G.R. No. 136031 - January 4, 2002
JEFFERSON LIM, Petitioner, vs. QUEENSLAND TOKYO COMMODITIES, INC., Respondent.
Before us is a petition for review assailing the June 25, 1998, decision1 of the Court of Appeals in CA-G.R. CV No. 46495 which reversed and set aside the decision of the Regional Trial Court of Cebu, Branch 24, dismissing the complaint by respondent for a sum of money as well as petitioner's counterclaim.
Private respondent Queensland Tokyo Commodities, Incorporated (Queensland, for brevity) is a duly licensed broker engaged in the trading of commodities futures with full membership and with a floor trading right at the Manila Futures Exchange, Inc..2
Sometime in 1992, Benjamin Shia, a market analyst and trader of Queensland, was introduced to petitioner Jefferson Lim by Marissa Bontia,3 one of his employees. Marissa's father was a former employee of Lim's father.4
Shia suggested that Lim invest in the Foreign Exchange Market, trading U.S. dollar against the Japanese yen, British pound, Deutsche Mark and Swiss Franc.
Before investing, Lim requested Shia for proof that the foreign exchange was really lucrative. They conducted mock tradings without money involved. As the mock trading showed profitability, Lim decided to invest with a marginal deposit of US$5,000 in manager's check. The marginal deposit represented the advance capital for his future tradings. It was made to apply to any authorized future transactions, and answered for any trading account against which the deposit was made, for any loss of whatever nature, and for all obligations, which the investor would incur with the broker.5
Because respondent Queensland dealt in pesos only, it had to convert US$5,000 in manager's check to pesos, amounting to
Petitioner Lim was then allowed to trade with respondent company which was coursed through Shia by virtue of the blank order forms, marked as Exhibits "G", "G-1" to "G-13",7 all signed by Lim. Respondent furnished Lim with the daily market report and statements of transactions as evidenced by the receiving forms, marked as Exhibits "J", "J-1" to "J-4",8 some of which were received by Lim.
During the first day of trading or on October 22, 1992, Lim made a net profit of
Meanwhile, on October 22, 1992, respondent learned that it would take seventeen (17) days to clear the manager's check given by petitioner. Hence, on October 23, 1992, at about 11:00 A.M., upon management's request, Shia returned the check to petitioner who informed Shia that petitioner would rather replace the manager's check with a traveler's check.11 Considering that it was 12:00 noon already, petitioner requested Shia to come back at 2:00 P.M.. Shia went with petitioner to the bank to purchase a traveler's check at the PCI Bank, Juan Luna Branch at 2:00 P.M.. Shia noticed that the traveler's check was not indorsed but Lim told Shia that Queensland could sign the indorsee portion.12 Because Shia trusted the latter's good credit rating, and out of ignorance, he brought the check back to the office unsigned.13 Inasmuch as that was a busy Friday, the check was kept in the drawer of respondent's consultant. Later, the traveler's check was deposited with Citibank.14
On October 26, 1992, Shia informed petitioner that they incurred a floating loss of
On October 27, 1992, Citibank informed respondent that the traveler's check could not be cleared unless it was duly signed by Lim, the original purchaser of the traveler's check. A Miss Arajo, from the accounting staff of Queensland, returned the check to Lim for his signature, but the latter, aware of his
Respondent asked Shia to talk to petitioner for a settlement of his account but petitioner refused to talk with Shia. Shia made follow-ups for more than a week beginning October 27, 1992. Because petitioner disregarded this request, respondent was compelled to engage the services of a lawyer, who sent a demand letter18 to petitioner. This letter went unheeded. Thus, respondent filed a complaint19 against petitioner, docketed as Civil Case No. CEB-13737, for collection of a sum of money.
On April 22, 1994, the trial court rendered its decision, thus:
On appeal by Queensland, the Court of Appeals reversed and set aside the trial court's decision, with the following fallo:
Petitioner herein filed a motion for reconsideration before the Court of Appeals, which was denied in a resolution dated October 6, 1998.22
Dissatisfied, petitioner filed the instant recourse alleging that the appellate court committed errors:
Despite the petitioner's formulation of alleged errors, we find that the main issue is whether or not the appellate court erred in holding that petitioner is estopped from questioning the validity of the Customer's Agreement that he signed.
