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 mortgagee-company (Overseas) was organized only on June 26, 1989
but the mortgage was executed much earlier, on June 20, 1989, that is six (6) days before Overseas
was organized. Overseas is a “shelf” company worth only $100.00. In the manifestation of spouses
Ishwar dated April 1, 1991, the Court was informed that this matter was brought to the attention of
the Central Bank (CB) for investigation, and that in a letter of March 20, 1991, the CB informed
counsel for spouses Ishwar that said alleged foreign loan

_______________

* 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 attorney-in-fact of Ishwar.
However, evidence had been adduced that notice in writing had been served not only on Choithram,
but also on Ortigas, of the revocation of Choithram’s power of attorney by Ishwar’s lawyer, on May
24, 1971. A publication of said notice was made in the April 2, 1971 issue of The Manila Times for
the information of the general public. Such notice of revocation in a newspaper of general
circulation is 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 Choithram’s power
of attorney. Despite said notices, Ortigas nevertheless acceded to the representation of Choithram,
as alleged attorney-in-fact of Ishwar, to assign the rights of petitioner Ishwar to Nirmla. While the
primary blame should be laid at the doorstep of Choithram, Ortigas is not entirely without fault. It
should have required Choithram to secure another power of attorney from Ishwar. For recklessly
believing the pretension of Choithram that his power of attorney was still good, it must, therefore,
share in the latter’s liability to Ishwar.

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 plaintiff-spouses.—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 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.”

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
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. 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 attorney’s 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 attorney’s 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, Peña 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 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

_______________

1 Exhibit A.

2 Exhibits B and C.

736

736

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

and May 24, 1971, respectively.3 Said notice was also registered with the Securities and Exchange
Commission on March 29, 19714 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 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 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 Orti-

_______________
3 Exhibit 3.

4 Exhibit H.

5 Exhibit F.

6 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, 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 Jeth-mal 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-Mar-iwasa 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;
738

738

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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

_______________

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 COURT’S FINDINGS BASED ON THE DIRECT DOCUMENTARY AND TESTIMONIAL EVIDENCE
PRESENTED BY CHOITHRAM IN THE TRIAL COURT ESTABLISHING THAT THE PROPERTIES WERE
PURCHASED WITH PERSONAL FUNDS OF PETITIONER CHOITHRAM AND NOT WITH MONEY
ALLEGEDLY REMITTED BY RESPONDENT ISHWAR.

III

THE COURT OF APPEALS ACTED IN EXCESS OF JURISDICTION IN AWARDING DAMAGES BASED ON THE
VALUE OF THE PROPERTIES AND THE FRUITS OF THE IMPROVEMENTS THEREON.”9

Similarly, spouses Ishwar 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 ORTI-GAS 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 LATTER’S DAUGHTER-
IN-LAW, AND THAT IT WAS IN GOOD FAITH WHEN IT TRANSFERRED ISHWAR’S RIGHTS TO THE LOTS
IN QUESTION.
II

THE RESPONDENT HONORABLE COURT OF APPEALS HAS SO FAR DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDING WHEN IT HELD IN THE QUESTIONED AMENDED DECISION
OF 17 NOVEMBER 1988 (ANNEX A) THAT RESPONDENT ORTIGAS & CO., LTD., IS NOT JOINTLY AND
SEVERALLY LIABLE WITH DEFENDANTS-APPELLEES

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 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 int he 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

_______________

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 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

_______________

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 Ap-peals, 63 SCRA 33;
Philippine American Life Assurance Co. vs. San-tamaria, 31 SCRA 798; Aldaba vs. Court of Appeals, 24
SCRA 189).

The evidence on record shows that the trial court acted under a misapprehension of facts and the
inferences made on the evidence palpably a mistake.

The trial court’s observation that ‘the entire records of the case is bereft of even a shred of proof’ that
plaintiffs-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 aswer.

‘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; italics supplied.)
xx xxx xx

‘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 land—that was in
1966 and the funds were used for the construction of the building from the US$150,000.00 (TSN, 7
March 1984, page 14; italics 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.

745

VOL. 196, MAY 7, 1991

745

Ramnani vs. Court of Appeals

‘A Probably, they sent out these two drafts from Switzerland.’ (TSN, 7 March 1984, pp. 16-17; italics
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. I, 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 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 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 his 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
746

746

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

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

_______________

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 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—

_______________

13 Exhibit R-1; italics supplied.

14 See Exhibit R to R-3.

749

VOL. 196, MAY 7, 1991

749

Ramnani vs. Court of Appeals

“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 claims that he purchased the
same for himself did not document in writing or in a memorandum the alleged temporary
arrangement with Ishwar’ (pp. 4-41, Appellant’s Brief).

Such verbal allegation of a temporary arrangement is simply improbable and inconsistent. It has
repeatedly been held that important contracts made without evidence are highly improbable.

