Cesar R. San Diego vs. Trendline Resources & Commodities Exponents, Inc., et al.

[SEC-SICD * CASE NO. 3528. August 17, 1992.] CESAR R. SAN DIEGO , complainant , vs . TRENDLINE RESOURCES & COMMODITIES EXPONENTS, INC., ET AL. , respondents . D E C I S I O N This is an action for recovery of a sum of money or investment and damages plus attorney's fee filed by the complainant originally against respondents Trendline Resources and Commodities Exponents, Inc. (Trendline, for brevity), Ricardo G. Padua, Joy C.Y. Fong, Lourdes E. de Leon, Andrew Dee, Roger R. de Leon, Noel Cordero and Emiliano Ignacio. On May 29, 1989, respondents filed their answer alleging , among others, by way of specific and affirmative defense that there is no showing in the complaint that the original respondents Ricardo G. Padua, Joy C.Y. Fong, Lourdes E. de Leon, Andrew Dee, Roger R. de Leon and Noel Cordero actively participated in nor was a party to any of the causes of actions raised in the complaint. aIHSEc Respondents' affirmative defense which was treated as a motion to dismiss was set for hearing on July 27 and August 11, 1989. On August 16, 1989, this Hearing Officer granted respondents' affirmative defenses only with respect to Noel Cordero. On August 29, 1989, respondents filed a motion for reconsideration seeking to reconsider, set aside or modify the Order of this Hearing Officer dated August 16, 1989, by excluding or dropping Ricardo G. Padua, Joy C.Y. Fong, Lourdes E. de Leon, Andrew Dee, Noel Cordero and respondent Roger R. de Leon as party respondents in this case for lack or absence of cause of action against them. On September 13, 1989, this Hearing Officer granted respondents' motion for reconsideration and dropped Ricardo G. Padua, Joy C.Y. Fong, Lourdes E. de Leon, Andrew Dee and Noel Cordero as party respondents thereby leaving Trendline, Roger R. de Leon and Emiliano Ignacio as the only respondents in this case. On September 26, 1989, complainant filed a motion for reconsideration of the Order of this Hearing Officer, dated September 13, 1989, dropping the other original respondents. On October 6, 1989, this Hearing Officer denied complainant's motion for reconsideration and on November 2, 1989, the latter filed a manifestation that he is no longer pursuing his "appeal" before the Commission En Banc. In support of his complaint, complainant alleged, inter alia, that Trendline is a registered domestic corporation duly licensed to engage as a commodity futures broker/merchant; that respondents Roger R. de Leon and Emiliano Ignacio are both employees and investment consultants of Trendline; that on April 2, 1987, complainant was enticed by Trendline, through Emiliano Ignacio, to invest money in commodity futures trading because of the huge profits and earnings to be derived therein with Trendline acting as the broker for the commodity, Manila Soybean, for which Account No. SEI-101 was opened with a marginal deposit of P100,000.00; that subsequently, complainant was convinced by Trendline, through its officers and its designated investment consultant and trader, respondent Emiliano Ignacio, to open two (2) additional accounts for the same commodity, Manila Soybean, wherein he made additional margin deposits as follows: Date Account No. Amount 5-08-87 SEI-103 P130,000.00 7-03-87 SEI-307 100,000.00 that complainant was thereafter required to make additional deposits to the aforesaid accounts by Trendline through its officers and investment consultant allegedly to comply worth the rules of Trendline and commodity futures trading and to ensure the realization of huge profits from positions being supported, as follows: Date Amount 4-15-87 P25,000.00 4-21-87 200,000.00 4-21-87 75,000.00 5-05-87 100,000.00 7-07-87 110,000.00 7-17-87 90,500.00 7-17-87 50,000.00 7-20-87 25,000.00 7-23-87 146,500.00 7-23-87 200,000.00 7-23-87 82,375.00 9-03-87 10,466.78 11-06-87 5,000.00 Total P1,119,841.78 ============ that despite the infusion of additional investments to maintain allegedly the positions in the commodity futures market and to realize huge profits from his investments as represented by Trendline through its officers and investment consultant, complainant lost practically all his investments as he was allowed to withdraw only P43,875.00 during said period., thus, incurring losses of P1,405,966.78; that Trendline and its officers and investment consultants flagrantly violated the basic policy of commodity futures trading to allow only licensed investment consultants to solicit investments