temporary arrangement is brought to fore when

we consider that Choithram has a son (Haresh Jethmal Ramnani) who is an
American citizen under whose name the properties in question could be
registered, both during the time the contracts to sell were executed and at
the time absolute title over the same was to be delivered. At the time the
Agreements were entered into with defendant Ortigas & Co. in 1966,
Haresh, was already 18 years old and consequently, Choithram could have
executed the deeds in trust for his minor son. But, he did not do this. Three
(3) years, thereafter, or in 1968 after Haresh had attained the age of 21,
Choithram should have terminated the temporary arrangement with Ishwar,
which according to him would be eective only pending the acquisition of
citizenship papers. Again, he did not do anything.

'Evidence to be believed, said Vice Chancellor Van Fleet of New

Jersey, must not only proceed from the mouth of a credible witness,
but it must be credible in itself such as the common experience and
observation of mankind can approve as probable under the
circumstances. We have no test of the truth of human testimony,
except its conformity to our knowledge, observation and experience.
Whatever is repugnant to these belongs to the miraculous and is
outside of judicial cognizance.' (Daggers vs. Van Dyek, 37 M.J. Eq.
130, 132).
prcd

Another factor that can be counted against the temporary arrangement

excuse is that upon the revocation on February 4, 1971 of the Power of

Attorney dated January 24, 1966 in favor of Navalrai and Choithram by
Ishwar, Choithram wrote (tsn, p. 21, S. July 19, 1985) a letter dated June 25,
1971 (Exhibits R, R-1, R-2 and R-3) imploring Ishwar to execute a new
power of attorney in their favor. That if he did not want to give power, then
Ishwar could make a letter in favor of Dada and another in his favor so that
in any litigation involving the properties in question, both of them could
represent Ishwar and his wife. Choithram tried to convince Ishwar to issue
the power of attorney in whatever manner he may want. In said letter no
mention was made at all of any temporary arrangement.
On the contrary, said letter recognize(s) the existence of principal and
attorney-in-fact relationship between Ishwar and himself Choithram wrote: '.
. . do you know that if I had predated papers what could you have done? Or
do you know that I have many papers signed by you and if I had done
anything or do then what can you do about it?' Choithram was saying that
he could have repudiated the trust and ran away with the properties of
Ishwar by predating documents and Ishwar would be entirely helpless. He
was bitter as a result of Ishwar's revocation of the power of attorney but no
mention was made of any temporary arrangement or a claim of ownership
over the properties in question nor was he able to present any
memorandum or document to prove the existence of such temporary
arrangement.

Choithram is also estopped in pais or by deed from claiming an interest over

the properties in question adverse to that of Ishwar. Section 3(a) of Rule
131 of the Rules of Court states that whenever 'a party has, by his own
declaration, act, or omission intentionally and deliberately led another to
believe a particular thing true and act upon such belief, he cannot in any
litigation arising out of such declaration, act or omission be permitted to
falsify it.' While estoppel by deed is a bar which precludes a party to a deed
and his privies from asserting as against the other and his privies any right
of title in derogation of the deed, or from denying the truth of any material
fact asserted in it (31 C.J.S. 195;19 Am. Jur. 603).
Thus, defendants-appellees are not permitted to repudiate their admissions
and representations or to assert any right or title in derogation of the deeds
or from denying the truth of any material fact asserted in the (1) power of
attorney dated January 24, 1966 (Exhibit A); (2) the Agreements of February
1, 1966 and May 16, 1966 (Exhibits B and C); and (3) the Contract of Lease
dated January 5, 1972 (Exhibit P).
'. . . The doctrine of estoppel is based upon the grounds of
public policy, fair dealing, good faith and justice, and its purpose is to
forbid one to speak against his own act, representations, or
commitments to the injury of one to whom they were directed and
who reasonably relied thereon. The doctrine of estoppel springs from
equitable principles and the equities in the case. It is designed to aid
the law in the administration of justice where without its aid injustice
might result. It has been applied by this court wherever and whenever
special circumstances of a case so demands' (Philippine National Bank

vs. Court of Appeals, 94 SCRA 357, 368 [1979]).

