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 JET RAMNANI, petitioners, vs. THE HONORABLE
COURT OF APPEALS, ORTIGAS & CO., LTD. PARTNERSHIP, and OVERSEAS HOLDING CO., LTD.,
respondents.

GANCAYCO, J.:

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 conflicting factual findings 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 difficulty 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 first building. The buildings
were leased out by Choithram as attorney-in-fact of Ishwar. Two of these buildings were later burned.

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 notified 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
Certificates 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) filed a complaint in the Court of First
Instance of Rizal against Choithram 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 filed 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 plaintiffs-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 Certificate of Title No. 403150 and Transfer Certificate 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).

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 first 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 filed 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 affirming 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 filed a petition for review of said judgment of the appellate court alleging the following
grounds:

1. The Court of Appeals gravely abused its discretion in making a factual finding 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

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 COURTS 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 filed 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;

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 MATTER'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.

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 qualified 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,
plaintiff Ishwar Jethmal Ramanani'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, plaintiffs averred that they
constituted a trust in favor of defendant Choithram Jethmal Ramnani. This Court can be in full agreement if
the plaintiffs were only able to prove preponderantly these remittances. The entire record of this case is
bereft of even a shred of proof to that effect. 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,
plaintiffs not exhibiting any commercial document or any document and/or paper as regard to these alleged
remittances. Plaintiff 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, plaintiffs did not present even a scum of proof, that defendant Choithram Ramnani
received the alleged two US dollar drafts. Significantly, he does not know even the bank where these two (2)
US dollar drafts were purchased. Indeed, plaintiff Ishwar Ramnani's lone testimony is unworthy of faith and
credit and, therefore, deserves scant consideration, and since the plaintiffs' theory is built or based on such
testimony, their cause of action collapses or falls with it.

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 bonafide investor and purchaser for
profit 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, plaintiff 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 findings 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 finding 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 findings, 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 t 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
plaintiff-appellants have remitted to defendant-appellee 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.

Plaintiff-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 first building was immediately put up after the purchase of the two parcels of land that was
in 1966 and the finds 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 Your?
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. Mulchandoni from Switzerland, a man of
immense wealth, which even defendants-appellees' 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 affirmative testimony of plaintiff-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 testifies affirmatively 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-in-fact empowering the latter to conduct and manage plaintiffs-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, firm or corporation); to enter in any contract of sale in oar behalf and to enter mortgages
between the vendees and the herein grantors that may be needed to finance 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-affirming the ownership of Ishwar over the disputed property and the trust
relationship between the latter as principal and Choithram as attorney-in-fact of Ishwar.

All of these facts indicate that if plaintiff-appellant Ishwar had not earlier sent the US $ 150,000.00 to his
brother, Choithram, there would be no purpose for him to execute a power of attorney appointing his
brothers as s attorney-in-fact in buying real estate in the Philippines.

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 fiduciary 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. ISHWAR 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 favor 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 filed 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.

(4) Try to send the power because it will be more useful. Make it in any manner whatever way you
have confident 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 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 hale 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 verified 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 confidence 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 ante-dated 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,
confirming 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 affirmed 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.

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 disqualified 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 filed 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 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 effective 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).

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, orfrom
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 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 first 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 reflect 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
disqualification 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 specific
citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, . . . any alien
or foreigner profiting thereby, shall be punished . . . by imprisonment . . . and of a fine 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 foist his 'temporary
arrangement' scheme as a defense before this court. Being in delicto, he does not have any right whatsoever
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 testified 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 testified that he was only an attorney-in-fact 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 testified 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.

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 s 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 difference 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 finds 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 (Navalrais) was occupying the apartment on top of the factory with his
family rent free except the amount of P l,000.00 a month to pay for taxes on said properties (tsn, p. 17, S.
Oct. 3, 1985).

Inherent contradictions also marked Navalrai testimony. "While the latter was very meticulous in keeping a
receipt for the P 10,000.00 that he paid Ishwar as settlement in Jethmal Industries, yet in the alleged
payment of P 100,000.00 to Ishwar, no receipt or voucher was ever issued by him (tsn, p. 17, S. Oct. 3,
1983). 15

We concur.
The foregoing findings of facts of the Court of Appeals which are supported by the evidence is conclusive on this
Court. The Court finds 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 confidence
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 notified, 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 accomplice 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 filing several criminal and civil suits against
them. These statements find 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 filed their answer.

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 fictitious 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 filed 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 Biflex (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 filed 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 P 100,000.00 to answer for any damages d 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 filed 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 Certificates 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 P 100,000.00 was filed 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., filed 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.

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 filed 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 nun 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 finds 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 an steps, even as the case was already pending in Court, to render ineffective any judgment that may
be rendered against them.

The problem is compounded in that respondent Ortigas is caught in the web of this bitter fight. 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 sufficient warning to third persons including Ortigas. 29 A notice of revocation was also registered with
the Securities and Exchange Commission on March 29, 1 971. 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:

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 plaintiffs' 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 efforts 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),
plaintiffs, by reason of defendants' fraudulent act, suffered 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 filed 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 suffering to be done, some act
probably in violation of plaintiffs'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
ineffective 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 finds and holds that the motion for
the issuance of a writ of preliminary attachment filed 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 plaintiff 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, the 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.1âwphi1 They entrusted
the money to Choithram to invest in a profitable 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 efforts. 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 Certificates 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";
 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 filed 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
$3-M is hereby declared null and void. The Register of Deeds of Pasig, Rizal, is directed to cancel the annotation of d
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 shag bear legal rate of interest of six percent (6%) per annum from the time this judgment
becomes final 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.
G.R. No. 70895 May 30, 1986

HABALUYAS ENTERPRISES, INC. and PEDRO HABALUYAS, petitioners, vs. JUDGE MAXIMO M. JAPSON,
Manila Regional Trial Court, Branch 36; SHUGO NODA & CO., LTD., and SHUYA NODA, respondents.

FERIA, J.:

Respondents have filed a motion for reconsideration of the Decision of the Second Division of the Court promulgated
on August 5, 1985 which granted the petition for certiorari and prohibition and set aside the order of respondent
Judge granting private respondents' motion for new trial.

