CASE 3 FOR SECURITIES

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.