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

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, 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: ‘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 Ishwar’s revocation of the power of attorney but no
mention was made of any temporary arrangement or a claim of ownership over the properties in
question nor was he able to present any memorandum or document to prove the existence of such
temporary arrangement.

Choithram is also estopped in pais or by deed from claiming an interest over the properties in question
adverse to that of Ishwar. Section 3(a) of Rule 131 of the Rules of Court states that whenever ‘a
party has, by his own declaration, act, or omission intentionally and deliberately led another to
believe a particular thing true and act upon such belief, he cannot in any litigation arising out of such
declaration, act or omission be permitted to falsify it.’ While estoppel by deed is a bar which
precludes a party to a deed and his privies from asserting as against the other and his privies any
right of title in derogation of the deed, or from denying the truth of any material fact asserted in it
(31 C.J.S. 195; 19 Am. Jur. 603).

Thus, defendants-appellees are not permitted to repudiate their admissions and representations or to
assert any right or title in 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, 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, 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 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 his testimony incredible
(People vs. Rafallo, 80 Phil. 22). Not only this, the doctrine of falsus in uno, falsus in omnibus is fully
applicable as far as the testimony of Choithram is concerned. The cardinal rule, which has served in
all ages, and has been applied to all conditions of men, is that a witness willfully falsifying the truth
in one particular, when upon oath, ought never to be believed upon the strength of his own
testimony, whatever he may assert (U.S. vs. Osgood, 27 Feb. Case No. 15971-a, p. 364); Gonzales vs.
Mauricio, 52 Phil. 728), for what ground of judicial relief can there be left when the party has shown
such gross insensibility to the 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

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, Appellant’s Brief). Since the acquisition of the properties in
question in 1966, Navalrai was occupying 1,200 square meters thereof as a factory site plus the fact
that his son (Navalrai’s) was occupying the apartment on top of the factory with his family rent free
except the amount of P1,000.00 a month to pay for taxes on said properties (tsn, p. 17, S. Oct. 3,
1985).

Inherent contradictions also marked Navalrai’s testimony. While the latter was very meticulous in
keeping a receipt for the P10,000.00 that he paid Ishwar as settlement in Jethmal Industries, yet in
the alleged payment of P100,000.00 to Ishwar, no receipt or voucher was ever issued by him (tsn, p.
17, S. Oct. 3, 1983).”15

We concur.

The foregoing 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

_______________

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

16 Exhibits R to R-3.

754

754

SUPREME COURT REPORTS ANNOTATED

Ramnani vs. Court of Appeals

thereto, Choithram nevertheless proceeded as such attorney-in-fact to assign all the rights and interest
of Ishwar to his daughter-in-law Nirmla in 1973 without the knowledge and consent of Ishwar.
Ortigas in turn executed the corresponding deeds of sale in favor of Nirmla after full payment of the
purchase price of the lots.

In the prefatory statement of their petition, Choithram pictured Ishwar to be so motivated by greed and
ungratefulness, who squandered the family business in New York, who had to turn to his wife for
support, accustomed to living in ostentation and who resorted to blackmail in 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

755

VOL. 196, MAY 7, 1991

755

Ramnani vs. Court of Appeals

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

_______________

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 the said properties and its improvements subject of this litigation.”21

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 expense of said spouses.22 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 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 counter-bond 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 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

______________

23 Annexes C, C-1 and C-2 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 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 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 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, 1971.30

Indeed in the letter of Choithram to Ishwar of June 25, 1971, Choithram was pleading that Ishwar
execute another power of attorney to be shown to Ortigas who apparently learned of the
revocation of Choithram’s power of attorney.31 Despite said notices, Ortigas nevertheless acceded
to the representation of Choithram, as alleged attorney-in-fact of Ishwar, to assign the rights of
petitioner Ishwar to Nirmla. While the primary blame should be laid at the doorstep of Choithram,
Ortigas is not entirely without fault. It should have required Choithram to

_______________

26 See pages to of Rollo.

27 Exhibit B.

28 Exhibit F.

29 Article 1922, Civil Code.

30 Exhibit H.

31 Exhibit R-1; supra.

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 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

_______________

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 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 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. Elepaño, G.R. L-5282, May 29, 1959; De la Cruz vs.
Tan Torres, G.R. L-14925, April 30, 1960.

761

VOL. 196, MAY 7, 1991

761

Ramnani vs. Court of Appeals

dice 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 Ish-war, 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 follow-ing
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 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

_______________

39 Exhibits T to T-14.

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 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’.
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 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 $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, Griño-Aquino 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. Soroñgan, 136 SCRA 407)

Ramnani vs. Court of Appeals, 196 SCRA 731, G.R. No. 85494, G.R. No. 85496 May 7, 1991