The issue in this case is whether the fifteen-day period within which a party may file a motion for reconsideration of
a final order or ruling of the Regional Trial Court may be extended.

Section 39 of The Judiciary Reorganization Act, Batas Pambansa Blg. 129, reduced the period for appeal from final
orders or judgments of the Regional Trial Courts (formerly Courts of First Instance) from thirty (30) to fifteen (15)
days and provides a uniform period of fifteen days for appeal from final orders, resolutions, awards, judgments, or
decisions of any court counted from notice thereof, except in habeas corpus cases where the period for appeal
remains at forty- eight (48) hours. To expedite appeals, only a notice of appeal is required and a record on appeal is
no longer required except in appeals in special proceedings under Rule 109 of the Rules of Court and in other cases
wherein multiple appeals are allowed. Section 19 of the Interim Rules provides that in these exceptional cases, the
period for appeal is thirty (30) days since a record on appeal is required. Moreover Section 18 of the Interim Rules
provides that no appeal bond shall be required for an appeal, and Section 4 thereof disallows a second motion for
reconsideration of a final order or judgment.

All these amendments are designed, as the decision sought to be reconsidered rightly states, to avoid the
procedural delays which plagued the administration of justice under the Rules of Court which are intended to assist
the parties in obtaining a just, speedy and inexpensive administration of justice.

However, the law and the Rules of Court do not expressly prohibit the filing of a motion for extension of time to file
a motion for reconsideration of a final order or judgment.

In the case of Gibbs vs. Court, of First Instance (80 Phil. 160), the Court dismissed the petition for certiorari and
ruled that the failure of defendant's attorney to file the petition to set aside the judgment within the reglementary
period was due to excusable neglect, and, consequently, the record on appeal was allowed. The Court did not rule
that the motion for extension of time to file a motion for new trial or reconsideration could not be granted.

In the case of Roque vs. Gunigundo (Administrative Case No. 1684, March 30, 1979, 89 SCRA 178), a division of
the Court cited the Gibbs decision to support a statement that a motion to extend the reglementary period for filing
the motion for reconsideration is not authorized or is not in order.

The Intermediate Appellate Court is sharply divided on this issue. Appeals have been dismissed on the basis of the
original decision in this case.

After considering the able arguments of counsels for petitioners and respondents, the Court resolved that the
interest of justice would be better served if the ruling in the original decision were applied prospectively from the
time herein stated. The reason is that it would be unfair to deprive parties of their right to appeal simply because
they availed themselves of a procedure which was not expressly prohibited or allowed by the law or the Rules. On
the other hand, a motion for new trial or reconsideration is not a pre-requisite to an appeal, a petition for review or
a petition for review on certiorari, and since the purpose of the amendments above referred to is to expedite the
final disposition of cases, a strict but prospective application of the said ruling is in order. Hence, for the guidance of
Bench and Bar, the Court restates and clarifies the rules on this point, as follows:

1.) Beginning one month after the promulgation of this Resolution, the rule shall be strictly enforced that no motion
for extension of time to file a motion for new trial or reconsideration may be filed with the Metropolitan or Municipal
Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court. Such a motion may be filed only in
cases pending with the Supreme Court as the court of last resort, which may in its sound discretion either grant or
deny the extension requested.

2.) In appeals in special proceedings under Rule 109 of the Rules of Court and in other cases wherein multiple
appeals are allowed, a motion for extension of time to file the record on appeal may be filed within the
reglementary period of thirty (30) days. (Moya vs. Barton, 76 Phil. 831; Heirs of Nantes vs. Court of Appeals, July
25, 1983, 123 SCRA 753.) If the court denies the motion for extension, the appeal must be taken within the original
period (Bello vs. Fernando, January 30, 1962, 4 SCRA 135), inasmuch as such a motion does not suspend the
period for appeal (Reyes vs. Sta. Maria, November 20, 1972, 48 SCRA 1). The trial court may grant said motion
after the expiration of the period for appeal provided it was filed within the original period. (Valero vs. Court of
Appeals, June 28, 1973, 51 SCRA 467; Berkenkotter vs. Court of Appeals, September 28, 1973, 53 SCRA 228).

All appeals heretofore timely taken, after extensions of time were granted for the filing of a motion for new trial or
reconsideration, shall be allowed and determined on the merits.
WHEREFORE, the motion for reconsideration of, and to set aside, the decision of August 5, 1985 is granted and the
petition is dismissed. No costs.

SO ORDERED.
G.R. No. L-34007 May 25, 1979

MARCELINO BELAMIDE, ALFREDO BELAMIDE (deceased and herein substituted by his children Rodolfo,
Reynaldo, Lilian and Alfredo, Jr., all surnamed Belamide), JOSE BELAMIDE, ANTONIO BELAMIDE, MARIA
BELAMIDE, LEONISA BELAMIDE and SALUD BELAMIDE, petitioners, vs. THE HONORABLE COURT OF
APPEALS and BIENVENIDO MONTOYA, FRANCISCA MONTOYA and GREGORIO MONTOYA, respondents.

DE CASTRO, J.:

This is a petition for certiorari to review the decision of the Court of Appeals (4th Division) promulgated on June 9,
1971, affirming the amended decision of the Court of First Instance of Cavite City the dispositive portion of which
reads:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court hereby adjudicates the parcel of land
described in Plan Psu-18949 situated in the poblacion of Silang, Cavite, in favor of the applicants
(Marcelino Belamide, of legal age, Filipino, married to Patrocinia de Castro, and resident of Silang
Cavite; Alfredo Belamide, of legal age, Filipino, married to Anita Velez, and resident of Silang, Cavite;
Jose Belamide, of legal age, Filipino, married to Elisea Quiamzon and resident of Silang Cavite;
Antonio Belamide, of legal age, Filipino, single, and resident of Silang, Cavite; Maria Belamide,
Filipino, of legal age, married to Sofronio Bayla and resident of Silang, Cavite; Leonisa Belamide, of
legal age, married to Fulgencio Reyes, and resident of Silang, Cavite; and Salud Bede of legal age,
Filipino, married to Conrado Menchavez and resident of Silang, Cavite) and the oppositors
(Bienvenido Montoya, Gregorio Montoya and Francisco Montoya, Filipinos, of legal age, married and
residents of Silang, Cavite) in the following proportions:

Three-fourths (3/4) undivided share belongs to the applicants, and one-fourth (1/4) undivided share
belongs to the oppositors.

