Quirino D. Panganiban, et al. vs. Inter-Asia Multilink, Inc., et al.

[SEC-SICD * CASE NO. 4324. March 26, 1998.] QUIRINO D. PANGANIBAN, LUISITO L. GONZALES and DEMETRIO P. SALIPSIP, JR. , petitioners , vs . INTER-ASIA MULTILINK, INC., MANILA INTERNATIONAL FUTURES EXCHANGE, INC., UTILITY ASSURANCE CORP. , respondents . UTILITY ASSURANCE CORP. , third-party plaintiff, vs . INTER-ASIA MULTILINK, INC., LYDIA A. CHIA, DANIEL OLAN and LORNA VERANO-YAP , third-party defendants . D E C I S I O N This is a suit filed by petitioners Quirino D. Panganiban, Luisito L. Gonzales, and Demetrio P. Salipsip, Jr. to recover from the respondents the alleged effective margins left unpaid by Inter-Asia Multilink, Inc. (Interasia) when it went out of operation in July 1992. LLpr Utility Assurance Corporation (Utility Assurance) and the Manila International Futures Exchange, Inc. (MIFE) were impleaded as co-respondents of Inter-Asia Multilink, Inc. Utility Assurance subsequently filed a third-party Complaint against Interasia, Daniel Olan, Lydia Chia and Lorna Verano-Yap. Interasia did not file any answer. Lydia Chia and Daniel Olan did file their answers either, despite proper service of summons. In this regard, the said parties were declared in default. In the course of proceedings, it was established that Interasia has been a Foreign Currency broker accredited with the MIFE, and that as required of it, Interasia obtained a Surety Bond from Utility Assurance in the amount of P2,000,000.00, that Lorna Verano-Yap, Lydia Chia and Daniel Olan allegedly signed an Indemnity Agreement to pay Utility Assurance the expenses of the latter in connection with the Surety Bond, that petitioners made the following investments with Interasia, to wit: NAME DATE AMOUNT EXHIBIT Quirino D. Panganiban February 18, 1992 P300,000.00 C-1 and "C-2" Luisito L. Gonzales January 31, 1992 185,500.00 D-1 and "D-2" Demetrio P. Salipsip, Jr. February 26, 1992 400,000.00 G-1 and "G-2" It has been established that petitioners' accounts moved in due course until Inter-Asia stopped its operations sometime in July 1992 and that when it closed, it left unpaid the following effective margins or cash credit balances of petitioners, to suit: NAME AMOUNT EXHIBIT Quirino D. Panganiban P318,090.22 E and "E-1" Luisito L. Gonzales 87,340.01 F and "F-1" Demetrio P. Salipsip, Jr. 240,021.76 G Petitioner Salipsip, however, has an additional claim of P50,000.00 which represented a supposed payment to him of P50,000.00 but which never released to him (Exhibit "G-3"). The same amount, if added to his Effective Margin, would result in a total claim of his of P290,021.76 (Exhibit "G-4"). According to the petitioners, they thereafter asked for payment from the respondents. In her testimony, Attorney-in-fact Myrna K. Panganiban sought them out; Utility Assurance ignored her whereas MIFE would pay only in the event the surety company failed to. Thus, petitioner said they were compelled to engage the services of a counsel, who subsequently wrote Utility Assurance for payment (Exhibit "H"). Still, no payment was forthcoming. Hence the suit. The liability of Inter-Asia, as the broker and primary liable for the return of petitioners' money, is unquestionable. For its part, Utility Assurance executed with Inter-Asia UTASSCO Surety Bond No. B-14390 G(16) 4545 dated December 12, 1991 (Exhibit "A") promising as follows: xxx xxx xxx NOW THEREFORE, in consideration thereof, this bond is given to secure the payment which the Commission may determine by order to any person or any loss or damage he may have suffered 1) by reason of any failure on part of the Principal on Commodity Future Commission Merchant/Broker and of its affiliated persons while acting for it, to comply with P.D. 902-A and the rules and regulations issued thereunder by the Securities and Exchange Commission and such other laws or 2) by reason of any violation of said Decree or such regulations governing commodity future transaction committed by said Principal and its affiliated persons while acting for it; and THE CONDITION OF THIS BOND is such that if during the full period that its registration as Commodity Future Commission Merchant/Broker is in force, the above-bounden Principal and all affiliated persons registered by it shall duly observe and faithfully comply with all the obligations