It was only after the services of counsel has been obtained that Choithram
alleged for the rst time in his Answer that the General Power of Attorney
(Annex A) with the Contracts to Sell (Annexes B and C) were made only for
the sole purpose of assuring defendants' acquisition and ownership of the
lots described thereon in due time under the law; that said instruments do
not reect the true intention of the parties' (par. 2, Answer dated May 30,
1983), seventeen (17) long years from the time he received the money
transmitted to him by his brother, Ishwar.
Moreover, Choithram's 'temporary arrangement,' by which he claimed
purchasing the two (2) parcels in question in 1966 and placing them in the
name of Ishwar who is an American citizen, to circumvent the
disqualication provision of aliens acquiring real properties in the Philippines
under the 1935 Philippine Constitution, as Choithram was then a British
subject, show a palpable disregard of the law of the land and to sustain the
supposed 'temporary arrangement' with Ishwar would be sanctioning the
perpetration of an illegal act and culpable violation of the Constitution.
Defendants-appellees likewise violated the Anti-Dummy Law (Commonwealth
Act 108, as amended), which provides in Section 1 thereof, that:
'In all cases in which any constitutional or legal provision
requires Philippine or any other specic citizenship as a requisite for
the exercise or enjoyment of a right, franchise or privilege, . . . any
alien or foreigner proting thereby, shall be punished . . . by
imprisonment . . . and of a ne of not less than the value of the right,
franchise or privileges, which is enjoyed or acquired in violation of the
provisions hereof . . .'

Having come to court with unclean hands, Choithram must not be permitted
to foist his 'temporary arrangement' scheme as a defense before this court.
Being in delicto, he does not have any right whatsoever from being shielded
from his own wrong doing, which is not so with respect to Ishwar, who was
not a party to such an arrangement.
The falsity of Choithram's defense is further aggravated by the material
inconsistencies and contradictions in his testimony. While on January 23,
1985 he testied that he purchased the land in question on his own behalf
(tsn, p. 4, S. Jan. 23, 1985), in the July 18, 1985 hearing, forgetting probably
what he stated before, Choithram testied that he was only an attorney-infact of Ishwar (tsn, p. 5, S. July 18, 1985). Also in the hearing of January 23,
1985, Choithram declared that nobody rented the building that was
constructed on the parcels of land in question (tsn, pp. 5 and 6), only to
admit in the hearing of October 30, 1985, that he was in fact renting the
building for P12,000.00 per annum (tsn, p. 3). Again, in the hearing of July
19, 1985, Choithram testied that he had no knowledge of the revocation of
the Power of Attorney (tsn, pp. 20-21), only to backtrack when confronted
with the letter of June 25, 1971 (Exhibits R to R-3), which he admitted to be
in 'his own writing,' indicating knowledge of the revocation of the Power of

Attorney.

Cdpr

These inconsistencies are not minor but go into the entire credibility of the
testimony of Choithram and the rule is that contradictions on a very crucial
point by a witness, renders his testimony incredible (People vs. Rafallo, 80
Phil. 22). Not only this, the doctrine of falsus in uno, falsus in omnibus is fully
applicable as far as the testimony of Choithram is concerned. The cardinal
rule, which has served in all ages, and has been applied to all conditions of
men, is that a witness willfully falsifying the truth in one particular, when
upon oath, ought never to be believed upon the strength of his own
testimony, whatever he may assert (U.S. vs. Osgood, 27 Feb. Case No.
15971-a, p. 364); Gonzales vs. Mauricio, 52 Phil. 728), for what ground of
judicial relief can there be left when the party has shown such gross
insensibility to the dierence between right and wrong, between truth and
falsehood? (The Santisima Trinidad, 7 Wheat, 283, 5 U.S. [L. ed.] 454).
True, that Choithram's testimony nds corroboration from the testimony of
his brother, Navalrai, but the same would not be of much help to Choithram.
Not only is Navalrai an interested and biased witness, having admitted his
close relationship with Choithram and that whenever he or Choithram had
problems, they ran to each other (tsn, pp. 17-18, S. Sept. 20, 1985),
Navalrai has a pecuniary interest in the success of Choithram in the case in
question. Both he and Choithram are business partners in Jethmal and Sons
and/or Jethmal Industries, wherein he owns 60% of the company and
Choithram, 40% (p. 62, Appellant's Brief). Since the acquisition of the
properties in question in 1966, Navalrai was occupying 1,200 square meters
thereof as a factory site plus the fact that his son (Navalrai's) was occupying
the apartment on top of the factory with his family rent free except the
amount of P1,000.00 a month to pay for taxes on said properties (tsn, p.
17, S. Oct. 3, 1985).
Inherent contradictions also marked Navalrai's testimony. While the latter
was very meticulous in keeping a receipt for the P10,000.00 that he paid
Ishwar as settlement in Jethmal Industries, yet in the alleged payment of
P100,000.00 to Ishwar, no receipt or voucher was ever issued by him (tsn,
p. 17, S. Oct. 3, 1983)." 15