and manage the investors accounts by knowingly and willfully assigning an unlicensed investment consultant, respondent Emilio Ignacio, to solicit the investments from complainant and to manage his accounts; that the willful act of Trendline and its officers and investment consultants in assigning unlicensed and unauthorized investment consultants to solicit the investments and manage the accounts of complainant made the Customer Agreements between the complainant and Trendline a nullity; that Trendline has no right to receive the investments of complainant under the void Customer Agreements and must return all the investments solicited from complainant in the amount of P1,405,966.78; that despite trading in only one commodity future, Manila Soybean, complainant was required to open three (3) different accounts for which he had to pay the required margin deposit as follows: HIAEcT Account No. Margin Deposit SEI 101 P100,000.00 103 130,000.00 307 100,000.00 that the representation of Trendline through its officers and investments consultants that the opening of three (3) separate accounts would further ensure confidentiality of complainant's accounts is fraudulent and baseless as all accounts regardless of number should be treated in confidence by Trendline and its officers and investment consultants; that this misrepresentation of Trendline through its officers and investment consultants is designed to increase the number of trades of complainant in commodity futures resulting to increased commissions for Trendline and its officers and investment consultants and the consequent confusion of the records of the accounts of complainant; that the opening of three (3) accounts led to the unauthorized and fraudulent opening of other accounts of complainant with Trendline by the concerted actions of its officers and investment consultants; that Trendline and its officers and investments consultants juggled and commingled the funds of the different accounts of complainant without prior approval nor knowledge of the latter causing undue prejudice to him and resulting to a violation of the rules on commodity futures trading by Trendline and its officers and investment consultants; that Trendline and its officers and investment consultants did not get the prior approval of complainant for the positions taken on his accounts nor presented the required Order Forms unto complainant to inform and apprise him of the positions taken for him in the commodity futures market and the consequence thereof; that Trendline, through its officers and investment consultants, deliberately confused the records of complainant, mishandled and manipulated the positions of complainant in the commodity futures market by the aforesaid fraudulent scheme and by deliberately withholding vital information on positions in the commodity futures market taken for him by Trendline through its officers and investment consultants and fraudulent liquidations of these positions resulting to losses of the investment of complainant; that Trendline and its officers and investment consultants charged and received from complainant exchange and brokerage fees as well as reimbursement of expenses for transactions allegedly entered into by the different accounts of complainant which are not consistent and are much higher than those prescribed by the exchange and the rules on commodity futures trading; that Trendline and its officers and investment consultants coerced and forced complainant to put as collateral and subsequently sell his 900,000 shares of stock with Philex Mining allegedly to save his positions in the commodity futures market knowing fully well the futility of such acts; that Trendline and its officers and investment consultants performed "ultra vires" acts in coercing complainant to sell his 900,000 shares of stock of Philex Mining and the charging of P11,125.00 transfer feed as Trendline is not authorized to act as a stock broker; that transactions allegedly entered into by complainant in the commodity futures market for which he was charged and wherein he duly paid the required fees thereof were not duly entered but were "bucketed" by Trendline and its officers and investment consultants in violation of the rules on commodity futures trading; that transactions allegedly entered into by complainant in the commodity futures market for which he was charged and wherein he duly paid for the required fees were commingled with the accounts of other investors of Trendline without the consent or approval of these