FIRST DIVISION

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

CHOITHRAM JETHMAL RAMNANI and/or NIRMLA V. RAMNANI AND

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

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

SPOUSES ISHWAR JETHMAL RAMNANI and SONYA JETHMAL

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

Quasha, Asperilla, Ancheta, Peña and Nolasco for petitioners in G.R. No. 85496.
Salonga, Andres, Hernandez & Allado for petitioners in G.R. No. 85494.
Rama Law O ce for petitioners in G.R. No. 85494, in collaboration with Salonga,
Andres, Hernandez & Allado.
Eulogio R. Rodriguez for Ortigas & Co., Ltd.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; ENTRUSTING MONEY AND VALUABLES

WITHOUT RECEIPT TO CLOSE FAMILY MEMBERS, NOT UNUSUAL. — The environmental
circumstances of this case buttress the claim of Ishwar that he did entrust the amount
of US$150,000.00 to his brother, Choithram, which the latter invested in the real
property business subject of this litigation in his capacity as attorney-in-fact of Ishwar.
True it is that there is no receipt whatever in the possession of Ishwar to evidence the
same, but it is not unusual among brothers and close family members to entrust money
and valuables to each other without any formalities or receipt due to the special
relationship of trust between them.
2. ID.; CIVIL PROCEDURE; DEFAULT; FAILURE TO FILE COMMENT OR ANSWER. —
Overseas was impleaded as respondent in the cases and required to le comment or
answer to the different pleadings led by petitioner. No comment or answer was led
by Overseas despite due notice, thus it is and must be considered to be in default and
to have lost the right to contest the representations of spouses Ishwar to declare the
aforesaid alleged mortgage null and void.
3. CIVIL LAW; MORTGAGE; NULLITY OF MORTGAGE SHOWN BY
CIRCUMSTANCES IN CASE AT BAR. — This purported mortgage of the subject
properties in litigation appears to be fraudulent and simulated. The stated amount of
$3 Million for which it was mortgaged is much more than the value of the mortgaged
properties and its improvements. The alleged mortgagee-company (Overseas) was
organized only on June 26, 1989 but the mortgage was executed much earlier, on June
20, 1989, that is six (6) days before Overseas was organized. Overseas is a "shelf"
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 company worth only $100.00. In the manifestation of spouses Ishwar dated April 1,
1991, the Court was informed that this matter was brought to the attention of the
Central Bank (CB) for investigation, and that in a letter of March 20, 1991, the CB
informed counsel for spouses Ishwar that said alleged foreign loan of Choithram, et al.
from Overseas has not been previously approved/registered with the CB. Obviously,
this is another ploy of Choithram, et al. to place these properties beyond the reach of
spouses Ishwar should they obtain a favorable judgment in this case. The Court nds
and so declares that this alleged mortgage should be as it is hereby declared null and
void.
4. ID.; AGENCY; NOTICE OF REVOCATION OF POWER OF ATTORNEY IN
NEWSPAPER, SUFFICIENT WARNING TO THIRD PARTY. — The problem is compounded
in that respondent Ortigas is caught in the web of this bitter ght. It had all the time
been dealing with Choithram as attorney-in-fact of Ishwar. However, evidence had been
adduced that notice in writing had been served not only on Choithram, but also on
Ortigas, of the revocation of Choithram's power of attorney by Ishwar's lawyer, on May
24, 1971. A publication of said notice was made in the April 2, 1971 issue of The Manila
Times for the information of the general public. Such notice of revocation in a
newspaper of general circulation is su cient warning to third persons including
Ortigas. A notice of revocation was also registered with the Securities and Exchange
Commission on March 29, 1971.
5. ID.; ID.; ID.; THIRD PARTY'S FAULT RENDERS HIM GUILTY TO PRINCIPAL. —
Indeed in the letter of Choithram to Ishwar of June 25, 1971, Choithram was pleading
that Ishwar execute another power of attorney to be shown to Ortigas who apparently
learned of the revocation of Choithram's power of attorney. Despite said notices,
Ortigas nevertheless acceded to the representation of Choithram, as alleged attorney-
in-fact of Ishwar, to assign the rights of petitioner Ishwar to Nirmla. While the primary
blame should be laid at the doorstep of Choithram, Ortigas is not entirely without fault.
It should have required Choithram to secure another power of attorney from Ishwar. For
recklessly believing the pretension of Choithram that his power of attorney was still
good, it must, therefore, share in the latter's liability to Ishwar.
6. ID.; TRUST; IMPLIED TRUST; CREATED WHERE THERE WAS FRAUDULENT
TRANSFER OF PROPERTY. — The allegations of the amended complaint above
reproduced clearly spelled out that the transfer of the property to Nirmla was
fraudulent and that it should be considered to be held in trust by Nirmla for spouses
Ishwar. As above-discussed, this allegation is well-taken and the transfer of the
property to Nirmla should be considered to have created an implied trust by Nirmla as
trustee of the property for the benefit of spouses Ishwar.
7. REMEDIAL LAW; PROVISIONAL REMEDY; PRELIMINARY INJUNCTION;
ISSUANCE. — The motion to dissolve the writ of preliminary injunction led by
Choithram, et al. should be denied. Its issuance by this Court is proper and warranted
under the circumstances of the case. Under Section 3(c), Rule 58 of the Rules of Court,
a writ of preliminary injunction may be granted at any time after commencement of the
action and before judgment when it is established: "(c) that the defendant is doing,
threatens, or is about to do, or is procuring or suffering to be done, some act probably
in violation of plaintiff's rights respecting the subject of the action, and tending to
render the judgment ineffectual."
8. ID.; ID.; ID.; PURPOSE. — The purpose of the provisional remedy of preliminary
injunction is to preserve the status quo of the things subject of the litigation and to
protect the rights of the spouses Ishwar respecting the subject of the action during the
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 pendency of the suit, and not to obstruct the administration of justice or prejudice the
adverse party. In this case for damages, should Choithram, et al. continue to commit
acts of disposition of the properties subject of the litigation, an award of damages to
spouses Ishwar would thereby be rendered ineffectual and meaningless.
9. ID.; ID.; ATTACHMENT; WARRANTED WHERE THERE IS AN INTENT TO
DEFRAUD CREDITORS; CASE AT BAR. — Section 1, Rule 57 of the Rules of Court
provides that at the commencement of an action or at any time thereafter, the plaintiff
or any proper party may have the property of the adverse party attached as security for
the satisfaction of any judgment that may be recovered, in, among others, the following
cases: "(d) In an action against a party who has been guilty of a fraud in contracting the
debt or incurring the obligation upon which the action is brought, or in concealing or
disposing of the property for the taking, detention or conversion of which the action is
brought; (e) In an action against a party who has removed or disposed of his property,
or is about to do so, with intent to defraud his creditors; . . ." Verily, the acts of
Choithram, et al. of disposing the properties subject of the litigation disclose a scheme
to defraud spouses Ishwar so they may not be able to recover at all, given a judgment in
their favor, thus requiring the issuance of the writ of attachment in this instance.
10. COMMERCIAL LAW; CORPORATION LAW; INDUSTRIAL PARTY WHILE
GUILTY OF FRAUDULENT SCHEME SHARES EQUALLY WITH CAPITALIST PARTNER;
CASE AT BAR. — Nevertheless, under the peculiar circumstances of this case and
despite the fact that Choithram, et al., have committed acts which demonstrate their
bad faith and scheme to defraud spouses Ishwar and Sonya of their rightful share in the
properties in litigation, the Court cannot ignore the fact that Choithram must have been
motivated by a strong conviction that as the industrial partner in the acquisition of said
assets he has as much claim to said properties as Ishwar, the capitalist partner in the
joint venture. Through the industry and genius of Choithram, Ishwar's property was
developed and improved into what it is now — a valuable asset worth millions of pesos.
As of the last estimate in 1985, while the case was pending before the trial court, the
market value of the properties is no less than P22,304,000.00. It should be worth much
more today. We have a situation where two brothers engaged in a business venture.
One furnished the capital, the other contributed his industry and talent. Justice and
equity dictate that the two share equally the fruit of their joint investment and 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.
11. CIVIL LAW; DAMAGES; AWARD OF MORAL & EXEMPLARY DAMAGES IN
CASE AT BAR. — However, the Court cannot just close its eyes to the devious
machinations and schemes that Choithram employed in attempting to dispose of, if not
dissipate, the properties to deprive spouses Ishwar of any possible means to recover
any award the Court may grant in their favor. Since Choithram, et al. acted with evident
bad faith and malice, they should pay moral and exemplary damages as well as
attorney's fees to spouses Ishwar.