specified on this bond as above-described, then this bond shall be null and void, otherwise it shall remain in full force and effect and the aggrieved party may sue it anytime until the lapse of one year from and after the date of expiration of the Principal's permit. The above-bounden parties hereby further agree that any person who may sustain damages covered by this bond, may, in addition to any other remedy that he may have bring an action before the Commission in his own name upon this bond for the recovery of any loss or damage sustained by them and upon such action being commenced the Commission in its discretion may require the filing of a new or additional bond immediately upon the recovery in any action on the original bond, the above-bounden Principal shall file a new or additional bond and upon failure to file in the same SEC within a new of ten (10) days in either case, such failure shall constitute efficient ground for the suspension or revocation of the Principal's certificate of ( illegible portion in SEC files ). llcd xxx xxx xxx While the bond was dated December 12, 1991, Utility Assurance clarified that its expiry date was December 31, 1992 (Exhibit "I"). The liability of MIFE for petitioners' claims is anchored on its Rules and Regulations providing; in part as follows: xxx xxx xxx 509 (a) To be compensable under the Compensation fund, the person making a claim must have suffered pecuniary loss in the course of or in connection with the commodity futures trading business of a Member which loss the Member cannot or refuses to pay because said Member has become insolvent or is under suspension of payment status . The default may be committed by the Member himself, if he is an individual, or by any of the Member's director, partner, employee or any other person acting for and on behalf of the Member. Only futures contracts duly registered, cleared and guaranteed by the Clearing House shall be compensable under the Fund, provided that recourse to the fund can only be made by a claimant after he has exhausted all available legal, administrative, and judicial remedies open to him . xxx xxx xxx MIFE argues among others that its liability has not attached since Interasia has not been declared insolvent or is not under suspension of payments status and that petitioners have not exhausted all legal, judicial and administrative remedies. We hold otherwise. The inability of Interasia to meet its obligations is a foregone conclusion. The Commission has official cognizance of Interasia's default and cessation of operations. To await its declaration of insolvency or suspension of payments before the investing public could seek relief on the Compensation Fund would destroy the spirit of the provision relied upon. As to the requisite exhaustion of available remedies, suffice it to say that petitioners have already written to Utility Assurance (Exh. "H") and made claims on MIFE which advised Mrs. Panganiban to bring the current suit as they did. To require more of the petitioners would effectively impose upon them unreasonable burdens especially since they had to move swiftly to salvage whatever they could or their investment. Moving now to the third-party claim anchored on the Indemnity Bond; as stated above, only third-party defendant Lorna Verano-Yap filed her answer. In Verano-Yap's verified answer, she denied having affixed her signature in the said Indemnity Agreement (Exhibit "1") and stated that the signature appearing thereat and purporting to be hers (Exhibit "1-E") is a product of forgery. To prove its allegation that Exhibit 1 was duly executed and signed by Third Party defendants, Third Party plaintiff presented the testimony of its Claims Supervisor, Mr. Dionisio Jabasa who substantially testified that Exhibit 1, purporting to be a notarized instrument, and containing the signatures of Third Party defendants, were found in company records in his possession. A second witness, Mrs. Carolina Recommendable, testified on the company practice of sending such Indemnity contracts to clients for their signatures, retrieving them, and sending them to company retained notary public for notarization. (TSN, August 16, 1996, p. 31). She further acknowledged that Exhibit 1 does not bear a notarial seal and furthermore, does not contain entries for the spaces provided for document