VOL.

196, MAY 7, 1991

731

Ramnani vs. Court of Appeals

*

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

CHOITHRAM JETHMAL RAMNANI AND/OR NIRMLA

V. RAMNANI AND MOTI G. RAMNANI, petitioners, vs.
COURT OF APPEALS, SPOUSES ISHWAR JETHMAL
RAMNANI,
SONYA
JETHMAL
RAMNANI
and
OVERSEAS HOLDING CO., LTD., respondents.
*

G.R. No. 85496. May 7, 1991.

SPOUSES ISHWAR JETHMAL RAMNANI AND SONYA

JETHMAL RAMNANI, petitioners, vs. THE HONORABLE
COURT OF APPEALS, ORTIGAS & CO., LTD.
PARTNERSHIP, and OVERSEAS HOLDING CO., LTD.,
respondents.
Mortgage Considering that the purported mortgage of the
properties subject of this litigation appears to be fraudulent and
simulated, the same is declared null and void.This purported
mortgage of the subject properties in litigation appears to be
fraudulent and simulated. The stated amount of $3 Million for
which it was mortgaged is much more than the value of the
mortgaged properties and its improvements. The alleged
mortgageecompany (Overseas) was organized only on June 26,
1989 but the mortgage was executed much earlier, on June 20,
1989, that is six (6) days before Overseas was organized. Overseas
is a shelf company worth only $100.00. In the manifestation of
spouses Ishwar dated April 1, 1991, the Court was informed that
this matter was brought to the attention of the Central Bank (CB)
for investigation, and that in a letter of March 20, 1991, the CB
informed counsel for spouses Ishwar that said alleged foreign loan
_______________
*

FIRST DIVISION.

732

732

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

of Choithram, et al. from Overseas has not been previously

approved/ registered with the CB. Obviously, this is another ploy
of Choithram, et al. to place these properties beyond the reach of
spouses Ishwar should they obtain a favorable judgment in this
case. The Court finds and so declares that this alleged mortgage
should be as it is hereby declared null and void.
Agency Power of Attorney, Revocation of The publication of
the notice of revocation of the power of attorney in the Manila
Times, a newspaper of general circulation, is sufficient warning to
third persons, including Ortigas.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 attorneyinfact
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 Choithrams power of attorney by
Ishwars lawyer, on May 24, 1971. A publication of said notice was
made in the April 2, 1971 issue of The Manila Times for the
information of the general public. Such notice of revocation in a
newspaper of general circulation is sufficient warning to third
persons including Ortigas. A notice of revocation was also
registered with the Securities and Exchange Commission on
March 29, 1971. 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 Choithrams power of attorney.
Despite said notices, Ortigas nevertheless acceded to the
representation of Choithram, as alleged attorneyinfact 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 latters
liability to Ishwar.
Property Implied Trust As defendant Nirmla Ramnani
acquired the property subject matter of litigation by means of
fraud, the transfer of said property in her favor should be
considered to have created an implied trust for the benefit of
plaintiffspouses.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
733

VOL. 196, MAY 7, 1991

733

Ramnani vs. Court of Appeals

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 abovediscussed, this allegation is welltaken
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.
Civil Procedure Provisional Remedies Injunction Evidence
shows that the defendants have committed and threaten to commit
further acts of disposition of the properties in litigation, apparently
designed to render ineffective any judgment in favor of plaintiff
spouses, hence, their motion to dissolve the writ of preliminary
injunction should be denied.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. x x x 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, and not to obstruct the administation of justice or
prejudice the adverse party. In this case for damages, should
Choithram, et al. continue to commit acts of disposition of the
properties subject of the litigation, an award of damages to
spouses Ishwar would thereby be rendered ineffectual and
meaningless.
Partnership We have here a situation where two brothers
engaged in a business venture, with one furnishing the capital,
and the other contributing his industry and talent. Justice and
equity dictate that the two share equally the fruit of their joint

investment and efforts.Nevertheless, under the peculiar

circumstances of this case and despite the fact that Choithram, et
al., have committed acts which demonstrate their bad faith and
scheme to defraud spouses Ishwar and Sonya of their rightful
share in the properties in litigation, the Court cannot ignore the
fact that Choithram must have been motivated by a strong
conviction that as the industrial partner in the acquisition of said
assets he has as much claim to said properties as Ishwar, the
capitalist partner in the joint venture. The scenario is clear.
Spouses Ishwar supplied the capital of $150,000.00 for the
business. They entrusted the money to Choithram to invest in a
734

