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[G.R. No. 85494.August 17, 1999]
CHOITHRAM J. RAMNANI, et. al. vs. CA, et. al.
EN BANC
Gentlemen :
Quoted hereunder, for your information, is a resolution of this Court dated AUG 17, 1999.
G.R. No. 85494(Choithram J. Ramnani and/or Nirmla Ramnani and Moti C. Ramnani, petitioners, vs. Court of Appeals, Sps. Shwar Ramnani, Sonya Ramnani and Overseas Holding Company, Ltd., respondents.)
G.R. No. 85496(Sps. Ishwar J. Ramnani and Sonya J. Ramnani, petitioners, vs. Hon. Court of Appeals, Ortigas & Company, Limited Partnership, and Overseas Holding Company Limited, respondents.)
On May 7, 1991, the First Division 1 Composed of Associate Justices Andres Narvasa, Emilio A. Gancayco (ponente), Isagani A. Cruz, Carolina C. Grino-Aquino, and Leo D. Medialdea.of this Court promulgated its Decision 2 Annex "A," Manifestation and Urgent Motion; Rollo. pp. 10 15-1056.in SC-G.R. Nos. 85494 and 85496 disposing as follows:
"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 the 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. 40350 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, Nirla V. Ramnani, Moti C. Ramnani and respondent Ortigas and Company, Limited Partnership (in G.R. 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 Aug. 1985. (Exhibits T to T-14, inclusive).
3.Petitioners Choithram, Nirmla and Moti Ramnani and respondent Ortigas and 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 1971 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
Ishwan 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 title 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 petitioner 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 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."
From the aforesaid Decision, alt the parties filed motions for reconsideration. Acting thereon on February 26, 1992, the Third Division 3 Composed of Associate Justices Hugo E. Gutierrez, Jr., Florentino P. Feliciano, Abdulwahid A. Bidin, Hilario G. Davide, Jr., and Flerida Ruth Romero.of this Court came out with a Resolution, 4 Annex "B," Manifestation and Urgent Motion; Rollo, pp. 1057-1069.ruling thus:
"CONSIDERING THE FOREGOING, THE COURT RESOLVED to DENY the motions for reconsideration filed by the petitioners in G.R. No. 85494 and the respondents in G.R. No. 85496.This denial is FINAL.The partial motion for reconsideration filed by the petitioners in G.R. No. 85496 who are also respondents in G.R. No. 85494 is GRANTED.The portion of our May 7, 1991 decision dividing the two parcels of land, improvements, and rentals equally between petitioner Choithram V. Ramnani and respondents Mr. & Mrs. Ishwar J. Ramnani is deleted and these properties are declared owned by the latter respondents."
Petitioners Choithram Ramnani, et. al. ("Choithram", for short) and Ortigas & Co., Ltd., Partnership ("Ortigas", for brevity) presented a Motion for Clarification of Judgment and/or Second Motion for Reconsideration of the Resolution, dated February 26, 1992, which the Court denied, holding:
"After carefully considering the motion for clarification of judgment and/or reconsideration in relation to the Omnibus Motion, the Court finds that it is merely a clever expedient resorted to by petitioners to go around the finality of our denial of the first motion for reconsideration.
Acting therefore, on the second motion for reconsideration and considering that the first motion for reconsideration was denied with finality, the court resolved to DENY the second motion for reconsideration and to order entry of judgment in this case." 5 Annex "C," Manifestation and Urgent Motion; Rollo, p. 1070-1071.
On March 19, 1992, the Decision handed down on May 7, 1991 and Resolution of February 26, 1992, in SC-G.R. Nos. 85494 and 85496, became final and executory.Entry of judgment was thus made on March 20, 1992.
On April 27, 1992, Overseas Holding Corporation filed a petition against the Spouses, Ishwar Ramnani and Sonya Ramnani, (hereinafter referred to as Spouses Ishwar), docketed as G.R. No. 105071 before the Court En Banc, to set aside as unconstitutional the May 7, 1991 Decision of the First Division and the February 26, 1992 Resolution of the Third Division in G.R. Nos. 85494 and 85496.However, the Supreme Court En Banc referred the same to the Third Division which issued a Resolution dated May 25, 1992 6 Annex "D," Manifestation and Urgent Motion; Rollo, p. 1072-1074.in G.R. No. 105071 and G.R. Nos. 85494 and 85496, the decretal portion of which, reads:
"CONSIDERING THE FOREGOING, the COURT RESOLVED, to:
1.EXPUNGE the petition to set aside as unconstitutional the May 7, 1991 decision of this Court's First Division and the February 26, 1992 Resolution of this Court's Third Division.
xxx
3.ORDER the Regional Trial Court at Pasay City to expeditiously execute as directed this court's decision and resolution in these cases and report to this court on the action taken within ten (10) days from notice hereof;
4.WARN the parties and their respective counsels, present and future, that no further pleadings questioning the already final decision and resolution or raising anew the issues already passed upon shall be entertained on pain of disciplinary action."
