Mercantile Law Bar Examination Q & A (1990-2006)

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ANSWERS TO BAR EXAMINATION QUESTIONS IN

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o+vs. P4 mi!!ion, 2his is %aying out or %ermitting the $0 ordinary Andre/ ?ee0 ourse hereby o+ assign0 business0 trans+er or and has Chattel 3nsolvency, Parties, (erivative 3nsure2, /etail Common Mortgage Accommo2ation Tra2e Acci2ent 'rau2ulent vs. *uit% Private 4a8 vs. /e1uisites vs. After<3ncurre2 ( Payment Carrier, !!3) *uici2e Party 4/ ( (efenses ((200.) (2002) !!7) /etail !!3) 9&ligations 1/ 84 67 /1 Tra2e (2002) 3nsure2, Parties, 3nsolvency, (erivative 4a8 94 ( !!!) Acci2ent Accommo2ation Ha&it ( !!0) *uit% Juris2iction, 77 *ystem Chattel 4/ ?atere2 *uici2e /etail (200+) Mortgage, *ole Party ( Tra2e *toc$ 94 !!+) Proprietorship (2003) Ha&it 1/ 4a8 ('oreclosure !!3) 3nsurer% *ystem, 88 ( !!0) Parties, 67 ( 6ffects% !!0) Agent (erivative 4/ ( !!") Accommo2ation /etail // of *everal the 3nsolvency, 77Tra2e *uit, /egistere2 Chattel 3nsurers Close 4a8, Law ...................................................................................................................... to be %aid out +unds o+ the bank a+ter the insu++i on-ey0 ient abso!ute!y rea!i6ab!e and assets un onditiona!!y0 to meet to its ,an-s2 Classi&ications o& ,an-s (2002) Mortgage, o&ligations Party Corporation, (200+) Consignment 98ner (2003) 1/ (200+) 98nership that 88 3nsurer, survive Corporate (Parties, 94 !! Maritime 3r2 )of (4/ !!") Accommo2ation Party Thing 9pportunity // Commerce, 4ia&ility Mortgage2 3nsolvency, (200+) ( !!0) Party #are&oat ( ;oluntary !!0) 67 1/ (200+) (erivative 3nsurer, 71 (2003) 3nsolvency 88 Cre2it 3r2 Parties, 94 *uit, Party Transactions Prior Minority Procee2ing Eol2er 4ia&ility 9perator *toc$hol2er in (2000) ( (ue ( /ule !!!) !! Course 14 (2003) ) 71 // 3nsurer, (2003) 3nsolvency, Mortgage 94 ( !!3) /egistere2 61 3r2 88 (istinction% Party ( ;oluntary !!!) Parties, 4ia&ility, 98ner, 71 (e #9(% 6lection ofannot Aliens&hereina+ter as mem&ers (200+) .. #9(, Capacity of (irectors ( !!0) .. #9(, Compensation !atter be amesi> inso!-ent, 2his a De$osit t is %ena!i6ed !iabi!ities0 Ready *redit or ,rin!i%les Bank ontinue in a!!ed business the ,an-s: 2here A$$lica.ilit%: are /orei'n &=) !asses Currenc% o+ banks Act identi+ied 0 +eneral of Mer!antile Law ..............................................................................5. Mortgage vs. Eol2er facto =o Conclusive 3nvoluntary 'ault in Corporation (ue vs. 3n2emnity 4evy Course Presumption *olvency (2003) vs. ( ( !!0) ( !!.) Corporation !!+) 7/ ( 88 !!0) 14 Mortgage, // Parties, 3nsurer, 98 4a8 Trans<*hipment, &y on Eol2er 6stoppel 3r2 65tra:u2icial Corporate Party in (ue (200.) 4ia&ility, /ecovery #ill 'oreclose Course of 61 Cuitclaim 4a2ing, (istinction% ( (2003) !!0) (2000) &in2ing ( 88 /4 !!.) 7/ Parties, (ivi2en2s /eha&ilitation, contract Mortgage, 14 3nsurer, Eol2er vs. ( !!3) 'oreclosure Profit% AuthoriDe2 in *tay (ue 98 9r2er Cash Course (river (2003) (2000) (ivi2en2 ( !!7) Clause 7/ vs. /4 by +ine o+ not !ess than P30000,00 nor more /ithout %robab!e a!! o+ my right0 !osses to and its ( de%ositors interest in and or3nterloc$ing ( Bank) !! ) .. #9(, Conflict of tit!e 3nterest !!.) .. #9(, (irectors (De$osits !!+)Banking .. #9(, 3nterloc$ing (irectors Secrec% in the o& ,anDenera! (2001) ?a/ o+ 2000, ;ame at Mortgage, *uspension 89 *toc$ ( Parties, !! a )(ivi2en2 14 'oreclosure Eol2er of 3nsurer, Payment in (200+) (ue AuthoriDe2 (2003) vs. Course, 61 3nsolvency (istinction, 7/ (river 3n2orsement Mortgage, Clause !!+) Private /4 'oreclosure in (2003) vs. *uspension &lan$ Pu&lic 14 (2002) 3nsurer, of Corporation of 3mprovements 89 Payments Place AuthoriDe2 of (200.) Payment vs. ( (river *tay !!!) 61 Partnership (istinction, 9r2er (2000) Clause, 7/them Mortgage, (2003) 89 vehicle *toc$ /4 is *uspension vs. stolen =on<*toc$ ( !!3) Commercial Transaction (2003) 5. Account (2000) 5. Joint Account vs. (2000) 5. Theory of than P300000,00 and by im%risonment +or reditorsH my or ounts has /i!!+u!!y re ei-ab!e -io!ated +rom a(Joint 7ome +ina! ease 7i !east 9ie!ding +our &') o+ +i!ed and a'oreclosure, e>%!ain om%!aint the ( to !!0) .6 #y<4a8s, ;ali2ity, limiting 1ualifications of #9( mem&ers ( *or%oration !!7) .6 #y<4a8s, ;ali2ity, limiting Commercial Transaction (2003) 6ffect of Payments, Corporation 18 of 3nsurer, mere /eha&ilitation -roup ta$ing (200.) 3nsurance, &y 6/ cre2itor<mortgagor (ivi2en2s% /eceiver 6mployer<Policy ( (eclaration !!!) /4 of *uspension property Eol2er of (ivi2en2s (2000) ( !!2) of Payments, (200+) 18 74 3nsurer, Mortgage, 6/ /eme2ies (ivi2en2s% 4ia&ility /e2emption (2003) of the *ources 3nsurers /8 Perio2, of (ivi2en2s, ( 'oreclose2 !!0) 18 4oss% Trust not !ess than t/o nor more than ten years, and Bui!ders desist De-e!o%ment order0 in-o!-ing *or%oration a tscommerce. against distinguishing +i-e o+ itshara o++i teristi ers or -io!ation +un )tion o+ o+ This work is intended for sale or This work is freeware. It+or ma !e Cognition vs. Theory of Manifestation (..............................................................................................4/ !!") 5.or ;ali2ity, 1ualifications ofnot #9( mem&ers (2000) .6 #y<4a8s, limiting 1ualifications of #9( mem&ers (200 .6 Negotia'le Instr.ments Law What do you understand by the term ANSWER( transa &hereina+ter tions amounting a!!ed the Ab!igor) to +raud arising or +rom a :e SU++ESTE6 ea tion 13 o+ &4() the *or%oration *ode, 2he Property 'un2 Actual (2002) (octrine Total 4oss 74 (200+) Mortgage, ( !!0) 6/ 19 (ivi2en2s, /eme2ies 4oss% Constructive (eclaration (2003) 78 Total Preference of (ivi2en2s 4oss (200+) of h Cre2its ( one, !!0) 19 4oss% 6/ (2002) (ivi2en2s, Total 78 Promissory 4oss (eclaration 9nly (=ote% !!2) of4ia&ility 19 (ivi2en2s Marine ;ali2ity, limiting 1ualifications of #9( mem&ers (2003) .7 Close Corporations, (ea2loc$s ( !!+) .7 Any +our &') o+ the si> &=) !asses o+ ,an-s2 7nsol enc%2 Re5uirements ()**+) #y<4a8s, ommer ia! transa tion"# $s itinstitution, essentia! that dissi%ation de!i-ery o+ the housing assets units o+ the /ith aof tota! ontra 2he t ( )Crosse2 or%oration !aimed that the said o++i ers #on2% #on2 vs. *urety #on2 (200.) 4/ Chec$s% Chec$s (200+) 44+o!!o/ing Chec$s% Crosse2 Chec$s vs. (200 ( !! 3nsurance, ) 78 ) Cash 6/ /eme2ies, 3mplie2 (ivi2en2s, ?arranties Availa&le (eclaration to (2000) Mortgagee<Cre2itor /0 (ivi2en2s Marine 3nsurance, (200 !!0) 6/ Peril (ivi2en2s, 78 of /eme2ies, the *hip /ight, vs. Availa&le Managing Peril of to the Corporation Mortgagee<Cre2itor *ea ( !!7) ( /0 !! Mutual )?a/ 64 banks identi+ied in the Denera! Banking at !east one %arty to a ontra t be a Di-e the basi re5uirements to be om%!ied Close2 Corporation, /estriction, Transfer of shares ( !!.) .7 Controversy, 3ntra<Corporate ( !!.) .1 freel co"ied and distri!#ted. It is "rimaril intended for all those who desire to ha$e a main %ri e %ur%ose o+ P'00000000,000 o+ the the Re des ei-er ri%tion is and to /ere gui!ty o+ ad-an ing their %ersona! Cancelle2 Chec$s (200.) 44 Crosse2 Chec$ ( !! 44 Chec$s, Crosse2 Chec$ ( 6ffects, !!.) are 44 Chec$s, (200 (octrine 3nsurance ) 79 /eme2ies, of Company, Corporate *ecure2 =ature 9pportunity (e&t ) Chec$s, (efinition ( !! (200+) ) su 79 (2000) 64 /0 65piration of the Corporate Term (200.) 64 Merger of 3 ,n"versal #an$s E 2hese those ,an-s2 Dili'ence Re5uire6 ()**2) o+ ) 20020 to /it: mer hant in order to onsider h 6ffect% a /ith by B:P be+ore the @onetary Board Tr.st Law Controversy, 3ntra<Corporate ( !!0) .1 Controversy, 3ntra<Corporate ( !!0) .1 Controversy, 3ntra<Corporate re ommend ontra t Re!ei%ts -a!ue the rehabi!itation o+...........................................................................................................................5. /hi h ...............................................................................................................98 are or atta !i5uidation hed hereto o+ interests to the %re.udi e o+ the or%oration0 an-ing Law SUGGESTED ANSWER: Crosse2 Chec$ ( tion# !!+) 48 Chec$s, Crosse2 Chec$ ( of !!0) 48 Chec$s, Crosse2 Chec$ ( e>%anded !!0) 48 Chec$s, 6ffect, /hi h used to be a!!ed $n the e-ent that $ sha!! be unab!e to %ay my Corporations ( !!!) 64 6ffects, ?in2ing >p Perio2 a Corporation ( !!") 68 6ffects, ?in2ing >p Perio2 of P!a ido0 a bank de%ositor0 !e+t his he kbook ommer ia! transa &'() an de !are a bank inso!-ent0 order it !osed the as bank, Anne> A &hereina+ter a!!ed the Juris2iction and .1 that they /ere gross!y neg!igent in a (2000) .1 Controversy, 3ntra<corporate, ( !!") Corporation *ole, (efinition (200.) ./ A *ommer ia! transa tion" is de+ined as ,,,,,, dee"er #nderstandin% of the iss#es to#ched ! the Phili""ine Bar E&aminations and its ommer ia! banks and the o%erations o+ outstanding Trust /eceipts indebtedness 4a8, Acts ) 9missions, o/ned to Covere2 the (2000) 98 Trust /eceipts 4a8, 4ia&ility for estafa ( !! ) 99 Acceptance &y the 2ra8ee &an$ ( !!7) 48 Chec$s, 6ffects, Alterations, Prescriptive Perio2 ( !!0) 48 Chec$s, on his desk at his house, 8nkno/n to him0 a and +orbid it +rom doing +urther business in Corporation (2000) 68 'oreign Corporation, @(oing in of the Philippines ( Aside !!7) 68 'oreign #an$s% Applica&ility% 'oreign Currency (eposit Act #usinessA ) *ecrecy #an$ (eposits (200+) 5. #an$s% Collateral Re ei-ab!es)," hand!ing its a++airs, +rom doCorporation, uments Corporation% 3ssuance of shares of stoc$ to pay for the services (200+) ./ Corporation% /ight of /epurchase of $t is not essentia! that at !east one %arty to SU++ESTE6 ANSWER( /hi h are no/ %rimari!y go-erned by the Bank0 the Bank sha!! ha-e the right0 /ithout -isitor at the time0 noti ing the same0 took a the Phi!i%%ines, Trust /eceipts 4a8, 4ia&ility for 6stafa ( !!") 99 Trusts /eceipt 4a8 (2003) 99 'orge2 Chec$, 6ffects (2000) 49 Chec$s, 4ia&ility, (ra8ee #an$ !!+) 80 Chec$s, Material Alterations, @(oing #usinessA in#an$s% the Philippines, Acts or Activities (2002) 68( 'oreign Corporation, @(oing #usinessA inathe and ontra ts0 the a!so submitted *ecurity (2002) 5. *ecrecy of #an$ (eposits, -arnishment (200.) 56 or%oration #an$s, Classifications of4ia&ility #an$s the ia! transa tion be a mer hant, Be+ore the @onetary Board an2hey de !are ,.'li! Servi!e Law ...............................................................................................................89 *hares, Trust 'un2 (octrine ./ Corporation% *ole Proprietorship (200.) ./ Corporation, Articles of Denera! Banking ?a/ o+ 2002, an any +urther +orma!ity or a(200+) t on its %art0 to he kommer there+rom0 +i!!ed it u% in the amount o+ ( !!!) 80 Chec$s, Presentment ( !!.) 80 Chec$s, Presentment in e-iden (2003) e re 80 ords Chec$s, o+ the ;ali2ity, o++i ers ?aiver 8,:, of Do!!ar #an$Gs Philippines, Test (2002) 69 Joint ;enture, Corporation ( !!0) 69 4ia&ilities, #9(, Corporate Acts ( !!0) (2002) 56 #an$s, Conservator vs. /eceiver (2000) 56 #an$s, (iligence /e1uire2 (it !!2) 57 #an$s, 3nsolvency, What is essentia! is that the transa tion bank inso!-ent0 order !osed and +orbid it 69 trend. Itt is s"eciall intended for law st#dents from the "ro$inces who' $er often' are e>er ise the %o/ers o+ an in-estment house o!!e the Re ei-ab!es +rom the Ab!igor and P10000,00 and su eeded in en ashing the Letters of Cre&it ..................................................................................................................../8 3ncorporation ( !!0) ./ Corporation, #ul$ *ales 4a8 (200+) .4 Corporation, #y<la8s (200 ) .8 Corporation, de%osits in se-era! banks o-erseas - Boston Certificate of pu&lic Convenience ( !!7) 89 Certificate of Pu&lic Convenience, insepara&ility of certificate an2 lia&ility for negligence ( !! ) 80 (efenses, 'orgery (200.) 85 'orgery, 4ia&ilities, Prior ) *u&se1uent Parties e-in e an intent to engage in ommer e or +rom doing +urther business in the 4ia&ilities, *toc$hol2ersB (irectorsB 9fficers ( !!") 69 Piercing the Corporate ;eil ( !!.) 69 Piercing the Prohi&ite2 Transactions (2000) 57 #an$s, 3nsolvency, /e1uirements ( !!") 57 #an$s, /estrictions on 4oan and in-est in non-a!!ied enter%rises, 2hey toka%%!y the same %ro eeds thereo+ to/ard he on the day, P!a idos a ount <or their %art0 the o++i ers +i!ed a Bank rimina! Commencement, Corporate 65istence (2003) .8 Corporation, Conversion of *toc$ Corporation (200 ) ;e/ .8 8. Bank0 Bank o+ :/it6er!and0 and o+ trade, Phi!i%%ines0 the +o!!o/ing basi re5uirements 4etter vessel of ( Cre2it% !!2) 90 Mortgage Certificate (200+) of Pu&lic /8 4etter Convenience, of Cre2it, Certification /e1uirements from ( !!+) Consignee 90 Po8ers ( !!3) of /8 the 4etters Pu&lic of *ervice Cre2it, ( !!0) 85 'orgery, 4ia&ilities, Prior ) *u&se1uent Parties ( !!+) 85 3ncomplete ) (elivere2 (200.) Corporate ;eil ( said !!0) 7057 Piercing the Corporate ;eil (200 ) 70 Piercing the Corporate ;eil *afety (200.) 70 Piercing ha-e the highest a%ita!i6ation %ayment o+ my Accommo2ations (2002) #an$s, /estrictions on 4oan Accommo2ations (2000) 51 #an$s, #o5, /as thereby debited in indebtedness," the same amount, om%!aint against the dire tors o+ re5uirement, 7i (eposit 9ie!ding Us.ry Law ...............................................................................................................................99 9ork, Joint Account (2000) Corporation, (e 'acto Corporation (&an$ !!.) .8 Corporation, (issolution, Metho2s of 4i1ui2ation (200 ) the .8 reci"ients of deli!eratel distorted notes from other #nscr#"#lo#s schools and 3 2here must be an e>amination by must be om%!ied /ith by the B:P0 to Andre/ to %ay the !oan on its due date Dis o-ering the erroneous debit0 P!a ido 4ia&ility Commission of +ai!ed a ( confirming !!3) 90 Pu&lic an2 notifying utilities (2000) ( !!.) 90 /evocation /9 4etters of of Certificate Cre2it, 4ia&ility ( !!3) of 95 alaw =otifying /evocation #an$ of (2003) Certificate /9 3ncomplete an2 (elivere2 (200+) 8. 3ncomplete 3nstruments, 2 3ncomplete Co--er."al (elivere2 #an$s 3nstruments E 2hese vs. 3ncomplete *or%oration +or -io!ation o+ Re%ub!i A/it: tare ;o, the Corporate ;eil (2000) 70 Pre<emptive /ight (200 ) 70 Pre<6mptive /ight vs. Appraisal /ight ( !!!) 75 *6C, 4ia&ility 51 #an$s, *ecrecy of #an$ (eposit, AM4C (2000) 51 #an$s, *ecrecy of #an$ (eposit, 65ceptions What is a .oint a ount# &2() head o+ the 3ncorporation, De%artment o+ :u%er-ision or as his Corporation, 3ncorporation, /e1uirements (2000) Corporation, /e1uisites (2002) on :e%tember 30 2002, When the Bank demanded that the bank redit him /ith a .8 >sury 4a8 ( !!) 99 ordinary or regu!ar ommer ia! banks0 ='2=0 other/ise kno/n as the <oreign 4etters ( !!3) 95 of Cre2it, Three (istinct Contract /elationships (2002) /9 >n2elivere2 3nstrument (2000) 8. 3n2orser% 3rregular 3n2orser vs. -eneral 3n2orser (200+) 8.ondition =egotia&ility (.9 !!3) SUGGESTED ANSWER: Juris2iction, Transferre2 Juris2iction ( !!0) 75 *toc$hol2er, (elin1uent, >npai2 *u&scription ( !!") 75 (2000) 5/ #an$s, *ecrecy of #an$ (eposits ( !!0) 5/ #an$s, *ecrecy of #an$ (eposits ( !! ) 5/ #an$s, e>aminers or agents into the o+ the attem%ted to2he o!!ebank t +rom the Ab!igor0 !ike amount, re+used on the the Corporation, Meetings, #9( ) *toc$hol2ers ( !!3) .9 *urren Corporation, =ationality of Corporation ( !!7) .9 86 distinguished +rom a! uni-ersa! bank, 2hey y De%osit A t o+ the Phi!i%%ines, 2he A .oint a ount is a transa tion o+ mer hants st#dents. (hare to others this work and o# will !e richl rewarded God in hea$en. 8. =egotia&ility (2002) 86 =egotia&ility, Eol2er in (ue Course ( !!2) 86 =egotia&ility, /e1uisites (2000) *toc$hol2ers% Preemptive /ight (200.) 7. *toc$hol2ers, Appraisal /ight that (2003) 7. *toc$hol2ers, /emoval of *ecrecy #an$ (eposits ( !!2) 54 #an$s, *ecrecy bank, of #an$ (eposits ( a%ita!i6ation !!.) 54 #an$s, *ecrecy of #an$ Ware"o.se Re!ei%ts Law Bank dis of o-ered that the !atter had a!ready ground that P!a ido /as neg!igent in !ea-ing ha-e a3nvest !o/er re5uirement than o++i ersto a!!eged their bank de%osits /ere Corporation, Corporation ( .................................................................................................500 !!3) .9 Corporation, Po8er Corporate 'un2s for other Purpose /here other =on<*toc$ mer hants agree to ontribute =egotia&le 3nstrument% Am&iguous 3nstruments ( !!7) 87 =egotia&le 3nstrument% (efinition ) Characteristics 2 2he e>amination dis !oses that the 9fficers ) #9( (200 ) 7. *toc$hol2ers, /emoval, Minority (irector ( !! ) 7. *toc$hol2ers, /ights ( !!0) 7. !osed o%erations and !i5uidated a!! its his (eposits he kbook ( o+ !!+) on his 54 #an$s, desk so *ecrecy of he#an$ ou!d (eposits ( !!7) 54dis #an$s, *ecrecy of #an$ (eposits (2000) 58 uni-ersa! banks and e>er ise i!!ega!!y !osed +or /ant o+ a60 ourt order0 the amount agreed u%on0 and /e1uisites ( !!+) 60 87 Corporation, Po8er tothat 3nvest Corporate 'un2s in =egotia&le another Corporation (annot !!0) Corporation, #ill of 4a2ing ( a%ita! !!7) 500 (elivery of -oo2s, ( !!7) 500 (elivery of the -oo2s ( the !! ) vs. 500 ondition o+ the bank is one o+ -arnishment inso!-en y0(200 or (200+) 3nstrument% 32entification (200+) 87 3nstrument% =egotia&le (ocument assets, 2he Bank sued Andre/ +or o!!e tion0 not %ut u% the=egotia&le de+ense o+ +orgery or /ant o+ *toc$hol2ers, ;oting Po8er of *toc$hol2ers ( !!0) 7. *toc$s, 3ncrease of Capital *toc$ (200 ) 7. *toc$s, *aleB #an$s, *ecrecy of #an$ (eposits, 65ceptions (200.) 58 #an$s, *ecrecy of #an$ (eposits, ) %o/ers o+ an in-estment house and in-est in and that su h de%osits /ere not e-en the It is also $er %ood karma. Maritime Commer!e ............................................................................................................./9 %arti i%ating in the +a-orab!e or un+a-orab!e Ins.ran!e Intelle!t.al Law ,ro%erty ........................................................................................................................79 ............................................................................................................./0 /ecovery of Moral (amages ( !!7) 60 Corporation, *eparate Juri2ical Personality ( !!+) 65 Corporation, 2he -arnishment <a ts dis 3nstrument !ose or Attachment that e-en of81 -oo2s to the ( om%!aint !!!) naked 500 =egotia&le (ocuments of Title ( !!2) 500 98nership of -oo2s that its ontinuan eagainst in business /ou!d but Andre/ mo-ed to dismiss the authority under the ;$?, =egotia&le (200+) =egotia&le 3nstrument, =egotia&ility ( !!") 81 =egotia&le 3nstruments, #earer non-a!!ied enter%rises, sub.e t o+ the ase them, a) Wi!! the Transfer of Certificates of *toc$ ( !!0) 76 *toc$s, *aleB Transfer of Certificates of *toc$ (200 ) 76 *toc$s, *aleB 58 #*P, /eceivership, Juris2iction ( !!2) 58 4egal Ten2er (2000) 59 P(3C 4a8 vs. *ecrecy of #an$ (eposits resu!ts thereo+ in the %ro%ortion they may Se!.rities Reg.lation ..........................................................................................................95 eye0 there marked di++eren es bet/een in-o!-e %robab!e !oss to/eceipt or *eparate Juri2ical Personality ( -eneral !!0) 65 Corporation, *eparate Juri2ical Personality ( reditors !!0) 65 Corporation, 9ie!ding *or%oration %ros%er# E>%!ain, on the ground that the debt had a!ready *tore2 (/ere !!2) 505 /ight to the -oo2s (200+) 505 >npai2 *eller, =egotiation ofCarriage the (3nstruments, !!3) 505 ;ali2ity of Average, Particular Average vs. Average (2003) /9 #ottomry ( !!.) 40 of (eviation% 1 /!r"ft #an$s E 2hese banks &su h /0 as +i!ed against the dire tors o+in 7i #eneficiary% Copyright 6ffects% (59 !!+) 3rrevoca&le /0 Copyright, #eneficiary Commissione2 (200+) 79 Artist #eneficiary% ( om%!aint !!+) /0 /ights, Copyright, 3rrevoca&le Commissione2 #eneficiary Artist (200+) (200.) 10 3nstrument ( !!7) 81 =egotia&le 3nstruments, #earer 3nstruments (in !!") 81 =egotia&le &earer determine, Transfer of Certificates of *toc$ (200.) 76 Trust 'un2 (octrine ( ANSWER: !!2) 76 Trust 'un2 (octrine, 3ntra<Corporate Act ( !!") /esponsi&ilities ) 9&:ectives of #*P (*eparate !!7) 59 Juri2ical Truth 4en2ing Act ( !! )-oo2s% 59 Truth 4en2ing SUGGESTED P!a idos signature and the one in the he k de%ositors, been %aid by reason o+ his e>e ution o+ the *eparate Juri2ical Personality ( !!!) 65 Corporation, Personality (2000) 6. Corporation, stipulations e5cusing 8arehouseman from 505 sa-ings and mortgage banks0 sto k Joint Account s! "artners#i$ (2000) 4ia&ility 3nsi2er (200.) (200+) 95 40 3nsi2er Carriage Tra2ing -oo2s, (an2 !!+) (eviation, 95negligence 3nsi2er Tra2ing, Proper Manipulative (200+) Practices Carriage (*urren !!.) of -oo2s, 9.y Manipulative 65ercise #eneficiary, Copyright, 4ife 3nfringement 3nsurance, Prohi&ite2 ( of !!.) /0 #eneficiaries Copyright, 3nfringement ( ?hen !!7) Concealment, ( 2he !!") /540 Material Copyright, Concealment 3nfringement (200 (sa-ings !!7) ) 10 instruments, of ma$er in2orsers (200 )(2000) 81 =egotia&le 3nstruments, an2 un2elivere2 ;o0 be ause the <oreign De%osit A /5 t Controversy (lia&ilities !! ) Assignment 76 Actby (2000) 59 +orged the -isitor, As bet/een P!a ido and 110 head o+ saidincomplete De%artment sha!! a+oresaid Deed o+ /hi h0 being and !oan asso iations0 and %ri-ate Distinguish *eparate Juri2ical .oint Personality a ount (2000) +rom 6. %artnershi%, Corporation, *et<9ff, >npai2 *u&scription ( !!.) 6. Corporation, *toc$ 65traor2inary Practices (200 (iligence ) 9. *ecurities (200+) /egulation 40 Charter Co2e, Party Purpose ( !! ) 40 ( !!7) Charter 9. *ecurities, Party (200.) (efinition 45 C9-*A% ( !!0) Prescription 9. *ecurities, of SU++ESTE6 ANSWER( Concealment, Copyright, 3nfringement Material Concealment% (2000) /5 3ncontesta&ility Copyright, Photocopy, Clause ( 8hen !!.) 10 allo8e2 Concealment, ( !!7) /5 Material 3nfringement Concealment% vs. >nfair &R,A, ;o, ='2=)0 in !uding its %uniti-e instruments, hol2er in 2ue course (2000) 8/ =egotia&le 3nstruments, 3ncomplete (elivere2 3nstruments, the bank0 /ho shou!d bear the !oss# E>%!ain, in+orm in /riting the @onetary Board o+ su h abso!ute and un onditiona!0 /as in essen e a SUGGESTED ANSWER: de-e!o%ment banks);ali2ity may e>er ise most o+ &1() 2he Corporation bank (200 ) bear 6. Corporation, the A ;ali2ity dra/ee of Corporate bank Acts ( !!7) 66 Corporation, of Corporate Acts %ro-isions0 re+ers toinstrument, +oreign de%osits ClaimsFActions *elling of shou!d *ecurities, (200.) Meaning 45 C9-*A, (2002) Prescription 9. Ten2er of Claims (2002) (+a !!2) 96 45 C9-*A, Prescription of urren Claims (2000) 4. )e wo#ld to seek the ind#l%ence of the reader for some Bar *#estions which ts, 3ncontesta&ility Competition (Clause !!0) /5 ( Bank 3nfringement !!0) 10 Concealment, vs. >nfair Competition Material Concealment% (2003) /5 3nfringement, 3ncontesta&ility (y !!") /5are Patent, 15 Comparative =egligence (!oss, !!") 8/ =egotia&le 3nstruments, $in2s of negotia&le 8or2s of negotia&ility da ion enlike %ago, 2he o%%osed the 9ffer 2he +o!!o/ing are the distin tions bet/een the %o/ers and +un Juris2iction tions Clause o+ a (2003) ommer ia! must e>er ise the highest di!igen e in (2002) Corporation, ;oluntary (issolution (2002) Corporation, ;oting Trust (the !!2) 66 /. a (ounts /ithin Phi!i%%ines, $t ' 8%on +inding said in+ormation or 'ault C9-*A, Prescriptive Perio2 (the !!+) 4. (octrine of 3nscruta&le 'ault (onstituted !!+) 4. (octrine of 3nscruta&le motion0 ontending that Deed o+ Patents% .oint a 66 ount and %artnershi%: Concealment, =on<Patenta&le Material (2000) /5 -as<*aving Clause !! (evice% )e> 15 Concealment, first to file Material rule (200+) Concealment, Patents% (2002) 8/ =egotia&le 3nstruments, /e1uisites ( 66 !!0) 84 =otice (ishonor ( Agreement !!0) 84 Parties, Accommo2ation bank e%t that they annot0 among others0 Edited and Arranged by: SU++ESTE6 ANSWER( sa+eguarding the 3nventions a Concealment, ounts o+ 3ncontesta&ility its !ienthas no a%%!i ation at a!! to a ounts0 e-en statement to be true0 the @onetary Board &3) A %artnershi% has +irm name /hi!e a Assignment /as on!y a se urity !oan, $+ ( !!") 4. (octrine of 3nscruta&le 'ault ( +or !!7) 4. 4imite2 /ule ( which !!.) 4. 4imite2 /ule ( !!") 4. o%en urrent or he k 4ia&ility a ounts /ithout %rior 3ncontesta&ility 3nfringement, Clause the /eme2ies question (a !!7) ) 15 is (efenses outside 3nsura&le the (a !!3) 3nterest% scope /. of #an$ Patents, (eposit 3nfringement (2000) 15( 3nsura&le !!2) /. 3nterest% Patents, Pu&lic /ights 6nemy over the Party ((Since !!0) 84 Parties, Accommo2ation Party ( !! ) 4ia&ility 84 Parties, Accommo2ation Party ( !!0) 84 de%ositors, 2he bank is a!so harged /ith im"ro"erl classified #nder a to"ic Silliman and for University some to"ics College are im"ro"erl or though they banks0 o%ened and sha!! a%%oint a reare ei-er to take harge o+ the .oint a /ere ount has none and is ondu ted in /ule you the Budge0 ho/ /ou!d you reso!-e the Bar Examination, it is recommended @onetary Board a%%ro-a!0 and they annot 4imite2 4ia&ility /ule ( !!!) 4. 4imite2 4ia&ility (2000) 46 4imite2 4ia&ility /ule, (octrine of 3nscruta&le genuineness (2000) 3nvention 1.o+ 3nsura&le (o+ !!0) the 3nterest% /6 signatures Tra2emar$ *eparate o+ ( !!0) 3nsura&le its /6 urrent Tra2emar$ 3nterest ( !!!) ( !!.) 1. /6 3nsura&le Tra2emar$B 3nterest, Test 61uita&le ofthe (ominancy 3nterest !!0) !! ) /6 b) Was there a -io!ation o+ :e re y((o+ Bank onstituted abroad, assets and !iabi!ities o+ the bank, of Law at!" #00$ thethe name the %artner, motion to ostensib!e dismiss +i!ed by Andre/# that the candidate be given full credit of issue !etters o+ 4ia&ility redit, 2heir o%erations are a ount ho!ders, But /hat an be more 'ault ( !! ) 46 4imite2 4ia&ility /ule, -eneral Average 4oss (2000) 46 4imite2 /ule, -eneral Average De%osits ?a/ &Re%ub!i A t ;o, 3'04)# E>%!ain, 1. Tra2emar$, 3nsura&le 3nterest, 3nfringement 4ife vs. ( Property !! ) /6 3nsurance Tra2emar$, ( Test !!") of 1. (ominancy 3nsura&le 3nterest, ( !!0) /7 4ife Tra2ename% vs. Property 3nternational 3nsurance (2000) Affiliation 4 go-erned Within =0 days0by the @onetary Board &2) E>%!ain Whi!e Mis!ellaneo.s a %artnershi% ......................................................................................................................50. has be .uridi a! &4() 5%, whatever may his answer, and he Bar %rimari!y the 2hri+t Banks A t o+ i%norantl "hrased' for the a#thors are +#st Re$iewees who ha$e "re"ared this striking is that there /ere marked di++eren es &4() 4oss (2000) 46 2he motion to dismiss shou!d be granted, 2he sha!! determine and on+irm i+ the bank is 16 %ersona!ity 1. (200+) 3nsura&le /7 and 3nterest, may 4ife sue vs. or be Property sued 3nsurance under (2002) 16 3nsura&le 3nterest, Property 3nsurance ( !!.) be given a bonus if he made an answer in 3FF4 &RA 7F0=), SU++ESTE6 ANSWER( bet/een P!a idos signature and the onea! 6nergy /egulatory Commission% Juris2iction )in Po8er (200.) 50. 'our AC3( Pro&lems of Philippine Ju2iciary sim%!e abso!ute and un onditiona! inso!-ent0 and %ub!i interest re5uires0 to the following manner ! U%&ate& 'y( its +irm name0 a .oint a ount has no .uridi 3nsura&le 3nterest, Property 3nsurance (200 ) 16 3nsurance, Cash ) Carry #asis (2003) 16 3nsurance, Co< ' be ause Rural #an$s E these are those /hi h ;o0 the %uniti-e %ro-isions o+ the Trans%ortation Law ..............................................................................................................96 the he k +orged by the -isitor, *ertain!y0 (2000) 50. -overnment (eregulation vs. PrivatiDation of an 3n2ustry (200.) 50. Political 4a8, ?T9 ( !!!) 50. on-eyan e embodied in the deed o+ order the !i5uidation o+ the bank, %ersona!ity and an sue or be sued on!y in work while re$iewin% for the Bar E&ams #nder time constraints and within their are organi6ed %rimari!y to (ou&le e>tend !oans ;o, and 3nsurance vs. /e<3nsurance ( !!.) 16 3nsurance, (ou&le 3nsurance (200+) 17 3nsurance, 3nsurance, :e re y o+ Bank De%osits ?a/ &R,A, P!a ido /as not neg!igent in !ea-ing his &1) Whi!e %artnershi% has a ommon +und0 assignment /ou!d be o%erati-e0 and theTra2e the name o+ the ostensib!e %artner, Po8era of the *tate% /egulating of (omestic (200.) 506 Tariff an2 Customs Co2e% ;iolation of Customs #oun2ary *ystem (200+) 96 Carriage, #reach of Contract, of ( !!0) 96 Carriage, other +a=egligence i!ities to +armers0 +ishermen or 3'04)0 in redit !uding the statutory e>em%tions effect ( !!3) 3nsurance, 6ffects, Payment of Premiums &yPresumption 3nstallment (2000) 17 3nsurance, 4ife 3nsurance, he kbook in17 his o/n desk &0N# v 1u"-po a .oint a ount has none, assignment /ou!d onstitute essentia!!y a ,an-s2 7nsol enc%2 "ro#i.ite6 Transactions (2000) 4a8s (200.) 506 +arm +ami!ies0 as /e!! as oo%erati-es0 #reach of Contract, Presumption of =egligence ( !!") 96 Carriage, 'ortuitous 6vent ( !!+) 96 Carriage, %ro-ided therein0 are not a%%!i ab!e to <*D8 D BAR-Retake 2007 158 'CRA 582 ) Assignment of%artnershi%0 Policy (o+ !! ) a!! 17 3nsurance, Perfection of to 3nsurance Contracts (2003) 17 3nsurance, Property &') Whi!e in %ayment a genera! mode o+ da ion en!osed %ago, limited knowled%e of the law. )e wo#ld like seek the reader,s ind#l%ence for a 2he @onetary Board or the B:P 8rban mer hants0 and) %ri-ate and %ub!i em%!oyees a ounts0 e-en /hen onstituted !olot a!!y, 4ia&ility, 4ost #aggage oro+ Acts of Passengers (a !!") 97 Carriage, Prohi&ite2 ;ali2 *tipulations (2002) 97 %artners ha-e the right management0 in ,an-s: Secrec% o& ,anDe$osits2 Garnis#ment (2003) 3nsurance, Prescription of Claims ( !!0) 17 3nsurance, /eturn of Premiums (2000) 11 3nsure2, Acci2ent Policy Bank a+ter it en ountered ri%%!ing +inan ia! and /hose o%erations are %rimari!y go-erned & Intengan v. Court of Appeals, G.R. No. 128996, Carriage, ;aluation of (amage2 ( /ith !!3) 97 Common Carrier ( !!0) 97 Common Carrier, #reach of .oint a 11 ount0 the ostensib!e %artner *D* maintained a sa-ings aCargo ount (200.) 3nsure2, Acci2ent vs. ( !!0) di++i u!ties that resu!ted in a *uici2e bank run, I011 one by the Rura! Banks A t o+ 3FF2 &RA 7141), February 15, 2 2 ) &4) Whi!e !i5uidations o+ a %artnershi% of t "o%ra"hical errors in this work. manages its business o%erations, *Bank, An orders o+ the @@ Regiona! 2ria! ,an-s: Collateral Securit% (2002) Contract, (amages (2003) 97 Common Carrier, (efenses (2002) 91Cooperat"ve Common Carrier, (efenses, 'ortuitous o+ the members o+ the BAD o+ the bank0 4 #an$s E these are those may0 by agreement0 be entrusted to a %artner *ourt0 the :heri++ garnished P400000 o+ his Andre/ is engaged in the business o+ 6vents ( !!.) Common Carrier, (efenses, 4imitation of /hi 4ia&ility ( !!7) 91 Common Carrier, (efenses, attended and 91 stayed throughout the entire h are organi6ed %rimari!y to %ro-ide or %artners0 in satis+y a .oint a ount !i5uidation a ount0 to the .udgment in +a-or o+ bui!ding !o/ost housing units under meeting o+ the Board that /as he!d /e!! in (uration of 4imitation ofon!y 4ia&ility (200 )by 91 Common Carrier, +inan 4ia&ility ia! and ( !!0) redit 91 Common ser-i es Carrier, to oo%erati-es (uty to The A#thors thereo+ an be *D* done the ostensib!e his reditor0 @A, om%!ained that the ontra ts /ith rea! estate de-e!o%ers, 7e ad-an e o+ the bank run and be+ore ne/s and /hose o%erations are %rimari!y go-erned .lSales Law .......................................................................................................................0 65amine #aggages, /ail8ay an2 Airline !!2) 9/re Common Carrier, Test (a !!0) 9/o+ Common Carriers, (efenses %artner, garnishment -io!ated the ?a/ on( the :e y -#l ./' .001 a%%!ied +or !oan P1 @i!!ion +rom Ready had begun to tri k!e to the business by the *oo%erati-e *ode o+ the Phi!i%%ines T#eor% o& 9/ Co'nition s! T#eor% o& 4ia&ility (ani&estation ()**+) ( o+ !!0) Common foria! 4oss (e !! ) 9/ Bank De%osits be ause the e>isten o+ Bank &the Bank)0 (2000) /hi h.0re5uired #ul$ *ales 4a8, Carriers, Covere2 Transactions (%it !!.) .0 #ul$ *redit *ales 4a8, Covere2 Transactions #ul$ *ales ommunity about the dire +inan the &RA =F1G), 2he *i-i! *ode ado%ts the theory o+ his had sa-ings a into, ount $mmediate!y /as dis !oseda+ter to the ,an-s2 Conser ator s! Recei er (2004) Andre/ to %ro-ide o!!atera! se urity +orofit, bank +a!!en the 4a8, Covere2 Transactions (2000) .0 #ul$ *ales ( !!3) .0 #an$s #ul$ *ales 4a8, 9&ligation the = Isla-". E these are those SU++ESTE6 ANSWER( ognition0 /hi!e the *ode o+ *ommer e 4a8, 65clusions %ub!i , &4() $s *D*Cs om%!aint meritorious Distinguish bet/een the ro!e o+ Andre/ o++ered to assign to the Bank his a meeting0 I aused the %re%aration and ;o, *D*Cs om%!aint is not meritorious, $t /as he!d /hi h are organi6ed %rimari!y to %ro-ide ;en2or ( !!+) .5 #ul$ *ales 4a8, 9&ligation of the ;en2or ( !!") .5 #ul$ *ales 4a8, 9&ligation of the ;en2or genera!!y re ogni6es the theory o+ Nationali4e& A!tivities Un&erta-ings ........................................................................47 or not# Reason brie+!y, or onser-ator and that o+ re in ei-er o+ a bank, re +inan ei-ab!es amounting toa es P' mi!!ion +rom issuan e #an$"ng o+ a in managers he %ayab!e to in(200 C!"na Corporat"on v.k %rtega, &9 'CRA (55 ia! and redit ser-i a manner or mani+estation0 the %er+e tion o+ ontra ts, ) .5 SU++ESTE6 ANSWER( &2,4() 7ome Bui!ders De-e!o%ment *or%oration &the Insolven!y Cor%orate Re!overy .................................................................................../7 SUGGESTED that %eso ANSWER: de%osits may and the himse!+ in Activities the sum o+ be 4 garnished mi!!ion )19*(+ transa tion onsistent $s!ami =ationaliDe2 or >n2erta$ings ( !!3)%esos 47 =ationaliDe2 Activities or >n2erta$ings (/ith !!.)the 47 =ationaliDe2 7o/ do these t/o2 theories di++er# 2he *onser-ator is a%%ointed +or a %eriod not Ab!igor), 2he Bank a e%ted o++er, 8nder the theory o+ %!a ognition0 the o+ de%ositary an om%!y /ith order e5ui-a!ent to bank the amount ed or the in-ested :hariah, At %resent0 on!y the A! the Amanah Activities or >n2erta$ings ( !!+) 41 /etail Tra2e 4a8 ( !!0) 41 /etail Tra2e 4a8 ( !! ) 41 /etail Tra2e 4a8 e> eeding one &3) year0 to take harge o+ the 3nsolvency vs./ithout *uspension of ( !!7) /7 3nsolvency% ;oluntary 3nsolvency (200+) /7 3nsolvency, A $s!ami ording!y0 Andre/ obtained the !oan Assets and a the e%tan e is onsidered to e++e ti-e!y garnishment -io!ating the ?a/ on the in bank by a business a Payment 5uaintan e,bind 7e $n-estment Bank o+ the Phi!i%%ines assets0 !iabi!ities0 and the management o+ a ( !!2) 41 he e>e uted a %romissory note undertaking vs. 4ia&ilities ( !!7) /1 3nsolvency, Assignees ( !!0) /1 3nsolvency, 6ffect, (eclaration of 3nsolvency ( !! ) /1 the:e o++eror on!y +rom the time itthe ame tothe his re y o+ Bank De%osits, E>e ution is no/ !aims that he is kee%ing +unds in has been organi6ed as an $s!ami Bank, bank or a 5uasi-bank in a state o+ ontinuing to %ay the !oan in +u!! in one !um% sum on kno/!edge, the theory o+ goa!+or o+ !itigation as it is its +ruit, Darnishment trust the 8nder o/ner and that he had SU++ESTE6 ANSWER( inabi!ity0 or to maintain a Cons.mer ,rote!tion Law ...................................................................................................5 :e%tember 30 un/i!!ingness 20020 together /ith interest Cre&it Transa!tions ..............................................................................................................77 mani+estation0 the ontra t is %er+e ted at is o+ agree the ution %ro 8%on ommitted no e>e -io!ation o+ the Denera! ;o, $ %art do not that there is ess, no -io!ation o+ ondition o+ !i5uidity deemed ade5uate to thereon at the rate o+ 20( %er annum, At the theser-i moment /hen the ao+ e%tan e is de !ared e o+ the noti e garnishment on the Banking A *ystem t&RA &RA 1170 as amended) +or /hi h the statute 1170 as amended), I -io!ated Metric 4a8 ( !!.) .5 Chattel Mortgage vs. After<3ncurre2 9&ligations ( !! ) 77 %rote t the interest o+ de%ositors and same time0 Andre/ e>e uted a Deed o+ or made bybe the o++eree, bank /here the de+endant de%osited he shou!d %unished, Do %re%aration you agree+unds0 that :e G4 /hen he aused the and reditors, in An the other hand0 Re ei-er Assignment +a-or o+ the Bankthe assigning tois su h +unds be ome %art o+ the sub.e t there has been no -io!ation o+ the statute# issuan e o+ a managers he k a%%ointed to manage a bank or 5uasi-bank the Bank his re ei-ab!es +rom the Ab!igor, matter o+ !itigation, &1() that is unab!e to %ay its !iabi!ities in 2he deed o+ assignment read:

Mercantile Mercantile Law Law Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006) Page 1/ Cor%oration of 103 Page %ayab!e Page # 0 3 10 of 3 $ 1 5 11 of 103 to of 103 of 103 himse!+ 103 Page 13in of the 103sum Page / of 103 Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006) Page 1# of 103

+eneral ,rin!i%lesTA of )* F LE OR EC)NTENTS WARD an-ing Law Mer!antile Law

MERCANTILE LAW
(1990 2006)

ARRANGED BY TOPIC

Dondee

From the ANSWERS TO BAR EXAMINATION QUESTIONS b the U! "AW #OM!"EX $ !%I"I!!INE ASSO#IATION OF "AW S#%OO"S 200&

2"dated3 -#ne .4' .004

June 27, 2007

,an-s2 Restrictions on 8oan Accommo6ations (2002) As %art o+ the sa+eguards against im%rudent banking0 the Denera! Banking ?a/ im%oses !imits or restri tions on !oans and redit a ommodations /hi h may be e>tended by banks, $denti+y at !east t/o &2) o+ these !imits or restri tions and e>%!ain the rationa!e o+ SU++ESTE6 ANSWER( ea h o+ them, &4() Any t/o &2) o+ the +o!!o/ing !imits or restri tions on !oan and redit transa tions /hi h may be e>tended by banks0 as %art o+ the sa+eguards against im%rudent banking0 3 to /it: '#2 Rules E &i,e,0 :ing!e Borro/ers ?imit) ru!es are those %romu!gated by the Bangko :entra! ng Pi!i%inas0 u%on the authority o+ :e tion 14 o+ the Denera! Banking ?a/ o+ 20000 /hi h regu!ate the tota! amount o+ !oans0 redit a ommodations and guarantees that may be e>tended by a bank to any %erson0 %artnershi%0 asso iation0 or%oration or other entity, 2he ru!es seek to %rote t a bank +rom making e> essi-e !oans to a sing!e borro/er by %rohibiting it +rom !ending beyond a s%e i+ied ei!ing, 2 3%'RI Rules E 2hese ru!es %romu!gated by the B:P0 u%on authority o+ :e tion 4 o+ the Denera! Banking ?a/ o+ 20000 /hi h regu!ate the amount o+ redit a ommodations that a bank may e>tend to its

Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Page Page 10 11 1$ of 103 of 103 +i!ed obser-ed name a om%!aint o+ other by the /ith %ersons, de%ositary, the *ity 2o

de%osits ', :u%%osing im%airment dire under tors0 the RA o++i !ause, tit!es 3'040 ers0 o+RA sto as the amended, kho!ders =G120 houses and reating and *an !ots their a are Bank the ommission inre!ated %ossession .usti+iab!y interests to in-oke o+ ondu &thus0 the tRA ?uansing an DA:R$), 3'04 in-estigation and Denera!!y0 Rea!ty0 a) o+ $n the not ,0res%ond isa itbanks +ai!ed under to the ob!igation redit 3FGF /rit a and ommodations ou% to b) de!i-er 5uash detat the the to and tit!es its to SU++ESTE6 ANSWER( to Rudy# sub%oena re ommend DA:R$ &2,4() +or must e>amination# measures be in the&4() to regu!ar %re-ent ourse simi!ar o+ 9es, 9es0 Whether itbusiness has an the ob!igation transa tion to is onsidered tit!es to a o+ attem%ts to sei6e and on %o/er terms is de!i-er not a -a!id !esse>er +a-orab!e ise sa!e Rudy, orto money As ?uansing %!a ement Rea!ty0 does $n not , make istonot the a ,an-s2 o& ,anDe$osits ()**2) %o!i eSecrec% the %o/er, bank than those o++ered nonmoney o-ered sub.e institution t matter under o+bank !itigation" :e tion /ithin o+ the 1, orro ;o ommer ia! sha!! make any :o re borro/ers, ei-ed O300000 +rom a1 +oreign bank DA:R$ the Anti-@oney meaning o+ ?aundering :e 2 entit!ed o+ RA A 3'04 t0 it/hi may h not !oan or dis ount on the se urity o+ shares o+ a!though she /as on!y to O30000,00, %rohibits in-oke this the !a/ dis to !osure re+use or de!i-ery in5uiry o+ into the bank tit!es its o/n sto k, %!an to $n an a%ita! a%%arent on ea! the ,an-s2 Secrec% o& ,anE9ce$tions (2004) de%osit to Rudy, e> e%t in De$osit2 ases /here the money erroneous!y sent amount0 she o%ened a do!!ar 8nder Re%ub!i A t ;o,3'04 &2he Bank ,an-s2 Restrictions on 8oan Accommo6ations (2004) the de%osited or in-ested is the sub.e t matter a ount /ith her !o a! bank0 de%osited :e!itigation" re is y ?a/)0 bank are Pio the and %resident Bank, 7is o+ nor /i!!de%osits it o+ matter /hether the O300000 issued 'Western he ks onsidered in the amount ,an-s2 Secrec% o& ,anDe$osits (2000) abso!ute!y on+identia! and may not be bank ea /i+e a%%!ied +or a !oan /ith said to h money /as s/ind!ed," o+ O20000 and 3 he k the +or O30000 DP is a sus%e ted .ueteng !ord /ho iso++i e>amined0 in5uired or !ooked into by any er to!d +inan e an internet a+e, 2he !oan %ayab!e to di++erent indi-idua!s /ho rumored to her be en.oying %o!i e and mi!itary %erson0 go-ernment o++i ia!0 bureau or o++i e, her that a%%!i ation /i!! not be a%%ro-ed de%osited the same in their res%e ti-e do!!ar SU++ESTE6 ANSWER( %rote tion, 2he en-y o+ many drug !ords What 2he sender the e>grant bank e%tions# then &4() a /ho i-i! suit be are ause the o+ !oans to re!ated a ounts /ith di++erent !obrought a! banks, 2he e> e%tions to the Bank :e reo-ery y ?a/ arethe had not es a%ed the dragnet o+ the !a/0 DP be+ore the R2* +or the re o+ interests o+ bank dire tors0 o++i ers0 and the +o!!o/ing: /as summoned to %rohibited a amount, hearing o+ erroneous!y sent $n the the ourse o+ the kho!ders is by the Denera! 3, sto :%e on ia! or genera! e>amination o+ a SU++ESTE6 ANSWER( *ommittee Ra keteering and Ather tria!0 the sender %resented testimonies o+ Banking ?a/, E>%!ain /hether the !oan bank0 authori6ed by the Bangko :entra! :e tion 1= o+ the Denera! Banking ?a/ o+ in :yndi ated *rimes o+ the that 7ouse o++unds ng bank o++i ia!s to sho/ the /ere0 o++i er is orre t, &4() Pi!i%inasC @onetary Board0 in ondu onne ting tion a /ith 2000 does not /hi entire!y %rohibit Re%resentati-es0 /as +a t0 de%osited in ahbank by :o dire orrotors andor %aid aongressiona! bank +raud or serious irregu!arity, o++i ers o+ the bank0 dire in t!y or %arti indire t!y0 in in-estigation aid o+ i%ated out to se-era! %ersons0 /ho 2, +romE>amination by an inde%endent the bank, this ase0 !egis!ation" the +rom in-o!-ement o+ $n %o!i e and the borro/ing on on ea!ment and dissi%ation o+ the Auditor0 hired by the Bank and +or Bank0 the /hi Pio is the %resident o+ Western mi!itary %ersonne!0 and %ossib!y e-en o+ !o a!h amount that :o orro had erroneous!y 1, Dis !osure /ith the De%ositorCs /ritten BankCs e> him !usi-e use, makes an ia!s0 o++i er0 dire tor and :o orro mo-ed to strike out said go-ernment o++i in the i!!ega! a testimonies ti-ities o+ re ei-ed, %ermission, sto kho!der o+ the said bank, 2he Denera! +rom the re ord in-oking the !a/ on se re y sus%e ted gamb!ing and drug !ords, 3 bank $n ase o+ $m%ea hment, Banking ?a/ %ro-ides +or additiona! o+ de%osits, $+ you /ere the Budge0 :ub%oenaed to attend the in-estigation /ere 2 $n tions ases o+ Bribery or dere!i tion o+ out# restri to the bank be+ore it an !end to /ou!d you issue an order to strike them o++i ers o+ ertain identi+ied banks /ith a duty bytors a ANSWER( Pub!i A++i er0 u%on order o+ a o+ SU++ESTE6 its dire or o++i ers, A /ritten a%%ro-a! Why# dire ti-e to them to bring the re ords and om%etent ourt, $ /i!! not strike out thethe testimonies +rom ma.ority -ote o+ a!! dire tors o+ the the do the uments o+ bank de%osits o+ indi-idua!s re 1 ord, $n ases 2he o+ testimonies money de%ositedLin-ested o+ bank o++i ia!s bank0 e>in !uding the dire tor on erned0 mentioned the sub%oenas0 among them is /hi h0 in turn0 is the sub.e t o+ ?itigation0 indi ating /here the 5uestioned do!!ar re5uired, <urthermore0 su h the dea!ings must DP, DP and the banks o%%osed %rodu tion SU++ESTE6 ANSWER( a u%on ounts order /ere o+ a om%etent o%ened *ourt, in tode%ositing be u%on terms not !ess +a-orab!e the bank o+ the banks re ords o+ de%osits on the 9es, 2he o%%osition is -a!id, DP is not a %ub!i ', misa%%ro%riated DA:R$ ?oans: ?oans /ith their Banks ' sums must & be onsidered as than those o++ered to others Section "#$%, ground that no su h in5uiry is a!!o/ed under o+ Bank o++i ia!, 2he Dire in-estigation tors0 A++i ers0 does :to not kho!ders in-o!-e and one !ike/ise in-o!-ed in !itigation E one /hi h is &entral Ban'(s )*anual ofDe%osits +egulations the ?a/ on :e re to y o+ Bank &RA for o+ the e> e%tions the %rohibition against re!ated interests, among the e> e%ted ases under the :e re y Ban's and ,ther -inancial .ntermediaries, 3'04 as amended), $s the o%%osition o+ DP diso+ 4 !osure ?oans o+ any in e> in+ormation ess o+ 4( o+ on the erning BankCs bank Bank De%osits A&0, t )4elon #an$ v 4ags"no cited in +anioso v/ 1/+/ 2o/ ""34"%, and the banks -a!id# E>%!ain, ,an-s2 Secrec% o& ,anDe$osits de%osits under the ?a/ on :e()**3) re y o+ Bank *a%ita! Sa&et% M 6((+ :ur%!us De$osit ,o92 8ia.ilit% 19 'CRA 5ecember 6, $777 ), A -io!ation o+ this @igue!0 a s%e ia! /ai-ed agent is De%osits, = and 2he 2he Borro/er *ommittee ondu his right ting the as @; AP rented austoms sa+ety de%osit bo>harged at %ro-ision /i!! ause his or her %osition to be be+ore the Ambudsman /ith ha-ing a o+ 5uired in-estigation is not a y om%etent ourt or the regards the :e re o+ Bank :$BA;J, 2he %arties signed a De%osits ontra t de !ared -a ant and the erring dire tor or 4, %ro%erty the Anti-Dra+t and o+onditions %ro%ortion to his sa!ary0 Ambudsman 7 Nio!ation authori6ed under the !a/ to is in !ease /ithout theo+ that: the bank o++i er sub.e ted to the %ena! %ro-isions o+ *orru%t Pra tio+ es A t,the -io!ation the Anti-Dra+t and *orru%t issue sub%oena +or %rodu tion o+ the notaa de%ository o+ the ontents o+ the sa+e the ;e/ *entra! Bank A t, =, *ou% dC etat ?a/ &RA =F=G0 Pra es A t, the 2he Ambudsman a bank reti ord in-o!-ing su h dis !osure, and has neither %ossession nor issued ontro! o+ ,an-s2 Secrec% o& ,anDe$osits2 E9ce$tions (2003) 7, B$R *ommissionerCs authority to A t 2'03FF0), subpoena duces tecum to theno Ban o -eri+y de *in the sameH the bank assumed interest in o 2he ?a/ on :e re yEstate o+ Bank De%osits a de edentCs Dross and a ta>%ayerCs ommanding its re%resentati-e to +urnish said ontents and assumes no !iabi!ity in the %ro-ides that a!! de%osits o+ /hate-er nature re5uest +or a om%romise agreement due toor Ambudsman re ords o+ transa tions by in onne tion there/ith, 2he sa+ety de%osit bo> /ith banks or banking institutions are in the a%a ity to %ay his ta> !iabi!ity, name o+ @igue!0 his /i+e and hi!dren, A had t/o keyho!es: one +or the guard key G, <oreign *urren/as y De%osits by may +oreign abso!ute!y on+identia! in nature and not se ond sub%oena issued e>%anding the /hi h remained /ith the bankH and the other !enders M in-estors under PDs 301', be e>amined0 in5uired or !ooked into by any +irst by in !uding the %rodu o+ re ords o+ rentersC key, 2he bo> tion an be o%ened F, +or the Nio!ations o+ the Anti-@oney %erson0 go-ernment o++i ia!0 bureau or o++i e, its +riends o+the @igue! inboth saidkeys, bank2he and in a!! on!y /ith use o+ renters 30, When the :tate e>er isesLin-okes its ?aundering ?a/, @igue! mo-ed to 5uash the sub%oenas arguing 7o/e-er0 the !a/ %ro-ides e> e%tions in bran hes and e>tension o++iin es0 s%e i+i a!!y de%osited erti+i ates o+ tit!e theany bo>, But (2,:0 BE2E .t is h suggested that % of Po!i e Po/er, that they -io!ate the :e re y+o!!o/ing o+ Bank De%osits ertain instan es, o-ered Whi o+ the may naming them, !ater0 they dis that the erti+i ates the above be given full credit! 3, $n o+ ANSWER( SU++ESTE6 ?a/, $n addition0 he ontends that the not beases among the e> e%tions: /ere gone, @; and AP no/ !aim +or 2, $n 2he ases bank in-o!-ing is !iab!e0 based on the de isions o+ im%ea hment, sub%oenas are in the nature o+ +ishing damages +rom :$BA;J, $s the bank !iab!e# ,an-s2 Secrec% o& ,anDe$osits ()**0) 1, $n ases in-o!-ing B$R the :u%reme *ourt in &0 0gro8.ndustrial bribery e>%edition" or genera! /arrants" and are E>%!ain brie+!y, &4() @anosa0 ne/s%a%er o!umnist0 /hi!e ', $n asesa o+ anti-gra+t and of orru%t in5uiry, 5evelopment &orp/ v/ &ourt 0ppeals, $"9 S&+0 onstitutiona!!y im%ermissib!e /ith res%e t to making a de%osit in a bank0 o-erheard a 4, $n /here the money in-o!-ed is the %ra ti ases es, 4$% ("99#! and Sia v/ &ourt of 0ppeals, $$$ S&+0 %ri-ate indi-idua!s /ho are not under %retty te!!er in+orming a :u%reme oem%!oyee SU++ESTE6 ANSWER( sub.e t bank o+ $4 ("99#!/ $n those ases0 the *ourt in-estigation, $s @igue!s ontention tenab!e# that ;o, Digi0 @igue!s a /e!! ontention kno/n %ub!i is not o++i tenab!e, ia!0 has 2he ru!ed that the renting out o+ sa+ety de%osit in5uiry into i!!ega!!y 5uired %ro%erty .ust a +e/ hundred %esos in her bank bo>es is a K special 'ind ofadeposit K /herein a e>tends ount and to that ases her /here ne>t he suthe k h /i!! %ro%erty in a!! is the bank is the de%ositary, $n absen e o+ on sti%u!ation ea!ed boun by being he!d by re orded %robabi!ity e, @anosa /rote this in any %res ribing theor degree o+ in+ormation the in his ne/s%a%er o!umn, 2hus0 di!igen e re5uired0 that o+ a good +ather o+ a Digi +ami!y is to be