We concur.
The foregoing ndings of facts of the Court of Appeals which are supported by the
evidence is conclusive on this Court. The Court nds that Ishwar entrusted
US$150,000.00 to Choithram in 1965 for investment in the realty business. Soon
thereafter, a general power of attorney was executed by Ishwar in favor of both
Navalrai and Choithram. If it is true that the purpose only is to enable Choithram to
purchase realty temporarily in the name of Ishwar, why the inclusion of their elder
brother Navalrai as an attorney-in-fact?
Then, acting as attorney-in-fact of Ishwar, Choithram purchased two parcels of land
located in Barrio Ugong, Pasig, Rizal, from Ortigas in 1966. With the balance of the
money of Ishwar, Choithram erected a building on said lot. Subsequently, with a

loan obtained from a bank and the income of the said property, Choithram
constructed three other buildings thereon. He managed the business and collected
the rentals. Due to their relationship of condence it was only in 1970 when Ishwar
demanded for an accounting from Choithram. And even as Ishwar revoked the
general power of attorney on February 4, 1971, of which Choithram was duly
notied, Choithram wrote to Ishwar on June 25, 1971 requesting that he execute a
new power of attorney in their favor. 16 When Ishwar did not respond thereto,
Choithram nevertheless proceeded as such attorney-in-fact to assign all the rights
and interest of Ishwar to his daughter-in-law Nirmla in 1973 without the knowledge
and consent of Ishwar. Ortigas in turn executed the corresponding deeds of sale in
favor of Nirmla after full payment of the purchase price of the lots.

In the prefatory statement of their petition, Choithram pictured Ishwar to be so

motivated by greed and ungratefulness, who squandered the family business in
New York, who had to turn to his wife for support, accustomed to living in
ostentation and who resorted to blackmail in ling several criminal and civil suits
against them. These statements nd no support and should be stricken from the
records. Indeed, they are irrelevant to the proceeding.
Moreover, assuming Ishwar is of such a low character as Choithram proposes to
make this Court to believe, why is it that of all persons, under his temporary
arrangement theory, Choithram opted to entrust the purchase of valuable real
estate and built four buildings thereon all in the name of Ishwar? Is it not an
unconscious emergence of the truth that this otherwise wayward brother of theirs
was on the contrary able to raise enough capital through the generosity of his
father-in-law for the purchase of the very properties in question? As the appellate
court aptly observed if truly this temporary arrangement story is the only
motivation, why Ishwar of all people? Why not the own son of Choithram, Haresh,
who is also an American citizen and who was already 18 years old at the time of
purchase in 1966? The Court agrees with the observation that this theory is an
afterthought which surfaced only when Choithram, Nirmla and Moti led their
answer.
LLpr

When Ishwar asked for an accounting in 1970 and revoked the general power of
attorney in 1971, Choithram had a total change of heart. He decided to claim the
property as his. He caused the transfer of the rights and interest of Ishwar to
Nirmla. On his representation, Ortigas executed the deeds of sale of the properties
in favor of Nirmla. Choithram obviously surmised Ishwar cannot stake a valid claim
over the property by so doing.
Clearly, this transfer to Nirmla is ctitious and, as admitted by Choithram, was
intended only to place the property in her name until Choithram acquires Philippine
citizenship. 17 What appears certain is that it appears to be a scheme of Choithram
to place the property beyond the reach of Ishwar should he successfully claim the
same. Thus, it must be struck down.
Worse still, on September 27, 1990 spouses Ishwar led an urgent motion for the