investors by Trendline and its officers and investment consultants in violation of the rules on commodity futures trading; that complainant likewise suffered and continue to suffer sleepless nights, serious anxiety, mental anguish and social humiliation thinking about how maliciously and in bad faith respondents defrauded him of his hard earned money without due regard to respondents' undertaking to the investing public, for which respondents should be held solidarily liable unto complainant for moral damages in an amount of at least P1,000,000.00; that to deter others similarly situated from unduly defrauding investors of their hard-earned money and to serve as an example for the public good, respondents should be held liable solidarily to pay complainant exemplary damages in the amount of at least P500,000.00; that Trendline should likewise be prohibited from operating as a future commodities broker and its licenses revoked perpetually for the protection of the investing public; that the corporate entity of Trendline must be dissolved, abolished and revoked for performing "ultra vires" acts; that the investment consultants must be charged criminally for all their fraudulent acts committed on investors of Trendline; that complainant was constrained to file this suit and hire the services of counsel for an agreed compensation of P50,000.00 and expect to incur additional litigation expenses of at least P50,000.00. Respondents, in their answer, denied all the material allegations in the complaint and alleged, among other things, that the complaint could not specify the particular laws or rules and regulations that are alleged to have been violated; that for the complaint to prosper, there must be a particular on the specific law or rules and regulations violated and that act/s or omission/s that constitute the violation to allow the respondents to answer squarely on the charged; that complainant opened three trading accounts with Trendline and in each instance, he executed a Customer's Agreement; that complainant was properly advised of the risks involved in futures trading through the "Risk Disclosure Statement" which, among others, informs the complainant that the risk of loss in commodity futures trading can be substantial and that he can incur total loss of margin funds or may even incur a trade deficit and overloss due to adverse market condition; that said Risk Disclosure Statement is incorporated in the Customer's Agreement; that complainant have also been appraised of the nature, intricacies and technicalities of commodity futures trading before the Customer's Agreement was executed by him and continuously thereafter, during all the time that he was trading in commodity futures covering a period of more than nine (9) months; that complainant have been furnished copies of the Customer's Agreement with the Risk Disclosure Statement; that as clearly indicated in the Customer's Agreement, the person designated to actively handle the complainant's accounts are Willy de Leon for Account Nos. SEI-101 and SEI-103 and Andrew Dee for Account No. SEI 307; that from the time the complainant executed the Customer's Agreement until he filed the instant complaint against the respondents, he has never questioned the authority of Willy de Leon and Andrew Dee as his investment consultants; that the instruction to buy or to sell were all initiated by the complainant; that the execution of these orders were immediately notified to him within 24 hours through "Confirmation of Contract and Balance Sheets" (CCBS, for brevity) that are delivered to complainant by Trendline's Agreement, the CCBS will be conclusive if no objection is received by Trendline within three (3) days from receipt thereof; that the same notice is prominently printed in the CCBS itself; that on the basis of these CCBS which are prepared and delivered to the complainant after every transaction, (including additional margin deposits), complainant is made fully aware of all his transactions together with the balance of his margin funds; that complainant made more than 60 individual buying or selling transactions for a period of more than 9 months and as such he received more than 60 CCBC; that with this number of transactions and confirmations of contracts, he never complained of any irregularity in any particular transactions; that the complainant did not cite any particular transaction that can be considered as violative of any of the rules and regulations on commodity futures trading; that with the experience