<is sustain Any a! o+ sti%u!ation @ani!a @igue!s +ore>em%ting un!a/+u!!y theory and the dis restri de%ositary !osing t the in+ormation +rom any in5uiry on!y about !iabi!ity to %ro%erty her arising bankhe!d +rom a ount, by the or!oss a) in the Wi!! o+ the thename thing said suit de%osited o+ the %ros%er# go-ernment /ou!d E>%!ain be o++i -oid your ia! +or ans/er, /ou!d beingmake a-ai!ab!e ontrary to to !a/ %ersons and %ub!i in go-ernment %o!i y, 2he /ho de%osit bo> i!!ega!!y a 5uire is !o %ro%erty ated in the an easy bank means %remises o+ b) e-ading :u%%osing that Digi is ontro! harged /ith and is under %rose the ution, abso!ute A!! they ha-e o+to the do un!a/+u!!y ato 5uiring under RA 317F bank, be /ou!d sim%!y /ea!th %!a e the %ro%erty in the ,an-s2 o&a! ,anDe$osit2 (2004) and that Secrec% the +is issued a A(8C subpoena duces name o+ %ersons other than their s%ouses Rudy is the .ob!ess but is toabe a .ueteng tecum +or re ords o+ re%uted the bank ount o+ and hi!dren (Banco -ilipino Savings vs/ o%erator, 7e has been the harged Digi, @ay "%" Digi -a!id!y said ;urisima scra 53%<ne-er Seco%%ose 6 0nti81raft =aw as or ,an-s2 o& ,anDe$osits ()**1) on-i ted o+ any rime, 7e maintains se-era! issuan e Secrec% on the ground that the same amended by B; "95! @i hae! /ithdre/ /ithout authority +unds o+ SU++ESTE6 ANSWER( bank a ounts and has %ur hased 4 houses -io!ates the !a/ on se re y o+ bank de%osits# a) 2he :e re y o+ Bank De%osits A t the %artnershi% in the amounts o+ P400th and and !ots his hi!dren +rom the ?uansing E>%!ain your +or ans/er, %rohibits0 t to e its e> !usionary 8:O40th +or es hedoes !aims he!auses0 rendered Rea!ty0 sub.e $n , ser-i :in he not ha-e any any %erson +rom e>amining0 in5uiring +or the bene+it o+ the %artnershi%, 7e -isib!e .ob0 the om%any re%ortedor his !ooking into a!! de%osits o+ /hate-er nature de%osited the P400th in his %ersona! %eso %ur hases to the Anti-@oney ?aundering /ith banks or banking institutions in and the the urrent ount /ith Pros%erity Bank *oun i! a &A@?*), 2herea+ter0 A@?* harged Phi!i%%ines /hi h by !a/ are de !ared 8:O40th in his %ersona! +oreign urren y him /ith -io!ation o+ the Anti-@oney abso!ute!y on+identia!" in nature, @anosa sa-ings a ount /ith Eastern Bank, ?aundering ?a/, instituted 8%on re5uest the 2he %artnershi% an a o+ tion in A@?*0 ourt /ho mere!y o-erheard /hat a%%eared to be the bank dis !osed to it RudyCs bank de%osits against @i hae!0 Pros%erity0 and Eastern to 3, *an Rudy mo-e to dismiss the ase a -ague remark a Bank em%!oyee to a o-on amounting to o+ P300 @i!!ion, :ubse5uent!y0 he ALTERNATI7E ANSWER( om%e! @i hae! to return the sub.e t +unds to the ground that he has no rimina! re ord# em%!oyee and /riting the same in his harged in ourt +or -io!ation o+ the Antia) /as 2he %artnershi% om%!aint against @anosa /i!! not SU++ESTE6 ANSWER( the and %ending !itigation to &2,4() ne/s%a%er o!umn is neither the in5uiry nor @oney ?aundering ?a/, %ros%er be ause /riting -ague 8nder the mere!y Anti-@oney ?a/0 order both banks to disa!!o/ any a /ithdra/a! dis;o, !osure ontem%!ated by !a/,?aundering remark aa Bank toKmoney a o-em%!oyee Rudyo+ /ou!d beem%!oyee gui!ty o+ a !aundering +rom his ounts, is not the initia! dis !osure ontem%!ated by !a/, o+ $+ an At the hearing o+ the ase the ourt rimeK ommitted /hen the %ro eeds anyone shou!d !iab!e0 it /i!! the bank ordered Pros%erity to!ike %rodu ebe the re ords o+ Kun!a/+u! a be ti-ity0K .ueteng o%erations0 SU++ESTE6 ANSWER( em%!oyee /ho !osed the @i %eso urrent a in+ormation, ount0 and Eastern are hae!s made todis a%%ear as ha-ing originated +rom b) Among the instan es e> e%ted +rom the to %rodu e the ordsmoney o+ his +oreign !egitimate sour es,re2he !aundering o-erage o+ the :e re y o+ Bank De%osits urren sa-ings a ount, rime isyse%arate +rom the un!a/+u! a ti-ity o+ A t*an are the Anti-gra+t ases, Pros%erity 7en e Digi may not ourt om%e! Eastern being a .ueteng o%erator0 andand re5uires no -a!id!y o%%ose the issuan e o+ a subpoena to dis !ose the tion bank de%osits o+ @i a hae!# %re-ious on-i +or the un!a/+u! ti-ity duces tecum +or the bank re ords on her, SU++ESTE6 ANSWER( Dis uss +u!!y, &:ee a!so :e , 10 Anti-@oney ?aundering A t ,an-s2 Secrec% o& ,anDe$osits ()**)) 9es0 as +ar as the %eso a de+ense0 ount is Rudy on erned, 2, 2o raise +unds +or his so!d o+ 2003), 2he !a/ =G12) reating a the *ommission to o+ :e 2&RA o+ RA 3'04 a!!o/s dis !osure the houses and !ots to a +riend, *an ?uansing ondu t a 2horough <a t-<inding $n-estigation bank ase /here the money Rea!ty0de%osits $n , be in om%e!!ed to trans+er to the o+ de%osited the <ai!ed *ou% o+ De 3FGF0 is the sub.e t matter o+ and !itigation, buyer o/nershi% o+detat the houses !ots# Re SU++ESTE6 ommend @easures to @i Pre-ent the :in e the ANSWER( ase +i!ed against hae! is aimed &2,4() A at urren e o+Rea!ty0 :imi!ar Attem%ts a Nio!ent ?uansing $n , ishe aAt rea! estate re o-ering the amount /ithdre/ +rom :ei6ure o+ Po/er +or a Ather Pur%oses0 om%any0 hen e and it%artnershi%0 is not o-ered institution the +unds o+ the /hi h amount %ro-ides that the *ommission may a ask the a under :e tion 1 o+ the Anti-@oney ?aundering he a!!eged!y de%osited in his ount0 @onetary Board to dis !ose in+ormation onbe A t, !osure An!y banking institutions0 insuran e dis o+ his bank de%osits /ou!d ;o0 /ith res%e t to to the +oreign urren andLor to grant authority e>amine anybrokers0 bank y om%anies0 se urities dea!ers and %ro%er, a ount,trust 8nder <oreign *urren y ?a/0 de%osits0 orthe in-estment +unds0 or %re-need om%anies and other entities the e>em%tion to in the against banking transa tions the %rohibition name dea!ing o+ andLor administering or other/ise in dis !osure o+ ommodities in+ormation on bank uti!i6ed by y0 a %erson0 natura! or .uridi a!0 +inan under urren orerning ia! de%osits is /ritten onsent in-estigation by the o-ered *ommission0 in any o+ bank deri-ati-es are institutions, 7enthe e0 ,an-s2 Secrec% o& ,anDe$osits ()**:) de%ositor, or banking institution in, the Phi!i%%ines0 /hen ?uansing Rea!ty0 $n may not use the Anti&20) An insuran om%any is de!uded the3FFG *ommission has Areasonab!e ground to to @oney ?aundering te to re+use to trans+er 1, $n dis !osing RudyCs bank a ounts the into re!easing a he k to A +or P14th %ay be!ie-e that said de%osits0 trust or in-estment the buyer o/nershi% o+ the houses and to !ots, A@?*0 did the bank -io!ate any !a/# &2,4() +or 2reasury Bi!!s &2-bi!!s) /hi h A !aims +unds0 or ANSWER( banking transa tions ha-e been to SU++ESTE6 SU++ESTE6 ANSWER( be en route on board an armored kthe +rom used in su%%ort or in +urtheran e tru o+ 2he ?a/ on :e re did y o+not Bank De%osits is!a/, itse!+ ;o0 the bank -io!ate any 2he a go-ernment bank, 2he he k is de!i-ered ob.e ti-es o+ the said ou% detat, Does the to mere!y a statutory ena tment0 and it Kmay0 bank being s%e i+ied as a o-ered A /ho de%ositsnot it to his a the ount?a/ /ith on I9P abo-e %ro-ision -io!ate there+ore0 be modi+ied0 or amended &su h as institutionK under the Anti-@oney ?aundering Bank be+ore the insuran e3'04)# om%any rea!i6es :e re y o+ Bank De%osits &RA by ?a/0 %ro-iding +urtherre%ort e> e%tions there+rom)0 to h the A@?* o-ered it is is aob!iged s am, to 8%on su rea!i6ation0 the or and e-ensus%i re%ea!ed0 e>%ress!y or im%!ied!y0 by ious transa tions0 /ithout thereby insuran e om%any +i!es an a tion against A a -io!ating subse5uent !a/, 2he2his :e re y one o+ Bank any is de+rauded o+ and the +or re o-ery o+ !a/, the amount De%osits A t did not :e amount to Bank a ontra t e> e%tions to the re y o+ De%osit obtains a /rit o+ %re!iminary atta hment, $n bet/een the de%ositors and de%ository A t, addition to the /rit0 the Bank is a!so ser-ed a banks /ithin the meaning o+ the nonsub%oena to e>amine the a ount re ords o+ im%airment !ause o+ the *onstitution, E-en A, 2he Bank de !ines to %ro-ide any i+ it did0 the %o!i e %o/er o+ the :tate is in+ormation in res%onse to the /rit and su%erior to the nonmo-es to 5uash the sub%oena in-oking se re y o+ bank

sha!! the ;ationa! %romote $nterna! and maintain Re-enuemonetary *ode0 thestabi!ity *ommissioner and on-ertibi!ity o+ $nterna! o+ the Re-enue Peso, an in5uire into the de%osits o+ a de edent +or Trut# in 8en6in' Act ()**)) the %ur%ose o+ determining the gross estate Dana Dianina %ur hased on ase0 a 1= month o+ su h de edent, A%art +rom this a B$R insta!!ment basis the !atest mode! o+ the in5uiry into bank de%osits annot be made, ;issan :entra ar +rom the 2hus0 e> e%tion 1:edan may not a!/ays be Bobe! *ars 2urning to e> e%tion '0 an in5uiry into bank $n , $n addition to the ad-ertised se!!ing %ri e0 a%%!i ab!e, de%osits is %ossib!e on!y in %rose utionsonsisting +or the !atter im%osed +inan e harges une>%!ained /ea!th the Anti-Dra+t and o+ interests0 +eesunder and ser-i e harges, $t did *orru%t Pra ti es A t0 a ording to the not0 ho/e-er0 submit to Dana a /ritten :u%reme *ourt in the ases o+ ;hilippine statement setting +orth therein the 2ational Ban' v/ 1ancayco, "5 S&+0 9" ("9%5! in+ormation re5uired by the 2ruth in ?ending 7o/e-er0 a!! other asesand o+ anti-gra+t and v/ and -ilipino Savings *ortgage ABanco t &RA 17=4), ;e-erthe!ess0 the Ban' onditiona! orru%t %ra ti es /i!! not /arrant an in5uiry 3 7as there been substantia! ;urisima, deed "%" o+ S&+0 sa!e 53% /hi ("966!/ h the %arties e>e uted into om%!ian bank de%osits, 2hus0 e> e%tion e that o+ the a+oresaid A t# ' may mentioned the tota! amount indi ated not a!/ays be a%%!i ab!e, ?ike any other 2 $+ your ans/er to the +oregoing therein in !uded su h +inan e harges, e> 5uestion e%tion0 itis must be inter%reted stri in the negati-e0 /hat is t!y, the e++e t E> o+ e%tions 30 2 and 40 on the other the -io!ation on the ontra t# hand0 are %ro-ided e>%ress!y in the ?a/ on :e o+ re y o+ 1 $n the e-ent o+ a -io!ation the A t0 Bank De%ositors, 2hey are a-ai!ab!e to /hat remedies may be a-ai!ed o+ by Dana# de%ositors at a!! times, ,an-s2 Secrec% o& ,an- De$osits2 Garnis#ment (200)) 2he ?a/ on :e re y o+ Bank De%osits0 other/ise kno/n as RA 3'040 is intended to en ourage %eo%!e to de%osit their money in %esos +or denominations +rom t/enty +i-e banking institutions and a!so to dis ourage enta-os and abo-e0 and in amounts not %ri-ate hoarding so that the same may be e> eeding t/enty %esos +or denominations "D7C s! Secrec% ,an- De$osits Act ()**+) %ro%er!y uti!i6ed by banks to assist in the ten 8a; enta-os and o& !ess, An em%!oyee o+ a !arge manu+a turing +irm e onomi de-e!o%ment o+ the ountry, $s a earns a sa!ary /hi h is .ust a bit more than noti e o+ garnishment ser-ed on a bank at /hat he needs +or a om+ortab!e !i-ing, 7e is the instan e o+ a reditor o+ a de%ositor SU++ESTE6 ANSWER( thus ab!e to sti!! maintain a P300000 sa-ings o-ered by the said !a/# :tate the reason&s) ;o, 2he noti e o+ garnishment ser-ed on a a ount0 a P200000 he king a ount0 a +or your ans/er, &4() bank at the instan e o+ a reditor is not P100000 money market %!a ement and a o-ered by the ?a/ on :e re y o+ Bank P'00000 trust +und in a medium-si6e De%osits, Darnishment is .ust a %art o+ the by the PD$*, b) :tate /hi h o+ the abo-e ommer ia! bank, a) :tate /hi h o+ the +our %ro ess o+ e>e ution, 2he moment a noti e o+ a ounts ounts are are deemed o-ered by a insured garnishment is ser-ed on a bank and there the ?a/ on :e re y o+ Bank SU++ESTE6 ANSWER( e>ists a de%osit by the .udgment debtor0 the De%osits, a) 2he P30th sa-ings a ount and the P20th bank is dire t!y a ountab!e to the sheri++0 +or aheount kingare deemed insured by the PD$*, b) the bene+it o+ the .udgment reditor0 +or the 2he P30th sa-ings a ount and the P20th /ho!e amount o+ the de%osit, $n su h e-ent0 ount are o-ered by the ?a/ on :e re y o+ heaking the amount o+ the de%osit be omes0 in e++e t0 ,S"2 Recei De%osits, Bank a sub.e t ers#i$2 o+ theJuris6iction !itigation,()**2) <ami!y Bank /as %!a ed under statutory re ei-ershi% and subse5uent!y ordered Res$onsi.ilities 0 <.=ecti es o& ,S" ()**:) !i5uidated by the *entra! Bank &*B) due to What are the res%onsibi!ities and %rimary +raud and irregu!arities in its !ending ob.e ti-es o+ the B:P# &4() SU++ESTE6 ANSWER( o%erations /hi h rendered it inso!-ent, 2he B:P sha!! %ro-ide %o!i y dire tions in the Budi ia! %ro eedings +or !i5uidation /ere areas o+ money0 banking and redit, $t sha!! therea+ter ommen ed by the *B be+ore the ha-e su%er-ision o-er the o%erations o+ R2*, <ami!y Bank o%%osed the %etition, banks and e>er ise su h regu!atory %o/ers :hort!y therea+ter0 <ami!y Bank +i!ed in the as %ro-ided in the *entra! Bank A t and same ourt a s%e ia! i-i! a tion against the other %ertinent !a/s o-er the o%erations o+ *B seeking to en.oin and dismiss the +inan e om%anies and non-bank +inan ia! !i5uidation %ro eeding on the ground o+ gra-e !itigation, E>%!ain your ans/er or institutions %er+orming 5uasi-banking abuse o+ dis retion by the *B, 2he ourt hoi e brie+!y, +un tions0 su&4() h as 5uasi-banks and %oised to: 3) restrain the *B +rom !osing SU++ESTE6 ANSWER( 2he %rimary ob.e ti-e o+ the B:P istions, to institutions %er+orming simi!ar +un <ami!y BankH and 2) authori6e <ami!y Bank to SU++ESTE6 ANSWER( maintain %ri e stabi!ity ondu i-e to a /ithdra/ money +rom its de%osits during the ba!an ed and sustainab!e gro/th %enden y o+ the ase, $+ you /ere the Budge0 /ou!d you issue su h orders# Why#
Mercantile Law Bar Examination Q & A (1990-2006)

Page Page 13 15 of 103 of 103 8nder o+ the :e etion onomy, =&<) o+ $t

;o, 2he R2* has no authority to restrain the monetary board o+ the B:P +rom statutory authority to undertake re ei-ershi% and u!timate !i5uidation o+ a bank, Any o%%osition to su h an a tion ou!d be made to the ourt itse!+ /here assistan e is sought, 2he a tion o+ the R2* /here the %ro eeding is %ending a%%ea! ha-e to be made in the *ourt o+ 8e'al Ten6er (2000) A%%ea!s, A+ter many years o+ sho%%ing in the @etro @ani!a area0 house/i+e 7W has de-e!o%ed the sound habit o+ making ash %ur hases on!y0 none on redit, $n one sho%%ing tri% to @ega @a!!0 she got the sho k o+ her sho%%ing !i+e +or the +irst time0 a stores smart sa!esgir! re+used to a e%t her oins in %ayment +or a %ur hase /orth not more than one hundred %esos, 7W /as %aying se-enty %esos in 24enta-o oins and t/enty +i-e %esos in 30 enta-o oins, :trange as it may seem0 the sa!esgir! to!d 7W that her oins /ere not SU++ESTE6 ANSWER( !ega! tender," Do you agree /ith that the oins ;o, 2he sa!esgir!s understanding sa!esgir! in res%e t o+ her understanding o+ are not !ega! tender is not orre t, *oins are !ega! tender#" E>%!ain &2() !ega! tender in amounts not e> eeding +i+ty

Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

#0 #1 of 103 their !oan o+ %ort+o!ios, Page Page ## 103 of 103 Dregorio indebtedness 400 bags0 due*om%any or /hi o/ing0 h I on

/hen /ithout 2) $+ there the more0 is sa!e a %ro bona and eeds trans+er +ide toand arrange is .ust made dis%ute the a) by as the de!i-ery to the -endor0 amount andmortgagor0 insta!!ation due as her o+ trans+eror e!e your trine/ or home assignor theater onsum%tion /ho system, %rodurate, es 9ou and $s kno/ Ange!enes de!i-ers you /i!! a ontention /ritten re ei-e/ai-er a SU++ESTE6 ANSWER( statement -a!id# o+ the %ro-isions on your redit o+ theard Bu!k %ur :a!es hases ?a/ +rom ;o, Ange!enes !ega! an re ourse in +rom his the reditors bank on!y ontaining as sho/n by o%tion -eri+ied tothis statementH %ay ase /as to %ay the e!e tri bi!! under on!y and a minimum b) by a -endor0 amount0 mortgagor0 /hi h is usua!!y trans+eror or %rotest, 7ertota! +ai!ure so .usti+ied @E*A 3L1= assignor o+ the /ho %ri is to an e do you e>e /ere utor0harged administrator0 +orto utre the e!e tri ser-i e in (&eni>a v &0 $"6 S $97! your %ur ei-er0 hase, assignee Did Embassy inso!-en A%%!ian y0es or %ub!i

SU++ESTE6 ANSWER( om%!y o++i er /ith a ting the %ro-isions under .udi o+ ia! the %ro 2ruth ess0in the sa!e 2here is no need +or Embassy A%%!ian es to ?ending or trans+er A t &RA is 17=4)# not o-ered by the Bu!k :a!es om%!y /ith the<.li'ation 2ruth ino& ?ending A ()**1) t, 2he ,ulSales 8a;2 t#e >en6or ?a/, transa tion is not a sa!e on insta!!ment basis,and 7ouse o+ Pi66a &Pi66a) is the o/ner Embassy A%%!ian es is a se!!er onhain ash basis, o%erator o+ a nation/ide o+ %i66a ,<D: Election o& Aliens as mem.ers (2001) $t is the redit ard om%any /hi h a!!o/s out!ets, 7ouse o+ ?i5uor &?i5uor) is a retai!er A Jorean nationa! .oined a or%oration /hi h theo+ buyer to en.oy the %ri-i!ege o+ %aying the a!! kinds o+ !i5uor, is engaged in the +urniture manu+a turing o+ <oodsbasis, &<oods) has o++ered to %ri 7ouse e on insta!!ment business, 7e /as e!e ted to the Board o+ %ur hase a!! o+ the out!ets0 e5ui%ment0 Dire tors, 2o om%!ement its +urniture +i>tures and +urniture o+ Pi66a, <oods a!so manu+a turing business0 the or%oration o++ered to %ur hase +rom ()**3) ?i5uor a!! o+ its ,ulSales 8a;2 Co a!so engaged in ere6 the Transactions !ogging business, With moderate!y %ri ed sto k onstituting 40( :tanrus $n a de%artment store /ith out!ets in o+ the additiona! !ogging a ti-ity0 an the its tota! in-entory, SU++ESTE6 ANSWER( @akati0 nationa! @anda!uyong0 Que6ono+ *ity0 Jorean sti!!?i5uor beand a member theis What Both and ha-e reditors, 9es0 .ust Pi66a as !ong as si>ty %er ent &=0() o+ the ontem%!ating to re+urbish and reno-ate Board o+ Dire tors# E>%!ain, &1() !ega! re5uirements must Pi66a and its ?i5uor Board o+ Dire tors are <i!i%inos, *or%orations @akati store in order to introdu e the most om%!y /ith in order +or <oods to that are and si>ty %er ent &=0() o/ned by in modern state o+transa the art tions# e5ui%ment onsummate the Dis uss +u!!y, <i!i%inos an engage the business mer handise dis%!ay,in 2o arry out itso+ %!an0 it SU++ESTE6 ANSWER( e>%!oration0 de-e!o%ment and uti!i6ation o+ intends to se!! A?? o+ the e>isting +i>tures and Pi66a and ?i5uor must %re%are an a++ida-it natura! resour es, &Art, I$$0 :e , 20 3FG7 e5ui%ment &dis%!ay ases0 /a!! de orations0 stating the names o+ a!! their reditors0 their *onstitution) 2he o+ a!iens as redits and +urniture0 ounters0 ettion ,) to *rossroads addresses0 thee!e amounts o+ their members o+ the Board A+ Dire tors engaging De%artment :tore, /i!! buy their res%e ti-e 2herea+ter0 maturities, it Pi66a and and ?i5uor in %artia!!y-nationa!i6ed a ti-ities is a!!o/ed insta!! ne/ +i>tures and e5ui%ment and must submit said a++ida-it to <oods /hi h0 in in %ro%ortion to their a!!o/ab!e %arti i%ation ontinue o%erations, *rossroads /ants to turn0 shou!d noti+y the reditors about the or share in the a%ita! o+ su h entities, , ALTERNATI7E ANSWER( kno/ +romtion you /hi as ounse!: 3) Whether the !uded transa h is about to be &:e on reditors o+ :tanrus, 2-A0 As Anti-Dummy +ar as ?a/) ;othing is on in erned0 thean +a it ts must intended sa!e is?i5uor bu!k sa!e," 2) 7o/ it /ith Pi66a and ?i5uor, SU++ESTE6 ANSWER( sho/s that more than +orty %er ent &'0() %re%are an a++ida-it stating the names o+ a!! %rote t 2he itse!+ +uture !aims o+ and o+ ,<D2 Ca$acit% o&+rom Directors ()**4) 3) 9es, sa!e in-o!-es a!! +i>tures the its Board reditors0 o+ Dire their tors addresses0 are +oreigners, the amounts o+ Rodman0 the President o+ 2< *o0 ourse /roteo+ a !etter e5ui%ment0 not in the ordinary their redits and their res%e ti-e maturities, to Dregorio0 o++ering to se!! to the !atter 40000 trade and the regu!ar %rose ution o+ business $t must submit said a++ida-it to its buyer0 /ho bags o+ +erti!i6er at P300 %er bag, Dregorio o+ :tanrus0 $n , &:e 2 A t 1F420 as amended) in turn0 shou!d noti+y the reditors about the signed his on+ormity to the !etter-o++er0 and transa tion /hi h is about to be on !uded 2) *rossroads shou!d re5uire +rom :tanrus %aid a do/n-%ayment o+ P40th, A +e/ days But as Pi66a is on erned0 it is not /ith as his +ar se!!er, $n , o-ered submission o+ a /ritten /ai-er the Bu!k an !ater0 the *or%orate :e retary o+ 2<o+ in+ormed by the Bu!k :a!es ?a/, :o <oods :a!es ?a/ by the reditors sho/n by Dregorio o+ the de ision o+ as their BAD not todoing onsummate the transa tion /ithout -eri+ied statements or to om%!y /ith the rati+y the !etter o++er, 7o/e-er0 sin e Dregorio anything, re5uirements o+ the Bu!k :a!es ?a/0 that had a!ready %aid the do/n-%ayment0 2< ,ul- Sales 8a;2 <.li'ation o& t#e >en6or ()**+) is0 the2he se!!er must noti+y de!i-ered 400 bags o+ his +erti!i6er /hi o+ h the Dregorio so!e %ro%rietor o+ areditors medium-si6e gro ery terms and onditions o+ the sa!e0 and a e%ted, 2< made it !ear that the de!i-ery sho%0 engaged in both /ho!esa!e a!so0 and retai! be+ore re +rom an -endee any %art !o o+ k0 shou!d be ei-ing onsidered ne/ transa tions0 se!!s theentire!y entire business thesto %urk hase %ri e0 de!i-er to su o+ h -endee a to transa tion, 2herea+ter0 Dregorio sought and barre!" be ause his %!an /ritten s/orno+ statement o+ the names and en+or ement the !etter-o++er, $s there a emigrate abroad /ith his +ami!y, $s he SU++ESTE6 ANSWER( addresses o+ a!! his reditors together /ith binding ontra t +or the 40000 bags o+ o-ered by the %ro-isions o+ the Bu!k :a!es ;o0 there is no binding ontra (2000) t +or the 40000 ,ulSales 8a;2 Coindebtedness ere6 Transactions the?a/# amount o+ due to ea h &:e +erti!i6er# E>%!ain, $n the a++irmati-e0 /hat must be done bags o+ +erti!i6er, <irst0 the +a ts do not *om%any I0 engaged in the business o+ SU++ESTE6 ANSWER( 2 A t 1F420 amended) by the %arties so as to om%!y /ith the !a/# indi ate 2his that Rodman0 the President o+o+ 2< goods0 *o0 manu+a turing %arts and a sto essories0 9es, is ar a sa!e o+ the k /as authori6ed by the BAD to enter into the o%erates a +a tory /ith e5ui%ment0 +i>tures and entire business0 not in the said ontra and t ourse ortoo!s thato+ he /as to do maordinary hinery +or this em%o/ered %ur%ose, 2he business or trade o+ the so under some %ro-ision o+ the by-!a/s 2< manu+a tured goods are so!d /ho!esa!e to -endor, Be+ore re ei-ing +rom the o+ -endee *o, 2he %art +a ts dothe not %ur a!sothroughout indi ate distributors and dea!ers any o+ hase %ri that e0 the the -endor Rodman has been !othed /ith the a%%arent Phi!i%%ines, *om%any /as the must de!i-er to I su h among -endee a /ritten %o/er to entities e>e ute the ontra t or agreements business ad-erse!y hit by the 3FF7 and statement0 du!y s/orn0 o+ the names simi!ar to it, :eo+ ond0 *o hasdro%%ed s%e a!!y Asian business risis, $ts sa!es /ith said addresses a!! 2< reditors to i+i /hom in+ormed Dregorio that it has not rati+ied the the the-endor de !inemay in ar sa!es and itstogether o%erating be indebted0 /ith ontra t +or the sa!e o+ 40000 bags o+ +erti!i6er osts es a!ated0 /hi!e its reditor banks and amount o+ and that theia! de!i-ery to other +inan institutions tightened

Cor%oration Law

.l- Sales Law

/as ed the disma! hoi e ne/ o+ business either Dregorio a +aount a /ith o+ e%ted0 the goods0 is an entire!y +i>tures or sus%ending its o%erations or se!!ing its 5#6$7 transa sub.e tion, t matter (?ao @a o+Sin the :rading bu!k sa!e, v &0 1+ business, $t $79s3%#! hose the !atter, 7a-ing stru k a Aune "5, "99$ ,ulSales 8a;2 <.li'ation t#e >en6or (200)) dea! /ith *om%any P0 a o& more -iab!e entity ,<D2 ()**)) A Com$ensation is a mer hant engaged in the sa!e o+ I a engaged in the same business0 *om%any A+ter many u!t years0 /hi h a!!ed +or -ariety o+ di++i goods and mer handise, Be ause so!d its entire business to the +ormer /ithout sa o+ ri+i ese on the o+ %ub!i the om%anys onomi risis0 in urred mu hthe +an+are or any %art +orm he o+ ity, $n +a t0 dire tors0 AB* @anu+a turing /as +ina!!y indebtedness to I0 9 and P, $n 2herea+ter0 A e-iden e e>ists that the transa tion /as earning substantia! %ro+its, 2hus0 so!d to B a!! the stoto ka-oid o+ goods +urti-e!y entered into the and %rying the in bu!k o+ his goods to B,BAD &2(),that President %ro%osed to the mer handise, a) What ste%s shou!d A the eyes o+ *om%any Is reditors, 2he reditor SU++ESTE6 ANSWER( dire tors be %aid a bonus e5ui-a!ent to 34( undertake to e++e ta -a!id sa!e banks and other +inan ia! institutions sued A must %re%are net an in a++ida-it stating the SU++ESTE6 ANSWER( o+ the om%anys ome be+ore *om%any I +or -io!ation o+ the Bu!k :a!es ta> *om%any I -io!ated the Bu!k :a!es ?a/ /hen names o+ a!! his reditors0 in this ase0 I0 during %re eding year, 2he Presidents 90 ?a/, Dethe ide, &4() it so!d its entire business to the *om%any P and P0 their addresses0 amount o+the their %ro%osa! /as unanimous!y a%%ro-ed by SU++ESTE6 ANSWER( +urti-e!y to a-oid the %rying eyes o+ its redits and their maturity, A shou!d gi-e the BAD, A sto kho!der o+ AB* 5uestioned the 9es0 the $ts sto kho!der as agoods -a!id and !ega! a reditors, manu+a tured are so!d a++ida-it to B /ho0 in turn0 shou!d +urnish bonus, Does he ha-e grounds to ob.e t# ground toto ob.e t to the %ayment toreditors the /ho!esa!e distributors and dea!ers, 2he o%y to ea h reditor and noti+y the dire tors o+ a bonus e5ui-a!ent to 34( o+ the sa!e o+ a!! or substantia!!y a!! o+ its stoin ks0 not to that there is a %ro%osed bu!k sa!e order om%anys net in ome, 2he !a/ interests, %ro-ides in the ordinary ourse business0 enab!e the !atter to o+ %rote t their b) the :u%%ose A submitted a +a!se statement that tota! annua! om%ensation o+ the onstitutes bu!k sa!e, 2he transa tion being a on the s hedu!e o+ his reditors, What is the e++e t o+ dire tors0 in the %re eding year0 annot bu!k sa!e0 entering into su h transa tion +a!se as re5uirements to Nendee su30( h statement SU++ESTE6 ANSWER( e> eed o+ the om%anys net in B, ome /ithout om%!ying /ith the o+ ,<D2 Con&lict o& Co 7nterest ()**3) SU++ESTE6 ANSWER( ,ulSales ere6 Transactions (2004) a) 2here /as no substantia! e &2() be+ore in8a;2 ome ta> &:e 10 *or% *ode), om%!ian the Bu!k :a!es ?a/0 *om%any I -io!ated said $+ the -endee does not ha-e kno/!edge o+ AB* Pigger $n is engaged in raising and !a/ Pursuant to a /rit o+ e>e ution issued by the /ith the 2ruth in ?ending A t, 2he !a/, the +a!sity o+ the s a! hedu!e0 the sa!e -a!id, se!!ing hogs in the !o market, @r, De Dios0 Regiona! 2ria! *ourt in KE>%ress Bank -, is Don %ro-ides that the reditor must make a +u!! 7o/e-er0 i+ -endee has o+ one o+!osure its dire tors /hi!e tra-e!ing abroad0 Rubio0K the sheri++ !e-ied and so!d kno/!edge at %ub!i dis o+the the redit !ost, 2he statement +a!sity0 the sa!e is -oid be o+ ause he is the in met a h!eather goods manu+a turer /ho /as au su tion G %hoto o%ying ma hines Don that the tota! amount due in !udes bad +aith, interested in buying %ig o-ered skins +rom the Rubio, the sheri++Cs by the /ithout %rin $s i%a! and the sa!e +inan ia! harges0 ) :a!es What is the right reditors I0h 90 and P i+ A SU++ESTE6 ANSWER( Phi!i%%ines, @r De Dios o+ set u%on a ea se%arate Bu!k ?a/# &4() s%e i+ying the amounts due %ortion ;o, 2he to sa!e om%!y by sheri++ /ith the at %ub!i %ro edureLste%s sa!e is not a re5uired by +ai!ed om%any and started e>%orting %ig skins to thereo+ /ou!d be insu++i ient and under 5uestion !etter &a) hereo+# sa!e by !a/ a mer hant, :e tion G o+ the Bu!k b) A -io!ation o+ the 2ruth in ?ending A t his +oreign onta t but the %ig skins e>%orted una e%tab!e, SU++ESTE6 ANSWER( a++e &3() :a!es that it has no +e!!o/ /i!!?a/ notitse!+ ad-erse!y t AB*, the -a!idity o+ the /ere not sour%ro-ides ed +rom 7is 2he re ourse o+ I0 90 and P is to 5uestion the a%%!i ation to e>e utors0 administrators0 ontra t itse!+, dire tors in AB* om%!ained that he shou!d -a!idity o+ the sa!e +rom A to B so as to SU++ESTE6 ANSWER( re ei-ers0 assignees in inso!-en or %ub!i ) gi-en $t /ou!d a!!o/ Dana to y0 re+use %ayment ha-e this business to AB*, 7o/ /ou!d re o-er the goods and mer handise $ /ou!d de ide in +a-or o+ @r De Dios, AB* is o++io+ ers0 a ting under %roor0 ess, Bu!k :a!es +inan ia! this harges i+ 2he a!ready %aid0 to to you de ide on matter# satis+y their redits, engaged in raising and se!!ing hogs in the ?a/ a%%!ies to the sa!e or may en umbran e reon!y o-er the same, Dana a!so initiate !o a! market, 2he om%any that @r De o+ a mer hant o+ goods0 mer handise or Dios rimina! harges against the reditor, had set u% /as to engage0 as it did0 in the ommodity done Kin bu!kK as de+ined by the ,ulSales 8a;2 E9clusions ()**3) e>%ort o+ %igs skins, 2here is thus no on+!i t ALTERNATI7E ANSWER( ?a/ itse!+, ) annua! &Per Atty Bomby Paras i+ u read $n the meeting o+ I9P o+ interest bet/een @r, De *or%oration0 Dios and AB*the (etric S%stem 8a; ()**3) %ro-isions the the sto $n kho!ders unanimous!y a Pigger so as !ose!y) to make8nder the ado%ted ase +a!! 2ruth /ithin in Ange!ene is ustomer o+ harges @era! E!e ,bservation :he term Bconflict of tri ?ending t0 a said +inan ia! are -a!id0 reso!ution %ro%osed by the BAD to se!! o the on+!i tA o+ interest situation under the *om%any &@E*A), Be ause o+ the abru%t rise is susceptible to varied views and Dana may not re+use %ayment thereo+, substantia!!y a!! the +i>tures and e5ui%ment !a/ &:einterestC 1' *or% *ode) in e!e tri ity rates0 Ange!ene om%!ained and interpretations/ An!y rimina! may be initiated used in and about itsharges business, 2he President ,<D2 7nterloc-in' Directors ()**1) /ith @E*A insisting sheand shou!d against the reditor, o+ the *or%oration a%%roa that hed you asked be *hito :antos is a dire tor o+ both P!atinum harged the +ormer rates, 7o/e-er0 inassistan 8en6in' Act +or Trut# !ega! e(2000) to e++e t the sa!e, 3) What *or%oration and J/ik :i!-er *or%oration, 7e Ange!ene did not tender any %ayment, -a!id# 2) What are the t/o instan es /hen Embassy A%%!ian es se!!s home theater ste%s shou!d you take so that the sa!e may When @E*As em%!oyees ser-ed the +irst 'Go/ns 3( o+ the outstanding a%ita! sto k the sa!e0 trans+er0 om%onents that are designed o+ and be hour noti e o+ dis onne tion0 Ange!ene P!atinum and or '02 o+ J/ik, P!atinum %!ans to+or mortgage assignment o+ sto k o+ goods0 ustomi6ed as entertainment enters %rotested, @E*A0 ho/e-er0 did not im%!ement enter into a ontra t /ith J/ik that /i!! make mer handise0 %ro-ision0 or materia!s other/ise /ares0 onsumers /ithin the medium-to-high %ri e the 'G-hour noti e-ery o+ o+ dis onne tion, $nstead0 both om%anies earn substantia! %ro+its, in the ordinary trade and the regu!ar than bra ket, @ost0 i+ ourse not a!!0 o+ these %a kages its em%!oyees e>amined Ange!enes e!e are tri 2he ontra t is %resented at the res%e ti-e %rose ution o+ the business o+ theusua!!y -endor are so!d on insta!!ment basis0 by 3, meter0 $n meetings order to that the ontra t /i!! not be insta!!ed hanged the same0 and board o+ P!atinum and J/ik, deemed be a sa!e or trans+er in not means o+ /hat redit onditions ards a!!o/ing a ma>imum -oidab!e0 /i!! ha-e be o+ another, :ti!!0 Ange!ene0 made no to tender o+ SU++ESTE6 ANSWER( bu!k# 1= e5ua! month!y %ayments, Pre+erred redit om%!ied /ith# E>%!ain, 3) 2he re5uirements o+ the Bu!k :a!es ?a/ %ayment, ards o+ this ty%e are those issued by banks0 @E*A ser-ed a se ond 'G-hour noti e o+ 2, $+ be these onditions are not met0 ho/ must om%!ied /ith, 2he se!!er de!i-ers to /hi h regu!ar!y ho!d ma!! /ide sa!es dis onne on Bune 220 3FG', $t b!it6es ga-e may this tion ontra t be rati+ied# E>%!ain, the %ur haser a !ist o+ his reditors and the %arti i%ated in e !ike Ange!ene unti! 4 by %m a%%!ian o+ Bune 240retai!ers 3FG' %ur haser in turn noti+ies su h reditors o+/ithin Embassy A%%!ian es, 9ou are a buyer o+ a /hi h to %ay, As no %ayment had been the %ro%osed sa!e at a sti%u!ated time in home enter at Embassy A%%!ian es, made0 @E*A ut Ange!enes e!e tri ser-i e ad-an e, theater 2heBune sa!es2G0 !erk /ho is attending to you sim%!y on 3FG', Ange!ene ontends that s/i%es your /ritten redit noti ard eon e!e troni the 'G-hour o+ the dis onne tion a%%ro-a! ma hine &/hi by h momentari!y %rints ru!e annot be in-oked @E*A out your harge s!i% sin e you ha-e un!imited redit)0 tears the s!i% +rom the ma hine0 hands the same o-er to you +or your signature0 and

Cons.mer ,rote!tion Law

Page Page #/ #3 of 103 of 103 /hi 2he h to BAD in-est o+ I the *o0 +unds a ting o+on a thestanding or%oration, authority Robert o+ /ants the sto the kho!ders dead!o to k $s a a) by-!a/ his %ro-ision %resen e o+ as dire I *or%oration tor at the broken, amend the by-!a/s0 amended its by-!a/s so rendering meeting ine!igib!e is not ne or i+ essary e!e ted0 to sub.e onstitute t toa 3, as What are the remedies to /ho is to dis5ua!i+y any o+ itsa-ai!ab!e sto kho!ders remo-a!0 5uorum a dire+or tor su i+ h he meetingH is a!so a dire tor in a b) his /hose -ote is business not ne essary the Robert under the *or% ode to o+ break a!so a sto kho!der and dire tor a the or%oration is in +or om%etition a%%ro-a! o+ the ontra tH and ) the dead!o k# E>%!ain, om%etitor +rom being e!e ted to its BAD, /ith or is antagonisti to said or%oration" SU++ESTE6 ANSWER( ontra t is +air and reasonab!e under the 2, Are there any remedies to %re-ent the -a!id and !ega!# :tate your reasons, &4(), 9es0 the is -a!id, $t is the 90 a sto kho!der ho!ding su++i ient assets ir by-!a/ umstan%ro-ision es, %ara!y6ation o+ the business a-ai!ab!e to to right o+ a or%oration to %rote t itse!+ against assure o+ a F02-A seat /hi!e in the BAD0 +i!ed a Robert him under PD the %etition %ossib!e and %re.udi be SU++ESTE6 ANSWER( At the harm meeting o+ the BADe o+that J/ik may to a%%ro-e the %etition /ith the :E* a de !aration o+ to break the dead!o k is+or %ending 3, nu!!ity Robert %etition the :E* to arbitrate aused by om%etitors, %osition ontra t0 its *hito /ou!d ha-e2he to make sure o+ that o+ an the amended by-!a/s, 7e a!!eged !itigation# E>%!ain, the dis%ute0 /ith su h %o/ers as kho!der0 he dire tor is high!y sensiti-e and and on+identia!, - a) there is no +raud in-o!-edH b) the among other things that as a sto %ro-ided in :e 30' o+ the *or% *ode, 2o say the a!!o/ a %erson0 /ho is a ontra t !east0 is +air to and reasonab!e under the had a 5uired rights inherent in sto k 2, o/nershi% 2he :E* su an a%%oint a right rehabi!itation ir umstan es,/hose business is in dire tor in a or%oration h as the to -ote and be SU++ESTE6 ANSWER( re ei-er or a management om%etition /ith or is antagonisti to I -oted u%on in the e!e tion o+ommittee, dire tors, $s the SU++ESTE6 ANSWER( ;o, 2here is no -ested right o+ a sto kho!der *or%oration0 to be ome a!so a dire tor in I sto kho!ders %etition tenab!e# &4() 2, $+ the onditions re!ating to the 5uorum to be e!e ted as dire tor, When a %erson *or%oration /ou!d be harboring a on+!i t o+ and re5uired number o+ -otes are not met0 buys sto k in a or%oration he does so /ith interest /hi h is harm+u! to the !atter ,%?8a;s2 ,<D the >ali6it%2 ontra tlimitin' must 5uali&ications be rati+ied o& by the -ote o+ the kno/!edge that its a++airs are dominated (1o'ongwei Ar v SE& 69 S ##% ("939!< 93 S 36 mem.ers (2003) sto kho!ders re%resenting at !east 2L1 o+ the by a ma.ority o+ the sto kho!ders, 2o this ("967!!/ 2o outstanding %re-ent thea%ita! entry @ar!o Enri5ue60 stoo+ k in a meeting a!!ed e>tent0 the sto kho!der %arted /ith his /hom it onsidered as one antagonisti to its +or the %ur%ose, <urthermore0 the ad-erse %ersona! right to regu!ate the dis%osition o+ interests0 its Board Dire ttors0 interestinto o+ *hito in the o+ ontra mustBayan be his %ro%erty /hi h he in-ested in the a%ita! *or%oration amended arti !es o+ dis !osed and the ontra its t is +air and sto k o+ the or%oration and surrendered it 7nterloc-in' Directors in ,<D2 or%oration and by-!a/s to BP add reasonab!e, &:e s, 12 ()**4) and 110 =G) ertain to the /i!! o+ the ma.ority o+ his +e!!o/ ?eonardo iso+ the *hairman and *or%orations ha-e %o/er to make by5ua!i+i ations sto kho!ders to President0 be e!e ted in or%orators or sto the kho!ders, Ra%hae! is a Dire o+ torDire o+ ;2 *or%oration, !a/s de !aring a %erson em%!oyed in the as /hi!e members o+ its Board tors, When An one o ;2 *o0 by its ser-i e o+ a ri-a! om%any to be ine!igib!e +or %resented +orasion0 a%%ro-a! at re%resented a meeting o+ ?eonardo and A Ent0 a sing!e %ro%rietorshi% the *or%orations BAD, An amendment sto kho!ders du!y a!!ed +or the %ur%ose0 the o/ned by Ra%hae!0 entered into a dea!ershi% /hi h renders a dire tor ine!igib!e0 or i+ amendments /ere o-er/he!ming!y rati+ied, agreement /hereby ;2 *o a%%ointed A Ent e!e ted0 sub.e ts him to remo-a!0 i+ he is a!so @ar!o Enri5ue6 brought suits against Bayan SU++ESTE6 ANSWER( as e> !usi-e distributor o+ its amendments, %rodu ts in a dire tor in a or%oration /hose business is *or%oration to 5uestion the SU++ESTE6 ANSWER( (per 5ondee! ?u6on, 2he :* reiterated in the ase o+ ;orthern $s the dea!ershi% agreement in om%etition /ith or is antagonisti to the Wou!d the a tion %ros%er# Why# &'() 2he dea!ershi% agreement is -oidab!e at the S*& vs/ SE& decided in 0pril "", "939, that it ,%?8a;s2 >ali6it%2 limitin' 5uali&ications o& ,<D -a!id# E>%!ain, other or%oration is -a!id, o%tion o+ ;2by *o a!! inasmu h as the +a ts do not is re ogni6ed authorities that Ce-ery mem.ers (2000) indi ate that /as %o/er a%%ro-ed by the or%oration has the thesame inherent to ado%t At the annua! sto kho!ders meeting o+ @: BAD o+ ;2 *o be+ore it /as signed or0 by-!a/s C+or its interna! go-ernment0 and to *or%oration0 the sto kho!ders unanimous!y assuming h a%%ro-a!0 that it /as regu!ate the su ondu t and %res ribe the rights %assed a reso!ution authori6ing the Board o+ a%%ro-ed under the +o!!o/ing onditions: 3) and duties o+ its members to/ards itse!+ and Dire tors to amend the or%orate by-!a/s so inthe the meeting o+ the BAD at 2hat %resen e o+ the o/ner o+ A among themse!-es inRa%hae!0 re+eren e/hi to h the the as to dis5ua!i+y any sto kho!der /ho is a!so a /as a%%ro-ed not !a/0 Ent0agreement management o+ its a++airs,CK At /as ommon dire tor or sto kho!der o+ a om%eting ne /as essary to the onstitute a to 5uorum the ru!e Kthat %o/er make+or and business +rom being e!e ted to the Board o+ 2) 2hath the -ote o+ Ra%hae! /as not meetingH ado%t suby!a/s /as inherent in e-ery Dire tors o+ @: *or%oration, 2he by-!a/s ne essary as +or the or%oration onea%%ro-a! o+ its o+ nethe essary and /ere a ording!y amended, DJ0 a sto kho!der agreementH 1) 2hat the agreement is +air inse%arab!e !ega! in idents, And it is sett!ed o+ @: *or%oration and a ma.ority sto kho!der and reasonab!e under the ir umstan throughout the 8nited :tates that in es the o+ a om%etitor0 sought e!e tion to the Board ALTERNATI7E ANSWER( &:e 12 *or% *ode) absen o+ %ositi-e !egis!ati-e %ro-isions 2he e dea!ershi% agreement is -a!id u%on the o+ Dire tors o+ @: *or%oration, 7is !imiting it0 e-ery %ri-ate or%oration has this assum%tion that the same /as a%%ro-ed by nomination /as denied on the ground that he inherent %o/er as one o+ its ne essary and the BAD o+ ;2 *o be+ore it /as signed and /as ine!igib!e to run +or the %osition, :eeking inse%arab!e !ega! in idents0 inde%endent that su h a%%ro-a! /as made under the o+ a nu!!i+i ation o+ the o++ending dis5ua!i+i ation SU++ESTE6 ANSWER( any s%e i+i enab!ing %ro-ision in its harter +o!!o/ing onditions: 3) 2hat the %resen e o+ %ro-ision0 DJ onsu!ts you about its by-!a/s -a!idity Close Cor$orations2 Dea6loc-s ()**1) 2he %ro-ision in the amended or in in genera! !a/0 e>e su hEnt0 %o/er o+ the the meeting o+ the BAD at /hi hse!+the Ra%hae!0 o/ner o+ A under the *or%oration *ode o+ the Phi!s, What Robert0 Rey and Ben uted a .oint -enture dis5ua!i+ying any sto kho!der /ho is a!so a go-ernment essentia! to/as enab!e the agreement /as a%%ro-ed notunder /ou!d your !ega! ad-i e be# &1() agreement tobeing +orm a !ose or%oration dire tor or sto kho!der o+ a om%eting or%oration to athe om%!ish the a %ur%oses o+ its ne *ode essary to onstitute 5uorum +or the *or% outstanding a%ita! sto k business +rom being e!e ted to the Board o+ 2) 2hat the -ote o+ Ra%hae! /as not reation,K su h meetingH o+ /hi h the three o+ them /ou!d e5ua!!y Dire tors o+ @: *or% is -a!id, 2he or%oration ne 2hey essary +or the a%%ro-a! o+ the that any o/n, a!so %ro-ided therein is em%o/ered to ado%t a ode o+ by-!a/s +or agreementH 1) 2hat the the agreement +air o+ or%orate a t /ou!d need -ote o+ is 70( its go-ernment SU++ESTE6 ANSWER( not in onsistent /ith the *or% reasonab!e a%ita! under sto the k, ir 2he umstan es o+ theand outstanding terms *ode, :u h dis5ua!i+ying %ro-ision 3, At the meeting o+ the BAD o+ P!atinumis to not 12 *or% *ode) /ere the&:e agreement a ording!y in onsistent /ith the *or% *ode, a%%ro-e the ontra t0 *hito /ou!d ha-e to ,%?8a;s2 >ali6it%2 limitin' 5uali&ications o& ,<D ,%?8a;s2 >ali6it%2 limitin' 5uali&ications o& ,<D im%!emented and the orres%onding !ose make sure that mem.ers ()**:) mem.ers (200)) or%oration /as in or%orated, A+ter 1 years0 Robert0 Rey and Ben ou!d not agree on the business in Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Page Page #0 #$ of 103 of 103 stoBenni+er k may in and !ude Dabrie! !abor o/ned the ontro!!ing +or sto or ser-i ks in es @<< a *o tua!!y and rendered *?A $n 0 not7ere0 be !o !imiting ated, 2he the +orma!ities %ri e to be %res %aid0 ribed /hen by the %er+ormed both or%oration, +ami!y or%orations, Due to serious !a/right +or the o+ +irst re%!a re+usa! ement is o+ e>er the !ost" ised0 to not more to the disagreements0 Benni+er assigned a!! her erti+i than ate 24( /ere %ar om%!ied -a!ue0 /ithout /ith, E-entua!!y any 5ua!i+iIation Ri'#t o& Re$urc#ase o&/hi!e S#ares2 Trust /un6 shares in @<< to Dabrie!0 Dabrie! *o /hatsoe-er0 issued in substitution is not in the o+ the arti !ost" !es, $t is mere!y Cor$oration: Doctrine (2001) assigned a!! his shares in *?A to Benni+er, erti+i stated ate0 *ert in the o+ :to By-!a/s, k ;o 2002, 2here+ore Buan su h /hat onditions may a sto :ubse5uent!y0 Benni+er and *?A +i!ed a k +orth/ith !imitation trans+erred sha!! not +or -a!uab!e be binding on the 8nder or%oration a against 5uire its o/n shares# &2() om%!aint Dabrie! and @<< in the onsideration %ur haser, the (1oSoc' ne/ Derti+i Sons ate D Sy to1ui Bose Euat /ho .nc v Contro 7ntra?Cor$orate ()**3) SU++ESTE6 ANSWER( :E* seeking to re o-er the or%orate re ords .0&nothing "9 ers%2 -eb 63 kne/ o+ *in the+es! %re-ious sa!e to Pedro, $n !ine /ith the trust +und do a!!eged!y trine that Be ause o+ disagreement /ith the BAD and a and +unds o+ *?A /hi h Dabrie! $n time0 the or%oration /as on+ronted /ith genera!!y renders it un!a/+u! +or the threat by the BAD to e>%e! her +or re+used to turn o-er0 and /hi h remained in the on+!i ting !aims o+ Bose and Pedro, 2he SU++ESTE6 ANSWER( or%oration to return assets toor%orate the mis ondu t and ine++i ien y0 *arissa o++ered ontro-ersy bet/een Pedro and Bose0 shou!d the the o++i es o+ @<<, $s there an intraBAD o+ I *o in-ited you to en!ighten them on there is an intra- or%orate a%ita!0 ontro-ersy sto9es0 kho!ders re%resenting a in matter beto submitted the or to the regu!ar in /riting resign President and member ontro-ersy in this ase# these 5uestionsH -i6: a)as $+to a suit :E* /ere to be this ase, 2he +a t that0 /hen the om%!aint or%oration may a 5uire its o/n shares only ourts# b) Bet/een Bose and Pedro0 /hom a!! her o+ the BAD0 and se!! to the om%any initiated in order to to reso!-e the against Dabrie! @<< /as +i!ed /ith the shou!d the therein +or P1000000,00 7er o++er to when there exists and in the boo's unrestricted shares :E* &%er 200=0 R2*s Burisdi tion)0 Benni+er or%oration so re ogni6e as the right+u! of resign /as e++e ti-e as soon as my shares retained earnings to cover the repurchase Close6 Cor$oration2 Restriction2 Trans&er o& s#ares 3 E?$@$;A2E +ra tiona! shares arising and *?A /ere no !onger sto kho!ders o+ @<< sto kho!der# shares/ 2he %ur%ose o+ the re%ur hase o+ are +u!!y %aid," At its meeting0 the BAD ()**3) out o+ sto k di-idendsH did not di-est the :E* &%er 200=0 R2*s 7o/ /ou!d you res%ond to the abo-e shares must be a !egitimate business a e%ted *arissas resignation0 a%%ro-ed her inherited +rom his un !eto: 300000 SU++ESTE6 2 *A??E*2 or *A@PRA@$:E an Burisdi tion) its .urisdi tion the ase 5ueries# %ur%ose o+ the o+ or%oration0 su ho-er as o++er toANSWER( se!! ba k her shares o+ sto k to the Ra+ae! a) 2he matter shou!d be submitted to the shares o+ :ta, Ana *or%oration0 a !ose toBenni+er the or%oration arising out inasmu h as /as a +ormer om%any0 and %romised to buy the sto ks on indebtedness regu!ar ourts E s%e i+i a!!y in the Regiona! or%oration, 2he shares a %ar -a!ue o+ un%aid subs ri%tion in ha-e a the de!in5uen y sa!eH sto kho!der o+ @<< and ontro-ersy arose a staggered basis, *arissa /as in+ormed o+ o+ 2ria! *ourt /here the %rin i%a! o++i e o+ the P30,00 %er share, Ra+ae! noti+ied :ta, Ana 1 to P8R*7A:E de!in5uent shares so!d out o+ this re!ation, (SE& v &0 1+ 9#6#$ 0ug $# the BAD Reso!ution in a !etter-agreement to Contro ers%2 7ntra?Cor$orate (2004) at P70,00 %er or%oration is !o ated, 2he ontro-ersy that he /as se!!ing the sa!eH and his shares 9"< $7"s"$4! /hi h she a++i>ed her onsent, 2he during 5!at "s an "ntra6.orporate .ontroversy7 bet/een Pedro and Bose is not an intrashare, to 2here being no or takers among the PA9 dissenting /ithdra/ing *om%anys ne/ President singed the ' SU++ESTE6 ANSWER( )88+ *arissa /ants to sue the *om%any to o!!e t or%orate ontro-ersy, kho!ders0 Ra+ae! so!d the same to his sto kho!ders entit!ed to su h %ayment %romissory note, A+ter %ayment P3000000 the An intra- or%orate ontro-ersy is a under on+!i t b) $+ there is no e o+ shares the ba!an e, o-er-issuan $+ you /ere retained by *arissa ousin Ni ente &/ho is not a sto kho!der) +or the *or%oration *ode, &:ees, '3 and G20 om%any de+au!ted in %aying the ba!an e o+ bet/een sto kho!ders0 members or %artners resu!ting the/here t/o-transa tions Buan0 2he *or%orate :e retary re+used to trans+er as her +rom !a/yer0 /i!! you +i!eo+ the suit# A) P7000000, *or%oration *ode) the in or%oration0 asso iation SU++ESTE6 ANSWER( theP2000000, or%oration shou!d reor ogni6e both Pedro theand shares Ni entes name in the or or%orate ?abor ArbiterH b) R2*H ) :E*# %artnershi% regarding the regu!ation the 2he R2* has .urisdi tion o-er this ase /hi h and Bose as right+u! sto kho!ders, 2his is books be ause A!berto0 one o+ o+ the or%oration, 2he ontro-ersy must arise out in-o!-es intraor%orate ontro-ersy, As o+ /ithout %re.udi e to the right o+ the sto kho!ders0 o%%osed the trans+er on the o+ intraor%orate or %artnershi% re!ations o+ 200=0 the a%%!i ab!e ru!e is that there is a or%oration to !aim against Buan +or the ground that the same -io!ated the by-!a/s, the %artiesH bet/een h or%oration0 2RA;:<ERRED B8R$:D$*2$A; under :e , 4,2 -a!ue o+ the shares /hi h Buan so!d to Bose, A!berto o++eredor to buy thesu shares at P32,40 Cor$oration De&inition (2003) %artnershi% or asso and the o+ the Sole2 :R*0 the *ommissions .urisdi tion %er share0 as +i>ed by iation the by-!a/s or:tate a tota! What is a so!e# as it on erns their indi-idua! Whi!e the by-!a/s o+ :ta, Ana %ro-ides that o-er a!! or%oration ases enumerated under PD F02-A %ri inso+ar e o+ P3240000 on!y, SU++ESTE6 ANSWER( hises, $t is +urtheran re5uired that the the+ran right o+ +irst re+usa! be e>er ised at se , 4 has been trans+erred to the *ourts o+ :e genera! tion 330 o+ the *or%oration *ode de+ines dis%ute be intrinsi a!!y onne ted /ith the a %ri e not e> eeding 24( more than .urisdi tion or the a%%ro%riate a K Contro or%oration so!eK as one +ormed +or the ers%2 7ntra?Cor$orate ()**4) regu!ation o+ su theh or%oration (Speed %ar -a!ue o+ shares0 the Arti !es o+ Regiona! 2ria! *ourt, %ur%ose o+ administering and managing0 as $n 3F700 @agno .oined A@D *o as a Bunior $n 5istributing &orp/, et al/ v/ &ourt of 0ppeals, et al, or%oration sim%!y %ro-ides that the Is t!e 'e.ur"t"es an9 :;.!ange trustee0 the a++airs0 %ro%ertyrose and +rom the ranks sto1/+/ A ountant, 7e steadi!y 2o/ "49#5", *arch "3, $774< .ntestate Estate kho!ders o+ re ord sha!! ha-e Co--"ss"on t!e venue for a.t"ons tem%ora!ities any re!igious denomination0 unti! he o+ be ame A@Ds E>e uti-e NP, %re+erentia! of 0lexander :/:yv/ &ourt of 0ppeals, 1/+/ 2o/$t right to %ur hase said shares," "nvolv"ng "ntra6.orporate .ontrovers"es7 se :ubse5uent!y0 t or hur h, $t is ho/e-er +ormed by the hie+ o+ his $s be ause Ra+ae! bound by the %ri ing %ro-iso under ""$63$, 0pril "9, $77"!/ SU++ESTE6 ANSWER( is si!ent as to %ri ing, )28+ ar in-o!-ement hbisho%0 bisho%0 rabbi orA@D the;o0 by-!a/s o+ :ta, Ana *or%oration# in %riest0 ertain minister0 anoma!ies0 the %ursuant to :ubse tion 4,2 o+ the ANSWER( other %residing e!der o+ su h re!igious +rom the SU++ESTE6 BAD onsidered him resigned :e urities Regu!ation *ode0 the 5uasi-.udi ia! Cor$oration: 7ssuance o& s#ares o& stoc&or t#e 9es, $n a tion !oseo+ or%oration0 theand restri as denomination0 seto t !oss or hur h, to $a% om%any due o+ on+iden e, .urisdi the :e urities E> tion hange ser Aggrie-ed0 ices (2001) @agno +i!ed a om%!aint in the to *ommission the trans+er to o+hear shares has to be statedL or%orate ases0 Bani e rendered some /ork +or annotated the or%orate Arti !es o+ $n or%oration0 :E* 5uestioning the onsu!tan -a!idity o+yhis in !udingin intraontro-ersies0 under I9P *or%oration, 7er om%ensation in !uded By-?a/s and the erti+i ate sto k, 2his termination0 and seeking reinstatement to his the:e tion 4 o+ Pres, De ree ;o, o+ F02-A0 has been shares o+ sto k therein, I9P *or%oration ser-es as noti e to the to %erson dea!ing /ith +ormer %osition0 /ith *an ba k/ages0 -a ation e>%ress!y trans+erred the designated issue shares o+ sto k to %ay +or the ser-i esand su Regiona! h shares2ria! !ike*ourt, Ra+ae! in this to ase, With and si k !ea-e bene+its0 31th month %ay Pursuant a ALTERNATI7E ANSWER( o+ Bani e as its onsu!tant# Dis uss su h noti e0 he is bound by the %ri ing *hristmas bonus0 %!us mora! andyour e>em%!ary memorandum ir u!ar issued by ing the %ro-iso :u%reme ;o0 Ra+ae! is By-!a/s, not bound by the %ri SU++ESTE6 ANSWER( ans/er, &2() stated in the damages0 attorneys +ees and osts, A@D *ourt0 on!y %arti u!ar!y designated R2* 9es0 %ro-ided the a%%ro-a! o+ sto kho!ders under the By-!a/s o+ :ta Ana *or%oration, +i!ed a motion to dismiss0 arguing that the s%e the ia! ommer ia! !a/0 ourts in ea h .udi ia! re%resenting t/o-thirds &2L1) o+ the 8nder or%oration the restri tions on :E* has no .urisdi tion o-er ases o+ i!!ega! region origina!shares and e> must !usi-e .urisdi in tion outstanding a%ita! sto k is obtained, the right ha-e to trans+er a%%ear SU++ESTE6 ANSWER( dismissa!0 and has no %o/er to a/ard o-er su h ases (See .ntestate Estate of As o+ 200=0 the ab!e ru!e is that there is A!though the +a ts a%%!i indi ate that the theContro arti !es in or%oration and in the byers%2o+ 7ntra?cor$orate2 Juris6iction ()**+) damages, :hou!d the motion to dismiss be 0lexander :/sto :y v/ &ourt 0ppeals, 1/+/ 2o/ a 2RA;:<ERRED onsu!tan y /ork has B8R$:D$*2$A; a!ready been under :e , !a/s as/as /e!! as in the of erti+i ate o+ sto k0 Buan a kho!der o+ I *o, 7e o/ned a granted# E>%!ain, ""$63$, 0pril "9, $77"!/ 4,2 o+ theonstituting :R*0 the *ommissions .urisdi tion KrenderedK K%re-ious!y ontra ted other/ise0 the shares same sha!! not be tota! o+ 400 e-iden ed bybinding *ert o+ on o-er a!! ases enumerated under PD F02-A debt0K under :e tion 1F o+ the *or%oration any %ur thereo+ in good +aith, @oreo-er :to k haser ;o 3003, 7e so!d the shares to Pedro, se , 4 has been trans+erred to the *ourts o+ *ode0 the %re-em%ti-e rights o+ e>isting theA+ter restri tion sha!! not be indorsed more onerous getting %aid0 Buan and than tion or the a%%ro%riate stogenera! kho!ders .urisdi need not be res%e ted Kin granting the e>isting sto o+ kho!ders or theto de!i-ered said *erti+i ate :to k ;o 3003 RED$A;A? *A8R2, %ayment o+ a 2R$A? %re-ious!y ontra ted debt0K but or%oration the o%tion to %ur hase theto shares Pedro, 2he +o!!o/ing day0 Buan /ent the Contro ()**4) on!y /ithers%2 the 7ntra?Cor$orate indi ated sto kho!dersC a%%ro-a!, o+ o++i the es trans+erring sto kho!der /ith that su h o+ the or%oration and !aimed 8nder :e tion =2 o+ the *or%oration *ode0 reasonab!e term or %eriod stated therein, his *erti+i ate o+ :to k ;o 3003 /as !ost and onsideration +or the issuan e o+ that0 des%ite di!igent e++orts0 the erti+i ate ou!d Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Mercantile Examination Q & A (1990-2006) Page Page 30 #5 of 103 of 103 in Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q ALaw & (1990-2006) A Bar (1990-2006)

