GR 136031; (January, 2002) (Digest)
G.R. No. 136031 ; January 4, 2002
JEFFERSON LIM, petitioner, vs. QUEENSLAND TOKYO COMMODITIES, INC., respondent.
FACTS
Queensland Tokyo Commodities, Inc., a licensed broker, entered into a Customer’s Agreement with investor Jefferson Lim. Lim deposited a US$5,000 manager’s check as margin for foreign exchange trading. As the check required a 17-day clearing period, Queensland, to accommodate Lim’s immediate trading request, advanced the peso equivalent (₱125,000) from its own funds. Lim signed a deposit notice acknowledging this advance and proceeded to trade through signed order forms. Initial trades yielded profit, but subsequent transactions incurred a loss of ₱44,465.
When Queensland later sought to replace the manager’s check with a properly endorsed traveler’s check, Lim, now aware of the loss, refused to complete the endorsement and demanded liquidation of his account and return of his investment. Queensland’s demands for settlement were ignored, prompting it to file a collection suit.
ISSUE
Whether petitioner Lim is liable to pay respondent Queensland the sum of ₱125,000 representing the advanced margin deposit.
RULING
Yes, Lim is liable. The Supreme Court affirmed the Court of Appeals’ decision, holding that a valid contract existed between the parties as evidenced by the signed Customer’s Agreement and deposit notice. The legal logic centers on contract law and the principle of estoppel. By signing the deposit notice (Exhibit “E-1”), Lim expressly acknowledged and consented to Queensland’s advance of the margin deposit on his behalf. His subsequent act of trading using the advanced funds constituted acceptance and ratification of this arrangement.
Lim cannot now disavow his obligation by claiming the advance was irregular or by refusing to complete payment via the traveler’s check. His failure to seasonably object to the funding arrangement and his active participation in trading operations estop him from denying his liability for the advanced capital. The loss from trading does not extinguish the primary debt for the margin deposit, which was a prerequisite for his account’s operation. Furthermore, the Court declined to address Lim’s new issue regarding a cease and desist order against commodity traders, as it was raised for the first time on motion for reconsideration at the appellate level, violating the rule that issues must be raised seasonably in the lower court.