DECISION

GANCAYCO , J : p

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 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
con icting factual ndings of the trial court and the appellate court, the resolution of
which will materially affect the result of the contest.

The following facts are not disputed.

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

Sometime in 1970 Ishwar asked Choithram to account for the income and
expenses relative to these properties during the period 1967 to 1970. Choithram failed
and refused to render such accounting. As a consequence, on February 4, 1971, Ishwar
revoked the general power of attorney. Choithram and Ortigas were duly noti ed of
such revocation on April 1, 1971 and May 24, 1971, respectively. 3 Said notice was also
registered with the Securities and Exchange Commission on March 29, 1971 4 and was
published in the April 2, 1971 issue of The Manila Times for the information of the
general public. 5
Nevertheless, Choithram as such attorney-in-fact of Ishwar, transferred all rights
and interests of Ishwar and Sonya in favor of his daughter-in-law, Nirmla Ramnani, on
February 19, 1973. Her husband is Moti, son of Choithram. Upon complete payment of
the lots, Ortigas executed the corresponding deeds of sale in favor of Nirmla. 6 Transfer
Certi cates of Title Nos. 403150 and 403152 of the Register of Deeds of Rizal were
issued in her favor.
Thus, on October 6, 1982, Ishwar and Sonya (spouses Ishwar for short) led a
complaint in the Court of First Instance of Rizal against Choitram and/or spouses
Nirmla and Moti (Choithram, et al. for brevity) and Ortigas for reconveyance of said
properties or payment of its value and damages. An amended complaint for damages
was thereafter filed by said spouses.
After the issues were joined and the trial on the merits, a decision was rendered
by the trial court on December 3, 1985 dismissing the complaint and counterclaim. A
motion for reconsideration thereof led by spouses Ishwar was denied on March 3,
1986.
An appeal therefrom was interposed by spouses Ishwar to the Court of Appeals
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 wherein in due course a decision was promulgated on March 14, 1988, the dispositive
part of which reads as follows:
"WHEREFORE, judgment is hereby rendered reversing and setting aside the
appealed decision of the lower court dated December 3, 1985 and the Order dated
March 3, 1986 which denied plaintiffs-appellants' Motion for Reconsideration
from aforesaid decision. A new decision is hereby rendered sentencing
defendants-appellees Choithram, Jethmal Ramnani, Nirmla V. Ramnani, Moti C.
Ramnani, and Ortigas and Company Limited Partnership to pay, jointly and
severally, plaintiffs-appellants the following:

1. Actual or compensatory damages to the extent of the fair market value of the
properties in question and all improvements thereon covered by Transfer
Certi cate of Title No. 403150 and Transfer Certi cate of Title No. 403152 of the
Registry of Deeds of Rizal, prevailing at the time of the satisfaction of the
judgment but in no case shall such damages be less than the value of said
properties as appraised by Asian Appraisal, Inc. in its Appraisal Report dated
August 1985 (Exhibits T to T-14, inclusive). prcd

2. All rental incomes paid or ought to be paid for the use and occupancy of the
properties in question and all improvements thereon consisting of buildings, and
to be computed as follows:
a) On Building C occupied by Eppie's Creation and Jethmal
Industries from 1967 to 1973, inclusive, based on the 1967 to 1973
monthly rentals paid by Eppie's Creation;
b) Also on Building C above, occupied by Jethmal Industries and
Lavine from 1974 to 1978, the rental incomes based on then rates
prevailing as shown under Exhibit 'P'; and from 1979 to 1981, based on
then prevailing rates as indicated under Exhibit 'Q';
c) On Building A occupied by Transworld Knitting Mills from 1972 to
1978, the rental incomes based upon then prevailing rates shown under
Exhibit 'P', and from 1979 to 1981, based on prevailing rates per Exhibit 'Q';
d) On the two-Bays Buildings occupied by Sigma-Mariwasa from
1972 to 1978, the rentals based on the Lease Contract, Exhibit 'P', and from
1979 to 1980, the rentals based on the Lease Contract, Exhibit 'Q',

and thereafter commencing 1982, to account for and turn over the rental incomes
paid or ought to be paid for the use and occupancy of the properties and all
improvements totalling 10,048 sq. m., based on the rate per square meter
prevailing in 1981 as indicated annually cumulative up to 1984. Then,
commencing 1985 and up to the satisfaction of the judgment, rentals shall be
computed at ten percent (10%) annually of the fair market values of the properties
as appraised by the Asian Appraisal, Inc. in August 1985 (Exhibits T to T-14,
inclusive.)
3. Moral damages in the sum of P200,000.00;