issuance of a writ of preliminary attachment and to require Choithram, et al. to

submit certain documents, inviting the attention of this Court to the following:
a)
Donation by Choithram of his 2,500 shares of stock in General Garments
Corporation in favor of his children on December 29, 1989; 18
b)
Sale on August 2, 1990 by Choithram of his 100 shares in Biex (Phils.), Inc.,
in favor of his children; 19 and
c)
Mortgage on June 20, 1989 by Nirmla through her attorney-in-fact,
Choithram, of the properties subject of this litigation, for the amount of $3 Million in
favor of Overseas Holding, Co. Ltd., (Overseas for brevity), a corporation which
appears to be organized and existing under and by virtue of the laws of Cayman
Islands, with a capital of only $100.00 divided into 100 shares of $1.00 each, and
with address at P.O. Box 1790, Grand Cayman, Cayman Islands. 20
An opposition thereto was led by Choithram, et al. but no documents were
produced. A manifestation and reply to the opposition was filed by spouses Ishwar.
All these acts of Choithram, et al. appear to be fraudulent attempts to remove these
properties to the detriment of spouses Ishwar should the latter prevail in this
litigation.
On December 10, 1990 the court issued a resolution that substantially reads as
follows:
"Considering the allegations of petitioners Ishwar Jethmal Ramnani and
Sonya Ramnani that respondents Choithram Jethmal Ramnani, Nirmla
Ramnani and Moti G. Ramnani have fraudulently executed a simulated
mortgage of the properties subject of this litigation dated June 20, 1989, in
favor of Overseas Holding Co., Ltd. which appears to be a corporation
organized in Cayman Islands, for the amount of $3,000,000.00, which is
much more than the value of the properties in litigation; that said alleged
mortgagee appears to be a "shell" corporation with a capital of only $100.00;
and that this alleged transaction appears to be intended to defraud
petitioners Ishwar and Sonya Jethmal Ramnani of any favorable judgment
that this Court may render in this case;
Wherefore the Court Resolved to issue a writ of preliminary injunction
enjoining and prohibiting said respondents Choithram Jethmal Ramnani,
Nirmla V. Ramnani, Moti G. Ramnani and the Overseas Holding Co., Ltd. from
encumbering, selling or otherwise disposing of the properties and
improvements subject of this litigation until further orders of the Court.
Petitioners Ishwar and Sonya Jethmal Ramnani are hereby required to post a
bond of P100,000.00 to answer for any damages said respondents may
suffer by way of this injunction if the Court finally decides the said petitioners
are not entitled thereto.
The Overseas Holding Co., Ltd. with address at P.O. Box 1790 Grand
Cayman, Cayman Islands, is hereby IMPLEADED as a respondent in these

cases, and is hereby required to SUBMIT its comment on the Urgent Motion
for the Issuance of a Writ of Preliminary Attachment and Motion for
Production of Documents, the Manifestation and the Reply to the Opposition
led by said petitioners, within Sixty (60) days after service by publication on
it in accordance with the provisions of Section 17, Rule 14 of the Rules of
Court, at the expense of petitioners Ishwar and Sonya Jethmal Ramnani.
Let copies of this resolution be served on the Register of Deeds of Pasig,
Rizal, and the Provincial Assessor of Pasig, Rizal, both in Metro Manila, for its
annotation on the Transfer Certicates of Titles Nos. 403150 and 403152
registered in the name of respondent Nirmla V. Ramnani, and on the tax
declarations of the said properties and its improvements subject of this
litigation." 21

The required injunction bond in the amount of P100,000.00 was led by the
spouses Ishwar which was approved by the Court. The above resolution of the Court
was published in the Manila Bulletin issue of December 17, 1990 at the expense of
said spouses. 22 On December 19, 1990 the said resolution and petition for review
with annexes in G.R. Nos. 85494 and 85496 were transmitted to respondent
Overseas, Grand Cayman Islands at its address c/o Cayman Overseas Trust Co. Ltd.,
through the United-Parcel Services Bill of Lading, 23 and it was actually delivered to
said company on January 23, 1991. 24
On January 22, 1991, Choithram, et al., led a motion to dissolve the writ of
preliminary injunction alleging that there is no basis therefor as in the amended
complaint what is sought is actual damages and not a reconveyance of the property,
that there is no reason for its issuance, and that acts already executed cannot be
enjoined. They also offered to file a counterbond to dissolve the writ.
LexLib