Once this decision becomes final, let the corresponding decree of registration be issued upon proof
that the corresponding estate and inheritance taxes have been paid, or certificate of tax exemption
has been issued.

Petitioners herein were the applicants for the registration of the parcel of land involved in this case The private
respondents were the oppositors allowed on Motion for a New Trial, to file an opposition even after a decision has
already been rendered by then Judge Felix V. Makasiar, after hearing, following the issuance of a general default
order. (par. 1-3, Petition).

From the amended decision rendered after the new trial both parties appealed to the Court of Appeals which found
the essential facts as narrated in the decision appealed thereto as duly established by the evidence, and quoted the
same approvingly as follows:

The next question that presents itself is when and by whom was the land in question acquired. The
oppositors allege that the acquisition was made during the first marriage of Vicente Montoya to Martin
Montoya, whereas the applicants maintain that such land was acquired during the marriage (second
marriage) of Vicente Montoya to Jose Velardo Both contentions are not supported by any document.
However, the fact that Susana Velardo Belamide sold a portion of the land in question (Exh. 6) to the
Municipality of Silang, Cavite (for widening of the street) on May 1933 without the intervention of, or
opposition from, Hilarion Montoya who died on December 2, 1955 (Exh. 3), coupled with the fact that
Susana Velardo Belamide has possession of the property since the death of her mother Vicenta
Montoya) in 1931 after she sold the same to the herein applicants on July 20, 1951 (Exh. B),
convince the Court that said property was acquired during the coverture of Jose Velardo and Vicenta
Montoya. Consequently, upon the death of Jose Velardo in 1888, the one-half (½) undivided portion
of the property passed by inheritance to Susana Velardo Belamide and the other one-half (½)
undivided portion went to Vicenta Montoya as her share of the conjugal estate. Upon the death of the
latter on February 28, 1931, her undivided one half (½) share of the property should be divided
equally between Susana Velardo Belamide and Hilarion Montoya, that is, each is entitled to one-
fourth (1/4) undivided share. Hence, Susana Velardo Belamide's share is three-fourths (3/4) while
Hilarion Montoya's share passed by inheritance to his children, the herein oppositor. For this reason,
the sale made by Susana Velardo Belamide in favor of the applicants (Exh. B) is null and void only
with respect to the one-fourth (1/4) undivided portion of the property (the share of the herein
oppositors) who did not consent to the sale).

As earlier stated, the Court of Appeals affirmed the amended decision of the Court of First Instance, this time
rendered by Hon. Jose P. Alejandro, and denied a Motion for Reconsideration filed by the petitioners herein on June
29, 1971 (Annex E to Petition), as well as a Motion for a New Trial (Annex F to Petition). The ground for the Motion
for New Trial was that Exhibit 8 of the oppositors (private respondents herein) which was allegedly relied upon by
both the Court of First Instance and the Court of Appeals is a falsified document, As recited in the petition, par. 12
thereof (p. 8, Reno the falsification consists of the following:

According to tie official records of the Civil Registrar of Silang, Cavite, the name of the father of
Hilarion Montoya in the marriage column is in blank. But according to Exhibit 8, the name of the
father of Hilarion Montoya is Martin Montoya. Thus, whale the official record of the civil registrar
shows that oppositors' father, Hilarion, had an unknown father, thru falsification, Hilarion father
 wasmade to appear in Exhibit 8 as Martin Montoya. The latter false. ly became husband of Vicente
Montoya, thereby enabling private respondents to inherit 1/4 of the land in dispute from Vicente
Montoya.

It is the denial of the Motion for New Trial by the Court of Appeals which petitioners allege to be in grave abuse of
discretion, and their allegation that the Court of First Instance, as a land registration court, has no jurisdiction to
declare who are the heirs of Vicente Montoya and partition the property by adjudicating 1/4 pro-indiviso to private
respondents as children of Hilarion Montoya, allegedly an unacknowledged natural child of Vicenta Montoya, and
that as a consequence, the Court of Appeals, likewise, is without jurisdiction, or acted in grave abuse of discretion,
in affirming the decision of the lower court, that petitioners came to this Court with the present petition.

1. There can be no grave abuse of discretion by the Court of Appeals in denying petitioners' Motion for New Trial.
The document alleged to be falsified (Exh. 8) was presented in the trial in the lower court. Petitioners should have
attacked the same as falsified with competent evidence, which could have been presented, if they had exercised
due diligence in obtaining said evidence, which is Annex "A" 1 to the Motion for New Trial (Annex F to Petition). 2 It
is, therefore, not a newly discovered evidence that could justify a new trial (Rule 37 [1-b], Rules of Court).

The new evidence would neither change the result as found by the decision. It might prove that Hilarion Montoya
was registered at birth without his father having been given, but from the testimony of Marcelino Belamide, one of
the applicants (now petitioners), Vicente Montoya was married twice, although he did not know the first husband.
Likewise, in the opposition of private respondents (pp. 30-31, Record on Appeal) 3, it is there alleged that the land
originally belonged to the spouses Martin Montoya and Vicente Montoya. This allegation was never contradicted. The
document sought to be presented by petitioners, as stated in their Motion for New Trial in the Court of Appeals,
cannot effectively destroy this allegation, first, because the marriage between Martin Montoya and Vicenta Montoya
could have taken place after the birth of Hilarion Montoya who was thus legitimized, and second, Martin Montoya
and Vicente Montoya evidently lived together as husband and wife, and are, therefore, presumed to have been
legally married (Section 5, par. [bb] Rule 131, Rules of Court). This Court held that a man and a woman who are
living under the same roof are presumed to be legitimate spouses (Que Quay vs. Collector of Customs, 33 Phil.
128), and in the instant case, no less than one of the herein petitioners, Marcelino Belamide, testified that Vicenta
Montoya married twice. The records suggest no other husband by the first marriage than Martin Montoya, who then
could have been the father of Hilarion Montoya who, undisputedly, is the son of Vicente Montoya.