The aforequoted Resolution of the Court became final and executory on October 5, 1992 and entry of judgment thereof was made on the same day.
Pursuant to another Resolution of this Court dated August 26, 1992, 7 Annex "E," Manifestation and Urgent Motion; Rollo, pp. 1076-1081.the case was re-raffled to the Regional Trial Court, Branch 119, Pasay City, presided over by Hon. Aurora Navarette-Recina.Thereafter, the same trial court, acting on plaintiffs' (Spouses Ishwar) Motion for Partial Execution of the Judgment in G.R. Nos.85494 and 85496, issued its Order 8 See: Sps. Ishwar's Consolidated Reply, p. 10; Rollo, p. 1317.of September 17, 1992,disposing as follows:
"Wherefore, in consonance with the judgment of the Supreme Court dated May 7, 1991, as amended by its Resolution dated February 26, 1992, and as prayed for by plaintiffs, let the corresponding partial writ of execution issue with respect to the following:
a. the rental income
of the properties and improvements from 1967 up to May 31, 1992 in the amount
of
P
24,879,365.00;
b. the 1985
appraised value of the properties in the amount of
P
22,364,000.00;
P
500,00.00 moral damages;
P
200,000.00
exemplary damages; and 10% of said amount as attorney's fees, plus 6% legal
interest on the totality of the amounts from the time judgment became final
until fully paid.
xxx
SO ORDERED."
Accordingly, on September 23, 1992, the Deputy Sheriff a quo implemented the writ of execution/attachment issued on September 17 and 18, 1992, by attaching and garnishing the properties and bank accounts of Choithram and Ortigas.
On July 19, 1993, a Compromise Agreement was entered into by the defendants, Ortigas, Choithram and Harish Ramnani, 9 Son of Choithram Ramnani.the latter acting as the financier and guarantor of the obligations of the former, on the one hand, and the Spouses Ishwar, on the other. Denominated as Tripartite Agreement, 10 Annex "F," Manifestation and Urgent Motion; Rollo, pp. 1082-1086.the said contract stipulated:
"xxx
2.xxx
The judgment debt provisionally set at P65 Million shall be paid jointly and severally by defendants Ortigas and Choithram Jethmal Ramnani plaintiffs Sps. Ishwar Jethmal Ramnani and Sonya Jethmal Ramnani, as follows:
a. P40 Million upon the signing hereof by the parties;
b. P10 Million within thirty (30) days from July 5, 1993 or on or before August 4, 1993;
c. P15 Million within sixty (60) days from July 5, 1993 or on or before September 3, 1993."
and further provided:
"6. In the event of default by defendants Ortigas and Choithram Jethmal Ramnani to pay any of the amounts within the agreed period, proceedings in execution, including hearings on valuation, shall immediately resume and plaintiffs shall be entitled to enforce and execute the Supreme Court's judgment against the defendants in accordance with the terms thereof and the final and total monetary entitlements described in paragraph 1 above, less whatever amounts plaintiff may have partially recovered from the defendants. In case of execution of the balance due Ishwar as finally determined by the Court, plaintiffs shall proceed to first sell the subject properties mentioned in par. 6 hereof."
Simultaneous with the signing of the said Compromise Agreement, plaintiff Spouses Ishwar received from the defendants (Choithram and Ortigas) two checks for a total amount of Forty Million (P40,000,000.00) Pesos in partial satisfaction of the monetary obligation involved.The said checks, both dated July 12, 1993, were encashed by the plaintiffs on July 22, 1993. Conformably, "the contracting parties have agreed to suspend the proceedings of the case until such time when all the documents in relation to the compromise agreement shall have been submitted to the Court." 11 See: Trial Court's Order dated July 21, 1993; Annex "1-B," Comment/Opposition; Rollo, p. 1214.