734

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

profitable business venture in the Philippines. For this purpose

they appointed Choithram as their attorneyinfact. Choithram in
turn decided to invest in the real estate business. He bought the
two (2) parcels of land in question from Ortigas as attorneyinfact
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, Ishwars property
was developed and improved into what it is nowa valuable asset
worth millions of pesos. As of the last estimate in 1985, while the
case was pending before the trial court, the market value of the
properties is no less than P22,304,000.00. It should be worth
much more today. We have a situation where two brothers
engaged in a business venture. One furnished the capital, the
other contributed his industry and talent. Justice and equity
dictate that the two share equally the fruit of their joint
investment and 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.
Damages Since the defendants acted with evident bad faith
and malice, they are liable for moral and exemplary damages as
well as attorneys fees.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 attorneys
fees to spouses Ishwar.

PETITION for review from the judgment of the Court of

Appeals.
The facts are stated in the opinion of the Court.
Quasha, Asperilla, Ancheta, Pea and Nolasco for
petitioners Ishwar Jethmal Ramnani & Sonya Ramnani.
Salonga, Andres, Hernandez & Allado for Choithram
Jethmal Ramnani, Nirmla Ramnani & Moti Ramnani.
Rama Law Office for private respondents in
collaboration with Salonga, Andres, Hernandez & Allado.
Eulogio R. Rodriguez for Ortigas & Co., Ltd.
735

VOL. 196, MAY 7, 1991

735

Ramnani vs. Court of Appeals

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 attorneysinfact, empowering them to manage
and
1
conduct their business concern in the Philippines.
On February 1, 1966 and on May 16, 1966, Choithram,
in his capacity as aforesaid attorneyinfact 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)2
with a total area of approximately 10,048 square meters.
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 Eppies 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 attorneyinfact 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
_______________
1

Exhibit A.

Exhibits B and C.
736

736

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals
3

and May 24, 1971, respectively. Said notice was also

registered with the
Securities and Exchange Commission
4
on March 29, 1971 and was published in the April 2, 1971
issue of The 5Manila Times for the information of the
general public.
Nevertheless, Choithram as such attorneyinfact of
Ishwar, transferred all rights and interests of Ishwar and
Sonya in favor of his daughterinlaw, Nirmla Ramnani, on
February 19, 1973. Her husband is Moti, son of Choithram.
Upon complete payment of the lots, Ortigas executed
the
6
corresponding deeds of sale in favor of Nirmla. Transfer
Certificates of Titlle 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 Choitram and/or spouses Nirmla
and Moti (Choithram, et al. for brevity) and Ortigas for
reconveyance of said properties or payment of its value and
damages. An amended complaint for damages was
thereafter filed by said spouses.
After the issues were joined and the trial on the merits,
a decision was rendered by the trial court on December 3,
1985 dismissing the complaint and counterclaim. A motion

for reconsideration thereof 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 plaintiffsappellants Motion for Reconsideration from
aforesaid decision. A new decision is hereby rendered sentencing
defendantsappellees Choithram Jethmal Ramnani, Nirmla V.
Ramnani, Moti C. Ramnani, and Orti
_______________
3

Exhibit 3.

Exhibit H.

Exhibit F.

Exhibits and J.

737

VOL. 196, MAY 7, 1991

737

Ramnani vs. Court of Appeals

gas and Company Limited Partnership to pay, jointly and

severally, plaintiffsappellants 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 T14,
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 Eppies Creation and Jethmal
Industries from 1967 to 1973, inclusive, based on the 1967
to 1973 monthly rentals paid by Eppies 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 twoBays Buildings occupied by SigmaMariwasa
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 T14, inclusive.)
3. Moral damages in the sum of P200,000.00
4. Exemplary damages in the sum of P100,000.00
5. Attorneys 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
738

738

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

and

7. The cost of suit.

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 but8 denying
the motion for reconsideration of Choithram, et al.