With the law and the evidence showing with reasonable sufficiency that Hilarion Montoya from whom private
respondents would derive hereditary rights over the land in question, is the legitimate son of Vicenta Montoya, the
adjudication of said land by the lower court, as specified in its decision, is in accordance with law.

2. The jurisdiction of the lower court as a land registration court to adjudicate the land for purposes of registration
cannot, as petitioners try to do, be questioned. The applicants and oppositors both claim rights to the land by virtue
of their relationship to the original owner, the late Vicente Montoya. The Court is thus necessary impelled to
determine the truth of their alleged relationship, and on the basis thereof, to adjudicate the land to them as the law
has prescribed to be their successional rights. The law does not require the heirs to go to the probate court first
before applying for the registration of the land, for a declaration of heirship. This would be a very cumbersome
procedure, unnecessarily expensive and unreasonably inconvenient, clearly averse to the rule against multiplicity of
suits.

Furthermore, petitioners Should not now be heard to complain after they have themselves gone to the lower court
to have their title to the land registered in their names without having had a previous declaration of their heirship
by the probate court. In filing their opposition to the application, private respondents merely went to the same court
invoking its jurisdiction in exactly the same fashion as did the petitioners. In effect, there was unanimity among the
parties in consenting to, or acquiescing in, the exercise of the jurisdiction of the land registration court, no matter
whether Same is a limited one. With this premise, and with the full opportunity given both parties to air their sides
with the presentation of all evidence as they may desire in support thereof, as fully as could be done in the ordinary
court with general jurisdiction, the decision of the lower court, sitting as a land court, supported as it is with
sufficient evidence, may no longer be questioned on jurisdictional grounds. (See Martin Aglipay vs. Hon. Isabelo
delos Reyes, Jr., G. R. No. L-12776, March 23, 1960; Franco vs. Monte de Piedad and Savings Bank, L-17610, April
22, 1963, 7 SCRA 660; City of Tarlac vs. Tarlac Development Corporation, L-24557, July 31, 1968, 24 SCRA 466;
City of Manila vs. Manila Lodge No. 761, L-24469, July 31, 1968, 24 SCRA 466; City of Manila vs. Army and Navy
Club of Manila, L-24481, 24 SCRA 466; Demetrio Manalo vs. Hon. Herminio C. Mariano, et. al., L-33850, January
22, 1976, 69 SCRA, 80).

For all the foregoing, the instant petition is hereby dismissed for lack of merit. Costs against petitioners.

SO ORDERED.
G.R. No. 112795 June 27, 1994

AUGUSTO CAPUZ, petitioner, vs. THE COURT OF APPEALS and ERNESTO BANEZ, respondents.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to reverse and set aside the
decision of the Court of Appeals in CA-G.R. SP No. 30030, which affirmed the judgment by default of the Regional
Trial Court, Branch 130, Kalookan City in Civil Case No. C-15501.

We grant the petition.

On July 15, 1992, private respondent filed a complaint for a sum of money against petitioner with the Regional Trial
Court, Branch 130, Kalookan City (Civil Case No. C-15501).

On September 5, petitioner was served with summons.

After petitioner failed to file any answer, private respondent filed on September 25, an Ex parte Motion to Declare
Defendant in Default.

On October 23, the trial court issued an order declaring petitioner in default and authorizing private respondent to
present his evidence ex parte.

On October 28, private respondent presented his evidence ex parte.

On November 6, the trial court rendered a decision, disposing as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff ERNESTO BANEZ against the
defendant AUGUSTO CAPUZ ordering the defendant to pay the following:

1. The principal amount of P90,000.00 plus 12% interest per annum from
June 13, 1992, the date of the written demand, until fully paid;

2. P10,000.00 as attorney's fees;

3. P1,000.00 as litigation expenses and the costs (Rollo, p. 11).

On November 13, petitioner received a copy of the Order dated October 23, 1992 and the Decision dated November
6, 1992.

On November 23, petitioner filed a verified motion to lift the order of default and to set aside the decision.

In said motion, petitioner averred that:

1. Defendant's failure to file his responsive pleading is due to fraud, mistake, accident and/or
excusable neglect, and that when defendant received a copy of the summons and the complaint on
September 5, 1992, defendant wasted no time in seeing the plaintiff and confronted him about his
receipt (payment of the subject obligation), plaintiff assured the defendant that he (plaintiff) will
instruct his lawyer to withdraw the complaint, and not to worry anymore. Defendant took the word of
his "compadre" the plaintiff. Hence, defendant did not file his answer to the complaint (Rollo, p. 11).

On December 7, the trial court issued an order, denying petitioner's verified urgent motion, the pertinent portion of
which reads:

The filing of the motion to lift order of default did not stop the running of the period of appeal, for his
only right at the moment is to receive notice of further proceedings regardless of whether the order of
default is set aside or not. On the other hand, defendant could have appealed the Decision before the
expiration of the period to appeal, for he is granted that right by the Rules. Since he failed to make a
timely appeal, the decision rendered in this case has became (sic) final (Rollo, p. 12).

On December 23, petitioner filed an urgent motion asking for the reconsideration of the Order dated December 7,
1992, claiming: (1) that the said order was prematurely issued; (2) that the trial court erred in holding that the
decision had become final; and (3) that the said order was contrary to law and jurisprudence.

On January 6, 1993, the trial court issued an order, denying petitioner's motion for reconsideration.

Petitioner filed a petition for certiorari under Rule 65 of the Revised Rules of Court with the Court of Appeals.
On November 18, the Court of Appeals dismissed the petition for lack of merit, holding: (1) that petitioner's motion
to lift the order of default and set aside the judgment was improper because there was already a judgment by
default rendered when it was filed; (2) that having discovered the order of default after the rendition of the
judgment, the remedy of petitioner was either to appeal the decision or file a motion for new trial under Rule 37;
and (3) that the said motion could not be considered as a motion for new trial under Rule 37 because it was not
accompanied by an affidavit of merit.

