Ramos v. C & T Global Futures, Inc.

[SEC-SICD * CASE NO. 4252. September 9, 1996.] VIDAL G. RAMOS , plaintiff, vs . C & T GLOBAL FUTURES, INC., ET AL. , defendants . D E C I S I O N This is a suit filed by plaintiff Vidal G Ramos [Ramos, for brevity] for the recovery of investment and profits, damages and attorney's fees against herein defendants. dctai Plaintiff Ramos avers, inter alia , that defendants Edanio de Jesus [De Jesus], Nelson Diaz [Diaz] as representatives of respondent C & T Global Futures, Inc. [C & T], being the Manager and Assistant Vice-President, respectively, induced him to invest in commodity futures trading through their assurances that an investment of P100,000.00 will earn P5,000.00 within a month, withdrawable anytime as though it were a deposit in the bank, and without risk of loss because defendants De Jesus and Diaz who are experts in futures trading shall be one to manage the plaintiff's investment; that plaintiff made an initial investment of P160,000.00 on 5 June 1990, and was rushed by defendants to sign blank purchase, sales, withdrawable forms, Trading Contract, and Rules for Commodity Futures Training allegedly the same being pro-forma and have to be forwarded to Makati, allegedly containing all the assurances of defendants Diaz and De Jesus; that when the contract was returned, plaintiff, discovered the presence of the Risk Disclosure Statement; that upon reading the same, he found out that it was contrary to the assurances/representations made by the herein defendants; that alarmed by the Risk Disclosure Statement, he immediately instructed De Jesus the withdrawal of all his investment; that contrary to the instructions of plaintiff, defendants did not withdraw plaintiff's investment, but, continued investing the same; that when defendant De Jesus failed to return plaintiff's money, the latter went to Makati office of C &, T where he learned that he incurred huge losses and could not withdraw his investment; that plaintiff was instead required to put up an additional margin in the amount of P30,000.00 so that he could recover all his investment; that while defendant Diaz offered, and promised, to advance the P30,000.00 from his personal funds, Diaz did not comply with the same; that plaintiff was informed that what was left of his investment was only P14,200.00 which was returned in March 1991. Plaintiff prays for the recovery of his investment, damages, Attorney's fees and cost of suit. In their Answer with counterclaim, defendants contend that the allegations of plaintiff is not true; that defendants duly performed all their obligations and acted in "diligentissimi pater familias"; that as a consequence thereof, no damages are recoverable, being baseless and speculative; that the complaint has no basis and is malicious; that the complaint be dismissed; and that damages, attorney's fees and costs be adjudged against the plaintiff. On 07 September 1992, the Preliminary Conference was held and the issues as agreed by the parties are, viz: a) Whether or not there was fraud in the solicitation of the commodity futures account/s from the plaintiff; b) Whether or not defendants C & T's account executives were duly licensed by the SEC as commodity futures solicitors; c) Whether or not plaintiff is entitled to the return of his investment. Hearings were conducted. Plaintiff presented both testimonial and documentary evidence. On the other hand, the counsel for the respondents postponed several hearings set for the reception of his evidence, either counsel was not available or that his witness was indisposed. Finally, in the hearing of 17 January 1994, both counsels agreed, in open court, that failure of the defendants and counsel to present evidence on 15 February 1994 shall constitute a waiver on their part to do so. In the hearing of 27 September 1994, in view of the absence, again, of the defendants' witness, this Hearing Officer ordered in open court that if the defendant's witness, Edanio de Jesus, will not appear at the next hearing set for 17 October 1994, his testimony will be stricken-off the record. Defendants were, likewise, directed to pay the plaintiff for the actual expenses incurred in coming to Ortigas from Olongapo in the amount of P250.00, pursuant to the Rules of Court. prcd Notwithstanding the previous warning issued, the counsel for the defendants, again, failed to present evidence in the hearing of 13 June 1995. Upon oral motion by plaintiff's counsel, citing the previous agreement of the parties and counsel that in the event that defendants' counsel is unable to adduce evidence the case shall be deemed submitted for decision solely on the evidence presented and marked, was granted [Vide: 15 June 1996 Order]. A motion for reconsideration of the same Order was denied on 12 July 1996. Pursuant to the agreement of the parties, through their counsel, that the SEC Cases Nos. 4250, 4251, 4253, and 4254 having been filed concurrently by several plaintiffs from Olongapo with only one lawyer representing all of them against the common defendants, whose defense is, likewise, handled by a sole lawyer in all cases filed; and that while these cases shall be heard individually, the decision shall be rendered separately, but simultaneously, in all cases so as not to pre-empt any pending cases still on trial, and/or cause any apprehension on both/either parties that the winning or losing of one case shall set a precedent to all others still pending considering that the witness/es of other cases shall also be utilized as witness/es in other cases. Hence, this decision. In view of the failure of defendants to adduce evidence to rebut the evidence and claims of plaintiff, this Hearing Officer finds for the plaintiff. Plaintiff was able to prove that the unwarranted assurances and misrepresentations, amounting to fraud, was committed by the defendants when they guaranteed a no-risk-no loss, being experts in the field of commodities futures, that considering the rush by which the defendants made the plaintiff sign the documents, plaintiff was not able to understand nor read the contents thereof but, was told that the same being pro forma, without any benefit of an explanation and/or introduction into the investment he was entering into; that the investment is withdrawable anytime; that investing in futures trading is a better investment than depositing money in the banks; and a 100% profit on any investments made, and that they continued to trade despite plaintiff's instruction of withdrawal and return of the investment. All of which are distinct violations of the Revised Securities Act notwithstanding that Diaz and/or De Jesus were duly registered with the SEC as investment consultants/solicitors. Plaintiff, therefore, is entitled to the return of his investment. ACCORDINGLY, judgment is hereby rendered DIRECTING the defendants to a) Return and pay the plaintiff the sum of P145,800.00 representing the principal investment; b) The amount of P50,000.00 as reasonable attorney's fees; and c) Cost of suit Should the defendants be incapable of paying or shall refuse to pay all of the above amounts, let judgment be satisfied against its Cash Bond; and if unavailing, then against its Compensation Fund deposited with the Manila International Futures Exchange (MIFE). SO ORDERED. (SGD.) YSOBEL S. YASAY-MURILLO Hearing Officer