G.R. No. 114145 - Lee Eng Hong vs. Court of Appeals

Petitioner Lee Eng Hong, a Chinese-born tailor-turned-foreign investor, and his half-sister Rosalinda Villacorta, both engaged in the furniture business.
Their late father, Tan Siu, was the owner of Manila Furniture, which later became Cebu Asia Furniture following his death.
Respondent Benjamin D. Yu is the son of Yu Ching, who had an ostensible marital relationship with Ivy Leung Chee Lue, Lee Eng Hong’s widowed mother, and who is also associated with the furniture business.

The controversy centers on the ownership of the funds, assets of Asia Furniture Center Company (and the former Cebu Asia Furniture Company), and a concrete building located along El Filibusterismo Street, Cebu City.
Benjamin Yu contends that these properties belonged exclusively to his late father, Yu Ching, arguing that Lee Eng Hong acted merely as a dummy.
Petitioners, on the other hand, contend that Lee Eng Hong, having entered the country as a foreign investor with funds (US$100,000 converted to P738,000), was an active partner in the furniture business and in the construction of the disputed building.

Evidence presented includes bank records (the Manager’s Check from Filmanbank for P738,000, though the original records were lost), the Alien Certificate of Registration (ACR 1328531 identifying Lee Eng Hong as a “Foreign Investor”), and various documents related to the construction of the building (invoices, permits, and tax declarations).
The building’s construction involved a partnership between Lee Eng Hong and Antonio Yu, with documents and a Conditional Deed of Sale showing Yu Ching’s sale of his half share to Antonio Yu while acknowledging Lee Eng Hong’s half.
Additional evidence came from a compromise agreement rendered in a previous case (LRC Rec. No. 9465) where the parties agreed on the co-ownership and disposition of the disputed property.

The Regional Trial Court (RTC) of Cebu ruled in favor of petitioners, dismissing Benjamin Yu’s complaint as baseless and unfounded, and awarded moral and exemplary damages, attorney’s fees, and costs.
The Court of Appeals reversed the RTC decision, ordering the petitioners to render accounting of the funds, profits, and disbursements of the furniture companies, and to reconvey the disputed assets to the estate of Yu Ching.
This issue was elevated to the Supreme Court where petitioners raised multiple issues regarding the misapplication of facts, the superiority of documentary evidence over mere oral testimony, and the appellate court’s erroneous reversal of the RTC findings.

Whether the trial court’s factual findings—especially concerning the credibility of evidence and the financial capacity of petitioner Lee Eng Hong—should be given deference over the appellate court’s reversal.
Whether petitioner Lee Eng Hong was indeed a bona fide foreign investor, contributing significant capital to the family business, or merely a “dummy” as alleged by respondent Benjamin Yu.
Whether the documentary evidence (including bank records, the Alien Certificate of Registration, permits, invoices, and tax declarations) sufficiently establishes that petitioners had real ownership interest in the disputed building and assets.
Whether the contested compromise agreement and ancillary documents, which clearly delineate the co-ownership arrangements of the building, should have binding effect in determining the title and rights over the property.
Whether the Court of Appeals erred by disregarding the weight of the RTC’s evidentiary findings when there is a conflict between documentary evidence and testimonial evidence.