II

In the instant petition, petitioner argues that the motion to lift the order of default and to set aside the decision
could be treated as a motion for new trial under Rule 37 and that a separate affidavit of merit need not be
submitted considering that the said motion was verified.

We agree that the verified motion of petitioner could be considered as a motion for new trial. The grounds alleged
by petitioner in his motion are the same as the grounds for a motion for new trial under Rule 37, which are: (1) that
petitioner's failure to file his answer was due to fraud, mistake, accident or excusable negligence; and (2) that he
was a meritorious defense. Petitioner explained that upon receiving the summons, he immediately saw private
respondent and confronted him with the receipt evidencing his payment. Thereupon, private respondent assured
him that he would instruct his lawyer to withdraw the complaint. The prior payment of the loan sought to be
collected by private respondent is a good defense to the complaint to collect the same loan again.

The only reason why respondent court did not consider the motion of petitioner as a motion for new trial was
because the said motion did not include an affidavit of merit.

The allegations contained in an affidavit of merit required to be attached to a motion to lift an order of default or for
a new trial need not be embodied in a separate document but may be incorporated in the petition itself. As held in
Tanhu v. Ramolete, 66 SCRA 425 (1975):

Stated otherwise, when a motion to lift an order of default contains the reasons for the failure to
answer as well as the facts constituting the prospective defense of the defendant and it is sworn to by
said defendant, neither a formal verification nor a separate affidavit of merit is necessary.

Speaking for the Court in Circle Financial Corporation v. Court of Appeals, 196 SCRA 166 (1991), Chief Justice
Andres R. Narvasa opined that the affidavit of merit may either be drawn up as a separate document and appended
to the motion for new trial or the facts which should otherwise be set out in said separate document may, with
equal effect, be alleged in the verified motion itself.

Respondent court erred when it held that petitioner should have appealed from the decision, instead of filing the
motion to lift the order of default, because he still had two days left within which to appeal when he filed the said
motion. Said court must have in mind paragraph 3 of Section 2, Rule 41 of the Revised Rules of Court, which
provides that: "a party who has been declared in default may likewise appeal from the judgment rendered against
him as contrary to the evidence or to the law, even if no petition for relief to set aside the order of default has been
presented by him in accordance with Rule 38."

Petitioner properly availed of the remedy provided for in Section 1, Rule 65 of the Revised Rules of Court because
the appeal under Section 2, Rule 41 was not, under the circumstances, a "plain, speedy and adequate remedy in
the ordinary course of law." In an appeal under Section 2, Rule 41, the party in default can only question the
decision in the light of the evidence on record. In other words, he cannot adduce his own evidence, like the receipt
to prove payment by petitioner herein of his obligation to private respondent.

WHEREFORE, the petition is GRANTED. The challenged decision of the Court of Appeals is REVERSED and the
judgment dated November 6, 1992 of the Regional Trial Court, Branch 130, Kalookan City is SET ASIDE. Let this
case be remanded to the court of origin for further proceedings. No pronouncements as to costs.

SO ORDERED.
G.R. No. L-48859 November 8, 1942

EMILIANO J. VALDEZ, petitioner, vs. FERNANDO JUGO, Judge of First Instance of Manila, ET AL.,
respondents.

MORAN, J.:

1. APPEAL AND ERROR; "PRO-FORMA" MOTION FOR NEW TRIAL IS OFFENSIVE TO NEW RULES OF COURT AND
DOES NOT INTERRUPT PERIOD FOR APPEAL; NECESSITY OF SPECIFICALLY SETTING OUT REASONS IN SUPPORT
OF MOTION OF NEW TRIAL. — Petitioner's motion for new trial did not and could not interrupt the period for appeal,
it having failed to state in detail as required by the rules, the reasons in support of the grounds alleged therein.
Under Rule 37, section 2, third paragraph, it is now required to "point out specifically the findings or conclusions of
the judgment which are not supported by the evidence or which are contrary to law, making express reference to
the testimonial or documentary evidence or to the provisions of law alleged to be contrary to such findings or
conclusions." And when, as in the instant case, the motion fails to make the specification thus required, it will be
treated as a motion pro-forma intended merely to delay the proceedings, and as such, it shall be stricken out as
offensive to the new rules.

2. ID.; ID.; ID.; DELIBERATE ATTEMPT TO DELAY PROCEEDINGS. — Petitioner's case justifies indeed the full rigor
of the new rules, there being circumstances showing a deliberate attempt on his part to delay the proceedings for
his own convenience. He filed his motion for new trial on November 22, 1941, and set it for hearing almost one
month thereafter, i. e., on December 20, 1941. The reason he gave in his oral argument to justify such delayed
hearing was that he wanted to have time to study the transcript of the testimony of witnesses and find out reasons
in support of the grounds alleged in his motion. Unquestionably, therefore, he filed his motion without knowing
whether the grounds therefor were or were not good, and wanted to delay the proceedings to gain time for study.
Again, asked as to why, when he was already in Manila and the Manila courts were already open, he failed to
inquire as to the result of his motion for new trial, he candidly answered that he was not interested in speeding up
the proceedings because he was the defeated party. With such an attitude this Court cannot be moved to grant an
equitable relief.
DAVID VS FERNANDEZ 176 SCRA 608
G.R. No. 110801 December 8, 1995

MARIKINA VALLEY DEVELOPMENT CORPORATION, ISIDORO LIAMZON, JR., SPS. BERNARDO AND DELIA
ROSARIO, SPS. MANUEL AND NORMA SANCHEZ, SPS. RUFINO AND MILAGROS JAVIER, SPS. RODOLFO
AND SONIA OCAMPO, SPS. LAZARO AND JULIETA SANTOS, SPS. TEODORO AND ZENAIDA BAUTISTA,
SPS. CHARLES AND MA. CORAZON MILLER, SPS. EDGARDO AND CRISTINA VALENZUELA, FRANCISCO
LIAMZON, MARIETTA LIAMZON, ROMEO THADEUS LIAMZON, MICHAEL RAYMOND LIAMZON, ROBERTO
ANTONIO LIAMZON, ROSABELLE THERESA LIAMZON, RONALDO ISIDORO LIAMZON and RODRIGO JESUS
LIAMZON, petitioners, vs. HON. NAPOLEON R. FLOJO, Presiding Judge of Branch 2, RTC Manila; BASILIO
SYTANGCO, as representative of the heirs of JOSE REYES SYTANGCO; and THE HON. COURT OF APPEALS,
respondents.