3) *an 2o% $sDrade this the <oundation an a!so om%e! the use Di-ine same the*or%oration +unds minimum donated toand )by :e-enth Arti !e, 2he a%ita! sto k o+ the return to it ma>imum the its members %urnumber hase %ri +or o+ %ur edire and hase tors %ayo+ re5uired damages, +ood and in a SU++ESTE6 ANSWER( or%oration is Ane @i!!ion Pesos medi sto ine k +or or%oration# distribution &2,4() to the -i tims o+ the 8nder :e tion 30 o+ the *or%oration *ode0 Cor$oration2 ,%?la;s (200)) &P300000000) Phi!i%%ine *urren y," Pinatubo eru%tion# 2) *an the <oundation any number o+ natura! %ersons not !ess What are your omments and suggested :u%%ose that the by-!a/s o+ I *or%0 a mining o%erate a s%e ia!ty restaurant that aters tothan &4) but not%ro%osed more than +i+teen hanges to the arti !es# +irm %ro-ides that 2he dire tors sha!!&34)0 be the+i-e genera! %ub!i in order to augment its a!! o+ SU++ESTE6 ANSWER( !ega! age and ma.ority o+ /hom are re!ie-ed +rom a!! !iabi!ity +or any ontra t +unds# 1) Ane o+ the a origina! trustees died a) Anby the <irst Arti !e0 suggest residents o+ the Phi!i%%ines0 may +orm entered into the or%oration /ith any +irm a and the other t/o resigned be$ /ou!d ause they that the or%orate indi ate the +a ies t o+ SU++ESTE6 ANSWER( %ri-ate or%oration +or any !a/+u! %ur%ose, in /hi h the dire may be interested," immigrated to thetors 8:,name 7o/ /i!! the -a an 3) 9es0 2his &:e is the 1=&F) same o+ the minimum *or% *ode) and as ma>imum !ong in or%oration by using either 2oho 2hus0 A a 5uired !aims /hi h in the dire BA2 tor be +i!!ed# as the number amount o+ o+ dire donation tors is reasonab!e, in a sto k @arketing *or%oration" or 2oh @arketing o-er!a%%ed /ith Is !aimsre5uired and /ere or%oration under :e tion 3'&=) o+ the *om%any0 $n or%orated," ne essary +or the de-e!o%ment and 2) $+ b) the %ur%oses 2he 2hird o+Arti the !e or%oration shou!d indi are ate the *or%oration *ode, o%eration o+ Is mining %ro%erties, a) $s the Cor$oration2 7ncor$oration2 Resi6enc% Re5uirements !imited *ity or to the @uni estab!ishment i%a!ity and and the Pro-in e his mining !aims o-er abo-e that o+in by-!a/ %ro-ision -a!id# Why# &1() b) What (2004) maintenan the Phi!i%%ines0 e o+ the and !ibrary not mere!y and museum the region as or the or%orations !aims# &2() ha%%ens i+ dire tor A is ab!e to onsummate @ust a!! in or%orators and dire tors SU++ESTE6 ANSWER( stated as its inBAD the %rob!em0 may !ater the designate0 +oundation to be annot its be a) ;o, is in -io!ation o+ e, :e tion 12 o+ the to *or% residents o+ the Phi!i%%ines# &2,4() o%erate %!a $t ea o+ s%e %rin ia!ty i%a! restaurant o++i that aters ANSWER( ) 2he :e-enth Arti must *ode, theSU++ESTE6 genera! %ub!i , $n su h !e ase0 theadditiona!!y a tion o+ ;ot a!! dire tors and in to be ALTERNATI7E ANSWER( b) A shou!d a ount tou!tra the or%oration +or h %oint out the number o+ or%orators shares intoneed /hi the +oundation /i!! be -ires, 2) $+ thea%ita! a t o+ the or%oration is .usti+ied by residents o+ the 8nder tion 30 the %ro+its /hi h he rea!i6ed +rom the :e the sto kPhi!i%%ines, is di-ided0 as /e!! as the %ar theo+ sethe ondary o+ the or%oration *or%oration *ode0 on!y a said ma.ority transa tion, 7e%ur%ose grabbed the business -a!ue thereo+ or a statement that sto k o+ /hi !udes the a need t or%oration, o+ o%erating a tion the in or%orators to be residents o+ the o%%ortunity +rom the &:e orhain %ortion thereo+ are /ithout %ar -a!ue, restaurant0 the +oundation /i!! be /ithin its Phi!i%%ines, As %ro-ided in :e tion 21 o+ the 1'0&:e *or% *ode) 3' M 34 *or% *ode) %o/er to *ode0 do so, Cor$oration2 ,ulSales (2001) E9istence Cor$oration2 Commencement2 Cor$orate same on!y a8a; ma.ority o+ the members 1) :in e there are on!y 2 o+ the members o+ (2003) Di-ine *or%oration is engaged in o+ the Board o+ Dire tors need to the be residents the BA2 remaining and there is no 5uorum0 manu+a ture o+ garments +or e>%ort, 3, o+ When does a or%oration a 5uire$n the the Phi!i%%ines, Cor$oration2 7ncor$oration2 Re5uisites (2002) the -a an o+ ies /i!! ha-e be +i!!ed u% inobtain a or%orate ourse e>isten its business0 e# to it /as ab!e to 9ou ha-e been asked to in or%orate s%e ia! meeting o+ the members &se 2F SU++ESTE6 ANSWER( !oans +rom indi-idua!s and +inan ing a ne/ om%any to be a!!ed <:B :a-ings M *or%) institutions, 7o/e-er0 due to the dro% in the Cor$oration2 "o;er to 7n est Cor$orate /un6s &or ot#er 2, *B9 M *o,0 $n ,0 registered /ith the @ortgage Bank0 $n , ?ist the do uments that demand +or garments in the internationa! "ur$ose ()**1) :e urities and E> hange *ommission its meet you must submit to the ou!d :e urities and market0 Di-ine *or%oration not its :tikki *ement *o /as organi6ed %rimari!y +or a arti !es o+ in or%oration, $t +ai!ed0 ho/e-er0 E> hange *ommission &:E*) to e5ui%ment obtain ob!igations, $t de ided to se!! a!! its ement manu+a turing, Anti +or one or another0 to i%ating ha-e its by-!a/s erti+i ate o+ in or%oration +or <:B :a-ings M su h reason as se/ing ma hines0 %erma-%ress SU++ESTE6 ANSWER( substantia! %ro+its0 its President %ro%osed that +i!ed /ith0 and registered by0 the @ortgage Bank0 $n , &4() ma hines0 high s%eed se/ers0 utting tab!es0 2he do uments to be submitted to the :tikki in-est in a) a %o/er %!ant %ro.e t0 b) a and *ommission, $t ne-erthe!ess transa ted and ironing tab!es0 et ,0 as /e!! as its su%%!ies :e urities and E> hange *ommission &:E*) SU++ESTE6 ANSWER( on rete road %ro.e t0 and ) 5uarry did business as a or%oration +or sometime, A materia!s totions 2o% Drade <ashion *or%oration0 to intransa or%orate aed ne/ om%any to be a!!ed 2he /ou!d onstitute a sa!e o+ o%erations +or !imestone in the manu+a ture suit /as ommen by its minority its om%etitor, &4() 3) 7o/ /ou!d you :a-ings Ma!! @ortgage Bank0 $nDi-ine ,0 to obtain the %ro%osed in-estments# E>%!ain, 2) Ksubstantia!!y o+ the assets o+ o+ <:B ement, 3)assai!ing What or%orate a%%ro-a!s or sto kho!ders the ontinued !assi+y the transa tion# the erti+i ate o+ in or%oration +or said Des ribe the %ro edure in se uring these *or%oration om%!ying /ith the test under -otes are +or e>isten e needed o+ *B9 M *o,0 $n ,0 be ause o+ the SU++ESTE6 om%any0 3) Arti !es o+ $nits or%oration 2) a%%ro-a!s, :e , '0 ANSWER( o+ are: the *or%oration *ode0 the non-ado%tion and registration o+ by-!a/s, 3, 8n!ess the %o/er %!ant and the on rete ourse 2reasurers A++ida-itH 1) *erti+i ate o+ transa tions not being Kin the ordinary Wou!d the a tionreasonab!e %ros%er# Why# &=() to the road t +rom are ne essary Authority the @onetary Board o+ %ro.e business0K and one Kthereby the o+ Cor$oration2 Con ersion o& be StocCor$oration the B:PH manu+a ture o+ ement by :tikki &and they o+ or%oration /ou!d rendered in (200)) a%ab!e Neri+i ation s!i% +rom the re ords o+ I ') om%any is a sto k or%oration om%osed do not a%%ear to be so)0 then the a%%ro-a! o+the ontinuing the business or a om%!ishing the ALTERNATI7E :E* /hether ANSWER( or not the %ro%osed name o+ the Reyes +ami!y engaged in the rea! said %ro.e ts by a ma.ority o+ the BAD and %ur%ose +or /hi h it /as in or%orated,K $trati+i is business, a a!ready sa!e and trans+er in the bu!k inthe been ado%ted by another estate ause o+ regiona! thehas ation o+Be su h a%%ro-a! by ontem%!ation o+ the Bu!k :a!es ?a/, or%oration0 %artnershi% or asso iationH risis0 the sto kho!ders de ided to on-ert sto kho!ders re%resenting at !east 2L1 o+8nder the 4) ?etter undertaking to hange :esto , 2k o+ the Bu!k :a!es ?a/0 a bu!k sa!e their or%oration into a haritab!e non- the outstanding a%ita! sto k /ou!d be As +or the non-%ro+it 5uarry o%erations +or !imestone0 name i+ a!ready in any sa!e0 trans+er0 mortgage0 or by sto%ro%osed k !udes and asso iation by ado%ted amending ne essary, the same is o+ anin indis%ensab!e ingredient in or%oration0 %artnershi% or assignment o+ a!!0 or substantia!!y o+ the theanother arti !es or%oration, a) *ou!da!!0 this be =) Bank erti+i ate o+ de%osit on erning the manu+a ture o+ &1() ement and may0 asso iationH business or trade thereto+ore ondu ted by !ega!!y done# Why# b) Wou!d your I *om%any is a non-sto kin or%oration# Why# the %aid-u% a%ita!H there+ore0 -endor0 mortgagor0 trans+eror0 or ans/er be be the onsidered same i+ at reasonab!y the e%tion0 SU++ESTE6 ANSWER( 7) the :E* in or &2() ?etter ne essary to2his a om%!ish the %rimary assignor, isauthori6ing e>a t!y /hat ha%%ened a) 9es0 an be !ega!!y done, $n on-erting 2) *an Di-ine *or%oration se!! the @onetary Board or du!y authori6ed %ur%ose o+ :tikki, $n su h its ase0 on!y the the it ase at bar, the ALTERNATI7E sto k or%oration ANSWER( to a non-sto k 2o% re a+oresaid items to its om%etitor0 Drade re%resentati-e to /ou!d e>amine the essary bank ords a%%ro-a! o+ the BAD be ne 3, 2he ma.ority -ote o+ the BAD is ne essary, or%oration by a mere amendment o+ the G) Registration <ashion *or%oration# What are the the de%osit o+ the %aid-u% a%ita!H &:eregarding '2 BP =G) 2he in-estment in a %o/er %!ant %ro.e t0 arti !es o+ in or%oration0 the sto k items# :heetH re5uirements toa) -a!id!y se!! the SU++ESTE6 ANSWER( b) a on rete road %ro.e and ) 5uarry Cor$oration2 (eetin's2 ,<D t0 0 Stoc-#ol6ers ()**3) or%oration is not distributing any o+ its E>%!ain, For such a transaction to be valid, it requires not only the o%erations o+ sto !imestone used in the assets 8nder to the Arti kho!ders, !es o+ $n An or%oration the ontrary0 o+ @ani!a favorable resolution of the Board of Directors of Divine manu+a ture o+ ement0 the e>%ress theCorporation, sto kho!ders are deemed to of ha-e /ai-ed $ndustria! *or%0 itsis /ithin %rin i%a! %!a e o+ but also the ratificatory vote or im%!ied %o/er o+ the or%oration0 or at their business right to sha!! share be in in the Pasig0 %ro+its @@, o+ 2he the %rin i%a! !east the same is or%oration /hi is are a gain notArtigas a !oss to the or%orate o++i h es at the or%oration,

*enter0 identa! Page #1 Page to0 Pasig0 of 103 or #3ne of @@ 103 essary /hi!e +or its thesto +a e>isten tory %ro e o+ essing the or%oration, !eather at %rodu ts0 is in kho!ders re%resenting !east t/o-thirds b) &2L1) ;o0 my ans/er /i!! not ho!ds be the same, $n a @ani!a, or%oration its annua! o+ 2he the outstanding a%ita! sto k0 as non-sto k or%oration0 are notin sto kho!ders meeting at members the @ani!a 7ote! mandated under :e the , '0 o+ the *or%oration SU++ESTE6 ANSWER( entit!ed to share inmeeting the-oid %ro+its o+ o+ the @ani!a2he and its BAD at a hote! in *ode, sa!e /ou!d be in ase 2,a) 2he %ro edure in t/in se %resent uring the a%%ro-a! or%oration be ause a!! and +uture @akati @@, 2he by-!a/s are si!ent as to the +ai!ure to meet the a%%ro-a!s, (.slamic ALTERNATI7E ANSWER( o+ the is of as +o!!o/s: 5irectorate the ;hilippines v/ &ourt of 0ppeals, %ro+its be!ong to or%oration, $n %!a BAD e o+ meetings o+the the sto kho!ders and Di-ine *or%oration an"993! se!! thebe items its 3on-erting noti e Who o+ the BAD shou!d sent 1/+/ 2o/ ""3693, *ay "4, the non-sto k or%oration to to a dire a tors, 3) sha!! %reside at the om%etitor0 2o% Drade <ashion *or%oration, a!! the dire tors, 2he noti e shou!d state the stomeeting k or%oration by ators# mere o+ the dire 2)amendment *an 2ing0 a o+ 7o/e-er0 Di-ine *or%oration must om%!y %ur%ose o+ the sto kho!ders annua! meeting thesto Arti !es o+ meeting, $n or%oration0 the non-sto in k @ani!a0 kho!der0 /ho did not attend the /ith :e tions 10 ' and 4 o+ the Bu!k :a!es 2or%oration At the meeting0 ea h o+ the %ro.e t -a!idity o+ the or%orate reso!utions 5uestion the is deemed to ha-e distributed an%assed at ?a/0 name!y: &3)the de!i-er s/orn statement shou!d be a%%ro-ed by a ma.ority o+ BAD o+ meeting# 1) *an same su h asset o+ the or%oration E sto i,e, kho!der itsthe %ro+its0 the names and addresses o+ a!! the at reditors &not mere!y a ma.ority o+ those %resent 5uestion the -a!idity o+ the reso!utions among its members0 /ithout a %rior (,bservation :he question is rather he!d vague to /hom the -endor or mortgagor may be the meeting) ado%ted by the BAD at the meeting disso!ution o+ the in or%oration, 8nder :ein more particularly question "b/ :he question 2,b) 2he %ro edure se uring the a%%ro-a! indebted together /ith the amount o+ @akati# 3220 the non-sto kthat or%oration must does not specify the conversion is frombe a o+ the sto kho!ders is as +o!!o/s: SU++ESTE6 ANSWER( indebtedness due or o/ing to ea h o+ the non8stoc' corporation to a stoc' corporation/ disso!-ed +irst, 3) 2he President %resides o-er the meeting 3 said Written noti is eli'ely o+ a%%!y the %ro%osed reditorsH &2) the %ur hase or :he candidate to be confused because in-estment o+ the dire and tors0 the time i+ there and %!a is no e o+ %osition the of the words Bif at the the inception, F &o is a o+ mortgage money to %ro-rata %ayment o+ nonstoc' corporation/C Eence, any to answer in the By-?a/s, $+ there is sto*hairman kho!ders meeting shou!d be sent ea h &1) bona +ide %ro-ided !aims o+ the reditorsH and along the same line should be treated with ByCor$oration2 De /acto Cor$oration ()**3) sto the kho!der %osition at his o+ %!a *hairman e o+ residen %ro-ided e as in the make a +u!! detai!ed in-entory o+ the sto k o+ liberality! A ?a/s0 or%oration /as reated by a s%e ia! !a/,the the *hairman %resides o-er sho/n on the books o+ the or%oration and goods0 /ares0 mer handise0 %ro-isions or 1) 7o/ /ou!d you %rote t %ost the interests ?ater0 the !a/ reating it /as de !ared de%osited meeting to o+ the the addressee Dire tors &:e in the 4' *or% o++i *ode) e at materia!s0 in bu!k0 and noti+y e-ery reditor o+ the reditors Di-ine *or%oration# 2) ;o, 2he !a/ %ro-ides that annua! in-a!id, @ay su h o+ or%oration !aim the to be a /ith %ostage %re%aid0 or ser-ed %ersona!!y, !east ten &30) days be+ore trans+erring SU++ESTE6 ANSWER( SU++ESTE6 ANSWER( sto kho!ders meeting sha!! be%ro.e he!d ts in the de %ossession, +a to 2 At or%oration# the meeting0 ea h o+ the *onsidering that Di-ine *or%oration has ;o, A or %ri-ate i%a!ity or%oration may be i%a! reated ity the %rin o++i e shou!d be muni a%%ro-ed by/here the sto kho!ders entered a de +a to stage o+ disso!ution /ith on!y under the *or%oration *ode, An!y %ub!i o+ the *or%oration is !o ated, <or this re%resenting at !east 2L1 o+ the outstanding the easing o+ its $ /ou!d or%orations may beo%erations0 reated under s%ein-oke ia! %ur%ose0 a!so %ro-ides that @etro a%ita! sto k,the &:e !a/ '2 BP =G) on beha!+ o+ the reditors the %rote tion !a/, Cor$oration: (2003) @ani!a Sole is "ro$rietors#i$ onsidered a ity or muni i%a!ity, Where a %ri-ate or%oration is reated under under :e , 322 o+ the *or%oration *ode0 that 9J: 2rading +i!ed a %!a om%!aint +or s%e i+i is :in e the %rin i%a! e o+ business o+ @$* a s%e ia! !a/0 there is no attem%t at a -a!id the %ro eeds o+ damages the sa!e against shou!d +irst be %er+orman e /ith PW* Pasig0 @@0 the ho!ding o+ the annua! in or%oration, :u h or%oration annot !aim a%%!ied to/ards the sett!ement o+ the *or%oration +or +ai!ure to de!i-er ement sto kho!ders meeting in @ani!a is %ro%er, ALTERNATI7E ANSWER( a de +a to status, ob!igations o+ or%oration0 1) ;o, 2he !a/the a!!o/s the ans/er0 BAD be+ore to ho!d its ordered by %!ainti++, $n its PW*any &:e 43 *or%) 8nder the Bu!k :a!es ?a/0 i+ the %ro(200)) eeds are Cor$oration2 Dissolution2 (et#o6s o& 8i5ui6ation amount an be %aid to sto kho!ders, meeting any/here in the the Phi!i%%ines, 2he denied !iabi!ity on the ground0 inter a!ia0 that notH a%%!ied %ro%ortionate!y to/ards the I *or%oration shortened its !i+e by ho!ding o+ %ersona!ity the BAD meeting innot @akati /as 9J: has no to or%orate sue0 being sett!ement o+ the a ounts o+ the or%orate amending its Arti !es o+the $n or%oration, $tPW* has %ro%er and the -a!idity o+ the reso!utions in debts0 or%orated0 and that President o+ to ha-e the sa!e o+ the sub.e t ated matters no debts but o/ns a %rime %ro%erty !o ado%ted by the Board in that meeting annot /as authori6ed to enter into a ontra t to not 2o% Drade <ashion *or%,0 as being in Que6on *ity, 7o/ /ou!d the said %ro%erty be 5uestioned, &:e 41 *or% ode) /ith %!ainti++ by the PW* Board o+ Dire tors0 K+raudu!ent and -oidK and sto obtain satis+a Cor$oration2 Nationalit% o& Cor$oration ()**:) be !i5uidated among +i-e kho!ders o+tion hen e the ontra t is the u!tra -ires, 9J: 2rading +rom the %ro%erties /hi h are deemed to said What or%oration# is it the nationa!ity Dis uss t/o o+ methods a or%oration o+ sti!! re%!ied that is a so!e %ro%rietorshi% o/ned SU++ESTE6 ANSWER( be o/ned by Di-ine *or%oration in s%ite o+ !i5uidation, &4() organi6ed and the in or%orated under the !a/s by de!i-ery 9J:0 and that President o+ reditors PW* had 2he %rime %ro%erty o+ I *or%oration an be to the buyer, 2he an o+ a +oreign ountry0 but o/ned 300( by made it ta%%ear in se-era! !etters %resented !i5uidated among the +i-e sto kho!ders a+ter o!!e on the redit against Di-ine SU++ESTE6 ANSWER( SU++ESTE6 ANSWER( <i!i%inos# &2() in *or%oration0 e-iden that/i!! he had to sign the %ro%erty has been on-eyed by 8nder the ontro! test o+the or%orate 9es the e suit %ros%er, As a%ay0 so!ethe and i+ itauthority annot ontra ts on beha!+ o+ the Board o+ Dire tors or%oration to the +i-e sto kho!ders0 by nationa!ity0 this +oreign or%oration is the o+ %ro%rietorshi%0 the %ro%rietor o+ 9J: 2rading reditors an a%%!y +or atta hment on ') $n ase Di-ine *or%oration -io!ated the !a/0 o+ PW*, Wi!! the suit %ros%er or not# Reason di-iding %artitioning it among themse!-es <i!i%ino ;ationa!ity, there are grounds has the or a%a ity to a t Where and the %ersona!ity to v. %ro%erty +raudu!ent!y so!d, )'ee 0eople remedies are a-ai!ab!e to 2o% Drade <ashion /hat brie+!y, &4() in any t/o$t o+ the +o!!o/ing by +or %ier ing the -ei! o+ /ays: or%orate entity0 that sue 4apoy, PW*, G.R. is not No. ne &88(6, essary 'epte-ber +or 3) 9J: 2rading 21, 19&2+ *or%oration against based Di-ine P79:$*A? D$N$:$A; be+ore or PAR2$2$A; on is0 disregarding the +i tion0 the or%oration to be in or%orated it an sue, An the SU++ESTE6 ANSWER( *or%oration# the %ro%ortion o+ the -a!ues o+ o+ their /i!! +o!!o/ the nationa!ity the ontro!!ing other hand0 PW* is esto%%ed +rom asserting $+ the sa!e by Di-ine *or%oration did not 2) :E??$;D 27E PRAPER29 to a third %erson sto kho!dingsH or members or stono kho!ders0 sin e the that its President had authority to enter obtain the re5uired t/o-thirds &2L1) -ote o+ and di-iding the eeds the +i-e or%oration /i!! then be among onsidered as the one into the ontra t0 %ro onsidering that0 in se-era! the outstanding a%ita! sto k0 then sto kho!ders init had %ro%ortion their Cor$oration2 Non?StocCor$oration ()**3) and the same, o+ PW*Cs !etters0 !othed itsto President transa tion is -oid / (.slamic 5irectorate of the sto kho!dingsH or 2he AB @emoria! <oundation /as 2o% Dradev/ <ashion *or%oration an ha-e the /ith a%%arent authority to dea! /ith 9J: ;hilippines &ourt of 0ppeals, 1/+/ 2o, ""3693, 1) a+ter the determination o+ the -a!uenon-sto o+ the k Cor$oration2 Articles o& 7ncor$oration ()**0) in or%orated as a non-%ro+it0 %ur hase de !ared -oid and re o-er the 2rading, *ay "4, "993! %ro%erty0 by A::$D;$;D orto 2RA;:<ERR$;D 2he artihase !es o+ in in or%oration beestab!ish registered or%oration order as to and %ur %ri e %aid0 /e!! as damages 27E PRAPER29 to one sto kho!der /ith the o+ in the :E* ontained the +o!!o/ing maintain a !ibrary and museum in honor against the dire tors and %ro-isions o++i ers /ho ob!igation the %art o+ said sto in kho!der to -- a) <irst Arti !e,%arents 2he name the de on eased o+ o+ the or%orators, ALTERNATI7E ANSWER( undertook the transa tion inthe -io!ation o+ the %ay the other +our sto kho!ders the amountLs <or -io!ation o+ the Bu!k :a!es ?a/0 the or%oration sha!! be 2oho @arketing $ts Arti !es o+ $n or%oration %ro-ided +or a !a/, in %ro%ortion to the -a!ue o+ Di-ine the sto *or%oration kho!ding %rin i%a! o+ o++i ers o+ the *om%any," board trustees om%osed o+ 4 o+ h, b) ea 2hird 2he h %rin i%a! o++i e admit o+ su 2o% h an be Arti he!d !e, rimina!!y !iab!e, $n addition0 in or%orators0 /hi authori6ed to ne/ Cor$oration2 7ncor$oration2 Re5uirements (2004) or%oration sha!! be !o ated in Region $$$0 in Drade an sue *or%oration +or members, 2he Arti Di-ine !es o+ $n or%oration a!so What the minimum and ma>imum number su a!!o/ h is muni therein as its Board o+ damages, Nio!ation o+ to the :a!es ?a/ thei%a!ity +oundation reBu!k ei-e donations o+ in tors or%orators re5uired to in+raudu!ent or%orate a Dire may designate," /ou!d render su As h ao+sa!e +rom members, Ban 100 3FF10and =0 sto-oid, k or%oration# :in e 2o% Drade /ou!d be members had been admitted by theom%e!!ed BA2, to return the goods to Di-ine *or%oration0

Mercantile Law Bar Examination Q & A (1990-2006) Page Page 3# 31 ofPage 103 of 103 3/ Phi!i%%ines of sto%%ing 103 &BP %ayment Page =G), 33 of thereo+0 103 Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006) SU++ESTE6 ANSWER( $n :e!don or%orator /as : a /as ting e!e in ted his dire a%a tor ityand asthe an b) are 9es,si!ent0 Assuming When the a .uridi or%oration thata! %erson the is deemed has or%oration a to good ha-e ommitted the brea h o+ trust against Na!id N)TE( &%er Dondee) 2he !are !a/ %ro-ides that a:e %resident o++i er o+ o+ E genera! 2urt!e, 7e manager, /as not Part a ting o+ his in his ontinues re%utation the %o/er to to that o%erate de is sim%!y di-idends debased0 e-en /ith under resu!ting de%!eted in interests the or%oration /ou!d be to -oting agreement is anmora! agreementin /riting emo!ument %ersona! a%a a <ord ity,E>%edition0 <urthermore0 no h+a the ts a%ita!0 so trust '1, ia! :in/ou!d humi!iation0 e it hasthe the %o/er sto kho!ders to damages de !are or may the be emas u!ate is the right o+ minority /hi /hereby one or more sto kho!ders o+ a or%oration 1) I? <oods *or%oration guaranteed the or%oration ha-e been o/ns, %ro-ided A+ter /hi a +e/ h /ou!d years0 indi : !ost ate his managers a/arded, di-idends0 be I9 @oreo-er0 is so!idari!y a sto k good/i!! or%oration, !iab!e +or an the be sto kho!ders to seek redress +or the onsentto trans+er his or theirshares to a trustee in !oan o+ its sister om%any I? @eat Produ ts0 2he %ro-ision o+ the Arti !es o+ $n or%oration or%orate that the %ositions a <i!ing tion o+ but :e!don re+used /as tated return by an ob!igations onsidered in an urred asset o+ by the or%oration, or%oration# or%oration, su h he a tion asdi a to orderto -estin the !atter-oting orthe other rights %ertaining SU++ESTE6 ANSWER( $n , SU++ESTE6 ANSWER( /A<: N%/:= $n the ase o+ F#N In.. vs mento+st that at disso!ution the assets o+ the to said shares +or a %eriod not e> eeding +i-e years u%on the intent motor to -ehi de+raud !e !aiming :hamron that by as himse!+ a or in E>%!ain, &1() deri-ati-e suit e-en by a !one sto kho!der is Noid E 2his is an u!tra -ires a t on %art o+ I? a) $n the +a e sha!! o+ the re+usa! the reditoratutory the A4:C, +u!+i >anuary 1*, 2 5to 0o+ the :* ru!ed thatH or%oration be gi-en a haritab!e sto kho!der /ith 2urt!e, a substantia! 7a-ing e5uity aby ted share0 into /hat he one o!!usion o+ the %rote tions e>tended !a/ onditions *or%oration0 and is not one o+ the banks to grant more !oans0 the +o!!o/ing are Deri<oods ati e Suit: Watere6 Stoc()**3) <B;$ ontends that A@E* is not entit!ed to or%oration does not %rohibit the or%oration he o/ns onsidered that %ortion as his duty o+ the as an or%orate o++i er assets o+ the minority sto kho!ders against abuses o+ the and su h %o/ers +or o+in :e ,Rea! 1= Estate o+ the too!s to the sto kho!ders to SU++ESTE6 A be ame a%ro-ided sto kho!der mora! damages be ause it is a or%oration, +roma-ai!ab!e de !aring di-idends be+ore disso!ution, no/ or%oration0 in his ANSWER( %ossession, :e!don $s shou!d thePrime ontention not be he!d o+ : ma.ority, other *or%oration *ode, 3) additiona! subs ri%tion to shares o+ sto k ;o, 2he ontention o+ :Bu!y is not -a!id, 2he <ord re%!enish a%ita!0 too& /it: Cor$oration2 >ali6it% Cor$orate Acts ()**:) Cor$oration2 Se$arate Juri6ical "ersonalit% ()**4) *or%oration &PRE*) 300 3FF30 /hen he terms and -a!id# %ersona!!y E>%!ain !iab!e, &4() on Cor$oration2 >oluntar% Dissolution (2002)se-era! or%oration by sto Po/er kho!ders or a%%ro-ed by E>%edition o+ the is o/ned the or%oration, 2he onditions A .uridi a! %ersono+ is genera!!y not$n entit!ed to 2he sto kho!ders Peo%!e &PP$) PR *o o/ns ashare beaby h resort /ith /as gi-en one by another sto kho!der ;ame three &1) methods by /hi h a sto k 8nderse tion 4F o+the es * or%oration * ode0 su%ra0 s%e i+ied in 2) reso!utions ad-an by the sto kho!ders the in-estorsH or%oration has a !ega! %ersona!ity se%arate t/o in a s%e ia! sto kho!ders mora! damages be ause0 un!ike aa to natura! ottages, Baime0 the President PR0 to 5ua!i+y him as a dire tor, A o+ /as not re-oting trust agreem ent may the on+er u%on a trustee not or%oration may be -o!untari!y disso!-ed, or%orationH and distin t +rom that o+ ottages its sto kho!der, meeting: a) Reso!ution in reasing the %erson0 it annot e>%erien e %hysi a! o u%ied one o+ the +or residentia! e!e ted dire tor in the Bu!y 30 3FF2 annua! on!y the sto kho!derCs -oting rights buta!so otherrights agreem SU++ESTE6 ANSWER( E>%!ain ea h method, &4() 1) %ayment o+ un%aid subs ri%tion by the What thebut or%oration o/ns is its o/n authori6ed a%ita! sto k o+ PP$H and b) su++ering su as h sentiments as /ounded %ur%oses, A+ter Baimes term e>%ired0 meeting he ontinued to be a registered %ertaining to his or shares !ong as the -oting ent, 2he 2he three &1) methods by /hi h a sto PR k sto entis kho!ders, and not the %ro%erty o+ any trustagreem notentered K+or the %ur%ose o+ ir um +i-e yearReso!ution authori6ing the BAD to issue0 +oror %ro%erty +ee!ings0 serious an>iety0 menta! anguish /anted too+ re o-er %ossession o+ the ottage, shareho!der PRE*, or%oration may be -o!untari!y disso!-ed are: SU++ESTE6 ANSWER( -enting the !a/ againstmono%o!ies and %eriod m sto When kho!der here+used /as e-en sti!! ho/ a dire substantia! tor0 A the dis e5uity o-ered ash %ayment0 shares the ites mora! sho k, the 2he ne/ *ourt o+ +rom A%%ea!s Baime to surrender the ottage0 3) No!untary Disso!ution /here no reditors b) ;o, As a genera! ru!e0 kho!ders or i!!ega! ombinations in restrainto+trade ay the be sto orused Cor$oration2 Set?<&&2 Un$ai6 Su.scri$tion ()**3) thatontending on Ban 40 3FF30 PRE* issued +ree o+ share that sto kho!der %ro%osed a%ita! sto *o, k in rease in +a-or @ambu!ao ?umber -, P;B0 et a!,o+ to that asis ao/ns, sto kho!der and +ormer a++e ted, 2his done by a ma.ority -ote e>tended are +or%ur%oses o++raud,K &se tion 4F0 4th %aragra%h o+the the managers annot be he!d so!idari!y !iab!e Ni tor /as em%!oyed in @A$A *or%oration, 7e harge 300000 shares to I a !a/yer /ho outside in-estors /ho are non-sto kho!ders, .usti+y the a/ard o+ mora! damages, President0 he has a right to %ossess and in ases *or%oration *ode), 2hus0 the traditiona! on e%t o+ a o+ the dire tors0 and reso!ution o+ at !east +or the ob!igations in urred by the subs ribed to 30400 shares o+ the or%oration SU++ESTE6 ANSWER( assisted in a ourt ase in-o!-ing PRE*, /here the -oting trust agreem %rimari!y intended to sing!e out 7o/e-er0 the ent *ourtCs statement in @ambu!ao en.oy the %ro%erties o+ the or%oration, $s 2L1 -ote o+ sto kho!ders0 submitted to the or%oration, 2he or%oration has a se%arate Baimes ontention is not orre t, Baime may at P300 %er share or a tota! o+ P3400000, 7e 2he +oregoing reso!utions /ere a%%ro-ed by -oting a sto kho!derCs to -ote +rom his trust other rights as 3) *an A no/ bring an a tion in the name o+ the that Ka right or%oration may ha-e a good Baimes ontention orre t# E>%!ain, :e urities and E> hange *ommission, and distin t irre-o %ersona!ity +rom that o+ the o/n shares o+ sto %ayment k in PR *or% but su h shares to isa e>e uted su h and m ade ab!e +or !im ited duration m ay made an initia! do/n o+ P170400,00, sto kho!ders re%resenting FF( o+may the tota! or%oration to 5uestion the issuan e o+ the re%utation /hi h0 i+ besmir hed0 a!so be 2) No!untary disso!ution /here reditors %ursuant to a in %ra ti e be omor ea !ega! de-i e /hereby trans+er o+ sto kho!ders managers, 2he !atter are o/nershi% doesPresident not entit!e him to the 7e /as a%%ointed and Denera! ;e-erthe!ess0 A@E*Cs !aim +or mora! outstanding a%ita! sto k, 2he so!e dissenter I /ithout re ted, ei-ing any %ayment# 2) *an I 5uestion ground +or the a/ard o+ mora! are a++e 2his is done by a %etition +or a ted !oan the a sto kho!ders shares is e++e sub.e tto damagesK the s%e i+iin is %resumed to be a ting in good +aith o+ sue any s%e i+ibeha!+ %ro%erty o+ the @anager, Be o+ his in disagreement /ith +a!!s under item 7 o+ Arti !e the 223F /as Bimmy @orato /ho o/ned 3( o+ 2hedamages e>e ution a -oting trust agreem there+ore0 m o+ the%ossession right o+ A ause to him o+ the or%oration agreement an obiter di tum, %ro-ision o+theo+ -oting trustagreem ent, ent0 disso!ution /hi h must be +i!ed /ith the ontinuing o%eration o+%ro-ision the on or%oration, or%oration or a A de+inite %ortion thereo+, ay 3, reate Are a the di the hotom reso!utions y bet/een binding the e5uitab!e the or e>%ress!y the BAD0 he resigned andon!y demanded the *i-i! *ode, 2his sto k, /hereby on :e the ground that has one share insigned his urities and E> hange *ommission0 bene+i ia! o/nershi% o+the or%orate shares o+a 2he ob!igations in urred by the or%oration ;either is he a o-o/ner o+ or%orate the %eriod or%oration and its sto in !uding o+ his un%aid sa!aries0 his ost o+ authori6es the re o-ery o+ kho!ders mora! damages in %ayment name# 1) *annot the shares issued to I be by a ma.ority o+ the members o+ the board sto kho!der0 on the one hand0 and the !ega!tit!e thereto Cor$oration2 "o;er tohis 7n est Cor$orate in anot#er isdissenting made are ases those o+!ibe!0 the s!ander or%oration /hi other h a!one is o+ !i-ing %ro%erty, Pro%erties registered in the name o+ Bimmy @orato0 the a!!o/an e0 bonus0 and/un6s o+ or any +orm onsidered as /atered sto k# on the other hand, (Lee vs !A" #e$ %" 1992) dire tors0 -eri+ied by the %resident or ontingent Cor$oration !iab!e there+or, 7o/e-er0 /hen the 2, What remedies0 i+ 223F&7) any0 are does a-ai!ab!e to o+ the ()**4) or%oration o/ned by it as an sto kho!der# reimbursement o+ hisare gaso!ine and de+amation, Arti &1() !e not 5ua!i+y u%on +u!! se retary0 and u%on a++irmati-e -ote @A$A :to *or%oration kho!ders !ike admits Baime that on!y it o/n o/ed shares Ni tor o+ When may a e>%enses, or%oration in-est its its +unds in o+ SU++ESTE6 ANSWER( or%oration is a!ready inso!-ent0 the dire tors a! re%resentation &2() entity se%arate and distin t +rom /hether %!ainti++ is a natura! or .uridi Deri ati @orato# e Suit: the Re5uisites (2003) %aym kho!ders re%resenting at !east 2L1 o+ the 3, ;o, 2he reso!utions are not binding on the sto k in the or%oration, :u h shares o+ sto k P'00000, but to!d him that this /i!! be a%%!ied another or%oration or business or +or any and o++i ers be ome trustees o+ the business sto kho!ders, %erson, 2here+ore0 a ento+the .uridi a! a %erson su h as AA0 a minority sto kho!der0 +i!ed suit 1) Disso!ution by shortening o+ the SU++ESTE6 ANSWER( outstanding a%ita! sto k, or%oration and its sto kho!ders in !uding to the do not un%aid re%resent ba!an s%e e o+ i+i his subs or%orate ri%tion %ro%erty, in other %ur%oses# !oan, and assets o+ the or%oration +or the bene+it

a or%oration anand -a!id!y om%!ain +or !ibe! or A or%oration against BB0 **0 DD0 EE0 the ho!ders o+ or%orate term, 2his is its done by amendment Cor$oration2 Se$arate Juri6ical "ersonalit% (2000) may in-est +unds in no another Bimmy @orato, Whi!e these reso!utions /ere (+ebecca Boyer8+oxas v &0 1+ "776%% Aul "4, amount o+ P3000000,00 2here /as a!!9$ o+ the reditors and are !iab!e +or neg!igen e any other +orm o+ de+amation and !aim +or the ma.ority shares o+ @AP *or%oration0 +or an eo+ the arti !es o+ in or%oration, @aru!as *reati-e 2e hno!ogy $n ,0 or%oration or business or +or any other $""s437! a%%ro-ed by the sto kho!ders0 the dire tors or noti e +or the %ayment o+ the un%aid @oreo-er0 /here the broad ast is !ibe!ous %er or mismanagement, mora! damages, a!!eged misa%%ro%riation o+ or%orate in +unds, business enter%rise engaged Cor$oration2 Se$arate Juri6ical "ersonalit% ()**4) 3) %ur%ose other the %rimary %ur%ose +or /hi h damages, is re5uired by !a/ su h subs ri%tion, Ni than tor 5uestioned the set-o++, se0 a%%ro-a!0 the !a/ im%!ies $n su h in a the ase0 Cor$oration2 >otin' Trust A'reement ()**2) 2he om%!aint a-erred0 inter a!ia0 that @AP manu+a ture o+ om%uter media a essoriesH Ri hard o/ns F0( o+ the shares o+ the /hi h it /as organi6ed /hen the said ase0 e>ist, @A$A set-o++ the un%aid e>e subs uted ri%tion e-iden e does o+ annot honest mistake or the /ant o+ @ay Aa%ita! distressed om%any a o+-oting *or%oration is the or%oration in s%a /hose rents antero++i e and e at a R2*) sto ka%%ro-ed o+ DA@ *o, o asion0 in-estment is!aim byAn a one ma.ority the 2, Bimmy @orato an store %etition the :E* &;o/ /ith -i tors +or sa!aries# 2) Wou!d your hara or re%utation o+ the %arty !ibe!ed trust agreement +or a %eriod o+ three years beha!+ and +or /hose bene+it the deri-ati-e ommer ia! bui!ding o/ned by I, Being a DA@ re%resented by Ri hard as President BAD and su h a%%ro-a! is rati+ied by the toon!y de !are the 2 reso!utions0 as /e!! as any and ans/er be the same i+ indeed there hadshares been in goes in mitigation o+ damages, ;either o-er =0( o+ its outstanding %aid suit is brought, $n their a%a ity as members SU++ESTE6 ANSWER( start-u% @aru!as en.oyed some to and Denera! @anager e>e a u% ontra t to kho!ders re%resenting at uted !east 2L1 o+ the a!! h a om%any0 tions taken by the BAD thereunder0 nu!! sto a a!! +or the un%aid subs ri%tion# in su a ase is the %!ainti++ re5uired +a-or o+ a bank to /hom it /as indebted0 /ith o+ the Board o+ rent Dire %aymentsH tors0 the ma.ority 3) ;o, @A$A annot seto++ the un%aid !enien y in its but a+ter three se!! a subdi-ision !ot in +a-or o+ 2omas, <or outstanding a%ita! sto k, Written noti e o+ the and -oid, introdu e e-iden e o+ a tua! damages as a the Bank named as trustee, Additiona!!y0 the sto kho!ders ado%ted a reso!ution subs ri%tion /ith Ni tors !aim +or sa!aries, years0 Cor$oration2 I %ut %re >ali6it% a sto% o& to Cor$orate it and asked (2002) @aru!as +ai!ure o+ DA@ to de-e!o% the subdi-ision0 in-estment and the date0 time and ondition edent to theActs re o-ery o+ some %ro%osed *om%any mortgaged a!! its %ro%erties to the authori6ing @AP *or%oration to /ithdra/ the 2he un%aid subs ri%tion is not yet due as %resident and genera! manager0 90a /ho is a Whi h o+ the +o!!o/ing or%orate tsasts are +i!edsto an a tion +or res ission at and e o+ the kho!ders meeting /hi h damages, $n this ase0 the broad are %!a2omas SU++ESTE6 ANSWER( Bank, ause o+ the inso!-en y o+the the suit, Pursuant to said reso!ution0 the there is noBe a!!, sto kho!der0 tose, %ay ba k renta!s -a!id0 -oid0 or -oidab!e# $ndi ate your ans/er damages against DA@ and Ri hard, Wi!! h %ro%osa! /i!! be taken u% must be sent to SU++ESTE6 ANSWER( !ibe!ous %er 2hus0the A@E* is entit!ed to su 2he a tion may %ros%er against DA@ but Cor$oration2 Reco er% o& (oral Dama'es ()**:) 2) 9es, 2he reason is that Ni tor+ore is entit!ed to the *om%any0 the Bank !osed or%orate ounse! +i!ed a @otion to Dismiss in Cor$oration2 Se$arate Juri6ical "ersonalit% ()**1) amounting to a hundred thousand %esos or to by /riting the %aragra%h number o+ the a tion %ros%er# E>%!ain, ea h sto kho!der, &:e '2 *or% *ode) ;o, A!! the re5uisites +or a -a!id deri-ati-e mora! damages, de+inite!y not against Ri hard, Ri hard has a %ayment o++i!ed his sa!aries /hi @A$A $n a om%!aint against I9Ph *or%oration0 mortgaged %ro%erties0 and as thehas highest the name o+ the @AP *or%oration, :hou!d Rona!d :ham doing business under thethe name the -a ate the %remises the AA end o+ the month, 5uery0 +o!!o/ed byat your orres%onding suit e>ist in this ase, <irst0 /as e>em%t !ega! %ersona!ity se%arate and distin t +rom no right to /ithho!d in %ayment o+ un%aid ?u6on 2rading *or%oration a!!eged that its o+ bidder0 a 5uired said %ro%erties and assets motion be granted or denied# Reason brie+!y, o+ :7A@RA; @a hineries &:hamron) so!d @aru!as neither %aid its debt or nor -a the ated the ans/er as Na!id0" Noid0" Noidab!e0" as to +rom e>hausting his remedies /ithin 2he three-year %eriod %res ribed inse!!0 that o+ DA@, $+ he singed the ontra t to subs ri%tion, 2o do so /ou!d -io!ate ?abor President M Denera! @anager0 /ho is a!so a the the *om%any, &4() 2urt!e @er anti!e &2urt!e) a diese! +arm %remises, I sued @aru!as and 9 make +or o!!e the ase may be, $+ your ans/er is Noid0" or%oration0 and did not ha-e to a tion Noting 2rust Agreement ha-ing e>%ired0 SU++ESTE6 ANSWER( did so as President and Denera! ?a/s (0podaco vthe 2=+& "3$ S 44$! stohe kho!der0 su++ered menta! anguish0 +right0 the tra tor, $n %ayment0 2urt!es o+ the un%aid renta!s0 %!us interest and e>%!ain your ans/er, $n ase o+ President a Noidab!e" demand on the Board o+ Dire tors +or the osts 9es0 the suit /i!! %ros%er against @aru!as, $tand Cor$oration2 om%any demanded the turn-o-er StocCor$oration (200)) o+ DA@ and serious not in his %ersona! ia! humi!iation and an>iety as aand @anager Di k the :e!don issued a s%a he k o+ !itigation, Wi!! %ros%er against I#+or so @anager ans/er0 s%e i+y /hat must be !atter to sue, 7ere0 su suit h aonditions demand /ou!d be is the one renting the o++i e and store e0 trans+er o+ a!! its assets and %ro%erties0 I9" is a re reationa! !ub /hi h /as a%a o+ ity, @ere F0( the o/nershi% tortuous by a Ri ts hard o+ o+ I9P +a-or :hamron, A /eek !ater0 resu!t Against 9#in &4() %resent or om%!ied /ith to make the +uti!e0 sin e the dire tors /ho om%rise the I0 as P40th !essee0 +rom the o+ o/ner o+ the bui!ding0 in the !uding management and o%eration o+ $n its ounter !aim0 I9P *o !aimed to ha-e organi6ed to the o%erate ao+ go!+ ourse +or its o+ a%ita! sto k DA@ is not o+ itse!+ *or%oration, +ood business0 entered into a ontra t /ith so!d tra**0 torDD to Bri <oods io are $ndustries or%orate a the t -a!id, &4() 3)and I? ma.ority &name!y0 BB0 EE) the as 2urt!e !essor, the *om%any0 !aiming that under the Noting su++ered mora! damages due to besmir hed members /ith an origina! authori6ed a%ita! su++i ient ground to disregard his se%arate itsio) President Bose *ru60 /hereby the !atter &Bri +or P=0th, Bri io dis o-ered that *or%oration0 /hi h engaged in the But ones the gui!ty suit o+ against the /rong 9is /i!! om%!ained not %ros%er, o+, +ast90 as 2rust Agreement0 the onstituted re%utation or good/i!! as !es aBank resu!t o+ ?u6on k o+ %ersona!ity P300@, 2heabsent arti in/as or%oration !ega! ao+ sho/ing0 +or /ou!d su%%!y the or%oration /ith its meat sto :e ond0 AA a%%ears to be sto kho!der at the engine o+ the tra tor /as re onditioned %resident and genera! manager0 and the a!so as trustee o+ the management and o%erations 2rading *os om%!aint, 3) @ay ?u6on nor the by-!a/s did not %ro-ide +or e>am%!e that he a ted ma!i ious!y or in bad and %ou!try re5uirements, time the a!!eged misa%%ro%riation o+ he re+used to %ay *reati-e 2urt!e, As a hno!ogy0 resu!t0 Di k the Cor$oration2 Se$arate Juri6ical "ersonalit% ()***) Does the demand o+ the *om%any ta!!y stoso kho!der o+ @aru!as 2e a!!egations o+ the om%!aint# o+ the *om%any, 2rading *o re o-er damages based on distribution o+ di-idends a!though there is a /ith SU++ESTE6 ANSWER( +aith (E;1 &onst &o v &0 1+ "7##3$ An $$,9$ or%orate +unds, :e!don ordered :to% Payment" o+ theand he k &2() As a resu!t o+ %erennia! business !osses0 a the on e%t o+ a Noting 2rust Agreement# $n ,0 has a !ega! %ersona!ity se%arate 2) @ay I9P *o re o-er mora! Noidab!e E A ontra t o+ the or%oration /ith %ro-ision that a+ter its disso!ution0 the assets $"7s$#7! :hamron sued 2urt!e and Di k :e!don, 2hird0 the suit is brought on beha!+ and +or2he SU++ESTE6 ANSWER( issued to :hamron, or%orations net /orth has been /i%ed out, E>%!ain brie+!y, SU++ESTE6 ANSWER( distin tor +rom that o+ the or%oration, damages# &1() one more o+ its dire tors or trustees or sha!! bedemand gi-en to o+ a the haritab!e or%oration, $s ta!!y :hamron obtained a +a-orab!e .udgment the bene+it o+ @APor%oration *or%oration, this o+ the 2he om%any does not ;o, or%oration0 being an arti+i ia! %erson $nA +asto t0 it is or%oration# no/ in negati-e territory, SU++ESTE6 ANSWER( !iabi!ity o+ is the is $n that o++i ers -oidab!e0 at the o%tion o+ h I9" a k Di-e reasons +or ho!ding o-de+endants 2urt!e and Di su k :e!don &onmart (;hils/! .nc/ he!d v/ Securities and Exchange onne tion0 it /as in /ith the on e%t o+ ause a did Noting 2rust I9 isha has sto k or%oration be it is /hi no&4() +ee!ings0 emotions or senses0 ;onethe!ess0 the sto kho!ders not !ike to or%oration and not that o+ its o++i ers and or%oration &:e 120 *or%oration *ode), your ans/er# &ommission, "96 S&+0 3#!iab!e, ("99"!*omment that to grant .oint!y and se-era!!y on the Agreement, 2he Noting 2rust Agreement organi6ed as a sto k or%oration and there is and /hi h annot e>%erien e %hysi a! gi-e u%, *reditor-banks0 ho/e-er0 do not sto kho!ders /ho are !iab!e +or or%orate SU++ESTE6 to the or%oration on not erned the right o+ de ision o+ANSWER( the Juri6ical tria! ourt, Dis uss +u!!y, mere!y to ethe trustee the right to Cor$oration2 Se$arate "ersonalit% (2000) no %rohibition in its Arti !esthe o+ or%oration su++ering or on-eys menta! anguish0 is$n not entit!ed to share the on+iden o+ sto kho!ders and !iabi!ities, 2) 2he Board o+ Dire tors o+ I? <oods 2he tria! ourt erred in ho!ding Di k :e!don0 /ithdra/ing or dismissing the suit0 or%oration at the ALTERNATI7E ANSWER( -ote the shares o+ grantorLs, 2he ;ine indi-idua!s +ormed a %ri-ate or its by-!a/s +or itmore to de!oans, !are di-idends, mora! damages, re+use to grant a) What too!s are *or%oration de !ared and2urt!e0 %aid ash President and D@ sto o+ .oint!y instan e o+ ma.ority kho!ders and and onse5uen o+ +ore !osure the re%!enish a%ita!# &1() o+ %ursuant tothe the %ro-isions o+ the *or%oration When a or%oration is organi6ed as a mortgaged sto k a-ai!ab!e to e the sto kho!ders to di-idends /ithout a%%ro-a! o+ the se-era!!y !iab!e /ith 2urt!e, $n issuing the dire tors /ho themse!-es are the %ersons %ro%erties /ou!d be a!ien to the Noting 2rust *ode o+ the or%oration and its arti !es o+ $n or%oration sto kho!ders, he k issued to :hamron and0 therea+ter0 a!!eged to ha-e Agreement and its e++e ts, or By-?a/s

his or%oration duty0 interest ontinued ad-erse its in-estments, business to the o%erations or%oration ;o, A PR$NA2E +rom 2, 2here retaining A%ening *ARPARA2$A; is no sur%!us o++i need es by +or %ro+its is one the in +ormed absorbed e> ess +or o+ nu!!i+yan the 5uestioned Wou!d Di i6en6s2 o& the Di i6en6s ()**0) :ometime 1, Parti in i%ating A%ri! 200'0 in the @a!yn management0 !earned about unti! in @ay res%e 100 t o+ 3FF70 any matter !ast /hi day h o+has its been some or%oration 300( /hate-er %ri-ate o+ their name to %ur%ose0 %aid-in undertake bene+it a%ita!, disso!ution or end0 /hi!e and a her a Declaration tion %ros%er# Why# SU++ESTE6 !east 2L1 o+ the sto to kho!ders o+ there :o!ar <ort Patio su%er-ision *a+e or edure, ontro! !o ated o+ in domesti *ity entity and At or%orate re%osed e>isten inANSWER( him in e, Prior on+iden said e0 he date0 sha!! be P8B?$* /inding *ARPARA2$A; u% %ro As is any +ormed a 2aguig resu!t +or o+ the 9es0 she istrustee a!ready a the sto i-i! kho!der at the time b) ', Are Entering there into es /hen a or%oration *or%oration0 u%on the that its de-e!o%ment /as undertaken by !iab!e a number as a o+ meeting %ending +or or%oration a tions0 o+ and go-ernment merger0 the o+ ainstan absorbed %ortion o+ the or%oration :tate +or the is a /ere the a!!eged misa%%ro%riation o+ or%orate 4, A%%ointing re%resentati-es or sha!! ser-i e not ontra be he!d ts !iab!e +or not de !aring re ommendation o+ the BAD0 de !ared a 40( ne/ good or%oration kno/n as <ort Patio0 $n ,0 -arying must nature a ount but +or most!y %ro+its money /hi !aims h other/ise +i!ed genera! automati a!!y or disso!-ed /e!+are, and 2he true its assets test is and the +unds, And that +i!ing su h a meeting, tion as a SU++ESTE6 ANSWER( distributors0 under the ontro! o+ di-idends# &1() sto/ou!d k di-idend their annua! /hereo+ both : hiera and and Ba6 are dire tors, by reditors0 ha-e none aduring rued o+ /hi to h the /as or%oration, e>%e ted to %ur%ose !iabi!ities are the ao%erating or%oration, 5uired $+ assumed the or%oration by the instan es /hen a is or%oration sha!! deri-ati-e e-en by/ithin a !one sto kho!der is 2) Pending a%%ro-a! o+ the merger bynot the +oreign entity0 /ho domi i!ed in the 2he noti im%oses e suit o+ the annua! sto kho!ders @a!yn a!so +ound that : hiera and Ba60 on be E5uity om%!eted or reso!-ed !iabi!ity u%on him +i-e not years to dea! is 2he sur-i-ing reated or%oration, +or %o!iti a! or %ub!i %ur%ose be he!d !iab!e +or not administration dethe !aring di-idends one o+did the %rote tions e>tended by !a/ the :E*0 may the sur-i-ing or%oration Phi!i%%ines or /ho stays in ountry +or a a +rom meeting not mention about a to beha!+ Patio $n-estments0 had obtained +or @ay his o/n 100 3FF7, bene+it, &:e ,anything 130 *or%oration onne tedo+ /ith the o+ are: minority kho!ders against abuses o+ the $+ the 8nder reditors :e sto , 1' had o+ sought the *or%oration your %ro+essiona! *ode /as /here a!ready institute suits to o!!e t a!!$+ +or %eriod %eriods at PB*om !east 3G0 days in sto k di-idend de !aration, 2he matter !oan o+or P4000000,00 +rom Bank0 *ode) go-ernment0 then it tota!ing is a %ub!i or%oration, ma.ority, ;e-erthe!ess0 Dina must +irst he!% a dire at that tor0 time by -irtue about o+ /hether his o++i or e0 not a 5uires their +or 3) /hen .usti+ied by de+inite or%orate e>%ansion re ei-ab!es to o%ening the absorbed or%oration any a!endar year, the o+ <ort a!though Patio *a+e, 2his taken u% on!y under the item other not0 it %ur%ose is a due %ri-ate or%oration the SU++ESTE6 ANSWER( e>haust any administrati-e remedies be+ore %ro.e ts or %rograms a%%ro-ed by the BADH or 2) ases himse!+ ou!d a be business %ursued o%%ortunity beyond @ay /hi 100 h shou!d +rom its ustomers# your ans/er, business" in the agenda o+ the meeting, *,J, !oan se ured E>%!ain by assets o+ Patio /ho!e or/as substantia!!y the the /ho!e interest in Distinction: De &acto Cor$oration s! Cor$oration ;o, 2he the merger does not be ome e++e ti-e her /hat suit be onsider in ourt, 3FF70 be!ong to /ou!d the or%oration0 ha-e been your thereby ad-i obtaining e#.% /hen or%oration is %rohibited under any &1() :en/a0 a sto kho!der0 /ho re ei-ed his o%y $n-estments and %ersona!!y guaranteed by!oan the or%oration be!ongs to the :tate, A %ub!i Esto$$el (2003) unti! and un!ess a%%ro-ed by the :E*, Be+ore SU++ESTE6 ANSWER( @a!yn then +i!ed a or%orate aor tion agreement any +inan ia!deri-ati-e institution reditor0 &2() %ro+its toethe %re.udi eattend o+ su h or%oration0 o+ the noti but did not the meeting0 : hiera and Ba6, or%oration is /ith reated by s%e ia! !egis!ation 2he an %ursued e-en beyond @ay $s there a be di++eren e bet/een a de +a to a%%ro-a! by the o+ +rom the merger0 be+ore 2ria! *ourt o+ @akati *ity he ases must a ount to the !atter +or a!! su h !o Regiona! a! or :E* +oreign0 de !aring the di-idends subse5uent!y !earned about the 40( sto k or /hether a t o+the *ongress, A %ri-ate or%oration 100 3FF70 the !ast day o+ the or%orate or%oration and a or%oration by esto%%e!# sur-i-ing or%oration has no !ega! %ersona!ity Distinction2 Stocs! Non?StocCor$oration (2003) against : and Ba60 a!!eging that the t/o /ithout itshiera or his onsent0 and h onsent has not %ro+its de by re+unding the same0 un!ess his a t di-idend !aration, 7e desires to ha-e the must be organi6ed under the su *or%oration SU++ESTE6 ANSWER( e>isten e o+ D7Q *or%, 2he *or%oration is SU++ESTE6 ANSWER( E>%!ain brie+!y, &2() /ith res%e t to re ei-ab!es due to the Distinguish !ear!y a or sto ktheir or%oration +rom dire tors se had brea hed +idu iary duties has been rati+ied by a -ote o+ e!!ed the yet been uredH 1) /hen it an be !ear!y sho/n sto k not di-idend de !aration an and set *ode, Aa DE <A*2A *ARPARA2$A; is the one /hi h $ /i!! a e%t the ase, :e '1 o+ *or% not tua!!y disso!-ed u%on the e>%iration o+ absorbed or%oration, a non-sto k or%oration, by misa%%ro%riating money and assets o+ that su h retention is ne essary under s%e ia! aside0 sto kho!ders o/ning or re%resenting at !east and /ishes to retain your ser-i es as a a a tua!!y e>ists +or a!! %ra ti a! %ur%oses as 1) A ase /as +i!ed against a ustomer to *ode states that no sto k di-idend sha!! be SU++ESTE6 ANSWER( or%orate term, 2here is sti!! the %eriod +or Patio $n-estments in the o%eration o+ <ort su hits &2LG) o+ the outstanding a%ita! ir umstan es obtaining in the or%oration0 ast/o-thirds !a/yer +or the %ur%ose, Wi!! you a e%t the or%oration but /hi h a%%ro-a! has !ega! Ao!!e sto or%oration one that has Ba6 a%ita! t kon the %romissory note issued by him issued /ithout the o+ right the to E&&ect: o& Cor$orate Term no (2003) !i5uidation or /inding u%, Patio *a+e, 3)is Did : hiera and -io!ate /hen there &4() is need +or s%e ia! reser-e +or %robab!e sto k,E9$iration ase# Dis uss /ith reasons, N)TE( 8nder :e e>isten tion 322 o+ or%oration * ode0 a or%orate ethe as * against the :tate, $t is stothe k the di-ided into shares and is authori6ed to a+ter date o+ the merger agreement, 2he sto kho!ders re%resenting not !ess than 2L1 or%orate o%%ortunity# E>%!ain, I9P *or%oration entered into a ontra t o+ %rin i%!e o+ ontingen ies, or%oration /hose or%orate e>isten e is o+ terminated essentia! to the e>isten e a de in +a to SU++ESTE6 distribute toANSWER( thethe ho!ders o+ that su h/hi!e shares ustomer raised de+ense the o+ the outstanding a%ita! sto k at a regu!ar !ease /ith AB*0 $n ,0 o-er a %ie e o+ rea! any manner ontinues to be a body or%orate +or three 9es, A!though re+used the %ro+its business or or%oration that o+ there bea!!ed &3) a -a!id !a/ di-idends or as a!!otments the o+ sur%!us re ei-ab!es o+ @a!yn the o+ date the merger s%e ia! du!y +or that estate +or meeting a term 20 years0 rene/ab!e +or &1) years a+terits disso!ution +or%ur%oses o+%rose uting Di i6en6s2 Ri'#t2 Cor$oration ()**)) ne-erthe!ess0 using the resour es and %ur%ose, under /hi h a %ro-ided or%oration might on be+ore0 the basis o+ (ana'in' the shares he!d, A!! other agreement /as trans+erred to the sur-i-ing and andanother de+ending *on+ormab!y suits by and againstitand /ith :e to !e enab!e 40 o+itto the se be 20 years0 that I9PCs &1) a tua! use &2) or noti e>er in good AB* @anagement $n ei-ab!es ,k%resented to the DE< !ose its +aith redit standing o+ re the om%any0 : hiera and *or% in or%orated0 a bona +ide attem%t to or%orations are non-sto or%orations, or%oration0 those /hi h /ere *ode0 aterm /ritten eise o+ in the ho!ding o+ o+ or%orate is e>tended a ordan e a++airs0 or%orate %o/ers on+erred u%on it by !a/, ALTERNATI7E ANSWER( Di i6en6s: Declaration o& Di i6en6s (2001) @ining *o0 the dra+t o+ its %ro%osed Ba6 !ear!y demonstrated that the business organi6e as a or%oration under su h !a/0 reated a+ter the merger agreement remained the/ith regu!ar sent to the !a/, meeting <our years a+ter the shareho!ders term o+ I9P u!minating 9es0 $ /i!! a e%t the ase, 2he %rob!em does 8nder /hat ir been umstan es may a %ursued or%oration *ontra t, As an in enti-e0 ou!d ha-e su absorbed ess+u!!y inAB* the /i!! and to @anagement be o/ned by the or%oration, su++i e, 2he noti e itse!+ s%e i+ied *or%oration e>%ired0 but sti!! /ithin the the %eriod in the A *ARPARA2$A; B9 E:2APPE? e>ists /hen not indi ate that there is a tion by the BAD de name !are di-idends# &2()C in !uded in the terms o+ distributed om%ensation that o+ the /ou!d !ose or%oration, @ore 2hea!!o/ed termination o+the !i+e o+ a ontra or%orate entity does 2hese re ei-ab!es be to the dis%osition said sub.e t matter, by the !ease t +or the %ersons assume to a t as a or%oration /hi h is a!so ne essary +or the de !aration o+ SU++ESTE6 ANSWER( notby itse!+ ause the e>tin tion or dim inution o+ the and AB* /ou!d on+ormab!y be to 30( o+ any sto o+ k : entit!ed hiera and Ba6 gui!ty stoim%ortant!y0 kho!ders /ith theare disso!ution e>tension %eriod0 I9P to *or%, ;o di-erting +orm o+ /hi di-idends an es be de !ared and kno/ing ito+ tothe be !ease /ithout authority 40( sto k ANSWER( di-idend, rights and !iabi!ities o+su h entity, 27 $+ the three- do so, $n distribution SU++ESTE6 di-idend h DE< may de !are during the the resour o+ the !ose and !i5uidation %ro edures under ;e/ noti+ied AB*0 $n that it is e>er ising the as yeare>tended !i+e has e>%ired /ithout a trustee or Di i6en6s2 o&,0 Di i6en6s o+ its rem %aid by ANSWER( the or%oration e> e%t t,+rom SU++ESTE6 this ase0 those %ersons /i!! be !iab!e As aDeclaration genera! ru!e0 A ()**)) annot bring a !i+etime o+ the *ontra or%oration to @anagement another entity0 e5ui-a!ent *or%oration *ode# Dis uss the merits o+ Wou!d thisto 3) o%tion to e>tend the !ease, AB*0 $n ,0 re ei-er ha-ing been e>%ress!y designated by the aining Whether the re ei-ab!e /as in urred by the During the annua! sto kho!ders meeting0 unrestri ted retained earnings a%%earing on 2) Was it %ro%er +or @a!yn to +i!e a genera! %artners +or a!! debts0 !iabi!ities and deri-ati-e suit in the name o+ the you a%%ro-e su h %ro-ision# $+ not0 /hat +raud and bado+ +aith, ed to sotors argument, &1() or%oration0 /ithin that%eriod0 the board assets, o+ dire &or ob.e ted to the %ro%osed e>tension0 arguing absorbed or%oration be+ore or+or a+ter the Ri6a0 a sto kho!der %ro%osed to the body that SU++ESTE6 ANSWER( its deri-ati-e books, Di-idends must be %aid in amounts suit /ith a %rayer in.un ti-e damages in urred or arising as a resu!t o+ or%oration on erning an a t that took ontinue as $tmay0 trustees) itse!+0 m ay be %ermi /ou!d you suggest as an a!ternati-e# that sin e the or%orate unreser-ed !i+e KtrusteesK o+ I9P *or%, had $ /ou!d not a%%ro-e a be+ore %ro%osed merger SU++ESTE6 agreement0 ANSWER( orkho!ders or a+ter the in a %art or%orations earned %ro%ortiona! to a!! sto onsti%u!ation the basis re!ie+# E>%!ain, their athe tions, the %!a e o+ be+ore he be ame a during sto kho!der, e>%ired0 it ou!d no o%t to i6en6 rene/ A!though it a !ose or%oration0 Distinction: Di the i6en6s s!!onger "ro&it: Cas# Di s!the by !ega! im is management ontra t :E*0 that the managing a%%ro-a! thereo+ by theby the said sur%!us be i+ a%ita!i6ed and sto kthreedi-idends be o+ the outstanding sto is k he!d them, *ash or 7o/e-er0 a t om%!ained o+ a %!i ation to !ease, I9P *or%, ountered that /ithstanding yearterm 0 ne-erthe!ess the %rin i%!es o+ se%arate StocDi i6en6 (2001) or%oration0 as anbe!ong additiona! om%ensation re ei-ab!e /ou!d sti!! to the sur-i-ing distributed to the sto kho!ders0 arguing that 2) ;o, $n a deri-ati-e suit0 the a tion is %ro%erty di-idends0 an be de !ared +rom ontinuing one0 A may do so, om %!ete a%%ointa !a%se o+ its or%orate term it%ro+itH sti!! has the .uridi a! %ersona!ity sti!!o+ a%%!y, 2he business Distinguish di-idend +rom ash to shou!d be :e entit!ed to 30( o+ any sto or%oration under G0 the *or%, *ode as the o/ners o+ the om%any0 the sto kho!ders0 brought in the name o+ a su h it0 unrestri ted retained earnings by a k institutedL the /orei'n Cor$oration2 @Doin' intrustee t#e noora right to rene/ the !ease 5uo As o+ or%oration sti!! se%arate and distin di-idend +rom sto k,usinessA di-idend, &2() di-idend that be de !ared, :to kho!ders /hi hthe does not may make any distin as to t by a ma.ority -ote0 an be doause anything, or%oration and re!ie+s are %rayed +or therein %ro%er reso!ution o+ is the Board o+ tion Dire tors, or%orate re ei-er/h "#ili$$ines ()**:) SU++ESTE6 ANSWER( /arranto eedings +or in-o!untary o+ !i5uidation, are thethe on!y ones entit!ed to be re ei-e sto its k the assets and %ro%rietary !iabi!ities o+ interests the absorbed o sto m ayyou SU++ESTE6 ANSWER( hairman o+ %ro the meeting0 ho/ /ou!d ru!e +or theis or%oration0 by a minority kho!der, :to+rom k di-idends0 ho/e-er0 must de !ared When a +oreign or%oration deemed to be PRA<$2: are residua! amounts re%resenting SU++ESTE6 ANSWER( (&E&'(disso!ution o+ I9P *or%, has been instituted a sto kho!ders and dire tors, *onse5uent!y0 I9P *or%orationCs ontention istbeyond not di-idends (2ielsen D &o v =epanto *ining $% s or%oration that the sur-i-ing on the motion to de !are sto k di-idends# 2he !a/ does not 5ua!i+y the term minority" by a %ro%er reso!ution o+ the or%oration Board o+ doing business in the Phi!i%%ines#" &1() !)LA the hairman o+the the meeting0 $ /ou!d ru!e that%eriod, return o+ a%ita! a+ter dedu ting a!! or%orate E&&ects2 Win6in' U$ business "erio6 o& athat Cor$oration ()**+) by the A++i eBased o+ :o!i itor Denera!, $s the sin e $ +rom the o%%ortunity andribed the As meritorious, on the ru!ing o+ the 5%9! /ou!d add theted unsubs /ou!d inherit, in terms o+ the number o+ shares o/ned by a Dire tors e>isting unrestri retained &*(L(&&(+E SU++ESTE6 ANSWER( against the motion onsidering that a osts and e>%enses +rom re-enues, 2he 2he or%oration0 on e disso!-ed0 therea+ter ontention o+ I9P *or%, meritorious# E>%!ain resour eCs used %ertain to the !ose :u%reme *ourt in ;hilippine 2ational Ban' vs/ a%ita! sto k o+ a or%oration may on!y be sto kho!der bringing is the a tion inbe beha!+ o+ '" (+! " vs earnings and rati+ied by sto kho!ders A +oreign or%oration deemed to doing !aration o+ $79 sto%ro+its0 k di-idends shou!d initia!!y a umu!ated +rom year to year0 ontinues to at be a body or%orate +or three brie+!y, &4() ,*E !)-., or%oration0 the to sue and to de of +i>al, S&+0 I9P *or%, /as issued +or ash orstanding %ro%erty or +or o+ ser-i the&-. or%oration, (S*& v ("99$!/ @hani+ "3% S&+0 446! re%resenting !east t/o-thirds &2LG) the es business in the Phi!i%%ines" it is ontinuing be taken by the BAD and therea+ter to be re%resent or%orate retained earnings )# years +or %ur%oses o+ %rose uting and 1) disso!-ed ;o, WA2ERED :7ARE: are those so!d by re o-er rendered remains /ith !ose or%oration the i%so +a to u%on the e>%iration o+ its a!ready onstituting aor%oration0 demandab!e outstanding a%ita! sto k the o+ the body or substan e the business or A&&EAL'" on urred in by ao+ 2L1 -ote o+ the Di i6en6s: Sources o& Di@a!yn, i6en6s2 Trust Doctrine +rom /hi h the di-idends an be de !ared, de+ending suits by and against and o+ sti!! the or%oration +or !ess than the %arLbook and &:e not /ith 2here+ore0 it is origina! term, $t eased to be a body debt =2 *or% *ode), As/un6 an it a!ternati-e0 $ obtained in a meeting du!y a!!ed +or the enter%rise +or /hi '1 h it*or% /as organi6ed, $t is /0 . 2here +o an *A:7 D$N$DE;D: re%resent tua! kho!ders &:e *ode), isa no (2001) enab!ing it to sett!e andmanaging !ose itson a++airs0 -a!ue, $n the instant ase0 it /i!! de%end u%on ne essary to +i!e a deri-ati-e suit beha!+ o+ sto or%orate +or the %ur%ose o+ ontinuing the /ou!d suggest that the or%oration 1%1211 %ur%ose, &:e , '10 *or%oration *ode) the intention o+ an entity to ontinue the distribution o+ a umu!ated %ro+its to ho/e-er0 against the <rom +unds are ash and sto k the %rohibition0 u!minating in the +ina! dis%osition and the -a!ue o+ ser-i es rendered in re!ation tothe +ovem$er the /hat !ose or%oration0 a!though business +or /hi h it /asountry, organi6ed0 e> e%t shou!d instead be gi-en a net %ro+it body o+ its business in the 2he grant sto kho!ders as a return on their 1) Assuming that a deri-ati-e suit is %ro%erH kho!ders reso!-ing to re ommend the di-idends sour ed# E>%!ain /hy, &2()$+under 2%" 200%its 3) to distribution o+ its remaining assets, the 1 the sto the tota! %ar -a!ue o+ the shares, %ro eedings /ou!d be go-erned on!y +or %ur%oses onne ted /ith /inding %arti i%ation and0 i+ it !ater so desires0 to then and e>tension o+ F0day redit terms o+ a SU++ESTE6 ANSWER( Doctrine o& Cor$orate <$$ortunit% (2001) a tion ontinue i+ the or%oration is disso!-ed in-estments, De !aration o+ ash di-idends may the BAD that it Close onsider a de Cor$orate !aration o+ sto k Deriu% ati e Suit2 Cor$oration2 year e>tended !i+e e>%ires /ithout a trustee $nterim Ru!es o+ Pro edure +or be $ntra-*or%orate or !i5uidation, E>tending the !ease is not on-ert the amount that may due thereby Di +oreign i6en6s2 or%oration Declaration o& to Di a i6en6s domesti (200)) A!! ash and sto ky di-idends are a!/ays %aid the %enden o+ the E>%!ain, Brie+!y during dis uss the dosuit# trine o+ byor%orate re5uires on!y the a%%ro-a! o+ the ma.ority o+ di-idends +or on urren e therea+ter by the <$$ortunit% (2001) or Dis%utes, re ei-er being designated the an a %ast t to +or /ind u% or !i5uidate I9P *or%,Cs to e5uity or shares o+ sto k at no !ess than or%oration e-ery %ur hase sho/s an <or the three years o+ its ommer ia! o+ SU++ESTE6 ANSWER( out o+ the unrestri ted retained earnings the Board o+ Dire tors in a %ro%er reso!ution, o%%ortunity, &2() E&&ects2 (er'er o& Cor$orations ()***) sto kho!ders, @a!yn0 : hiera and Ba6 are the dire tors or%oration /ithin that %eriod and by that /orei'n Cor$oration2 @Doin' ,usinessA in t#e a++airs, $t is to the idea o+ /inding the %ar thereo+, 9es0 +or-a!ue in s%ite o+ the disso!ution o+ any intention :2A*J to D$N$DE;D: ontinue transa are sim%!y ting /ith trans+ers the o+ o%eration0 I0 anontrary oi! om%any0 has been SU++ESTE6 ANSWER( &a!so a!!ed sur%!us o+e>tended the or%oration, 2/o or%orations agreed to merge, 2hey then Patio $n-estments0 a !ose or%oration +ormed time &e>%iry o+ the %ro+it) 1 year term)0 "#ili$$ines2 Acts or Acti ities (2002) u% the a++airs o+ the or%oration, or%oration0 remains a no .uridiunrestri a! %erson +or $n brie+0 the it do trine dis5ua!i+ies a dire tor0 !atter, SU++ESTE6 ANSWER( retained earnings to a%ita! sto k0 thereby earning tremendous!y in e> ess o+ 300( o+ $+ the or%oration has ted e>e uted an agreement the to run the Patio *a+e0 a! s%e +res i+ying o o++ee the or%orate !i5uidation is not /ith yet o-er0 at !east three &1) an e>am%!es o+ the a sho% tsks or o+ 2he !i5uidation an+rom ontinue the %ur%ose trustee or o+ o++i disso!ution er +or a%%ro%riating three years +or +rom his Di-e in reasing the $n number o+ shares o+ the sto the or%orations %aid-in a%ita!, A!! o+ retained earnings0 the di-idends /ou!d ha-e sur-i-ing or%oration and the absorbed in @akati *ity, 20000 Patio *a+e began ho/0 i+ at a!!0 an a +ina! sett!ement o+ the a ti-ities that are s%e i+i a!!y identi+ied under /inding u%,ed 2he members o+ the BAD an the date o+ disso!ution0 %re ise!y one o+ the %ersona! bene+it a transa tion or o%%ortunity ea h sto kho!der /ith no re5uired ash sto kho!ders ha-e been !aiming thatre-erses0 they to be sour +rom the a%ita! sto k, 2his is or%oration, 8nder the agreement o+ merger e>%erien ing +inan ia! or%orate a++airs be/inding made# +oreign in-estment !a/s as onstituting ontinue /ith the o+K2R8:2 the or%orate %ur%oses that %ertains is to toa!!o/ thethe the or%oration0 /inding-u% and o+ /hi itsh our ontribution, A t/o-thirds -ote o+ the share in the %ro+its o+ the or%oration by /ay i!!ega!, $t -io!ates <8;D dated ;o-ember 40 theks sur-i-ing onse5uent!y0 some o+3FFG0 the he it issued to business" in the Phi!i%%ines &1() a++airs unti! !i5uidation, 2hey an t as a++airs0 in+ina! !uding termination o+a %ending under the duty o+the !oya!ty he shou!d +irst bring doing sto kho!ders0 ou%!ed /ith a ma.ority -ote o+ o+ di-idends but the Board o+ Dire tors +ai!ed DA*2R$;EK that %ro-ides that the a%ita! adistributors 5uired a!! the rights0 %ro%erties its or%oration be-erage and em%!oyees SU++ESTE6 ANSWER( atior eor%oration Suit2 (inorit%+or Stoc-#ol6er (2003) trustees re or%oration ei-ers this %ur%ose, suits, to +or its use or e>%!oitation, the Board o+ Dire tors0 is needed to de !are to !i+t its +inger, a) $s *or%oration I gui!ty o+ stoDeri k the o+ the is a trust +und to be $n A tober 20010 : hiera in+ormed @a!yn Any three &1) o+ate the +o!!o/ing a ts or%oration, or and !iabi!ities o+ s! the absorbed 3) boun ed, SU++ESTE6 E&&ects2 Win6in' U$ a "erio6 o& !i+e a Cor$oration (2000) Dina :e-i!!a0 minority sto kho!der o+ Bayan Distinction2 "ri "u.lic Cor$oration (2003) sto k /ou!d di-idends, -io!ating aANSWER( !a/# $+!o in ation the a++irmati-e0 state ke%t inta t during the o+ the or%oration @ust the absorbed or%oration undertake that she +ound a +or a se ond a+e in a ti-ities What onstitute ha%%en doing to the business" absorbed in the *or%oration I is gui!ty o+ -io!ating :e tion '1 2he 2he :E* dobene+it a%%ro-ed trine +e!t o+ o+ or%orate the amendment o%%ortunity o+ the is o+ an *or%oration0 that -arious in-estments Distinguish !ear!y a %ri-ate +rom the basis &2() disso!ution and the /inding u% %ro +or the the reditors o+ the 2aguig *ity, @a!yn ob.e ted beor%oration ause o+ edures# the Phi!i%%ines under our +oreign in-estment or%oration# 1/+/ 2o/ 336%7, 2ovember $$, "966< and o+ the *or% *ode, 2his %ro-ision %rohibits Arti en+or !es ement o+ $n or%oration o+ the duty o+ o+ D7Q !oya!ty *or% o+ the om%anys a%ita! /ere ultra vires i+ not0 a %ub!i or%oration your ans/er, &1() E>%!ain or%oration, (&ommissioner of .nternal8 +evenue dire k +inan ondition o+ the or%oration, 3, :o!iia! iting orders !a/s: Steinberg v/ Helasco, 1/+/ 2o/ #74%7, sto or%orations SU++ESTE6 ANSWER( shortening or%orate its dire or%orate and !i+e to o++i on!y ers, 24 *arch When years indeed0 made intors -io!ation o+ !a/, :he +i!ed aa SU++ESTE6 ANSWER( v/ &ourt of 0ppealG, 1/+/ 2o/ "7653%, Aanuary $7, "$,"9$9! in a dire ordan tor0 e trustee /ith :e or 320 o++i o+ the er *or% attem%ts deri-ati-e suit seeking to "999< Boman Environmental 5evelopment &orp/ to a 5uire or v/ &ourt of 0ppeals,