A comment/opposition thereto was filed by spouses Ishwar that there is basis for the
injunction as the alleged mortgage of the property is simulated and the other
donations of the shares of Choithram to his children are fraudulent schemes to
negate any judgment the Court may render for petitioners.
No comment or answer was led by Overseas despite due notice, thus it is and must
be considered to be in default and to have lost the right to contest the
representations of spouses Ishwar to declare the aforesaid alleged mortgage null
and void.
This purported mortgage of the subject properties in litigation appears to be
fraudulent and simulated. The stated amount of $3 Million for which it was
mortgaged is much more than the value of the mortgaged properties and its
improvements. The alleged mortgagee-company (Overseas) was organized only on
June 26, 1989 but the mortgage was executed much earlier, on June 20, 1989, that
is six (6) days before Overseas was organized. Overseas is a "shelf" company worth
only $100.00. 25 In the manifestation of spouses Ishwar dated April 1, 1991, the
Court was informed that this matter was brought to the attention of the Central
Bank (CB) for investigation, and that in a letter of March 20, 1991, the CB informed
counsel for spouses Ishwar that said alleged foreign loan of Choithram, et al. from

Overseas has not been previously approved/registered with the CB. 26

Obviously, this is another ploy of Choithram, et al. to place these properties beyond
the reach of spouses Ishwar should they obtain a favorable judgment in this case.
The Court nds and so declares that this alleged mortgage should be as it is hereby
declared null and void.
All these contemporaneous and subsequent acts of Choithram, et al., betray the
weakness of their cause so they had to take all steps, even as the case was already
pending in Court, to render ineective any judgment that may be rendered against
them.
The problem is compounded in that respondent Ortigas is caught in the web of this
bitter ght. It had all the time been dealing with Choithram as attorney-in-fact of
Ishwar. However, evidence had been adduced that notice in writing had been served
not only on Choithram, but also on Ortigas, of the revocation of Choithram's power
of attorney by Ishwar's lawyer, on May 24, 1971. 27 A publication of said notice was
made in the April 2, 1971 issue of The Manila Times for the information of the
general public. 28 Such notice of revocation in a newspaper of general circulation is
sucient warning to third persons including Ortigas. 29 A notice of revocation was
also registered with the Securities and Exchange Commission on March 29, 1971. 30
Indeed in the letter of Choithram to Ishwar of June 25, 1971, Choithram was
pleading that Ishwar execute another power of attorney to be shown to Ortigas who
apparently learned of the revocation of Choithram's power of attorney. 31 Despite
said notices, Ortigas nevertheless acceded to the representation of Choithram, as
alleged attorney-in-fact of Ishwar, to assign the rights of petitioner Ishwar to
Nirmla. While the primary blame should be laid at the doorstep of Choithram,
Ortigas is not entirely without fault. It should have required Choithram to secure
another power of attorney from Ishwar. For recklessly believing the pretension of
Choithram that his power of attorney was still good, it must, therefore, share in the
latter's liability to Ishwar.

In the original complaint, the spouses Ishwar asked for a reconveyance of the
properties and or payment of its present value and damages. 32 In the amended
complaint they asked, among others, for actual damages of not less than the
present value of the real properties in litigation, moral and exemplary damages,
attorneys fees, costs of the suit and further prayed for "such other reliefs as may be
deemed just and equitable in the premises." 33 The amended complaint contain the
following positive allegations:
llcd

"7.
Defendant Choithram Ramnani, in evident bad faith and despite due
notice of the revocation of the General Power of Attorney, Annex "D" hereof,
caused the transfer of the rights over the said parcels of land to his
daughter-in-law, defendant Nirmla Ramnani in connivance with defendant
Ortigas & Co., the latter having agreed to the said transfer despite receiving
a letter from plaintis' lawyer informing them of the said revocation; copy of

the letter is hereto attached and made an integral part hereof as Annex "H";
8.
Defendant Nirmla Ramnani having acquired the aforesaid property by
fraud is, by force of law, considered a trustee of an implied trust for the
benefit of plaintiff and is obliged to return the same to the latter;
9.
Several eorts were made to settle the matter within the family but
defendants (Choithram Ramnani, Nirmla Ramnani, and Moti Ramnani)
refused and up to now fail and still refuse to cooperate and respond to the
same; thus, the present case;
10.
In addition to having been deprived of their rights over the
properties (described in par. 3 hereof, plaintis, by reason of defendants'
fraudulent act, suered actual damages by way of lost rental on the
property which defendants (Choithram Ramnani, Nirmla Ramnani, and Moti
Ramnani) have collected for themselves;" 34