FELICIANO, J.:

Jose Reyes Sytangco instituted a complaint for reconveyance of a piece of land situated along España Street,
Manila, against petitioner Marikina Valley Development Corporation ("Marikina Valley") and Milagros Liamzon. In his
complaint, Jose Reyes Sytangco alleged that he and his wife, Aurelia Liamzon-Sytangco had entrusted some funds
to Milagros Liamzon, sister-in-law of Aurelia, in order to purchase the España Street property from its former
owners. The Sytangco spouses had years ago built their house on that parcel of land then leased from the original
owners with whom they negotiated for purchase of that land. Milagros Liamzon, however, in alleged violation of the
trust reposed upon her, purchased the España Street property in her own name and had title to the same registered
in her name. Thereafter, she transferred title over that property to petitioner Marikina Valley, a closed corporation
owned by the Liamzon family.

In their answer, petitioner denied the allegations of Jose Reyes Sytangco and claimed that Milagros Liamzon had
purchased the España Street property by and for herself, with funds coming from petitioner Marikina Valley. For her
part, Milagros Liamzon insisted, among other things, that the Reyes Sytangco spouses had waived in her favor their
right to buy the property in question.

During the trial in the court below, Jose Reyes Sytangco died and he was substituted by his heirs, who are private
respondents herein. After trial, the trial court ruled in favor of private respondent heirs in a decision dated 11
October 1991. The trial court directed petitioner Marikina Valley to execute a Deed of Conveyance covering the
property involved in favor of private respondents.

On 28 October 1991, Marikina Valley and the other petitioners — heirs of Milagros Liamzon (Milagros having, in the
meantime, passed away) — received a copy of the decision of the trial court. Petitioners moved for reconsideration
on 7 November 1991.

The Reyes Sytangco heirs opposed petitioners' motion for reconsideration upon the ground that it was a pro forma
one. The heirs contended that the allegations of insufficiency of evidence were couched in very general terms,
contrary to the requirements of Section 2, Rule 37 of the Rules of Court.

On 21 November 1991, the trial court denied petitioners' motion for reconsideration for lack of merit. The trial court
said:

The defendant anchors his motion on the assertion that:

1. There is no sufficient evidence to show that the down payment for the property came from the
plaintiff;

2. That the money used for the property did not come from the plaintiff, hence, no implied trust could
have been created between Milagros Liamzon and Aurelia Liamson;

3. That piercing the veil of corporate entity is not applicable to this case.

After a perusal of the arguments posed in support of these grounds, the court finds that these
arguments had been discussed and resolved in the decision. There being [no] other matter of
consequences asserted which has not been considered in the decision, the Court resolves to deny the
same.

WHEREFORE, the Motion for Reconsideration is DENIED for lack of merit. 1 (Emphasis supplied)

Petitioners received a copy of the above order on 22 November 1991. On 25 November 1991, they filed a
notice of appeal with the trial court.

In the meantime, private respondent heirs moved for execution of the decision of 11 October 1991. They insisted
that petitioners had failed to perfect an appeal within the reglementary period.

In its order dated 25 November 1991, the trial court dismissed the notice of appeal filed by petitioners for having
been filed beyond the reglementary period to perfect an appeal. The trial judge reasoned that petitioners' motion for
reconsideration was pro forma and hence did not stop the running of the reglementary period. Thereupon, the trial
judge granted private respondents' motions for execution.
Petitioners went to the Court of Appeals on certiorari and injunction. They denied that their motion for
reconsideration was merely pro forma and claimed that they had filed their notice of appeal seasonably. They also
challenged the validity of subsequent orders of the trial court directing execution.

The Court of Appeals dismissed the petition, declaring that petitioners' motion for reconsideration was indeed pro
forma and, "therefore, clearly without merit." The appellate court went on to say that:

[w]here a motion for reconsideration merely submits, reiterates, repleads, repeats, or reaffirms the
same arguments that had been previously considered and resolved in the decision, it is pro forma.

The Court of Appeals concluded that petitioners' pro forma motion for reconsideration had not stopped the
running of the period to perfect an appeal and that, accordingly, the judgment had become final and private
respondents were entitled to execution as a matter of right. Petitioners sought reconsideration of the Court
of Appeals' decision, without success.

In their present Petition for Review on Certiorari, petitioners aver once more that their motion for reconsideration
filed before the trial court was sufficient in form and substance and was not pro forma. They reiterate that their
motion had effectively suspended the running of the reglementary period, and that their notice of appeal filed three
(3) days from receipt of the order denying their motion for reconsideration had been filed well within the remaining
period to perfect an appeal.

The rule in our jurisdiction is that a party aggrieved by a decision of a trial court may move to set aside the decision
and reconsideration thereof may be granted when (a) the judgment had awarded "excessive damages;" (b) there
was "insufficiency of the evidence to justify the decision;" or (c) "the decision was against the law." 2

A motion for reconsideration based on ground (b) or (c) above must

point out specifically the findings and conclusions of the judgment which are not supported by the
evidence or which are contrary to law, making express reference to the testimonial or documentary
evidence or to the provisions of law alleged to be contrary to such findings and conclusions. 3

A motion for reconsideration, when sufficient in form and substance — that is, when it satisfies the requirements of
Rule 37 of the Rules of Court — interrupts the cunning of the period to perfect an appeal. 4 A motion for
reconsideration that does not comply with those requirements will, upon the other hand, be treated as pro forma
intended merely to delay the proceedings and as such, the motion will not stay or suspend the reglementary period.
5
The net result will be dismissal of the appeal for having been unseasonably filed.