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
I
THE COURT OF APPEALS ACTED IN GRAVE ABUSE OF ITS
DISCRETION IN MAKING A FACTUAL FINDING THAT
PRIVATE RESPONDENT ISHWAR REMITTED THE AMOUNT
OF US$150,000.00 TO PETITIONER CHOITHRAM IN THE
ABSENCE OF PROOF OF SUCH REMITTANCE.
II
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE
OF DISCRETION AND MANIFEST PARTIALITY IN
DISREGARDING THE
_______________
7

Pages 80 to 82, Rollo of G.R. No. 85496 pages 55 to 57, G.R. No. 85494

Associate Justice Rodolfo A. Nocon was the ponente, concurred in separate

opinions by Justices Ricardo P. Tensuan and Manuel C. Herrera. Justices Felipe
B. Kalalo and Venancio D. Aldecoa, Jr., both dissented in separate the opinions
and voted to affirm the decision of the trial court.
8

The five justices wrote separate opinions.

739

VOL. 196, MAY 7, 1991

739

Ramnani vs. Court of Appeals

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

REMITTED BY RESPONDENT ISHWAR.

ALLEGEDLY

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
9
IMPROVEMENTS THEREON.

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. 534P, 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
_______________
9

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

740

740

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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 LATTERS
DAUGHTERINLAW, AND THAT IT WAS IN GOOD
FAITH WHEN IT TRANSFERRED ISHWARS 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 DEFENDANTSAPPELLEES
741

VOL. 196, MAY 7, 1991

741

Ramnani vs. Court of Appeals

CHOITHRAM, MOTI AND NIRMLA RAMNANI IN SPITE OF

ITS ORIGINAL DECISION OF 14 MARCH 1988 THAT
ORTIGAS WAS DULY NOTIFIED OF THE REVOCATION 10OF
THE POWER OF ATTORNEY OF CHOITHRAM RAMNANI.

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$150,000.00 to Choithram precisely to be used in
the real estate business, the trial court made the following
disquisition
After a careful, considered and conscientious examination of the
evidence adduced int he case at bar, plaintiff Ishwar Jethmal
Ramananis main evidence, which centers on the alleged payment
by sending through registered mail from New York two (2) US$
drafts of $85,000.00 and $65,000.00 in the latter part of 1965
(TSN 28 Feb. 1984, p. 1011). 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

_______________
10

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

742

742

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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 Ramnanis 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 attorneyinfact (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 fatherinlaw borrowed the
two US dollar drafts from the Swiss Bank or whether or not his
late fatherinlaw had any
debit memo from the Swiss Bank (TSN
11
of May 2, 1984, pp. 910).

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
_______________
11

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

743

VOL. 196, MAY 7, 1991

743

Ramnani vs. Court of Appeals

there is grave abuse of disretion (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 trial court acted under a
misapprehension of facts and the inferences made on the evidence
palpably a mistake.
The trial courts observation that the entire records of the case
is bereft of even a shred of proof that plaintiffsappellants have
remitted to defendantappellee Choithram Ramnani the amount of
US$150,000.00 for investment in real estate in the Philippines, is
not borne by the evidence on record and shows the trial courts
misapprehension of the facts if not a complete disregard of the
evidence, both documentary and testimonial.
Plaintiffappellant 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 attorneyinfact paid in

your behalf. Can you tell this Honorable Court where
your attorneyinfact got the money to pay this
property?

ATTY. CRUZ:

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

COURT:

Witness can aswer.

A I paid through my attorneyinfact. I am the one who

gave him the money.
ATTY. MARAPAO:
Q You gave him the money?
A Thats 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 italics supplied.)

xxxxxxx

ATTY. CRUZ:
744

744

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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
xxxx 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 landthat was in 1966
and the funds were used for the construction of the
building from the US$150,000.00 (TSN, 7 March 1984,
page 14 italics supplied.)

xxxxxxxxx

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. 1415).

On crossexamination, the witness reiterated the

remittance of the money to his brother Choithram, which
was sent to him by his fatherinlaw, Rochiram L.
Mulchandoni from Switzerland, a man of immense wealth,
which even defendantsappellees witness Navalrai
Ramnani admits to be so (tsn., p. 16, S. Oct. 13, 1985).
Thus, on crossexamination, 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 fatherinlaw.
Q From where did your fatherinlaw sent these two bank
drafts?
A From Switzerland.
Q He was in Switzerland.
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VOL. 196, MAY 7, 1991

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Ramnani vs. Court of Appeals

A Probably, they sent out these two drafts from Switzerland. (TSN, 7
March 1984, pp. 1617 italics supplied.)