In said amended complaint, spouses Ishwar, among others, pray for payment of
actual damages in an amount no less than the value of the properties in litigation
instead of a reconveyance as sought in the original complaint. Apparently they
opted not to insist on a reconveyance as they are American citizens as alleged in the
amended complaint.
The allegations of the amended complaint above reproduced clearly spelled out that
the transfer of the property to Nirmla was fraudulent and that it should be
considered to be held in trust by Nirmla for spouses Ishwar. As above-discussed, this
allegation is well-taken and the transfer of the property to Nirmla should be
considered to have created an implied trust by Nirmla as trustee of the property for
the benefit of spouses Ishwar." 35
The motion to dissolve the writ of preliminary injunction led by Choithram, et al.
should be denied. Its issuance by this Court is proper and warranted under the
circumstances of the case. Under Section 3(c), Rule 58 of the Rules of Court, a writ
of preliminary injunction may be granted at any time after commencement of the
action and before judgment when it is established:
"(c)
that the defendant is doing, threatens, or is about to do, or is
procuring or suering to be done, some act probably in violation of plainti's
rights respecting the subject of the action, and tending to render the
judgment ineffectual."

As above extensively discussed, Choithram, et al. have committed and threaten to

commit further acts of disposition of the properties in litigation as well as the other
assets of Choithram, apparently designed to render ineective any judgment the
Court may render favorable to spouses Ishwar.
The purpose of the provisional remedy of preliminary injunction is to preserve the
status quo of the things subject of the litigation and to protect the rights of the
spouses Ishwar respecting the subject of the action during the pendency of the suit,
36 and not to obstruct the administration of justice or prejudice the adverse party. 37

In this case for damages, should Choithram, et al. continue to commit acts of
disposition of the properties subject of the litigation, an award of damages to
spouses Ishwar would thereby be rendered ineffectual and meaningless. 38
Consequently, if only to protect the interest of spouses Ishwar, the Court hereby
nds and holds that the motion for the issuance of a writ of preliminary attachment
led by spouses Ishwar should be granted covering the properties subject of this
litigation.
Section 1, Rule 57 of the Rules of Court provides that at the commencement of an
action or at any time thereafter, the plainti or any proper party may have the
property of the adverse party attached as security for the satisfaction of any
judgment that may be recovered, in, among others, the following cases:
"(d)
In an action against a party who has been guilty of a fraud in
contracting the debt or incurring the obligation upon which the action is
brought, or in concealing or disposing of the property for the taking,
detention or conversion of which the action is brought;
prLL

(e)
In an action against a party who has removed or disposed of his
property, or is about to do so, with intent to defraud his creditors; . . ."

Verily, the acts of Choithram, et al. of disposing the properties subject of the
litigation disclose a scheme to defraud spouses Ishwar so they may not be able to
recover at all, given a judgment in their favor, thus requiring the issuance of the
writ of attachment in this instance.
Nevertheless, under the peculiar circumstances of this case and despite the fact that
Choithram, et al., have committed acts which demonstrate their bad faith and
scheme to defraud spouses Ishwar and Sonya of their rightful share in the
properties in litigation, the Court cannot ignore the fact that Choithram must have
been motivated by a strong conviction that as the industrial partner in the
acquisition of said assets he has as much claim to said properties as Ishwar, the
capitalist partner in the joint venture.
The scenario is clear. Spouses Ishwar supplied the capital of $150,000.00 for the
business. They entrusted the money to Choithram to invest in a protable business
venture in the Philippines. For this purpose they appointed Choithram as their
attorney-in-fact.
Choithram in turn decided to invest in the real estate business. He bought the two
(2) parcels of land in question from Ortigas as attorney-in-fact of Ishwar. Instead of
paying for the lots in cash, he paid in installments and used the balance of the
capital entrusted to him, plus a loan, to build two buildings. Although the buildings
were burned later, Choithram was able to build two other buildings on the property.
He rented them out and collected the rentals. Through the industry and genius of
Choithram, Ishwar's property was developed and improved into what it is now a
valuable asset worth millions of pesos. As of the last estimate in 1985, while the
case was pending before the trial court, the market value of the properties is no less

than P22,304,000.00. 39 It should be worth much more today.