already gained by the complainant after all these transactions, the latter could no longer claim ignorance on the nature, intricacies and technicalities of futures trading nor of being required or enticed to do things; that due to and as a consequence of the malicious, unwarranted and oppressive manner by which complainant acted by filing the present action which is clearly baseless and unfounded, said respondents suffered actual and moral damages which, although incapable of pecuniary estimation at present may be reasonably assessed as follows: Trendline P2 Million Roger R. De Leon 1 Million Emiliano Ignacio 1 Million that as a further consequence of the malicious institution of the present action, respondents were constrained to engage the services of counsel whom they agreed to pay the sum of P100,000.00 for and as attorney's feed and expect to incur additional litigation expenses of at least P100,000.00; that by way of example or correction for the public good and in order to serve as stern warning to the public in general; and to the complainant in particular, said complainant should be condemned to pay the sum of at least P1 Million for and as exemplary or correctional damages. As agreed upon by the parties and as gathered from the records, the issued to be resolved are: 1. Whether or not respondents Trendline, Roger R. De Leon and Emilio Ignacio committed fraud and misrepresentation in securing and inducing complainant to engage in commodity futures trading and in trading complainant's accounts in the commodity futures market; 2. Whether or not Trendline committed fraud in allowing its employees, respondents Roger R. de Leon and Emiliano Ignacio to trade complainant's accounts in the commodity futures market; and 3. Who should be entitled to the claim for damages and attorney's fees? Both parties presented testimonial, as well as documentary evidence. From the evidence adduced, it appears that sometime in March 1987, respondent Emiliano Ignacio who has never been licensed as Commodity Futures Solicitor/Salesman of Trendline (Exh. "R") approached the complainant in the latter's officer and, after presenting himself as an investment consultant of Trendline (TSN, Dec. 6, 1989, p. 10), inform the latter of the nature of commodity futures trading and proceeded to convince him to invest in commodity futures trading since it is a profitable business (TSN, id., p. 10; TSN Jan. 12, 1990, pp. 28-29). At that time, however, complainant was never informed by respondent Emiliano Ignacio that such investment undertaking would also result in losses (TSN, Sept. 19, 1990, p. 27; TSN, Sept. 4, 1990, p. 18). In the course of informing complainant of the nature of commodity futures trading and convincing him of the alleged profitable nature of said business, respondent Emiliano Ignacio informed the former that the following things had to be accomplished and done, in order to trade in commodity futures and to realize profits to wit: 1. The opening of an account of a commodity for trade in the commodity futures trading; 2. The signing of a customer's agreement containing printed matters (TSN, Sept. 4, 1990, p. 14) which is allegedly a standard operating procedure of Trendline (TSN, id., pp. 16-17) and a mere formality (TSN, Sept. 19, 1990, pp. 24-25); 3. The making of margin deposits for the account to be traded (TSN, Dec. 6, 1989, p. 16); 4. The accomplishment of buying and selling order forms in the course of trading in commodity futures (Exhs. "S", "S-1"; TSN, Jan. 12, 1990, pp. 8-15; TSN, Sept. 4, 1990, pp. 33-38); 5. In order to have profits in a buying position, one must dispose at a higher price; in a selling position, one must sell at a lower price (TSN, Jan. 12, 1990, pp. 29-30); and 6. When the price is going up, one must open a buy position and if the price is going down, a sell position must be opened (TSN, Jan. 12, 1990, p. 31). Having been convinced by respondent Emiliano Ignacio that it is a profitable business, the complainant agreed to engage in commodity futures trading (TSN, Dec. 6, 1989, p. 10). Thus, on April 2, 1987, Trendline and the complainant executed a Customer's Agreement (Exh. "A"). Pursuant to the advise of respondent Emiliano Ignacio, the complainant, in April, 1987, opened an initial account , denominated as SEI 101, involving the commodity futures trading of Manila Soybeans (TSN, Dec. 6, 1989, pp. 11-17; TSN, Sept. 4, 1990, pp. 23-24; TSN, Sept. 19, 1990, pp. 16-27). aCcADT In line with the alleged requirement of commodity futures trading, the