4. Exemplary damages in the sum of P100,000.00;

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

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

7. The cost of suit." 7

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

"1. The Court of Appeals gravely abused its discretion in making a factual nding
not supported by and contrary to the evidence presented at the Trial Court.
2. The Court of Appeals acted in excess of jurisdiction in awarding damages
based on the value of the real properties in question where the cause of action of
private respondents is recovery of a sum of money.

ARGUMENTS
I
THE COURT OF APPEALS ACTED IN GRAVE ABUSE OF ITS DISCRETION IN
MAKING A FACTUAL FINDING THAT PRIVATE RESPONDENT ISHWAR REMITTED
THE AMOUNT OF US$150,000.00 TO PETITIONER CHOITHRAM IN THE ABSENCE
OF PROOF OF SUCH REMITTANCE.

II
THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND
MANIFEST PARTIALITY IN DISREGARDING THE TRIAL COURT'S FINDINGS
BASED ON THE DIRECT DOCUMENTARY AND TESTIMONIAL EVIDENCE
PRESENTED BY CHOITHRAM IN THE TRIAL COURT ESTABLISHING THAT THE
PROPERTIES WERE PURCHASED WITH PERSONAL FUNDS OF PETITIONER
CHOITHRAM AND NOT WITH MONEY ALLEGEDLY REMITTED BY RESPONDENT
ISHWAR.
III
THE COURT OF APPEALS ACTED IN EXCESS OF JURISDICTION IN AWARDING
DAMAGES BASED ON THE VALUE OF THE PROPERTIES AND THE FRUITS OF
THE IMPROVEMENTS THEREON." 9

Similarly, spouses Ishwar led a petition for review of said amended decision of
the appellate court exculpating Ortigas of liability based on the following assigned
errors —
"I
THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR AND HAS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH
LAW AND/OR WITH APPLICABLE DECISIONS OF THIS HONORABLE COURT —

A) IN PROMULGATING THE QUESTIONED AMENDED DECISION

(ANNEX 'A') RELIEVING RESPONDENT ORTIGAS FROM LIABILITY AND
DISMISSING PETITIONERS' AMENDED COMPLAINT IN CIVIL CASE NO.
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 534-P, AS AGAINST SAID RESPONDENT ORTIGAS;

B) IN HOLDING IN SAID AMENDED DECISION THAT AT ANY RATE

NO ONE EVER TESTIFIED THAT ORTIGAS WAS A SUBSCRIBER TO THE
MANILA TIMES PUBLICATION OR THAT ANY OF ITS OFFICERS READ THE
NOTICE AS PUBLISHED IN THE MANILA TIMES, THEREBY ERRONEOUSLY
CONCLUDING THAT FOR RESPONDENT ORTIGAS TO BE
CONSTRUCTIVELY BOUND BY THE PUBLISHED NOTICE OF REVOCATION,
ORTIGAS AND/OR ANY OF ITS OFFICERS MUST BE A SUBSCRIBER
AND/OR THAT ANY OF ITS OFFICERS SHOULD READ THE NOTICE AS
ACTUALLY PUBLISHED;

C) IN HOLDING IN SAID AMENDED DECISION THAT ORTIGAS

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

D) IN IGNORING THE EVIDENCE DULY PRESENTED AND ADMITTED

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

F) IN SUSTAINING RESPONDENT ORTIGAS VACUOUS REHASHED

ARGUMENTS IN ITS MOTION FOR RECONSIDERATION THAT IT WOULD
NOT GAIN ONE CENTAVO MORE FROM CHOITHRAM FOR THE SALE OF
SAID LOTS AND THE SUBSEQUENT TRANSFER OF THE SAME TO THE
LATTER'S DAUGHTER-IN-LAW, AND THAT IT WAS IN GOOD FAITH WHEN
IT TRANSFERRED ISHWAR'S RIGHTS TO THE LOTS IN QUESTION.
II
THE RESPONDENT HONORABLE COURT OF APPEALS HAS SO FAR DEPARTED
FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDING WHEN IT
HELD IN THE QUESTIONED AMENDED DECISION OF 17 NOVEMBER 1988
(ANNEX A) THAT RESPONDENT ORTIGAS & CO., LTD., IS NOT JOINTLY AND
SEVERALLY LIABLE WITH DEFENDANTS-APPELLEES CHOITHRAM, MOTI AND
NIRMLA RAMNANI IN SPITE OF ITS ORIGINAL DECISION OF 14 MARCH 1988
THAT ORTIGAS WAS DULY NOTIFIED OF THE REVOCATION OF THE POWER OF
ATTORNEY OF CHOITHRAM RAMNANI." 1 0

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

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

Further, the rate of exchange that time in 1966 was P4.00 to $1.00. The alleged
two US dollar drafts amounted to $150,000.00 or about P600,000.00. Assuming the
cash price of the two (2) lots was only P530,000.00 (ALTHOUGH he said: ' Based on my
knowledge I have no evidence,' when asked if he even knows the cash price of the two
lots). If he were really the true and bona de investor and purchaser for pro t 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
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 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). 1 1
On the other hand, the appellate court, in giving credence to the version of Ishwar,
had this to say —
"While it is true, that generally the ndings of fact of the trial court are binding
upon the appellate courts, said rule admits of exceptions such as when (1) the
conclusion is a nding grounded entirely on speculations, surmises and
conjectures; (2) when the inferences made is manifestly mistaken, absurd and
impossible; (3) when there is grave abuse of discretion; (4) when the judgment is
based on a misapprehension of facts and when the court, in making its ndings,
went beyond the issues of the case and the same are contrary to the admissions
of both appellant and appellee (Ramos vs. Court of Appeals, 63 SCRA 33;
Philippine American Life Assurance Co. vs. Santamaria, 31 SCRA 798; Aldaba vs.
Court of Appeals, 24 SCRA 189).

