REGULATION LOPEZ,LOCSIN,LEDESMA & CO.INC VS. CMS FACTS:
•On August 14 and 26, 1969 CMS Stock Brokerage,
Inc. (CMS for short) sold to Lopez, Locsin, Ledesma and Co., Inc., (LLL for short)
• 2,650 Benguet Consolidated shares for the total
price of • P297,650.00 on a ten (10) to twenty (20) days delayed • delivery basis , 500 shares were purchased for and on orders of Jose Ma. Lopez; 1,600 shares for and on orders of Alfredo Ramos; 275 shares for and on orders of Rene Ledesma; and 275 shares for and on orders of Cesar A. Lopez, Jr. CMS failed to deliver to LLL the 2,650 Benguet Consolidated shares within the ten (10) to twenty (20) days on January 5, 1970 the auditors discovered
that the 2,650 Benguet Consolidated shares
which CMS sold to LLL still remained undelivered and unpaid by LLL So CMS made known the LLL that it would effect delivery of said shares of stocks the following day
LLL refused to accept delivery at that late time
since its clients for whom the purchases were made had "elected to cancel" the orders on January 8, 1970 CMS replied that, pursuant to the Rules and Regulations of the Makati Stock Exchange, LLL had no right to cancel its orders, nevertheless, made a disposal in favor of LLL the next day.
On January 9, 1970, LLL refused to
acknowledge receipt of and sign the covering disposal letter BOARD OF GOVERNORS OF THE MAKATI STOCK EXCHANGE
Messrs. Lopez, Locsin, Ledesma & Co.,
Inc., as buyer of 2,650 Benguet share per contracts executed August 14, 1969 for delivery within 10 to 20 days be held to have violated Section 1 of Article VI of the Rules and Regulations of the Makati Stock Exchange for failure to advise the selling broker in writing within a reasonable time BOARD OF GOVERNORS OF THE MAKATI STOCK EXCHANGE
CMS Stock Brokerage, Inc., be, as it is
hereby held to have violated Section 1 (5) of Article XI of the Rules and Regulations of the Makati Stock Exchange for failure to give notice in writing on the agreed date of delivery of 2,650 Benguet shares and even within a reasonable time from said agreed date of delivery On March 15, 1971, CMS filed a complaint docketed as Civil Case No. 14518 in the Court of First Instance of Rizal against Lopez, Locsin, Ledesma & Co., Inc., to compel the latter to accept the shares of stock in question. ISSUE:
WHETHER OR NOT LLL SHOULD BE
COMPELLED TO ACNOWLEDGE DELIVERY OF THE SUBJECT STOCKS COURT OF FIRST INSTANCE OF RIZAL
Compelling defendant Lopez, Locsin, Ledesma &
Co., Inc., to accept delivery from plaintiff of the 2,650 shares of Benguet Consolidated covered by the latter's disposal letter of January 9, 1970 and to pay plaintiff the amount of P297,650.00
plus legal interest thereon from the date of extra-
judicial demand on January 9, 1970 until the said amount shall have been fully paid Consequently, Lopez, Locsin, Ledesma & Co., Inc., and third-party defendants Jose Ma. Lopez and Cesar Lopez, Jr., and Alfredo Ramos appealed to the Court of Appeals. COURT OF APPEALS On June 5, 1975, the Court of Appeals affirmed the decision of the trial court.
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