complainant, upon the advise of respondent Emiliano Ignacio, was also made to sign a blank form of customer's agreement containing printed matters (TSN, Sept. 4, 1990, p. 14) which is allegedly a standard operating procedure of Trendline (TSN, id., pp. 16-17) and a mere formality (TSN, Sept. 19, 1990 pp. 24-25). However, at the time the complainant was made to sign the blank customer's agreement, respondent Emiliano Ignacio did not call nor attempt to call the attention of the complainant to the printed matters in the customer's agreement, specifically the Rules on Commodity Futures and the Risk Disclosure Statement (TSN, Sept. 4, 1990, pp. 14-17) since according to respondent Emiliano Ignacio, whatever he could recommend to the complainant does not give much bearing on the printed matters reflected in the customer's agreement (TSN, id. pp. 16-17). Likewise, the said customer's agreement was returned to the complainant only after it was notarized (TSN, Dec. 6, 1989, p.14). In addition to his signing of a customer's agreement and in accordance with the alleged requirements of commodity futures trading, the complainant was also required to make an initial margin deposit. During his initial trading, the complainant was required to affix his signature on the sales order forms (TSN, Sept. 4, 1990, p. 33) From April, 1987 to December , 1987, the following events transpired in connection with complainant's accounts which was/were traded by Trendline in the Manila International Futures Exchange (MIFE): 1. To allegedly ensure confidentiality and realize more profits, two (2) other accounts, SEI 103 and SEI 307 were also opened on May 13, and July, 1987, respectively, wherein complainant was also required to make additional and separate margin deposits for these accounts for a total margin deposit of P330,000.00 for the three (3) accounts (Exhs. "A", "B", and "C"; TSN, Dec. 6, 1989, pp. 11-17; TSN, Sept. 4, 1990, pp. 23-24); 2. When the three (3) accounts were traded by Trendline, the complainant was further required to make additional margin deposits in the total amount of P1,119,941.78 (Exhs. "D", "D-1", "E", "E-1", "F", "F-1", "G", "G-1", "H", "H-1", "I", "I-1", "J", "J-1", "K", "K-1", "L", "L-1", "M", "N", "O", "Q", "Q-1", "P", "P-1"; TSN, Dec. 6, 1989, pp. 16-24'; TSN, July 31, 1990, pp. 63-65; TSN, June 8, 1990, pp. 34-35; TSN, July 9, 1990, pp. 7-10; TSN, Feb. 12, 1991, pp. 55-57); 3. On subsequent tradings of his accounts, after the initial order and/or trading, the complainant was no longer required to affix his signature on the sales order forms and it was Dee or some other persons who signed for him although he did not authorize or designate them to sign for him (Exhs. "S", "S-1", "M", "M-1", "N-1", "O", "O-1", "P", "P-1"; TSN, Jan. 12, 1990, pp. 11-12; TSN, Sept. 4, 1990, pp. 33-37; TSN); 4. All the tradings of complainant depended solely upon the recommendations of his investment consultants and traders, respondents Emiliano Ignacio and Roger R. de Leon upon whom he relied for their represented expertise although the final decision was on the part of the complainant (TSN, July 9, 1990, pp. 3-7); 5. During the same period (April 15 to November 6, 1987), the complainant was able to withdraw the amount of P9,875.00 and P34,000.00 on August 18 and December 21, 1987, respectively, thereby leaving their balance of P1,405,096.78 as losses. After he incurred the loss of P1.405,096.78 (Exhs. "DD", "EE" and "T"; TSN, June 8, 1990, pp. 47-51; TSN, Jan. 12, 1990, pp. 16-28), the complainant referred to the Commission to find out if the investment consultants and/or traders assigned to him by Trendline (respondents Emiliano Ignacio and Roger R. De Leon ) were duly licensed commodity futures investment consultants and traders and in the process, complainant discovered, as indicated by the records of the Commission, particularly the Brokers and Exchanges Department, that respondent Emiliano Ignacio was not duly licensed investment consultant and/or trader (Exhs. "R", and "R-1"; TSN, Jan. 12, 1990, pp. 5-7; TSN, Sept. 19, 1990, pp. 74-75). Although in Exh. "R", respondent Roger R. de Leon appeared to be an unlicensed investment consultant and/or trader, a further review and/or verification of the records of the Brokers and Exchanges Department show that respondent Roger R. de Leon was indeed registered and licensed as Commodity Futures Solicitor/Salesman in his capacity as Fund Management Manager of Trendline from January 1, 1987 to December 31, 1987 (Exh. "25"). Likewise, aside