The question in every case is, therefore, whether a motion for reconsideration is properly regarded as having
satisfied the requirements, noted above, of Rule 37 of the Rules of Court. As already pointed out, the Court of
Appeals took the position that where a motion for reconsideration merely "reiterates" or "repleads" the same
arguments which had been previously considered and resolved in the decision sought to be reconsidered, the
motion is a pro forma one. In taking this position, the appellate court quoted at some length from a prior decision of
this Court:

. . . Said the Supreme Court in "Dacanay v. Alvendia, et al.," 30 SCRA 31, to wit:

In Estrada v. Sto. Domingo, recently decided by this Court, we once again called the attention of the
bar and litigants to the "principle already forged by this Court . . . that a motion for reconsideration
which has no other purpose than to gain time is pro forma and does not stop the period of appeal
from slipping away." Mr. Justice Dizon pointed out in his concurring opinion that "The motion
aforesaid is pro forma on yet another ground, in substance it was but a reiteration of reasons and
arguments previously set forth in respondent Sto. Domingo's memorandum submitted to the trial
court and which the latter had already considered, weighed and resolved adversely to him when it
rendered its decision on the merits." And earlier in Lonaria v. De Guzman, we held that "[T]he filing of
the second motion on January 22, 1963 did not suspend the running of the period, first, because it
was " pro forma based on grounds already existing at the time of the first motion." 6 (Emphasis partly
in the original and partly supplied)

It should, however, be noted that the circumstance that a motion for reconsideration deals with the same issues
and arguments posed and resolved by the trial court in its decision does not necessarily mean that the motion must
be characterized as merely pro forma. More than two (2) decades ago, Mr. Justice J.B.L. Reyes had occasion, in
Guerra Enterprises Company, Inc. v. Court of First Instance of Lanao del Sur, 7 to point out that a pleader preparing
a motion for reconsideration must of necessity address the arguments made or accepted by the trial court in its
decision:

. . . . Among the ends to which a motion for reconsideration is addressed, one is precisely to convince
the court that its ruling is erroneous and improper, contrary to the law or the evidence (Rule 37,
Section 1, subsection [c]); and in doing so, the movant has to dwell of necessity upon the issues
passed upon by the court. If a motion for reconsideration may not discuss these issues, the
consequence would be that after a decision is rendered, the losing party would be confined to filing
only motions for reopening and new trial. We find in the Rules of Court no warrant for ruling to that
effect, a ruling that would, in effect eliminate subsection (c) of Section 1 of Rule 37. 8 (Emphases
supplied)
 The movant is very often confined to the amplification or further discussion of the same issues already
passed upon by the trial court. Otherwise, his remedy would not be a reconsideration of the decision, but a
new trial or some other remedy. 9

The kinds of motions for reconsideration which have been regarded as merely pro forma are illustrated
byCrisostomo v. Court of Appeals, 10 where a one sentence motion for reconsideration, which read thus:

COMES NOW the petitioners-appellants in the above-entitled case and to this Honorable Court
respectfully move for reconsideration of the decision promulgated on November 8, 1966, copy of
which was received by the undersigned on November 9, 1966, on the ground that the same is
contrary to law and evidence. (Emphasis supplied)

was considered a pro forma motion for total failure to specify the findings or conclusions in the trial court's
decision which were supposedly not supported by evidence or were contrary to law. Similarly, in Villarica v.
Court of
Appeals, 11 a motion for reconsideration which no more than alleged the following:

1. that the order is contrary to law; and

2. that the order is contrary to the facts of the case,

did not suspend the running of the period for appeal, being a pro forma motion merely. These kinds of
motion present no difficulty at all.

A motion for reconsideration which is not as starkly bare as in Crisostomo and in Villarica, but which, as it were, has
some flesh on its bones, may nevertheless be rendered pro forma where the movant fails to make reference to the
testimonial and documentary evidence on record or the provisions of law said to be contrary to the trial court's
conclusions. In other words, the movant is also required to point out succinctly why reconsideration is warranted. In
Luzon Stevedoring Company v. Court of Industrial Relations, 12 the Supreme Court declared that:

it is not enough that a motion for reconsideration should state what part of the decision is contrary to
law or the evidence; it should also point out why it is so. Failure to explain why will render the motion
for reconsideration pro forma. (Emphasis supplied)

Where a substantial bonafide effort is made to explain where and why the trial court should be regarded as
having erred in its main decision, the fact that the trial court thereafter found such argument unmeritorious
or as inadequate to warrant modification or reversal of the main decision, does not, of course, mean that the
motion for reconsideration should have been regarded, or was properly regarded, as merely pro forma.

It is important to note that the above case law rests upon the principle that a motion for reconsideration which fails
to comply with the requirements of Sections 1 (c) and 2 of Rule 37 of the Rules of Court, and is therefore pro forma
merely, has no other purpose than to gain time. It is intended to delay or impede the progress of proceedings and
the rule that such motion for reconsideration does not stop the period of appeal from "slipping away" reflects both
poetic and substantial justice. In Estrada, et al. v. Sto. Domingo, et al., 13 the Court underlined.

