G.R. No.

85494 May 7, 1991

RAMNANI
vs.
COURT OF APPEALS
GANCAYCO, J.:p
FACTS: Ishwar Jethmal Ramnani as well as his wife Sonya had their main business
based in New York. Ishwar received US $150,000.00 from his father-in-law in Swi
tzerland.
In 1965, Ishwar Jethmal Ramnani sent the amount of US $150,000.00 to Choithram i
n 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.
Subsequently, spouses Ishwar executed a general power of attorney appointing Ish
war s full blood brothers Choithram and Navalrai as attorneys-in-fact, empowering
them to manage and conduct their business concerns in the Philippines.
Choithram, as attorney-in-factr, entered into two agreements for the purchase o
f two parcels of land located in Pasig Rizal from Ortigas & Company, Ltd. Partne
rship (Ortigas Ltd.) with a total area of approximately 10,048 square meters.
Three buildings were constructed thereon and were leased out by Choithram as at
torney-in-fact of spouses Ishwar. Two of these buildings were later burned.
In 1970 Ishwar asked Choithram to account for the income and expenses relative t
o these properties during the period 1967 to 1970.
Choithram failed and refused to render such accounting which prompted Ishwar to
revoke the general power of attorney.
Choithram and Ortigas Ltd. were duly notified by notice in writing of such revo
cation. It was also registered with the Securities and Exchange Commission and p
ublished in The Manila Times.
Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all righ
ts and interests of Ishwar spouses in favor of Nirmla Ramnani, the wife of Choit
ram s son, Moti.
Ortigas also executed the corresponding deeds of sale in favor of Nirmla and the
TCT issued in her favour..
Thus, spouses Ishwar filed a complaint in the Court of First Instance of Rizal a
gainst Choithram and spouses Nirmla and Moti (Choithram et al.) and Ortigas Ltd.
for reconveyance of said properties or payment of its value and damages.
Trial court dismissed the complaint ruling that the lone testimony of Ishwar reg
arding the cash remittance is unworthy of faith and credit because the cash remi
ttance was made before the execution of the general power of attorney. Ishwar al
so failed to corroborate this lone testimony and did not exhibit any commercial
document as regard to the alleged remittances.
It believed the claim of Choitram that he and Ishwar entered into a temporary ar
rangement in order to enable Choithram, then a British citizen, to purchase the
properties in the name of Ishwar who was an American citizen and who was then qu
alified to purchase property in the Philippines under the then Parity Amendment.
Upon appeal, the CA reversed the decision and gave credence to Ishwar.
It upheld the validity of Ishwar s testimony and gave cognizance to a letter writt
en by Choihtram imploring Ishwar to renew the power of attorney after it was rev
oked. It states therein that Choithram reassures his brother that he is not afte
r his money and that the revocation is hurting the reputation of Ishwar. Choithr
am also made no mention of his claimed temporary arrangement in the letter..
The CA ruled that Choithram is also estopped in pais or by deed from claiming an
interest over the properties. Because of Choitram s admissions from (1) power of
attorney, (2) the Agreements, and (3) the Contract of Lease
It furthermore held that Choithram's 'temporary arrangement, by which he claime
d purchasing the two (2) parcels in question in 1966 and placing them in the nam
e of Ishwar who is an American citizen circumvents the disqualification provisio
n of aliens acquiring real properties in the Philippines. Upholding the supposed
"temporary arrangement" with Ishwar would be sanctioning the perpetration of an
illegal act and culpable violation of the Constitution.
During the pendency of the case, Choithram made several attempts to dispose of h
is properties by way of donation and also mortgaged the properties under litigat
ion for 3 million USD to a shell partnership with a mere capital of 100 USD.
The Supeme Court affirms the findings of the Court of Appeals.
ISSUES: (1)Whether or not there was a partnership between the brothers Ishwar an
d Choithram; (2) Whether or not Ortigas Ltd. is liable.
HELD: As to the first issue, there was a partnership between the brothers Ishwar
and Choithtam. Even without a written agreement, the scenario is clear. Spouses
Ishwar supplied the capital of $150,000.00 for the business. They entrusted the
money to Choithram to invest in a profitable business venture in the Philippine
s. 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 t
wo (2) parcels of land in question from Ortigas as attorney-in-fact of Ishwar- I
nstead of paying for the lots in cash, he paid in installments and used the bala
nce of the capital entrusted to him, plus a loan, to build two buildings. Althou
gh the buildings were burned later, Choithram was able to build two other buildi
ngs on the property. He rented them out and collected the rentals. Through the i
ndustry and genius of Choithram, Ishwar's property was developed and improved in
to what it is now a valuable asset worth millions of pesos.
We have a situation where two brothers engaged in a business venture. One furnis
hed the capital, the other contributed his industry and talent. Justice and equi
ty dictate that the two share equally the fruit of their joint investment and ef
forts. Perhaps this Solomonic solution may pave the way towards their reconcilia
tion. Both would stand to gain. No one would end up the loser. After all, blood
is thicker than water.
However, because of the devious machinations and schemes that Choithram employed
he should pay moral and exemplary damages as well as attorney's fees to spouses
Ishwar.
As to the second issue, Ortigas Ltd. is liable because it had several notices of
the revocation. Despite said notices, Ortigas nevertheless acceded to the repr
esentation of Choithram, as alleged attorney-in-fact of Ishwar, to assign the ri
ghts of petitioner Ishwar to Nirmla. While the primary blame should be laid at t
he doorstep of Choithram, Ortigas is not entirely without fault. It should have
required Choithram to secure another power of attorney from Ishwar. For reckless
ly believing the pretension of Choithram that his power of attorney was still go
od, it must, therefore, share in the latter's liability to Ishwar.