On July 23, 1993, in compliance with the Tripartite Agreement, as stipulated in paragraph 2 (b), Choithram transmitted to Spouses Ishwar two (2) post-dated Equitable Banking Corporation checks, dated August 12, 1993, payable to the said spouses in the amount of Five Million (P5,000,000.00) Pesos each; and for the satisfaction of paragraph 2 (c) of the same, Choithram issued three (3) other post-dated Equitable Banking Corporation checks dated September 12, 1993, each for Five Million (P5,000,000.00) Pesos, also payable to the plaintiff spouses.
In a letter dated July 29, 1993, Spouses Ishwar returned the said five personal post-dated checks of Choithram for the reason that the same were not in accordance with the period/date stipulated in paragraphs 2 (b) and (c) of the Tripartite Agreement.Spouses Ishwar insisted that the first and second sets of checks should have been dated August 4, 1993 and September 3, 1993, respectively.
On August 3, 1993, Choithram wrote the Bureau of Internal Revenue, asking for clarification on their obligations with respect to any tax due that the government may collect against them as payors of P65 Million.In response thereto, BIR Commissioner Liwayway Vinzon.s-Chato, in a letter 12 Annex "8" Comment/Opposition; Rollo, page 1220.dated August 6, 1993, informed petitioners Choithram and Ortigas that the P65 Million compromise settlement is subject to 30% withholding tax collectible against Sps. Ishwar; and to protect the interest of the government, Commissioner Vinzons-Chato constituted Choithram and Ortigas as "withholding agents" of the same, originally assessed at P20,150,000.00.
On September 7, 1993 or
three days after the maturity date of the second set of checks by Choithram,
Sps. Ishwar filed with the court a quo an Urgent Motion for Immediate
Resumption of Hearing
13
Annex "11," Comment/Opposition; Rollo, pages 1223-1228.arguing that pursuant to paragraph 6 of the
Tripartite Agreement, defendants Choithram and Ortigas were already in default
in the payment of the outstanding balance amounting to P25 Million.
On January 24, 1994, the lower court issued an Order, 14 Annex "19," Comment/Opposition; Rollo, pages 1261-1264.the pertinent portions of which, stated:
"That defendant's desire to pay the balance of the amount stipulated in their Tripartite Agreement is apparent. Under the aforestated facts and circumstances, is it equitable that they be held in default? Article 1229 of the Civil Code gives the court the power to equitably reduce penalty when the principal obligation has been partly complied with by the debtor. In default cases, the court may likewise, reconsider its order of default when the interest of justice so dictates.
In order not to put to naught all the efforts of the parties in forging the Tripartite Agreement which took them a long period of time to arrive at, the Branch Clerk of Court is directed to immediately endorse to the counsel of plaintiffs the two (2) checks in her custody but the defendants are directed to pay the prevailing interest thereon from the time the amount of P25 Million was actually due the plaintiffs, up to the time the same is encashed, under the following terms:
1. That the Quasha Law [F]irm receives the balance of the amount of P25 Million in compliance with the Tripartite Agreement, adverted to, and subject to the tax claim of the BIR;
2. That it shall release to the plaintiffs the amount due them after the tax matter on said amount shall have been resolved, and in the meanwhile the said amount shall be deposited in an interest bearing account and/or money placement in treasury bills; and
3. That upon receipt of the afore-stated amount, plaintiffs shall execute . the Deed of Assignment of Judgment in favor of defendants Ortigas & Co., Ltd. Partnership and Choithram Jethwal Ramnani in the proportion agreed upon by the said defendants.
In view of the foregoing, plaintiffs' Motion for continuation of hearing is DENIED.
xxx
SO ORDERED."
Plaintiff spouses' motion for reconsideration was likewise denied. 15 Trial Court's Order dated April 5, 1994. See: Annex "22," Comment/Opposition; Rollo, page 1268.Hence, Sps. Ishwar presented the present Manifestation and Urgent Motion before this Court, contending that the court a quo committed grave abuse of discretion (1) In denying the motion for resumption of hearing; (2) In imposing as a condition that the Quasha Law Firm as attorneys for Spouses Ishwar should receive the amount of P25 Million and to act as escrow agent and (3) respondent judge's application of equity in favor of defendants is misplaced and goes against the doctrine "that he who invokes equity must come with clean hand."
Under the facts and circumstances of the case, did the respondent judge act with grave abuse of discretion in denying the two motions of Sps. Ishwar? On this sole issue, the Court resolves in the negative.