The evidence on record shows that the trial court acted under a misapprehension
of facts and the inferences made on the evidence palpably a mistake.
The trial court's observation that 'the entire records of the case is bereft of even a
shred of proof' that 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 answer.
'A I paid through my attorney-in-fact. I am the one who gave him the money .
'ATTY. MARAPAO:

'Q You gave him the money ?

'A That's right.
'Q How much money did you give him?
'A US$150,000.00.

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 'Q How was it given then?
'A Through Bank drafts. US$65,000.00 and US$85,000.00 bank drafts. The total
amount which is $150,000.00 (TSN, 28 February 1984, p. 10; emphasis
supplied.)

xxx xxx xxx

'ATTY. CRUZ:
'Q The two bank drafts which you sent I assume you bought that from some
banks in New York?
'A No, sir.
'Q But there is no question those two bank drafts were for the purpose of paying
down payment and installment of the two parcels of land?
'A Down payment, installment and to put up the building.
'Q I thought you said that the buildings were constructed . . . subject to our
continuing objection from rentals of first building.
'ATTY. MARAPAO:

Your Honor, that is misleading.

'COURT;
Witness (may) answer.
'A Yes, the rst building was immediately put up after the purchase of the two
parcels of land — that was in 1966 and the funds were used for the
construction of the building from the US$150,000.00 (TSN, 7 March 1984,
page 14, emphasis supplied.)

xxx xxx xxx

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

'A That is right.

'Q And the two bank drafts which were put in the registered mail, the registered
mail was addressed to whom?
'A Choithram Ramnani.' (TSN, 7 March 1984, pp. 14-15).

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

brother Choithram, which was sent to him by his father-in-law, Rochiram L. Mulchaudoni
from Switzerland, a man of immense wealth, which even 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?
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 'A From Switzerland.
'Q He was in Switzerland.
'A Probably, they sent out these two drafts from Switzerland.' (TSN, 7 March 1984,
pp. 16-17; emphasis supplied.)
This positive and a rmative 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 testi es a rmatively that
something did happen should be believed for it is unlikely that a witness will
remember what never happened (Underhill's Cr. Guidance, 5th Ed., Vol. 1, pp. 10-
11).
That is not all. Shortly thereafter, plaintiff-appellant Ishwar Ramnani executed a
General Power of Attorney (Exhibit 'A') dated January 24, 1966 appointing his
brothers, defendants-appellees Navalrai and Choithram as attorney-in-fact
empowering the latter to conduct and manage plaintiffs-appellants' business
affairs in the Philippines and specifically —

'No. 14. To acquire, purchase for us, real estates and improvements
for the purpose of real estate business anywhere in the Philippines and to
develop, subdivide, improve and to resell to buying public (individual, rm
or corporation); to enter in any contract of sale in our behalf and to enter
mortgages between the vendees and the herein grantors that may be
needed to 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-a rming
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
U5$150,000.00 to his brother, Choithram, there would be no purpose for him to
execute a power of attorney appointing his brothers as his attorney-in-fact in
buying real estate in the Philippines. Cdpr

As against Choithram's denial that he did not receive the US$150,000.00 remitted
by Ishwar and that the Power of Attorney, as well as the Agreements entered into
with Ortigas & Co., were only temporary arrangements, Ishwar's testimony that he
did send the bank drafts to Choithram and was received by the latter, is the more
credible version since it is natural, reasonable and probable. It is in accord with
the common experience, knowledge and observation of ordinary men (Gardner vs.
Wentors, 18 Iowa 533). And in determining where the superior weight of the
evidence on the issues involved lies, the court may consider the probability or
improbability of the testimony of the witness (Sec. 1, Rule 133, Rules of Court).

Contrary, therefore, to the trial court's sweeping observation that 'the entire
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 records of the case is bereft of even a shred of proof' that Choithram received the
alleged bank drafts amounting to US$150,000.00, we have not only testimonial
evidence but also documentary and circumstantial evidence proving said
remittance of the money and the duciary relationship between the former and
Ishwar." 1 2

The Court agrees. The environmental circumstances of this case buttress the
claim of Ishwar that he did entrust the amount of US$150,000.00 to his brother,
Choithram, which the latter invested in the real property business subject of this
litigation in his capacity as attorney-in-fact of Ishwar.
True it is that there is no receipt whatever in the possession of Ishwar to
evidence the same, but it is not unusual among brothers and close family members to
entrust money and valuables to each other without any formalities or receipt due to the
special relationship of trust between them.
And another proof thereof is the fact that Ishwar, out of frustration when
Choithram failed to account for the realty business despite his demands, revoked the
general power of attorney he extended to Choithram and Navalrai. Thereafter,
Choithram wrote a letter to Ishwar pleading that the power of attorney be renewed or
another authority to the same effect be extended, which reads as follows:
"June 25, 1971

MR. ISWAR JETHMAL

NEW YORK
(1) Send power of Atty. immediately, because the case has been postponed for
two weeks. The same way as it has been send before in favour of both names.
Send it immediately otherwise everything will be lost unnecessarily, and then it
will take us in litigation. Now that we have gone ahead with a case and would like
to end it immediately otherwise squatters will take the entire land. Therefore, send
it immediately.
(2) Ortigas also has sued us because we are holding the installments, because
they have refused to give a rebate of P5.00 per meter which they have to give us
as per contract. They have led the law suit that since we have not paid the
installment they should get back the land. The hearing of this case is in the
month of July. Therefore, please send the power immediately. In one case DADA
(Elder Brother) will represent and in another one, I shall.
(3) In case if you do not want to give power then make one letter in favor of Dada
and the other one in my favor showing that in any litigation we can represent you
and your wife, and whatever the court decide it will be acceptable by me. You can
ask any lawyer, he will be able to prepare these letters. After that you can have
these letters ratify before P.I. Consulate. It should be dated April 15, 1971.
LibLex

(4) Try to send the power because it will be more useful. Make it in any manner
whatever way you have 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
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 have anything in my mind.
I should not be writing you this, but because my conscience is clear do you know
that if I had predated papers what could you have done? Or do you know that I
have many paper signed by you and if I had done anything or do then what can
you do about it? It is not necessary to write further about this. It does not matter if
you have cancelled the power At that time if I had predated and done something
about it what could you have done? You do not know me. I am not after money. I
can earn money anytime. It has been ten months since I have not received a
single penny for expenses from Dada (elder brother). Why there are no expenses?
We can not draw a single penny from knitting (factory). Well I am not going to
write you further, nor there is any need for it. This much I am writing you because
of the way you have conducted yourself. But remember, whenever I have the
money I will not keep it myself. Right now I have not got anything at all.
I am not going to write any further.