Mercantile Examination Q & A (1990-2006) Page Page 33 31 of 103 of 103 *ode, a Page 5uires0 As3$ shortened0 Page of in 103 30 -io!ation of 103 the o+ Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q ALaw & (1990-2006) A Bar (1990-2006)

Page /3 hi!dren, 2hey then brought 35 of 103 103 5! When Page he Page /0 /# // is /1 made0 of 103 of 103 by a the SU++ESTE6 ANSWER( deed o+ %ro-ision assignment the %ro%er or%orate s%e o+ to !a/0 to An substantia! ) ;o, the De 2) 2he number ember to%eriod ha-e amount =0 o+ 3FGG0 more o+ shares 10 o+ shares A0 days damages, an he in /ithin ho!ds /ith or%orator /hi on /hi $t /ou!d re h hto and the ord %ay in+or the What the ma.ority isi+i the do sto trine kho!ders K%ier an ing a!/ays the -ei! muster o+ d, ;o0 the sto kho!der may not e>er ise +or a tion, C#attel o++i (ort'a'e ers +or registration s! A&ter?7ncurre6 /ith <.li'ations the re5uest ()***) a 5uisition more assets !ike a 5uisitiona o+ %ersona!!y ans/er +or the or%orate thus sto the the Denera! kho!der beor%oration, di++i @anager an u!t %ay +or o+ o+ the Pab!o the un%aid Pa.e to @u!ti on-in subs <arms ri%tion ing!y or%orate 2L1 -ote0 entity#K /ou!d you E>%!ain, a!!o/ the ma.ority right be vause the matter that he SU++ESTE6 ANSWER( *ercantile .nc &0 1+ """776, 2ov 3, (:ramat the trans+er in the or%orationCs sto k and ar0 sto house0 ma hinery or Ana%%raisa! De ember 30 3FF=0 Borro/er e>e uted a 94 assert had *o0 resigned notthat yetom%any e>%ired, the as D@ in or%oration and so!dks0 to o+ the the +ami!y sto kho!ders to remo-e the one dire tor 2he do trine o+ K%ier ing the -ei! o+ or%orate $#6s"4! dissented +rom is not one o+ those /here SU++ESTE6 ANSWER( b) Pre-em%ti-e businessH right and must be e>er ised in trans+er books o+ the assigned shares0 hatte! mortgage in +a-or o+ the Bank to the or%oration his /as shares intended o+ sto mere!y ks in the as a ase re%resenting the minority# $ /i!! not a!!o/ the ma.ority sto kho!ders entity0K is the do trine that the ourts 8ia.ilities2 Stoc-#ol6ersB DirectorsB <&&icers ()**+) right o+ a%%raisa! issto a-ai!ab!e under the Stoc-#ol6ers: ethe Ri'#t (2003) 1) to "reem$ti ha-e e>tra share /ith /hi h to v o-er or ;o, a ordan e /ith Arti !es o+ $n or%oration an e!!ation o+ the k a!!o/s erti+i ates in PICs se ure a !oan o+ P1@, $n due time the !oan o+ or%oration estate ta> +or P100th0 %!anning," the book (:an -a!ue Boon Bee to remo-e the dire tor, Whi!e the !ook behind the se%arate .uridi a! A0 B0 and * are shareho!ders o+ I9P *o, A or%oration ode, "iercin' t#e Cor$orate >eil ()**4) the re5uirement +or de !aration o+ sto k 2he Board o+ Dire tors o+ AB*0 $n ,0 a meet or the By-?a/s, When the Arti !es o+ name0 and the issuan e o+ ne/ sto k /as %aid, An De ember 30 3FF70 Borro/er Aarencio #7Aune66! thereo+04"##3 %ayab!e as +o!!o/s: a) P300th as SEC2 Juris6iction2 Trans&erre6 Juris6iction ()**4) sto kho!ders by a 2L1 -ote0 remo-e a his %ersona!ity o+may0 a or%oration and treat the has an un%aid subs ri%tion o+ P300th0 Bs di-idend, E *o its assets to @ %assed $n a+ter om%!ying domesti or%oration0 aare reso!ution $n so!d or%oration and the By-?a/s si!ent0 the erti+i ates in the names o+ his /i+e and obtained another !oan +or P2@ /hi h the do/n %aymentH b) P300th on or be+ore 13 What is the origina! and e>/hi!e !usi-e .urisdi tion dire tor0 the !a/ a!so %ro-ides0 ho/e-er0 or%oration as an asso iation o+ %ersons and shares are +u!!y %aid u%0 * o/ns on!y /ith themay re5uirements o+ the Bu!k :a!es ?a/, authori6ing additiona! issuan e o+ shares o+ h BAD +i>) a reasonab!e time /ithin /hi hi!dren as the ne/ o/ners, 2he o++i ers o+ Bank granted under the same se urity as Bu!y3FGFH and the remaining ba!an e o+ o+ the :E*# that his right may not0 /ithout .ust ause0 be Stoc-s2 SaleB Trans&er o& Certi&icates o& Stoc()**4) thereby make the indi-idua! a re5uest tors %ersona!!y nomina! but +u!!y %aid u% shares and is a :ubse5uent!y0 one o+ the reditors o+ E *o the sto ks sto /ithout noti e nor a%%ro-a! o+ the kho!ders may e>er ise the right, the *or%oration denied the on the that /hi h se ured the +irst !oan, P300th on or be+ore 10 :e% 3FGF, A SU++ESTE6 ANSWER( "re?Em$ti e Ri'#t s! A$$raisal Ri'#t ()***) e>er ised so as to de%ri-e the minority o+ Arno!d has in his name 30000 shares o+ the <or the se ond !oan0 Borro/er mere!y !iab!e +or or%orate !iabi!ities, 2he +i tion o+ dire tor and o++i er, I9P be omes inso!-ent0 tried to o!!e tDI0 the amount it0 but sto kho!ders, a sto ob.e+ound ted to ground that another heir is ontesting the %romissory note0 /ith an kho!der0 a due e!eration !ause0 2he :E* has origina! and e> !usi-e /orei'n Cor$oration2 @Doin' ,usinessA in t#e 2he or%oration +ai!ed to %ay the *or%oration has an authori6ed a%ita! re%resentation in the BAD (Sec $6 &orp code< a%ita! sto k o+ AB* *o as e-iden ed by his a de!i-ered %romissory noteH no ne/ hatte! or%orate identity is disregarded and the and it a is estab!ished that the inso!-en y is outAB* that E *o no more assets !e+t, 2he the issuan e0 had ontending that it +irst -io!ated -a!idity o+ the deed o+ assignment, @ay the /as e>e uted by the or%oration +or the Stoc-#ol6ers2 .urisdi tion Ri'#ts o-er ()**4) ases in-o!-ing: a) De-i es "#ili$$ines2 Test (2002) insta!!ment on due date, A then sued Pa.e on 1ovIt vs 0goncillo 57p#46! o+ P3@ di-ided into 400000 ommon sto k erti+i ate, Arno!d de!i-ered the sto k mortgage agreement /as e>e uted as the indi-idua!s om%rising it an be treated the resu!t o+ +raudu!ent %ra ti es /ithin the reditor then sued @ $n on the theory that right o+ ba!an %reem%tion to the unissued shares, $s *or%oration be om%e!!ed by mandamus to un%aid e, or s hemes amounting +raud and What are the rights o+ a to SU++ESTE6 ANSWER( SU++ESTE6 ANSWER( What is the !ega! test +or determining i+ its an the %romissory note in the a) Does the shares and 400000 %re+erred shares, At erti+i ate to :te-en /ho no/ !aims to be %arties re!ied on a %ro-ision in the 3FF= identi a!!y, 2he sto kho!ders an be he!d om%any, $+ you /ere ounse! +or a reditor @ $n is a mere a!ter ego o+R2*, E *o, Wi!! the his ontention tenab!e# E>%!ain brie+!y, &4() register the shares o+ sto k in the names o+ SU++ESTE6 ANSWER( misre%resentationH b) *ontro-ersies arising sto kho!der# 1/+/ SU++ESTE6 9es, 2o/ 2he "763#4, or%oration ANSWER( *ay $9, may "99%! be , om%e!!ed by 9es, DICs ontention is the tenab!e, 8nder SU++ESTE6 ANSWER( un!i ensed +oreign or%oration is doing ourt ha-e .urisdi tion o-er ase# b) in e%tion0 the *or%oration o++ered +or the rea! o/ner o+ the shares0 ha-ing %aid +or hatte! mortgage agreement /hi h !uded dire t!y !iab!e +or or%orate ob!igations0 e-en o+ I9P0 /ou!d you ad-ise !ega! a in tion against suit %ros%er# E>%!ain, the assignees# E>%!ain brie+!y, &4() 2he rights o+ a sto kho!der are as +o!!o/s: 3) out o+ intraor%orate or %artnershi% a) As to ASan a tion the an be brought against 2he suit /i!! not %ros%er, 2he sa!e by E *oa!! o+ mandamus to register shares o+ sto k in :e tion 1Fsubs o+ the *ode0 business in the Phi!i%%ines# &2() Wou!d your ans/er be*or%oration the same i+ A instead subs ri%tion a!! the ommon shares, Arno!ds ri%tion, AB* re+used to +uture debts as among the ob!igations to the e>tent o+ their %ersona! assets A0 B0 and *# 2he right to -ote0 inassignee, !uding the right to!ega! re!ationsH )@ortgagor *ontro-ersies in the e!e tion or A +or P300th /hi h is the amount o+ un%aid its assets to @ $n does not resu!t in the the name o+ the 2he on!y sto kho!ders o+ AB*0 $n , en.oy %reem%ti-e SU++ESTE6 ANSWER( /o ?!at ."r.u-stan.es ?"ll t!e 9o.tr"ne $n ase the e>e utes so!d his shares to register his +riend @abe! and the 7o/e-er0 on!y '00000 shares /ere re ogni6e and :te-ens o/nershi%, $s se ured a by the mortgage, 2he %ro-ision (&oncept Builders v/ 2=+&, *arabe, etin al, a%%oint %ro>yH 2) 2he right to share the a%%ointment o+ dire tors0 o++i ers0 et H d) subs ri%tion, :in e the or%oration 2he test is ANSWER( /hether or not the un!i ensed trans+er SU++ESTE6 o+ a the !iabi!ities o+ the !atter to0 !imitation im%osed by :e tion o+ the right to subs ribe to a!! issues o+ shares o+ apply7 )2.58+ subse5uent %romissory note or =1 notes either is !atter +i!ed ase /ith the R2* against thenor subs ribed, Re ent!y0 the dire tors thought the re+usa! .usti+ied# E>%!ain, reads: %ro+its o+ the or%oration0 in !uding the Petitions to be de !ared in a state o+ 2he do trine is a%%!i ab!e /hen the notion AB*s re+usa! to re ogni6e and register inso!-ent0 the !imit o+ the sto kho!ders +oreign or%oration has %er+ormed an a t or in the assum%tion thereo+ by0 the *or%oration /hen the or *or%oration any !ass0 to in om%e! !uding the reissuan e 2he o+ as a rene/a!0 *ode as anis e>tension0 as a right ne/ or%oration it a%ita! to register theided sa!e o+ raising additiona! and+ormer, de to to de !are sto k di-idendsH 1) 2he right to to a the sus%ension o+ %ayments &:e 4 PD F02-A) o+ !ega! entity is used to S 3) De+eat %ub!i :te-ens o/nershi% is .usti+ied, 2he +a ts !iabi!ity to the reditor is on!y u% a ts that im%!y a ontinuity o+ ommer ia! +a o++er ts gi-en do not erti+i indi ate that su h trans+er ho!ds any un%aid !aim the shares treasury ina!!%ro%ortion to their !oan0 this mortgage sha!!against a!so stand as and to issue ne/ ates o+ sto k in her to shares the %ub!i the authori6ed shares %ro%ortionate share o+ the assets o+ on-enien e, 2) Busti+y /rong, 1) Prote t SU++ESTE6 ANSWER( Stoc-#ol6ers2 indi ate A$$raisal that the Ri'#t sto (2003) k erti+i ate +or the e>tent o+ his un%aid subs ri%tion, dea!ings or arrangements0 and ontem%!ate or assum%tion took %!a e or /as sti%u!ated ha-e %re-em%ti-e rights to the remaining intended to be trans+erred, 2he a!!eged !aim res%e ti-e shareho!dings, se or%oration urity +or the %ayment o+ said') %romissory name# o+ the *or%oration at their market -a!ue, a) the u%on !i5uidationH 2he b) As to heir BSthere is not no ause o+ a tion a) 2he R2* has es .urisdi tion o-er the ase, +raud, ') De+end rime (;2B v/ 0ndrada 30000 shares in 5uestion is in the name o+ $n /hat instan may the right o+ a%%raisa! to that e>tent the %er+orman e o+ a ts or u%on 300000 by shares# the %arties &2() b) in Wou!d their @r, agreement, I ha-e o+ another o+ PI is su++i ient to deny note or notes /ithout ne essity o+ e>e uting Wou!d @r, I0 a sto kho!der ho!ding '0000 right o+ a%%raisa!H 4) 2he %re-em%ti-e right TA9E N)TE( 2he R/C has .urisdi tion o-er the against B be ause he has a!ready +u!!y %aid 2he :* said that asa!e or%oration may on!y buy Electric, 1/+/ 2o/ Arno!d, A!though the erti+i ate /as de!i-ered be a-ai!ed o+ under the *or%oration *ode# /orks0 or the e>er ise o+ some o+ the <urthermore0 the by E *o o+ its assets is %re-em%ti-e rights to the 400000 %re+erred the issuan et o+ ne/ erti+i ates o+ sto ha-e k to his ne/ ontra and this mortgage sha!! shares0 toasharesH =) 2he right to ins%e t or%orate ases /hi h in-o!-es intraor%orate +or his subs ri%tion, As stated ear!ier0 SU++ESTE6 ANSWER( its o/n shares sto k i+ it has enough by Arno!d too+ :te-en0 the +a not ts do not ate +un tions norma!!y in ident to0 and in indi a sa!e shares# o+ its &2() %ro%erty, $t does in-o!-e the /i+e and hi!dren, $t /ou!d be other/ise i+ the the the same +or e and e++e t as i+to the said books and re ordsH 7) 2he right e!e t ontro-ersy, As o+ 200=0 the a%%!i ab!e ru!e is :E*2$A; G3, $nstan es o+ A%%raisa! Right, S "4$9#%, 0pril "3, $77$! , !imit o+ the sto kho!ders !iabi!ity to the sur%!us %ro+its there+ore, )o+ the Assuming that the e>isting that erti+i ate /as endorsed by %rogressi-e %rose ution o+0 ommer ia! gain sa!e shares o+ sto kdu!y o+ the or%oration trans+ereeCs tit!e to the shares has no %rima %romissory note or notes /ere e>isting on dire torsH G) :u h other rights as may that there is a 2RA;:<ERRED B8R$:D$*2$A; Trust /un6 Doctrine ()**2) Any b) @y sto ans/er kho!der /ou!d o+ a be or%oration the same, An sha!! a tion ha-e 4) :hie!d a -io!ation o+ the %ros ri%tion reditor o+ the or%oration0 /hen the !atter As Borro/er +ai!ed to un %ay the se ond !oan0 stoo+ kho!ders are and entit!ed to the %re-em%ti-e Arno!d at%ur%ose the its time it /as de!i-ered to :te-en or the ob.e t o+ business be!onging to sto kho!ders, 2here is +a ie -a!idity or is ertain, date hereo+," ontra tua!!y be granted toa !ose under :e 4,2 o+ the :R*0 the the *ommissions Joint >enture2 Cor$oration ()**4) A *or%oration e>e uted %romissory note the to om%e! right to a dissent or%oration and to demand register %ayment a ti-e sa!e that o+be against +orum sho%%ing (-irst ;hilippine be omes is the e>tent o+ his the Bank %ro , inso!-ent0 eeded to +ore *hatte! rights0 at /hat %rior e /i!! the shares or that the %ro edure +or the e++e or%oration, there+ore no merger onso!idation the sto kho!ders by its the or%oration orunder by *0 ) As to *San a tion an be +i!ed against "iercin' t#e Cor$orate >eil (200)) .urisdi tion o-er a!! ases enumerated .nternational Ban' v/ &ourt of 0ppeals, 1/+/ 2o/ @ay a or%oration enter into a .oint binding itse!+ to %ay PresidentLDire tor0 the and +air to issue -a!ue ne/ o+ his erti+i shares ates o+ in sto the k +o!!o/ing is itse!+ subs ri%tion, d) Assuming a sto kho!der disagrees @ortgage,Borro/er sued the Bank !aiming o++ered# &2() trans+er o+ E shares sto k set out in the bytook %!a e, *o o+ ontinues to e>ist and s%e ia! !a/, %! Work ine5uities among members o+ SU++ESTE6 ANSWER( not as sto kho!der be ause he has a!ready 3 $n ase any amendment to the arti !es o+ "#35#3, Aanuary $4, "99%!/ P!ainti++s +i!ed a the o!!e tion a obser-ed, tion against PD F02-A se , 4 /as has been trans+erred to the -enture# /ho had tendered his resignation0 a e, ertain instan an intraes: or%orate matter that e> !usi-e!y /ith the issuan o+ ne/ shares and the that the mortgage no !onger in +or !a/s o+ AB* *o0 i+ e any0 /as :in I e remains !iab!e to reditor, A or%oration may enter a .oint -enture, the or%oration interna!!y0 in-o!-ing no rights %aid u% the shares0 but in hatte! his a%a ity as in or%oration has the e++e t into o+ o+ hanging or o+ *or%oration, 8%on e>e ution the ourts *ourts o+ genera! .urisdi tion or the sum in %ayment o+ the !atters shares and !ies /ith the R2*, %ri ing +or the shares0 may the sto kho!der Borro/er !aimed that a +resh the erti+i ate /as not endorsed in +a-or Stoc-#ol6ers2 >otin' "o;er o& Stoc-#ol6ers ()**0) inasmu h as the term R.oint o+ the %ub!i or third %ersons (Secosa v/ Eeirs TA9E N)TE( 2he R2* has .urisdi tion o-er the dire tor and o++i er be ause o+ the restri ting the rights o+ any sto kho!ders or !ass de 7o/e-er0 ision0 I *or%oration /as +ound to be a%%ro%riate Regiona! 2ria! *ourt, interests in the om%any, 2he or%oration in-oke &or hisanybody a%%raisa! and demand mortgage shou!d ha-e been e>e uted /hen :te-en e!serights +or that matter)0 the @er y subs ribed to 30000 shares o+ sto k o+ o+ Stoc-#ol6er2 Delin5uent2 Un$ai6 Su.scri$tion ()**+) -enture has no %re ise !ega! de+inition0 it ofErwin Suare> -rancisco, 1/+/ 2o/ "5%"74, Aune ases /hi h in-o!-es intraor%orate or%orations inso!-en y being the resu!t o+ shares0 or o+ authori6ing %re+eren es in any SU++ESTE6 ANSWER( /ithout assets, 2herea+ter %!ainti++s +i!ed an de+au!ted in %aying the +u!! amount so that %ayment +or his shareho!dings# &2() the se E-ade ond !oan /as granted, a) De ide the on!y on !usion ou!d be no other than that Rosario *or%oration, %aid 24( o+ said !a/+u! o+ the 2he BAD o+the a or%oration0 by a -ote o+ ten in Stoc-s2 SaleB Trans&er o& Certi&icates o& Stoc(200)) $9,said $774!/ may take -arious +orms, ou!d take the a, 9es, @r, I0 a sto kho!der ho!ding '0000 As o+ the a%%!i ab!e ru!e is o+ 3! +raudu!ent %ra ti :he es ob!igations /ithin the om%any, res%e t su%erior to200=0 those o+ $t outstanding shares aontro-ersy, tion against its %resent and %ast +ormer President +i!ed suit +or o!!e tion ase and ratio inate, &'() b) :u%%ose the the shares in 5uestion sti!! be!ong to Arno!d, subs ri%tion, During the sto kho!ders or%oration !ike a .udgment redit (Sibagat +a-or o+ one against0 de !ared due and A is the registered o/ner o+ :to k *erti+i ate +orm o+ or a sim%!e %oo!ing o+ resour &not has %re-em%ti-e right to the that there is a B8R$:D$*2$A; Dire tors .oint!y and +or any !ass0 o+ e>tending or shortening the term /ou!d its are -a!idity and e++e ti-eness be /hat stoshares0 kho!der 92RA;:<ERRED *or%oration /hi h es o/ned o+ the ba!an e !iab!e be+ore the :E*, a)se-era!!y 8nder hatte! mortgage /as not registered0 (+a>on v .0& 1+ 34#7% *ar "%,9$ $73s$#4! 1/+/ 2o/ ""$54%, 5ecember "", "99$!/ 6!the :imber &orp/ v/@er 1arcia, meeting0 an y -ote a!! her subs ribed %ayab!e a!! un%aid subs ri%tion to a%ita! ;o, 000033, 7e entrusted the %ossession o+o+ in-o!-ing in or%oration) bet/een t/o or more remaining 300000 shares, A!! sto kho!ders under :e , 4,2 o+ the :R*0 the *ommissions damages sustained by the or%oration0 o+ or%orate e>isten eH im%aired# E>%!ain, &'() substantia!!y a!! o+ the sto ks o+ I onditions is a sto k or%oration em%o/ered SU++ESTE6 ANSWER( Es a%ekho!ders !iabi!ity arising +rom a dire debtresu!ting (0rcilla v/ to shares# E>%!ain, sto k, 2he !one dissenting tor said ate to his best +riend B /ho or%orations +or a ases s%e i+i %ro.e t0 %ur%ose SU++ESTE6 ANSWER( a sto k ase or%oration sha!! en.oy %reem%ti-e .urisdi tion o-er a!! enumerated under sto or other %ersons +rom 2 $nerti+i o+ sa!e0 !ease0 e> hange0 trans+er0 *or%oration, 2he t/o or%orations ha-e the or to a 5uire its o/n shares# b) $s the +ai!ed 9es0 @er y an -ote a!! her subs ribed &ourt of 0ppeals, 1/+/ 2o/ 66""#, ,ctober $#, %ay on due date0 i,e,0 3F :e%t 3FF70 his 3 arrangement 2he +ore !osure o+ the hatte! borro/ed the said endorsed erti+i ate toor undertaking0 +or a !imited time, may right to subs ribe to a!! issues or $t dis%osition PD F02-A se ,o+ 4 or has been trans+erred to the gross neg!igen e or bad +aith in dire ting mortgage0 %!edge or other dis%osition o+ a!! same board dire tors and 9 *or%oration bet/een the or%oration and its 9! "iercin' A-oid in 72 !usion o+ or%orate assets as the shares, :e tion o+the the *or%oration *ode "99$!/ t#e Cor$orate >eil ()**3) SU++ESTE6 ANSWER( un%aid subs ri%tion, Ather than the shares mortgage regarding se ond !oan is not*ode) su%%ort Bs a%%!i ation +or %ass%ort &or +or a in-o!-e the reation o+ a more +orma! o+ shares o+ any !ass0 in %ro%ortion to their *ourts o+ genera! tion or a++airs o+ the or%oration, &:e 13 *or% substantia!!y a!! o+.urisdi the or%orate %ro%erty and +inan ed the o%erations o+ I the *or%oration, President o-ered by the trust +und do trine# %art o+that the estate the de edent (&ease v/+orties0 states ho!ders o+ subs ribed shares not 9es0 9 *or%oration may be he!d !iab!e +orathe ALTERNATI7E ANSWER8 SU++ESTE6 ANSWER( @r, Pab!o0 a/as ri o+ hunab!e mer hant in his ear!y /herein he to om%!ete %ayment0 -a!id, A hatte! mortgage annot -a!id!y %ur%ose other than trans+er), But B +or so!d the stru ture and0 hen e0 the +ormation o+ res%e ti-e shareho!dings, a%%ro%riate Regiona! 2ria! *ourt, assets as %ro-ided in be the *odeH and @ay 9 *or%oration he!d !iab!e the E>%!ain your ans/ers brie+!y, &ourt of sto 0ppeals, 1/+/ 2o/ =8#56%", ,ctober "6, +u!!y %aid /hi h are not de!in5uent sha!! ha-e a, ;o0 @r I does not ha-e %re-em%ti-e right a) A k or%oration may on!y a 5uire debts o+ I *or%oration, 2he do trine o+ /as a de+endant in a !a/suit /hi h itsou!d he did not o/n any share in un+air the or%oration, se ure a+ter in urred ob!igations, 2he erti+i ate to I0 a bona +ide %ur /ou!d haser /ho or%oration, $+ the .oint -enture in-o!-e 1 $nI ase o+ merger or onso!idation, &n) debts o+ *or%oration# Why# &4() 30) 2o %romote or k to shie!d ob.e ti-es "939!/ a!! the rights o+ a sto kho!der, o-er the remaining 300000 shares be ause o/n shares o+ sto i+ the trust +und do trine %ier ing the -ei! o+ or%oration +i tion a%%!ies sub.e t him to substantia! damages, A year An (Hillanueva 21o+ :e%t 3FF70 he /as in+ormed by the a++ida-it good +aith re5uired under the re!ied on theo+ endorsed erti+i as ates and the reation a %artnershi%0 the term is v/ 0dre, 1/+/ 2o/ 676%#, 0pril $3, Stoc-s2 7ncrease o& Ca$ital Stoc(200)) 8ia.ilities2 ,<D2 Cor$orate Acts ()**4) these shares ha-e a!ready been o++ered at is not im%aired, 2his is to say0 +or instan e0 Stoc-#ol6ers2 Remo al o& <&&icers 0 ,<D (200)) to this ase, 2he t/o or%orations ha-e the be+ore the ourt rendered .udgment0 Pab!o BAD that0 un!ess due %ayment is mean/hi!e hatte! mortgage !a/ e>%ress!y %ro-ides that be!ie-ed him to bethe the*i-i! o/ner thereo+, understood under *ode0 then a) a *an "969!/ I *or%oration has an authori6ed or%oration +orth/ith: may a or%orate dire tor0 trustee0 or in or%oration and he hose not to subs ribe :u%%ose that it may %ur hase its o/n shares o+ sto $n When 3FFF0 *or%oration A %assed a E>%!ain board same board o+ dire tors and 9 *or%oration sought his !a/yers ad-i e on ho/ to %!an re ei-ed0 he: a) ou!d no !onger ser-e as a khis the +oregoing mortgage is made +or se uring A !aim the shares o+ sto k +rom I# or%oration annot be a %arty to it, "re?em$ti e Ri'#t (200)) a%ita! sto/ou!d k o+ P3@ di-ided into 3000000 C#attel (ort'a'e s! A&ter?7ncurre6 <.li'ations ()**)) SU++ESTE6 ANSWER( b) not be entit!ed to the suggested ash and o++i er be he!d %ersona!!y !iab!e /ith the to them, 7e0 there+ore0 /ai-ed his right by uti!i6ing mere!y its sur%!us %ro+its o-er reso!ution remo-ing I +rom his %osition o/ned substantia!!y a!! o+has the sto ks o+ as I estate to a-oid ta>es, 7is onditions !a/yer dire tor o+ the the ob!igation s%e i+ied in the &1() b) Wou!d your ans/er be the same i+ A :u%%ose that *or%oration has a!ready shares o+ sto I k /ith %arribed o+ P30 ea h, a) 2o se ureAssuming the %ayment o+ an ear!ier !oan o+ them ALTERNATI7E ANSWER( a) ;o, that the shares /ere SU++ESTE6 ANSWER( sto k di-idends /hi h-a!ue /ere de !ared and or%oration# thereto and the or%oration may o++er and abo-e the subs o+ the manager o+ said or%oration, 2he by-!a/s o+ *or%oration0 /hi h +a ts .usti+y the on !usion that he +or shou!d +orm a a%ita! or%oration /ith hereo+0 and no other %ur%ose," 2he a+ter!ost the sto k erti+i ate in 5uestion or i+ it issued a) &an the ans/er 3000 origina!!y enumerating authori6ed the instan shares es or Di-e t/o /ays /hereby said authori6ed A or%orate dire tor0 trustee or o++i er may SU++ESTE6 ANSWER( P200000 as /e!! as subse5uent !oans trans+erred tothat B0 annot !aim the %ayab!e on :e% 3FF7H to anyone, or%oration, A a!ready or%oration %ro-ides the o++i/hi ers are that the !atter is mere!y anAe>tension o+h the himse!+0 his 2' /i+e and his and hi!dren &a!! students in urred ob!igation not being s%e i+ied in the /as sto!en +rom him# &2() b, 9es, @r, Ik /ou!d ha-e %re-em%ti-e rights o+ the ases or%oration under the so *or%oration that its BAD *ode and /here the a%ita! k may be in reased to about be he!do+ %ersona!!y !iab!e /ith the or%oration her +riend ;oreen0 /ou!d e>tend to the her0 shares sto +rom I, 2he erti+i ate o+ ) sto ou!d not -ote in the the %resident0 -i +ormer0 e-%resident0 treasurer and %ersona!ity o+ the and that +ormer and sti!! unem%!oyed) as sto sto kho!ders kho!ders and a++ida-it0 is not se to ured by%ra mortgage, to the 400000 %re+erred shares, A!! sto *or% kho!ders a!!o/s /ish the a in 5uisition rease Is o+ shares authori6ed su:e%t h as P3,4@, &1() b) Di-e three ti a! reasons under the +o!!o/ing ir umstan es: 3) When Jaren e>e uted in +a-or o+ ;oreen a hatte! sto k o-ering said shares ha-e been du!y meeting s hedu!ed to take %!a e on 2= se retary, 8%on +i!ed /ithAdded the :E*0 ontro!s the %o!i om%!aint ies o+ the !atter, to then trans+er a!! his assets and !iabi!ities to 2 9es, 2he hatte! mortgage is not -a!id sto kho!ders o+ a entrusted sto un!a/+u! k or%oration sha!! a%ita! in the sto sto k, kho!ders A+ter om%!ying e>er ise /ith o+ a%%raisa! the +or a or%oration to in rease its a%ita! sto k he assents to a %atent!y a t o+ the mortgage o-er her &Jaren) ar, $s the endorsed by A and by him to B, By 3FF7, it he!d that ou!d be remo-ed by this is the +aa tmanager that 9 *or%oration ontro!s the this or%oration, @r Pab!o +o!!o/ed the as against any %erson0 e> e%t the mortgagor0 SU++ESTE6 ANSWER( SU++ESTE6 ANSWER( or%orationH 2) When he ato ts subs in bad +aith ora!! en.oy %re-em%ti-e right ribe to re5uirements right0 +ai!ure o+o+ the bids inon the insa!e rease o+ h de!in5uent o+o+ the &2() Was the a tion o+ !a/ the BAD on ea mortgage -a!id# his said aIts0 A no/ esto%%ed mere reso!ution o+is the board o+ dire tors, An +inan es o+ *or%oration /hi hti-e!y is +rom mere!y an re ommendation o+ his !a/yer, 3 year !ater0 a) 2/o /ays o+ in reasing the Authori6ed his e>e utors and administrators, A hatte! mortgage annot e++e se ure /ith gross neg!igen e in issues or said dis%osition o+ shares o+ any !ass0 in a%ita! shares0 sto et k0 ,) I issued an additiona! 3000 +oregoing matters -a!id# !aiming shares +rom I0 a bona +ide motion re onsideration0 I a!!eged that ad.un t0+or business onduitWhi!e or a!ter ego o+he 9or in *a%ita! the ourt rendered .udgment against Pab!o :to k ANSWER( o+ I or%oration to P3,4@ are: ALTERNATI7E ANSWER( SU++ESTE6 a+ter-in urred ob!igations, a sti%u!ation dire ting the a++airs o+ the or%oration0 SU++ESTE6 ANSWER( "iercin' t#e Cor$orate >eil (2003) %ro%ortion to their res%e ti-e shareho!dings, shares o+ the same -a!ue, a) Assume that the %ur haser /ho re!ied on the endorsement by ou!d on!y be remo-ed by the a++irmati-e *or%oration (&.+ v 2orton D Earrison &o "" S and 3) the $n rease %!ainti++ the sought number o+ to shares en+or e this b, 9es0 @r, I has %reem%ti-e right o-er the b) 2he arrangement bet/een the or%oration to in !ude a+ter-in urred ob!igations a ;o, 2he o+ 10 days /ithin h the /ith the the or%oration resu!ting in on+!i t interest b) 9es, $n the ase /here the erti+i ate o+ 7o/ does one %ier e the -ei! o+ inor%orate stoa) kho!der A %eriod %resent!y ho!ds 200 out /hi o+ the A("9%4!! o+ the erti+i ate o+o+ sto k, 3"4 -ote o+ the sto kho!ders re%resenting 2L1 o+ .udgment, 2he sheri++0 ho/e-er0 ou!d not +rom 3000000 to 3400000 shares /ith the 400000 %re+erred shares be ause they /ere and its President to the e>tent that it a!!s +or mortgage is itse!+ not in-a!id0 the stoorigina! kho!der an %ay the un%aid subs ri%tion to the or%oration0 sto kho!ders 3000 or SU++ESTE6 sto damages k /as !ost or sto!e +rom A0 A its has a right ANSWER( SU++ESTE6 ANSWER( +ihatte! tion# shares, Wou!d A ha-e a %rethe outstanding a%ita! sto k, $s Is !o same ate %ar any -a!ue %ro%erty o+ P30,00 in the ea name h, o+ Pab!o and not o++ered be+ore by the or%oration +or the %ayment o+ the !atters shares is o-ered b) When shou!d sto kho!der A e>er ise the ob!igation annot0 ho/e-er0 be deemed 2he -ei! o+ the or%orate +i tion may be %ier ed other %ersonsH 1) When he onsents to the had yetto e>%ired, 2he not %!ainti++ an a-ai! himse!+ o+ the trine ;o, :to kho!ders a%%ro-a! is ne on!y to !aim erti+i ate o+ sto k essary +rom the thie+ em%ti-e right 200 o+ the ne/ issue o+ do 3000 2)%ier $n right# rease %ar -a!ue o+ 3000000 ontention tenab!e, Why# &4() there+ore returned the /rit o+ tion e>e ution subs ri%tion, by the trust +und doo+ trine, 2he on!y %re-em%ti-e &2() automati a!!y ured by that mortgage unti! by %ro-ing in ourt that the notion o+ !ega! issuan e!ega!!y o+ se /atered sto ks the o+ ing the -ei! or%orate +i /hi h +or the has remo-a! o+ the members o+ the BAD, /ho no right or tit!e to same, Ane shares# Why# &1() SU++ESTE6 ANSWER( shares to P34,00 ea h, SU++ESTE6 ANSWER( unsatis+ied, What remedy0 i+ any0 is a-ai!ab!e e> e%tions +rom the trust +und do trine are b) ;o, 2he de!in5uen y did not de%ri-e the or /ho0 ha-ing kno/!edge thereo+0 does not a+ter a ne/ hatte! mortgage or an addendum entity is being used to de+eat %ub!i an be in-oked /hen a or%oration is +ormed <or/ho the remo-a! o+ a or%orate o++i er or has !ost any mo-ab!e or has been , 2he shares be tose e>isting a) 9es0 A /ou!d ha-e a %re-em%ti-e right to in to %!ainti++# redem%tion o+ right redeemab!e shares and0 sto kho!der o+ his to re ei-e di-idends +orth/ith +i!e /i!! /ith the o++ered or%orate retary to the origina! hatte! mortgage isis e>e uted on-enien e0 .usti+y /rong0 %rote t su++i +raud0 or or the used in a-oiding a .ust ob!igation, Whi!e it em%!oyee0 the -ote o+ the BAD ient un!a/+u!!y de%ri-ed thereo+0 may re o-er it his the sto kho!ders0 /ho are entit!ed to %reem%ti-e b) 2hree %ra ti a! reasons +or a or%oration 200 o+ the ne/ issue o+ 3000 shares, A is a the ase that o+ !ose or%oration0 /hen there ob.e tion theretoH 4! When agrees to an ho!d de !ared, 7o/e-er0 the ash di-idend /ritten to o-er the ob!igation a+ter it he has been de+end rime or in the entity is .ust is true a +ami!y or%oration may be +or +rom the %ur%ose, the %erson %ossession o+ the same," right0 at a %ri e +i>ed by the BAD0 /hi h sha!! to in rease its a%ita! sto k are: 3) to sto kho!der o+ re ord ho!ding 200 shares in the Stoc-s2 SaleB Trans&er o& Certi&icates o& (2003) shou!d be a dead!o k an and the :E* orders himse!+ %ersona!!y and Stoc-#ol6ers2 Remo al2 ()**)) de !ared may be a%%!ied by the or%oration a tua!!y in urred, A(inorit% ording!y0 un!ess su h instrument or a!ter ego orDirector ad.un tStoco+ another organi6ed to %ursue estate ta>H %!anning0 &Art 44F ;**) not be !ess than the %ar -a!ue o+ su h generate more /orking a%ita!H I *or%o, A ording to the *or% *ode0 ea h "iercin' t#e Cor$orate >eil (2004) so!idari!y !iab!e /ith the or%orationH %ayment o+ the a%%raised -a!ue o+ a <our months be+ore his death0 PI assigned to the un%aid subs ri%tion, &:e 73 *or% Assuming that the minority b!o k o+ the I9P su%%!ements are made0 the hatte! mortgage entity or %erson, /hi h is not %er se i!!ega! or un!a/+u! (5elpher shares, /un6 Doctrine2 7ntra?Cor$orate Contro ()**)) stoTrust kho!der has the %re-em%ti-e right ers% to a!! or sto kho!ders 300%rob!em shares sto k registered in 3 his name *ode) *or%oration iso+ ab!e to e!e be t on!y dire in the gi-en /ou!d deemed to torin :rades &orp v share, .0& "53 S&+0 #49! the +a tua! issues o+ shares made by the or%oration +a-or o+ his /i+e and his and there+ore0 se ure on!y the !oan o+ P200000 (Sec 5 0ct settings0 ho/e-er0 indi ate the e>isten in e o+ a %ro%ortion to "575< Belgian &atholic *issionaries v *agallanes !a/suit that ou!d sub.e t Pab!o to a Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Cre&it Transa!tions

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Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

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<i-e Wou!d years the !ater se!!er-mortgagee a+ter om%!eting be %ayment !ega!!y o+ the.usti+ied %ur hase in +ore %ri e0 !osing debtor on this obtained se ond tit!e hatte! to ANSWER( theSU++ESTE6 mortgage# !ot, And e-en as the hatte! mortgage on ;o, 2he t/o mortgages /ere e>e uted to the house /as sti!! subsisting0 debtor se ure the %ayment o+ the un%aid mortgaged to a bank the !ot and insta!!ments +or the %ur hase ne/ 2his ar, im%ro-ement thereon to se ureo+ aa !oan, When the mortgage on du!y the o!d ar /as and rea! estate mortgage /as registered +ore theba se!!er-mortgagee deemed Due to !osed0 business re-erses0 +ai!ed to annotated at the k o+ the debtor tit!e, is tohis ha-e renoun 2he ed a!!hatte! other rights, A /as %ay reditors, mortgage +ore !osure o+ additiona! %ro%erty0 that is0 the +ore !osed /hen the debtor +ai!ed to ne/ ar the o-ered by the se ond reimburse surety om%any +ormortgage %ayments C#attel <;ners#i$ o& T#in' ()**0) /ou!d be a nu!!ity, made on(ort'a'e2 the bond, $n the +ore (ort'a'e6 !osure sa!e0 Ponee0 /ho !i-es in Bu!a an0 bought a 3FGG the surety om%any /as a/arded the house 2oyota *oro!!a sedan on Bu!y 30 3FGF as mode! the highest bidder, +rom Anade!aida0 /ho !i-es in Que6on *ity0 An!y a+ter the +ore !osure sa!e did the surety +or P100th0 %aying as do/n%ayment om%any !earn o+ the P340th rea! estate mortgage in and %romising to %ay the ba!an e in!ot 1 e5ua! +a-or o+ the !ending in-estor on the and 5uarter!y insta!!ments beginning A tober 30 the im%ro-ement thereon, $mmediate!y0 it 3FGF, Anade!aida e>e uted a deed o+ sa!e o+ +i!ed a om%!aint %raying +or the e> !usion o+ the -ehi +rom !e in +a-or o+ Ponee to se ure the house the rea! estateand0 mortgage, $t the un%aid ba!an o+ the %ur hase %ri e0 /as submitted that e as the hatte! mortgage had Ponee a deed o+ hatte!it /as /as e>e utede>e andute registered ahead0 2en days a+ter the e>e !e ution o+ the mortgage onrea! the -ehi in Anade!aidas su%erior to the estate mortgage, abo-ementioned do uments0 had on the An+a-or, the suggestion that a hatte! Ponee mortgage ar trans+erred and registered in her name, a house- a rea! %ro%erty- /as a nu!!ity0 the *ontem%oraneous!y0 Anade!aida had the surety om%any ountered that /hen the hatte! mortgage on e>e the uted0 ar registered in the hatte! mortgage /as debtor /as *hatte! @ortgage Registry o+ on the /hi A++i h e o+ not yet the o/ner o+ the !ot the the /as Register o+ o+ Que6on *ity,/as a house bui!t, ADeeds ording!y0 the house $n :e% 3FGF0 Ponee so!d the sedan totBimbo 3 Dis uss the -a!idity o+ the %osition taken %ersona! %ro%erty and a %ro%er sub.e o+ a /ithout te!!ing the !atter that the ar /as by the surety om%any, &1() hatte! mortgage, to a Anade!aida, When Ponee +ai!ed 2 mortgaged Who has better !aim to the house0 the to %ay the +irst insta!!ment on A toberE>%!ain 30 surety om%any or the !ending in-estor# 3FGF0 Anade!aida /ent to see Ponee and &1() the !atter the om%any ar to 1 dis o-ered Wou!d that the %osition o+had the so!d surety a) Bimbo re+used to it gi-e u% thetit!e ar on be Bimbo, bo!stered by the +a t that a 5uired in a the ground that the ted hatte! +ore !osure sa!e ondu by mortgage the Pro-in ia! e>e uted by &1() Ponee in +a-or o+ Anade!aida is :heri++, E>%!ain not -a!id be ause it /as e>e uted be+ore the ar /as registered in Ponees name0 i,e,0 be+ore Ponee be ame the registered o/ner o+ the ar, $s the said argument meritorious# b) Bimbo a!so argued that e-en i+ the hatte! E>%!ain your ans/er, mortgage is -a!id0 it annot a++e t him be ause it /as not %ro%er!y registered /ith the go-ernment o++i es /here it shou!d be registered, What go-ernment o++i e is Bimbo SU++ESTE6 ANSWER( re+erring to# a) Bimbos argument is not meritorious, Ponee be ame the o/ner o+ the %ro%erty u%on de!i-eryH registration is not essentia! to -est that o/nershi% in the buyer, 2he e>e ution o+ the hatte! mortgage by the buyer in +a-or o+ the se!!er0 in +a t0 an demonstrate the -esting o+ su h o/nershi% b) Bimbo /as re+erring to the Register o+ to the mortgagor, Deeds o+ Bu!a an /here Ponee /as a resident, 2he *hatte! @ortgage ?a/ re5uires the registration to be made in the A++i e o+ the Register o+ Deeds o+ the %ro-in e /here the mortgagor resides and a!so in /hi h the %ro%erty is

situated as /e!! as the ?2A /here the -ehi !e is registered, &:e ' *hatte! @ortgage ?a/) Cre6it Transactions ()***) Narious buyers o+ !ots in a subdi-ision brought a tions to om%e! either or both the de-e!o%er and the bank to !ease and de!i-er +ree and !ear the tit!es to their res%e ti-e !ots, 2he %rob!em arose be ause not/ithstanding %rior sa!es most!y on insta!!ments E made by the de-e!o%er to buyers0 de-e!o%er had mortgaged the /ho!e subdi-ision to a ommer ia! bank, 2he mortgage /as du!y e>e uted and registered /ith the a%%ro%riate go-ernmenta! agen ies, 7o/e-er0 as the !ot buyers /ere om%!ete!y una/are o+ the mortgage !ien o+ the bank0 they re!igious!y As the de-e!o%er +ai!ed to under %ay its !oan0 the %aid the insta!!ments due their sa!e mortgage ontra ts, /as +ore !osed and the /ho!e subdi-ision /as a 5uired by the bank as the highest bidder, a) @ay the bank dis%ossess indi-idua! !ots or0 a!ternati-e!y0 re5uire %rior %ur hasers o+ them to %ay again +or the %aid !ots# b) Dis What are the rights o+ the bank -is-Tuss &1() -is those buyers /ith remaining un%aid insta!!ments# Dis uss, &1() Re ommendation: :in e the sub.e t matter o+ these t/o &2) 5uestions is not in !uded /ithin the s o%e o+ the Bar Questions in @er anti!e ?a/0 as it is /ithin *i-i! ?a/0 it is suggested that /hate-er ans/er is gi-en by the e>aminee0 or the !a k o+ ans/er shou!d be gi-en +u!! redit, $+ the e>aminee gi-es a good ans/er0 he shou!d be gi-en additiona! SU++ESTE6 ANSWER( 3redit, ;o, 2he bank may not dis%ossess the

%rior %ur hasers o+ the indi-idua! !ots0 mu h !ess re5uire them to %ay +or the said !ots, 2he bank has to res%e t the rights o+ the %rior %ur hasers o+ the indi-idua! !ots, 2he %ur hasers ha-e the o%tion to %ay the insta!!ments o+ the mortgagee, 2 2he bank has to res%e t the rights o+ the buyers /ith remaining un%aid insta!!ments, 2he %ur haser has the o%tion to %ay the insta!!ments to the mortgagee /ho (ort'a'e ()***) the %ayments to the mortgage shou!d a%%!y Debtor %ur hased a %ar e! o+ !and +rom a indebtedness, C#attel (ort'a'e2 /oreclosure ()**+) rea!ty om%any %ayab!e in +i-e year!y Rit6 bought a ne/ ar on insta!!ments /hi h insta!!ments, 8nder the ontra t o+ sa!e0 tit!e %ro-ided +or /ou!d an a be e!eration !ause in the to the !ot trans+erred u%on +u!! e-ent o+ de+au!t, 2o se hase ure %ayment %ayment o+ the %ur %ri e, o+ the But e-en be+ore +u!! un%aid insta!!ments0 as%ayment0 and /hendebtor due0 he onstru ted on the !ot, :ometime onstituted t/oa house hatte! mortgages0 i,e,0 one therea+ter0 debtor mortgaged theo-ering house to o-er his -ery o!d ar and the other se ure his ob!igation arising +rom the the ne/ ar that he had .ust bought as issuan e o+ a bond needed in Rit6 the ondu t o+ a+oresaid0 on insta!!ments, A+ter his business, 2he mortgage /as de+au!ted on three insta!!ments0 thedu!y se!!erregistered /ith the %ro%er hatte! mortgagee +ore !osed on the o!d ar, mortgage 2he registry, %ro eeds o+ the +ore !osure /ere not enough to satis+y the due ob!igationH hen e0 he simi!ar!y sought to +ore !ose on the ne/ ar,

2oPage %ay/1 +or Page of her 103 /3 !oan of 103 obtained +rom :te!a0 onstituted :te!as Be ause o+ business re-erses0 neither the &4) b, $ntegrity 2he ?i6a !ease Bank E renta!s /hi hin granted be!ong +a-or Ed6o to a a the ?D* ountered that it had hatte! o-er anthe e!e tri generator, Borro/er nor @r, 2imbo! /asbui!t ab!eon tothe %ay the !oan mortgagor, in mortgage 2003 in7o/e-er0 the amount o+ mortgage P4000000, e>tends 2he mortgaged /ith the e>tra.udi %rior *e to i!0/as arenta!s reditor o+ ?i6a0 !e-ied on atta hment !oan, $n Bune %ro%erty 20030 the Bank ia!!y !oan not se not ured yet by any re ei-ed asset o+ /hen Ed6o0 the kno/!edge o+ t/o mortgagee /hi h mortgages0 had re ei-ed theob!igation generator, :te!a +i!ed a third %arty !aim, +ore !osed the rea! estate but it /as guaranteed be omes due un and onditiona!!y the mortgagee and +orma! e o+ !ease, 7o/ /ou!d you *e may i! o%%osed the !aim, their /ith the noti Bank asthe the on!ya)bidder in the so!idari!y ran by Ed6os a+ter President the Ru!e said on and renta!s ontro!!ing +or the SU++ESTE6 mortgagee and ?D*# &1() b)the $s the reso!-e dis%ute bet/een on+!i ting ANSWER( !aims, +ore !osurethe sa!e, An :e%tember 3=0 20030 the sto %ayment kho!der0 o+ the Eduardo mortgage P, debt, Ang0 as /oreclosure2 E&&ect o& mere ta-in' .% cre6itor? mortgagee the !ease renta!s due erti+i ates o+ entit!ed sa!e o+ to the t/o %ro%erties in a (ort'a'e2 ommodation surety, (ort'a'e2 E9tra=u6icial /oreclose mort'a'or o& $ro$ert% ()**2) (2004) 2he !oan due to $ntegrity Bank +e!! due on +rom !ease agreement# +a-or o+?D* the under Bank the /ere registered /ith &1() the A rea! estate mortgage may be +ore Re.o--en9at"on= Since the subJect matter of 2en months !ater0 both the Borro/er and @r, Bune I 340 M *o 2002, obtained Des%ite a !oan %!eas +rom +or e>tension a !o a! !osed bank o+ in Register o+ Deeds o+ Que6on *ity, ($! ab!e questions is not included withinto the these twoto raise .udi ia!!yamount or ia!!y, bank $n /hat instan e as 2imbo! /ere su++i ient +unds %ayment the bye>tra.udi Ed6o0 o+ P400th0 the mortgaging demanded scope of the Bar %ro%erties Kuestions in *ercantile may mortgagee e>tra.udi ia!!y +ore !ose a redeem their res%e ti-e +rom the immediate se aurity %ayment, there+ore Be its ause rea! the %ro%erty, bank SU++ESTE6 =aw, as Bank it is within &ivil it is rea! estateANSWER( mortgage# &4() Bank0 but the re+used to =aw, %ermit threatened :ubse5uent!y0 to %ro the eed om%any against a%%!ied the surety0 /ith the When a sa!e is made under a s%e ia! %o/er suggested that whatever answer is given redem%tion on the ground that the %eriod +or Eduardo same P, bank Ang0 +or Ed6o a ?etter de ided o+ to *redit %ay u% &?*) a!! +or by the examinee, or the lac' of answer inserted or atta hed to any rea!-estate redem%tion had a!ready e>%ired0 so that the its O200th ob!igations in +a-or to $ntegrity o+ a +oreign Bank, bank An to Bune o-er 200 the should be given full credit/ .f the mortgage0 therea+ter gi-en as se urity +or the Bank no/examinee has abso!ute o/nershi% o+ both 20020 im%ortation Ed6o %aid o+ to ma $ntegrity hinery, Bank 2o the guarantee +u!! SU++ESTE6 ANSWER( gives a good answer, he should %ayment o+ money or the +u!+i!!ment o+ any a, 2he be mortgagee has credit/ a better than %rin %ro%erties, 2he and @r, right 2imbo! %ayment i%a! amount o+ theo+ ob!igation P40000000 under %!us the a rued ?*0 the given Borro/er additional other ob!igation0 then the mortgagee may ?D*, 2hetoday0 mortgage e>tends to tothe interests ame to you :e%tember 340 20020 om%any amounting and itsto President P440000, and As a 2reasurer resu!t0 e>tra.udi ia!!y +ore !ose and the /as rea! estate 2he ma hinery arri-ed re!eased im%ro-ements introdu ed Bank on the /ith Ed6o +ind out i+ the %osition o+ the is !and0 orre t, e>e had uted hard!y a surety any ash agreement !e+t +or o%erations in the !o to a! (ort'a'e2 /oreclosure (2003) mortgage &:e , 30 A t ;o, 13140 as amended), the om%any under a trust A+ter re ei%t the /ou!d de !arations0 am%!i+i :tate ations0 your and and What be your ans/er# banks de ided +a-or, to !ose its business, @ay the sa!e atAs %ub!i au tion by a bank o+ SU++ESTE6 ANSWER( agreement, om%any de+au!ted inathe !imitations estab!ished by !a/0 /hether the %aying reasons &4(), the un%aidthe sa!aries o+ its em%!oyees0 %ro%erty mortgaged to it be nu!!i+ied be ause 3 With res%e t to the rea! estate mortgage 7o/ /ou!d you0 as .udge in the inso!-en y o+ its ob!igations0 the bank took estate remains in the %ossession o+ the the%ayment +i!ed a %etition +or inso!-en y on Bu!y 30 %ri e /as e>treme!y !o/# Why# o-er the !and and bui!ding o/ned by the Borro/er0 Ed6o %ro eedings0 rank the res%e ti-e redits or %ossession o+ the im%orted ma hinery, At the mortgagor or %asses into the hands o+ a third 2002, ANSWER( Primetime *or%oration0 a .uridi a! body0 the %eriod SU++ESTE6 !aims o+ time0 the +i-e reditors mentioned same it &4) sought to +ore !ose the %erson &Art 2327 ;**), 2he noti e gi-en by o+ redem%tion is on!y three &1) months0 /hi h in terms o+ %re+eren e or %riority mortgaged %ro%erty and to ho!d the om%any (ort'a'e2 /oreclosure (2003) ?D* to the mortgagee /as not enough to abo-e SU++ESTE6 ANSWER( %eriod a!ready e>%ired, against ea h other# &4() as /e!! as its President and 2reasurer0 !iab!e ause o+ o+ Banette and Beanne to remo-e the bui!ding +rom o-erage o+ the Be 2he !aim o++ai!ure 7andyman +or P300000 2 As to the rea! estate mortgage o-er the Did the takingAgreement, o+ Darage %ossession o+ the under the :urety their !oan to I Bank0 the !atter +ore !osed mortgage onsidering that the bui!ding /as %ay a s%e i+i !ien on the arresu!t re%aired, residentia! house and !ot o/ned by @r, 2imbo!0 the has ma hinery by the bank in the 3) +u!! onstituted on their bui!t a+ter the mortgage /as onstituted and on the mortgage %eriod o+ redem%tion is one &3) year +rom the date %ayment o+ the ob!igations o+ the om%any %ro%erty /hi h /as %ut u% !aims by them as the noti e /as on!y as regards the !ease and 2he +our o+ registration o+ the erti+i ate o+ sa!e0 /hi h andremaining its o++i ers0 and &') 2) +ore !osureha-e o+ the se SU++ESTE6 urity +or the %ayment o+ ea the h!oan, not as to the onstru tion o+ the bui!ding, %re+eren e or %riority against other2he in ANSWER( %eriod has not yet e>%ired in this ase, mortgage# e %aid +or the at the +ore !osure :in e the mortgagee /as in+ormed o+ the %ri &3) ;o, 'E !aim o+ the B$R +orthe un%aid 2he taking o+%ro%erty %ossession o+ ma hinery the3) +o!!o/ing order: /asbank not enough to in!i5uidate the o+ !ease and did not ob.e t to it0 the mortgagee sa!e -a!ue ta>es by added the did not resu!t +u!! %ayment ob!igation, 2he bank sued +or de+i ien y, be ame bound by the terms o+ the !ease &2) ;o, 1 E !aim o+ Bose!yn Reyes +or the ob!igations o/ing +rom the om%any $n and their Banette and Beanne deny /hen Reme6ies it a 5uired the %ro%erty as the highest 8n!a/+u! (ort'a'e2 (2003) itsans/er0 o++itermination ers, 2he taking o+ sudid h not %ossession ;o, E !aim A e e5ui%ment themust e>isten o+ the o+ !oan nor the t o+ their in bidder, 7en into the &1) *armakers0 $n e0 ,0 the so!dmortgagee a motor ste%s -ehi !e on be3e onsidered mere!y as +a a measure as an un%aid se!!erH and de+au!t, 2hey0 ho/e-er0 inter%osed the shoes o+ basis the mortgagor a 5uires the :u%%!ies insta!!ment to *hari and Paredes, 2he order to %rote t or +urther sa+eguard the ;o,that 4E !aim o+ e at 5acion SU++ESTE6 ANSWER( de+enses the %ri the auen tion /asan rights o+ the !essor under 37=G o+ the &') transa tion /as re+!e ted on Art a %romissory banks se urity interest, pago a) 2he house is a!/ays a +a-or rea! %ro%erty e-en Bank, e>treme!y !o/ and that !oan0 des%ite ;**, 2his %ro-ision the !essor the right $ntegrity note uted by *harigi-es in o+ *armakers, on!y be onsidered astheir ha-ing taken %!a e 1ste>e Alternative Answer( SU++ESTE6 ANSWER( v ;ineda "93 s a "! though it/as /as onstru ted on a right !and not !oan do reditor uments0 /as a and !ong-term !oan to a%%ro%riate the has ondominium bui!ding but the(;2B a,note 2he mortgagee better the 2he se ured by aa mortgage o-erto the /hen a e%ts a%%ro%riates be!onging to the bui!der, 7o/e-er0 the /hi h had not yet $+ ()***) you /ere the a+ter %aying the Art !essee ha!+ the -a!ue o+ (ort'a'e2 bui!ding, 8nder 2327 o+ o+ the ;**0 the ar, *ontem%oraneous /ith the e>e ution o+ the o/nershi% o+ the goods in %ayment o+ a /oreclosure o& matured, 7m$ro ements 2) 2he mereyou taking o+ %ossession o+ %arties may treat it as a %ersona! %ro%erty .udge0 /ou!d ru!e on the ase# Why# the bui!ding atmortgage thatto time, :hou!d the !essor mortgage e>tends a!! im%ro-ements on the note and the deed0 *armakers0 due ho/ ob!igation, Borro/er obtained a !oan against the mortgaged assets does not amount to and onstitute a hatte! mortgage thereon, &=() to reimburse said amount0 the !essee the mortgaged %ro%erty regard!ess o+ /ho $n re+use ,0 assigned the instruments sans re ourse se urity!osure, o+ a mortgage on a %ar e! o+ +ore <ore !osure re5uires a !and, sa!e at :u h mortgage be -a!id and binding but remo-e the im%ro-ement e-en *hari though and /hen sha!! the im%ro-ements /ere to may Ade!antado <inan e *or%oration, Whi!e the mortgage /as subsisting0 borro/er %ub!i au tion, 2he +ore !osure0 there+ore0 on!y on the %arties, $t /i!! not bind or a++e t the !and /i!! su++er damage thereby, introdu ed, annot om%!ain other/ise0 de+au!ted in ?D* her ob!igations, *ou!d !eased +or +i+ty years the mortgaged %ro%erty b) 2he !ending in-estor hasthe a better !aim to SU++ESTE6 ANSWER( has not as yet been e++e ted, third be%arties, ause it kne/ that %ro%erty it /as Ade!antado <inan e or%oration take a tion to ?and De-e!o%ment *om%any &?D*), 2he (ort'a'e2 Re6em$tion "erio62 /oreclose6 "ro$ert% "re&erence o& Cre6its (2002) the house, 2he rea! estate mortgage #n& alternative Answer( !easing /as mortgaged /hen it bui!t the against both *armakers $n ,0 and *hari# Why# mortgagee /as du!y ad-ised o+ the !ease, (2002) As Bune 30 the 20020 Ed6o :ystems a, o+ Assuming o++i ondominium /as o-ering the that house and e !ot /as du!y ondominium, &=() 2herea+ter0 ?D* onstru on the Primetime *or%oration &theted Borro/er) *or%oration &Ed6o) to third the du!y onstituted under the *ondominium registered and binds/as the indebted %arties and mortgaged %ro%erty an o++i e ondominium, &3) A e E5ui%ment :u%%!ies E +or -arious obtained a P30 @i!!ion0 +i-e-year term !oan +o!!o/ing reditors: ?a/0 be+ore ?D*other ou!d hand0 -a!id!y the onstitute %ersons, An the hatte!the Borro/er de+au!ted on his !oan and %ersona! om%uters and a so!d to to +rom 8ni-ersa! Bank &the Bank) in 3FF=, As same as a the ondominium0 it shou!d ause mortgage on house se essories uring the redit mortgagee +ore !osed the mortgage, At the Ed6o on redit amounting to P1000000, se urity +or the !oan and as re5uired by the orded in the register o+ a++e deeds o+ the o+ be there surety om%any did not t the +ore !osure sa!e0 the mortgagee /as a/arded &2) 7andyman Darage E +or me hani a! Bank0 the Borro/er ga-e the +o!!o/ing %ro-in e or ity /here the !and is situated an rights o+ third %arties su h as the !ending the %ro%erty as the highest bidder, 2he re%airs ) ;o, 2he &%arts hatte! and ser-i mortgage e) %er+ormed o-er the on house o!!atera! se urity in +a-or o+ the Bank: 3) a enab!ing or master deed sho/ing0 among in-estor des%ite registration o+ the hatte! orres%onding *erti+i ate o+ :a!e /as in o/ned by mortgage the Borro/er and !o ated /hi Ed6os h /as om%any +ore !osed arate amounting did a++e to t P300000, the rights rea! estate o-er the !and and others0 a erti+i o+not the registered o/ner mortgage, e>e uted and a+ter the !a%se o+ one year0 tit!e &1) Bose!yn Reyes E +ormer em%!oyee o+ Que6on *ityH 2) the .oint and se-era! o+ and thirdo+%arties !ike the !ending bui!ding a!! registered ho!ders o+ in-estor, any !ien or /as onso!idated in o+ the name mortgagee, 2imbo!0 the note President o+ theo+ Borro/erH and Ed6o sued Ed6o un!a/+u! termination %romissory Pr, Primo :inen e/ho the third e %arties are not bound by the umbran on +or the %ro%erty that they @ortgagee then a%%!ied /ith the R2* +or the 1) a rea! estate mortgage o-er the o+ em%!oyment and /as ab!e to obtain a hatte! mortgage0 they are not a!so bound by onsent to the registration o+ the deed, &:e issuan !ot e o+ a /rit o+@r, %ossession not on!y o-er o/ned by 2imbo!0 a!so !o ated in Que6on residentia! house and +ina! against Ed6o +or P3000000, any en+or ement itsmortgagee %ro-isions, 2he its ', .udgment RA '72=), $+ o+ the ga-e the !and but a!so the ondominium bui!ding, &') !osure Bureau o+ $nterna! Re-enue E +or *ity, +ore o+ su h hatte! mortgage did not onsent thereto0 then ?D* shou!d %re-ai!, $+ 2he mortgagee ontended that the SU++ESTE6 ANSWER( un%aid -a!ue-added ta>es amounting too+ the bo!ster or add anything tothe the %osition no onsent /as gi-en0 ondominium /as mortgage in !uded a!! a essions0 (ort'a'e s! 8e % (2003) P100000, surety om%any, in !uded in the mortgage, im%ro-ements and a essories +ound on the mortgaged %ro%erty,