It appears from the records on hand that immediately after BIR Commissioner Liwayway Vinzons-Chato constituted defendants Choithram and Ortigas as "withholding agents" the contracting parties, through their respective lawyers, 16 Sps. Ishwar are represented by Atty. Cirilo Doronila of Quasha Law Firm; Choithram Ramnani, et. al. by Any. Mario Ongkiko of Ongkiko and Dizon Law Offices; and the Ortigas & Co., Ltd. Partnership by Attys. Rodriguez and Cabote.met a number of times to discuss how the withholding tax assessment could be settled to the satisfaction of all the parties concerned including the Bureau of Internal Revenue.
On August 17, 1993, Atty. Cirillo Doronila, Sps. Ishwar's counsel, requested Atty. Mario E. Ongkiko, Choithram's counsel, to suspend remittance of any amount as withholding tax to the Bureau of Internal Revenue since he (Atty. Doronila) intended to file a protest. In a letter bearing the same date, Atty. Ongkiko acceded to the request of Atty. Doronila and assured the latter that he (Atty. Ongkiko) was to hold in abeyance the payment of subject withholding tax pending the filing of the protest with the BIR. 17 See: "Annex 10", Comment/Opposition; Rollo, page 1222.
It is worthy to note that the inquiry of defendants' counsel for any tax liability as payor of P65 Million to BIR was dons prior to the maturity date of the first two checks worth P5 Million each, and when the date due of said checks lapsed, instead of reinforcing their right to declare defendants in default as stipulated in paragraph 6 of the Tripartite Agreement, Sps. Ishwar, through counsel, requested defendants to withhold the said amount until their protest with BIR would be resolved.
On September 7, 1993, or three days after the date of maturity of the second set of checks issued by Choithram, spouses Ishwar J. Ramnani and Sonya J. Ramnani filed with the lower court of origin an urgent motion for immediate Resumption of Hearing, theorizing that Choithram and Ortigas were already in default in the payment of their outstanding balance amounting to Twenty Five Million (P25,000,000.00) Pesos, as stipulated in paragraph G of the Tripartite Agreement.
On January 24, 1994, the court a quo issued an Order which denied the Motion for Continuation of hearing, ruling thus:
"That defendants' desire to pay the balance of the amount stipulated in their Tripartite Agreement is apparent. Under the afore-stated facts and circumstances, is it equitable that they be held in default? Article 1229 of the Civil Code gives the Court the power to equitably reduce penalty when the principal obligation has been partly complied with by the debtor.In default cases, the Court may likewise, reconsider its order of default when the interest of justice so dictates.
In order not to put to naught all the efforts of the parties in forging the Tripartite Agreement which took them a long period of time to arrive at, the Branch Clerk of Court is directed to immediately endorse to the counsel of plaintiffs the two (2) checks in her custody but the defendants are directed to pay the prevailing interest thereon from the time the amount of P25 Million was actually due the plaintiffs, up to the time the same is encashed, under the following terms:
1. That the Quasha Law firm receives the balance of the amount of P25 Million in compliance with the Tripartite Agreement, adverted to, and subject to the tax claim of the BIR;
2. That it shall release to the plaintiffs the amount due them after the tax matter on said amount shall have been resolved, and in the meanwhile the said amount shall be deposited in an interest bearing account and/or money placement in treasury bills; and
3. That upon receipt of the afore-stated amounts, plaintiffs shall execute the Deed of Assignment of Judgment in favor of defendants Ortigas & Co., Ltd. Partnership and Choithram Jethwal Ramnani and or third party Harish Ramnani in the proportion agreed upon by the said defendants.
In view of the foregoing, plaintiffs' Motion for Continuation of hearing is DENIED.
xxx
SO ORDERED."
The spouses' Motion for Reconsideration was denied in the Order dated April 5, 1994 of the trial court a quo.Dissatisfied therewith, movants have come to this Court via the present Manifestation and Urgent Motion for the reversal thereof, ascribing to the lower court grave abuse of discretion.
Given the foregoing factual and case settings, the Court finds no grave abuse of discretion on the part of the trial court.
WHEREFORE, the Manifestation and Urgent Motion of petitioner spouses Ishwar J. Ramnani and Sonya J. Ramnani is DENIED and the challenged Orders dated January 24, 1994 and April 5, 1994, respectively, of the trial court quo are UPHELD. Let the case be remanded to the lower court for appropriate proceedings.
Very truly yours,
(Sgd.) LUZVIMINDA D. PUNO
Clerk of Court
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