number and page number normally appearing in notarized documents (Id. p. 35-36) On the part of defendant Lorna Verano-Yap, Atty. Rodel Batocabe testified that on or before December, 1991, when he was then the Chief of staff of then Rep. Lorna Verano-Yap, he distinctly recalls advising defendant Yap from affixing her signature in the said Indemnity Agreement explaining furthermore the "dangerous consequences", or legal ramifications of signing the same (TSN, January 6, 1997, p. 11). Further, he testified that such advise was heeded as precisely, it was this refusal of Rep. Yap to sign, herself angered by the request to affix her signature after realizing the consequences of the same, which led to the relationship between Defendant Yap and defendant Chia, the latter being the one who requested her to affix her signature in the said instrument, to henceforth be estranged. Atty. Batocabe further testified that defendant Yap was not an officer of Inter-Asia Multilink, but was merely holding office in the premises of defendant corporation (Id.). Defendant Yap herself testified to corroborate the testimony of Atty. Batocabe and positively stated that the signature appearing in Exhibit 1 and purporting to be hers was not her signature (TSN, January 6, 1997, p. 14). She also testified that while she is not positive as to the identity of the forger, it could be that her then personal Secretary, Ogie Palma, whom she described as a "golden arm" as he was capable of copying her signature, could have been the perpetrator of the forgery, which act was not sanctioned by her (Id., p. 28). A careful perusal of the evidence presented indicates that while Exhibit 1 purports to be a notarized instrument, it is nonetheless incomplete on its face for lacking a notarial seal and for not being registered in the notarial book of the notary purporting to have notarized the same. It is thus not a public instrument as there is no showing that the same was actually notarized and duly registered as such in the appropriate notarial book. When third Party defendant Lorna Verano-Yap impugned the genuineness of her signature appearing thereat, it was incumbent upon the Third party Plaintiff to prove otherwise. This it miserably failed to do as in fact, no evidence was introduced at all to prove that the same was indeed the signature of defendant Yap. On the contrary, what is no record is a testimony of a practice to send these indemnity agreement for signature of clients from the Third Party Plaintiff's office in Intramuros, Manila (TSN, August 16, 1996, p. 30) and have the same subsequently notarized but a notary public elsewhere. Atty. Romeo Mendoza, the purported Notary Public involved, works in Makati (Id.). Here therefore, evidence preponderates in favor of defendant Yap that the signature purporting to be hers and appearing thereat was forged as: it was most likely not signed and executed before the notary, and two, it was not notarized in due course. Plaintiff's claim that the instrument bears the signatures of all Third Party Defendants could have been given credence had they presented the notary himself, a disinterested person, to testify that the instrument was indeed executed by defendant Yap before him. For reasons, however, known only to the Third Party Plaintiff, no such evidence was presented. In view of what was presented to this Office, third-party defendant Lorna Verano-Yap should not be held liable to Utility Assurance. However, in the absence of any rebutting evidence, this Office gives credence to the allegations of the third-party plaintiff that Inter-Asia Multilink, Inc., Daniel Olan and Lydia Chia should be held liable to it pursuant to the Indemnity Agreement executed by them. WHEREFORE, judgment is hereby rendered ordering respondent Inter-Asia Multilink, Inc., Utility Assurance Corporation and Manila International Futures Exchange to pay petitioners Quirino D. Panganiban the amount of P318,690.22, Luisito L. Gonzales the amount of P87,340.00, and Demetrio P. Salipsip, Jr. the amount of P290,021.76 with interests, and attorney's fees of P15,000.00. Third-Party defendants Inter-Asia Multilink, Inc., Daniel Olan, and Lydia Chia are ordered to refund Utility Assurance Corporation whatever the latter would pay by virtue hereof. LLjur SO ORDERED. (SGD.) C. A. GERARD M. LUKBAN Hearing Officer