This positive and affirmative testimony of plaintiffappellant 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 defendantappellees 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 (Underhills Cr.
Guidance, 5th Ed., Vol. I, pp. 1011).
That is not all. Shortly thereafter, plaintiffappellant Ishwar
Ramnani executed a General Power of Attorney (Exhibit A) dated
January 24, 1966 appointing his brothers, defendantsappellees
Navalrai and Choithram as attorneyinfact empowering the latter
to conduct and manage plaintiffsappellants 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 our 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 defendantappellee signing the
Agreements in his capacity as Attorneyinfact 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
attorneyinfact of Ishwar entered into a Contract of Lease with
SigmaMariwasa (Exhibit P) thereby reaffirming the ownership
of Ishwar over the disputed property and the trust relationship
between the latter as principal and Choithram as attorneyinfact
of Ishwar.
All of these facts indicate that if plaintiffappellant 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 his attorneyinfact in buying real
estate in the Philippines.
As against Choithrams denial that he did not receive the
US$150,000.00 remitted by Ishwar and that the Power of
Attorney, as
746

746

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

well as the Agreements entered into with Ortigas & Co., were
only temporary arrangements, Ishwars 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 courts 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
12
and Ishwar.

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 attorneyinfact 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
_______________
12

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

747

VOL. 196, MAY 7, 1991

747

Ramnani vs. Court of Appeals

(1) Send power of Atty. immediately, because the case has
been postponed for two weeks. The same way as it has
been send before in favour of both names. Send it
immediately otherwise everything will be lost
unnecessarily, and then it will take us in litigation. Now
that we have gone ahead with a case and would like to end
it immediately otherwise squaters 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 I had done anything or do then what can you do about it? It
is not necessary to write further about this. It does not matter if
you have cancelled the power. At that time if I had predated and
done something about it what could you have done? You do not
know me. I am not after money. I can earn money anytime. It has
been ten months since I have not received a single penny for
expenses from Dada (elder brother). Why there are no expenses?
We can not draw a single penny from knitting (factory). Well I am
not going to write you further, nor there is any need for it. This
much I am writing you because of the way you have conducted
yourself. But remember, whenever I have the money I will not keep
it
748

748

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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 13 will

discontinue because he likes to keep his business very clean.

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,
14
Department of Sindhi, University of Karachi.
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 Ishwars money.
3. To demonstrate that he can be relied upon, he said
that he could have antedated the sales agreement
of the Ortigas lots before the issuance of the powers
of attorney and acquired the same in his name, if he
wanted to, but he did not do so.
4. He said he had not received a single penny for
expenses from Dada (their elder brother Navalrai).
Thus, 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

_______________
13

Exhibit R1 italics supplied.

14

See Exhibit R to R3.

749

VOL. 196, MAY 7, 1991

749

Ramnani vs. Court of Appeals

Choithrams 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
plaintiffappellant 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 T14, inclusive), and yet for such
valuable pieces of property, Choithram who now belatedly claims that he
purchased the same for himself did not document in writing or in a
memorandum the alleged temporary arrangement with Ishwar (pp. 441,
Appellants 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 itselfsuch as the common
750

750

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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, R1, R
2 and R3) 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 attorneyinfact relationship between Ishwar and
himself. Choithram wrote: x x x 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 Ishwars revocation of the
power of attorney but no mention was made of any temporary
arrangement or a claim of ownership over the properties in
question nor was he able to present any memorandum or
document to prove the existence of such temporary arrangement.
Choithram is also estopped in pais or by deed from claiming an
interest over the properties in question adverse to that of Ishwar.
Section 3(a) of Rule 131 of the Rules of Court states that
whenever a party has, by his own declaration, act, or omission
intentionally and deliberately led another to believe a particular

thing true and act upon such belief, he cannot in any litigation
arising out of such declaration, act or omission be permitted to
falsify it. While estoppel by deed is a bar which precludes a party
to a deed and his privies from asserting as against the other and
his privies any right of title in derogation of the deed, or from
denying the truth of any material fact asserted in it (31 C.J.S. 195
19 Am. Jur. 603).
Thus, defendantsappellees are not permitted to repudiate their
admissions and representations or to assert any right or title in
deroga
751