Keep your business clean with Naru. Otherwise he will discontinue because he
likes to keep his business very clean." 1 3

The said letter was in Sindhi language. It was translated to English by the First
Secretary of the Embassy of Pakistan, which translation was veri ed correct by the
Chairman, Department of Sindhi, University of Karachi. 1 4
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 con dence 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, con rming 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 a rmed the fact that he bought the same as mere agent
and in behalf of Ishwar. Neither did he mention the alleged temporary arrangement
whereby Ishwar, being an American citizen, shall appear to be the buyer of the said
property, but that after Choithram acquires Philippine citizenship, its ownership shall be
transferred to Choithram. LLjur

This brings us to this temporary arrangement theory of Choithram.

The appellate court disposed of this matter in this wise —
"Choithram's claim that he purchased the two parcels of land for himself in 1966
but placed it in the name of his younger brother, Ishwar, who is an American
citizen, as a 'temporary arrangement,' because as a British subject he is
disquali ed under the 1935 Constitution to acquire real property in the
Philippines, which is not so with respect to American citizens in view of the
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 Ordinance Appended to the Constitution granting them parity rights, there is
nothing in the records showing that Ishwar ever agreed to such a temporary
arrangement.
During the entire period from 1965, when the US$150,000.00 was transmitted to
Choithram, and until Ishwar led a complaint against him in 1982, or over 16
years, Choithram never mentioned of a temporary arrangement nor can he present
any memorandum or writing evidencing such temporary arrangement, prompting
plaintiff-appellant to observe:
'The properties in question which are located in a prime industrial
site in Ugong, Pasig, Metro Manila have a present fair market value of no
less than P22,364,000.00 (Exhibits T to T-14, inclusive), and yet for such
valuable pieces of property, Choithram who now belatedly claims that he
purchased the same for himself did not document in writing or in a
memorandum the alleged temporary arrangement with Ishwar' (pp. 4-41,
Appellant's Brief).
Such verbal allegation of a temporary arrangement is simply improbable and
inconsistent. It has repeatedly been held that important contracts made without
evidence are highly improbable.
The improbability of such temporary arrangement is brought to fore when we
consider that Choithram has a son (Haresh Jethmal Ramnani) who is an
American citizen under whose name the properties in question could be
registered, both during the time the contracts to sell were executed and at the time
absolute title over the same was to be delivered. At the time the Agreements were
entered into with defendant Ortigas & Co. in 1966, Haresh, was already 18 years
old and consequently, Choithram could have executed the deeds in trust for his
minor son. But, he did not do this. Three (3) years, thereafter, or in 1968 after
Haresh had attained the age of 21, Choithram should have terminated the
temporary arrangement with Ishwar, which according to him would be effective
only pending the acquisition of citizenship papers. Again, he did not do anything.

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

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

Another factor that can be counted against the temporary arrangement excuse is
that upon the revocation on February 4, 1971 of the Power of Attorney dated
January 24, 1966 in favor of Navalrai and Choithram by Ishwar, Choithram wrote
(tsn, p. 21, S. July 19, 1985) a letter dated June 25, 1971 (Exhibits R, R-1, R-2 and
R-3) imploring Ishwar to execute a new power of attorney in their favor. That if he
did not want to give power, then Ishwar could make a letter in favor of Dada and
another in his favor so that in any litigation involving the properties in question,
both of them could represent Ishwar and his wife. Choithram tried to convince
Ishwar to issue the power of attorney in whatever manner he may want. In said
letter no mention was made at all of any temporary arrangement.
On the contrary, said letter recognize(s) the existence of principal and attorney-in-
fact relationship between Ishwar and himself Choithram wrote: '. . . do you know
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 that if I had predated papers what could you have done? Or do you know that I
have many papers signed by you and if I had done anything or do then what can
you do about it?' Choithram was saying that he could have repudiated the trust
and ran away with the properties of Ishwar by predating documents and Ishwar
would be entirely helpless. He was bitter as a result of Ishwar's revocation of the
power of attorney but no mention was made of any temporary arrangement or a
claim of ownership over the properties in question nor was he able to present any
memorandum or document to prove the existence of such temporary
arrangement.

Choithram is also estopped in pais or by deed from claiming an interest over the
properties in question adverse to that of Ishwar. Section 3(a) of Rule 131 of the
Rules of Court states that whenever 'a party has, by his own declaration, act, or
omission intentionally and deliberately led another to believe a particular thing
true and act upon such belief, he cannot in any litigation arising out of such
declaration, act or omission be permitted to falsify it.' While estoppel by deed is a
bar which precludes a party to a deed and his privies from asserting as against
the other and his privies any right of title in derogation of the deed, or from
denying the truth of any material fact asserted in it (31 C.J.S. 195;19 Am. Jur.
603).
Thus, defendants-appellees are not permitted to repudiate their admissions and
representations or to assert any right or title in derogation of the deeds or from
denying the truth of any material fact asserted in the (1) power of attorney dated
January 24, 1966 (Exhibit A); (2) the Agreements of February 1, 1966 and May 16,
1966 (Exhibits B and C); and (3) the Contract of Lease dated January 5, 1972
(Exhibit P).
'. . . The doctrine of estoppel is based upon the grounds of public
policy, fair dealing, good faith and justice, and its purpose is to forbid one
to speak against his own act, representations, or commitments to the injury
of one to whom they were directed and who reasonably relied thereon. The
doctrine of estoppel springs from equitable principles and the equities in
the case. It is designed to aid the law in the administration of justice where
without its aid injustice might result. It has been applied by this court
wherever and whenever special circumstances of a case so demands'
(Philippine National Bank vs. Court of Appeals, 94 SCRA 357, 368 [1979]).

