People Vs Petralba
People Vs Petralba
People Vs Petralba
SECOND DIVISION
[G.R. NO. 137512 : September 27, 2004]
PEOPLE OF THE PHILIPPINES, Appellee, v. ELVIRA PETRALBA, Appellant.
RAYMOND HOUSCHT, JEFF GONZALES, and RICHARD ALCANTARA, Co-
Accused.
D E C I S I O N AUSTRIA-MARTINEZ, J.:
Dr. Bailey gave the accused a check worth $6,000.00 as her starting capital for foreign
exchange trading to be handled by Mr. Richard Alcantara, the manager of Lansdale.
Accused Petralba assured Bailey that the business was protected by a foreign company
in the amount of $4,000,000.00. Four (4) persons, namely, Petralba, the manager, the
assistant manager and another person were present. Petralba signed a receipt wherein
her confirmatory signature appears.
Bailey demanded partial return of her investment from accused Petralba but the latter
failed to do so. Bailey contacted the office of Lansdale, its officers including the
manager and Petralba several times but these persons were always out. Finally, Bailey
went to the Securities and Exchange Commission (SEC), filed a complaint and
executed an affidavit before Atty. Cunanan, the director, the original copy of which is
with the SEC. She likewise submitted the original copy of the receipt with the SEC.
When Bailey signed the check for investment, the persons present were Alcantara,
Petralba and two others. Alcantara introduced himself as the Assistant Vice-President of
Lansdale. The customer's agreement was signed by Bailey.
It was Atty. Rosalinda San Fontanosas of SEC's legal department who investigated
Lansdale Enterprises in connection with the complaint of Dr. Leoni Bailey after a certain
Felix Chan in their office resigned.
On July 2, 1991, all the accused were not yet licensed as traders when they presented
to Dr. Bailey the investment proposal except Mr. Alcantara who has a license for the
period from January 15, 1991 to December 31, 1991.
Lansdale Enterprises Ltd. has not been registered with the Securities and Exchange
Commission (SEC) per first indorsement dated July 25, 1994 and another indorsement
dated July 20, 1994
After trial on the merits, the RTC rendered judgment, finding the accused Elvira Petralba
guilty beyond reasonable doubt in three (3) counts of Violations of Sections 4, 19 and
29 of Batas Pambansa Bilang, otherwise known as The Revised Securities Act.
On appeal to the Court of Appeals, the appellate court affirmed in full the RTC
judgment.
ISSUE: Whether the contract between complainant Dr. Leoni Bailey and Lansdale
Enterprises Ltd. falls within the term "securities" contemplated by the Revised Securities
Act.
HELD: No. The Court of Appeals erred in affirming the RTC's decision. The
prosecution failed to establish the guilt of appellant beyond reasonable doubt.
Appellant claims that the transaction that transpired between complainant and her
employer Lansdale was a mere foreign exchange trading which is not covered by the
term "securities" of B.P. Blg. 178,13 the prevailing law at the time of the commission of
the alleged crimes.
Clearly therefrom, as pointed out by the Office of the Solicitor General, the foreign
exchange trading transaction that transpired between complainant and Lansdale
appears to be an investment contract or participation in a profit sharing agreement that
falls within the definition of the law.
When the investor is relatively uninformed and turns over his money to others,
essentially depending upon their representations and their honesty and skill in
managing it, the transaction generally is considered to be an investment contract.