The essential elements of estoppel are: (1) conduct of a party amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intent, or at least expectation, that this conduct shall be acted upon by, or at least influence, the other party; and (3) knowledge, actual or constructive, of the real facts.23
Here, it is uncontested that petitioner had in fact signed the Customer's Agreement in the morning of October 22, 1992,24 knowing fully well the nature of the contract he was entering into. The Customer's Agreement was duly notarized and as a public document it is evidence of the fact, which gave rise to its execution and of the date of the latter.25 Next, petitioner paid his investment deposit to respondent in the form of a manager's check in the amount of US$5,000 as evidenced by PCI Bank Manager's Check No. 69007, dated October 22, 1992.26 All these are indicia that petitioner treated the Customer's Agreement as a valid and binding contract.
Moreover, we agree that, on petitioner's part, there was misrepresentation of facts. He replaced the manager's check with an unendorsed traveler's check, instead of cash, while assuring Shia that respondent Queensland could sign the indorsee portion thereof.27 As it turned out, Citibank informed respondent that only the original purchaser (i.e. the petitioner) could sign said check. When the check was returned to petitioner for his signature, he refused to sign. Then, as petitioner himself admitted in his Memorandum,28 he used the traveler's check for his travel expenses.29
More significantly, petitioner already availed himself of the benefits of the Customer's Agreement whose validity he now impugns. As found by the CA, even before petitioner's initial marginal deposit (in the form of the PCI manager's check dated October 22, 1992)30 was converted into cash, he already started trading on October 22, 1992, thereby making a net profit of
Clearly, by his own acts, petitioner is estopped from impugning the validity of the Customer's Agreement. For a party to a contract cannot deny the validity thereof after enjoying its benefits without outrage to one's sense of justice and fairness.
It appears that petitioner's reason to back out of the agreement is that he began sustaining losses from the trade. However, this alone is insufficient to nullify the contract or disregard its legal effects. By its very nature it is already a perfected, if not a consummated, contract. Courts have no power to relieve parties from obligations voluntarily assumed, simply because their contracts turned out to be disastrous or unwise investments.33 Notably, in the Customer's Agreement, petitioner has been forewarned of the high risk involved in the foreign currency investment as stated in the "Risk Disclosure Statement,"34 located in the same box where petitioner signed.
Further, petitioner contends that the Customer's Agreement was rendered nugatory because: (1) the marginal deposit he gave was in dollars and (2) respondent allowed him to trade even before the US$5,000 manager's check was cleared. This contention is disingenuous to say the least, but hardly meritorious.
Petitioner himself was responsible for the issuance of the US$5,000 manager's check. It was he who failed to replace the manager's check with cash. He authorized Shia to start trading even before the US$5,000 check had cleared. He could not, in fairness to the other party concerned, now invoke his own misdeeds to exculpate himself, conformably with the basic principle in law that he who comes to court must come with clean hands.
Contrary to petitioner's contention, we also find that respondent did not violate paragraph 14 of the Guidelines for Spot/Futures Currency Trading, which provides:
Respondent claims it informed petitioner of its policy not to accept dollar investment. For this reason, it converted the petitioner's US$5,000 manager's check to pesos (
Neither is there merit in petitioner's contention that respondent violated the Customer's Agreement by allowing him to trade even if his manager's check was not yet cleared, as he had no margin deposit as required by the Customer's Agreement, viz:
But as stated earlier, respondent advanced petitioner's marginal deposit of
Anent the last assigned error, petitioner faults the appellate court for not taking judicial notice of the cease and desist order against the Manila International Futures Exchange Commission and all commodity traders including respondent. However, we find that this issue was first raised only in petitioner's motion for reconsideration of the Court of Appeals' decision. It was never raised in the Memorandum41 filed by petitioner before the trial court. Hence, this Court cannot now, for the first time on appeal, pass upon this issue. For an issue cannot be raised for the first time on appeal. It must be raised seasonably in the proceedings before the lower court. Questions raised on appeal must be within the issues framed by the parties and, consequently, issues not raised in the trial court cannot be raised for the first time on appeal.42
WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals dated June 25, 1998, in CA-G.R. CV No. 46495 is AFFIRMED. Costs against petitioner.
Bellosillo, Mendoza, and De Leon, Jr., JJ., concur.
Search for www.chanrobles.com
|Copyright © ChanRoblesPublishing Company| Disclaimer | E-mailRestrictions|
ChanRobles™Virtual Law Library ™ | chanrobles.com™