from the opening and trading of accounts other than those officially opened by the complainants, Trendline and his investment consultants and traders juggled or commingled the funds of the complainant without the authority, consent and approval of the latter (Exh. "AA"; TSN, March 13, 1990, pp. 19-31) which was done through the transfers of funds from one account to another. Hence, on July 7, 1987, CCBS No. 1236 (referring to Account No. 307 (Exh. "AA-1") reflected a transfer of the amount P20,000.00 from SEI No. 307 to SEI 301. CCBS No. 1235 (referring to account No. 301) (Exh. "AA-2"), also dated July 7, 1987, reflects the amount of P20,000.00 being transferred from SEI 307 (Exhs. "AA-1", "AA-1-a", "AA-2" and "AA-2-a"; TSN, March 13, 1990, pp. 20-21). Again, on July 9, 1987, CCBS No. 1256 (referring to Account No. SEI 301) (Exh. "AA-3") and CCBS No. 1259 (referring to Account NO. 307 (Exh. "AA-4") reflect that there was a transfer to SEI 307 of the amount of P130,000.00 (Exhs. "AA-3", "AA-3-a", "AA-4", "AA-4-a"; TSN, March 13, 1990, pp. 22-23). On the same date, CCBS No. 1257 (referring to Account No. 307 (Exh. "AA-6") indicate a transfer of the amount of P201,000.00 from account SEI 303 to SEI 307 (Exhs. "AA-5", "AA-6"; TSN, March 13, 1990, pp. 22-25). Other CCBS given the complainant by respondent (Exhs. "AA-7", "AA-8", "AA-9", "AA-10", "AA-11", "AA-12", and "AA-13) also reflect a transfer of funds from one account to another. Based from the foregoing, it is thus clear that respondents are guilty of fraud and misrepresentation in securing and inducing complainant to engage in commodity futures trading and in trading complainant's accounts in the commodity futures market which would warrant the nullification of the Customer's Agreements (Exhs. "A", "B" and "C"). Trendline has likewise committed fraud in allowing respondent Emiliano Ignacio who was not a licensed investment consultant (Exh. "R") to trade complainant's accounts in the commodity futures market. Thus, Sections 20 and 28 of the Revised Rules and Regulations on Commodity Futures Trading expressly provide: "SECTION 20. Licensing of person associated with futures commission merchants . It shall be unlawful for any person to be associated with any futures commission merchant as a partner, officer or employee (or any person occupying similar status or performing similar functions), in any capacity which involves (a) the solicitation or acceptance of customers, orders (other than in a clerical capacity) or b) the supervision of any person or persons so engaged unless such person shall have been registered/licensed by the Commission and such license shall not have expired nor been suspended or revoked, and it shall be unlawful for any futures commission merchant to knowingly permit such person to become or remain associated with him in such capacity. . . ." "SECTION 28. Prohibited Acts . It shall be unlawful for any person to engage in any futures transaction, or solicit, accept orders, or act as a conduit without being duly authorized by either the SEC or the commodity futures exchange under the SEC or the commodity futures exchange under the existing rules." It is clear from the evidence presented by the complainant that it was respondent Emiliano Ignacio who undoubtedly solicited, accepted orders and acted as investment consultant of the former and served as a conduit between the former and Trendline. However, in the latter part of his transactions with Trendline, complainant sought a change of his investment consultant (TSN, May 20, 1991, pp. 40-42). Consequently, Trendline assigned respondent Roger R. de Leon as complainant's investment consultant vice respondent Emiliano Ignacio (TSN, July 27, 1989, pp. 42-43; TSN, Sept. 19, 1990, pp. 29,33). Respondent Roger R. de Leon then took over the functions of respondent Emiliano Ignacio and thereafter advised complainant on his trading transactions (TSN, Sept. 19, 1990, pp. 61-81). Verily, it could no longer be gainsaid that respondent Roger R. de Leon also solicited, accepted orders and acted as investment consultant of complainant He likewise acted as a conduit between complainant and Trendline. Evidently, there was a clear misrepresentation on the status of respondent Emiliano Ignacio in his dealings with complainant. He misrepresented himself to complainant that he was a licensed investment consultant and trader when he was not. (Exh. "R"). There was also misrepresentation on the part of Trendline when it represented respondent Emiliano Ignacio as duly