- Petitioner
- Queensland-Tokyo Commodities
- Respondent
- Thomas George
- Citation
- G.R. No. 172727
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Nachura, J.
- Decided
- September 8, 2010
Summary
Thomas George invested with Queensland-Tokyo Commodities Inc. (QTCI) in 1995 through unlicensed salesmen Mendoza and Lontoc, signing a Customer's Agreement that appointed Mendoza as his attorney-in-fact to manage his commodity futures trading account. When the SEC issued a cease-and-desist order against QTCI in 1996, George discovered the salesmen were unlicensed and sued for recovery of his investment. The SEC found that QTCI violated securities regulations by allowing unlicensed persons to handle client accounts and ordered return of George's investment plus damages. The Supreme Court affirmed this decision, declaring the Customer's Agreement void under the Revised Securities Act since it was executed in violation of securities regulations. The Court held that George, as the non-guilty party, could recover his investment under Civil Code Article 1412. Corporate officers Lau and Collado were held jointly and severally liable with QTCI under Corporation Code Section 31 for assenting to unlawful acts and gross negligence in supervision, though the Court reduced the damage awards from the original amounts.