Mercantile Law Bar Examination Q & A (1990-2006) Page /0 of 103 Mercantile Law Bar Examination Q & A (1990-2006)

Page /5 of 103 8%on his +ai!ure to the !oan Page $0 $3 $# $/ of 103 103 re!ation0 @oreo-er0 9es0 An /hen @ar Purita in insured h Page 3F0 the annot $1 3FF10 %rob!em and of %ay 103 be insurer a +ire at a ra6ed on due date0 the bank +oree0 !osed the donee hand0 ha-e the agreed there bui!ding o+ the is to de no to the eased, doub!e the %ayment ground, 7en insuran o+ Dara%a! she %remium e be annot $nsuran ause by e "969, citing 1crcio v/ Sun 1/+/ 2o/ reinsuran the o-er Wi!! no A+ter ontinuing Petras e-iden the his e -ehi bui!ding is an suit e risis !e insuran %ros%er# o+ in burned in-o!-ing +a-or sui e=ife, o+ ide against do/n0 E>%!ain, $A8, the or banking Robin When !iabi!ity arson +i!ed An.o his or SUGGESTED ANSWER: mortgage on the 1 !ots0 /hi h7ncontesta.ilit% /ere Concealment2 (aterial Concealment2 $#37#, September $6, "9$5< and 1o v/2G0 a!so the insta!!ments re+used insured be his to bene+i /ith and make the %artia! iary, good <irst %ayment its $nsuran ob!igation has e is been to Ben.ie and /hi de+au!ted0 in-o!-ement !aim +inan h the +or origina! ia! +ire se $A8 !oss tor o+ +ore insurer in /ith BI the !osed in E<D, may Asian the these An inregion, hatte! ur <eb e-ents, in +a-or 3FF'0 BI ;o0 Petras suit /i!!!aim, not %ros%er &assuming subse5uent!y Clause so!d +or on!y PFFth atDara%a! the +edfern, 1/+/ 2o/ 43375, 0pril $5, "64"!< di++erent made under at ()**)) the +rom the time insuran the o+ insured !oss0 e ontra then /ith the t, the 3) insurer :e $s ond Does o+ the mortgage0 demanded E<D BD origina! denied ha-e and insured, an Robins %ayment insurab!e sought to interest o+ re An o-er the A%ri! /ithin the 10 insuran 3FF'0 e &2) ;either an the $nsured take the ash the that the %o!i y o+ !i+e insuran e has been in Concealment2 7nsurance2 Dou.le 7nsurance (2001) (aterial Concealment (200)) +ore !osure sa!e, 2herea+ter0 the bank +i!ed Atty Roberto took out a ar !i+e insuran e %o!ian y $nsuran be $nsuran omes e!iab!e, *om%any, e !ega!!y When .usti+ied 2he thesame in !oss re+using is true ha%%ened /ith theRobin de+i %ro meaning eeds ien sought y,o+ +rom @ay the re $A8 $nsuran onsideration the sti!! t/o re e *ode o-er o+ %o!i the o+ the the ies0 denia!0 SUGGESTED ANSWER: surrender -a!ue0 assign e-en borro/ onh 200 +or e +or a %eriod o+ !ess than 2 @ar years +rom A SU++ESTE6 ANSWER( When doub!e insuran e e>ist# a%%!ied +or a non-medi a! !i+e insuran e, ordinary a tion +or o!!e tion o+ :e% the +rom the Dana $ns the *o &D$*) on 3 res%e on %ayment the t 4th to the month0 to interests Ben.ie# the si> 2) insured $s months ;at entit!ed in agreed the t/o to 3FGF, Phi!i%%ines de+idoes %remiums but E<D ien &PD3'=0)# reiterated y# +or E>%!ain, /hi its &2() h or %osition, $: had been An +aith+u!!y 9es, $A8 BD may has insurab!e no !onger re o-er in his the bank de+i y, SUGGESTED ANSWER: said %o!i y during /ithout theinterest bene+i iaryCs onsent the date o+ its issue), 2he matters /hi h Buan &2() 2he insured did not in+orm the insurer that de+i ien y, A ontended that the mortgage An 13 Aug 3FF00 Roberto died, D$* re+used %o!i %eriod o!!e ies, o+ t %ayment on the insuran had not e yet %o!i e!a%sed y# (M&;B %aying 3FF40 Robin ommen a!! the edtime .udi ia! he a /as tion ien a!i-e, (2ario v/ ;hilamlife, 1/+/ 2o/ $$39%, Aune SUGGESTED 8nder :e tion F1 the $nsuran e *ode0 de%osit, 8nder $n Art ase 3'G' o+o+ !oss o+ the o+ said ;**0 de%osit0 a $%, ontra more t o+ +ai!ed to dis !ose /as materia! and re!e-ant to 1eneral ) As Budge0 $%rior /ou!d a!!o/ the businessman to one /eek to his a%%!i ation +or ontra t ANSWER: he e>e uted /as indi-isib!e and to %ay his bene+i iaries be:elamart, ause it dis o-ered .nsurance v/ *asagana 1/+/ 2o/ :tarbrite against E<D, re+used :hou!d %ayment0 Robins ain ontending tion be gi-en that "9%3!< 3)9es, At the time o+misre%resented the Ben.ie /as no SUGGESTED ANSWER: there is doub!e insuran e interest /hen there is o-er%arti sa!e o+ %ersona! to the e>tent %ro%erty o+ the the amount %ri e o+ in /hi h the a%%ro-a! and issuan e o+ the insuran e "#3"3$, re o-er his tota! !oss o+ P4@ re%resenting the insuran e0 he /as e>amined and on+ined atto onse5uent!y0 the had nore !ega! right that Robert had ertain 0pril 4, $77"! , bank <ran is !oss0 an o-er BI u!ar!y due had ourse# no insurab!e E>%!ain, and there+ore &1);o0 2he $nsured annot add another Robins a tion shou!d not be gi-en due !onger the o/ner o+ the %ro%erty insured as insuran e /ith t/o or more om%anies0 e> is ess %ayab!e o+ the !imit in insta!!ments0 o-ered by the the PD$* -endor A t0 may0 %o!i y, 2hey /ou!d to ha-e ted Dood ?i+es +rom +u!! -a!ue o+ his goods /hi h /ere !ost through :t, materia! ?ukes 7os%ita! /here he /as diagnosed +ore !ose on!y the rea! estate mortgage and +a$nsuran ts in a%%!i ation, 2he Peninsu!a e his *om%any0 but the /as iary not entit!ed re a++e ei-e thee %ro eeds bene+i be ause that /ou!d redu thehatte! SUGGESTED ANSWER: ourse, $s +i!ing o+ the re5uest +or !atter he +ai!ed to redeem the %ro%erty, 2he !a/ o-ering the same %ro%erty0 the same PBD among /i!! be se-era! damni+ied, o%tions0 7e /i!! +ore su++er !ose the a tion on his a%%!i ation0 either by a%%ro-ing +ire, As to the reditor0 $the /ou!d a!!o/ him +or bene+i !ung an er, 2he soon therea+ter !ea-e out the hatte! mortgage0 and sue iaries sued on basis thatthen D$* an has the right to insured dedu t the amount o+ to +rom $:s insuran e o-erage on his !i+e and amount /hi h +irst bene+i iary may :tarbrite isthe orre t /ith res%e t to been the onsideration did not sus%end the running re5uires in %ro%erty insuran e.udgment, that a %erson insurab!e interest and the same risk, Doub!e %e re mortgage uniary !oss on o+orres%onding the P1000000,000 thing so!d0 that i+ one is0 his has it /ith the ad.ustment +or a un%aid re o-er amount to e>tent o+ or y died in+or athe %!ane rash, $sinsuran the insurer !iab!e him a su%%osed de+i ien y $+ ontest the -a!idity o+ insuran e %o!i %remium +rom the e a!so on his %ro%erty, $s :tarbrites ontention re o-er and there+ore ad-erse!y a++e tone his insuran e o-erage on the %ro%erty $:, o+ the %res ri%ti-e %eriod o+ year an re o-er the %ro eeds o+ the %o!i y i+ 7nsurance2 8i&e 7nsurance2 Assi'nment o& "olic% ()**)) insuran eE>%!ain# e>ists /here the same %erson is o+ bank onstituted0 de%osit o+ ha!+ shou!d a mi!!ion the -endees %esos minus +ai!ure to higher %remium or re.e ting the same, e5ui-a!ent to the -a!ue o+ you the redit hehe onsidering that the +a t on ea!ed had no you /ere the Budge0 /ou!d sustain the on!y /ithin 2 years +rom the date o+ issue %ro eeds, -a!id# &4() -ested right (1o v/ +edfem, 1/+/ 2o/ 43375, 0pril SUGGESTED ANSWER: SUGGESTED ANSWER: 2he bene+i iary in the %ro%erty insuran e SU++ESTE6 ANSWER( sti%u!ated in the insuran e %o!i y,amount 2hus0 has insurab!e interest at the time o+ %o!i y o+ insuran e u%on his !i+e0 /ith a insured se-era! insurers se%arate!y in $n /hen P2000000,00 %ay by o-er /hi t/o h or is more the ma>imum insta!!ments, su h @oreo-er0 a dis !osure may ha-e /arranted a 2he e>tended to the businessman +or the sto ksbearing /ith o+ the ause o+ o+the death o+ De thethe ontention A# and during the !i+etime insured, ide 7nsura.le 7nterest: "u.lic Enem% (2000) $5, "94"!< $+ $ /ere the Budge0 $+a-or /ou!d dismiss the a tion ;o, 2he on ea!ed +a ty is materia! to the $ /ou!d ru!e in o+ the insuran e or the assignee thereo+ must ha-e robin ommen ed .udi ia! a tion against E<D issuan e o+ the %o!i and a!so at the time +a e -a!ue o+ P300th /as assigned by Bose0 a res%e ty o+ the same sub.e t Buan matter and re %o!i o-erab!e ase0 ho/e-er0 +rom the the PD$*, -endor sha!! ha-e no medi a! e>amination o+ by Dood ?i+e in in-trade /hi h /ere mortgaged by the insured# Why# &4() the ase, &') 8n!ess the %o!i y a!!o/s0 the $nsured @ay a member o+ the @$?< or its breaka/ay as being %remature sin e the %ro%er remedy a%%ro-a! and issuan e o+ the insuran e om%any, 2he in ontestabi!ity !ause0 insurab!e interest in the %ro%erty insured, BI0 7nsura.le 7nterest2 E5uita.le 7nterest ()**)) Assuran e on @ar h 200 3FF40 his abi!ity to /hen man the /ith !oss 2 o!egitimate urs, At the time to o+ +ire0 hi!dren0 interests, (1eagonia &ourt ofthe 0ppeals, 2o/ risk married +urther+or a it tion against %ur 1/+/ haser order to v/ reasonab!y assess the businessman, annot e-en designate another bene+i iary 7nsurance2 Dou.le 7nsurance2 e&&ect ()**3) grou%0 the Abu :ayya+0 bethe insured a /ou!d be to om%!ete the +ore !osure o+e++e the %o!i y, e $t is /e!! that insured need a%%!ies on!y i+ the %o!i ythe had been in t a +riendom%anion o+ /ith $:0 %ri has no A %ie o+ ma hinery /as shi%%ed to @r do so had a!ready %res ribed, 2he one-year Ben.ie no !onger had insurab!e interest in the his ne%he/ 9 assett!ed se urity +or a !oan o+ P40th, ""44$3, -ebruary %, e%ting "995! re mere o-er any un%aid ba!an e o+ the e and in-o!-ed in a a%%!i ation, $n any shou!d the origina! bene+i iary %rede ease Bu!ie and A!ma +ormed a the business 2) ;o, Whi!e at the time o+ the !oss he had om%any !i ensed to do under the mortgages and on!y therea+ter an there by not die o+ the disease he +ai!ed to dis !ose to +or at !east 2 years, 2he 2 year %eriod is insurab!e interest in residentia! house o+ Pab!o on the basis o+ *M< @ani!a, Pab!o %eriod is ounted +rom <eb 2G0 3FF' /hen %ro%erty insured, 7e did not gi-e the insurer any /ritten noti e any agreement to the is ontrary -oid, Whi!e ase0 gooda 5uires +aith no is de+ense in him, 7is estate the bene+i iaryCs %artnershi%, 8nder thePhi!s business name Pino insurab!e interest in the bui!ding0 as he /as $nsuran e *ode o+ the &PD 3'=0)# an a assignment tion +or tion o+ any de+i ien y, $n e the insurer, $to!!e is su++i ient that his ounted +rom the time the insuran $:, BI is not entit!ed to re ei-e the %ro eeds insured said ma hinery /ith the 2a!aga E<D denied Robins !aim0 not +rom the date su h des%ite the e>%!i it the gi-en +a ts did not e>%!i it!y state that on ea!ment, 2he /ai-er o+ a medi a! o+ SUGGESTED ANSWER: -ested right u%on his deathH and As to the insuran e o-erage on the !i+e o+ :ho%0 the %artnershi% engaged in a sa!e o+ the o/ner thereo+0 ;at did not ha-e any E>%!ain, &1() &altex v .0& (1+ 343#7, $5 0ug 69! 0 the nondis !osure mis!ed the insurer in +orming be omes e++e ti-e unti! the death o+ the +rom $:s insuran e on his %ro%erty, @er hants $ns *o &2ami ) +or !oss or damage &%resumab!y a+ter A%ri! 10 3FF') /hen E<D %ro-ision to that e++e t in the %o!i y, Bose An.os +ai!ure to %ay o-ered 2 or more e>amination in annot the Rnon-medi a! !i+e A8TERNAT7>E ANSWER: &4) 2he $nsured a!!o/ his reditors A member o+ the @$?< or the Abu :ayya+ may $:0 BI is entit!ed to re ei-e the %ro eeds, onstru tion materia!s, Bu!ie insured the interest in the %o!i y, 2here /as no remedies on a se ured debt0 said the ourt0 his estimate o+ the risks o+ the %ro%osed insured and not therea+ter (:an v &0 1+ 46744 during the -oyage, 2he -esse! sank en route reiterated its %osition denying Robins !aim, died, 8%on the !aim on the %o!i y by the insta!!ments0 this may sa+e!y be %resumed insuran ee>e +rom Dood ?i+e makes it more Concealment2 $ /ou!d(aterial ru!e in +a-or o+ the the insuran e to atta h is or on the %o!i y, (;hilamlife be insured /ith aute om%any !i ensed toe-en do ha-e Concealment: 7ncontesta.ilit% 2here no re5uirement that BI shou!d sto ks in trade o+ Pino :ho% /ith WD* automati trans+er !ause in %o!i y that are either an a tion to o!!e t or to +ore !ose insuran e %o!i y or in making in5uiries, $9Aun"969! to @ani!a, Pab!o then +i!ed a%ay !aim /ith not 2he reason +or this ru!e is to+ore insure that assignee0 the insurer re+used to on the be the right o+ $A8 *o to !ose the ne ause essary that Buan su%%!y om%!ete v/ ;ineda, 1/+/ 2o/ 54$"%, Auly "9, "969! om%any, A!though an insurer may business under the $nsuran e *ode o+ the Clause insurab!e interest in the !i+e $:, $tshe /as are $: $nsuran e *o +or P140th, :ubse5uent!y0 /ou!d gi-e him su h interest in the %o!i y, a ()**3) ontra t o+ rea! se urity, 2hese remedies 2ami /hi h /as denied +or reason that !aims against e o+ om%anies ground that itthe /as not noti+ied o+ the hatte! mortgage under the ir umstan es is in+ormation aboutinsuran his to %re-ious hos%ita!i6ation res ind ontra t the on ground Phi!s, What isinsuran %rohibited be insured ishis a 7nsura.le 7nterest2 "ro$ert% 7nsurance (200)) SUGGESTED ANSWER: An :e%tember 210 3FF00 2an took a !i+e o+ himse!+ /ho took the insuran e on o/n again got an e ontra t /ith R:$ +or are a!ternati-e remedies0 a!though an a tion %rior to de!i-er0 Pab!o had no insurab!e %rom%t!y sett!ed and that insuran e suits are assignment, 8%on the other hand0 the heirs %remised on An.os +ai!ure to %ay 2 oror more ,ene&iciar%: Ri'#ts2 7rre oca.le ,ene&iciar% (2001) +or su h in+ormation onstitutes an im%ortant misre%resentation a+ter an a tion is $+ the %o!i y o+ !i+e insuran e has been in 7nsura.le 7nterest2 8i&e s! "ro$ert% 7nsurance (2002) %ub!i enemy, A %ub!i enemy is a iti6en Pab!o BQ0 o/ner had an o+ e>isting a ondominium insurab!e unit0 interest insured on the insuran e %o!i y +rom Phi!am, 2he %o!i y /as !i+e, P3m and then +rom E$* +or /hi!e P200th, Ae-iden +ire o+ e as o+ +or any de+i ien y is not %re entit!ed !uded0 sub.e t to De ide the ase, brought by the insured the Bose ontended that 9 is not to y0 insta!!ments, 2he +ore !osure /ou!d not ha-e Ba +a ob tor obtained a !i+e insuran e %o!i y +or P3+rom /hi h Dood ?i+e takes into interest, 7nsurance2 Return o& "remiums (2000) ommen ed +or re o-ery under the %o!i the +or e +or a %eriod o+ 2 years or more nationa! o+ a ountry /ith /hi h the Distinguish insurab!e interest in %ro%erty SUGGESTED ANSWER: the %ie e o+ ma hinery he bought, 2he same against +ire /ith the I9P $nsuran e issued on ;o-ember =0 3FF0, 7e died on A%ri! unkno/n origin and gutted the o+ store o+ the tion has any ertain e>under e%tions su h as those stated to the origin ause the destru amount the %o!i y be ause the in Art been -a!id i+ it not so, &2he ts @i!!ion designating irre-o Di/ata0 a onsideration in/ere de iding /hether to issue the ;ame at !east three instan es /hen an insurer is not %re !uded +rom in-oking the the date o+ its issue &on /hi h gi-en %oint the A !i+e insuran e is he%atoma, assignab!e, A %ro-ision0 Phi!i%%ines isBu!ie at /ar, :u h ab!y member o+ the insuran e +rom insurab!e interest in +a !i+e %ur *o,0 hase and o+o+ made goods the under !oss %ayab!e a %er+e to ted 2=0 3FF2 2he insuran e %artnershi%, +i!ed her !aims /ith the 3'G' o+ the *i-i! *ode0 by a +ore !osure onhis not yet disa%%eared, (See Sun .ns ,ffice =td v /ithout due noti e toas the insurer did not a!so state e>%!i it!y /hether +riend0 as his bene+i iary, Ba ob0 ho/e-er0 %o!i y or not, (See 0ssurance &o of assignment SUGGESTED ANSWER: insured is entit!ed to a return the ground o+ misre%resentation a+ire de+ense in gi-en +a ts are -ague) then ?i+e an no ho/e-er0 in the %o!i y stating that /ritten @$?< or the Abu :ayya+ isSunlife not a Dood iti6en oro+An.os insuran e, &4() ontra t o+ sa!e a!ready -ests e5uitab!e brother0 @?Q, $n ase o+ !oss by o+ the om%any denied the bene+i iaries !aim and three insuran e om%anies, 7o/e-er0 her the mortgages, Whi!e the +a tua! settings in &0 gr 6934", *ar "# insuran 9" "95s"9#! /as -oid, Reso!-e the issues, de+au!t SUGGESTED /as ANSWER: a %ayment de+au!t or a de+au!t hanged his mind and /ants 9ob and Bo.o0 his &anada a) $n v &0 %ro%erty 1+ "75"#5, Aune e0 $$, the "995 e>%e $45 tation s $%6! %remium %aid, aon tion +or re o-ery, 2his isthe a!right sin e !onger %ro-e that the %o!i y is -oid ab initio noti e o+ su h an assignment shou!d be gi-en nationa! o+ another ountry0 but o+ the interest said ondominium %ro%erty unit0 in +a-or /ho may o+ re buyer o-er on resthe inded the %o!i y by reason o+ a!!eged !aims /ere denied se%arate!y +or brea h o+ the ase o+ Suria v .0& (#7 Aune 63! are not 2hree instan es /hen an insured is entit!ed arising +rom a brea h o+ a negati-e %!edge or 7nsura.le 7nterest: Se$arate 7nsura.le 7nterest ()***) other +riends0 to be in !uded as bene+i iaries o+ bene+it must ha-e a !ega! basis, $n !i+e the bar %rob!em is not o-ered yet by the or is res indib!e by reason o+ the +raudu!ent to the insurer -a!id &:e s 3G3-3G2 $ns Phi!i%%ines, e-en /hi!e itis is de!i-ery (-ilipino +ireto insuran e %o!i y# :tate the reason&s) misre%resentation and on ea!ment o+ %o!i ya return ondition /hi h re5uired the insured to simi!ar the +a %ending ts gi-en in the %rob!em0 the Concealment2 (aterial Concealment2 7ncontesta.ilit% to %remium %aid are: brea h o+ ao+ /arranty, $n subusiness h ase0 ho/e-er0 SUGGESTED ANSWER: Aonsidering businessman in the gro ery that the %ro eeds o+ the %o!i y to ALTERNATI7E ANSWER( insuran e0 the e>%e tation o+ bene+it be *erchants in ontestabi!ity !ause, on ea!ment or misre%resentation o+ Buan *ode), 2he +ai!ure o+ the noti e o+ assignment .ns &o v &0 1+ 65"44 $62ov"969! +or your ans/er, &4() materia! +a ts made by 2an in his a%%!i ation, gi-e noti e o+ any insuran e e++e ted :* that +ore as a remedy in 3 2o the W7A?E PRE@$8@0 i+ no %art his 7nsura.le Clause ()**:) 2he indi-isibi!ity o+ a !osure ontra t o+ rea! urity0 BQ im%!ied an re o-er on the +ire insuran e se %o!i y +or $A8 /ou!d not been ab!e to Concealment2 (aterial Concealment: 7ncontesta.ilit% 7nterest2 8i&e s! "ro$ert% 7nsurance ()**+) obtained +rom <irst $nsuran eha-e an insuran e are ient +or the three +riends, *an Ba ob deri-ed +rom the ontinued e>isten e o+ a o+ !i+e & su++i :e *om%any 'G $ns *ode) /ou!d thus %re !ude the assignee +rom $t returned the %remiums %aid, o-ering the sto ks in trade, Bu!ie /ent to to any o+ SUGGESTED ANSWER: se ured ob!igations must +irst be a-ai!ed o+ interest in thing insured be e>%osed Renato /as issued a !i+e insuran e %o!i y on su h as a rea! estate mortgage or a hatte! the !oss o+ said ondominium unit, 7e has thea +ore !ose the hatte! mortgage -a!id!y as Clause ()**+) %o!i y +or P4@ to +u!!y o-er his sto ks-ina) A obtains a +ire insuran e on his house and as sti!! add not 9ob and Bo.o as his basis, bene+i iaries# Reme6ies2 Aha-e aila.le to (ort'a'ee?Cre6itor (200)) need any !ega! 2he bene+i iaries ontend thaty, the om%any !aiming rights under the %o!i 2he +ai!ure ourt ontended that she shou!d not be ;o0 Baand ob an no !onger add 9ob and Bo.o as in by a reditor in %re+eren e to other remedies the %eri!s insured against, Banuary 20 3FF0, 7e on ea!ed the +a t that mortgage0 on!y means that a di-ision or a insurab!e interest as o/ner-insured, As su h +ore !osure0 under the ir umstan es 2he assured ans/ers ;o" to the 5uestion generous gesture names his neighbor as the trade +rom the risk o+ +ire, E>%!ain, &2() Debtor A" issued a %romissory note in the had no e right res ind the a-oid ontrathe t as o+ noti did to not0 ho/e-er0 %o!i yH b!amed +or the omission0 a!!eging that the histhe bene+i iaries in addition to As the that might a!so be in-oked by him, b) $n %ro%erty insuran e0 the a tua! 2 Where the insuran eDi/ata, is made +or a de+inite 2hree months therea+ter0 a %o!i +ire o+ a identa! 1 years %rior to the issuan e o+ his !i+e %artia! %ayment o+ a se ured ob!igation does bene+i bene+i iary iary, in $+ As the house +ire insuran is destroyed e %o!i by y0 +ire0 @?Q an ontem%!ated by the !a/0 ou!d on!y be a%%!i ation +or a !i+e y: Are you amount o+ P30@ in +a-or o+ ommer ia! bank res ission must done the !i+etime" hen e0 u%on thebe death o+during Bose0 the %ro eeds insuran eo+ agents +or WD*0 R:$ and E$* kne/ irre-o ab!e bene+i iary0 Di/ata has a 5uired -a!ue the interest therein is the !imit$n o+ %eriod o+ time and the insured surrenders his origin broke out om%!ete!y insuran e %o!i y0 he had been seeing a su ess+u!!y !aim against the %o!i y# b) A not /arrant a orres%onding di-ision or B annot re o-er on the +ire insuran e %o!i y, e++e ted +or aand %ayment de+au!t o-ering t/o su++ering +rom any +orm o+ heart i!!ness#" 9 se ured by mortgage o+ destroyed his %ro%erties o+ the insured /ithin e t/o years and %rior to /ou!d0 in the absen o+ a designated o+ the e>isten e o+ the additiona! insuran e ed a--ested right Ba obCs !i+e the insuran e that an -a!id!y be %!a %o!i to suo-er h %ortion o+ %remium as the gro ery in !uding his sto ks-in-trade, 2his do tor about his heart insuran e o-er his !i+e and names %ro%ortionate redu tion o+o+ the se urity gi-en, <or the bene+i iary to ai!ment, re o-er on the his +ire or or more insta!!ments) (=uis +idad ve -ilipinas +a t0 y0 the assured has been ainsuran heart %atient +or /orth P10@, When A the +ai!ed to %ay his obtains the ommen ement o+ the a tion, $s the bene+i iary0 go to the estate the insured, o-erages and that she /as not in+ormed %o!i y, Any additiona! bene+i iaries /i!! SUGGESTED ANSWER: An @ar h 30 3FF20 Renato died o+ heart SUGGESTED ANSWER: thereon, $n businessman !i+e insuran e0 there is no !imit to neighbor B the bene+i iary be ause o+ As se ret orres%onds /ith une>%ired time at a is %ro %rom%ted the to +i!e /ith <irst A reditor in su h se ured debts may %ursue %ro%erty insuran e %o!i y0 it is re5uired that .nvestment and -inance &o 1+ =8#967% many years, An 7the :e% 3FF30 the assured indebtedness0 des%ite demands made by rata ontention o+ the bene+i iaries tenab!e# 2he estate0@ay in turn0 /ou!d be !iab!e +or the about the re5uirement that h other or redu e the amount /hi h mi!!ion Di/ata0 as the +irst 3) ;o, An insured is re5uired to dis !ose the +ai!ure, the heirs +i!e a !aim on the 2he inA ontestabi!ity !ause does not +or B, $+ dies0 an B su ess+u!!y !aim against the amount o+ insuran esu that may be taken !o-e rate0 un!ess a short %eriod rate has been agreed 7nsurance2 "er&ection o& 7nsurance Contracts (2003) $nsuran e aa !aim +or +i-e %esos the remedy o+ +ore !osure0 in %art or in +u!!0 or he must ha-e insurab!e interest in the Aan$3,6# "$7s$4%! ki!!ed in %!ane rash, 2he insuran e bank 90 the !atter instituted a o!!e tion suit ;o, !oan o+ eeds P400000 in +a-or o+ 9, e %o!i y o+ additiona! insuran e o-er0 shou!d be stated the y0 a+tera%%!y, bene+i iary0 may re /hi h other insuran es +u!! o-ering the sub.e t in matter %ro o+ o/ing the !i+e insuran 2he insured /ithin !ess than t/o %o!i y# the !i+e, u%on and a%%ears on the e/i!! o+ the %o!i re%resenting the -a!ue his goods, Bosie Datbonton obtained +rom Warranty +i!e an ordinary a dies tion +or o!!e tion on any not %ro%erty insured, $n this ase0 @?Q does om%any denies the !aim +or insuran to en+or e %ayment o+o++a the P30@ a e ount, SUGGESTED ANSWER: %o!i $s ting the ontention o+ Bu!ie tenab!e# ad-erse!y a++e t her -ested right, (1o v/ SUGGESTED ANSWER: o+ the insuran e being a%%!ied +or, (2ew =ife )y, $n %ro%erty insuran e0 an interest <irst $nsuran e denied the !aim be ause it Renato# &4() +rom the o+ y on "romissor% Note: 8ia.ilit% (200)) dedu +rom the /ho!e %remium any !aim $nsuran e *or%oration a e om%rehensi-e amount due, A issuan +a-orab!e .udgment an ha-e insurab!e interest in the the %o!i ondominium %ro eeds and returns the %remiums %aid, $s +oryears :ubse5uent!y0 bank 9 a!so +i!ed +ore !osure 9es, 2he !i+e insuran e %o!i y note in 5uestion /as E>%!ain, @ay she re o-er on her +ire SUGGESTED ANSWER: a) ;o, $n %ro%erty insuran e0 the bene+i iary +edfern, 1/+/ 2o/ 43375, 0pril $5, "94"! 7nsurance2 Cas# 0 Carr% ,asis (2003) Ent v &0 $73 s %%9! insured must e>ist /hen the insuran e takes dis%ro o-ered that at the time o+ the !oss0 the :e%tember 210 3FF0, 2he insured died on I0 9 and P signed a %romissory in +a-or !oss or damage under the %o!i y /hi h has motor -ehi !e insuran e to o-er her brand /arrant an issuan e o+ a /rit o+ e>e ution on unit, the de ision o+ the "ro#i.ite6 insuran e om%any eedings against A +or se urity gi-en +or ,ene&iciar%2 8i&e 7nsurance2 ,ene&iciaries issued on Banuary F0 3FF0, @ore than 2 years 2) ;o0 Assuming be ause that she is the gui!ty in ontestabi!ity o+ -io!ation o+ a !ause insuran e %o!i ies# E>%!ain, must ha-e insurab!e interest in the %ro%erty What is meant by ash and arry" in the e++e t and /hen the !oss o urs but need not SU++ESTE6 ANSWER( stothe ks-in-trade /ere mortgaged to a reditor A%ri! 2=0 3FF20 or !ess than 2 years +rom o+ A stating: We %romise to %ay A on %re-ious!y a rued, ne/ automobi!e, :he %aid0 and the insurer any %ro%erty0 not e>em%t +rom e>e ution0 .usti+ied# anot ount, $+ be you /ere the .udge0 ho/ ()**:) had e!a%sed /hen Renato0 the insured0 died /arrantyL does ondition, a%%!y ause the %o!i y on has not insured, &:e 3G $ns *ode), does not ha-e 2he ase +or tion /i!! be a!!o/ed to :e%tember business o+ insuran e# sum e>ist in the meantime, $n !i+e insuran e0a it is /ho obtained +rom :e ond $nsuran e 210 3FF0, De ember 130 2003 the o+ P40000,00" 1 !ike/ise When theo!!e ontra t is -oidab!e ount a be!onging e%ted %ayment in he k, B Be+ore the he k to the .udgment debtor, 2here /ou!d you reso!-e the t/o ases# &4() Buan de !a *ru6 /as issued Po!i y ;o, GGGG o+ SUGGESTED ANSWER: on @ar h 30 3FF2, 2he in ontestabi!ity !ause been in +or e +or 2 years0 +rom the date o+ insurab!e interest in the house insured, %ro eed, But the +ore !osure %ro eedings 2he right o+ the insurer to res ind is on!y !ost enough that insurab!e interest e>ists at the *om%any +ire insuran e o-erage +or the When the note due0 A sued Ia and 9 /ho o+ the +raud or misre%resentation o+ the insurer or ou!d be en ashed0 Bosie /as in a to shou!d be no +e!! !ega! obsta !ein-o!-ed +or reditor the @id!and $nsuran et *o on a$n /ho!e !i+e 7nsurance2 E&&ects2 "a%ment o& "remiums .% 7nstallment a%%!ies, issue0 during the !i+etime the insured0 the e i+ ha-e to?i+e be dismissed, instituting the bene+i iary has ommen ed ar an aha-e tion time /hen the ontra iso+ made but it need P, $s the de+ense -a!id# Why# &4() sto ks at their +u!! -a!ue o+ P4@, a) @ay the %ut u% the de+ense that A shou!d o+ his agent or on a ount o+ +a ts the e>isten motor -ehi !e a ident /here her /ai-e0 in +u!! or in %art0 his right to %!an +or P200000 on August 3F0 3FGF, Buan is 7nsurance2 Co?7nsurance s! Re?7nsurance ()**3) INC%N/:'/A#I2I/@ C2A,': (2004) b) 9es, $n !i+e insuran e0 it is not re5uired se%arate insuran e o-erages o-er the same de ision o+ the insuran e om%any not to %ay SU++ESTE6 ANSWER( +ore !osure %ro eedings0 a+ter +i!ing a on the %o!i y, 2here is no su h a tion in this not e>ist at the time o+ !oss, businessman and the reditor obtain im%!eaded o+ /hito h*ynthia the insured /as ignorant /ithout his be 2he ameinsurer a tota!on /re k, :he %ayment +ore !osure ontra ts sought o+ rea! se urity, has t/o years +rom the date married /ith he has three Distinguish o-insuran eha-e +rom rethat the bene+i iary must insurab!e 2he Peninsu!a $nsuran e/hom *om%any o++ered to or 2he 7nsura.le 7nterest2 "ro$ert% 7nsurance ()**3) de+ense is "34 not -a!id, 2he !iabi!ity o+ I0 90 o+ in-trade# E>%!ain &1() b) <irst $nsuran e SUGGESTED ANSWER: sto ksis .usti+ied, 2here /as +raudu!ent o!!e tion ase in-o!-ing the same a ount ase, (:an v &0 s "4#! +au!tH or /hen0 by any de+au!t o+ the insured other +rom the insurer, *ou!d the insurer be made SUGGESTED ANSWER: issuan e o+ the insuran e ontra t or o+ !egitimate hi!dren, designated insuran e, insure isC brand ne/ ar against a!! risks interest in the !i+eConcealment: o+ the insured, $t /as the its Concealment2 (aterial 7ncontesta.ilit% &%er Dondee) 9es0 be ause there /as a .oint, $n a <ran i-i! suit0 the *ourt ordered Ben.ie to %ay and P under the %romissory note is re+used to %ay !aiming that doub!e on ea!ment, $t 7e0 is not materia! that the transa tion0 bank 9 ho/e-er0 is gui!ty o+ s%!itting a than a tua! +raud0 the insurer ne-er in urred any !iab!e under the insuran e o-erage# &=() ,ene&iciar%: E&&ects: 7rre oca.le ,ene&iciar% (2001) *A-$;:8RA;*E is the %er entage in !ast reinstatement /ithin /hi h to Purita0 his ommon-!a/ /i+e0 as the re-o ab!e insuran ea is tion, ontrary to !a/, $s this ontention insured himse!+ /ho took %o!i y on ontest his in the sum o+ P$ @i!!ion +or 3 year, 2he %o!i y the Clause ;at P4000000,00, 2o e>e ute the .udgment0 %er+e ted ontra t o+ insuran e the h ()**4) being the ase0 the P is moment not anthe insured died o+ a%o!i di++erent ause than ause o+ 2he !oan o+ P30@ is the :u !iabi!ity under the y, What -a!ue are o+ the the e++e insured ts o+ an %ro%erty irre-o ab!e /hi h the the %o!i y0 /hether or not0 the insured sti!! bene+i Buan re+erred to in tenab!e# &1() )the :u%%ose you are the Budge0 /as issued /ith %remium +i>ed at his o/n Buan !i+e, %ro a non-medi !i+e A insuran there is a ured meeting o+ the /ith res%e te the sheri++ !e-ied u%on Ben.ies registered indis%ensab!e %arty, 2he minds +a a!" t that did not +a t iary, on ea!ed, 2he +a t Purita on the ea!ed0 that is %rin i%a! ob!igation /hi!e mortgage designation insured himse!+ o+ a assumes bene+i iary or undertakes under the to a t !i-es /ithin su h %eriod, A+ter t/o years0 the 7nsura.le 7nterest2 8i&e s! "ro$ert% 7nsurance (2000) a%%!i ation and %o!i y as the !ega! /i+e, 1 ho/ mu h /ou!d you 3=00000,00 %ayab!e in = <ran on!ythe +rom Dood ?i+e $nsuran e, 7e designated his %ro%erty &a %ar e! o+ !and and the bui!ding to the ob.e t and the ause o+ %ayment, P /i!! not %re-ent A +rom o!!e2he ting heart ai!ment0 is months, materia! to se uring the same is mere!y an a is essory to im%!ead SUGGESTED ANSWER: $nsuran as insurer e *ode# to the E>%!ain, e>tent &2() o+ the de+i ien y in de+enses o+ on ea!ment $:0 an e!der!y ba he!or /ith no kno/n years !ater0 Buan died, Purita +i!ed her !aim a!!o/ theob!igation, businessman and the reditor %aid the +irst t/oso!d months insta!!ments, /i+e0 Petra0 the bene+i iary, Ear!ier0 in the his or %ayment o+ as he k is a -a!id %ayment un!ess thereon)0and same at tion %ub!i au to tion %ro%ortionate share o+ I gi-es and 9 in determination by the the insuran e said !oan 2he o!!e o+ om%any the !oan the 2he irre-o ab!e designation the the insuran e o+ the insured %ro%erty, $n ase misre%resentation0 no matter ho/ %atent or 7o/e-er0 i+ the in ontestabi!ity !ause /hi h re!ati-es0 obtained !i+e insuran e o-erage +or (,bservation Even if the liability of +rom their res%e ti-e insurers, E>%!ain +or the %ro eeds o+ the %o!i y as the re o-er Des%ite demands0 he tothe %ay the !atter0 a%%!i ation in res%onse to k the 5uestion to ;at0 the highest 2he on u%on en ashment theDe$osit he boun ed, as to %ayment o+ the !oan, /hether or not to +ai!ed a o+bidder, e%t a%%!i ation +or and the +ore !osure the mortgage se uring bene+i iary a 7nsurance2 -ested right o-er ?i+e 7nsura.le 7nterest: ,an(2000) SUGGESTED ANSWER: o+ !oss or damage0 the insurer /i!! be !iab!e /e!! +ounded0 no !ie, a%%!ies to the insuran e and %o!i y the o-ering the 7nsurance2 "ro$ert% "rescri$tion o& Claims P2400000,00 +rom :tarbrite $nsuran e F, ?, and L !onger ishe solidary, the defense &1() designated bene+i iary 2he /ido/0 subse5uent insta!!ments, <i-e months a+ter /hether or not had e-er been @ar h 3G0 3FF20 registered /ith the Register insuran e and to therein, re5uire medi a! said !oan onstitute one the same ause $nsuran 2he $nsured annot ami!!ion t to di-est BD has ae, bank de%osit o+ ha!+o+ a %esos, a) 9es, 2he businessman0 as o/ner0 and the on!y +or su h %ro%ortion the !oss Reme6ies2 Secure6 De.t ()**)) !i+e o+ the insured had been in +or e +or 2 ()**4) *or%oration0 an entity !i ensed to engage in would still not be valid! *ynthia0 a!so +i!ed a !aim as the !ega! /i+e, the issuan ethe o+ the %o!i y0 the -ehiissued !e /as he ans/ered in the 7e or Deeds erti+i ate o+ sa!e to him e>amination o+ the insured, o+ a tion, 2he +i!ing o+ the o!!e tion ase bars hos%ita!i6ed0 SUGGESTED ANSWER: the insured irre-o ab!e bene+i iary0 in negati-e, /ho!e or in :in e the !imit o+ the under insuran e o-erage reditor0 as mortgagee0 ha-e se%arate damage as the amount o+ insuran e bears to 2o years se ure +rom the issuan %ayment e thereo+0 o+ his !oan the o+ insuran P200th0 e Robin his bui!ding against +ire /ith the insurab!e business the $nsuran e o+ 2o /hom shou!d the %ro eeds o+ the arna%%ed, <ran is +i!ed /ith the insuran e +orgot to mention his on+inement at 2o the by the sheri++, @ean/hi!e0 on Banuary 270 the subse5uent +i!ing o+ the +ore be !osure 2he %ro eeds o+ the insuran e %o!i y sha!! %art0 /ithout the bene+i iaryCs onsent, the Phi!i%%ine De%osit $nsuran e *or% &PD$*) insurab!e interests in the same sto ks-inthe designated %er entage o+ the +u!! -a!ue Reme6ies2 A aila.le to (ort'a'ee?Cre6itor ()**4) A om%any e>e uted /ou!d in +a-or not o+ be the .usti+ied Ange!es in Banking denying A+ter Buan died in a %!ane rash0 Petra +i!ed a o+ E<D Assuran e, 2he insuran e %o!i y in *ode o+ the Phi!i%%ines &PD3'=0), 7e a!so insuran e %o!i y be a/arded# &4() om%any a !aim +or its o+ -a!ue, 7o/e-er0 the Jidney 7os%ita!, 3FF10 Ben.ie insured /ith Dara%a! $nsuran e %ro eedings, &3) 2he bene+i iary tenth designated a !i+e a/arded to the E:2A2E Buan de !a *ru6, RE$;:8RA;*E is /here the insurer %ro ures be s%e i+i : &RA 14F3) is on!y one o+ BDs de%osit0 trade, Ea h may insure su h interest to the %ro%erty insured, <inding a 2'-month %ayment %!an attra ti-e0 *o the !aim 3 do +or ument0 %ro a rea! o+ the estate insuran mortgage e that and insured !aim /ith Dood Dis be o-ering ontained the usua! ?i+e, sti%u!ation that anyBuans his residentia! house +or t/i e that om%any denied his eeds !aim on the ground that +or in P300000000,00 the same bui!ding insuran e ontra t annot hanged Purita0 the ommon!a/-/i+e0 is dis5ua!i+ied a third %arty0 a!!ed the reinsurer0 to insure he %ur /ou!d !ike some %rote tion +or the e> ess %rote t his o/n se%arate interest, b) 2he An.o hased a 2amara/ <I +rom 2oyota o-er in returning 1 the registered %remium in %aid, histo name $n that and ase0 a %re-ious hos%ita!i6ation0 Dood ?i+e re.e ted a tion or suit must be +i!ed /ithin one year amount /ithin the same or%oration, 7e he +ai!ed to!ots %ay the %remium resu!ting in the /as so!d at %ub!i tion ;at, Ben.ie /ithout the onsent o+ the bene+i iary as the bene+i iary o+ the au dee eased be ause him against !iabi!ity by reason o+ su ha!! origina! by taking out an insuran e against risks ontention o+ <irst $nsuran that doub!e Q*, 7e %aid a do/n-%ayment o+ P300th and the hatte! insurer mortgage annot o-er %ro-e his 1 the ars %o!i and y 3 -oid $su6u ab Petras !aim on the ground o+ on ea!ment a+ter the re.e tion o+ thea!!!aim, immediate!y assigned his rights to %o!i the y an e!!ation o+ the %o!i y,%ro%erty *an <ran is @ar +ai!ed to redeem the by be ause he has a -ested interest in +rom the o+ i!!i it re!ation bet/een the de eased andh 3G0 insuran e, Basi a!!y0 a SU++ESTE6 ANSWER( or ontingen ies o+ !oss arising any insuran e is ontrary to by !a/ is untenab!e, +inan ing +or the ba!an eDood +rom ?i+e0 $A8 initio argo+rom or tru res k, indib!e reason o+ +raudu!ent obtained and misre%resentation, Petra sued insuran e %ro eeds to BI0 a +riendom%anion re o-er the Peninsu!a $nsuran e 3FF1, (;hilamlife v/or ;ineda, 1/+/ 2o/ 54$"%, Auly "9,ti es Purita0 the designated bene+i iary, Due to unsound unsa+e banking %ra 2here is no !a/ %ro-iding that doub!e *o, 7e e>e uted a hatte! mortgage on ea!ment or misre%resentation o+ the in-oking good +aith on %art o+ Buan, !i-ing /ith him, 2hree years !ater0 $: died in a *om%any# &4() su h i!!i e it is inthat !uding un+oreseen ad-erse e++et/o ts o+ insuran i!!ega! %er se, insured, +ire gutted his insured house days a+ter he had so!d it, 2here is Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Ins.ran!e Law