It was only after the services of counsel has been obtained that Choithram
alleged for the rst time in his Answer that the General Power of Attorney (Annex
A) with the Contracts to Sell (Annexes B and C) were made only for the sole
purpose of assuring defendants' acquisition and ownership of the lots described
thereon in due time under the law; that said instruments do not re ect 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 disquali cation 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.
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 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 speci c citizenship as a requisite for the exercise or
enjoyment of a right, franchise or privilege, . . . any alien or foreigner
pro ting thereby, shall be punished . . . by imprisonment . . . and of a ne
of not less than the value of the right, franchise or privileges, which is
enjoyed or acquired in violation of the provisions hereof . . .'
Having come to court with unclean hands, Choithram must not be permitted to
foist his 'temporary arrangement' scheme as a defense before this court. Being in
delicto, he does not have any right whatsoever from being shielded from his own
wrong doing, which is not so with respect to Ishwar, who was not a party to such
an arrangement.
The falsity of Choithram's defense is further aggravated by the material
inconsistencies and contradictions in his testimony. While on January 23, 1985
he testi ed 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 testi ed 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 testi ed that he had no knowledge of the
revocation of the Power of Attorney (tsn, pp. 20-21), only to backtrack when
confronted with the letter of June 25, 1971 (Exhibits R to R-3), which he admitted
to be in 'his own writing,' indicating knowledge of the revocation of the Power of
Attorney. Cdpr

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

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

We concur.
The foregoing ndings of facts of the Court of Appeals which are supported by
the evidence is conclusive on this Court. The Court nds that Ishwar entrusted
US$150,000.00 to Choithram in 1965 for investment in the realty business. Soon
thereafter, a general power of attorney was executed by Ishwar in favor of both Navalrai
and Choithram. If it is true that the purpose only is to enable Choithram to purchase
realty temporarily in the name of Ishwar, why the inclusion of their elder brother Navalrai
as an attorney-in-fact?
Then, acting as attorney-in-fact of Ishwar, Choithram purchased two parcels of
land located in Barrio Ugong, Pasig, Rizal, from Ortigas in 1966. With the balance of the
money of Ishwar, Choithram erected a building on said lot. Subsequently, with a loan
obtained from a bank and the income of the said property, Choithram constructed three
other buildings thereon. He managed the business and collected the rentals. Due to
their relationship of con dence 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 noti ed, Choithram wrote to Ishwar
on June 25, 1971 requesting that he execute a new power of attorney in their favor. 1 6
When Ishwar did not respond thereto, Choithram nevertheless proceeded as such
attorney-in-fact to assign all the rights and interest of Ishwar to his daughter-in-law
Nirmla in 1973 without the knowledge and consent of Ishwar. Ortigas in turn executed
the corresponding deeds of sale in favor of Nirmla after full payment of the purchase
price of the lots.
In the prefatory statement of their petition, Choithram pictured Ishwar to be so
motivated by greed and ungratefulness, who squandered the family business in New
York, who had to turn to his wife for support, accustomed to living in ostentation and
who resorted to blackmail in ling several criminal and civil suits against them. These
statements nd no support and should be stricken from the records. Indeed, they are
irrelevant to the proceeding.
Moreover, assuming Ishwar is of such a low character as Choithram proposes to
make this Court to believe, why is it that of all persons, under his temporary
arrangement theory, Choithram opted to entrust the purchase of valuable real estate
and built four buildings thereon all in the name of Ishwar? Is it not an unconscious
emergence of the truth that this otherwise wayward brother of theirs was on the
contrary able to raise enough capital through the generosity of his father-in-law for the
purchase of the very properties in question? As the appellate court aptly observed if
truly this temporary arrangement story is the only motivation, why Ishwar of all people?
Why not the own son of Choithram, Haresh, who is also an American citizen and who
was already 18 years old at the time of purchase in 1966? The Court agrees with the
observation that this theory is an afterthought which surfaced only when Choithram,
Nirmla and Moti filed their answer. LLpr

When Ishwar asked for an accounting in 1970 and revoked the general power of
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 attorney in 1971, Choithram had a total change of heart. He decided to claim the
property as his. He caused the transfer of the rights and interest of Ishwar to Nirmla.
On his representation, Ortigas executed the deeds of sale of the properties in favor of
Nirmla. Choithram obviously surmised Ishwar cannot stake a valid claim over the
property by so doing.
Clearly, this transfer to Nirmla is ctitious and, as admitted by Choithram, was
intended only to place the property in her name until Choithram acquires Philippine
citizenship. 1 7 What appears certain is that it appears to be a scheme of Choithram to
place the property beyond the reach of Ishwar should he successfully claim the same.
Thus, it must be struck down.
Worse still, on September 27, 1990 spouses Ishwar led an urgent motion for
the issuance of a writ of preliminary attachment and to require Choithram, et al. to
submit certain documents, inviting the attention of this Court to the following:
a) Donation by Choithram of his 2,500 shares of stock in General Garments
Corporation in favor of his children on December 29, 1989; 1 8
b) Sale on August 2, 1990 by Choithram of his 100 shares in Bi ex (Phils.), Inc., in
favor of his children; 1 9 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. 2 0
An opposition thereto was led by Choithram, et al. but no documents were
produced. A manifestation and reply to the opposition was filed by spouses Ishwar.
All these acts of Choithram, et al. appear to be fraudulent attempts to remove
these properties to the detriment of spouses Ishwar should the latter prevail in this
litigation.
On December 10, 1990 the court issued a resolution that substantially reads as
follows:
"Considering the allegations of petitioners Ishwar Jethmal Ramnani and Sonya
Ramnani that respondents Choithram Jethmal Ramnani, Nirmla Ramnani and
Moti G. Ramnani have fraudulently executed a simulated mortgage of the
properties subject of this litigation dated June 20, 1989, in favor of Overseas
Holding Co., Ltd. which appears to be a corporation organized in Cayman Islands,
for the amount of $3,000,000.00, which is much more than the value of the
properties in litigation; that said alleged mortgagee appears to be a "shell"
corporation with a capital of only $100.00; and that this alleged transaction
appears to be intended to defraud petitioners Ishwar and Sonya Jethmal
Ramnani of any favorable judgment that this Court may render in this case;
Wherefore the Court Resolved to issue a writ of preliminary injunction enjoining
and prohibiting said respondents Choithram Jethmal Ramnani, Nirmla V.
Ramnani, Moti G. Ramnani and the Overseas Holding Co., Ltd. from encumbering,
selling or otherwise disposing of the properties and improvements subject of this
litigation until further orders of the Court. Petitioners Ishwar and Sonya Jethmal
Ramnani are hereby required to post a bond of P100,000.00 to answer for any
damages said respondents may suffer by way of this injunction if the Court
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 finally decides the said petitioners are not entitled thereto.