VOL. 196, MAY 7, 1991

751

Ramnani vs. Court of Appeals

tion 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).
x x x The doctrine of estoppel is based upon the grounds of public policy,
fair dealing, good faith and justice, and its purpose is to forbid one to
speak against his own act, representations, or commitments to the injury
of one to whom they were directed and who reasonably relied thereon.
The doctrine of estoppel springs from equitable principles and the
equities in the case. It is designed to aid the law in the administration of
justice where without its aid injustice might result. It has been applied
by this court wherever and whenever special circumstances of a case so
demands (Philippine National Bank vs. Court of Appeals, 94 SCRA 357,
368 [1979]).

It was only after the services of counsel has been obtained that
Choithram alleged for the 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, Choithrams 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.
Defendantsappellees likewise violated the AntiDummy 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, x x x x x x any alien or
foreigner profiting thereby, shall be punished x x x by imprisonment x x x
and of a fine of not less than the value of the right, franchise or
privileges, which is
752

752

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

enjoyed or acquired in violation of the provisions hereof x x x.

Having come to court with unclean hands, Choithram must not

be permitted to foist his temporary arrangement scheme as a
defense before this court. Being in delicto, he does not have any
right whatsoever from being shielded from his own wrongdoing,
which is not so with respect to Ishwar, who was not a party to such
an arrangement.
The falsity of Choithrams 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 attorneyinfact 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. 2021), only to backtrack when confronted with the letter of
June 25, 1971 (Exhibits R to R3), 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 his
testimony incredible (People vs. Rafallo, 80 Phil. 22). Not only
this, the doctrine of falsus in uno, falsus in omnibus is fully

applicable as far as the testimony of Choithram is concerned. The

cardinal rule, which has served in all ages, and has been applied
to all conditions of men, is that a witness willfully falsifying the
truth in one particular, when upon oath, ought never to be
believed upon the strength of his own testimony, whatever he
may assert (U.S. vs. Osgood, 27 Feb. Case No. 15971a, 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 Choithrams 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. 1718, S. Sept. 20, 1985), Navalrai
has a pecuniary interest in the success of Choithram in the case
in question. Both he and Choithram
753

VOL. 196, MAY 7, 1991

753

Ramnani vs. Court of Appeals

are business partners in Jethmal and Sons and/or Jethmal

Industries, wherein he owns 60% of the company and Choithram,
40% (p. 62, Appellants 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 P1,000.00 a month
to pay for taxes on said properties (tsn, p. 17, S. Oct. 3, 1985).
Inherent contradictions also marked Navalrais testimony.
While the latter was very meticulous in keeping a receipt for the
P10,000.00 that he paid Ishwar as settlement in Jethmal
Industries, yet in the alleged payment of P100,000.00 to Ishwar,
no receipt
or voucher was ever issued by him (tsn, p. 17, S. Oct. 3,
15
1983).

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 attorneyinfact?
Then, acting as attorneyinfact 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
16
power of attorney in their favor. When Ishwar did not
respond
_______________
15

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

16

Exhibits R to R3.
754

754

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

thereto, Choithram nevertheless proceeded as such

attorneyinfact to assign all the rights and interest of
Ishwar to his daughterinlaw Nirmla in 1973 without the
knowledge and consent of Ishwar. Ortigas in turn executed
the corresponding deeds of sale in favor of Nirmla after full
payment of the purchase price of the lots.
In the prefatory statement of their petition, Choithram
pictured Ishwar to be so motivated by greed and
ungratefulness, who squandered the family business in
New York, who had to turn to his wife for support,
accustomed to living in ostentation and who resorted to
blackmail in 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 fatherinlaw 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
755

VOL. 196, MAY 7, 1991

755

Ramnani vs. Court of Appeals

17

name until Choithram acquires Philippine citizenship.

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
18
children on December 29, 1989
b) Sale on August 2, 1990 by Choithram of his 100
shares in
Biflex (Phils.), Inc., in favor of his
19
children and

Mortgage on June 20, 1989 by Nirmla through her

c) attorneyinfact, 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 at20P.O. Box 1790, Grand Cayman,
Cayman Islands.
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
_______________
17

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

18

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

19

Annex B, supra page 451, supra.

