Ramon Y. Ascue vs. LMST Securities Corp.

[SEC-AC NO. 016. January 18, 1980.] RAMON Y. ASCUE, complainant-appellee, vs . LMST SECURITIES CORPORATION , respondent-appellant . D E C I S I O N This is an appeal to the Commission en banc by LMST Securities Corporation from the Order of this Commission, thru Associate Commissioner Julio A. Sulit, Jr. dated November 22, 1977, upholding Ramon Ascue as the rightful purchaser from LMST Securities Corporation of Subscription Rights No. 4247 for 1,000,000 Class "A" shares of Oriental Petroleum Mineral Corporation with a down payment of Two Thousand Five Hundred (P2,500.00) Pesos or the equivalent of twenty-five (25%) percent thereof; and if delivery of Subscription Agreement No. 4247 is no longer possible, LMST Securities Corporation is ordered to restitute the same. From the aforesaid judgment, respondent-appellant made the following assignment of errors, namely: prcd 1. The Commission gravely erred in declaring complainant Ramon Ascue as the rightful purchaser from respondent of Subscription Rights No. 4247 for 1,000,000 shares of Oriental Petroleum and Mineral Corporation; 2. The findings of facts contained in the Order, subject of this Appeal, are not supported by substantial evidence as basis thereof, and the conclusions are clearly against the law; and 3. The complaint and the evidence presented do not involve any violation of, or attempt to violate any specific provision of law enforced by the Commission or rules and regulations promulgated thereunder. Contrary to what have been alleged in the complaint, a close study of the evidence shows that complainant Ramon Ascue bought, thru LMST Securities Corporation, only Subscription Rights for 1,000,000 Class "A" Shares of Oriental Petroleum and Mineral Corporation by paying 25% of the price. The transaction is evidenced by Confirmation Slip No. 1932, Exhibit "A". This established fact cannot be altered by virtue of In Receipt 2212, Annex "E", which was given to complainant by LMST said receipt purporting to show that Ascue had delivered to respondent-appellant Subscription Agreement No. 4247 in the name of Miguel Littaua. It could not be shown from the evidence that there was no purchase transaction effected, as argued by respondent-appellant, because Confirmation Slip No. 1932 shows the stock position of complainant Ascue. Moreover, this Confirmation Slip No. 1932 was prepared by the respondent firm and the same was signed by appellee Ascue upon down payment of 25% of the price. In the decision under review, it was noted therein what transpired thereafter, where "on February 12, 1971, without the knowledge, authority and consent of herein complainant, respondent remitted the sum of FIFTEEN THOUSAND (P15,000.00) PESOS to Oriental Petroleum and Mineral Corporation, Annex "5", which amount represents the seventy-five (75%) percent balance unpaid subscription of Miguel Littaua for his subscription rights Numbers 4246 and 4247." Stock Certificate No. 03342 in the name of Miguel Littaua was later cancelled and Stock Certificate No. 03647 issued in the name of respondent firm. On the basis of the foregoing findings, respondent-appellant has clearly violated Rule 16 of the Rules governing Brokers, Dealers and Salesmen which provides, to wit: "16. Loaning, pledging, commingling and disposal of customer's free securities . Securities in which a broker has extended any credit to a customer, including the securities which are in excess of the margin requirements, shall be kept separate for the particular customer who owns them and shall not be loaned, pledged or commingled with other securities owned by the broker himself or by other customers, or otherwise disposed of as his own, unless he shall have first obtained a separate authorization in writing from such customer permitting the lending, pledging, commingling, or disposal of such securities. . . . In case such securities should be loaned, pledged or otherwise disposed of as his own by the broker shall report to the latter within five (5) days after the loan, pledge or disposal, stating the name or names of the person or persons to whom they were loaned or pledged or disposed of and the amount for which they were loaned, or at which they were disposed of and the date of the maturity of the loan." dctai WHEREFORE, there being no errors committed in the judgment appealed from, the same is hereby AFFIRMED, without pronouncement as to costs. SO ORDERED. (SGD.) ANGEL L. LIMJOCO, JR. Chairman (SGD.) JULIO A. SULIT, JR. (SGD.) SIXTO T. J. DE GUZMAN, JR Associate Commissioner Associate Commissioner