licensed and qualified trading consultant and broker when in truth and in fact he was not. In misrepresenting respondents Emiliano Ignacio as licensed and qualified investment consultant and broker, Trendline, in effect, violated the aforementioned rules and regulations or commodity futures trading. In the instant case, fraud was evident considering the fact that the primary consideration in entering into commodity futures trading on the part of the complainant was of his trust and confidence on these so-called investment consultants and traders which Trendline failed to provide him with someone who could have been able to protect his investment. Articles 1390 and 1338 of the New Civil Code (Civil Code, for short) provide: "ARTICLE 1390. The following contracts are voidable or annullable even though there may have been no damage to the contracting parties: xxx xxx xxx (2) Those where the consent is vitiated by mistake, violence, intimidation undue influence or fraud . (Emphasis supplied) "ARTICLE 1338. There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to." Otherwise stated, in order that the fraud may vitiate consent and be a cause for annulment of a contract, the following requisites must concur: 1. It must have been employed by one contracting party upon the other (Articles 1342 and 1344, Civil Code); 2. It must have induced the other party to enter into the contract (Art. 1338, id.); 3. It must have been serious (Art. 1344, id.); and, 4. It must have resulted in damage or injury to the party seeking annulment (Butte vs. Ong Sui Niu (C.A.), 51 Off. Gaz. 5704, Nov., 1955). In the case at bar, fraud and misrepresentation have been employed by respondents Trendline and Emiliano Ignacio because they never informed the complainant during the whole duration that respondent Emiliano Ignacio acted as investment consultant and trader. The misrepresentation made by respondent Emiliano Ignacio that commodity futures trading is a profitable business without informing the complainant that such investment undertaking would also result in losses had induced the latter to enter into three (3) Customer's Agreements with Trendline (Exh. "A", "B" and "C") and such fraud or misrepresentation was so serious as it caused the complainant to lose his hard-earned money in the amount of P1,405,096.78. Hence, all the aforesaid requisites for the annulment of a contract are present in the instant case. It must likewise be noted that pursuant to Trendline's Renewal of License as Commodity Futures Commission Merchant/Broker, all contracts traded by any unlicensed salesman of the former shall be considered null and void. Regarding the issue of damages, this Hearing Officer is of the opinion that the Commission, through its Hearing Officers and the Commission en banc, has the authority to hear and decide claims for damages and, if meritorious, award the same. This authority can be inferred from the provisions of Section 6, (m) of P.D. 902-A * as amended , which provides that the Commission shall possess the following power: "To exercise such other powers as may be provided by law as well as those which implied from, or which are necessary or incidental to the carrying out of, the express powers granted to the Commission to achieve the objective and purposes of this Decree." (Emphasis supplied) To adopt a different policy will perpetuate multiplicity of suits and splitting of a single cause of action and the same will put a premium on litigation as the cost thereof will be doubled as suitors will always go to two fora to obtain complete relief, i.e., to the Commission for an administrative remedy and to the courts for their claim for damages. Besides, the Supreme Court frown upon split jurisdiction and multiplicity of suits when it held that: "The law and the courts frown upon split jurisdiction and the resultant multiplicity of actions. To paraphrase the leading case of Rheem of the Phil., Inc., et al. vs. Ferrer, et al., G.R. No. L-22979, January 27, 1967, . . ., to draw a tenuous jurisdiction line is to undermine stability in litigations . A piece-meal resort to one court and another gives rise to multiplicity of suits. To force the parties to shuttle from one court to another to secure full determination of their suits is a situation gravely prejudicial to the administration of justice. The time lost, the effort wasted, the anxiety augmented, additional expenses incurred, the irreparable injury to the public interest are considerations which weigh heavily against split jurisdiction ." (PCGG