The Overseas Holding Co., Ltd. with address at P.O. Box 1790 Grand Cayman,
Cayman Islands, is hereby IMPLEADED as a respondent in these cases, and is
hereby required to SUBMIT its comment on the Urgent Motion for the Issuance of
a Writ of Preliminary Attachment and Motion for Production of Documents, the
Manifestation and the Reply to the Opposition led by said petitioners, within
Sixty (60) days after service by publication on it in accordance with the provisions
of Section 17, Rule 14 of the Rules of Court, at the expense of petitioners Ishwar
and Sonya Jethmal Ramnani.
Let copies of this resolution be served on the Register of Deeds of Pasig, Rizal,
and the Provincial Assessor of Pasig, Rizal, both in Metro Manila, for its
annotation on the Transfer Certi cates of Titles Nos. 403150 and 403152
registered in the name of respondent Nirmla V. Ramnani, and on the tax
declarations of the said properties and its improvements subject of this litigation."
21

The required injunction bond in the amount of P100,000.00 was led by the
spouses Ishwar which was approved by the Court. The above resolution of the Court
was published in the Manila Bulletin issue of December 17, 1990 at the expense of said
spouses. 2 2 On December 19, 1990 the said resolution and petition for review with
annexes in G.R. Nos. 85494 and 85496 were transmitted to respondent Overseas,
Grand Cayman Islands at its address c/o Cayman Overseas Trust Co. Ltd., through the
United-Parcel Services Bill of Lading, 2 3 and it was actually delivered to said company
on January 23, 1991. 2 4
On January 22, 1991, Choithram, et al., led a motion to dissolve the writ of
preliminary injunction alleging that there is no basis therefor as in the amended
complaint what is sought is actual damages and not a reconveyance of the property,
that there is no reason for its issuance, and that acts already executed cannot be
enjoined. They also offered to file a counterbond to dissolve the writ. LexLib

A comment/opposition thereto was led by spouses Ishwar that there is basis

for the injunction as the alleged mortgage of the property is simulated and the other
donations of the shares of Choithram to his children are fraudulent schemes to negate
any judgment the Court may render for petitioners.
No comment or answer was led by Overseas despite due notice, thus it is and
must be considered to be in default and to have lost the right to contest the
representations of spouses Ishwar to declare the aforesaid alleged mortgage null and
void.
This purported mortgage of the subject properties in litigation appears to be
fraudulent and simulated. The stated amount of $3 Million for which it was mortgaged
is much more than the value of the mortgaged properties and its improvements. The
alleged mortgagee-company (Overseas) was organized only on June 26, 1989 but the
mortgage was executed much earlier, on June 20, 1989, that is six (6) days before
Overseas was organized. Overseas is a "shelf" company worth only $100.00. 2 5 In the
manifestation of spouses Ishwar dated April 1, 1991, the Court was informed that this
matter was brought to the attention of the Central Bank (CB) for investigation, and that
in a letter of March 20, 1991, the CB informed counsel for spouses Ishwar that said
alleged foreign loan of Choithram, et al. from Overseas has not been previously
approved/registered with the CB. 2 6
Obviously, this is another ploy of Choithram, et al. to place these properties
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 beyond the reach of spouses Ishwar should they obtain a favorable judgment in this
case. The Court nds and so declares that this alleged mortgage should be as it is
hereby declared null and void.
All these contemporaneous and subsequent acts of Choithram, et al., betray the
weakness of their cause so they had to take all steps, even as the case was already
pending in Court, to render 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 ght. It had all the time been dealing with Choithram as attorney-in-fact of
Ishwar. However, evidence had been adduced that notice in writing had been served not
only on Choithram, but also on Ortigas, of the revocation of Choithram's power of
attorney by Ishwar's lawyer, on May 24, 1971. 2 7 A publication of said notice was made
in the April 2, 1971 issue of The Manila Times for the information of the general public.
2 8 Such notice of revocation in a newspaper of general circulation is su cient warning
to third persons including Ortigas. 2 9 A notice of revocation was also registered with
the Securities and Exchange Commission on March 29, 1971. 3 0
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. 3 1 Despite said
notices, Ortigas nevertheless acceded to the representation of Choithram, as alleged
attorney-in-fact of Ishwar, to assign the rights of petitioner Ishwar to Nirmla. While the
primary blame should be laid at the doorstep of Choithram, Ortigas is not entirely
without fault. It should have required Choithram to secure another power of attorney
from Ishwar. For recklessly believing the pretension of Choithram that his power of
attorney was still good, it must, therefore, share in the latter's liability to Ishwar.
In the original complaint, the spouses Ishwar asked for a reconveyance of the
properties and or payment of its present value and damages. 3 2 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." 3 3 The amended complaint contain the following positive
allegations: llcd

"7. Defendant Choithram Ramnani, in evident bad faith and despite due notice of
the revocation of the General Power of Attorney, Annex "D" hereof, caused the
transfer of the rights over the said parcels of land to his daughter-in-law,
defendant Nirmla Ramnani in connivance with defendant Ortigas & Co., the latter
having agreed to the said transfer despite receiving a letter from 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 bene t 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,
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 suffered actual damages by way of lost rental on the property which defendants
(Choithram Ramnani, Nirmla Ramnani, and Moti Ramnani) have collected for
themselves;" 3 4