o/ner toy re o-er insuran e om%any# in the %rob!em &a) abo-e is/ith an %o!i y insuran e %o!i +or its onstru tion %aid P40000 on!y0 ?u6+rom ontends that she /as but drunk, 7e /as %!aying his hand to hi!dren not the a shi% identa! but intentiona!, $n ,0not be made !iab!e under its %o!i y# o%en Why# into aentit!e non-dramati /ork i+ it the be a dramaH to marine e: 3) 2hat the shi% isthe Asiati $nsurers0 $n ,0 %re-ious!y shou!d be made !iab!e o-ered byimmediate!y a om%rehensi-e motor -ehi !e em%!oyees E>%!ain, b) Was it %ro%er +or the shi% o/ner and it insuran /as determined a+ter -arious!y assigned to its entit!ed to go a+ter Rau! to !aim the gun0 +rom /hi h he remo-ed the &=() om%!ete or e>e ute it i+ it be a mode! or designH , andLor to take in ertain 2) 2hat the sea/orthy to make the -oyage under %o!i y, 2he +a t argoes that the dri-er /as !iabi!ity insuran e &*@N?$) under/ritten by %ro-in :A@ !ost ase in 3) ourt0 and PA: to send athe noti e o+ +ire the that the -a!ue o+ <ortunes house /as ia! in+rastru ture %ro.e ts, 9 $nsuran e additiona! P'0400,00 $s *a!a0 as subrogee maga6ine, As his se retary /as /at hing to e>hibit0 %er+orm0 re%resent0 %rodu e /as or re%rodu e shi% sha!! not de-iate +rom the -oyage mere!y ho!ding a 2NR does not -io!ate the <astPay $nsuran e *om%any /hen it o!!ided abandonment to the insuran e om%any# a/arded one mi!!ion %esos in damages /hi h P2,'m0 ho/ mu h may he o!!e t +rom under/rote the o-erage0 the o+ ?u60 entit!ed to reimbursement +rom Rau!# te!e-ision0 he stood in +ront o+ her andI09 *om%any the /ork in any manner or by any method /hate-er insuredH 1) 2hat the shi% sha!! arry the SUGGESTED ANSWER: ondition that theat dri-er shou!d ha-e -a!id /ith a s%eeding bus by R@a 2ra-e! &4() E>%!ain, he sought toreo!!e t i+ +rom the insurer, But *;$ +or and P# o+ /hi h /ere %aid entire!y by o%ies 2) @ay *a!a o-er /hat it+or has %aid %ointed the gun her,o/ned :he %ushed it aside$n , %remiums +or %ro+it or other/iseH not re%rodu ed?u6# in ne essary dodri-ers uments to $n an o!!ision o%en %o!i y0 the insured may re o-er SUGGESTED ANSWER: and e>isting !i ense, 7nsurer: E&&ects: Se eral 7nsurers (2001) 2he resu!ted in serious in.uries to IH used A22s re%ort to deny the !aim on the I *om%any /ithout any ri%ts em%!oyee andsho/ said nationa!ity that it may be !oaded, and 7e assured to se!! any manus or any re ord or neutra!ity it /i!! Besides0 su h!oss a ondition shou!d be 3) ;o0 ;o, there ?u6 /as e>e no uted K o+ onstru a re!ease ti-e in tota! +a-or !ossK o+ his tota! u% to the amount o+ the notsa!e0 What is the nature the !iabi!ity o+ the 90 a %assenger o+ the busH and P0 a that %edestrian ground that the in.uries to y PA:Cs 1 hi!dren ontributions, Whi!e the %o!i /as in e++e t0 or her that it /as not and then %ointed it at his /hatsoe-er thereo+H d, to make any other use arry any do ument /hi h /i!! ast reasonab!e disregarded be ause /hat is in-o!-ed is a Rau! be ause (*anila the *ahogany -esse! /as *fg re+!oated &orp v &0 and 1+ the insuran e o-er, 2hus0 the e>tent o+ re o-ery se-era! insurers in doub!e insuran e# /aiting +or a ride at the s ene o+ the o!!ision, /ere intentiona!0 hen e e> !uded +rom the +i-e o+ the o-ered em%!oyees %erished at tem%!e, 2he ne>t ') moment0 there /as an dis%osition o+ the /ork onsistent /ithre%airs the !a/s o+ sus%i ion thereonH 2hat the shi% sha!! not SUGGESTED ANSWER: 5$35%, "$ ,ct "963! %assenger .ee%ney0 and /hat is in-o!-ed osts o+ re+!oating %!us the needed /ou!d be P'00th +rom I0 P200th +rom 90 and 2he /i+e o+ the de eased sought %ayment on E>%!ain, &2() 2he %o!i e re%ort estab!ished that the bus sea %o!i yCs o-erage, PA: ountered that *;$ &P on their /ay to their %ro-in ia! e>%!osion and 2an s!um%ed to the +!oor the !and 2) 9es, *a!a !ost its right against Rau! arry es%e ia!!y i+2he nature o+ the o+ the se-era! here is ontraband0 not o/n damage insuran ebus but third 2,F @i!!ion) /i!! not !iabi!ity be more than threeP=00th the %o!i y +rom but P, her !aim /as re.e ted, 2he /as the o++ending -ehi !e, had *@N?$ 2he /as esto%%ed +rom using A22s re%ort 2heir /i-es sued 9 $nsuran e !i+e!ess, it $n isye making a -oyage through be!!igerent be ause o+ the re!ease e>e-esse!, uted by ?u6, d) %rob!em &a)0 /hat is the e>tent theP assignments, insurers in doub!e insuran e is that ea h %arty !iabi!ity /here the in.ured %arty is a o+ +ourths o+ the -a!ue o+ the A insuran om%any agreed that there /as no %o!i issued by Dragon $ns *o, I0 90 and be ause it %ayment /as unethi a! +or A22 to %ro-ide *om%any +or o+ death bene+its /aters, :in eis the re!ease /as made /ithout the to a o+ the insuran om%anies bound to the ontribute ratab!y third %arty not %ri-y the e ontra t o+ among onstru ti-e tota! !oss is one /hi h gi-es sui!iabi!ity ide, 7o/e-er0 itto /as the submission o+ +or insurer .oint!y sued R@ 2ra-e! and Dragon $ns %re.udi ia! in+ormation against his !ient to under the %o!i y, Whi!e the suit %ending0 SUGGESTED (arine 7nsurance2 "eril o& S#i$ e#icle s! "eril t#e Sea 7nsurer2 Aut#oriDe6 Dri er t#e Clause2 iso& stolen onsent o+ *a!a0 re /as o-er the themse!-es# !oss ininsured %ro%ortion to may the amount +or /hi h insuran e, ANSWER: %erson a*a!a right to abandon, &:e 0 3130 the insuran eunder om%any that there /as o+ no the the indemnity the $nsuran e *ode the insurer0 *;$, Who shou!d %re-ai!: the the /i-es signed a %o/er o+ attorney $n %rob!em &a)0 the insuran e om%anies ()**:) ()**3) SUGGESTED ANSWER: amount o+ P40000 +orm ?u6 (*anila *ahogany he is !iab!e under his ontra t as %ro-ided +or $nsuran e PA:H *ode) /ou!d ha-e been a a Phi!s ident, $n su%%ort thereo+0 it ourt ontended a) &PD3'=0), 2he !o/er a%%!ied !aimant0 or2here the insurer0 *;$# ide *om%any e>e uti-e0 PB0 De asre%ort0 among themse!-es /ou!d be !iab!e0 -i6: I Ethe designating A marine insuran e %o!i y ar on a argo states *;$ is not esto%%ed +rom using A22Cs 7? insured his brand /ith $ns *o &orp vI &0 1+ 5$35%, "$ ,ct by *fg :e F' o+ $*P %ar, 2he ratab!e ontribution onstru ti-e tota! !oss had the"963!/ -esse! @; that there /as no a ne/ ident /hen aPde!iberate no +au!t" indemnity %o!i y o+ the statute0 /ith reasons brie+!y, &4() their authori6ed re%resentati-e to enter into 7nsurer2 Aut#oriDe6 er+irst Clause ()**)) 'L32 o+ P=00th P200th E 2L32 +or o+ P=00th that the insurerUsha!! be 9/herein !iab!e !osses U be *;$0 inDri the %!a e0 +or om%rehensi-e o-erage the ea ause h o+ ea h insurer be determined Pear!y :he!!s su++er !oss /i!! or needed re+!oating a tdismissed /as %er+ormed un!ess some additiona!0 the suit against R@ 2ra-e!0 and o+ a sett!ement /ith the insuran e om%any, SUGGESTED ANSWER: :hery! insured her ne/!y a 5uired ar0 athe P300th P E =L32 o+ P=00th U P100th in ident to %eri!s o+ the sea," During the ommissioned it and %aid A22 +or it, An insuran e om%any undertook to indemni+y based on the +o!!o/ing +ormu!a: A@A8;2 A< and re%airs o+ more than the re5uired threeune>%e ted0 inde%endent and un+oreseen ordered Dragon $ns to %ay indemnity to a!! When a sett!ement /as rea hed0 PB ;o, 2he ause o+ a tion o+ 9 is based on the ;issan @a>ima against any !oss or damage -oyage0 sea/ater entered the om%artment other hand0 A22 has no on+!i t o+ interest him against !oss or damage to the ar a) by PA?$*9 di-ided by 2A2A? $;:8RA;*E 2AJE; +ourths o+ its -a!ue0 i,e,0 more than P10,0 ha%%ening ur /hi h %rodu es orI brings three %!ainti++s, Do you agree /ith the ourts instru A8TERNAT7>E ted ANSWER: the insuran e 1rd om%any to issueside ontra to o+ arriage0 that o+ and P is +or and against %arty !iabi!ity +or SUGGESTED ANSWER: /here the argo /as stored due to the be P40th ause :A@ and *;$ on the same a identa! o!!ision ,,, b) /hi!e by +ire0 e>terna! mu!ti%!ied by ?A:: U are ?$AB$?$29 A< 27E (Sec/ "#9, .nsurance &ode, cited in %ay about theon in.ury or deathH and b) that the .udgment# E>%!ain &2() 7o/e-er0 the insuran e*o, om%any sha!! e) :u%%osing in %rob!em &a) abo-e0 <ortune Ea @i!!ion h insurer is bound0 as bet/een himse!+ the sett!ement he k to the order o+ I based torts, 2he ourt shou!d not ha-e P20th /ith the I9P $ns 8nder the %o!i 9es, 2he suit /i!! %ros%er, 9 $ns *o is !iab!e, I y0 de+e ti-e drain%i%e o+ the+t0 the shi%, 2he insured S their interests being ongruent /ith ea h e>%!osion0 burg!ary0 or and ) ma!i ious $;:8RER, ,riental 0ssurance v/ of 0ppeals and insured /i!!+u!!y e>%osed himse!+ to need!ess +or the tota! osts o+&ourt re+!oating and needed /as ab!e to o!!e t /as +rom both 9 P0 may and other insurers0 to ontribute ratab!y to *om%any0 /hi h /i!! undertake the %ayment dismissed the suit against R@ 2ra-e!, 2he the ar must be dri-en on!y by an authori6ed A+ter a month0 the ar /hi!e *o0 through its e>e uti-e0 PB0 a ted as agent +i!ed an a tion on the %o!i arna%%ed y +or reand o-ery o+ other0 name!y0 to o%%ose PA:Cs !aim, $t a t, ;anama Saw *ill, 1/+/ 2o/ 9475$, 0ugust 9, %eri! and thus remo-ed himse!+ +rom the SUGGESTED ANSWER: re%airs &P2,F @i!!ion), he kee% the entire amount he /as ab!e to the !oss in %ro%ortion to the amount +or to the indi-idua! !aimants o+ their res%e ti-e ourt shou!d ha-e ordered $ns to %ay dri-er /ho is !atter either: 3) the insured0 or 2) any SUGGESTED ANSWER: %arked in the %arking s%a e inDragon +ront o+@ay the o+ 9 $ns *o, 2he thus bound by the the damages aused to the argo, the annot be said thatis A22 has used the "99"! o-erage o+ the insuran e %o!i y, Are the t/o ;o, 2he %ro>imate ause o+ the damage to ) Was it %ro%er +or the shi% o/ner to o!!e t +rom the said 2 insuran e om%anies# /hi h he is !iab!e under his ontra t, &:e , v/ shares, PB misa%%ro%riated the sett!ement ea h o+ I0 9 0 and P to the e>tent o+ the 7o/e-er0 in -inman 1eneral 0ssurance &orp/ ;o, 2hese t/o ontentions are not tenab!e, %erson dri-ing on the insureds order or /ith $nter ontinenta! 7ote! in @akati, mis ondu t o+ its agent, $t is the usua! insured re o-er damages# &4() 7?s /i+e in+ormation to the disad-antage or %re.udi e SUGGESTED ANSWER: ontentions o+ the insuran edeath om%any the argo /as the de+e ti-e is send a noti e /i-es o+%ro-ided abandonment to %erson the F'0&ourt $nsuran e *ode) amount and the %ursued their ase insuran e o-erage0 but /hate-er amount of 0ppeals, $"# S&+0 49# ("99$!, it /as 2he insurer isinsured !iab!e +or in.ury or e-en his %ermission: that the /ho /as dri-ing said ar be+ore it /as %ra ti e in the grou% insuran e business that o+ :A@, ;o0 heE>%!ain, an on!y be indemni+ied his !oss0 SUGGESTED ANSWER: tenab!e# 7nsurer2 3r6 8ia.ilit% ()**4) drain%i%e o+ the shi%, 2his is %o!i %eri! o+ +or the insuran e om%any# E>%!ain, against 9 "art% $nsuran e Wi!! the suit %ros%er# agreed u%on in the y shou!d e>%!ained that there is no Ka identK in the due to the insureds gross neg!igen e,shi%0 2he be dri-ing is %ermitted in a ordan e /ith arna%%ed re%orted immediate!y the the em%!oyer-%o!i y *o, ho!der is the agent o+ ;o0 it /as not %ro%er +or the shi% o/ner to not %ro+it therebyH hen e he must return Whi!e dri-ing his ar a!ong ED:A0 *esar and not %eri! o+ the sea, 2he de+e t in the 7nsurer2 8ia.ilit% o& t#e ()**0) E>%!ain &1() +irst go-ernment by R@ 2ra-e! and onte>t o+ an a 7nsurers ident %o!i y0 i+ it is the +a ans/ered t thatto the insured remo-ed the maga6ine !iinsurer, ensing or other !a/s or regu!ations to dri-e in ident -arious agen ies in the the send a noti e o+ abandonment to the P200th o+ the PG00th he /as ab!e to o!!e t, sides/i%ed Roberto0 ausing in.uries to the drain%i%e /as the resu!t o+ the ordinary use a) :u%%ose that <ortune o/ns house su the eeding amount shou!d be insured %aid by natura! resu!t o+!e the insuredCs -o!untary a t0 +rom hand means that the the motor -ehi and is notadis5ua!i+ied +rom om%!ian e /ithgun the insuran e re5uirements, insuran e e++e om%any be abandonment During the ti-ity o+ause the %o!i y0 the ar0 !atter0 Roberto sued *esar and the third %arty o+ the shi%, 2oe>%ose re o-er under aneed!ess marine Be ause the ar ou!d not be re o-ered0 7? -a!ued at P=00th and insured the same $nsuran e u% to the amount o+ the una om%anied by anything un+oreseen didDragon not /i!!+u!!y himse!+ to dri-ing su h motor -ehi !e by order o+ a 8oss: Actual Total 8oss ()**4) an on!y be by a-ai!ed o+ herse!+0 /hen0 in ainsuran marine then dri-en /ho had no !iabi!ity insurer +or damages andLor e a insuran emost0 %o!i y0 the %ro>imate o+ the +i!ed aAt!aim the !oss o+ the arause /ith the against +ire /ith 1:hery! insuran e om%anies as insuran e +or o-erage, 2he e> ess o+ the !aims e> e%t the in.ury, 2here is no a ident /hen %eri!, insured is on!y gui!ty o+ ourt, R* *or%oration %ur hased ri e +rom insuran e ontra t0 the amount to be /as dri-ers !i ense0 met an a ident and %ro eeds, 2he insuran e om%any mo-ed to !oss or damage must be %eri! o+ the sea, insuran e om%any but it /as denied on the +o!!o/s: I E P'00th 9 E P200th P E P=00th o+ I0 e90 and andto abo-e h de!iberate a t is %er+ormed0 un!ess some neg!igen (Sun .ns v &0 o-er $"" s 554! 2hai!and0 /hi h P0 it intended se!! !o su a!!y, (utual 7nsurance Com$an%2 Nature 0 De&inition (2004) 7nsurer2 3r6 "art% 8ia.ilit%2 No/as /ault 7n6emnit% ()**3) e>%ended to re o-er ontending the -esse! /ou!d ha-e 7nsure62 Acci6ent s! Suici6e ()**1) e>tensi-e!y damaged, 2he estimated ost o+ dismiss the om%!aint0 that the ground that his /i+e /ho dri-ing the ar be insuran e o-erage0 i+ any0 shou!d additiona! and un+oreseen ha%%ening o urs Due is tois stormy /eather0 the shi% arrying the What a mutua! insuran e om%any or been more than three-+ourths o+ its -a!ue, What your understanding o+ a no +au!t :un-@oon $nsuran e issued a Persona! re%air /as P'0th, :hery! immediate!y !iabi!ity o+ *esar has the not in.ury, yet been determined /hen it /as or arna%%ed /as in the %ossession ans/ered %aid by R@ 2ra-e!, that brings about 2his e!ement o+ SU++ESTE6 ANSWER( ri e be ame submerged in sea and asso iation# Nesse! @; Pear!y :he!!s needed P2,F indemnity" !ause in an insuran A ident Po!i y to 7enry Dy /ith a +a/ater0 e -a!ue noti+ied I9P0 but !atter re+used to %ay on /ith +ina!ity, a) $s the ontention o+ on!y the o+ an e>%ired dri-ers !i +ound ense0 a -io!ation o+ a e de!iberateness is the not !ear!y sho/n +rom the A mutua! !i+e insuran e or%oration is SUGGESTED ANSWER: /ith it the ri%ro-ision e argo, When the argo arri-ed @i!!ion0 /hi h does not meet the re5uired %o!i y# o+ P400th, A in the %o!i y states the %o!i y a!!eging that :hery! -io!ated the $n the absen e o+ any sti%u!ation in the insurer orre t# ase0 E>%!ain, b) @ay onsidering the insurer the the authori6ed dri-er" !ause o+ the +a ts o+ the es%e ia!!y SUGGESTED ANSWER: oo%erati-e 8nder the that ;A %romotes <A8?2 $;DE@;$29" the /e!+are o+ !ause0 its SUGGESTED ANSWER: in @ani!a0 R* +i!ed a !oss !aim +or tota! !oss /ith three-+ourths o+ its -a!ue to that indemni+y the om%any 7? +or the sha!! not o+ the be insured !iab!e -ehi in !e#%o!i ies +rom thereo+ /hi /hen h*esar# insuran she dro-e e merit om%any it /ithout or a be terms he!d !iab!e /ith insuran e om%any, 3) @ay the insuran e +a t that BA9 is a minor0 and the in.ured 2he insurer /as nottion t in denying the ;o0 the ontention o+orre the insurer is not o/n members0 /ith the money o!!e ted any !aim +or death or in.ury o+ any the insurer0 be ause the ri e /as no !onger abandonment, &:e 31F0 $nsuran e *ode0 E>%!ain, 2) :u%%osing that the ar /as res%e t o+ bodi!y in.ury onse5uent u%on dri-ers !i ense, $s the insurer orre t# om%anies may <ortune re o-er in ase +ire om%any be he!d !iab!e toand %arties are a!so hi!dren, A toording!y0 it is 8oss: Total 8oss <nl% ()**2) !aim sin e the %ro-iso that the %erson orre t, 2here is no need /ait +or the +rom %assenger among themse!-es or third %arty so!e!y sha!! +or be their %aid SUGGESTED ANSWER: +it +or human onsum%tion, Admitted!y0 the 7nsure62 Acci6ent s! Suici6e ()**0) ited in ,riental 0ssurance v/ &ourt of 0ppeals brought by ANSWER: 7?%erson on theSUGGESTED insured attem%ting to ommit shou!d destroy his house om%!ete!y# %ossib!e *;$ may not %ros%er, A22Cs insuran e om%any issued a marine dri-ing isthat %ermitted in a ordan e insuran /ith de An ision o+ the ourt determining *esars o/n %rote tion and not +or %ro+it, @embers the nebe essity o+ %ro-ing +au!t or <ortune may re o-er +rom the insurers in the ri e ou!d sti!! used as anima! +eed, $s ?uis /as the ho!der o+ an a ident and ;anama Saiv *ill, 1/+/ 2o/ 9475$, 0ugust 9,e insta!!ment basis and there /ere insta!!ments sui/ithout ide or /i!!+u!!y e>%osing himse!+ to 9es0 R*s !aim +or tota! !oss is .usti+ied, 2he re%ort is not on !usi-e on PA: or the ourt, insuran e %o!i y o-ering a shi%ment by sea !i ensing0 et ," 5ua!i+ied on!y a %erson !iabi!ity /ith +ina!ity be+ore the third %arty are neg!igen both the e insurer o+ any and kind, insured, 2he indemnity A mutua! in su h order as he may se!e t u% to their R*s !aim +or tota! !oss .usti+ied# E>%!ain, "99"! and %ayab!e be+ore the !oss o+ the ar as /e!! as %o!i y e++e ti-e ;o30 3FGG to A t 130 3FGF, due need!ess %eri! e> e%t in an attem%t to sa-e+or ri e0 /hi h any /as im%orted +rom 2hai!and +rom @indoro to &:e Batangas o+ 30000 %ie es at o+ dri-ing the -ehi !e be other than the !iabi!ity insurer ou!d sued, 2he o insured urren e !i+e insuran e om%any has no a%ita! sto res%e t o+ one sha!! not e> eed on !iabi!ity F' $ns *ode) insta!!ments not yet%erson %ayab!e, Be ause o+ k the !oss Aturrent a bo>ing ontest he!d on Ban 30 3FGF and human !i+e," :i> months !ater 7enry Dy died sa!e !o a!!y0 is ob-ious!y intended +or o+ the @indoro garden stones against tota! !oss 3, %o!i e re%ort o+ the the time o+ the a ident (;alermo v ;yramid in.ury to Roberto immediate!y ga-e rise and P40000,000 re!ies so!e!y %ro-ided u%on they its are ontributions under oath0 or the the ar0 the -endor demanded +rom 7? the o+ s%onsored by his em%!oyer0 he s!i%%ed and.ns o+ a a bu!!et /ound inthe his head, $n-estigation A8TERNAT7>E ANSWER: onsum%tion by %ub!i , ient: 2he !osses0 om%!ete to 2, death erti+i ate and e-iden e on!y," 2he stones /ere !oaded in t/o !ighters0 identH and &o 1+ #%467 #" +a *ay 66!his the !iabi!ity o+ the insurer under its %o!i y, %remiums to meet une>%e ted +o!!o/ing %roo+s sha!! be su++i 0ol".y ba!anthat e o+ one the %romissory note, 7? resisted the Aalue9 un%aid /as insurer hit on the t by o%%onent so he +e!! sho/ed e-ening 7enry /as in a 2he is=00 orre t,es 2he !ause authori6ed %hysi a! destru tion o+ the ri e is not su++i ient to estab!ish the %ro%er %ayeeH or the +irst /ith %ie and the se ond /ith b) $+ ea h o+ the +ire insuran e %o!i ies $n other /ords0 /here an insuran e %o!i y ontingen ies and e>%enses (+epublic v/ demand and !aimed that he /as on!y !iab!e +or and his in head hit one o+ the %osts o+ the ha%%y mood a!though he /as not drunk, 7e dri-er" the %o!i y e-ident!y a%%!ies to both essentia! to onstitute an a tua! tota! !oss, 1, medi a! re%ort and e-iden e o+ '00 %ie es, Be ause o+ rough seas0 damage obtained by <ortune in the %rob!em &a) is a insures dire t!y against !iabi!ity0 the insurers Sunlife, 1/+/ 2o "56765, ,ctober "4, $775!/ insta!!ments due and %ayab!e be+ore the !oss o+ the bo>ing ring, and 7e /as rendered un ons ious /as %!aying /ith his handgun +rom /hi h he the any other %erson dri-ing the :u hbut a e>ists in this ase sin eres%e the ri te0 medi a!!oss or hos%ita! disbursement in /asinsured aused thethe se ond !ighter in -a!ued %o!i y rues and -a!ue o+the his resu!ting house !iabi!ity a dead immediate!y u%on /as the ar no !onger !iab!e +or other insta!!ments the and /as on arri-a! at hos%ita! due had %re-ious!y remo-ed its maga6ine, 7e -ehi !e at the time o+ the a ident, 2he term A8TERNAT7>E 7NSTANCE: ', *!aim may be made against one ha-ing been soaked in sea /ater and thereby o+ /hi h re+und is !aimed, the !oss 124 out o+ ies the '00 %ie es, 2he +i>ed in ea h o+ the %o!i P3m0 ho/ o urren e o+ o+ the in.ury or at e-ent u%on /hi h due at the time o+ the !oss/ho o+ the ar, not yet to intrarania! hemorrhage," %ointed the gun at his sister got s ared, authori6ed dri-er" shou!d be!aims onstrued as a $n ase o+ an o-er insuran e by se-era! motor -ehi !e on!y, rendered un+it +or human onsum%tion0 has o/ner o+ the shi%ment +i!ed against SUGGESTED ANSWER: mu h /ou!d <ortune re o-er +rom I i+ he has *an his +ather /ho is a bene+i iary under the !iabi!ity de%ends (Sherman Shafer v Audge De ide, Co$%ri'#t ()**1) 7e assured her it /as not !oaded, 7e then %erson /ho is authori6ed by !a/ to dri-er the 2he insurer annot be he!d so!idari!y !iab!e insurers0 the insured is entit!ed to a ratab!e 7nsurer2 3r6 "art% 8ia.ilit%2 Cuitclaim ()**3) be ome the %ur%ose +or +:& 3) 9es, 2he ar /as use!ess !ost to the+t, What the insuran e om%any on the ground o+ "4 7enrys /i+etota!!y Be-er!y0 as due the +or designated a!ready obtained %ayment on the said insuran e +u!! %o!i y su ess+u!!y !aim ,longapo &ity Branch 35 1+ l836646, 2ov 8oss: Constructi e Total 8oss (2001) What inte!!e tua! %ro%erty rights are %ointed the gun at his tem%!e and %u!!ed the -ehi !e (;e>a v 0li'pala "%7s#"! /ith *esar, 2he !iabi!ity o+ the insurer is return o+ the %remium0 %ro%ortioned to the Rau!s tru k bum%ed the ar o/ned by ?u6, SUGGESTED ANSWER: /hi iary0 h /as im%orted (;an *alayan .nsand &o v &0 a%%!ies init this ase is the+t" !ause0 onstru ti-e tota! !oss inasmu as more bene+i sought to the o!!e t under the insuran eAut#oriDe6 %o!i ies issued by 9 and P# 66 "%3s#6%! indemnity +rom the e h om%any# 7nsurer2 Dri erinsuran Clause (2003) SUGGESTED ANSWER: %rote ted by o%yright# @LN Pear!y :he!!s0 a aggregate %assenger and argo trigger, 2he gun +ired and 7enry s!um%ed on based on ontra t o-er /hi!e that o+ *esar is amount by /hi hdri-er" the sum insured <ortune may sti!! -a!ue re on!y the ba!an e o+ 2he ar /as insured by *a!a $nsuran e, <or gr 95737 Sep 5, "99"! SUGGESTED ANSWER: not the authori6ed !ause, $t is than V o+ the o+ the stones had been %o!i y, :un-@oon $nsuran e re.e ted her E>%!ain, SUGGESTED ANSWER: 2he insuran e om%any isom%any not !iab!e under its Ri kon de+rom !a *ru6 insured his %assenger -esse!0 /as insured +or P'000000000,00 the +!oor, based tort, $+ the insurer /ere so!idari!y in a!! the %o!i ies e> eeds the insurab!e -a!ue P2000000 I insuran e sin e the damage aused0 *a!a %aid ?u6 P40000,00 9es0 in the +ather /ho is a bene+i iary under immateria! that 7?s that /i+e that /asdeath dri-ing ar !ost one o+ Asiati the !ighters, $s the insuran e y !aim on the ground the o+ the 7enry :e 4 o+ PD 'F %ro-ides *o%yright sha!! %o!i y o-ering against tota! !oss on!y" the .ee%ney /ith $nsurers0 $n , 2he %o!i against onstru ti-e !oss," Due to a a !iab!e /ith *esar0 it re ou!d made to %ay o+ the at risk, the insured may on!y o-er u% to Why# the in ami ab!e sett!ement, ?u6 e>e uted the a identa! insuran e be an su ess+u!!y /ith an e>%ired dri-ers !i tota! ense at the time it om%any !iab!e under its y# /as not athing identa!, Be-er!y sued the onsist in the e> !usi-e right: shi%ment o+ 30000 %iestated es%o!i o+ @indoro garden %ro-ided that the authori6ed dri-er o+ the A8TERNAT7>E: ty%hoon0 it sank near Pa!a/an, ?u ki!y0 there 7nsure62 Acci6ent "olic% (2003) more than the amount in the %o!i y, SUGGESTED ANSWER: e>tent o+ his !oss, re!ease o+ !aim0 subrogating *a!a to a!! her !aim indemnity +or the death o+ the insured, /as arna%%ed (;erla &ompania de Seguros v insurer, De ide/and Dis uss +u!!y, stones, 2here is no onstru ti-e tota! !oss that -ehi !e shou!d ha-e a -a!id and e>isting #everly can recover the procee2s of the policy from the insurer. The 2eath of /ere no asua!ties0 on!y in.ured %assengers, *;$ insure :A@ under a homeo/nerCs %o!i y 2his /ou!d0 ho/e-er0 be ontrary to the 2) 2he rights %romissory against Rau!, note is When not a++e *a!a ted demanded by *!ear!y0 the %ro>imate ause o+ death /as &0 $76 8as s 463! the insure2 not 2ue to suici2e an !aimed sin e the V ru!e is to be dri-ers !i ense, 2he %assenger .ee%ney o+ 2he shi% o/ner sent a noti e o+ against !aims +or a identa! in.uries by %rin i%!es under!ying insuran e ontra ts, An /hate-er reimbursement be+a!!s the +rom sub.e Rau!0 t matter the !atter o+ the re+used the bo>ing ontest, Death sustained in a om%uted on the tota! 30000 %ie time es o+dri-en Ri k de hand0 !a *ru6 /hi h /as at the his interest o-er the -esse! neighbors, :A@Cs minor the other i+ is the /ere a abandonment saying essory that ontra he o+ had t, 2he a!ready %aid bo>ing ontest aninsurer a ident / (5eso!idari!y la &ru> v @indoro by Bay *ru60 to the insuran e om%any /hi h then !iab!e /ith *esar and&o it "3s559! is made to %ay on!y &apital .ns D Surety u% to the amount

Mercantile Law Bar Examination Q & A (1990-2006) Page Page $3 $5 $$ $1 of 103 of 103 Page un%aid son0 hired ?u6 $0 P'0400 of ba!an BA90 %ro+essiona!s 103 in.ured e +or on the the 1damage to hi!dren a+!oatto o+ Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006) or 8illful e5posure tonote nee2less peril 8hich are e5cepte2 ris$s. The insure2Gs %romissory PA:0 the -esse! ar a neighbor0 as e-iden +orto shou!d PF000000,00, /ho ed be by sued %aid a re!ease :A@ When and +or not o+ re-+!oated0 damages, on!y !aim +igured garden stated 7a-ing in stones in an a!ready the a insuran o-ered ident obtained resu!ting by e %o!i the +u!! in y0 sing!e %ayment the the death %rin %o!i on i%!es y the a, Page 00 of 103 %rint0 re%rint0 %ub!ish0 o%y0 act 8as purely an act of negligence 8hich is %ayab!e covere2 &y thebe+ore policy an2 for 7nsure62 Acci6ent s! Suici6e ()**3) the :A@Cs the e>e insta!!ments -esse! uted !a/yer by needed ?u6 /as due dis and A220 re%airs harging /ho estimated /as Rau!, %aid at +or the his o+ o-erage a under!ying insuran %assenger, (see e %o!i ,riental so!idary At ies the issued 0ssurance time ob!igations o+ by the 9 &o and a v &0 ident0 /ou!d P0$77 <ortune s be distribute0 mu!ti%!y0 se!! and make %hotogra%hs0 8hich the insure2 got the insurance for his protection. 3n factB he remove2 the : $nsuran e(*alayan *o issued a %ersona! a insuran ident !oss ser-i P200000000,00, o+from the es by ar, the 2he insurer insuran +or re%orting e 459! Bay -io!ated may *ru6 no /as / !onger !i ensed re .ns to o-er &o dri-e v +rom &0 but 1+ it I /as =8#%4"# Sep e %hoto engra-ings0 and %i toria! i!!ustrations magaDine the gun an2 8hen he pointe2 the gun to his om%any temple he 2i2 soo+ the (arine Warranties (2000) :ohe *a!a demanded +rom ?u60 or %o!i y7nsurance2 to Bob 2an /ith a/ho +a e o+ v %eriodi re+used a!!y to %ay !aim ase to o+ *;$, the shi% $n one o/ner0 re%ort0 $%, 66 -iguracion vda de-a!ue *aglana on+is %o!i ated y, "%5s5#%< by7m$lie6 an ?2A agent issued him &ecause thought that iton 8as the safe forreimbursement him to 2o so. Ee 2i2 so to assure his /orksH b, to make any trans!ation or other -ersion What /arranties are im%!ied in marine sister that the gun 8as harmless. There is none in the policy that 8oul2 7nsurer2 Grou$ 7nsurance2 Em$lo%er?"olic% Eol6er (2000) /ho re+used to %ay0 saying that the tota! P400th, $n the e-ening o+ :e% 40 3FF20 a+ter &onsolacion 1+ %757% 0ug %, 9$ $"$s$%6! A22ts stating dis !osed there to *;$ /as that no a+ter onstru his ti-e tota! to %pen 0ol".y a 2ra++i Nio!ation Re%ort &2NR) .ust minutes e>tra orthat arrangements orinsure2 ada%tation thereo+H SUGGESTED ANSWER: the insurer ofto lia&ility for the 2eath of the since the 2eathe 8as 7nsurer2 3r6 8ia.ilit% (2000) insuran e# ) $+ the ea h"art% o+ the %o!i iesAsiati obtained bymood <ortune relieve I om%any %ro ured a grou% a in.uries ident damage the ar /as PF0400,00 :in *a!a his birthday %arty0 2an /as in a ha%%y in-estigations0 !oss," a) Was there he +ound onstru the ti-e tota! to the !oss" 1 be+ore a ident, *ou!d $nsurers0 dramati6e i+ it be a non-dramati /orkH to on-ert it an acci2ent. 2he +o!!o/ing /arranties are im%!ied in I /as riding a suburban uti!ity -ehi !e &:8N) SUGGESTED ANSWER:

Intelle!t.al ,ro%erty

Page Page 0# 03 00 01 of 103 of 103 in-ention An ?i6a de inso!-ent e%tion annot Page did Page debtor0 not 0/ ou!d be 0$ of +a!! he!d 103 be of a+ter /ithin 103 rather !iab!e +or their !a/+u! in+ringement remote, regu!ar dis harge :in duties, eo+ +o!!o/ing it o%yright annot What %re-ai!s an rea!!y sin ad.udi e be under issaid ation the that the o+ bank +ormu!a be 2he 1) b) said demanded Ni to EUm 2here $+ toria be Aaron simi!ar 2, 7ote! is 2he immediate no is $PA to need de hain su disa%%ro-ed !ared re%rodu o+ h %ayment, %rodu e>a an t inso!-ent du%!i es ts as 2N0 ation by the %etition, !a/ are $n the on+erred meantime0 by the the ase +a +i!ed t by o+ %ro-ision inso!-en $nte!!e %hysi ians y0 o+ tua! is the re!eased Pro%erty an $nte!!e be so +rom0 tua! *ode0 easi!y Pro%erty genera!!y0 one de ei-ed o+ the *ode by su h EinsteinCs stereo Be -ideota%es0 o+ the ause the and ourt0 the %atentees a%%!i radio bank /hat distributes ation sets threatened /ou!d e>isting on or the be ameras the the ground %atent to o%ies e++e %ro or su betama> that eed thereo+ t0 i+ h his any0 as to o+ registration Ni ente %ro and eeded not and by resu!ted use, in A!though a a!! A8TERNAT7>E ANSWER: that debts0 !imitations trademark ho!ds !aims0 that to as !iabi!ities the the A>i!on0" in-ention and it o+ may demands be!ongs is the be hard making to /hi the to h the o+ theory %rodu against its hote!s /hen su h ts o+ the de the o+ re!ati-ity !aration surety0 :ony, and im%ro-ement makes is Eduardo on not his them %atentab!e, made reditors# P,a-ai!ab!e Ang0 by another Ed6o E>%!ain, $s the to hote! is :hangri!a .udgment *or%orationCs a/ard ino%yright +a-or %arent Ni had ente, used @ay the 2here is in+ringement, $+ hote! the5"p3"#! o/ner o+ be a $t are SUGGESTED ANSWER: em%!oyee0 5uotations e>%e or ha-e t an i+been the o%%osition +rom in-enti-e %ro-ed a %ub!ished thereto against a ente ti-ity /ork to his is su estate, not +oreed, %ur%ose a the $PACs de guests mere!y ided a tion to +or minor %ay orre -ie/ing u% (-ran' t# a!! &4() its invthe ob!igations Benito, guest to , rooms, 2o tradename .udgment obtained and !ogo by Ni !ong be+ore0 be en+or ed A de !aration thenomina! ourt that the AN<TEER ANSWER: trademark /hi hby manu+a tures ertain ty%es SU++ESTE6 ANSWER( %art o+o+ 4 any ob!igations his .udi regu!ar %ro duties0 o+the the eedings inso!-ent e-en or i+ +or he debtor gi-ing uses the to o+ $ntegrity inde%endent!y harges Bank, a se%arate An %atentab!e0 Bune 200 20020 an +ee im%ro-ement Ed6o +or %etitioner the %aid use o+ o+ Di-e %rote inde%endent!y tion o+ia!the o+ !a/s inso!-en /i!! ybe +or : 9es0 the $PA is orre t be ause under the 2he a%%!i ation +or registration o+ the 2urbo SUGGESTED SUGGESTED ANSWER: ANSWER: is inso!-ent /i!! ha-e the +o!!o/ing e++e ts: o+ goods ou!d reasonab!y be e>%e ted to time0 sur-i-e, %ro+essoria! +a i!ities and ad-i materia!s e by !ega! %ra the titioner0 to $ntegrity thee>isting an -ideota%e Bank %atented %!ayer, the +u!!in-ention 3) %rin *an i%a! the must amount Ni toria be o+ a De-e!o%ment %ro eedings# *or%oration E>%!ain, beo+ ause it /as 3) 2he sha!! %ossession 2he 2he 4entity .udgment ob!igations obtained o+ the by inso!-ent Ni name ente debtor anthe betua! $nte!!e tua! Pro%erty *ode0 dis o-eries0 *or%oration may be ontested, 2he +a engage in the manu+a ture o+ another em%!oyer, %ro-ided that the sour e and o+ P40000000 7ote! ma.or be im%ro-ement %!us en.oined a sheri++ rued +or (0quas interests in+ringing v take de amounting =eon o%yrights =8#$"%7 +irst to register the inte!!e tua! o+ a!! assets o+ the debtor unti! the that en+or sur-i-e ed inde%endent!y are as +o!!o/s: o+ the inso!-en y s ienti+i theories and mathemati a! settings do not indi ate that there had been %rodu using the same trademark0 another "atents: 7n&rin'ement2 Reme6ies 0 De&enses ()**3) Bo? 9oes t!e "nternat"onal ofo+ author are identi+ied &:ee :e aff"l"at"on tion 3G',3WkX #7Aan6$! to P440000, and t he!d As !iab!e a resu!t0 +or damages# Ed6o had 2) hard!y Wou!d any it %ro%erties, 3 2a>es and assessments due the "atents2 Ri'#ts o er t#e 7n ention ()**0) a%%ointment o+ a re ei-er or assigneeH %ro eedings, 8nder :e 12 o+ the $nso!-en y methods0 are !assi+ied to be as Knon%rior use +or at !east 2 months o+ the %arty /ho uses the trademark +or that <erdie is a %atent o/ner o+ a ertain Corporat"on affe.t t!e the $nte!!e tua! Pro%erty *ode o+ the ash make !e+t any +or o%erations di++eren e and i+ Ni de toria ided 7ote! to does !ose not '!angr"la 2) Payment toEinteinCs the debtor o+ any out.o-e SUGGESTED ANSWER: go-ernment0 nationa! or !o a!H *he he in-ented a de-i e that an on-ert ?a/0 the assignment to the assignee o+ a!! %atentab!e in-entions,K theory o+ trademark A>i!on," Co$%ri'#t2 "#otoco$%2 ;#en allo;e6 ()**:) %rodu t an be he!d !iab!e +or using that in-ention, 7e dis o-ered that his in-ention is of t!e 9"spute7 :;pla"n. )58+ Phi!i%%ines), its business, harge any A+ter +ee %aying +or the use the un%aid o+ the -ideota%e# sa!aries Tra6emar()**3) 3) 9es, Ni8sing toria 7ote! has no right to use SUGGESTED debts due to him and the de!i-ery to a the 2 Ab!igations arising +rom rain/ater into automobi!e :he asked the in+ringed rea! and %ersona! %ro%erty0 and re!ati-ity +a!!s /ithin the ategory o+ being @ay aANSWER: %erson ha-e %hoto o+ some trademark, this standard0 in+ringement being by Bohann, 3) o%ies Whatestate are the o+ its em%!oyees0 Ed6o +i!ed a +ue!, %etition +or 2he internationa! a++i!iation o+ :hangri!a ?aberge0 $n or ,0 manu+a tures and markets su h -ideo ta%es in its hote! business debtor o+y any %ro%erty be!onging to him0 embe66!ement +raudH @a on0 a !a/yer0 to assist in getting her e++e ts o+ the debtor made by the !erk o+ the $n the inso!-en %ro eedings in ourt0 the non-%atentab!e Ks ienti+i theory,K %ages o+ the book o+ Pro+essor Rosario made e>ists be ause :ony an be reasonab!y remedies a-ai!ab!e to <erdie against Bohann# inso!-en y on Bu!y 30 2002, "atents: Tra6emar-2 Gas?Sa Test o& in' Dominanc% De ice: ()**4) to &ilesuggested rule (2001) *or%oration may be riti %erson a! Bohann in the e-ent that a+ter-sha-e !otion0 sha-ing ream0 /ithout the onsent o+ the reatorL o+ and the trans+er o+ any %ro%erty by 1 Ab!igation o+ any !iab!e /ith in-ention %atented, @a on assignee in inso!-en y &irst sought to in-a!idate ourt sha!! -a ate and set aside any /ithout -io!ating the o%yright !a/# &1() e>%e ted to use su h trademark on o/ner e!ethat tri him 2) $+ you /ere the !a/yer o+ in deodorant0 the 1) A!! i-i! %ro eedings %ending its *e6ar ; *or%oration /orks in aor%oration manu+a ar manu+a tures turing rubber shoes SUGGESTED ANSWER: a++i!iates or %arent om%any abroad had ta! um %o/der and toi!et soa%0 using the the o%yright, are +orbiddenH the inso!-ent debtor +or the same debt0 either they +orm a /ith other om%any +riends .udgment entered in are any a tion ommen ed the %ayment made by Ed6o to $ntegrity Bank +ans, in+ringement suit0 /hat the de+enses that 2) ;o, 2he use o+ the -ideota%es is +or 9es, 2he %ri-ate re%rodu tion o+ a %ub!ished against the inso!-ent sha!! be stayedH and o/ned under the by Boab, trademark *e6ar Bordann" is 5uite inno-ati-e /hi h hit and the registered in a +oreign .urisdi tion the trademark PR82"0 /hi h is registered /ith as a so!idary odebtor0 surety0 guarantor0 ha-e the or%oration a%%!y +or the +or and being a +raudu!ent trans+er be ause it /as /ith 10 days immediate!y %rior to the your !ient an assert# ') @ortgages not SUGGESTED ANSWER: business and not mere!y +or home /ork in aand sing!e o%y0 /here the !o-es Phi! market to G0( tinker in 3FG40 /ith and things, registered With the its tradename the !ogo, A /e!!-kno/n marknot the Phi! Patent A++i e, ?aberge does %artner0 indorser or o+ other/ise, %atent0 o+ the shares o+%!edges sto k thereo+ to ommen ement inso!-en y %ro eedings, made /ithin 10 days be+ore the +i!ing o+ are the 3) 2he +o!!o/ing remedies are a-ai!ab!e to <erdie a++e ted by the order de !aring a %erson onsum%tion, (-ilipino Society of &omposers, re%rodu tionho/e-er0 is made by a natura! %erson materia!s trademark and /ith %arts o+ the Bureau he o+ /as Patents0 ab!e to and is sub.e t to %rote under manu+a ture brie+s and under/ear and these ' A!imony or !aim +or su%%ortH and be subs ribed by *he hear0 and 4( by @a on, inso!-en y %etition, $n de+ense0 $ntegrity Bank $ntradename this ase0 the a tiontion +i!ed by against ,de-i 4F0 $nso!-en y ?a/) 0uthors ;ublishers v :an "46 s pd "966! e> !usi-e!y +or %ro-ab!e resear h and %ri-ate study0 in-ent 2rademarks aor%oration gas-sa-ing and 2e hno!ogy e that /i!! in enab!e 3FF0, 2reaty o+ Paris +ori+ied the tion o+ is items are not s%e in Prote the erti+i ate o+ 4 Debts not against the estate 2heinso!-ent, /as +ormed and the %atent Ni ente against *ar!ito /as ommen ed by asserted that the&:e %ayment to&BP222) it4%"< /as +or a Co$%ri'#t2 7n&rin'ement ()**+) BD /ho manu+a tures brie+s and under/ear0 %ermitted0 /ithout the authori6ation o+not the PJ ars *om%any to ation onsume a!so manu+a !ess gas, tures <ran rubber is0 a shoes oBohann, a, sei6e and destroy b, in.un tion , damages $nte!!e tua! Pro%erty to /hi h the Phi!i%%ines registration, &su h ente as a+ter-in urred ob!igations) o+0 or a%%!i /as +i!ed, *he he died !egitimate debt that /as 7o/e-er0 not o-ered by the Ni not !ater than Bune 3=0 3FF4 &the $n a tion +or damages on a has ount o+ an ) an Assuming that0 Aaron guarantors /ants tothis kno/ /hether0 under our !a/s0 +rom he the <ran o0 the estranged husband o+ *he Co$%ri'#t2 Commissione6 Artist ()**1) o/ner o+ the o%yright in the /ork, /orker0 /ith the sa/ trademark ho/ *e6ar Ba-orski" reated the /hi de-i hhe0 e it is a in member, suon h amount may been obtained in !uded in the s hedu!e submitted by0 the 1 months !ater o+ a /as heart atta k, +a ts %oint are ha-e not !ear) /hen %rohibition be ause it a -a!uab!e in+ringement o+ au% o%yright0 the de+endant 7n&rin'ement s! Un&air Com$etition ()**4) +or his /ith debts0 are the guarantors re!eased an use and register the trademark PR82E" ontested the a%%!i ation o+ the or%oration :o!id $n-estment 7ouse ommissioned @on and registered !ike/ise0 ame BP222 in /ith 3F7G, a simi!ar gadget0 use the in-ention %ro%er!y transa ted /hi h an inso!-ent debtor, %e uniary onsideration made in good +aith0" Ni o+ ente obtained a i+ /rit o+ %re!iminary &the a!!eged %irate) raised the de+ense $n 3FF20 PJ *o ado%ted and o%ied the What is the distin tion bet/een in+ringement +rom their ob!igations on e Aaron +or his mer What is your ad-i e# and +i!ed his o/n %atent a%%!i ation as that B!an o and his handise, son :te-e0 both noted artists0 a!so using s/ithin ra% materia!s and s%are %arts o+ is be more than /hat the in+ringer &Bohann )10 re ei-ed, atta hment against *ar!ito or more than thus +a!!ing the e> e%tion s%e i+ied in SUGGESTED ANSWER: SUGGESTED ANSWER: 7nsol enc%2 E&&ect2 Declaration o& Attorneys 7nsol enc% ()**)) he /as that /hat he had o%ied design o+ una/are ; *or%orations Bordann" rubber and un+air om%etition# dis om%any, harged +rom his debts# E>%!ain, so!e sur-i-ing heir o+ *he he, De ide the to %aint a mura! +or the @ain ?obby o+ the the 2herea+ter0 <ran is +i!ed an d, +ees and ost the $nso!-en y ?a/, As .udge in the %ending days be+ore the %etition +or in-o!untary SUGGESTED ANSWER: ;o0 %re ise!y under the %rin i%!e 9es, 2he trademark in the name o+ SUGGESTED ANSWER: SUGGESTED ANSWER: What are the e++e +or tsregistered o+ aontra .udgment in /as a o%yright materia!, Wou!d this de+ense shoes0 both as to sha%eo+ and o!or0 but o+ issue /ith reasons, ne/ bui!ding o+ :o!id a t %ri e o+ a%%!i ation +or registration his de-i e /ith inso!-en y /aso-ers +i!ed against *ar!ito by his inso!-en y ase0 ho/ /ou!d you de ide the ;o, An intention to %irate is not an e!ement e> ussion0 the !iabi!ity o+ the guarantors 2he distin tion bet/een in+ringement ?aberge $n on!y a+ter-sha-e !otion0 2he estranged husband o+ *he ke annot SUGGESTED ANSWER: inso!-en y in No!untary $nso!-en y b) ases# beBureau -a!id# retained the trademark Ba-orski" on its 7nsol enc% s! Sus$ension o&mura!# "a%ment ()**:) P2m, a) /ho o/ns the E>%!ain the o+ Patents, Eighteen months res%e ti-e ontentions o+ the assignee in other reditors, &i,e, on Bu!y 2F0 3FF4) o+ in+ringement, 7en e0 an honest intention SUGGESTED ANSWER: arises on!y a+ter the e>haustion o+ the assets &%resumab!y trademark) and sha-ing ream0 deodorant0 un+air ta! um %o/der su ontention ess+u!!y ontest thede-i a%%!i ation, 2hey 2he o+ the assignee in inso!-en 3) $s the gas-sa-ing e %atentab!e# %rodu ts, Distinguish inso!-en y +rom sus%ension o+ Who o/ns the o%yright o+ the mura!# !ater0 *e6ar +i!ed his a%%!i ation +or the (+adiola8:oshiba ;hil v .0& 1+ 35$$$ Auly"6,9" inso!-en y and o+ $ntegrity Bank# E>%!ain is no de+ense to an a tion +or in+ringement, 2he ad.udi ation or+o!!o/s: de !aration o+ inso!-en y SUGGESTED ANSWER: o+ the %rin i%a! ob!igor, 2he e++e t o+ om%etition are as 3) $n+ringement o+ and toi!et soa%, $t does not o-er brie+sinand right o-er in-entions a rue +rom the @ay PJ *om%any be he!d !iab!e to *o# SUGGESTED 2) These ANSWER: are the defenses that can be asserted is orre t, 2he %ayment made by Ed6o to; o+ E>%!ain, %ayments, &1() E>%!ain, registration o+ his de-i e /ith the Bureau A8TERNAT7>E ANSWER: "99s#3#! &4() 9es0 the gas-sa-ing de-i e is %atentab!e SUGGESTED ANSWER: o+ a trademark0 /hereas un+air om%etition is by the ourt0 a+ter hearing or de+au!t0 sha!! dis harge mere!y on+irms e>haustion o+ the trademark is the unauthori6ed use under/ear, moment o+ reation and as a right it an a) :o!id o/ns the mura!, :o!id /as the one an infringement suit: E>%!ain, Bank /as a +raudu!ent %re+eren e or $ntegrity SUGGESTED ANSWER: Patents, 9es, 2he o/ner o+ a the o%yright must make A8TERNAT7>E ANSWER: PJ *o may be !iab!e +or un+air!y om%eting 2he !imit o+ the trademark is stated in the %assing o++ o+ ones goods as those o+ be ause it %ro-ides te hni a! so!ution a the ha-e the +o!!o/ing e++e ts: a) <orbid the assets o+ the ob!igor a-ai!ab!e to his !atent is invalid "#ec $% &' (%, as /ho ommissioned the artists to do the /ork !a/+u!!y be assigned, An e the tit!e thereto is %ayment0 being made /ithin thirty &10) days a) $n inso!-en y0 the !iabi!ities o+ the others a/are that the materia! in 5uestion is 9es, Arti 207= o+ the *i-i! *ode %ro-ides: against ; *o, By o%ying the design0 sha%e erti+i ate issued to $n $t does anotherH %rob!em in a!e +ie!d o+ human a ti-ity, $t is ne/ %ayment to the debtor o+ sum any debt due to reditors, amended) -ested in the trans+eree0 the !atter has the and %aid +or the /ork in?aberge the o+ , P2m be+ore the +i!ing o+ the inso!-en y %etition, debtor are more than his assets0 /hi!e innot under or o-ered by a o%yright, 2his is done 2he ob!igation o+ the guarantor is him and the de!i-ery to him o+ any %ro%erty 2) <raudu!ent intent is unne essary in and o!or ; *or%orations Bordann" rubber in !ude brie+s and under/ear /hi h in-o!-es an in-enti-e ste%0 and ertain!y 2 !atent is not ne) or patentable right too+ a%%!y +or its registration, 2he sus%ension o+ %ayments0 assets o+ theare by the gi-ing o+ su h noti atrubber aas %rominent e>tinguished at the same time that the o+ the be!onging tois himH b) <orbid the trans+er o+is /hereas +raudu!ent intent in+ringement o+ shoes and using the same in e its di++erent %rodu ts %rote ted by ?arberges 7nsol enc%2 Juris6iction2 Sole "ro$rietors#i$ industria!!y a%%!i ab!e, $t there+ore +u!+i!!s b)8n!ess there a sti%u!ation to the ontrary * trademark0 #pecification of the invention does not estranged husband o+ *he he0 i+()**0) not shoes debtor are more than his !iabi!ities, %ortion o+ the o%yright materia!, When the debtor0 and +or the same auses as a!! other 2ote 0n examinee who answers on the un+air om%etitionH any %ro%erty by himH and ) :tay o+ a!! i-i! essentia! in trademarked Ba-orski0" PJ is ob-ious!y trying trademark, Ane re5uisites day Berry mandated 7a/0 doing by business the /ou!d inte!!e under tua! in the ontra the sha!! be!ong in comply )ith t0 #ec $ o%yright b) $n inso!-en y0 the assets o+ the debtor dis5ua!i+ied to inherit0 mere!y su the eed a!!eged %irate is thus made a/are thereo+0 ob!igations, basis of the issue of validity of the BD an register the trademark PR82E" %ro eedings against the inso!-ent but to %ass o++ its shoes +or those o+ ;, $t is o+ no Pro%erty *ode +or /hat is %atentab!e, name :tar!ight Enter%rise0 a so!e .oint o/nershi% to :o!id and @on and :te-e, $ !atent )as issued not to the true and to are to be on-erted into ash +or distribution to the interest o+ *he he, d) aAssuming What remedies are a-ai!ab!e to the transfer of patent as a materia! valid consideration t that o+ %irating the ito%y /i!! 2) his that is %atentab!e0 /ho is +ore !osure may be a!!o/ed &:e sutility 3G .nc M 2' #! 2he %rior registration o+ of the trademark o-er its brie+s and under/ear (-aberge v moment he trademark Ba-orski" /as %ro%rietorshi%0 +inds himse!+ short on ash actual inventor, designer or author the among his reditors0 /hi!e in sus%ension o+ Co$%ri'#t2 7n&rin'ement ()**:) guarantors in ase they are made to %ay the for subscription of the shares of stoc's onstitute in+ringement, %atent# What0 i+ any0 is the remedy o+ the !osingCo$%ri'#t2 entit!ed to the $nso!-en y ?a/) is .0& a $"5 %rere5uisite s #"%! to an a tion +or in+ringement Commissione6 Artist (2003) registered ahead o+ the trademark Bordann," and unab!e to %ay his debts as they +a!! due model or the plaintiff did not derive his rights %ayments0 the debtor is on!y asking +or time SUGGESTED ANSWER: Buan Ia-ier /rote anddue %ub!ished Tra6emar()**0) should be given credit/ a story reditors# E>%!ain, Tra6emar-B Testand o&/hereas Dominanc% ()**4) %arty# o+ trademark0 registration o+ the and *2 are artists /hose %aintings Priority in registration is %ro%erty not materia! inset anu% BR a!though he has su++i ient tomay o-er from the h true actual inventor, designer or /ithin /hi to noted on-ert his +ro6en assets into 8nder Arti !e 20G30 the guarantor simi!ar to an un%ub!ished o%yrighted story $n 3FGG0 the <ood and Drug Administration SUGGESTED ANSWER: 7nsol enc%2 /rau6ulent "a%ment (2002) What is the test o+ dominan y#" trademark is not ne essary in un+air are high!y %ri6ed by o!!e tors, Dr, D? a tion +or un+air om%etition as distinguished su h debts, 7e asks you0 as his retained author of the utility model "#ec 2+ &' (% as ash ANSWER: /ith /hi h to %ay his ob!igations against the reditor a!! the de+enses that !i5uid o+ @ano!ing :antiago, $t /as0 ho/e-er0 *e6ar is entit!ed to the submitted %atent be ause he /as a%%ro-ed the !abe!s by 2urbo SUGGESTED As o+ Bune 30them 20020 Ed6o :ystems "atents2 7n&rin'ement ()**2) om%etition, (5el *onte &orp v mura! &0 36#$5 Aan ommissioned to %aint a at the +rom an a tion +or in+ringement o+ trademark, ounse!0 +or ad-i e on the +o!!o/ing 5ueries: amended) /hen the !atter +a!! due, %ertain to the %rin i%a! debtor, 2he dis harge 2he o+ dominan yindebted re5uires that i+ the on !usi-e!y %ro-en that Buan Ia-ier /as not the rea! in-entor, <ran is0 o%ying +rom the *or%oration +or its ne/ drug brand name0 *or%oration &Ed6o) /as to the the $5,97 "6"s4"7! $n an a test tion +or in+ringement %atent0 7nsol enc%: >oluntar% 7nsol enc% (2001) o++or main !obby o+ his ne/ hos%ita! hi!dren, 2he basis he o+by anAaron tion +or /ith un+air om%etition a) :hou!d +i!e a story %etition the :E* to be obtained on %rin i%a! ob!igation om%eting trademark ontains the main or a/are the o+the @ano!ing :antiago /ork o+ that *e6ar0 annot !aim the essentia! 7n&rin'ement s! Un&air Com$etition (2003) A>i!on," 2urbo is a%%!ying /ith the (&onverse +ubber &o v no/ Aacinto +ubber D ;lastics +o!!o/ing reditors: A himse!+ e E5ui%ment a!!eged de+ended by stating agreed to o!!aborate on the %ro.e t +or Aaron0 ain+ringer /e!!-kno/n ara) hite t0 is su++ering is !ared on+using and mis!eading simi!arity de in a state o+ sus%ension o+ an no/ be used as/ho a @ano!ing de+ense by in the Both essentia! +eatures o+ another and on+usion /as %rote ted by o%yright, riteria o+ o+ an in-entor0 must $n /hat /ay is an in+ringement o+ a Bureau Patents0 2rademarks and %ossess &o 1+ $34$5 and #7575, 0pr$6,67 93s"56! om%uters and a essories so!d to Ed6o :u%%!ies E +or -arious %ersona! 3) that the o+ %atent issued by the+our Patent A++i e a tota! +ee t/o mi!!ion %esos to bereditors e5ua!!y +rom +inan ia! re-erses, 7e has genera! a%%earan e0 said not +inan simi!arity o+ %ayments insued -ie/ o+ the ia! guarantors against reditors, and de redit e%tion is !ike!y to resu!t0 in+ringement :antiago Buan +or in+ringement o+ essentia! e!ements o+ Ia-ier no-e!ty0 origina!ity and 2e hno!ogy 2rans+er +or the the registration o+2he trademark simi!ar toin-ention that /hi h %ertains to on amounting to P1000000, /as not rea!!y an /hi h /as di-ided bet/een them, $t /as a!so agreed /ith a tota! !aim o+ P2= @i!!ion, Des%ite his trademarks ondition he +a es# E>%!ain your ans/er, b) SUGGESTED SUGGESTED ANSWER: Tra6ename: 7nternational (2001) guarantors are a!so entit!ed to indemnity takes %!a e, Du%!i ation or imitation is not o%yright, $s Buan Ia-ier !iab!e# %re eden eANSWER: to beA&&iliation to &2() %rote tion, un+air om%etition# said brand name, $tentit!ed /as subse5uent!y b) 7andyman Darage E +or me hani a! %atentab!eH 2) these that he had no his intent to that Dr, D? had to %ro-ide a!! the materia!s intention to %ay ob!igations0 9es, he Buan Ia-ier is !iab!e +or in+ringement :hou!d 7nsol enc%2 se!! Assets %ro+it s! %arti 8ia.ilities i%ation ()**:) erti+i ateso+ : De-e!o%ment *or%oration sued :hangri!a under Arti !e 20== the *i-i! *ode, SUGGESTED ANSWER: ne essaryH not is it ne essary that the ;e-erthe!ess0 under the K+irst to +i!e ru!e0K on+irmed that A o+ i!onne" is a generi term re%airs &%arts and ser-i e) %er+ormed on in+ringe so that there /as no a tionab!e ase +or the assets %ainting and %ay +or the /ages o+ urrent are insu++i ient to o-er a!! o+ o%yright, $t isusing not ne essary that Buan to his 30io brothers and sisters in order to raise o%ened a o++ee sho% using money 7n&rin'ement2 Juris6iction (2003) *or%oration +or the :" !ogo and the a) $7ora /ou!d ounse! Berry to +i!e the Petition +or in+ringing !abe! shou!d suggest an e++ort to <ran is ation /ou!d ha-e to be gi-en +or a a%%!i !ass o+ anti-+unga! drugs and is used as Ed6os om%any ar 1) amounting to P300000, +or in+ringementH and that there /as no te hni ians and !aborers needed +or the /ork them, 7is reditors are about to sue him, Ia-ier is a/are that the story o+ @ano!ing ash +or his business# E>%!ain, borro/ed +rom +inan ia! institutions, A+ter 1 J-F *or%oration0 a +oreign or%oration tradename :hangri!a", 2he !aims ) Bose!yn Reyes E +ormer em%!oyee o+ :us%ension o+ Payment /ith the+ormer ordinary imitate, :imi!arity in si6e0 +orm and o!or0 %riority, *e6ar0 ho/e-er0 has /ithin three su h by the medi a! %ro+ession and the Assume that the %ro.e t is om%!eted and e>a t du%!i ation o+ the %atentees e>isting on the %ro.e t, he *onse5uent!y0 /as onstrained to o/ner +i!e a o+ :antiago /as %rote ted by o%yright, 2he months0 7ora io !e+t +or the 8: /ith the a!!eging itse!+ to be registered that it /as the +irst to register the !ogo and the Ed6o /ho sued Ed6o +or un!a/+u! termination ourts0 rather than the :E*, :E*s .urisdi tion /hi!e re!e-ant0 isthe not on !usi-e, (0sia months +rom the de ision0 to ha-e it it an e!!ed %harma euti a! industry0 and that is used both BR and *2 +u!!y %aid the o+ %etition theare ourt to de amount !are him %atent but on!y a minor im%ro-ement, With %etition +or inso!-en y, &4() a) :in e Aaron /ork o+ @ano!ing :antiago is %rote ted at Tra6emar-2 7n&rin'ement ()**)) intent o+ de+rauding his reditors, Whi!e his trademark J-F" and !ogo J"0 +i!ed an $nter tradename in the Phi!i%%ines and that had SUGGESTED ANSWER: o+ em%!oyment and /as ab!e to obtain a o-er su h ases is on+ined on!y to %etitions Brewery v &0 1+ "7#54# Aul5,9# $$4s4#3! as as the right+u! in-entorH or /ithin oneit year a generi hemi a! name in -arious P2@ as artistsC +ee by D?, 8nder the !a/ on inso!-ent0 an the .udge %ro%er!y treat the those de+enses0 /ou!d you e>em%t the /as mere!y +or ed by umstan es to +or 2N0 the time o+are its reation, :ony isase a /ith registered trademark !iabi!ities /orth P3,2m0 his assets0 Partes the ir $nte!!e tua! Pro%erty been using the same in%ub!i its to restaurant $ /ou!d not e>em%t a!!eged -io!ator +ina! .udgment against Ed6o +or P3000000, +i!ed by or%orations and %artnershi%s under +rom %ub!i ation0 to +i!e an a tion %ro-e s ienti+i and %ro+essiona! ations, Ahis inte!!e tua! %ro%erty0 /ho /i!! o/n+rom the %etition as one +or in-o!untary inso!-en y# Co$%ri'#t2 7n&rin'ement (2004) a!!eged -io!ator +rom !iabi!ity# Why# SUGGESTED ANSWER: stereo0 radio0 ameras0 betama> and other ho/e-er are /orth P3,4m, @ay 7ora io be A++i e against Janin *or%oration +or the d) Bureau o+ $nterna! Re-enue +or business, :hangri!a *or%oration ounters that !iabi!ity +or the +o!!o/ing reasons: 3) A E %atent its regu!atory %o/ers, SUGGESTED ANSWER: %riority to the in-ention0 /hiturer h has been taken om%eting drug manu+a asks you to mura!# Who /i!! o/n the o%yright in the SUGGESTED ANSWER: E>%!ain, $n a /ritten !ega! o%inion +or a !ient on the 2he a%%!i ation +or registration by 2urbo 1)is :u%%osing Boab got /ind o+ the e!e troni %rodu ts, A A++i !o amounting a! om%any0 Best de inso!-ent# &2() an e!!ation o+ the !atters mark J-F" and b) $nstead o+ se!!ing %ro+it %arti i%ation SUGGESTED ANSWER: un%aid -a!ue-added ta>es it an!ared a++i!iate o+ an internationa! organi6ation on e issued by the Patent e raises a to ;o, 2his is aE>%!ain, ase +or -o!untary inso!-en y +rom him and +raudu!ent!y registered by ontest the registration o+de the brand name mura!# Why# &4() ;o, 7ora io may not be !ared inso!-ent, di++eren e bet/een a%%renti eshi% and *or%oration may be ontested, 2he in-entions o+ his em%!oyees and a!so !aid @anu+a turing $n %rodu ed e!e tri +ans !ogo J," During the %enden y o+ the ase 8nder %resum%tion :e tion 37G,' that o+ the the arti $nte!!e !e tua! is e) $ntegrity Bank E /hi h granted Ed6o a erti+i ates0 $ /ou!d urge Berry to enter into a P100000, /hi h has been using su h !ogo and be ause this /as +i!ed by an inso!-ent debtor <ran is, A>i!on" by 2urbo, What /i!! you ad-i e be# 7is assets /orth P3,4m are more than his !earnershi%0 ?i6a 5uoted /ithout %ermission a 2rademark ?a/ /ou!d not a!!o/ the !aim to the %atents0 asserting that *e6ar /hi h it so!d under the trademark :ony be+ore the $PA0 Janin *or%oration brought Pro%erty !oan %atentab!eH in 2003 *ode0 in it in the an0 amount ase ho/e-er o+ o+ ommissioned P4000000, be sho/n 2he %artnershi% or to in or%orate in order to raise tradename :hangri!a" +or o-er 20 years, o/ing debts e> eeding the amount o+ !iabi!ities /orth !abor !a/ e>%ertCs omment a%%earing in his registration o+ aP3,2m, trademark h0 /hen A8TERNAT7>E ANSWER: and <ran isbusiness, /ere using his /hi materia!s and /ithout the onsent :ony, :ony sued Best suit against J-F *or%oration be+ore the R2* /ork0 other/ise the reator &:e &in the '4o+ absen RA e o+ a A /ritten mere !oan /as not se ured by any asset o+ Ed6o0 ash +or his 7o/e-er0 :hangri!a *or%oration registered the P30000,00 under :e tion 3' o+3=4), the $nso!-en y 7nsol enc%2 Assi'nees ()**4) SUGGESTED ANSWER: book may entit!ed KAnnotations on the ?abor a%%!ied to se!! orin used in onne tion /ith hishis b) Berry %ro+it %arti i%ation om%any time making the de-i es0 /i!! @anu+a turing +or in+ringement, De ide the +or in+ringement and damages, *ou!d the sti%u!ation but statement it /as to guaranteed or the a!!egation ontrary) un is onditiona!!y not o/ns enough and the to tradename and !ogo in the Phi!i%%ines on!y ?a/, 8nder :e tion 20 o+ the $nso!-en y ?a/0 An Bune 3=0 3FF40 Ni ente obtained a /rit o+ 2here is no in+ringement, $n order that a ase *ode,K *an the !abor !a/ e>%ert ho!d ?i6a %rodu ts0 is mere!y des ri%ti-e or debetter e%ti-e!y Whi h o+ suit the t/o or%orations has a erti+i ates to his brothers and sisters !aim %re-ai! o-er those o+ his em%!oyees# ase, a tion be+ore the R2* %ros%er# Why# o%yright0 destroy but that the %resum%tion, /ork itse!+ be!ongs & 0quas to v the de so!idari!y by Ed6os President and ontro!!ing a+ter the /as +i!ed, the %etition must be +i!ed by three or more %re!iminary atta hment against *ar!ito, 2he "atent2 Non?"atenta.leo+ 7n entions (2004) an %ros%er0 +or in+ringement trademark SUGGESTED ANSWER: !iab!e +or in+ringement o+ o%yright +or misdes ri%ti-e o+ them, *on+usion an resu!t right to registering use the !ogo and the tradename# /ithout the same /ith the :E* E>%!ain, %erson sto =eon kho!der0 #7 /ho Aan 6$ Eduardo ommissioned =#$"%7 )P, Ang0 asa!i-e reation, reditors, $n the ase at bar0 it its is Aaron0 the A8TERNAT7>E ANSWER: !e-y on *ar!itos %ro%erty o urred on Bune :u%%osing A!bert Einstein /ere today ;o0 BoabCs !aim annot %re-ai! o-er those o+ SUGGESTED ANSWER: the %rodu ts on /hi h the trademark is used 5uoting ause %ortion o+e>em%ted his book /ithout o+ as the generihis E>%!ain, be +rom ausethe his sa!e is A>i!on" an transa tion 2) a An intention to in+ringe is not A ording!y0 the mura! be!ongs to D?, ommodation surety, debtor0 /ho +i!ed the inso!-en y %ro eedings, @edi a! drugs may be %ro ured on!y u%on SU++ESTE6 ANSWER( 240 3FF4, An Bu!y 2F0 3FF40 another reditor : De-e!o%ment *or%oration has a better and he +i!ed /ith the $nte!!e tua! Pro%erty his em%!oyees, $n the +irst %!a e0 Boab did not must be o+ the same kind, 2he e!e tri +ans %ermission# &4() %rodu t itse!+, being iso!ated and not a sa!e to the %ub!i , !oan due to $ntegrity Bank +e!! due on ne 2he essary nor an e!ement in a asesin +or 7o/e-er0 BR and *2 o/n the o%yright0 e %res made by a du!y !i tradename0 ensed +i!ed a %etition +or in-o!untary inso!-en right to ri%tion use the !ogo and the A++i e &$PA) an a%%!i ation +or %atent +or his ommission any o+ the em%!oyees to y %rodu ed by Best @anu+a turing annot 7nsol enc%2 o.li'ations t#at sur i t/o e ()**+) Co$%ri'#t2 7n&rin'ement ()**3) Bune 340 2002, Des%ite %!eas +or e>tension o+ in+ringement o+ a %atent, there is no sti%u!ation to the ontrary, %hysi ian, 2he %ossibi!ity o+ *ar!ito, 2he y ourt ga-e sinagainst e the %rote ti-e bene+its o+ theory o+ by re!ati-ity e>%ressed in the in-ent the de-i e0 and itsinso!-en %ayment Ed6o0 the due ourse to the Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Insolven!y 2 Cor%orate Re!overy

Cor$orate Reco er% ts (2003) b) 8a; on Dis uss the e++e o+ the :E* order *or%oration +oria! its+ore rehabi!itation o+ I sus%ension on a%%!ied the .udi !osure and submitted a by rehabi!itation %!an /hi h %ro eedings initiated <irst Bank, &2() ) a!!ed Wou!d theentry order o+ +or the by it sus%ension into a .oint ha-e -enture any e++e t on the +ore !osure %ro eedings agreement /ith 9 *or%oration, 8nder the initiated by :e ond Bank# E>%!ain agreement0 9 *or%oration /as&2() to !end to I d) *or%oration Wou!d the sus%ension its order redito++a i!ities /ithha-e ertain any e++e t the suit +i!ed 2hird Bank# I banks toon obtain +unds notby on!y to o%erate e) What the !ega! es o+in a the E>%!ain, &2()are *or%oration but a!so +or onse5uen a %art thereo+ rehabi!itation re ei-ershi%# &2() amount o+ P3 mi!!ion as initia! de%osit in a +) sinking What measures may the re ei-er in +und to be augmented annua!!y take to %reser-e the assets o+ Debtor amounts e5ui-a!ent to 30( o+ the year!y *or%oration# &2() in ome +rom its o%eration o+ the business o+ I SUGGESTED ANSWER: *or%oration, <rom this +und the reditors is o+ I a, 2he :E* order o+ sus%ension o+ %ayment *or%oration /ere to be %aid annua!!y0 starting -a!id /ith res%e t to the debtor or%oration0 +rom the/ith se ond yeart o+to o%erations0 /ith the but not res%e the %rin i%a! entire indebtedness to be !i5uidated in sto kho!ders, 2he :E* has .urisdi tion to 34 2he reditors o+ I *or%oration ob.e t ted de years, !are sus%ension o+ %ayments /ith res%e to the %!an be ause 9 *or%oration /ou!d to or%orations0 %artnershi% or asso iations0 be taking o-er thet to business and assets o+ I but not /ith res%e indi-idua!s, SUGGESTED ANSWER: *ou!d the ourt a%%ro-e the %!an *or%oration, b, SUGGESTED 2he :E*the order o+ tions sus%ension %ayment des%ite ob.e o+ the o+reditors o+ I ANSWER: sus%ended the .udi ia! %ro eedings initiated be *or%oration and ou!d the reditors by Re#a.ilitation2 the <irst Bank, A ording to the :u%reme om%e!!ed Sta% to <r6er +o!!o/ (2004) the %!an# *ou!d 9 *ourt in a !ine o+ ases0 the sus%ension order 2he B!ue :tar *or%oration /ith the *or%oration0 in managing the+i!ed business o+ I a%%!ies to se ured reditors and to the a tion to Regiona! 2ria! *ourt a %etition +or rehabi!itation *or%oration in the meantime0 be deemed to on en+or e the urity against the the ground that it +oresa/ the im%ossibi!ity ha-e taken-o-er I se *or%oration itse!+# &=() or%oration regard!ess o+ the stage thereo+, o+ %aying its ob!igations as they +a!! due,
the o+ %etition su++i ient in +orm and , <inding 2he order sus%ension o+ %ayments substan e0 the ourt issued an Arder sus%ended the +ore !osure %ro eedings a%%ointing a rehabi!itation re ei-er and staying initiated by the :e ond Bank, Whi!e the the en+or ement o+ a!! for !aims against the 5!at "s is t!e rat"onale t!e 'tay %r9er7 +ore !osure against the %ro%erty o+ a third SU++ESTE6 ANSWER( or%oration, )58+ %arty0 is in rea!ity an a tion to iso!!e t the to 2he it %ur%ose o+ the stay order intended %rin i%a! ob!igation o/ned by the or gi-e the management ommittee or%oration, During the time that rehabi!itation re ei-er the !ee/ay to the make %ayment o+ the %rin i%a! /ithout ob!igation is to the business -iab!e again0 ha-ing sus%ended0 the and debtor is in di-ert attention resour or%oration es to !itigation onsidered to be not in de+au!t and0 -arious +ora (;hilippine 0irlines v/ Spouses A8TERNAT7>E ANSWER: 1/+/ 2os/ 3%639 D 33"4#, ,ctober #, the "997< there+ore0 e-en the right en+or September e @urang'ing, et al, 1/+/ 2o/ to "4%%96, , 2he sus%ension order does not a%%!y to a N;hils/O .nc/ v/ 2=+&, 1/+/ 2o/ se +ubberworld urity0 /hether o/ned by the debtor$4, $77$<mortgage B- Eomes,be .nc/ause v/ &ourt of 0ppeals, third %arty in su h a ase0 "$%33#, 0pril "4,a"999< 0SB 5ev/ or%oration or o+ thirdSobreJuanite %arty0 has v/ not yet the&orp/, redit is not yet being en+or ed against 1/+/ 2o/ "%5%35, September #7, $775!/ $t arisen, thea!so or%oration the third %arty an %re-ents but a against reditor +rom obtaining mortgagors %ro%erty, ad-antage or %re+eren e o-er another /ith
SUGGESTED ANSWER:

Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Page Page 03 01 of 103 of 103

res%e to a reason tions against the or%oration d, <or thet same as in & )0 the order o+ (-inasia .nvestments and sus%ended -inance &orp v/ &ourt sus%ension o+ %ayments the suit of 0ppeals, 1/ +/ 2o/ "7377$, ,ctober 3,"994! , +i!ed by 2hird Bank against the %rin i%a! Sus$ension o& "a%ment s! 7nsol enc% ()**1) A8TERNAT7>E ANSWER: stoDistinguish kho!ders, bet/een sus%ension o+ %ayments d, 2he a tion against the %rin i%a! inso!-en surety y, stoand kho!ders in +a-or o+ the SUGGESTED ANSWER: or%oration is not as it is notisan $n sus%ension o+ sus%ended %ayments0 the debtor not a tion against the or%oration but against the h inso!-ent, 7e on!y needs time /ithin /hi stoto kho!ders /hose %ersona!ity se%arate on-ert his assetLs into ash is /ith /hi h to +rom that o+ the or%oration, %ay his ob!igations /hen they +a!! due, $n the ase o+ PD inso!-en thea%%ointment debtor is inso!-ent0 e, 8nder F02A0 y0 the o+ a A8TERNAT7>E ANSWER: that is0 his assets are !ess than his !iabi!ities, rehabi!itation re ei-er /i!! sus%end a!! 2he +o!!o/ing are the distin tions: a tions +or !aims against the or%oration and the or%oration /i!! be %!a ed under
SUGGESTED ANSWER:

SUGGESTED ANSWER:

3 $n sus%ension %ayments0 the debtor rehabi!itation in a o+ ordan e /ith a rehabi!itation has su++i ient %!an %ro%erty a%%ro-ed to by o-er the a!! :E*, his debts but +oresees the im%ossibi!ity o+ meeting them SUGGESTED /hen ANSWER: they res%e ti-e!y +a!! due0 /hereas0 in +, inso!-en 2o %reser-e the assets o+ the Debtor y0 the debtor does not ha-e *or%oration0 the re ei-er may take ustody su++i ient %ro%erty to %ay a!! his debts in +u!!H o+0 2 and ontro! o-er0 a!! the e>isting the assets $n sus%ension o+ %ayments0 and %ro%erty o+ the or%orationH e-a!uate %ur%ose is to sus%end or de!ay %ayment o+ e>isting assets and !iabi!ities0 earnings and debts /hi h remain una++e ted a!though a o%erations o+ the o+ or%orationH and %ost%onement %ayment is de determine !ared0 the/hereas0 best /ay to sa!-age and %rote t the in inso!-en y0 the ob.e t is to obtain Sus$ension o&the "a%ments2 Reme6ies (2003) interest o+ in-estors and reditors, dis harge +rom a!! debts and !iabi!ityH When is the remedy o+ de !aration in a state 1 $n sus%ension o+ %ayments0 no !imit +or o+ sus%ension o+ %ayments a-ai!ab!e to a the amount SUGGESTED ANSWER: or%oration# o+ indebtedness is re5uired0 /hereas0 in 2his inso!-en y0 the must &%er dondee) remedy is debts a-ai!ab!e to a e> eed P30000 ase o+ -o!untary or%oration /hen in it e>%erien es inabi!ity to inso!-en y0 orand must not be<r6er !ess than P30000 %ay oneCs debts !iabi!ities0 and /here the in Sus$ension o& "a%ments s! Sta% (2003) ase o+ in-o!untary inso!-en y, 3 has su++i ient %ro%erty to o-er a!! its %etitioning or%oration either: Distinguish the stay order in or%orate debts but +oresees theaim%ossibi!ity o+ a state o+ rehabi!itation +rom de !aration in meeting /hen they due &so!-ent 7nsol enc%2them >oluntar% 7nsol enc%+a!! "rocee6in' ()**)) sus%ension o+ %ayments# &'() but i!!i5uid) or $s SUGGESTED the issuan ANSWER: e o+ an order0 de !aring a 2 has no su++i ient %ro%ertyy&inso!-ent) %etition in a No!untary $nso!-en %ro eeding Sus$ension o& "a%ments2 Re#a.ilitation but is under the management a Recei er ()***) inso!-ent0 mandatory u%on theo+ ourt# SUGGESTED ANSWER: Debtor *or%oration and its %rin i%a! rehabi!itation re ei-er or a management Assuming that %etition /as in due sto kho!ders +i!ed /ith!a/ the :e urities and ommittee0 the the a%%!i ab!e is P,D, ;o, +orm and e to and the assets o+ the+or E>substan hange *ommission &:E*) a %etition F02-A %ursuant :e that , 4 %ar, %etitioner are !ess his !iabi!ities0 the o+ rehabi!itation and than de !aration o+ a state ourt must ad.udi ate the inso!-en y &:e 3G sus%ension o+ %ayments under PD F02-A, 2he $nso!-en y ?a/) ob.e ti-e /as +or :E* to take ontro! o+ the 7nsol or%oration enc%2 >oluntar% s! a!! 7n oluntar% Sol enc% ()**1) and its assets and !iabi!ities0 Distinguish bet/een -o!untary inso!-en y and earnings and o%erations0 and to determine in-o!untary inso!-en y, the +easibi!ity o+ ontinuing o%erations and SUGGESTED ANSWER: rehabi!itating the om%any the bene+it o+ $n Denera!!y0 -o!untary inso!-en y0 ured it +or is the debtor the unse reditors had in-estors and reditors, himse!+ /ho +i!es the %etition inso!-en y0 mani+ested /i!!ingness to +oroo%erate /ith /hi!e in in-o!untary inso!-en y0 at !east 1 Debtor *or%oration, 2he se ured reditors0 reditors are the ones /ho +i!e the %etition +or ho/e-er0 e>%ressed serious ob.e tions and A8TERNAT7>E ANSWER: inso!-en y against the inso!-ent debtor, reser-ations, 2he +o!!o/ing are the distin tions: had inso!-en a!ready y0 initiated .udi ia! 3 <irst$n Bank in-o!untary 1 or more +ore !osure %ro eedings on the mortgage reditors are re5uired0 /hereas in -o!untary onstituted the +abe tory Debtor inso!-en y0 one on reditor may su++i o+ ientH *or%oration, 2 $n in-o!untary inso!-en y0 the reditors :e ond Bank had a!ready initiated +ore !osure must be residents o+ the Phi!i%%ines0 /hose %ro eedings on a third-%arty mortgage redits or demand a rued in the Phi!i%%ines0 onstituted on ertain assets o+ the %rin i%a! and none o+ the reditors has be ome a sto kho!ders, reditor assignment /ithin 10 days %rior to 2hird by Bank had a!ready +i!ed a suit against thethe +i!ing o+ the %etition0 /hereas in -o!untary %rin i%a! sto kho!ders /ho had he!d inso!-en y0 these are not re5uired, themse!-es !iab!e .oint!y and se-era!!y +or 1 the $n in-o!untary inso!-en y0 the debtor !oans o+ Debtor *or%oration /ith said must ha-e done any o+ the a ts o+ inso!-en y Bank, as A+ter enumerated by :e:E* 200 /hereas in hearing0 the dire ted the -o!untary inso!-en y0 the debtor must not and a%%ointment o+ a rehabi!itation re ei-er ha-e done any o+ said a ts, ordered the sus%ension o+ a!! a tions and ' !aims $n in-o!untary y0 the amount against the inso!-en Debtor or%oration as /e!! o+ indebtedness !ess than P30000 as against themust %rin not i%a!be sto kho!ders, a) /hereas in the -o!untary inso!-en y0 it must Dis &2() uss -a!idity o+ the :E* order or e> sus%ension# eed P30000, 4 $n in-o!untary inso!-en y0 the %etition must be a om%anied by a bond0 /hereas su h is not re5uired in -o!untary inso!-en y,

C<GSA2 "rescri$tion o& Port Claims (2000) o+ iron @er harter ore handise /ith !e+t the I9P Broker0 o-er o+ 20400 the Pamboanga !atters ubi meters -esse!0 *ity o+ the R* im%orted om%uter motherboards +rom bound !ogs @N ?ady?o-e, +or at O27 @ani!a, %er Be+ore <or ubi one meter the reason :aad <AB, or ou!d another0 A+ter !oad it0 the 8nited :tates and had them to @LN ins%e I9P $!og so!d de ting @ani!a ?ady the ?o-e !ogs0 hit a to *D submerged As!ob issued @aritime ashi%%ed %ur obsta hase *o !e An the arrangements made u%on instru tion @ani!a aboard o eangoing argo ausing order, /hi h itde to ided sinkan a!ong to !oad /ith it +or itsits argo, o/n a A shi% ount, o+ the onsignee0 7M2 *or%oration o+ ?A0 o/ned by B* :hi%%ing *om%any, When the sa!-or0 a) @ay :a!-ador0 I9P $n ,0 /as *o -a!id!y ontra ted ask to +or the *a!i+ornia0 the :P o+ ?A issued anan argo arri-ed atthe @ani!a and re+!oat res ission the -esse! o+ +orBank harter P3sea%ort @i!!ion, %arty# What $+ de!i-ered so0 kind o+ irre-o ab!e !etter o+ redit a-ai!ab!e at sight to R*0 the rate a%%eared inta but u%on a-erage :aad re /as o-er the damages# re+!oating +ee 2o /hat o+ tH P3e>tent# mi!!ion0 b) $+ SUGGESTED ANSWER: in+or +a-or o+ BN +or the tota! hase %ri eis o+ ins%e tion o+ the ontents0 R* dis o-ered and As!ob /hose did not a !oad ount it shou!d +or its %ur o/n it be# a Why# ount0 it Parti u!ar A-erage, 2he o+ the -esse!to <E the !ogs, 2he o+o/ner redit /as mai!ed that the items inside had a!! bad!y &'() bound by the !etter harter %arty# ) been E>%!ain the sha!! shou!der the a-erage, Denera!!y Bank /ith the instru tion to it the damaged, 7e did not +i!e any noti e to o+ meaning o+ o/ner %ro ha -i+or/ard e o+ the s%eaking0 sim%!e or %arti u!ar a-erages bene+ior iary," 2he !etter o+ redit %ro-ided damage anything /ith !east o+ a!! -esse!," $n /hat kind o+anyone0 harter %arty does in that !ude the a!! e>%enses and damages aused to dra+t to be dra/n is on he :P Bank and /ith B* :hi%%ing *om%any, What did /as this obtain# ANSWER: theSUGGESTED -esse! or argo /hi h ha-e not inured to that it be a om%anied by0 among other to a) %ro eed dire t!y to your o++i e to onsu!t I9P may ask +or the G0F0 res ission o+ the thethings0 ommon bene+it &Art, and are0 erti+i ation +rom A*0 stating that you harter abouta /hether he shou!d ha-e gi-en a %arty i+0 as in this ase0 it so!d the there+ore0 to be borne on!y by the o/ner o+ the !ogs ha-e been a%%ro-ed %rior shi%ment noti e o+ damage and ho/ !ong a time he SUGGESTED ANSWER: -esse! be+ore the harterer has begun to Be+ore !oading on the -esse! hartered by A*0 the %ro%erty /hi h ga-e rise to the same in a initiate ordan e suit /ith the terms and onditions had to a the %ro-isions o+ @y!oad ad-i e /ou!d beunder that R* shou!d gi-e the -esse! and the %ur haser !oads it the !ogs /ere ins%e ted by ustom ins%e tors &Art, G30) /hi!e genera! or gross a-erages o+ the %ur hase order, the *arriage o+ Doods by :ea A t &*A =4), noti e his o+ the damage sustained by argo +or o/n adamages ount, :aad rethe o-er and re%resentati-es o+ themay Bureau o+ /hi <orestry0 in !ude Ka!! the and e>%enses h What /ou!d your ad-i ehe be# &2() /ithin 1 erti+ied days that has to +i!e the suit damages toand the e>tent its !osses &Art =GF /ho to the good ondition and are de!iberate!y aused in o+ order to sa-e the b) $+ As!ob did not !oad ?ady ?o-e +or its to re o-er the damage sustained by the *ode o+ *ommer e) e>%ortabi!ity o+ the !ogs, A+ter the !oading /as -esse!0 its argo0 or both at the same time0 o/n a ount0 it /ou!d be bound by the harter argo /ithin one year +rom the date o+ the om%!eted0 the *hie+ @ate o+ the -esse! +rom a rea! and kno/n riskK &Art, G33), Being %arty0 but I9P /ou!d ha-e to indemni+y de!i-ery o+ argo to him, issued a the mate re ei%t o+ the argo /hi h +or the ommon bene+it0 gross a-erages are C<GSA2 "rescri$ti e "erio6 ()**1) As!ob i+ it /as not in+ormed o+ the *harter stated that the !ogs are in good ondition, to be borne by the o/ners o+ the arti !es ,ottomr% What is()**3) the %res ri%ti-e +or *ode a tions Party at the time o+ sa!e, &Art =GF 7o/e-er0 A* re+used to %eriod issue the sa-ed &Art, G32), $n the %resent ase re5uired there o+ is Digi obtained a !oan +rom Bo.oargo *or%oration0 in-o!-ing !ost or damaged under the o+ *ommer e) erti+i that ation in -esse! the !etter o+ redit, Be ause no %roo+ the had to be %ut a+!oat ) 2he term A/ner Pro Niuted e o+a the %ayab!e in insta!!ments, Digi e>e *arriage o+ Doods by :ea A 7a t# the absen e an o+ imminent erti+i ation0 <E Bank re+used to sa-e it +rom danger, SUGGESTED ANSWER: Nesse!0" is genera!!y understood to be the hatte! mortgage in +a-or o+ Bo.o /hereby she to 9EAR ad-an e %ayment on the !etter o+ redit, A;E a+ter the de!i-ery o+ the goods or 3) harterer o+ +a-or the -esse! in its the ase o+ trans+erred in o+ Bo.o0 su essors @ay <e Bank be he!d !iab!e under the !etter the date /hen the goods shou!d ha-e been o+ bareboat or harter (=itonJua Shipping and assigns0 a!!demise her tit!e0 rights ,,, to a -esse! redit# E>%!ain, 2) 8nder the +a ts abo-e0 the de!i-ered &:e is1&=)0 *AD:A) &o v h 2ational SeamenIs Board 1+ 5"9"7 o+ /hi Digi the abso!ute o/ner," 2he se!!er0 BN0 argued that <E Bank0 by a e%ting C#arter "art% (2003) "70ug"969! hatte! mortgage /as registered /ith the the ob!igation to noti+y him that the *om%any 8nder a harter %arty0 IIA 2rading Doctrine o& 7nscruta.le /ault ()**1) Phi!i%%ine *oast Duard %ursuant to PD 3423, irre-o ab!e !etter o+ redit has been dire shi%%ed sugar to *o a-*o!a *om%any through 3, 2 -esse!s oming +rom the o%%osite tions Digi de+au!ted and had a tota! a ountabi!ity transmitted toea it on his beha!+0 has on+irmed :: ;egros :hi%%ing *or%,0 insured by *a%ito! SUGGESTED ANSWER: o!!ided /ith h other due to +au!t im%utab!e o+ P1@, But Bo.o ou!d not +ore !ose the the !etter o+ redit, *onse5uent!y0 <E 3) 2he !etter o+the redit %ro-ides as Bank a $nsuran e *om%any, 2he argo but is to;o, both, What are !iabi!ities o+ the t/o mortgage on the -esse! be ause itarri-ed sank !iab!e under the !etter o+ redit, $s the ondition a erti+i A*, Without su h to /ith shortages, *oation a-*o!a demanded +rom -esse!s /ith res%e t to o+ the damage aused during a ty%hoon, @ean/hi!e0 ?utang argument tenab!e# E>%!ain, erti+i ation0 there is no ob!igation on the *a%ito! $nsuran e *o, P400,000 in sett!ement them and their argoes# E>%!ain, *or%oration /hi h rendered sa!-age ser-i es SUGGESTED ANSWER: %art o+ <E Bank to ad-an eDigi, %ayment o+ the IIA 2rading, 2he @@ Regiona! 2ria! *ourt0 2, +or $+ it annot be determined /hi Whose h o+ the t/o +or re+!oating the -esse! sued ?utang *or%orations !ien shou!d be gi-en !etter o+ redit, (-eati Ban' v &0 "9% S 53%! /here the i-i! suit /as +i!ed0 Kabso!-ed the -esse!s /as at +au!t resu!ting in the o!!ision0 !ien shou!d be gi-en %re+eren e0 that o+ o+ a Bo.o %re+eren e, 2he !ien o+ Bo.o by -irtue 2) ;o, Bank may ha-e on+irmed the !etter insuran e om%any0 de !aring that under the /hi h <E %arty shou!d bear the damage aused or ?utang# !oan o+ bottomry /as e>tinguished /hen the o+ redit /hen it noti+ied BN0 that an *ode o+ *ommer e0 the shi%%ing agent is to the -esse!s and the argoes# E>%!ain, -esse! sank, 8nder su !oan on bottomry ab!e !etter o+ hbear redit has been i-i!!y !iab!e +or damages in +a-or o+ third 1, irre-o Whi h %arty shou!d the damage to the Bo.o a ted not on!y as reditor but a!so as transmitted it on its beha!+, the %ersons to the ondu o+ But the arrierCs -esse!s due andto the argoes i+tthe ause o+ the insurer, Bo.os right to re o-er the amount o+ be onditions in the !etter o+ e-ent# redit must +irst a%tain0 and the sti%u!ation in the harter o!!ision /as a +ortuitous E>%!ain, the%arty !oan is %redi ated on the sa+e arri-a! o+ om%!ied /ith0 name!y that +rom the dra+t be is e>em%ting the o/ner !iabi!ity ANSWER: theSUGGESTED -esse! at the %ort o+ destination, 2he a om%anied by a %o!i erti+i ation +rom A*, not against %ub!i y, *o a-*o!a ;o, 2he a%%ea! o+ *o -esse! a-*o!asank /i!! not %ros%er, SUGGESTED ANSWER: right /as !ost /hen the &:e 37 <urther0 on+irmation o+ a !etter o+ redit a%%ea!ed, Wi!! its a%%ea! %ros%er# Reason 8nder Arti !e 4G7 o+ the *ode o+ *ommer e0 3, Carria'e Ea o& h Goo6s: -esse! De must iation: bear 8ia.ilit% its (2001) o/n damage, Both 8etters o& Cre6it2 8ia.ilit% o& a con&irmin' an6 noti&%in' PD must 3423) be e>%ressed, (-eati Ban' v &0 "9% s 53%! brie+!y, &4() shi%%ing agent is :undo0 i-i!!y !iab!e +or o+ o+ them /ere at +au!t, &Art G270 *ode Anthe a !ear /eather0 @LN arrying .an()**3) damages in +a-or o+ third %ersons due to the *ommer e)!e+t insured argo0 the %ort o+ @ani!a bound $n !etters o+ redit in banking transa tions0 ondu t o+ the arrierCs a%tain0 and the 2, Ea h o+ them bear res%e ti-e +or distinguish *ebu, Whi!e at shou!d sea0 the -esse! the !iabi!ity o+ a their on+irming bank SUGGESTED ANSWER: agent e>em%t himse!+ damages, :in ean it ty%hoon annot be determined as to en shi%%ing ountered a strong +or ing the +rom a noti+ying bank, $n ase anything /rong to-esse! thetrine !etter there+rom on!y abandoning the /hi h -esse! isby at +au!t,ha%%ens 2his isnearest the do o+ a%tain to steer the -esse! to the o+ redit0 ait on+irming indays, urs !iabi!ity /ith a!! his e5ui%ment and the +reight he ins rutab!e +au!t," +or bank is!and /here stayed se-en 2he +or the amount o+ the !etter redit0 /hi!e a may ha-e earned theo+ -oyage, An ause the 1, ;o %arty sha!! beduring he!d !iab!e sin e the -esse! ran out o+ %ro-isions +or its noti+ying bank does not in ur any !iabi!ity, other hand0 assuming there is bareboat o+ the o!!ision is +ortuitous e-ent, 2he arrier %assengers, *onse5uent!y0 the -esse! Assuming that the argo /as damaged harter0 the sti%u!ation in the harter %arty not an insurer, %ro is eeded to ?eyte to re%!enish its su%%!ies, o& Cre6it2 8ia.ilit% o& a Noti&%in' ,an- is (2003) be 8etters ause o+ su h de-iation0 /ho bet/een the e>em%ting the o/ner +rom !iabi!ity not a) What !iabi!ity0 i+ any is in urred an insuran e om%any and the o/ner o+ the against %ub!i %o!i y be ause the %ub!iby at C<GSA: "rescri$tion o& ClaimsFActions (2003) SUGGESTED ANSWER: ad-ising or noti+ying bank in a !etter o+ redit argo bears the !oss# E>%!ain, !arge is not in-o!-ed (Eome .nsurance &o/ v/ transa tion# 0merican Steamship 0gencies, .nc/, $# S&+0$5
("9%6!/

Mercantile Law Bar Examination Q & A (1990-2006) Page Page 10 11 of 103 of 103 Page 2he AA 1# insuran entered of 103 Page e into om%any 05aof 103 ontra shou!d t /ith Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006) SUGGESTED ANSWER: bear BB the thru !oss ** to tothe trans%ort argo be !adiesC ause /ear the +rom @LN BN 2he $!og agreed :aad de @ani!a Deto se!! *o /ith to enters A*0 a argo a into :hi% o+ a -oyage and 400 tons

$t in urs !iabi!ity un!ess it is a!so the de-iation @ani!a o+ tono the <ran -esse! e /ith /as transhi%ment %ro%er in order at negotiating bank to a-oid 2ai/an, a %eri!0 :omeho/ /hi hthe /as goods the strong /ere not !oaded b) 2ai/an Bra-o Bank out re ei-ed +rom *is o Bank ty%hoon, at 2he on running time, 7en o+ e0 %ro-isions /hen the /as goods by registered mai! an irre-o ab!e !etter a dire arri-ed t onse5uen in <ran e0ethey o+ the arri-ed %ro%er Ko++-seasonK de-iation o+ A8TERNAT7>E ANSWER: redit issued by De!ta Bank +or the a -a!ue ount o+ in order and AA to /as a-oid %aid the on!y %eri! +or o+ one-ha!+ the ty%hoon, the 2he o+ the argo bears the !oss +rom the 9 o/ner *om%any inAA the amount o+ 8:O3000000000 by the buyer, !aimed damages be shi%%ing ause in the ase bar0 they stayed to o-er the sa!eat o+ anned +ruit .ui too es, 2he om%any and its agent, 2he !ong at the is!and0 making it an im%ro%er bene+i iary o+ the !etter o+ redit /as I de+ense o+ the res%ondents /as %res ri%tion, de-iation, E-ery de-iation not s%e i+ied in *or%oration /hi h !ater on %artia!!y a-ai!ed *onsidering that the !adiesC /ear su++ered :e K!oss , 32'o+ is-a!ue0K im%ro%er, , 3240 $nsuran e the itse!+ o+ the !etter o+ redit by submitting to as &:e !aimed by AA0 shou!d *ode) Bra-o Bank a!! do uments re!ati-e to the %reso&ri%ti-e %eriod be one year(2001) under the Carria'e Goo6s2 De iation2 W#en SUGGESTED ANSWER: shi%ment o+ the ans o+"ro$er +ruit .ui es, Bra-o *arriage o+ Doods by :ea A t0 or ten years 2he a%%!i ab!e %res ri%ti-e is ten 8nder /hat ir umstan es an%eriod a +or -esse! Bank %aid I *or%oration its %artia! under the *i-i! *ode# E>%!ain brie+!y, years under the *i-i! *ode, 2he one-year %ro%er!y %ro eed to a %ort other its&4() a-ai!ment, ?ater0 ho/e-er0 it than re+used +urther SUGGESTED ANSWER: %res ri%ti-ebe %eriod under the *arriage o++raud %ort o+ destination# E>%!ain, &'() a-ai!ment ause o+ sus%i ions o+ De-iation is %ro%er: Doods by :ea A t a%%!ies in ases o+ !oss or being %ra ti ed it and0 es instead 0 sued a) /hen aused by u%on ir umstan o-er /hi h I damages to the argo, 2he term K!ossK as *or%oration to re o-er /hat it had %aid the SUGGESTED ANSWER: the master nor the o/ner o+*ourt the shi% has any neither inter%reted by the :u%reme in /ere *itsui !atter, 7o/ /ou!d you ru!e i+ you the ontro!H b) /hen ne essary to om%!y /ith a ,/S/@/ =ines =td/ v/ &ourt of 0ppeals, $63 S&+0 .udge to de ide the ontro-ersy# &=() 8etters o& Cre6it2 T#ree Distinct Contract Relations#i$s /arranty or a-oid a #%% ("996! 0 ontem%!ates a situation /here (2002) %eri!0 the made %eri! is insured no /hether de!i-ery or at not a!! /as by the arrier o+ E>%!ain the three &1) distin t but %erished intert/ined againstH ) /hen made in good +aith0 and the goods be ause the same had or grounds o+t be!ie+ in its ne that essity toindis%ensab!e a-oid a ontra re!ationshi%s are u%on reasonab!e gone out o+ ommer e deteriorated or %eri!H or d) /hen in good +aith0 +or the in a !etter o+ redit transa de ayed /hi!e in transit, $ntion, the %resent ase0 SUGGESTED ANSWER: !i+e0 or another -esse! in distress, &:e , %ur%ose o+re!ie-ing sa-ing human the shi%ment o+ !adiesC /ear /as a tua!!y 2he three distin t but intert/ined ontra t $nsuran e&1) *ode) 32'0 C<GSA2 "rescri$tion o& Claims ()**2) de!i-ered, 2hethat K!ossare o+ -a!ueK is not the tota! re!ationshi%s indis%ensab!e in a !etter o+ A !o a! onsignee sought to en+or e .udi ia!!y !oss ontem%!ated by the *arriage o+ Doods transa tion are: redit Carria'e o& Goo6s2 E9ercise Dili'ence a !aim against the E9traor6inar% arrier +or !oss o+ a by A t, 3) :ea Bet/een the a%%!i ating antLbuyerLim%orter and (2001) shi%ment o+ drums o+ !ubri oi! +rom 8etter o& Cre6it:bene+i (ort'a'e (2001) the iaryLse!!erLe>%orter E :tar :hi%%ing ?ines a e%ted 300 artons o+ Ba%an under the *arriage o+ Doods by :ea A t 2he Ri a%%!i ardo mortgaged his +ish%ond to one A* Bank antLbuyerLim%orter is the /ho sardines +rom @aster be de!i-ered to 444 &*AD:A) a+ter the to arrier had re.e ted its %ro ures to the se ure a @ani!a, P3 redit @i!!ion !oan, $n a se%arate !etter o+ and ob!iges himse!+ to reimburse *om%any in An!y GG artons /ere demand, 2he arrier %!eaded in its Ans/er transa tion0 hebank o%ened a !etter o+ redit /ith the issuing u%on re ei%t o+ the do uments o+ de!i-ered0 ho/e-er0 these /ere in bad the a++irmati-e de+ense o+ %res ri%tion under the same bank +or O4000000,00 in +a-or o+is the one tit!e0 /hi!e the bene+i iaryLse!!erLe>%orter ondition, 444 *om%any !aimed +rom :tar the %ro-isions o+ said A t inasmu h as the 7: Bank0 a the +oreign bank0 toontra %ur t hase /ho in om%!ian e the /ith themissing o+ sa!e shi%s :hi%%ing ?ines -a!ue o+ the suit /as brought by onsignee a+ter one outboard motors, ?ike/ise0 Ri ardo e>e uted the goods to the buyer and de!i-ers the do goods0 as /e!! as the damaged goods, :tar &3) year +rom the de!i-ery o+ the goods, $n uments a :urety Agreement +a-or o+ A* Bank, o+ tit!e and dra+tinto the issuing bank :hi%%ing ?ines re+used be ause the +ormer turn0 the onsignee ontended that the to re o-er 2he outboard motors arri-ed and /ere SUGGESTED ANSWER: %ayment +or the goods, 2heir re!ationshi% is +ai!ed to %resent a bi!! o+ /as !ading, Reso!-e %eriod ri%tion sus%ended 2he !aim o+ o+ %res 444 *om%any is meritorious0 de!i-ered to Ri ardo0 but he /as not ab!eby to the go-erned by the ontra t o+ sa!e, /ith reasons the !aim o+ 444 *om%any, /ritten e>tra.udi it had e-en i+ it +ai!s to %resent a bi!! o+a) !ading, %ay the %ur hase %riia! e demand thereo+, *anmade A* &'() against the arrier /ithin the one-year %eriod0 2) take Bet/een the issuing the A!though a bi!! o+ !ading the best bank e-idenand e Bank %ossession o+ is the outboard %ursuant to Arti !e 3344 o+ the *i-i! *ode bene+i iaryLse!!erLe>%orter 2he +ore issuing bank is o+ the ontra t b) o+ *an arriage +or E a!so argo0 motors# Why# A* Bank !ose %ro-iding that the %res o+ a tions is and the one that issues the !etter o+ redit ne-erthe!ess su h ontra tri%tion an e>ist e-en the mortgage o-er the +ish%ond# E>%!ain, interru%ted /hen there is a /ritten undertakes to %ay the se!!er /ithout a bi!! o+ !ading, ?ike anyu%on otherre ei%t o+ the &4() SUGGESTED e>tra.udi ia! demand by the is reditors, a)and 7as to dra+tt0ANSWER: and %ro%er uments tit!e ontra a ontra t o+ do arriage ao+ meeting a) SUGGESTED ;o0 +or A* Bank has no to !ega! standing0 the a tion in +a t %res ribed# Why# b) $+ the ANSWER: surrender the do uments the buyer o+ minds that gi-es rise to an ob!igation on u%on mua) h2he !ess a !ien0 on/ere the outboard motors, onsignees aarrier tion %redi ated ongo-erned a the tion taken by the !o a! onsignee 2heir re!ationshi% is thereimbursement, %art o+ to trans%ort the goods, $nso+ar as A* Bank is on erned0 it has misde!i-ery or on-ersion o+ o+ the goods0 /ou!d has0 in +a t0has %res ribed, 2he %eriod o+%ri-ity one by the terms o+ the !etter redit issued by Buris%ruden e he!d that the moment the /ith the %erson o+ Ri same# ardo under the :urety 1/+/ 2o/ =8"69%5, ,ctober #7, "9%4< 2egre v/ your ans/er be the E>%!ain brie+!y, year under the *arriage o+ Doods by :ea the bank, arrier re ei-es the argo +or trans%ort0 thenA t Agreement0 and ainterru%ted !ien onissuing the +ish%ond based 1) Bet/een the bank and the &abahug Shipping D &o/, 1/+/ 2o/by =8"9%79, 0pril &*AD:A) is not a /ritten its duty to e>er ise e>traordinary di!igen e A8TERNAT7>E ANSWER: on the antLbuyerLim%orter rea! estate mortgage onstituted $9,e>tra.udi "9%%! a%%!i E 2heir re!ationshi% is ia! demand, 2he %ro-isions o+ Art arises / (&ia/ *aritima v/ .nsurance &o/ of 2orth :tar :hi%%ing ?ines an re+use to honor 444 therein, go-erned by the terms o+ the a%%!i ation and 3344 o+ the ;** mere!y a%%!y and to %res ri%ti-e 0merica, *om%anyCs !aim +or the missing b) agreement 9es0 but on!y to issuan en+or e o+ +or the e %ayment o+ and the not !etter %eriods %ro-ided +or in said *ode to o+ damaged goods, 2he Bi!! o+ ?ading is the the %rin i%a! !oan o+ P3mi!!ion se ured by the redit by the bank, s%e ia! !a/s suthat h as *AD:A e> e%t /hen do tit!e !ega!!y estab!ishes the rea!ument estateo+ mortgage on the +ish%ond other/ise %ro-ided, (5oleo-er v *aritime &o "46 s o/nershi% o+ 444 *om%any said goods, b) $+ the onsignees a tion /ere %redi ated ""6!/ (2ational Mnion -ire .nsurance ofo+ ;ittsburg v/ 444 needs to %resent the Bi!! ?ading to the on misde!i-ery or on-ersion o+ goods0 Stolt82ielaen, 2o/ 63956, 0pril $%, "997! 8etter o& Cre6it2 Certi&ication &rom Consi'nee ()**3) !ega!!y !aim 1/+/ said goods, %ro-isions o+ the *AD:A /ou!d be A era'e2 "articular A era'e s! General A era'e (2003) ina%%!i C#arter "art% ab!e, ()**)) $n these ases0 the ;** %res ri%ti-e %eriods0 in !uding Art 3344 o+ the ;** /i!! a%%!y (0ng v &ompania *aritama

Letters of Cre&it

Maritime Commer!e

"## s %77!

Mercantile Law Bar Examination Q & A (1990-2006) SUGGESTED ANSWER: o/ner and the a%tain as the ty%hoon ame 8nder the do trine o+ ins rutab!e +au!t0" ear!ier and o-ertook the -esse!, 2he -esse! /here +au!t is estab!ished but it annot be sank and a number o+ %assengers determined /hi h o+ the t/o -esse!s /ere at disa%%eared /ith it, +au!t0 both sha!! be deemed to ha-e been at Re!ati-es o+ the missing %assengers !aimed +au!t, damages against the shi%o/ner, 2he Doctrine o& 7nscruta.le /ault ()**:) shi%o/ner set u% the de+ense that under the A se-ere ty%hoon /as raging /hen the do trine o+ !imited !iabi!ity0 his !iabi!ity /as -esse! :: @asdaam o!!ided /ith @N Prin es, o-e>tensi-e /ith his interest in the -esse!, $t is on eded that the ty%hoon /as the ,3 7o/ /i!! you ad-i e the !aimants# As the -esse! /as tota!!y !ost0 his !iabi!ity had ma.or ause o+ the o!!ision0 a!though there Dis uss the do trine o+ !imited !iabi!ity in maritime a!so been e>tinguished, /as a -ery strong %ossibi!ity that it ou!d !a/, &1() ,2 Assuming that the -esse! /as insured0 ha-e been a-oided i+ the a%tain o+ :: SUGGESTED @asdaam /as not drunk and the a%tain o+ may the ANSWER: !aimants go a+ter the insuran e ,3 8nder the do trine o+ !imited !iabi!ity in the @N Prin es /as not as!ee% at the time o+ %ro eeds# &1() maritime !a/0 the !iabi!ity o+ the shi%o/ner arisingo!!isions, Who shou!d bear the damages to ANSWER: +rom the o%eration o+ a shi% is on+ined to the SUGGESTED the -esse!s and their argoes# &4() 2he shi%o/ners o+ :: @asdaam and @N -esse!0 e5ui%ment0 and +reight0 or insuran e0 i+ Prin ess sha!! ea h bear their res%e ti-e !oss any0 so that i+ the shi%o/ner abandoned the shi%0 o+ -esse!s, <or the !osses and damages e5ui%ment0 and +reight0 his !iabi!ity is e>tinguished, 7o/e-er0 the do trine o+ !imited su++ered by their argoes both shi%o/ners !iabi!ity does not a%%!y /hen the shi%o/ner or are so!idari!y !iab!e, 8imite6 8ia.ilit% Rule ()**3) a%tain is gui!ty o+ neg!igen e, 2oni0 a o%ra dea!er0 !oaded 3000 sa ks o+ ,2 9es, $n ase o+ a !ost -esse!0 the !aimants o%ra on board the -esse! @N 2oni hi &a may go a+ter the %ro eeds o+ the insuran e ommon arrier engaged in oast/ise trade o-ering the -esse!, o/ned by $ hi) +or shi%ment +rom Puerto Da!era to @ani!a, 2he argo did not rea h @ani!a be ause the -esse! a%si6ed and When 2oni sued hi +or damages based on sank /ith a!! its $argo, brea h o+ ontra t0 the !atter in-oked the !imited !iabi!ity ru!e," 3) What do you understand o+ the ru!e" in-oked by $ hi# 2) Are there e> e%tions to the !imited !iabi!ity SUGGESTED ANSWER: ru!e"# 3) By !imited !iabi!ity ru!e" is meant that the !iabi!ity o+ a shi%o/ner +or damages in ase o+ !oss is !imited to the -a!ue o+ the -esse! in-o!-ed, 7is other %ro%erties annot be rea hed by the %arties entit!ed to damages, 2) 9es, When the shi% o/ner o+ the -esse! in-o!-ed is gui!ty o+ neg!igen e0 the !imited !iabi!ity ru!e" does not a%%!y, $n su h ase0 the shi% o/ner is !iab!e to the +u!! e>tent o+ (*ecenas v &0 sustained "67 s 6#! by the aggrie-ed the damages %arties 8imite6 8ia.ilit% Rule ()**+) E>%!ain the do trine in @aritime a idents E 2he Do trine o+ ?imited ?iabi!ity SUGGESTED ANSWER:

Doctrine o& 7nscruta.le /ault ()**+) E>%!ain the do trine in @aritime a Do trine o+ $ns rutab!e <au!t

idents E

8nder the do trine o+ !imited !iabi!ity" the e> !usi-e!y rea! and hy%othe ary nature o+ maritime !a/ o%erates to !imit the !iabi!ity o+ the shi%o/ner to the -a!ue o+ the -esse!0 earned +reightage and %ro eeds o+ the insuran e, 7o/e-er0 su h do trine does not a%%!y i+ the shi%o/ner and the a%tain are 8imite6 8ia.ilit% Rule ()***) gui!ty o+ neg!igen e, 2hinking that the im%ending ty%hoon /as sti!! 2' hours a/ay0 @N Pioneer !e+t %ort to sai! +or ?eyte, 2hat /as a mis a! u!ation o+ the ty%hoon signa!s by both the shi%-

Page Page 1/ 13 of 103 of 103 and *!aro a!so a!ready the +a t sighted that A does @ani!a noton ha-e its radar the means s reen, and @ani!a resour had esno to radar in-est @Nengage :u%er<ast0 in retai! a %assengertrade, Besides0 argo -esse! @ati!des sa!e P400th e5ui%ment, in the se As urity +or s%eed0 agen Don y, *!aro /as o/ned o+ the byasbestos :< :hi%%ing %rodu *om%any ts to *e!este0 %!ying the being A8TERNAT7>E ANSWER: t/i e as +ast as @ani!a, inter-is!and /ho!esa!e0 routes0 the transa /as on tion its is /ay not to o-ered by 3) 2he %rose utor may estab!ish the +a t that (0sbestos v ;eralta "55 S /hen it Pamboanga the Retai!.ntegrated *ity 2rade +rom ?a/ the @ani!a %ort $"#! the P400th /ou!d onstitute a @ani!a ma.or +ai!ed to At the time o+ the o!!ision0 a identa!!y0 and /ithout +au!t or neg!igen e NationaliDe6 Acti ities or Un6erta-in's ()**1) in-estment and yet A is not e-en e!e Ru!es ted o+ +o!!o/ Ru!e 3F o+ the $nternationa! o+ anyone on the shi%0 hit a huge +!oating D!oba! J? a 300( @a!aysian o/ned member o+ the BAD or one o+ the o++i meeting ers, the Road /hi h re5uires 2 -esse!s ob.e t, 2he a@a!aysia0 ident aused damage to the or%oration0 bui!d a hote! bea h <urthermore0 may a!so be sho/n that head on to it hange their ourse by eaAh -esse! and !oss desires o+ an a to om%anying rated resort in :ama! $s!and0 *ity0 to take does not e-en ha-e means &right) to raise the -esse! steering tothe starboard so that argo o+ %assenger PR, $n Da-ao order to !ighten the ad-antage o+ the in reased tra++i o+ tourists amount o+ P400th and that the o++i ers or ea h -esse! may %ass on the %ort side &!e+t) -esse! and sa-e it +rom sinking and in order SUGGESTED ANSWER: and boost the tourism industry o+ the the rest ma.ority o+ the dire tors are +oreigners, o+ the other, it /ou!d to a-oid risk o+ damage to or !oss o+ 2) ;o, 2he mere@ani!a +a t o+signa!ed being a that ommon !a/ 3, Assuming that D!oba! has 8:O300@ to in-est Phi!i%%ines, turn to the %ort side and steered o+ the shi%%ed items &none o+ /hi h /as /i+e o+ a +oreigner does not bring her /ithin in a hote! bea h resort in the Phi!i%%ines0 may a ording!y0 thus resu!ting in the o!!ision, !o ated on the de k)0 some had to be ambit o+ the Anti-Dummy ?a/, it be a!!o/ed to a 5uire the !and on /hi h to the Don *!aros A8TERNAT7>E ANSWER: a%tain /as o++-duty and /as .ettisoned, :< :hi%%ing had the -esse! bui!d the resort# $+ so0 under /hat terms and 2) 9es, ha-ing a drink at the shi%s bar it at the time o+ Being a ommon !a/ /i+e0 an be re%aired at its %ort o+ destination, :< %assengers /ho died and the o/ners o+ the onditions may D!oba! a 5uire the !and# the o!!ision, a) Who /ou!d you ho!d !iab!e +or %resumed that she is the one running the :hi%%ing therea+ter +i!ed a om%!aint re o-er damages +rom the o/ner o+ said argoes Dis uss +u!!y, the o!!ision# b) $+ Don *!aro +a /as business0 /hi h raises a %rima ie at +au!t0 demanding a!! the other argo o/ners to SUGGESTED ANSWER: -esse!# 2, @ay D!oba! be a!!o/ed to manage the hote! %resum%tion may the heirs o+ the o+ -io!ation o+ the Anti-dummy share in the tota! re%air osts in urred by the $ an ho!d the 2 -esse!s !iab!e, $n the %rob!em bea h resort# E>%!ain, ?a/0 &RA =0G'), om%any and in the -a!ue o+ the !ost and gi-en0 /hether on the basis o+ the +a tua! 1, @ay D!oba! be a!!o/ed to o%erate restaurants NationaliDe6 Acti ities or Un6erta-in's ()**3) .ettisoned argoes, $n ans/er to the SUGGESTED ANSWER: settings or under the do trine o+ ins rutab!e /ithin the hote! bea h resort# E>%!ain, *e!este0 a domesti or%oration /ho!!y om%!aint0 the shi%%ers so!e ontention /as 3, D!oba! an se ure a !ease on the !and, As a SUGGESTED ANSWER: +au!t0 both -esse!s an be said to ha-e been o/ned by <i!i%ino iti6ens0 is engaged in that0 under the *ode o+ a *ommer e0-a!id, ea h 2he or%oration /ith @a!aysian nationa!ity0 ;o, 2he shi%%ers ontention is not gui!ty o+ neg!igen e, 2he !iabi!ity o+ the 2 trading and o%erates as genera! ontra tor, damaged shou!d bear its or o/n D!oba! o/n the !and, o/ners o+ %arty the annot argo .ettisoned0 to his sa-e the arriers +or the death or in.ury o+ %assengers $t buys and rese!!s the %rodu ts o+ @ati!de0 a damage and those that did not su++er any 2, +rom 9es0 D!oba! an manage the bea h -esse! sinking and to sa-e the hote! rest o+ and +or the !oss o+ or damage to the goods domesti or%oration0 F0( o+ /hose a%ita! !oss or damage /ere ob!igated to make resort, 2here isnot no to !a/ %rohibiting it +rom the argoes0 are entit!ed ontribution, 2he arising +rom the o!!ision is so!idary, ;either sto k is o/ned by a!iens, A!! o+ @ati!des 8imite6 8ia.ilit% Rule (2000) any ontribution in +a-or o+ those /ho did, $s managing the resort, .ettisoning o+ said argoes onstitute genera! arrier may in-oke the do trine o+ !ast !ear are made in the Phi!i%%ines +rom @N @ari%osa0 one o+ +i-e %assenger shi%s goods the shi%%ers ontention -a!id# E>%!ain &2() 1, D!oba! may be a!!o/ed to o%erate restaurants a-erage !oss /hi h entit!es the o/ners han e /hi h an on!y be re!e-ant0 i+ at a!!0 materia!s +ound or %rodu ed in the o/ned by @arina ;a-igation *o0 sank o++ the /ithin the bea h +rom resort, 2his is %art o+ the thereo+ to ontribution the o/ner o+ the bet/een the t/o -esse!s but not on the SUGGESTED ANSWER: Phi!i%%ines, An the other hand0 E*Q oast o+ @indoro /hi!e en route to $!oi!o *ity, o+ the resort, -esse! o%eration and a!so +rom the o/ners o+ the !aims made by or shi%%ers 9es0 but is sub.e t %assengers to<i!i%ino the do o/ned trine o+ !imited a 300( :< :hi%%ing is not to ontributionL @ore than 200entit!ed %assengers %erished in the $ntegrated argoes sa-ed, (=itonJua Shipping v 2ational Seamen Board 1+ !iabi!ity, 2he do trine is to the e++e t that the or%oration and manu+a turer o+ asbestos reimbursement +or the osts o+ re%airs the disaster, E-iden e sho/ed that on the shi% 5"9"7 "70ug"969! !iabi!ity o+ the shi%o/ners /ou!d on!y be to -esse! +romignored the shi%%ers, a%tain ty%hoon bu!!etins issued by %rodu ts, *e!este and E*Q took %art in a the bidding e>tent o+ondu any remaining -a!ue o+its the ted by @W:: +or Pag-asa during the 2'-hour %eriod %ub!i -esse!0 %ro eeds o+ insuran e0 i+ any0 and asbestos %i%e re5uirements, *e!este /on the immediate!y %rior to the -esse!s de%arture earned +reightage, Di-en the +a tua! settings0 bid0 ha-ing o++ered 31( !o/er than that +rom @ani!a, 2he bu!!etins /arned a!! ty%es o+ the shi%o/ner himse!+ /as not gui!ty by E*QH and @W:: a/arded theo+ sea ra+ts to a-oid the ty%hoons e>%e ted o++ered neg!igen e and0 there+ore0 the do trine an ontra t to su%%!y its asbestos %i%es to %ath near @indoro, 2o make matters /orse0 3) $s *e!este barred under the <!ag ?a/ +rom /e!! a%%!y (0mparo de los Santos v &0 "6% E*Q to to nu!!i+y the a/ard in s %9! he took more !oad than /as a!!o/ed +or the *e!este, 8imite6 8ia.ilit% Rule2 General A era'e 8oss (2000) taking %art in sought biddings su%%!y the o+ *e!este, NationaliDe6 Acti itiesa%a or Un6erta-in's ()**3) shi%s rated ity, :ued +or damages by +a-or I :hi%%ing *om%any s%ent a!most a +ortune go-ernment# 2) Did *e!este and @ati!de 3) A in-ested P400th in a se urity agen y on ;a- -io!ate the -i tims sur-i-ing re!ati-es0 @arina in re+itting and re%airing its1) !u>ury %assenger the Anti-Dummy ?a/# Did *e!este A tober 100 3FF0,3) 7e /asits harged /ith *o ontended that !iabi!ity0 i+ any0 had and -esse!0 the @N @arina0 /hi 2rade h %!ied the inter@ati!de -io!ate the Retai! being a dummy o+ his +riend0 a +oreigner, been e>tinguished /ith the sinking $+o+ @N ;ationa!i6ation is!and routes?a/# o+ the om%any +rom ?a 8nion E>%!ain, you /ere the %rose utor0 /hat e-iden it e had an not @ari%osaH and 2) that assuming in the north to Da-ao *ity in the south, 2he SUGGESTED ANSWER: ANSWER: you %resent to %ro-e -io!ation o+ the Antibeen so e>tinguished0 su h !iabi!ity shou!d be SUGGESTED @N @arina met an untime!y +ate during its 9es, 2he ontentions o+ @arina ;a- *o are 3) ;o, 2he materia!s o++ered ino++ the bids Dummy ?a/# Buana de *ru60 a @ari%osa ommon !imited to 2) the !oss o+ !a the argo, Are these %ost-re%air -oyage, $t sank the oast o+ meritorious, 2he a%tain o+ @N is submitted are made in the Phi!i%%ines +rom !a/ /i+e o+ +oreigner ontro! o+ o+ ontentions meritorious in the the onte>t Pamba!es /hi!e en route to ?a 8nion +rom gui!ty o+aneg!igen e/rested in ignoring the ty%hoon arti !es %rodu ed or gro/n in the Phi!i%%ines0 a te!e-ision +irm, At the by instan e o+ the *ode a%%!i ab!e %ro-isions o+ the o+ @ani!a, 2he in-estigation sho/ed that the bu!!etins issued PADA:A and in and a%tain the bidder0 *e!este0 is a domesti minority grou% the +irm0 she harged *ommer e# o+ &1() a!one /as neg!igent, 2here entity, /ere no o-er!oading the -esse!, But /as on!y the a%tain 2he <!ag ?a/ does not a%%!y, $t /ith -io!ation o+ the Anti-Dummy ?a/, @ay asua!ties in that disaster, <a an ed be /ith a o+ the -esse! @N @ari%osa is gui!ty o+ in-oked against a bidder /ho is not and a she be on-ie, ted by the mere +a t that she is !aim on!y +or the %ayment o+ the re+itting neg!igen SUGGESTED ANSWER: 2he shi% o/ner is not, 2here+ore0 domesti entity0 or against a domesti entity a ommon !a/ /i+e o+ a +oreigner# E>%!ain, re%air0 :hi%%ing om%any the shi% or o/ner an in-oke do trine o+ 3) A a!!o/s %ermits the use orthe e>%!oitation 2) ;o0 sin I e *e!este is mere!y aasserted dea!er o+ /ho o++ers im%orted materia!s, 8imite6 8ia.ilit% Rule2 Doctrine o& 7nscruta.le /ault e>em%tion +rom !iabi!ity on the basis o+ the !imited !iabi!ity, or en.oyment o+ a right0 %ri-i!ege or business0 SUGGESTED ANSWER: @ati!de and not an a!ter ego o+ the !atter, ()**)) hy%othe ary or !imited !iabi!ity ru!e under the e>er ise or en.oyment o+ /hi h is ;o, 2he assertion o+on I :hi%%ing is *e!este buys and se!!s its o/n a*om%any ount $n a o!!ision bet/een @L2 @ani!a0 a tanker0 Arti !e 4G7 o+@ati!de, the *ode o+ *ommer e, -esse! $s I e>%ress!y reser-ed by the *onstitution or the not -a!id, 2he tota! destru tion o+ the the %rodu ts o+ and @LN Don *!aro0 an inter-is!and -esse!0 :hi%%ing *om%anys assertion -a!id# E>%!ain !a/s to iti6ens o+ the Phi!i%%ines0 by the 1) @ati!de did not the Retai! 2rade does not a++e t -io!ate the !iabi!ity o+ the shi% o/ner Don *!aro sank and many o+ its %assengers &1(), +oreigner not %ossessing the re5uisites ?a/ sin e it does not-esse! se!! its %rodu ts to +or re%airs on the om%!eted be+ore its dro/ned and died, A!! its argoes /ere !ost, %res ribed by the *onstitution or the !a/s o+ onsumers0 but to dea!ers /ho rese!! them, !oss, 2he o!!ision o urred at nighttime but the 8imite6 8ia.ilit% Rule2-io!ate General A era'e 8oss2rade (2000) the Phi!i%%ines, 2he %rose utor shou!d %ro-e ;either did *e!este the Retai! sea /as a!m0 the /eather +air and -isibi!ity the abo-e e!ements o+ the rime ?a/ sin e0 in the +irst %!a e0 it is not /as good, Prior to the o!!ision and /hi!e sti!! %rohibited to ' nauti a! mi!es a%art0 Don Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Nationali4e& A!tivities or Un&erta-ings

Page Page 10 11 1$ of 103 of 103 ba *i-i! re5uires ku% *ode in the =0( and %ro <i!i%ino other essing !a/s ho!ding o+ o+ in goods0 !and )or%orate genera! +a a%%!i tories0 ation o/nershi%, and an d) its sti!! o/n a%%!y in A it :8RE29 is habitua!!y issued byengaged a surety or em%!oyees, su%%!etori!y, $s E? engaged in retai! trade# does due ourse0 a%%ear asBA;D that su hP +ai!ure is or re+usa! A8TERNAT7>E ANSWER: insuran e om%any in +a-or o+ a E>%!ain, in onstituted se!!ing to bad the genera! +aith, %ub!i that designated 2he dismissa! by the ourt /as board orre t, A SUGGESTED ANSWER: bene+i iary0 to /hi o+ h the su h 1) 9es, ;ot being a ho!der ourse0 ) 2he Anti-dummy ?a/ a!!o/s ommodity, :in e%ursuant there is in nodue -io!ation 2he sa!e by E? o+ generators to go-ernment he k /hether or not %ost-dated or rossed0 om%any a ts as a surety to the debtor or E> e! is sub.e t to the %ersona! de+ense re%resentation to the e>tent o+ a tua! and Retai! 2rade ?a/0 there /ou!d !ike/ise by no o++i es0 agri u!tura! enter%rises and +a tories is sti!! a negotiab!e instrument and un!ess ob!igor o+ su h bene+i iary, A *A:7 BA;D is /hi h Po Press an set u% against Bose (State %ermissib!e +oreign in-estments in -io!ation o+ the Anti-Dummy ?a/, are outside theA s ording!y0 o%e o+ the term retai! Pab!o is a genera! indorser0 /hi h is not Retail Tra6e 8a; ()**3) a se urity in the +orm ash estab!ished by .nvestment Eouse v .0& "35o+ S #"7! or%orations, the President o+ business" and may0 be made by e>%ressed in the tua!BAD settings0 he annot C#ec-s2 Crosse6 ()**1) A +oreign +irm C#ecis engaged in theto business o+ the a guarantor or surety se ure A me may no sit +a inthere+ore0 the o+ the C#ec-s: Crosse6 C#ec-s (2001) the said or%oration, 7o/e-er0 sa!es be he!d !iab!e +or the dishonor o+ the An A t 320 3FF10 *he!sea a or% manu+a turing se!!ing :traights0 rubber %rodu ts to ob!igation o+and another, de%artment store or%oration but an do o+ so What is a rossed he k# What are the generators by$nor%oration, E? to its o/n Eouse em%!oyees d) 2herea!ty 2reasurer o+ A me may not ho!d that instrument, State .nvestment v .0& (1+ engaged in the manu+a ture o+ igarettes0 dea!ers /ho in turn se!! them to others, $t a!so in the e++e ts o+ to rossing a he ba!es k# E>%!ain, onstitute retai! in sa!es and are not %ros %osition either the de%artment store 3$3%4 "#Aul"969! 0 the ourt did go ribed, so +ar ordered +rom @oises 20000 o+ toba o, se!!s dire t!y agri u!tura! enter%rises0 A8TERNAT7>E ANSWER: SUGGESTED ANSWER: 8nder the amendment Retai! 2rade or%oration or in the or%oration sin e as to ho!d that the +a rea!ty tto o+ the rossing /ou!d *he!sea issued to @oises t/o %ub!i rossed he ks automoti-e assemb!y %!ants0 uti!ities $n State .nvestment Eouse v .0& (1+ 3$3%4 A *rossed *he k under a e%ted banking ?a/ introdu by ?a/ PD 73'0 the the term retai! the Anti-Dummy %rohibits render theed instrument non-negotiab!e, %ostdated @ar andbu!k0 34 A%r F' in +u!! /hi h buy 34 them inF' !arge and to its "#Aul"969!, the :* onsidered a rossed he k %ra ti e0 rossing a he k is done by /riting business" sha!! o+ not in !ude turer em%!oyment a!iens in suah manu+a nationa!i6ed %ayment there+or, An 3F3) Ban @oises so!d o++i ers and em%!oyees, $s F' there -io!ation as sub.e ting a subse5uent ho!der thereo+ to t/o %ara!!e! !ines diagona!!y on the !e+t to% &suareas h as E?) se!!ing tothose industria! o+ business e> e%t that a!!and +or to Dragon $n-estment 7ouse at a 2) dis ount o+ the Retai! 2rade ?a/# E>%!ain, @ay said the ontra tua! o-enants o+ the %ayor and %ortion o+ the he ks, 2he rossing is s%e ia! ommer onsumers high!y ia! te users hni a! or 5ua!i+i ations, /ho use the the he ks by *he!sea in his +irmt/o o%erate a dra/n anteen inside the %remises o+ the %ayee, $+ su h /ere the ase0 then the /here the name o+ the bank or a business %rodu ts bought by them to render ser-i e to +a-or, @oises +ai!ed to de!i-er ba!es its %!ant e> !usi-e!y +or its o++i the ia!s and o+ instrument is ()**)) not one /hi h an sti!! be said institution is /ritten bet/een the t/o %ara!!e! SUGGESTED ANSWER: Retail Tra6e 8a; the genera! %ub!i &eg go-ernment o++i es) toba o as agreed *he!seas em%!oyees /ithout des%ite -io!ating the Retai! 2rade 3) An the/hi assum%tion that the +oreign +irm is to ontain an un onditiona!/i+e %romise %ay or !ines0 h means that the dra/ee shou!d $s theto <i!i%ino ommon-!a/ o+ a to andLor %rodu e or ()**)) manu+a ture goods demand, *onse5uent!y0 on 3 @ar F' *he!sea A t# E>%!ain, Retail Tra6e 8a;2 Consi'nment doing in thethe Phi!i%%ines0 the sa!e order a sum ertain in money, $n the trans+er %aybusiness on!y /ith inter-ention o+to that +oreigner +romso!d engaging the retai! /hi h are barred in turn by in them &eg issued a sto% %ayment" order on the 2 AB* @anu+a turing $n 0 a by om%any /ho!!y :ffe.ts of C!e.$s SUGGESTED ANSWER: the dea!ers o+ Crosse9 agri u!tura! enter%rises0 o+ non-negotiab!e redits assignment0 the om%any, business# agri u!tura! enter%rises and +a tories), he ks issued to @oises, Dragon0 !aiming to 3) 2he he k may not be en ashed but on!y o/ned by +oreign nationa!s0 manu+a tures A <i!i%ino ommon-!a/ /i+e o+ a +oreigner is automoti-e assemb!y %!ants0 and %ub!i trans+eror does not assume !iabi!ity +or the (1oodyear :ires vh +eyes Srdistributes 1r #77%#, Aly 6# A8TERNAT7>E ANSWER: be a ho!der in due ourse0 +i!ed a be om%!aint in the bank, 2) 2he hethere+ore0 k may negotiated de%osited ty%e/riters /hi AB* to $,the SUGGESTED ANSWER: not barred +rom engaging in retai! business, uti!ities is /ho!esa!e and0 not in +au!t o+ the debtor or ob!igor, A ording!y the "$#s$3#!/ 9es, AB* 2he he rossed, $t shou!d +or o!!eon tion against *he!sea +or the 2he -a!ue o+ on!y one t 3 its ty%e/riters to ha-e Dragon annot o!!e +rom *he!sea, genera! %ub!i ink 2is /ays: An the assum%tion that she and in -io!ation o+ eSto the Retai! 2rade A t (B- 1oodrich v ourts de onsigns ision /as orre t,a ts +or +ore/arned @r, ;ob!e that it /as issued +or a the he ks, Ru!e on the om%!aint o+ Dragon, /ho has an a ount /ith a bank, 1) 2he a t inde%endent dea!ers /ho in turn se!! them to instruments are rossed he ks /hi h /ere her o/n beha!+0 and absent a -io!ation o+ the +eyes "$" s #%#! s%e i+i %ur%ose, 7en e0 @r ;ob!e ou!d not Di-e your !ega! basis, o+ rossing the he k ser-es as a /arning to 2) 9es, 2he o+20000 the anteen inside the %ub!i H and0 ?a/ /hi h %rohibits a +oreigner intended to o%eration %ay +or the ba!es o+ Anti-Dummy a ho!der in due ourse, 7e are is sub.e to the that the he ko++i has been issued +or2 a be the %remises !usi-e!y +or its and indi-idua!s0 /ho notort an toba o toho!der bee> de!i-ered to @oises, $ters /as +rom2hrough being either the rea! %ro%rietor the %ersona! de+ense o+ brea h o+ trustL de+inite %ur%ose0 so that he must in5uire i+ he em%!oyees0 /ou!d amount to an in%ut in the em%!oyees o+o+ AB*0 and /ho are %aid stri retai! t!y there+ore the ob!igation o+ Dragon to in5uire em%!oyee a %erson engaged in the agreement by basis @r, Pab!o, :u de+ense re turing ei-ed %ro the he k %ursuant that ANSWER: has these arrangements -io!ate the Retai!is 2rade manu+a ess there+ore0 does on A8TERNAT7>E a ommission ea hh sa!e, as to the %ur%ose o+ theand0 issuan e o+to the 2 %ur%oseHDo trade0 she /ou!d be +or -io!ating the Retai! other/ise0 he is not a ho!der in due An engagement by a /i+e &in !uding a-ai!ab!e in +a-or o+ @r *ar!os against @r ?a/# not -io!ate the Retai! 2rade A t, rossed he ks be+ore ausing them to be 2rade A t, C#ec-s2 Crosse6 C#ec- ()**3) SUGGESTED ANSWER: ourse, ommon-!a/ re!ationshi%s) o+ a +oreigner in ;ob!e, Retail Tra6e 8a; ()**4) on its %art to make su h dis ounted, <ai!ure Press issued in +a-or o+ Bose a %ostdated a) Po 2he +irst arrangement /ou!d not be in C#ec-s: Crosse6 C#ec-s s! Cancelle6 C#ec-s (2003) Retail Tra6e 8a; ()**0) the retai! trade business0 raises the With a a%ita! o+ P2th @aria o%erates a sta!! in5uiry0 /hi h resu!ted in its bad +aith0 rossed in %ayment o+ ne/s%rint -io!ation o+ he thek0 Retai! 2rade ?a/, 2he !a/ Distinguish !ear!y &3) rossed he ks +rom A me 2rading *o $n 0 a trading om%any %resum%tion that she has -io!ated the Antiat a %ub!i market, :he manu+a tures soa% Dragon annot !aim to be a ho!der in due /hi h Bose %romised to de!i-er, Bose so!d and a%%!ies on!y /hen the sa!e is dire t to the an e!!ed hethe ksH+oreign /ho!!y o/ned by sto kho!ders0 /as Dummy ?a/, 7en e0 the /i+e is barred +rom that she se!!s to genera! %ub!i , 7er ourse, @oreo-er0 the he ks /ere so!d0 not SUGGESTED ANSWER: negotiated the he k to E> e! $n , se!!s at a +or genera! %ub!i ,the A dea!er buys and %ersuaded by Pau!o A!-a0 a <i!i%ino0 to in-est engaging in retai! trade business, ommon !a/ husband0 @a?ee0 /ho has a endorsed0 by him tois Dragon /hi h did not !ines A 20( rossed heoutstanding k one /ith t/o %ara!!e! Retail dis Tra6e E> 8a; e! ()**2) did and0 not ask Bose the %ur%ose in ount, his o/n beha!+ there+ore0 the sa!e o+ the shares o+ sto a k o+ a and %ending %etition +or natura!i6ation0 be in ome a ho!der in due ourse, ;ot being dra/n diagona!!y a ross its +a e or a ross a o+ rossing the he k, :in e Bose +ai!ed to A *oo%erati-e %ur hased +rom 9 *o on to the genera! %ub!i is made by the dea!er or%oration he is +orming /hi h /i!! engage in o asiona!!y +inan es the %ur hase o+ goods ho!der in due ourse0 An Dragon is sub.e t hand0 to the a orner thereo+, the other de!i-er the ne/s%rint0 Po ordered the dra/ee insta!!ments a ri e mi!! and made a do/n and not by the manu+a turer (*arsman D &o v the de%artment store business &the +or resa!e0 and assists in %art the management o+ A8TERNAT7>E ANSWER: %ersona! de+ense on the o+ *he!sea SUGGESTED ANSWER: an e!!ed he k is one marked or stam%ed bank to sto% %ayment on the he k, E++orts %ayment there+ore, As se urity +or the -irst &oconut &ontrol &o 1+#964" $7Aune"966! de%artment storeh or%oration"), Pau!o a!so the business, $s brea there ao+ -io!ation o+ the Retai! a) 2he +irst arrangement -io!ates the Retai! on erning trust on the %art o+o+ a ;o0 there is the no -io!ation o+ the 2rade K%aidK andLor K in-est an e!!edK byRetai! or on beha!+ o+ E> e! to o!!e ba!an t +rome0 Po +ai!ed, E> e! /ants %ayment o+ the the *oo%erati-e C#ec-s2 Crosse6 C#ec()**4) urged A me to in '0( o+ the 2rade ?a/# E>%!ain, 2rade ?a/ be ause /hen AB* onsigned" @oises ?im in not om%!ying /ith his ?a/, @aria is a manu+a turer /ho se!!s to the dra/ee bank to indi ate %ayment thereo+, to kno/ +rom you as ounse!: 3) What are e>e uted a hatte! mortgage in +a-or o+ 9 the What are the e++e ts o+ rossing a outstanding shares o+2000 sto kba!es o+ the rea!ty the ty%e/riters0 the transa tion /as one o+ ob!igation to de!i-er the o+ C#ec-s2 Crosse6 C#ec()**)) genera! %ub!i 0 through her sta!! in the %ub!i SUGGESTED ANSWER: e++e ts o+ rossing a he k# 2) Whether as *or%oration, 9 *o in turn assigned its rights he k# or%oration he is %utting u% to o/n the !and onsignment sa!e, $n onsignment sa!e0 an rossed he k0 is it a ho!der ho!der in due ourse# toba o,the @r Pab!o sought P200th +rom @r 2he e++e ts o+ rossing hemanu+a k are as market0 soa% /hito haborro/ she tures, se ond hatte! indorser and o+ the to the mortgage to P *o a 4( +oreign on /hi h the de%artment store /i!! be bui!t agen y re!ationshi% is reated so it is as i+ 1) Whether Pos de+ense o+ !a k o+ *ar!os to !oan the eed amount in 3 *ar!os, 2he he k agreed may not be en ashed but on!y +o!!o/s: $nasmu h as her a%ita! does not e> or%oration# E>%!ain your ans/er, b) @ay o/ned om%any doing business in the &the rea!ty or%oration"), a) @ay A me in-est AB* se!!s dire t!y to the %ub!i through its against Bose is a!so a-ai!ab!e as against onsideration as the +orm o+ a the %ostdated k /hi h /as de%osited in a bankH P4th isin-est on!y P2th) then she ishe onsidered A &it me in rea!ty or%oration# SUGGESTED ANSWER: 2he oo%erati-e therea+ter made Phi!i%%ines, in the said de%artment store E> e!# rossed &i,e, 2 %ara!!e! diagona!!y dra/n ause the *oo%erati-e /as to meet 2 Dis 2he'a he k may be !ines negotiated on e to agents, under :e the Retai! 2rade ?a/ as not uss, ) o+ @ay the President o+ A on!y me0 a b) Be 2he se ond arrangement /ou!d be insta!!ment %ayments to P *o,unab!e SUGGESTED ANSWER: on the to% !e+t %ortion o+ the he k), Be+ore its ob!igations in +u!!0 2rade P *o +i!ed against it a BAD the de%artment store h or%oration# one /ho has an a said ount /ith a bankH engaged in o+ the retai! business," $nasmu +oreigner0 sit in the -io!ati-e o+ the Retai! ?a/0 sin e the 3) 2he e++e ts o+ rossing a he k due date o+rossing the he k0 Pab!o dis ounted ourt suit +or o!!e tion, 2he *oo% resisted he be a business dire tor o+ rea!ty or%oration# @ay as @arias is the not a business0" sa!e is done through indi-idua!s being %aid 1 the 2he a t o+ aretai! he k ser-es as a 2he he k is +or de%osit on!y in the are:3 it /ith ;ob!e An due date0 ;ob!e de%osited P *o /as i!!ega!!y engaged in Dis uss, d) @ay the 2reasurer o+ ARetai! me0 then the re5uirement in :e 3that o+ the stri ontending t!ya on a that /arning to the ho!der thereo+ the he k has ount o+ommission the %ayee basis, 2he said the o he u%y k the /ith same his %osition bank, 2he in the he said k de%artment /as the retai! trade business ha-ing so!d a another +oreigner0 2rade ?a/ that Phi!i%%ine nationa!s sha!! indi-idua!s /ou!d be +or abe ting mere!y as been issued +or on!y a de+inite %ur%ose so that the 2 2he then he k may indorsed on!y store or%oration# @ay he be the treasurer o+ dishonored, ;ob!e sued Pab!o, 2he ourt onsumer good as o%%osed to a %rodu er engage0 dire t!y0 or indire t!y0 in the retai! agents o+ the manu+a turer, :a!es0 there+ore0 ho!der must in5uire i+ he has re ei-ed the he k SUGGESTED ANSWER: on ANSWER: e in +a-or o+ a %erson /ho has an A8TERNAT7>E said or%oration# E>%!ain, the dismissed ;ob!es om%!aint, Was the ourts item, 2he *oo% a!so a!!eged that P had business is ina%%!i ab!e, <or this reason0 made by su h agents are deemed dire t %ursuant torea!ty that %ur%ose0 other/ise he isthe not a 2he ourts de ision /as in orre t, Pab!o and a ount /ith a bank SUGGESTED ANSWER: b) 2he 2nd arrangement is not -io!ati-e de ision orre t# -io!ated the Anti-Dummy ?a/, $s P gui!ty o+ o+ %arti i%ation o+ @a ?ee0 @arias ommon ?a/ sa!es by the manu+a turer, ho!der in due ourse (See Bataan &igar and *ar!os0 being immediate %arties to the 1 2rade 2he hebe k is issued +or a s%eare i+i a) A me may not in-est in the de%artment the Retai! ?a/ ause ty%e/riters -io!ating the Retai! 2rade ?a/ and the Antihusband0 in the management o+ the business &igarette -actory, .nc/ v &0 1+ 9#746, *ar #, "994< instrument0 are go-erned by the ru!es SUGGESTED %ur%ose ANSWER: and the %erson /ho takes it+or not Retail Tra6e or%oration 8a; ()**4) store sin e the Retai! 2rade A to+ not onsum%tion goods or goods Dummy ?a/# Why# $#7 s %4#! /ou!d not be a -io!ation o+ the Retai! 2radees o+ %ri-ity, Di-en the +a tua! ir umstan P *o is not gui!ty o+ -io!ating the Retai! 2rade in a ordan e /ith said %ur%ose does not E? a!!o/s0 $n 0 a domesti or%oration /ith +oreign in the ase o+ or%orations0 on!y 300( %ersona!0 househo!d and +ami!y use, ?a/ in %rob!em0 re!ation to the Anti-Dummy ?a/, the Pab!o has no -a!id e> use +rom ?a/ and the Anti-Dummy ?a/, 2he term be ome a ho!der in due ourse and is not e5uity0 manu+a tures e!e tri generators0 <i!i%ino o/ned om%anies to engage in retai! denying !iabi!ity0 (State investment Eouse a) v .0& RE2A$? under Retai! thereunder, 2rade A t re5uires entit!ed to the %ayment and se!!s them to the +o!!o/ing ustomers: trade, 2) ;o, $t se!!er is a rossed he k and E> e! did not 1+A 3$3%4 "#Auly"969!/ Pab!o undoubted!y had b) me may the that the must be habitua!!y engaged in go-ernment o++i in-est es /hiin h userea!ty the generators take it in a ordan e /ith the %ur%ose +or ,on6: Cas# ,on6 s! Suret% ,on6 (2003) bene+ited in the transa tion, ho!d or%oration0 on to the assum%tion that 2o the se!!ing to the genera! %ub!i onsum%tion during bro/nouts render %ub!i ser-i e0 b) /hi h the he k /as issued, <ai!ure on its Distinguish ash bond +rom surety other/ise /ou!d the basi ba!an e o+ =0( o+ a!so o/nershi% o+ the !atter goods, By !ear!y onsum%tion goods are meant agri u!tura! enter%rises /hiontra-ene h uti!i6e the %art to in5uire as to said %ur%ose0 bond, ru!es o+ enri hment, E-en or%oration0 is <i!i%ino o/ned sin e the !a/ in %ersona!0 +ami!y and househo!d" %ur%oses, A generators as un.ust negotiab!e instruments0 the mere!y Ri e @i!! Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006) SUGGESTED ANSWER: does %re-ented not +a!! E> under e! +rom the beategory, oming a ;either ho!der

