Monday, January 25, 2016

Virginia A. Zamora vs. Jose Armando Eduque, Roy Tang CheeHeng, et.al. [GR No. 174005, January 25, 2012]

FACTS: Respondents held the positions of officers or directors or both of East Asia, a licensed investment company that dealt in securities and commercial papers. Zamora gave East Asia sums in July 1999 to buy for her certain commercial papers that Metro Pacific Corporation (MPC) had issued. In turn, East Asia gave her an outright sale invoice for each transaction, and a Custodian Receipt, indicating that it was keeping the commercial papers for her. Once these papers matured, East Asia was to either roll-over the investments or have the papers redeemed, depending on Zamora's instruction. Becoming suspicious of her dealings with East Asia when she discovered that some of the new commercial papers it bought for her carried the same serial numbers as some of the commercial papers it also previously bought for her, Zamora requested the redemption of her matured and “on demand” placements. East Asia told her, however, that it did not have enough funds to comply with her request. She learned that MPC had already paid East Asia for these papers and that most of the papers that matured were not in her name but in those of other persons.

ISSUE: Whether the money received by East Asia were in the nature of loans to the company in the form of money-market placements to exonerate its officers from prosecution for estafa

RULING: No. East Asia acted as dealer of commercial papers and custodian of the same on Zamora's behalf. This is clear from the terms of its sale invoice and custodian receipt. East Asia acquired the commercial papers in trust and was obliged to deliver them and their proceeds to Zamora, failing which, its responsible officers could be prosecuted for estafa. The Court held that Sesbreno Case was not applicable because that case involved a money market placement under a short-term credit instrument, not commercial papers.


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