G.R. No. 85494, 7 May 1991

FACTS:

Ishwar, Choithram and Navalrai, all surnamed JethmalRamnani, 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 appointing Navalrai and Choithram as attorneys-in-fact, empowering them to manage and conduct their business concern in the Philippines.

Choithram, in his capacity as aforesaid attorney-in-fact of Ishwar, entered into two agreements for the purchase of two parcels of land from Ortigas & Company, Ltd. Partnership. Per agreement, Choithram paid the down payment and installments on the lot with his personal checks. A building was constructed thereon by Choithram and this was occupied and rented. 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.

Ishwar asked Choithram to account for the income and expenses relative to these properties. Choithram failed and refused to render such accounting. As a consequence, 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, NirmlaRamnani. Upon complete payment of the lots, Ortigas executed the corresponding deeds of sale in favor of Nirmla. Thus, Ishwar and Sonya filed a complaint against Choithram and/or spouses Nirmla and Moti and Ortigas for reconveyance of said properties or payment of its value and damages.

Hence, this petition.

ISSUE:

Whether Ishwar can recover all the investments entered into by Choithram in his capacity as attorney-in-fact of Ishwar?

RULING:

NO, Ishwar cannot recover all.

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.

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.

*Case digest by Doreena Pauline V. Aranal, JD – 4, Andres Bonifacio College, SY 2019 – 2020