We have a situation where two brothers engaged in a business venture. One
furnished the capital, the other contributed his industry and talent. Justice and
equity dictate that the two share equally the fruit of their joint investment and
eorts. Perhaps this Solomonic solution may pave the way towards their
reconciliation. Both would stand to gain. No one would end up the loser. After all,
blood is thicker than water.
However, the Court cannot just close its eyes to the devious machinations and
schemes that Choithram employed in attempting to dispose of, if not dissipate, the
properties to deprive spouses Ishwar of any possible means to recover any award
the Court may grant in their favor. Since Choithram, et al. acted with evident bad
faith and malice, they should pay moral and exemplary damages as well as
attorney's fees to spouses Ishwar.
WHEREFORE, the petition in G.R. No. 85494 is DENIED, while the petition in G.R.
No. 85496 is hereby given due course and GRANTED. The judgment of the Court of
Appeals dated October 18, 1988 is hereby modified as follows:
1.
Dividing equally between respondents spouses Ishwar, on the one hand, and
petitioner Choithram Ramnani, on the other, (in G.R. No. 85494) the two parcels of
land subject of this litigation, including all the improvements thereon, presently
covered by Transfer Certicates of Title Nos. 403150 and 403152 of the Registry of
Deeds, as well as the rental income of the property from 1967 to the present.
2.
Petitioner Choithram Jethmal Ramnani, Nirmla V. Ramnani, Moti C. Ramnani
and respondent Ortigas and Company, Limited Partnership (in G.R. No. 85496) are
ordered solidarily to pay in cash the value of said one-half (1/2) share in the said
land and improvements pertaining to respondents spouses Ishwar and Sonya at
their fair market value at the time of the satisfaction of this judgment but in no
case less than their value as appraised by the Asian Appraisal, Inc. in its Appraisal
Report dated August 1985 (Exhibits T to T-14, inclusive).
3.
Petitioners Choithram, Nirmla and Moti Ramnani and respondent Ortigas &
Co., Ltd. Partnership shall also be jointly and severally liable to pay to said
respondents spouses Ishwar and Sonya Ramnani one-half (1/2) of the total rental
income of said properties and improvements from 1967 up to the date of
satisfaction of the judgment to be computed as follows:
"a.
On Building C occupied by Eppie's Creation and Jethmal Industries
from 1967 to 1973, inclusive, based on the 1967 to 1973 monthly rentals
paid by Eppie's Creation;
"b.
Also on Building C above, occupied by Jethmal Industries and Lavine
from 1974 to 1978, the rental incomes based on then rates prevailing as
shown under Exhibit 'P'; and from 1979 to 1981, based on then prevailing
rates as indicated under Exhibit 'Q';
LLpr

"c.

On Building A occupied by Transworld Knitting Mills from 1972 to

1978, the rental incomes based upon then prevailing rates shown under
Exhibit 'P', and from 1979 to 1981, based on prevailing rates per Exhibit 'Q';

"d.
On the two-Bays Buildings occupied by Sigma-Mariwasa from 1972
to 1978, the rentals based on the Lease Contract, Exhibit 'P', and from 1979
to 1980, the rentals based on the Lease Contract, Exhibit 'Q'.
and thereafter commencing 1982, to account for and turn over the rental
incomes paid or ought to be paid for the use and occupancy of the
properties and all improvements totalling 10,048 sq. m., based on the rate
per square meter prevailing in 1981 as indicated annually cumulative up to
1984. Then, commencing 1985 and up to the satisfaction of the judgment,
rentals shall be computed at ten percent (10%) annually of the fair market
values of the properties as appraised by the Asian Appraisals, Inc. in August
1985. (Exhibits T to T-14, inclusive.)"