In said amended complaint, spouses Ishwar, among others, pray for payment of
actual damages in an amount no less than the value of the properties in litigation
instead of a reconveyance as sought in the original complaint. Apparently they opted
not to insist on a reconveyance as they are American citizens as alleged in the amended
complaint.
The allegations of the amended complaint above reproduced clearly spelled out
that the transfer of the property to Nirmla was fraudulent and that it should be
considered to be held in trust by Nirmla for spouses Ishwar. As above-discussed, this
allegation is well-taken and the transfer of the property to Nirmla should be considered
to have created an implied trust by Nirmla as trustee of the property for the bene t of
spouses Ishwar." 3 5
The motion to dissolve the writ of preliminary injunction led by Choithram, et al.
should be denied. Its issuance by this Court is proper and warranted under the
circumstances of the case. Under Section 3(c), Rule 58 of the Rules of Court, a writ of
preliminary injunction may be granted at any time after commencement of the action
and before judgment when it is established:
"(c) that the defendant is doing, threatens, or is about to do, or is procuring or
suffering to be done, some act probably in violation of plaintiff'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, 3 6
and not to obstruct the administration of justice or prejudice the adverse party. 3 7 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. 3 8
Consequently, if only to protect the interest of spouses Ishwar, the Court hereby
nds and holds that the motion for the issuance of a writ of preliminary attachment
led by spouses Ishwar should be granted covering the properties subject of this
litigation.
Section 1, Rule 57 of the Rules of Court provides that at the commencement of
an action or at any time thereafter, the 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; prLL

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

Verily, the acts of Choithram, et al. of disposing the properties subject of the
litigation disclose a scheme to defraud spouses Ishwar so they may not be able to
recover at all, given a judgment in their favor, thus requiring the issuance of the writ of
attachment in this instance.
Nevertheless, under the peculiar circumstances of this case and despite the fact
that Choithram, et al., have committed acts which demonstrate their bad faith and
scheme to defraud spouses Ishwar and Sonya of their rightful share in the properties in
litigation, the Court cannot ignore the fact that Choithram must have been motivated by
a strong conviction that as the industrial partner in the acquisition of said assets he has
as much claim to said properties as Ishwar, the capitalist partner in the joint venture.
The scenario is clear. Spouses Ishwar supplied the capital of $150,000.00 for the
business. They entrusted the money to Choithram to invest in a pro table 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. 3 9 It
should be worth much more today.
We have a situation where two brothers engaged in a business venture. One
furnished the capital, the other contributed his industry and talent. Justice and equity
dictate that the two share equally the fruit of their joint investment and efforts. Perhaps
this Solomonic solution may pave the way towards their reconciliation. Both would
stand to gain. No one would end up the loser. After all, blood is thicker than water.
However, the Court cannot just close its eyes to the devious machinations and
schemes that Choithram employed in attempting to dispose of, if not dissipate, the
properties to deprive spouses Ishwar of any possible means to recover any award the
Court may grant in their favor. Since Choithram, et al. acted with evident bad faith and
malice, they should pay moral and exemplary damages as well as attorney's fees to
spouses Ishwar.
WHEREFORE, the petition in G.R. No. 85494 is DENIED, while the petition in G.R.
No. 85496 is hereby given due course and GRANTED. The judgment of the Court of
Appeals dated October 18, 1988 is hereby modified as follows:
1. Dividing equally between respondents spouses Ishwar, on the one hand, and
petitioner Choithram Ramnani, on the other, (in G.R. No. 85494) the two parcels of land
subject of this litigation, including all the improvements thereon, presently covered by
Transfer Certi cates 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
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 and improvements pertaining to respondents spouses Ishwar and Sonya at their fair
market value at the time of the satisfaction of this judgment but in no case less than
their value as appraised by the Asian Appraisal, Inc. in its Appraisal Report dated
August 1985 (Exhibits T to T-14, inclusive).
3. Petitioners Choithram, Nirmla and Moti Ramnani and respondent Ortigas & Co.,
Ltd. Partnership shall also be jointly and severally liable to pay to said respondents
spouses Ishwar and Sonya Ramnani one-half (1/2) of the total rental income of said
properties and improvements from 1967 up to the date of satisfaction of the judgment
to be computed as follows:
"a. On Building C occupied by Eppie's Creation and Jethmal Industries from 1967
to 1973, inclusive, based on the 1967 to 1973 monthly rentals paid by Eppie's
Creation;

"b. Also on Building C above, occupied by Jethmal Industries and Lavine from
1974 to 1978, the rental incomes based on then rates prevailing as shown under
Exhibit 'P'; and from 1979 to 1981, based on then prevailing rates as indicated
under Exhibit 'Q'; LLpr

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

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

Footnotes
1. Exhibit A.

2. Exhibits B and C.
3. Exhibit 3.
4. Exhibit H.

5. Exhibit F.
6. Exhibits and J.
7. Pages 80 to 82, Rollo of G.R. No. 85496; pages 55 to 57, G.R. No 85494; Associate Justice
Rodolfo A. Nocon was the ponente, concurred in separate opinions by Justices Ricardo
P. Tensuan and Manuel C. Herrera. Justices Felipe B. Kalalo and Venancio D. Aldecoa,
Jr., both dissented in separate the opinions and voted to a rm the decision of the trial
court.
8. The five justices wrote separate opinions.

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

10. Pages 23 to 24, Rollo, G.R. No. 85496.
11. Pages 117 to 119, Rollo, G.R. No. 85496.

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

13. Exhibit R-1; italics supplied.
14. See Exhibit R to R-3.
15. Pages 45 to 50, Rollo, G.R. No. 85494; emphasis supplied.

16. Exhibits R to R-3.

17. TSN, July 18, 1985, page 12; and July 19, 1985, pages 8 to 9.
18. Annex A to Urgent Motion, etc; pages 438 to 450, Rollo, G.R. No. 85494.

19. Annex B, supra; page 451, supra.

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

23. Annexes C, C-1 and C-2 to Manifestation and Complaint of petitioners Ishwar & Sonya led
on January 26, 1991.
24. Annex D to Manifestation, etc.
25. Annex A to Reply to Opposition led by petitioners on December 7, 1990; Pages 383 to 384,
Rollo; See also Manifestation of petitioners, December 11, 1990, pages 438 to 443 rollo,
G.R. 85494.
26. See pages to of Rollo.

27. Exhibit B.
28. Exhibit F.
29. Article 1922, Civil Code.

30. Exhibit H.
31. Exhibit R-1; supra.
32. Annex C to Petition in G.R. No. 85494; pages 88 to 92, rollo.
33. Annex D, supra; Pages 93 to 97, Rollo.

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

35. Annex C to Petition in G.R. No. 85494; pages 88 to 92, Rollo.
36. Calo vs. Roldan, 76 Phil. 445 (1946); De los Reyes v. Elepaño, G.R. L-5282, May 29, 1959; De
la Cruz vs. Tan Torres, G.R. L-14925, April 30, 1960.

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

38. Calo vs. Rolda. supra.
39. Exhibits T to T-14.

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