20

Annex C, supra pages 452 to 456, supra.

756

756

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

dated June 20, 1989, in favor of Overseas Holding Co., Ltd. which
appears to be a corporation organized in Cayman Islands, for the
amount of $3,000,000.00, which is much more than the value of
the properties in litigation that said alleged mortgagee appears
to be a shell corporation with a capital of only $100.00 and that
this alleged transaction appears to be intended to defraud
petitioners Ishwar and Sonya Jethmal Ramnani of any favorable
judgment that this Court may render in this case
Wherefore the Court Resolved to issue a writ of preliminary
injunction enjoining and prohibiting said respondents Choithram

Jethmal Ramnani, Nirmla V. Ramnani, Moti G. Ramnani and the

Overseas Holding Co., Ltd. from encumbering, selling or
otherwise disposing of the properties and improvements subject of
this litigation until further orders of the Court. Petitioners Ishwar
and Sonya Jethmal Ramnani are hereby required to post a bond
of P100,000.00 to answer for any damages said respondents may
suffer by way of this injunction if the Court finally decides the
said petitioners are not entitled thereto.
The Overseas Holding Co., Ltd. with address at P.O. Box 1790
Grand Cayman, Cayman Islands, is hereby IMPLEADED as a
respondent in these cases, and is hereby required to SUBMIT its
comment on the Urgent Motion for the Issuance of a Writ of
Preliminary Attachment and Motion for Production of Documents,
the Manifestation and the Reply to the Opposition 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 21
the
said properties and its improvements subject of this litigation.

The required injunction bond in the amount of P100,000.00

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
22
expense of said spouses. On December 19, 1990 the said
resolution and
_______________
21

Pages 438 to 442, rollo, G.R. No. 85496 pages 413 to 417, rollo, G.R.

No. 85494.
22

Page 450, rollo, G.R. No. 85496.

757

VOL. 196, MAY 7, 1991

757

Ramnani vs. Court of Appeals

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
23

Lading, and it was actually delivered to said company on

23

Lading, and it was

actually delivered to said company on
24
January 23, 1991.
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 null and void.
This purported mortgage of the subject properties in
litigation appears to be fraudulent and simulated. The
stated amount of $3 Million for which it was mortgaged is
much more than the value of the mortgaged properties and
its improvements. The alleged mortgageecompany
(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.
25
Overseas is a shelf company worth only $100.00. In the
manifestation of spouses Ishwar dated April 1, 1991, the
Court was informed that this matter was brought to the
attention of the Central Bank (CB) for investigation, and
that in a letter of March 20, 1991, the CB informed counsel
for spouses Ishwar
______________
23

Annexes C, C1 and C2 to Manifestation and Complaint of

petitioners Ishwar & Sonya filed on January 26, 1991.

24

Annex D to Manifestation, etc.

25

Annex A to Reply to Opposition filed by petitioners on December 7,

1990 Pages 383 to 384, Rollo See also Manifestation of petitioners,

December 11, 1990, pages 438 to 443 rollo, G.R. 85494.
758

758

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

that said alleged foreign loan of Choithram, et al. from

Overseas
has not been previously approved/registered with
26
the CB.
Obviously, this is another ploy of Choithram, et al. to
place these properties beyond the reach of spouses Ishwar
should they obtain a favorable judgment in this case. The
Court 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 all 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 attorneyinfact 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 Choithrams
power of attorney
27
by Ishwars lawyer, on May 24, 1971. A publication of said
notice was made in the April 2, 1971 issue of The 28Manila
Times for the information of the general public. Such
notice of revocation in a newspaper of general circulation
is
29
sufficient warning to third persons including Ortigas. A
notice of revocation was also registered with the
Securities
30
and Exchange Commission on March 29, 1971.
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 31of the revocation of Choithrams power of
attorney. Despite said notices, Ortigas nevertheless
acceded to the representation of Choithram, as alleged
attorneyinfact 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
_______________
26

See pages to of Rollo.

27

Exhibit B.

28

Exhibit F.

29

Article 1922, Civil Code.

30

Exhibit H.