[T]he principle [previously] forged by this Court — that a motion for reconsideration which has no
other purpose than to gain time is pro forma and does not stop the period of appeal from slipping
away. It is in recognition of this doctrine that we hold that where a motion for reconsideration in an
election case is taken advantage of for purposes of delay to the prejudice of the adverse party
orwhere such motion forms part of a matrix delay, that motion does not stop running of the five-day
period for appeal. 14 (Emphasis supplied)

Where the circumstances of a case do not show an intent on the part of the movant merely to delay the
proceedings, our Court has refused to characterize the motion as simply pro forma. Thus, in the Guerra Enterprises
case, the Court took note of the fact that the motion for reconsideration had been filed within barely twelve (12)
days (the reglementary period was then thirty [30] days) after receipt by the counsel for the movant party, which
fact negated the suggestion that the motion had been used as "a mere delaying tactic." 15 Dacanay v. Alvendia, 16
on which the Court of Appeals had relied, is not in fact in conflict with the cases we have above referred to.
InDacanay, the motion for reconsideration was in effect a fourth motion for reconsideration: the "reasons and
arguments" set out in the motion for reconsideration had on three previous occasions been presented to the trial
court and each time considered and rejected by the trial court. In Lonario v. De Guzman, 17 the motion for
reconsideration which the Court characterized as pro forma was in fact a second motion for reconsideration based
on grounds already existing at the time the first motion for reconsideration was filed. Further, at the time of the
filing of the second motion, the period to appeal had already lapsed. This Court dismissed the case for having been
appealed beyond the reglementary period. In Samudio v. Municipality of Gainza, Camarines Sur, 18 the Court had
before it a "so-called motion for new trial based exactly on the very ground alleged in [defendant's] first motion for
reconsideration dated October 17, 1952" and accordingly, held that the motion for new trial did not suspend the
period for perfecting an appeal "because it [was] mere repetition of the [first] motion for reconsideration of October
17, 1952." 19 (Emphasis supplied)

We turn then to the application of the above standards to the motion for reconsideration in the case at bar. The text
of petitioners' motion for reconsideration dated 7 November 1991 is quoted below:
 (a) There [was] no sufficient evidence introduced to prove the alleged fact that the down-payment for
the property in question came from Jose Sytangco. Private transactions are presumed to be fair and
regular (citations omitted). The regularity of defendant Liamzon's transaction with the Prietos for the
sale of the property implies that the consideration came from her and not from plaintiff. This
presumption cannot be rebutted by the bare testimony of abiased witness;

(b) The money used to pay for the property not belonging to the plaintiff, there could never be a trust
between him and defendant Liamzon. Even then, plaintiff merely claimed that what belong to him was
only the down-payment, not the total amount used to purchase the property, that the defendant
Liamzon was the one paying the installments can be gleaned from the fact that while plaintiff
allegedly authorized defendant Liamzon to purchase the property sometime in 1968, it was only in
1981 that he came to know that the property was titled in the name of defendant corporation.
Plaintiff's (Jose Reyes Sytangco) total lack of knowledge about the transactions regarding the
property for 13 long years, meant that he had no contract with the Prietos, the seller during this
period. Assuming without admitting that the down-payment belonged to plaintiff, he is only entitled to
reimbursement but not title to the property;

(c) Piercing the veil of corporate fiction applies only to cases where the corporation was created for
purposes of fraud, usually in tax cases; fraud, however, being the exception rather than the rule
should be proven by convincing evidences. That defendant Liamzon is a director of defendant
Corporation is not indicative of fraud. The money used to buy the property being advances from
defendant corporation, there is nothing wrong to have said property be titled in the name of the
corporation to offset said advances;

(d) It may be mentioned that the ejectment counterpart of this case had already been decided with
finality in favor of defendant corporation. 20

In paragraph (a) of their motion, petitioners claimed that the evidence submitted was insufficient to show that the
downpayment for the purchase of the España Street property had in fact come from private respondents'
predecessor-in-interest Jose Reyes Sytangco. In effect, petitioners here aver that the presumption of regularity of
private transactions carried out in the ordinary course of business had not been overturned by the testimony of Jose
Reyes Sytangco himself. This reflected petitioners' appraisal of the trial court's conclusion that Jose and Aurelia
Reyes Sytangco had handed over to Milagros Liamzon the amount of P41,000.00 to complete the downpayment of
the Reyes Sytangco spouses on the España lot. The trial court had not discussed the presumption of regularity of
private transactions invoked by petitioners.

In paragraph (b) of their motion, petitioners, building upon their paragraph (a), argued that since the money used
to pay the property did not belong to the plaintiff, no constructive trust arose between Jose Reyes Sytangco and
Milagros Liamzon. Petitioners further argue that assuming that the money for the downpayment had really come
from the Reyes Sytangco spouses, the rest of the payments on the España property had been made by Milagros
Liamzon. Accordingly, they argue that the Reyes Sytangco spouses would be entitled only to reimbursement of the
downpayment and not to reconveyance of the property itself. The trial court had not addressed this argument in its
decision; the trial judge had found Milagros Liamzon's testimony concerning whose money had been used in the
purchase of the lot as "filled with contradictions" which seriously impaired her credibility. 21

The third argument of petitioners in their motion assailed the reliance of the trial court upon the doctrine of piercing
the corporate veil by asserting that that doctrine was available only in cases where the corporation itselfhad been
created for purposes of fraud. Implicitly, petitioners argue that no evidence had been submitted to show that
Marikina Valley had been created precisely "for purposes of fraud." The trial court had not touched on this
argument. In paragraph (d) of their motion, petitioners aver that the ejectment suit instituted by them had been
decided in their favor. The trial court's decision had not mentioned such an ejectment suit.

We are, therefore, unable to characterize the motion for reconsideration filed by petitioners as simply pro forma.
That motion for reconsideration, it may be noted, had been filed no more than ten (10) days after receipt of the trial
court's decision by petitioner Marikina Valley.

It is scarcely necessary to add that our conclusion that petitioners' motion was not pro forma, should not be
regarded as implying however indirectly that that motion was meritorious.

We note finally that because the doctrine relating to pro forma motions for reconsideration impacts upon the reality
and substance of the statutory right of appeal, that doctrine should be applied reasonably, rather than literally. The
right to appeal, where it exists, is an important and valuable right. Public policy would be better served by according
the appellate court an effective opportunity to review the decision of the trial court on the merits, rather than by
aborting the right to appeal by a literal application of the procedural rule relating to pro forma motions for
reconsideration.

WHEREFORE, for all the foregoing, (a) the Orders of the trial court dated 27 November 1991, 12 December 1991
and 22 January 1992 and (b) the Decision of the Court of Appeals dated 8 December 1992, are hereby REVERSED
and SET ASIDE. The case is REMANDED to the trial court which is hereby DIRECTED to GIVE DUE COURSE to
petitioners' notice of appeal. No pronouncement as to costs.

SO ORDERED.