Ramnani vs. Court of Appeals, 196 SCRA 731, G.R. No. 85494, G.R. No.

85496 May 7, 1991

Facts:

Ishwar, Choithram and Navalrai, all surnamed Jethmal Ramnani, are brothers. 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.

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) .

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.

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. Upon complete
payment of the lots, Ortigas executed the corresponding deeds of sale in favor of Nirmla. Transfer
Certificates of Titlle Nos. 403150 and 403152 of the Register of Deeds of Rizal were issued in her favor.

Thus, on October 6, 1982, Ishwar and Sonya (spouses Ishwar for short) filed a complaint in the Court of
First Instance of Rizal against Choitram and/or spouses Nirmla and Moti (Choithram, et al. for brevity)
and Ortigas for reconveyance of said properties or payment of its value and damages.

Issue: Whether the partner brothers of Ishwar have a share in the profits of the properties in question.

Held: YES

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 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.