An investment
company refers to any issuer which is or holds itself out as being engaged or
proposes to engage primarily in the business of investing, reinvesting or
trading in securities. As defined in
Sec. 2, par. (a), of the Revised Securities Act, 9 securities "shall
include . . . commercial papers evidencing indebtedness of any person,
financial or non-financial entity, irrespective of maturity, issued, endorsed,
sold, transferred or in any manner conveyed to another with or without
recourse, such as promissory notes . . ." Clearly, the transaction between
petitioners and respondent was one involving not a loan but purchase of
receivables at a discount, well within the purview of "investing,
reinvesting or trading in securities" which an investment company, like
ASIA PACIFIC, is authorized to perform and does not constitute a violation of
the General Banking Act. Moreover, Sec.
2 of the General Banking Act provides in part —
SECTION 2. Only
entities duly authorized by the Monetary Board of the Central Bank may engage
in the lending of funds obtained from the public through the receipt of
deposits of any kind, and all entities regularly conducting such operations
shall be considered as banking institutions and shall be subject to the
provisions of this Act, of the Central Bank Act, and of other pertinent laws
Indubitably,
what is prohibited by law is for investment companies to lend funds obtained
from the public through receipts of deposit, which is a function of
banking institutions. But here, the funds supposedly "lent" to
petitioners have not been shown to have been obtained from the public by way of
deposits, hence, the inapplicability of banking laws.
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