4.
To determine the market value of the properties at the time of the
satisfaction of this judgment and the total rental incomes thereof, the trial court is
hereby directed to hold a hearing with deliberate dispatch for this purpose only and
to have the judgment immediately executed after such determination.
5.
Petitioners Choithram, Nirmla and Moti, all surnamed Ramnani, are also
jointly and severally liable to pay respondents Ishwar and Sonya Ramnani the
amount of P500,000.00 as moral damages, P200,000.00 as exemplary damages
and attorney's fees equal to 10% of the total award to said respondents spouses.
6.
The motion to dissolve the writ of preliminary injunction dated December 10,
1990 led by petitioners Choithram, Nirmla and Moti, all surnamed Ramnani, is
hereby DENIED and the said injunction is hereby made permanent. Let a writ of
attachment be issued and levied against the properties and improvements subject
of this litigation to secure the payment of the above awards to spouses Ishwar and
Sonya.
7.
The mortgage constituted on the subject property dated June 20, 1989 by
petitioners Choithram and Nirmla, both surnamed Ramnani in favor of respondent
Overseas Holding, Co. Ltd. (in G.R. No. 85496) for the amount of $3M is hereby
declared null and void. The Register of Deeds of Pasig, Rizal, is directed to cancel the
annotation of said mortgage on the titles of the properties in question.
8.
Should respondent Ortigas Co., Ltd. Partnership pay the awards to Ishwar and
Sonya Ramnani under this judgment, it shall be entitled to reimbursement from
petitioners Choithram, Nirmla and Moti, all surnamed Ramnani.
9.
The above awards shall bear legal rate of interest of six percent (6%) per
annum from the time this judgment becomes nal until they are fully paid by
petitioners Choithram Ramnani, Nirmla V. Ramnani, Moti C. Ramnani and Ortigas,
Co., Ltd. Partnership. Said petitioners Choithram, et al. and respondent Ortigas shall
also pay the costs.

SO ORDERED.

Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

Footnotes

1.

Exhibit A.

2.

Exhibits B and C.

3.

Exhibit 3.

4.

Exhibit H.

5.

Exhibit F.

6.

Exhibits and J.

7.

Pages 80 to 82, Rollo of G.R. No. 85496; pages 55 to 57, G.R. No 85494;
Associate Justice Rodolfo A. Nocon was the ponente, concurred in separate
opinions by Justices Ricardo P. Tensuan and Manuel C. Herrera. Justices Felipe B.
Kalalo and Venancio D. Aldecoa, Jr., both dissented in separate the opinions and
voted to affirm the decision of the trial court.

8.

The five justices wrote separate opinions.

9.

Pages 15 and 16, Rollo, G.R. No. 85494.

10.

Pages 23 to 24, Rollo, G.R. No. 85496.

11.

Pages 117 to 119, Rollo, G.R. No. 85496.

12.

Pages 41 to 45, Rollo, G.R. No. 85494.

13.

Exhibit R-1; italics supplied.

14.

See Exhibit R to R-3.

15.

Pages 45 to 50, Rollo, G.R. No. 85494; emphasis supplied.

16.

Exhibits R to R-3.

17.

TSN, July 18, 1985, page 12; and July 19, 1985, pages 8 to 9.

18.

Annex A to Urgent Motion, etc; pages 438 to 450, Rollo, G.R. No. 85494.

19.

Annex B, supra; page 451, supra.

20.

Annex C, supra; pages 452 to 456, supra.

21.
22.
23.
24.
25.

Pages 438 to 442, rollo, G.R. No. 85496; pages 413 to 417, rollo, G.R. No.
85494.
Page 450, rollo, G.R. No. 85496.
Annexes C, C-1 and C-2 to Manifestation and Complaint of petitioners Ishwar &
Sonya filed on January 26, 1991.
Annex D to Manifestation, etc.
Annex A to Reply to Opposition led by petitioners on December 7, 1990; Pages
383 to 384, Rollo; See also Manifestation of petitioners, December 11, 1990, pages
438 to 443 rollo, G.R. 85494.

26.

See pages to of Rollo.

27.

Exhibit B.

28.

Exhibit F.

29.

Article 1922, Civil Code.

30.

Exhibit H.

31.

Exhibit R-1; supra.

32.

Annex C to Petition in G.R. No. 85494; pages 88 to 92, rollo.

33.

Annex D, supra; Pages 93 to 97, Rollo.

34.

Supra, pages 95 to 96, Rollo; italics supplied.

35.

Annex C to Petition in G.R. No. 85494; pages 88 to 92, Rollo.

36.

Calo vs. Roldan, 76 Phil. 445 (1946); De los Reyes v. Elepao, G.R. L-5282, May
29, 1959; De la Cruz vs. Tan Torres, G.R. L-14925, April 30, 1960.

37.

Yu Tiong Tay vs. Barrios, 79 Phil. 597 (1947).

38.

Calo vs. Rolda. supra.

39.

Exhibits T to T-14.