31

Exhibit R1 supra.
759

VOL. 196, MAY 7, 1991

759

Ramnani vs. Court of Appeals

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 latters liability to Ishwar.
In the original complaint, the spouses Ishwar asked for
a reconveyance of the properties
and/or payment of its
32
present value and damages. 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
33
deemed just and equitable in the premises. 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 daughterinlaw, 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, and34 Moti Ramnani) have
collected for themselves

In said amended complaint, spouses Ishwar, among others,

pray for payment of actual damages in an amount no less
than
_______________
32

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

33

Annex D, supra Pages 93 to 97, Rollo.

34

Supra, pages 95 to 96, Rollo italics supplied.

760

760

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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 abovediscussed, this allegation is welltaken
and the transfer of the property to Nirmla should be
considered to have created an implied trust by Nirmla 35as
trustee of the property for the benefit of spouses Ishwar.
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
plaintiffss 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
36
pendency of the suit,
and not to obstruct the
administation of justice or preju
_______________
35

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

36

Calo vs. Roldan, 76 Phil. 445 (1946) De los Reyes v. Elepao, G.R. L

5282, May 29, 1959 De la Cruz vs. Tan Torres, G.R. L14925, April 30,
1960.
761

VOL. 196, MAY 7, 1991

761

Ramnani vs. Court of Appeals

37

dice the adverse party. In this case for damages, should

Choithram, et al. continue to commit acts of disposition of
the properties subject of the litigation, an award of
damages to spouses Ishwar38 would thereby be rendered
ineffectual and meaningless.
Consequently, if only to protect the interest of spouses
Ishwar, the Court hereby finds and holds that the motion
for the sissuance 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 x x x.

Verily, the acts of Choithram, et al. of disposing the

properties subject of the litigation disclose a scheme to
defraud spouses Ishwar so they may not be able to recover

at all, given a judgment in their favor, thus requiring the

issuance of the writ of attachment in this instance.
Nevertheless, under the peculiar circumstances of this
case and despite the fact that Choithram, et al., have
committed acts which demonstrate their bad faith and
scheme to defraud spouses Ishwar and Sonya of their
rightful share in the properties in litigation, the Court
cannot ignore the fact that Choithram must have been
motivated by a strong conviction that as the industrial
partner in the acquisition of said assets he has as
_______________
37

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

38

Calo vs. Rolda. supra.

762

762

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

much claim to said properties as Ishwar, the capitalist

partner in the joint venture.
The scenario is clear. Spouses Ishwar supplied the
capital of $150,000.00 for the business. They entrusted the
money to Choithram to invest in a profitable business
venture in the Philippines. For this purpose they appointed
Choithram as their attorneyinfact.
Choithram in turn decided to invest in the real estate
business. He bought the two (2) parcels of land in question
from Ortigas as attorneyinfact 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, Ishwars property was developed and improved
into what it is nowa 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
39
properties is no less than P22,304,000.00. It should be
worth much more today.
We have a situation where two brothers engaged in a
business venture. One furnished the capital, the other
contributed his industry and talent. Justice and equity
dictate that the two share equally the fruit of their joint
investment and 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 attorneys 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
_______________
39

Exhibits T to T14.
763

VOL. 196, MAY 7, 1991

763

Ramnani vs. Court of Appeals

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 onehalf (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
T14, 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 onehalf (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 Eppies Creation and
Jethmal Industries from 1967 to 1973, inclusive,
based on the 1967 to 1973 monthly rentals paid by
Eppies 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 twoBays 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.
764

764

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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 T14, 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
attorneys 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 $3M is hereby declared
null and void. The Register of Deeds of Pasig, Rizal,
is directed to cancel the annotation of said
mortgage on the titles of the properties in question.
8. Should respondent Ortigas Co., Ltd. Partnership
pay the awards to Ishwar and Sonya Ramnani
under this judgment, it shall be entitled to
reimbursement from petitioners Choithram, Nirmla
and Moti, all surnamed Ramnani.
765

VOL. 196, MAY 7, 1991

765

People vs. Godines

9. The above awards shall 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.
Narvasa (Chairman), Cruz, GrioAquino and
Medialdea, JJ., concur.
Petition in G.R. No. 85494 denied petition in G.R. No.
85496 granted. Judgment modified.
Note.An action for reconveyance of realty, based upon
a constructive or implied trust resulting from fraud may be
barred by prescription. The prescriptive period is reckoned
from the issuance of title which operates as a constructive
notice. (Sinoan vs. Sorogan, 136 SCRA 407)
o0o

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