vs. Pea, G.R. No. L-77663, April 12, 1988) llcd In fact, the latest trend is towards recognizing the competence of administrative and quasi-judicial bodies to award damages. This is clearly manifested from the latest ruling/opinion of the Supreme Court in the case of Abacast Shipping Management Agency, Inc. vs. NLRC, G.R. No. 81124-26, June 23, 1988, wherein the finding of the NLRC sustaining the decision of POEA to award damages in a case involving illegal dismissal was duly affirmed. Moreover, in the very recent case of Stronghold Insurance Co. Inc. vs. Court of Appeals, G.R. No. 84979, November 6, 1989, the Supreme Court held that: "To avoid multiplicity of suits, all incidents arising from the same controversy must be settled in the same court having jurisdiction of the main action. Thus, the application for damages must be filed in the court which took cognizance of the case, with due notice to the other parties." As to who should be entitled to the claim for damages, Articles 19, 20, 21 and 2176 of the Civil Code state that: "ARTICLE 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." "ARTICLE 20. Every person who, contrary to law, willfully or negligently cause damage to another, shall indemnify the latter for the same." "ARTICLE 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." "ARTICLE 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done." Since it has been clearly established that respondents Trendline and Emiliano Ignacio were the ones who employed fraud and misrepresentation in enticing the complainant to engage in commodity futures trading without informing the latter that respondent Emiliano Ignacio was an unlicensed investment consultant and trader and, therefore, not authorized to solicit, accept orders or act as a conduit without being authorized by the Commission, it is but just and proper for the respondents, by way of actual or compensatory damages, to return the investment made by the complainant in the amount of P1,405,966.78 plus interest thereon from the date the instant case was filed until fully paid. Anent the matter of moral damages, complainant had testified that as a consequence of respondents' fraudulent acts which resulted in the loss of his P1,405,966.78 hard earned money which he had painstakingly earned for several years, complainant had suffered mental anguish, sleepless nights, social humiliation and shame to friends and family (TSN, May 18, 1990, p. 18) for which he should be entitled to the claim for damages and by way of example or correction for the public good, an exemplary or corrective damages should be imposed upon respondents Trendline and Emiliano Ignacio, without prejudice to any administrative or criminal liability that may be imposed against respondent Trendline and its officers by the proper body or authority. With respect to the claim for attorney's fee, and in the light of the foregoing, it is but just and proper that a reasonable amount should be awarded to the complainant who had engaged the services of a lawyer to protect his interest. ACCORDINGLY, judgment is hereby rendered: 1. Declaring as null and void the three (3) Customer's Agreements entered into by and between complainant and Trendline Resources and Commodities Exponents, Inc.; 2. Declaring as null and void all the trading transactions undertaken by the respondent Trendline Resources and Commodities Exponents, Inc. or its agent/s in behalf of the complainant; 3. Ordering the respondents, Trendline Resources and Commodities Exponents, Inc. and Emiliano Ignacio, jointly and severally, to pay the complainant the sum of P1,405,966.78, Philippine Currency, plus legal rate of interest from the date the instant case was filed until fully paid; and, 4. Ordering the respondents Trendline Resources and Commodities, Inc. and Emiliano Ignacio, jointly and severally, to pay the complainant the sum of P80,000.00, as moral damages, P20,000.00, as exemplary damages and P50,000.00 as attorney's fee. The amount of damages and attorney's fee awarded by this Hearing Officer is without prejudice to the amount of fine that the Commission, through its Brokers and Exchanges Department, may impose upon respondent Trendline for having committed fraud and misrepresentation against the complainant and for having juggled and commingled the funds or accounts of the latter. Let copy of this DECISION be furnished the Brokers and Exchanges Department for its information, guidance and appropriate action. EHTADa SO ORDERED. (SGD.) ROLANDO C. MALABONGA Hearing Officer