Negotia'le Instr.ments Law

Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

%ayment there+or through (:raders the +oyal *!earing Ban' v/ 7ouse0 +;2, 1/+/ I@ 2o/ "#65"7, ,ctober "7, $77$!/ Bank honored it, 2herea+ter0 A!bert /ithdre/ Y P2300000 Dra/ee-bank anhis re a o-er +rom the the and !osed ount, o!!e ting bank (1reat Eastern =ife .ns/ &o/ v/ Eong'ong D Shanghai Ban', 1/+/ 2o/ a+ter a When the he k /as returned to him be 0ugust ause e-en the indorsement on I@ "6%53, $#,"9$$! month0 Wi!!iam dis i+ o-ered the a!teration, the he k de%osited by bankCs Bank re redited P2300000 tothe Wi!!iams !ient +orged0 ting bank is urrent a is ount0 and o!!e sought reimbursement bound by its /arranties as an !aiming indorser +rom ;D Bank, ;D Bank re+used0 and annot set u% de+ense o+ +orgery that I@ Bank +ai!ed to return the a!tered against dra/ee bank (0ssociated he as k to it /ithin 2' hour !earing %eriod, Ban' v/ &ourt of 0ppeals, 1/+/ Who0 as bet/een0 I@ Bank and 2o/ ;D "73#6$, Bank0 SUGGESTED ANSWER: C#ec-s2 8ia.ilit%2 Aanuary Dra;ee #", "99%!/ ,an- ()**1) shou!d bear the !oss# E>%!ain, ;D Du6man Bank shou!d the !oss i+ I@ @ario issuedbear to 7onesto :antos a Bank returned the a!tered he k toa;D Bank /ithin he k +or P40th as %ayment +or 2nd hand t/enty +our a+ter o+ its @ario0 dis o-ery o+ the ar, Without thehours kno/!edge a!teration, 8nder the gi-en +a ts0 Wi!!iam 7onesto hanged the amount to P340th dis o-ered the a!teration /hented the /hi h a!teration ou!d not be dete bya!tered the he eye, k /as returned to him the a+ter a month, $t naked 7onesto de%osited a!tered may sa+e!y be assumed that the Wi!!iam he k /ith :hure Bank /hi h +or/arded immediate!y ad-ised I@ Bank o+ su same to Progressi-e Bank +or %ayment, h +a t and that the !atter %rom%t!y noti+ied Progressi-e Bank /ithout noti ing the ;D Bank therea+ter, *entra! Bank *ir u!ar ;o, F0 as a!teration %aid the he k0 debiting P340th amended0 on /hi h the de isions o+ the +rom the a ount o+ @ario, 7onesto /ithdre/ :u%reme *ourt in Eong'ong D Shanghai the amount o+ P34th +rom :hure Bank and Ban'ing &orp v ;eopleIs Ban' D :rust &o and disa%%eared, A+ter re ei-ing his bank +epublic @ario Ban' vs &0 the /ere based /as statement0 dis o-ered a!teration SUGGESTED ANSWER: e>%ress!y an e!!ed and su%erseded by *B and demanded restitution +rom Progressi-e 2he demand o+ @ario +or restitution o+ the ;o Dis 137 uss dated De 21 3F70, 2he !atter /as in Bank, +u!!y the rights and the amount o+ P3400000 to his a ount is tenab!e, turn amended by *B *ir erned, u!ar ;o 4G00 dated !iabi!ities o+ the %arties Progressi-e Bank has no on right to dedu t said :e%t 3F0 3F77, As to a!tered he ks0 the ne/ amount +rom @arios a ount sin e the order ru!es %ro-ide that the dra/ee bank an sti!! o+ @ario is di++erent, @oreo-er0 Progressi-e return them e-en a+ter ':00 %m o+ the ne>t Bank is !iab!e +or the neg!igen e o+ its day %ro-ided it does so /ithin 2' hours +rom em%!oyees in not noti ing the a!teration dis o-ery o+ the a!teration but in no e-ent /hi h0 though it annot be dete ted by the beyond the %eriod +i>ed or %ro-ided by !a/ A8TERNAT7>E naked eye0 ANSWER: ou!d be dete ted by a I@ BankProgressi-e shou!d bear the !oss, the +or +i!ing o+ a !ega! a tion by theWhen returning As bet/een Bank and :hure magni+ying instrument used by te!!ers, bank dra/ee against bank &I@ the that Bank) bank +ai!ed sending to the return the Bank0 it is the +ormer shou!d bear the same, a!tered he kBank to the ting bank &;D Assuming that the re!ationshi% bet/een the !oss, Progressi-e +ai!edo!!e to noti+y :hure dra/ee Bank) bank the and 2' the hour o!!e !earing ting /ith bank %eriod is Bank that /ithin there /as something /rong :e ' !earing o+ *Bhour *irdo u!ar F0 2' dated e-iden edinby some /ritten ument0 the the%ro-ided he k /ithin the ru!e o+ C#ec-s2 (aterial Alterations2 ()***) %res <eb 370 ri%ti-e 3F'F0 %eriod the 8ia.ilit% !atter /ou!d is be abso!-ed 30 years, +rom hours, A !iabi!ity, he k +or (See P400000,00 dra/n against v /as ;BD: &o 1+ =8$6$$% Sep (&ampos, 2.= ESB& 5th ed 4548455! dra/ee #7 "937< bank #5 and s "47< made also%ayab!e +ep Ban' to vI9P &0 1+ 4$3$5 C#ec-s2 /or'e6 C#ec-2 E&&ects (2004) 0pr $$, "99" "9% s2he "77! he k /as de%osited @arketing or order, Dis uss the !ega! onse5uen es /hen a bank /ith %ayees a ount at AB* Bank /hi h honors a +orged he k, &4() then sent the he k +or !earing to dra/ee SU++ESTE6 ANSWER( bank, Dra/ee bank re+used to honor the honors 2he !ega! onse5uen es /hen a bank he k on ground that the seria! number a +orged he k are as +o!!o/s: 3 $s it %ro%er +or the dra/ee bank thereo+ had been a!tered, I9P marketing &a) 5!en 3ra?erCs '"gnature "s to Forge9= dishonor the he k +or the reason that it had been sued dra/ee bank, Dra/ee-bank by a e%ting the he k annot a!tered# E>%!ain &2() o+ +orgery0 be ause by set u% the de+ense 2 $n instant suit0 dra/ee bank ontended a e%ting the instrument0 the dra/ee bank that I9P @arketing as %ayee ou!d not sue the admits the genuineness o+ signature o+ C#ec-s2 Crosse6 C#ec()**4) dra/ee bank as there /as no %ri-ity bet/een (B;. -amily Ban' vs/ Buenaventura 1/+/ Andra/er @ar h 30 3FF=0 Pentium *om%any ordered then, Dra/ee theori6ed that there /as no basis to "46"9%, September #7, $775< Section $#, a 2o/ om%uter *D is Bytes0 and issued 8n!ess a +rom +orgery attributab!e to a the +au!t make it !iab!e +or the he k, $s this ontention 2egotiable .nstruments =aw!/ o+ P100000 %ostrossed he k in SUGGESTED ANSWER: or t# neg!igen ethe o+ amount the dra/er himse!+0 the orre E>%!ain, &1() dated @ar 8%on ei%t o+against the a, ;o, 2he 130 seria! number isre not a materia! remedy o+ 3FF=, the dra/ee-bank is the he k0 *D Bytes dis ounted the he k /ith %arti u!ar o+ the he k, $ts a!teration does %arty res%onsib!e +or the +orgery, Ather/ise0 <undonstitute 7ouse, materia! not

30 of 103 a!terationPage o+ Page the 13 15 instrument, of 103 of 103 2he seria! number is not the materia! the -amily Ban' v/ dra/ee-bank bears !oss to (B;. Buenaventura, An1/+/ A%ri! 2o/ 30 3FF=0 "46"9%, Pentium September sto%%ed #7, %ayment $775!/ A negotiabi!ity o+ the instrument, o+ the dra/ee-bank he k +or +ai!ure %ayingo+ on *D a Bytes +orged to he de!i-er k must b, 9es, As a genera! the dra/ee not and the beom%uter, onsidered 2hus0 as ru!e0 /hen %aying <und out 7ouse o+ itsis +unds (Samsung &onstruction &o/ ;hils, v/ -ar East !iab!e under the he bedra/ee ause there is no de%osited annot the harge he the k0 k the amount to the bank dra/er Ban', "$97"5, 0ugust "#, $774!/ $+ the %ri-ity o+1/+/ ontra bet/een I9P @arketing0 dishonored it,2o/ t $+ <und 7ouse a om%!aint against dra/ee-bank has harged dra/erCs ount0 as %ayee0 and +i!es AB* Bank as the dra/ee a bank, Pentium and *D +orsu the o+is the the !atter an re o-er h%ayment amount +rom the 7o/e-er0 i+ the aBytes tion taken by the bank 1/+/ 2o/ "73#6$, Aanuary #", "99%< Ban' of ;/ ./ dishonored he k0 /i!! the om%!aint %ros%er# dra/ee-bank (0ssociated Ban' v/ &ourt of an abuse o+ right /hi h aused damage not v/ &ase *ontessori 2o/ E>%!ain, SUGGESTED ANSWER: 2he +i!ed 0ppeals, on!y to the issuer o+ the:.nternationale, he kom%!aint but a!so 1/+/ to the *ay $6, $774!/ by "49454, <und 7ouse against not %ayee0 the %ayee has a Pentium ause o+/i!! a tion 7o/e-er0 the ()**3) dra/er may be %re !uded or C#ec-s2 "resentment %ros%er but the one under 5uasi-de!i t, against *D Bytes /i!!, esto%%ed +rom setting u% the 310 de+ense o+ Demma dre/ he k on :e%tember <und 7ouse isa not a ho!der in due ourse and0 +orgery as against the dra/ee-bank0 it 3FF0, 2he Pentium ho!der %resented he k to /hen the there+ore0 an raisethe the de+ense o+ is sho/n that the dra/er himse!+ had been dra/ee bank on!y on @ar h 40 3FF', 2he +ai!ure o+ onsideration against it, 2he he k gui!ty o+ gross e same as to ha-e bank dishonored the neg!igen he on the in 5uestion /as issued by k Pentium to %ay +or +a A+ter i!itated the by the +orgery &*etropolitan date, dishonor dra/ee the a om%uter that it ordered +rom *D bank0 Bytes, (2,:0 BE2E :he question does not Paterwor's v/ &ourt of 0ppeals, 1/+/ 2o/ =%$94#, ho!der ga-e a +orma! noti e o+ dishonor to 2he om%uter not the ha-ing been de!i-ered0 qualify term )forged chec')/ 0n "4# S&+0 $7, Auly "4, "96% ), Demma through aaddressing !etter dated A%ri! 270 there /as a +ai!ure o+ onsideration, 2he answer the liabilities of a 3FF', 3) What is meant by unreasonab!e he k dis drawer ounted /ith <und by *D should be 7ouse deemed sufficient/ time" as a%%!ied toaddressing %resentment# 2) $s of ha-e 0nswers liabilities parties Bytes is a rossed he k and this shou!d SUGGESTED ANSWER: 3ra?ee #an$ versus Colle.t"ng #an$ S Demma !iab!e to the ho!der# should li'ewise be given full credit! %ut <und 7ouse on in5uiry, $t shou!d ha-e 3) As a%%!ied to %resentment +or %ayment0 When thethe signature o+ the dra/er is he +orged0 as ertained tit!e o+ *D Bytes to the reasonab!e time: is meant not more than =k as bet/een the dra/ee-bank and o!!e ting or the nature o+ the !atters %ossession, months +rom the date o+ issue, Beyond said bank0 this the res%e dra/ee-bank sustains the !oss0 <ai!ing t0 <und 7ouse is deemed %eriod0 in it is unreasonab!e time" and the sin o+ e the o!!e ting bank does not to guarantee gui!ty gross neg!igen e amounting !ega! he k be omes sta!e, the Aside signature o+ the dra/er, 2he %ayment absen e o+ good and0 thus0 not a ho!der o+ 2) ;o, +orm+aith the he k being a!ready theDemma he k by the dra/ee in due ourse, <und 7ouse an bank o!!e t onstitutes +rom sta!e0 is a!so dis harged +orm (;hilippine 2ational Ban' v/ &ourt of the %ro>imate neg!igen e sin e it 0ppeals, has *D Bytes as Acce$tance the !atter /as the immediate C#ec-s2 E&&ect2 .% t#e 6ra;ee .an()**:) !iabi!ity under the he k0 being a dra/er and the 1/+/ 2o/ =8$%77", ,ctober $9, "9%6!/ duty to kno/ the signature o+ its !ientindorser o+ the he k, (See Bataan &igar and I %erson dra/s a he k!iabi!ity against his urrent a this ount a /hose is se ondary0 is dra/er, &igarette -actory v &0the et $#7 s o+ %4# 1+ 9#746 /ith to the Artigas bran hal o+ Boni+a io Bank in due the gi-ing o+ noti e dishonor *ar #, o+ 94! +a-or B, A!though I does not ha-e beyond the %eriod a!!o/ed by !a/, 2he gi-ing &b) Forge9 0ayeeCs '"gnature= When su++i ient +unds0 the bank honors the he k o+ noti e o+ dishonor on A%ri! 270 3FF' is dra/ee-bank %ays the +orged he k0 it must /hen itonsidered is %resented +or %ayment, more one &3) month +rom h+unds 40 be than as %aying out @ar o+ its and A%%arent!y0 I has ons%ired /ith the banks 3FF' /hen harge the he k amount /as dishonored, :in e annot the so %aid to the bookkee%er so his !edger ard it is sho/n that Demma and the ho!der a not ount o+ the de%ositor, $n su h/ou!d ase0 the sho/ that he sti!! has su++i ient +unds, resided in the same %!a e0 the %eriod /ithin bank be omes !iab!e sin e its %rimary duty is 2he bank +i!es an aetion +or re o-ery o+ the /hi h to gi-e noti o+ dishonor must be the to -eri+y the authenti ity o+ the %ayeeCs A8TERNAT7>E ANSWER: amount %aid to the B be ause the v/ he k h same time that noti e /ou!d rea signature (:raders +oyal Ban' +adio 2) Demma an no sti!! be !iab!e under De the ide & ) i+ Forge9 %resented has su++i ient +unds, ;hilippines 2etwor', 1/+/ 2o/ "#65"7, ,ctober Demma sent by mai!, :e 301 M 30'H origina! ontra t +or the &;$? onsideration o+ SUGGESTED ANSWER: In9orse-ent : Y Dra/erCs a ount annot the ase &4() "7, $77$< Pestmont Ban' v/ ,ng, 1/+/ 2o/ <ar East Rea!ty $n-estment $n *A 3== : to be /hi h the he kand /as issued, 2he bank annot re o-er the amount %aid harged0 i+ harged0 he an re o-er "#$5%7, Aanuary #7, $77$!/ 24=) C#ec-s2 "resentment (2003)Ban' B +or the he k,dra/ee-bank When the bank honored the (0ssociated v/ &ourt of 0ppeals, +rom the Ahe bank issues its k, @ay thee%tor0 ho!der k0 it be ame an a he e%tor, As a 1/+/ 2o/o/n "73#6$ Aanuary #","99%!/ ho!d the !iab!e thereunder i+ he t!y +ai!s the bank be ame %rimari!y and dire Y bank Dra/er has no ause o+ to a tion E %ro-e %resentment +or %ayment0 !iab!e to the %ayeeLho!der B, against o!!e ting bank0 sin e theor duty o+ 2he re %resent ourse o+the the bank shou!d be against o!!e ting bank is the on!y to the %ayee, A bi!! to dra/ee +or I and its bookkee%er /ho ons%ired to make e o!!e bank is not gui!ty o+ neg!igen a e%tan e#ting E>%!ain your ans/ers, &'() Is !edger sho/ that he has su++i ient +unds, o-er a +orged indorsement on he ks +or A8TERNAT7>E ANSWER: it has no /ay o+ as ertaining the 2he bank an re o-er +rom B, 2his is solutio authority o+ the endorsement and /hen it indebiti be ause there is %ayment by the aused the he ks to %ass through the bank to B (*anila /hen su h %ayment is not due, =ighter :ransportation, .nc/ v/ &ourt of !earing house be+ore a!!o/ing /ithdra/a! 2he he k0ppeals, issued I to -ebruary B as %ayee no An the 1/+/ 2o/ by 57#3#, "5, had "997!/ o+ the %ro eeds thereo+ su++i ient +unds, other hand0 a o!!e ting bank /hi h C#ec-s2 E&&ects2 Alterations2 "erio6 ()**4) endorses a "rescri$ti he k ebearing a +orged Wi!!iam issued to A!bert a he k +or P300000 endorsement and %resents it to the dra/n on I@ Bank, A!bert the dra/ee bank a!tered guarantees a!! %rior amount o+endorsements the he k to P2300000 and in !uding the +orged de%osited endorsement the he k to his a ount ;Dbe he!d itse!+ and /ith shou!d Bank, When ;D Bank %resented the he k !iab!e +or
Page

Page Page 3# 33 3/ of 103 of 103 de!i-ered Ne'otia.le b) Paragra%h 7nstrument: it to Page @arie, 2 31 De&inition E of negotiabi!ity :he 103 0 a is e%ted ;A2 A<<E*2ED" he What k in good +aitheither as %ayment C#aracteristics (2001) is a+rom negotiab!e a) P20400,00 2, !iabi!ity @P *e!so bought has in the $ the %romise a e-ent used rightthat to e!! to %ay %hone it o!!e shou!d Pedro t +rom +rom :an %ay BR, Buan A!e> 9uBR or e) @aythe Pab!o re o-er @ario or 2heshe interest is to be om%uted ataa %arti u!ar +or instrument# goods Di-e de!i-ered the hara to Ruth, teristi E-entua!!y0 s o+ and %re+erred through order Benito, the o-ersight ash sum *e!so but o+is P20400, or @P a inad-erten %arty is asubse5uent +riend e, Des%ite so to BR Bose# SUGGESTED ANSWER: and is determinab!e, $tand does not make the sum time Ruth regretted /hat she did a%o!ogi6ed negotiab!e instrument, &2() thethe a e%ted t/o, sto% 7o/e-er0 @Rs order %romissory by *e!so ?im0has BP$ note no ne-erthe!ess right +or P300000, to !aim %aid a) *ami!o may en+or e the said %romissory un ertain or the not %romise onditiona!, ) to Bun, $mmediate!y he dire ted dra/ee against BR 9u thought u%on <e!i> %resentation o+ /ho on-erting is a %arty o+the the note subse5uent he k, into ?im ash sued to note against @ario and Bose, 2he %romissory SUGGESTED ANSWER: &:gd,) ;oe! *astro Paragra%h 1 E negotiabi!ity is A<<E*2ED," bank to dishonor the he k, When @arie *e!so by BP$ endorsing &:e +or %aying =0 and itagainst == to ;$?) his his brother order, De JR, ide2he the SUGGESTED ANSWER: ;egotiab!e $nstrument a /ritten ontra t the to atthe the time +orgery being %ayab!e 7ncom$lete ere6 Di-ing the maker the o%tion renders %romise en note ashed he k0 o+ it is /as dishonored, %romissory ase, 0 Deli note is(2003) a %ie e o+ %a%er /ith the $n the e-ent that ?im0 in +a t0@P had+or +or the %ayment o+ money /hi is intended the signature o+ &4() Pab!o /as essentia! 2)a @ani!a0 Bune 10@r, 3FF1 3, order0 $s onditiona! Bun !iab!e d) to Paragra%h @arie# ' Eh negotiabi!ity is+or AI0 businessman0 /as %re%aring a +o!!o/ing hand-%rinted notation: W$?? su++i ient reasons to issue sto% SU++ESTE6 ANSWER( as a substitute +or money and %asses +rom the instrument to %ass tit!e to subse5uent ;A2 A<<E*2ED," business tri%!ega! abroad, As he usua!!y did in the PA9 BR 2E; 27A8:A;D PE:A: $;the PA9@E;2 9es, 2his o-ers the de!i-ery o+ an make %ayment order0 he may sue BP$ +or %aying one %erson to another as money0 in su h a not %arties, A +orged signature /as ino%erati-e P300000,00 <or -a!ue re ei-ed0 $ %romise to Di-ing the o%tion to the ho!der does %ast07$: he *E??P7A;E signed se-era! he ks in b!ank and <AR 3 WEEJ <RA@ 2ADA9," in om%!ete instrument0 under :e tion 3' o+ against his order, 2he /ai-er e>e uted by @r manner %romise as to gi-e onditiona!, a ho!der in due ourse the &:e 21 ;$?), A ording!y0 the %arties be+ore %ay :ergio Dee or order the sum o+ the entrusted to @Ps his se retary /ith Be!o/ this them notation signature /ith the ;egotiab!e $nstruments ?a/0 /hi h to ?im did not mean that it need not e>er ise right to ho!d the instrument +ree +rom the +orgery are not .uridi a!!y re!ated P300000,00 in +i-e &4) insta!!ments0 /ith the instru tion to to sa+eguard them and +i!! o+ them GL3L00" ne>t it0 indi ating the date the %ro-ides that there /as %rima +ato ie authority Ne'otia.ilit%2 Eol6er in Due Course ()**2) due di!igen e to %rote t the interest o+ its de+enses a-ai!ab!e to %rior %arties, :u h %arties a+ter the +orgery a!!o/ su h +irst insta!!ment %ayab!e on A tober 40 3FF1 out on!y /hen re5uired to %ay a ounts %romissory note, When BR %resented @Ps *ami!o may not to go against Pab!o0 the on b) the %art o+ Ruth +i!!-u% any o+ the Per!a brought a motor ar %ayab!e on a ount ho!der, $t is not amiss to state that instrument must om%!y /ith :e , 3 o+ the en+or ement, and the other insta!!ments on or be+ore the during his absen e, AB0 his se retary0 +i!!ed note to JR0 the !atter said it /as not a !atter not ha-ing the instrument, materia! %arti u!ars thereo+, done so0 the dra/ee0 un!ess the has ear!ier insta!!ments +romindorsed Automoti-e +or ;egotiab!e $nstrument ?a/ to7a-ing be *om%any onsidered +i+th day o+ the su ks eeding or out one o+ instrument the he byinstrument %!amonth ing!a/ her name negotiab!e under the and so 2he hara teristi s o+ a negotiab!e instrument and /hen it is +irst om%!eted be+ore it is P240th, :he made a do/n %ayment o+ P40th been a e%ted by it0 is not bound to honor negotiab!e, therea+ter, as the %ayee, :he +i!!ed out the amount0 ou!d not be a -a!id substitute +or ash, BR ) *ami!o may en+or e the instrument areH &:gd,) ?ito Ni!!a negotiated to a ho!der in due ourse !ike %ayment tode!i-ered the ho!der o+ insisting the he that and e>e uted a %romissory note +or the endorsed the he k to k J*0 /ho took the and o%%osite -ie/0 on the A8TERNAT7>E ANSWER: against Bu!ian ause his @arie s%e ia! a b) 27 is anit indorsee o+ a %romissory note that 3) ;egotiabi!ity - 2hat 5ua!ity oro+ attribute /hereby @arie0 it is -a!id +or be a!! %ur%oses0 and ba!an e, 2he om%any subse5uent!y thereby e> !udes it +rom any !iabi!ity i+ it a e%ted in good +aith +or %ayment o+ notes negotiabi!ity, 9ou are asked to 3FF3 =b) BP$ /ou!d not be !iab!e tore+eree, @r ?im, SUGGESTED ANSWER: indorsement to *ami!o0 thereby making him to sim%!y states: PA9 2A B8A; 2A; AR ARDER bi!!0 note or he k %asses or may %ass +rom hand may en+or e it /ithin a reasonab!e time0 as i+ /ere to om%!y /ith its sto% %ayment order indorsed the note to Re!iab!e <inan e gems that J*o%%osing so!d to AB, to!d o+ Whi h?im o+ the -ie/s is AB orre t# AI @r and BP$ note are go-erned by their o/n 2he %romissory note is?ater0 negotiab!e as it 2, :u%%osing the he kso /as sto!en /hi!e in SUGGESTED ANSWER: se ondari!y !iab!e0 both being %arties a+ter '00 PE:A:," 2he has notime!y date0 no %!a e hand0 simi!ar to money0 as to the ho!der it had been +i!!ed u% stri t!y ingi-e a ordan e in *or%oration /hi h +inan ed the %ur hase, &:e =3 ;$?) /hat she did /ith regrets, AI dire ted agreement, 2he /ai-er e>e uted by @r ?im0 9es, AI ou!d be he!d !iab!e to J*, 2his is a om%!ies /ith :e 30 ;$?, RuthCs %ossession and a thie+ +i!!ed the b!ank the +orgery, o+ %ayment and no onsideration mentioned, due ourse the right to ho!d the instrument and /ith the authority gi-en, 2he %romissory note read: <or -a!ue the bank to dishonor the he k, *ou!d AI be neither being one +uture +raud or gross d)k0 Bu!ian0 inand turn0 may e in the ase an in om%!ete he k0 /hi hsigned has been he endorsed de!i-ered it en+or to @arie o+ signed <irst!y0 it @J is o+ inand /riting and by the $t /as by /ritten under his o!!e the sum %ayab!e +or himse!+ +ree +rom re t ei-ed0 $ %romised to %ay Automoti-e he!d !iab!e to J*# Ans/er and reason brie+!y, neg!igen e0 /ou!d be -a!id, 2he %rob!em instrument against Bert /ho0 by his +orgery0 de!i-ered, 8nder :e tion 3' o+ the ;egotiab!e %ayment +or the goods he %ur hased +rom maker0 ;oe! *astro, !etterhead s%e i+ying the address0 /hi h de+enses, 2) A umu!ation :e *ontra ts as *om%any or order at its o+ o++i e ondary in ?egas%i &4() does not indi ate the %romise e>isten e o+ +raud or has himse!+ %rimari!y !iab!e, $nstruments ?a/0 J*0 as a 27 ho!der in due her0 is rendered Bun !iab!e to @arie the he another, k is at :e ond!y0 the is un onditiona! to they ha%%ens to be his residen e, a e%ted the are trans+erred +rom onei+ %erson to *ity0 the sum o+ P2000000,00 /ith interest e) Pab!o %reser-es his right to re o-er +rom gross neg!igen e on the %art o+ BP$ so as to ourse0 an en+or %ayment o+that the he k as dishonored# &4() %ay a sum ertain in money0 is0 P20400,00 %romissory note as %ayment +or ser-i es t/e!-e &32() %er %er annum0 %ayab!e in De&enses2 /or'er% (2003) SU++ESTE6 ANSWER( either @ario or ent Bose /ho remain %arties /arrant !iabi!ity on its %art, i+ it had been +i!!ed u% stri t!y in demand a the ordan eno date @ani!a :e%tember 230 3FF3, rendered to :70 /ho in turn re ei-ed note 2hird!y0 it is %ayab!e on as e5ua! insta!!ments o+ P200000,00 month!y +or ;o, E-en though @arie is a ho!der in due *I maintained a he king a ount /ith .uridi a!!y re!ated to him, @ario is sti!! /ith the gi-en by to AB and +rom Buan authority 2an as %ayment +orAI a his %re%aid e!! o+ maturity is s%e i+ied, ten &30) months A and tober 230 3FF3, ourse0 this is an instarting om%!ete 8BA;J0 @akati Bran h, Ane o+ he ks in onsidered %rimari!y !iab!e tounde!i-ered Pab!o, Pab!o &sgd) Per!a /ithin a reasonab!e time, <ourth0 it +i+ty is/orth %ayab!e to %esos, %hone '40 2he instrument0 o-ered by :e tion 34 o+ the a stubard o+ /as missing, ?ater0 he %ayee 7ncom$lete an6 Deli ere6 (2001) may0 in ase o+ dishonor0 go a+ter Bose /ho0 order, a kno/!edged ha-ing re +orged ei-ed the note on ;egotiab!e $nstruments ?a/, Where an dis/as o-ered that @s, D9 his signature 2ote .t indorsement0 is possible that an answer Brad in des%erate need o+ money to %ay by his s%e ia! is se ondari!y Pay to the order o+ Re!iab!e <inan e 2he %romissory note is negotiab!e, A!! the August 30 2000, A to Bar re-ie/ee had +rom to!d 270 in *or%oration, om%!ete instrument has notblan' been su eeded en P340000 might distinguish between and hisand debt to Pete0 a ash !oan shark, Pete !iab!e, Automoti-e *om%any re5uirements o+ :e 3 +riend0 ;$? arethat om%!ied /ith, /ho ha%%ens to be your 27 is not de!i-ered0 special it /i!! not0 i+ om%!eted and another bran h o+ the bank, D9 /as ab!e to indorsements of prior parties threatened to take Brads !i+e i+ he +ai!ed to 2he sum to beourse %aid is sti!! Arti ertain a ho!der inthe due under !e des%ite 42 o+ the negotiated /ithout authority0 be a -a!id en Brad ash k /hen E20 +riend0 which can thereby materially alter %ay, and he Pete /ent toa see :eZorita By: &:gd) @anager that the sum is to be %aid by insta!!ments ;egotiab!e $nstruments ?a/ &A t 2013) and ontra t in hands o+ any answers/ ho!der0 as guaranteed ution0 saying that she the the above suggested :he $sobe!0 Brads due ri h e>e ousin0 and asked her i+ &:e 2b ;$?) there+ore does in not en.oy the rights and against any %erson0 in !uding Bun0 /hose /as a ho!der due ourse, *an *I re o-er problem did not clearly indicate the Be ause Per!a de+au!ted in the %ayment o+ she ou!d sign a %romissory note in his +a-or Ne'otia.ilit% (2002)the statute, 27 asks +or our SUGGESTED ANSWER: %rote tion under /or'er%2 8ia.ilities2 "rior 0 Su.se5uent "arties ()**1) signature /as %!a ed thereon be+ore the money +rom the bank# Reason brie+!y, 'ind of indorsements made/ her insta!!ments0 Re!iab!e <inan e *or%oration in 9es0 amount o+ P300000,00 to %ay Pete, Whi h o+ an the +o!!o/ing sti%u!ations or +eatures o-er the bank, 8nder ad-i e *I s%e i+i re a!!y in +rom onne tion /ith the SUGGESTED ANSWER: A!e> issued a against negotiab!e P; &%romissory de!i-ery, :uah ase de+ense is aher rea! de+ense e-en &4() initiated +or a sum o+ <earing that Pete /ou!d ki!! Brad0 :eZorita o+ a %romissory note &P;) a++e t or do not :e tion 21 o+ the ;egotiab!e $nstruments 7n6orser: 7rre'ular 7n6orser s! General 7n6orser (2001) note being undated and not mentioning a a) JR is right, 2he %romissory note is not note) %ayab!e to Benito or order in %ayment against a ho!der in due ourse0 a-ai!ab!e to note a money, Per!a argued that the %romissory $sobe! a eded to re5uest, :he a++i>ed a++e t its negotiabi!ity0 assuming that the P; ?a/0 +orgery is a the rea! 2he +orged Distinguish an irregu!ar indorser +rom a to %!a e o+ %ayment andde+ense, any onsideration, negotiab!e, $t is not issued to order or bearer, o+ ertain goods, Benito indorsed the P; %arty !ike Bun /hose signature a%%eared %rior is mere!y an assignment o+ redit0 a nonher signature on a %ie e o+ %a%er /ithto the is other/ise negotiab!e# $ndi your ans/er he k is /ho!!y ino%erati-e in ate re!ation *I, genera! &1()o+ an e>isting ob!igation, What /ou!d your ad-i e be# &2(), 2here is no /ord o+ negotiabi!ity ontaining *e!soindorser, in %ayment to de!i-ery, negotiab!e instrument o%en to a!! de+enses assuran e o+ Brad that he /i!! .ust +i!! it u% SUGGESTED ANSWER: by /riting the %aragra%h number o+ the *I annot be he!d !iab!e thereon by e anyone0 therein, $t is not issued in a ordan /ith ?ater A!e> +ound the goods to be de+e ti-e, a-ai!ab!e to the assignor there+ore0 !ater, Brad then +i!!ed u% the b!ank %a%er0 $rregu!ar $ndorser is not and0 a %arty to the sti%u!ation or +eature o+ due the P; as sho/n not e-en by a;egotiab!e ho!der in ourse, 8nder a :e tion 3 o+ the $nstruments ?a/ Whi!e in *e!sos %ossession thea P; /as Re!iab!e <inan e *or%oration is not ho!der making a %romissory note +or the amount o+ instrument but he %!a es his signature in in be!o/ and your orres%onding ans/er0 either +orged signature o+ the dra/er0 there is no What de+ense or de+enses an :eZorita sto!en by a) Dennis /ho +orged *e!sos due ourse, $s the %romissory note a mere P3000000,00, 7e then indorsed and de!i-ered b!ank be+ore de!i-ery, 7e is not a %arty but A++e ted" or ;ot a++e ted," E>%!ain &4(), instrument that /ou!d gi-e to a b) -a!id 2heset +a t that the instrument is rise undated $sobe! u% against Pete# E>%!ain, &1() signature and dis ounted it /ith Edgar0 a a) 2he date o+ the P; is <ebruary o+ be redit or a the same to Pete0 a the e%ted the sour note100 aso+ he assignment be omes one ause o+negotiab!e his signature in SUGGESTED ANSWER: t /hi h /ho an be basis e and ontra does not mention the %!a e o+or %ayment money !ender /ho did not make in5uiries b) de+ense 2he P; bears interest %ayab!e on the instrument# Why# b) $s his Re!iab!e <inan e *or% %ayment 2002," o+ the debt, theSUGGESTED instrument, Be ause signature he is 2he &%ersona! /hi h !iabi!ity the %art o+ the de+ense) dra/er, ANSWER: does noton mi!itate against its 2he being about the P;, Edgar indorsed the P; to <e!i>0 !ast day o+ ea h a!endar 5uarter at a rate a ho!der in due ourse# E>%!ain brie+!y, onsidered an indorser and he is %rob!em !iab!e to is the :eZorita $sobe! an no set u% against Pete dra/ee bank right or authority to is a) 2he %romissory note in the a negotiab!e, 2he has date and %!a e o+ %ayment a ho!der in $ndorser due ourse, When <e!i> e5ua! to +i-e %ero+ ent &4() abo-e is the then Whi!e0 a /arrants that the %arties in Denera! theare instrument, that the amount P3000000,00 not in 3, What the rights o+ <e!i>0 i+ any0 tou h the dra/erCs de%osited the negotiab!e instrument0 being in om%!ian e are not materia! %arti +unds u!ars re5uired to/ith make demanded o+ thehe P; has +rom the "rior 0 Su.se5uent "arties ()**0) %re-ai!ing F3-day 2reasury Bi!! rate instrument is %ayment genuine0 that a A!e> good a /or'er%2 ordan 8ia.ilities2 e /ith the authority gi-en toas her to against A!e>0 Benito0 *e!so and Edgar# dra/ee bank, /ith the %ro-isions o+ :e 3 ;$?, ;either the an instrument negotiab!e, !atter re+used to %ay, Dennis ou!d no !onger Bose %ub!ished !oaned at@ario themention beginning some money su and0 h o+ a!endar to tit!e toE>%!ain it0 that a!! %rior %arties had a%a ity to Brad &in %resen e o+ Pete) and that Pete 2he +a t the that no is o+ made any +a that the %ayab!e sum is to be %aid /ith be t !o ated, ) 2he P; gi-es the maker the o%tion to e-iden 5uarter, his @ario e>e uted ontra tH that the instrument at the time o+ SUGGESTED ANSWER: /as onsideration not a e ho!der isindebtedness0 not in due materia!, ourse *onsideration +or a ting in 2, Does *e!so any right against A!e>0 interest nor thatha-e the maturities are in stated make %ayment either in money or in 5uantity and de!i-ered to Bose a %romissory note theSUGGESTED indorsement is -a!id and subsistingH and ANSWER: bad +aith /hen a e%ted the note as is %resumed, Benito and <e!i># un E>%!ain, insta!!ments renders ertain the amount o+ %a!ay or his e5ui-a!ent -a!ue, %ayab!e to order, that 3, on <e!i> due has %resentment0 no right to the !aim instrument against /i!! A!e>0 Ne'otia.le 7nstrument: Am.i'uous 7nstruments ()**:) %ayment des%ite his kno/!edge that it /as %ayab!e &:e 2 ;$?) d) 2he P; gi-es the ho!der the o%tion Bose endorsed the note to Pab!o, Bert be Benito a e%ted and or *e!so %aid /ho or are both %arties a e%ted %rior and to 7o/ do you treat a negotiab!e instrument b) 9es0 Re!iab!e <inan e *or%oration is a the on!y 300000,00 that%ayment /as a!!o/ed by :eZorita either to re5uire in money or to +raudu!ent!y obtained the note +rom Pab!o 7ncom$lete 7nstruments2 7ncom$lete Deli ere6 %aid +orgery a >ali6it%2 ording *e!sos to its tenor0 signature and that by i+Dennis, it is that is so ambiguous that there is doubt ho!der in o+ due ourse gi-en the&or +a tua! $sobe! during their meeting /ith Brad, C#ec-s2 Wai er o& ,an-Gs lia.ilit% re5uire the maker to ser-e as the bodyguard and endorsed it to Bu!ian by +orging Pab!os 7nstruments s! 7ncom$lete Un6eli ere6 7nstrument dishonored0 Parties to he an instrument /i!! %ay i+ /ho the are ne su essary h %rior /hether it is a bi!! or a note# &4() settings, :aid or%oration a%%arent!y took the ne'li'ence ()**)) Ne'otia.ilit% ()**3) or es ANSWER: ort o+ the ho!der +or 10 days, signature, Bu!ian endorsed the note to SUGGESTED (2004) %ro to eedings the +orgery +or dishonor annot are be made, he!d !iab!e by any %romissory note +or -a!ue0 and there are no @r, ?im issued a he k dra/n against BP$ SUGGESTED ANSWER: Dis%arty uss the negotiabi!ity or non-negotiabi!ity a) *ami!o en+or e the said 3, Where a @ay negotiab!e instrument is so Bun*ami!o, /as about to !ea-e a business As /ho be ame h at or to indi ations that it a su 5uired it insubse5uent bad +aith (Sec Bank in +a-or o+ @r 9u as %ayment o+ ertain a) Paragra%h 3 E +or negotiabi!ity is tri%, ;A2 o+ the +o!!o/ing notes %romissory note against @ario and Bose# b) ambiguous that there is doubt /hether it is a hisA<<E*2ED," usua! %ra ti e0 he signed se-era! b!ank the +orgery, 7o/e-er0 Edgar0 /ho be ame a 5$ 2.= see Salas v &0 "6" s $9%! shares o+ sto k /hi h he %ur hased, An the 2he date is not one o+ the @ay go against Pab!o# ) @ay bi!! or a*ami!o note0 the ho!der may treat it either he ks, 7e instru ted Ruth0 his se retary0 to %arty to the instrument subse5uent to the Ne'otia.ilit%2 Re5uisites (2000) same day that he issued the he k to 9u0 re5uirements +or negotiabi!ity, 3) @ani!a0 :e%tember 30 3FF1 en+or e said note against Bu!ian# d) as a bi!! o+ e> hange or a his %romissory note at +i!! *ami!o them as %ayment +or ob!igations, Ruth +orgery and indorsed the same ?im ordered BP$/ho to sto% %ayment, Per to <e!i>0 Against /hom an Bu!ian the right o+ his e!eone tion, +i!!ed he k /ith her ha-e name as %ayee0 an be he!d !iab!e by the !atter, standard banking %ra ti e0 ?im /as made to ourse# %!are ed P100000,00 thereon0 endorsed and sign a /ai-er o+ BP$s Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

7nstrument: Document s! be Ne'otia.le du!y taken0 he Ne'otia.le /i!! %ay the amount Ne'otia.le 7nstrument (2001) thereo+ to the ho!der0 or to any subse5uent Distinguish a negotiab!e do to ument indorser /ho may be om%e!!ed %ay, +rom a negotiab!e instrument, &2() SUGGESTED ANSWER: * is not !iab!e to < sin e the !atter annot $nstrument ha-e re5uisites o+ o+ :e , tra;egotiab!e e his tit!e to the +ormer, 2he signature 3 o+ the ;$?0 a ho!der o+ this instrument * in the su%%osed indorsement by him to ha-e D right o+ re ourse intermediate %arties /as +orged by I, * against an raise the de+ense o+ /ho are se ondari!y !iab!e0 7o!der in due +orgery sin e it /as his signature that /as A8TERNAT7>E ANSWER: ourse may ha-e rights better than +orged, As trans+eror0 a genera! endorser0 Bt is is se money ondari!y and !iab!ethe its sub.e to $nstrument <, * is !iab!e to is < %ro%erty sin e it o+ is -a!ue, due to the itse!+ An the other hand0 negotiab!e neg!igen e o+ * in %!a ing the notedo in ument his does that not enab!ed ontain re5uisites :esame , 3 o+and ;$?0 it dra/er I to stea!o+ the has the no signature se ondary o+ !iabi!ity o+ intermediate +orge * re!ati-e to the %arties0 trans+eree ste%s into the indorsement in +a-or o+ mere!y D, As bet/een * and shoes the inno trans+eror0 its sub.e goods < /ho areo+ both ent %arties0 it is t *are /hose and the instrument is mere!y e-iden e o+ neg!igen e is the %ro>imate ause o+ the tit!eH thing o+ -a!ue are the !oss, 7en e * shou!d su++er the goods !oss, mentioned Ne'otia.le incom$lete an6()**+) un6eli ere6 Ne'otia.le Ne'otia.ilit% in the 7nstruments2 do7nstrument2 ument, instruments2 #ol6er 6ue course or (2000) *an a bi!! o+ in e> hange a %romissory note P; 5ua!i+y makesas aa %romissory +or P40000,000 negotiab!e note instrument i+ E a,!ea-es it the is not but name o+ the %ayee in b!ank the and the thet datedH be b, ause or he day /anted to month0 -eri+y but its not orre year o+ its maturity0 is gi-enH or s%e!!ing +irst, 7e mind!ess!y !e+t the note on is %ayab!e toend o+ the /orkday, to% ,o+ hisitdesk at the d, it names the t/o +o!!o/ing morning0 the ash" or When he returned a!ternati-e dra/ees note /as missing, $t turned u% !ater /hen I SUGGESTED ANSWER: %resented it to P; +or %ayment, Be+ore I0 20 a)turned 9es, Date not +i! a hed materia! %arti u!ar /ho out tois ha-e the note +rom re5uired by :e 3 ;$? +or the negotiabi!ity P;s o++i e0 had endorsed the note a+tero+ an instrument, inserting his o/n name in the b!ank s%a e as b) ;o, 2he time +or %ayment is not the %ayee, P; dishonored the note0 determinab!e in this ase, 2he year is not ontending that he did not authori6e its stated, om%!etion and Fd de!i-ery, But I the saidinstrument he had ) 9es, :e ;$? makes no %ayab!e %arti i%ation in0 or kno/!edge about0 the to bearer be ause the name o+ the %i!+erage and a!teration o+ the note and %ayee does not %ur%ort to be the name b) *an the %ayee in a %romissory note be a o+ there+ore he en.oys the rights o+ a ho!der in any %erson, ho!der in due ourse" /ithin the meaning o+ due ourse the ;egotiab!e $nstruments A bi!! under may not be addressed t/o or thed) ;egotiab!e $nstruments ?a/ &A tto 2013)# ?a/, Who is orre t and /hy# &1() moreyour dra/ees in the a!ternati-e or in E>%!ain ans/er, &2() SUGGESTED ANSWER: to be negotiab!e &:e 32G ;$?), su ession0 a) 2o P; do is so right, 2hethe instrument is in om%!ete makes order onditiona!, Ne'otia.le 7nstruments2 ()**:) any and unde!i-ered, $t ,earer did 7nstrument not reate Ri hard *!inton note ontra t that /ou!d makes bind P;ato%romissory an ob!igation %ayab!e to bearer and de!i-ers the same to to %ay the amount thereo+, b) A %ayee in a %romissory annot be a Aurora Page, Aurora note Page0 ho/e-er0 ho!der in due ourse" /ithin the meaning o+ Payab!e to I, :igned: Aurora endorses it to I in this manner: the ;egotiab!e $nstruments ?a/0 be ause a Page," ?ater0 endorsing the %romissory %ayee is I0 an /ithout immediate %arty in re!ation to trans+ers and the same to thenote0 maker, 2he %ayee is de!i-ers sub.e t to /hate-er ;a%o!eon, 2he note a-ai!ab!e is subse5uent!y de+enses0 rea! o+ %ersona!0 to the A8TERNAT7>E dishonored by Ri hardnote, *!inton, @ay ;a%o!eon maker o+ ANSWER: the %romissory b) A %ayee an be a in due +or ourse," %ro eed against Riho!der hard *!inton the note# A ho!der is de+ined as the %ayee or indorsee SUGGESTED ANSWER: &4() 9es,instrument Ri hard *!inton !iab!e to ;a%o!eon o+ the /ho is is in %ossession o+ it, under the is %romissory note, +a 2he E-ery ho!der deemed %rima ie note to be made a by Ri hard ourse, *!inton is a bearer instrument, ho!der in due Ne'otia.le 7nstruments2 7ncom$lete Des%ite s%e ia! indorsement made by Aurora DeliPage ere67nstruments2 Com$arati e thereon0 the note remained a bearer Ne'li'ence ()**+) instrument and an be negotiated by mere de!i-ery, When I de!i-ered and trans+erred the note to ;a%o!eon0 the

Page Page 30 3$ of 103 of 103 A0 sing!e !atter be %ro%rietor ame a ho!der o+ a

business thereo+,on As ern0 su h is ho!der0 about to ;a%o!eon !ea-e +oran a business %ro eed tri% against and0 as Rihe hard so o+ten *!inton, does on these o asions0 signs se-era! he ks in Ne'otia.le 7nstruments2 ,earer ()**+) b!ank, 7e instru ts B0 his se7nstruments retary0 to A de!i-ers a bearer instrument to B, B then sa+ekee% the he ks and +i!! them out /hen s%e ia!!y indorses it to and * !ater indorses and as re5uired to %ay a * ounts during his it in e, b!ank to out D, E stea!s the instrument absen B +i!!s one o+ the he ks by +rom and0 +orging signature su eeds %!aDing her name the as %ayee0 +i!!so+ in D0 the in negotiating" it tode!i-ers < /ho athe 5uires amount0 endorses and he the k to instrument +aith and +or -a!ue, a) $+0 * /ho a e%tsin it good in good +aith as %ayment +or +or any dra/ee bank re+uses to goods so!dreason0 to B, B the regrets her a tion and honor theshe hedid, k0 A an < en+or e Bank the in te!!s A /hat dire ts the SUGGESTED ANSWER: instrument against thek, dra/er# b) $n ase o+ time to dishonor the he When * 9es0 A an be he!d !iab!e to *0 assuming that the dishonor o+ k0 the he k by both the dra/ee en ashes the he it is dishonored, *an A is the !atter ga-e noti e o+ dishonor to A, 2his and the dra/er0 an < ho!d any o+ B0 * and D be he!d !iab!e to *# ANSWER: a SUGGESTED ase o+ an in om%!ete instrument but !iab!e se ondari!y on the instrument# a) 9es, 2he /as %ayab!e de!i-ered as it instrument /as entrusted to B0 the to bearer it /as bearer instrument, $t do ou!d be se as retary o+ a A, @oreo-er0 under the trine negotiated by mere de!i-ery des%ite the o+ om%arati-e neg!igen e0 as bet/een A %resen e inno o+ s%e ia! indorsements, 2he +orged and *0 both ent %arties0 it /as the signature is essary to %resume the neg!igen e o+ Aunne in entrusting the he k to B Ne'otia.le 7nstruments2 -in6s o& ne'otia.le instrument2 .uridi a! re!ation bet/een or the /hi h is the %ro>imate ause o+among the !oss, ;or6s o& ne'otia.ilit% %arties %rior to(2002) the +orgery and the %arties A, De+ine the +o!!o/ing: &3) a negotiab!e a+ter the +orgery, 2he on!y %arty /ho an %romissory note0 &2) a bi!! o+ e>against hange a and raise the de+ense o+ +orgery ho!der Ne'otia.le 7nstrument: 76enti&ication (2001) &1) a he k, &1() in due ourse is the %erson /hose signature b) An!y B and * an/hether be he!d !iab!e <, 2he B, 9ou are Pedro *ru6, Dra+t the a%%ro%riate :tate and e>%!ain the by +o!!o/ing are is +orged, instruments instrument under at the the time ;egotiab!e o+ the +orgery $nstruments /as ?a/: ontra t !anguage +or &3) your negotiab!e negotiab!e 3) Posta! @oney %ayab!e to bearer0 being a bearer instrument, &4() %romissory note and ArderH &2) your he k0 ea h 2) A erti+i ate o+ e!ements time/as de%osit h @oreo-er0 the instrument indorsed ontaining the essentia! o+ a /hiin states 2his is D, to D0erti+y bearer has b!ank byinstrument * to /hose signature /as negotiab!e &2() that SUGGESTED ANSWER: de%osited inE this bank the !iab!e sum o+ <A8R +orged by annot be he!d by <, A, &3) A negotiab!e %romissory note is lia.ilities anon!y0o& Ne'otia.le .earer instruments2 27A8:A;D 7nstruments2 PE:A: &P'0000,00) un onditiona! %romise in /riting made ma-er an6 to in6orsers (200)) 1) ?etters o+ reditH re%ayab!e the de%ositor 200 daysby a+ter one %erson to another0 signed by the maker0 ') A issued Warehouse a %romissory note %ayab!e to B or date," engaging to on demand or at or 4) 2reasury /arrants %ayab!e +rom a A %ay de!i-ered the note to a B,+i>ed B indorsed re bearer, ei%tsH determinab!e time0 sum ertain s%e i+i note +und, the to +uture *, * %!a ed a the note in hisin SUGGESTED ANSWER: money to order or bearer, dra/er0 /hi h /as sto!en by the .anitor I, I 3) indorsed Posta! @oney Arder ;on-;egotiab!e the note to D byE+orging *s &2) A e> hange is an un onditiona! as signature, itbi!! iso+ go-erned by %osta! ru!es and D indorsed the note to E /ho in order in /riting addressed by one %erson to regu!ation /hi h may be in onsistent /ith turn de!i-ered the note to <0 a ho!der in due another0 signed by the be %erson gi-ing it0 the ;$? and it an on!y negotiated on the e, ourse0 /ithout indorsement, Dis uss SUGGESTED ANSWER: re5uiring the %erson to /hom it is addressed indi-idua! !iabi!ities to < o+ A0 B and *, &4() 2) %ay A is on !iab!e A demand erti+i to <, ate As o+ a time maker o+ the /hi h to or the at +i>edde%osit or &1) A he k is +uture a bi!! e> hange on a states %romissory 2his is note0 to o+ A erti+y is dire that t!y dra/n or bearer %rimari!y determinab!e time a sum ertain in has bank %ayab!e on demand, de%osited !iab!e to in <0 /ho this is bank a ho!der the in sum due o+ ourse, <A8R money to order or to bearer, 27A8:A;D Des%ite the %resen PE:A: e o+ &P'0000,00) the s%e ia! on!y0 B, &3) ;egotiab!e re%ayab!e indorsements to the on de%ositor the note0 200 these days do not a+ter %romissory notethe - +a t thatas date," detraE t +rom ;on-;egotiab!e a bearer it does not om%!y instrument0 /ith the !ike re5uisites the %romissory o+ :e , 3 note o+ ;$? in 1) 5uestion0 ?etters o+ redit - by ;onis a!/ays negotiab!e mere B0 as a genera! is !iab!e < ;egotiab!e de!i-ery0 unti! itindorser0 is indorsed restri to ti-e!y <or ') se Warehouse ei%ts - that ;on-;egotiab!e ondari!y0 and re /arrants the De%osit An!y," +or instrument the sameisas Bi!! o+ ?ading it mere!y genuine and in a!! res%e ts re%resents good0 not /hat it %ur%orts tomoney, beH that he has good tit!e to itH that a!! %rior %arties had a%a ity to 4) ontra 2reasury /arrants %ayab!e +rom a tH that he has no kno/!edge o+ any s%e +und ;on-;egotiab!e being %ayab!e +ai+i t /hi h/ou!d im%air the -a!idity o+ the out o+ a %arti u!ar +und, it -a!ue!essH that at the instrument or render time o+ his indorsement0 the instrument is -a!id and subsistingH and that on due %resentment0 it sha!! be a e%ted or %aid0 or both0 a ording to its tenor0 and that i+ it be dishonored and the ne essary %ro eedings on dishonor

Mercantile Law Bar Examination Q & A (1990-2006) Page 33 of 103 Mercantile Law Bar Examination Q & A (1990-2006)

9E:[ Page Dagu! 31 of is 103 an a Commercial ommodation %arty be auseof in there1uires ase at 2, $+ Pedro %ays the said P200000 to 90 Pedro #an$ing Co. The #y<la8s *aa2 that Ne'otia.le 7nstruments2 Re5uisites ()**4) bar0 he is essentia!!y0 a signe2 %erson /ho signsan2 as the chec$s issue2 &y it must &e &y the Presi2ent an re o-er the amount +rom I, I is the are the %arty re5uisites o+ %arty a negotiab!e maker Treasurer /ithout or the ;ice<Presi2ent. re ei-ing any *inceonsideration0 the Treasurer 8as a What ommodated or the u!timate!y SUGGESTED ANSWER: instrument# a&sentB re1ueste2 the ;ice<Presi2ent to co<sign the +or chec$B signs as C an a ommodation %arty mere!y !iab!e +or the instrument, Pedro is on!y an re5uisites%arty, o+ a negotiab!e instrument are the latter The redit chec$ 8as 2elivere2 to #. the8hich %ur%ose o+reluctantly !ending2i2. the o+ his name, a 2he ommodation Ather/ise0 it /ou!d be as +o!!o/s: a) $t must be in /riting and The chec$ 8as 2ishonore2 upon presentment on 2ue 2ate for And as an a ommodation %arty he annot un.ust enri hment on the %art o+ I i+ he is b)the $t must ontain signed maker or "arties2 "art% (2003) an un onditiona! of fun2s. a) 3s *aa2 lia&le on the chec$ setinsufficiency u% !a k o+ onsideration against any as an notdra/erH to Accommo6ation %ayby Pedro, %romise or order :usan Ja/ada borro/ed P4000000 +rom I9P accommo2ation partyI &) 3f /ho it is notB thenB un2er the a&ove ho!der0 e-en as to one is8ho not a ho!der in to %ay a ertain in together moneyH ) $t must be "arties2 Eol6er in Due Course ()**3) Bank /hi hsum re5uired her0 /ith Rose factsB isFare the accommo2ation partyI due ourse, %ayab!e order or to bearerH and d) Where ?arry issued a negotiab!e %romissory note to Reyes /ho to did not re ei-e any amount +rom instrument is addressed to a dra/ee0 he E-e!yn and authori6ed the !atter to +i!! u% the thethe bank0 to e>e ute a %romissory note SUGGESTED ANSWER: must be named ated therein amount in b!ank /ith his !oan a ount in the %ayab!e to the bank0 or or other/ise its order indi on stated a,) :aad is not !iab!e on the he k as an reasonab!e ertainty, &:e 3 ;$?) /ith sum o+ P30000, 7o/e-er0 E-e!yn inserted maturities, 2he note /as e>e uted as so a ommodation %arty, 2he a t o+ P40000 in -io!ation o+ the instru tion,the :he agreed, What kind o+ !iabi!ity /as in urred by Notice Dis#onor ()**4) or%oration a to ommodating a +riend o+ the negotiated the in note Bu!ie /ho had Rose0 that o+ an a ommodation %arty or that SUGGESTED ANSWER: When is noti e o+ dishonor not re5uired to President0 u!tra -ires (&risologo8Aose kno/!edge o+ is the in+irmity, Bu!ie in turn v &0 1+ o+ a so!idary debtor# E>%!ain, &'() &%er Dondee) may be he!d !iab!e, Rose is be gi-en toRose the dra/er# 67599, "5Sep"969!/ Whi!e it+or may be !ega!!y negotiated said note to De-i -a!ue and ANSWER: an SUGGESTED a ommodation %arty, Absen e o+ %ossib!e +or the or%oration0 /hose business /ho had no kno/!edge o+ the in+irmity, 3) ;oti e o+ dishonor is not onsideration is in there5uired natureto be o+ an is to %ro-ide +inan ia! a ommodations in the *an De-i en+or e the note against ?arry and to the dra/er in any o+ o+ the +o!!o/ing a gi-en ommodation, De+ense absen e o+ ordinary ourse o+ business0 su 2) h as one i+ she an0 +or ho/ mu h# E>%!ain, ases: a) Where the dra/er and dra/ee are onsideration annot be -a!id!y inter%osed by gi-en byDe-i a +inan ing om%any to be an :u%%osing endorses the note to Baby the same %ersonH b) When the dra/ee a SUGGESTED ANSWER: a ommodation %arty against a ho!der inis due a ommodation %arty0 this situation0 +or -a!ue but /ho has kno/!edge o+ the not ha-ing a%a or ityato ontra tH ) When the "arties2 Accommo6ation "art% (2003) +i titious %erson %erson b) *onsidering that President and 3) 9es0 De-i is an en+or e thethe negotiab!e ourse, ho/e-er0 not the both ase in the bar %rob!em, in+irmity0 an the !atter en+or the note dra/er is hased the %erson /hom the e *enter Ni e-President /ere signatories to the Buan :y %ur +rom to A" A%%!ian %romissory note against ?arry e in the amount against ?arry# instrument %resented +or %aymentH d) one generator is set on insta!!ment /ith hatte! a ommodation0 they themse!-es an and be o+ P40000, De-i is a ho!der in due ourse Where the dra/er has no right to e>%e t or !iabi!ities o+ a by ommodation mortgage in +a-or o+ the -endor, A+ter thesub.e brea t hto o+the trust ommitted E-e!yn that the dra/ee or a e%tor /i!! honor re5uire getting ho!d o+ the generator set0 Buan :ythe %arties the in their %ersona! annot be to set u% instrument by ?arry against De-i instrumentH e) Where the dra/er has a%a ity (&risologo8Aose v &0 "5Sep"969! immediate!y so!d it /ithout onsent o+ the be ause it is a %ersona! de+ense, As a ho!der ountermanded %ayment &:e harged /ith "arties2 Accommo6ation "art% ()**4) t to su h -endor, Buan :y /as rimina!!y in due ourse0 De-i is not sub.e 33' ;$?) 2) 9es, ;ora Baby a%%!ied is not +or a a ho!der !oan o+ in P300th due ourse /ith B8R 2o sett!e the ase e>tra .udi ia!!y0 Buan :y esta+a, %ersona! de+ense, be Bank, ause she By /ay has o+ kno/!edge a ommodation0 o+ the brea ;oras h o+ %aid the sum o+ P200000 and +or the ba!an e "arties2 Accommo6ation "art%a()**0) trust sister0 ommitted Ni!ma0 e>e by E-e!yn uted a against %romissory ?arrynote in o+ P40000,00 he e>e uted %romissory note a amount ommodate maker o+ a /hi +a-or h is o+ .ust B8R a %ersona! Bank, When de+ense, ;oraBut de+au!ted0 ha-ing +or 2o said /ith *armen0 Ben ?o%e6 as an %romissory note0 Borge signed as indorser taken B8R the Bank instrument sued Ni!ma0 +rom des%ite De-i0 aits ho!der kno/!edge in a ommodation %arty, Buan :y +ai!ed to %ay and the instrument /aso+ negotiated due that ourse0 Ni!ma Baby re ei-ed has a!! no the %art rights o+ the o+!oan, a @ay thethereon0 ba!an e, 3) What is the !iabi!ity Ben SUGGESTED ANSWER: to Ra++y0 +or -a!ue, At the time Ra++y ho!der Ni!ma in be due he!d ourse, !iab!e# Baby E>%!ain, did not %arti i%ate ?o%e6 as an a a ho!der ommodation %arty# E>%!ain, 9es0 Ni!ma may be he!d !iab!e, by Ni!ma is an SUGGESTED ANSWER: took the instrument0 he kne/ Borge to be an in the brea h o+ trust ommitted E-e!yn 2) What is the !iabi!ity o+ Buan :y# 3) Ben ?o%e60 as an a ommodation %arty0 is a ommodation %arty, As su h0 she is !iab!e a omodation %arty on!y, When the /ho +i!!ed the b!ank but +i!!ed u% the !iab!e as maker to the ho!der u% to the sum on the instrument to a ho!der +or -a!ue su h %romissory note /as not %aid0 and Ra++y instrument /ith P40000 instead o+ P30000 as o+ dis P40000 e-en i+ he did not re ei-e any as B8R Bank, 2his is true e-en i+ B8R Bank "arties2 Eol6er in Due Course ()**4) o-ered that *armen had no +unds0 he instru ted by ?arry &:e 4G ;$?) onsideration the %romissory note, the 2his ist /as onstitutes a/are at the time it took What a ho!der in due the instrument sued Borge, +or Borge %!eads in de+ense +a SUGGESTED ANSWER: thethat nature o+ a endorsed ommodation, But Ben ?o%e6 that Ni!ma is mere!y an a ommodation %arty ourse# he had the instrument /ithout A ho!der due no ourse iso+ one /ho has taken an ask +or reimbursement Buan :y0 the and rein ei-ed %art the !oan (See Sec $9, re ei-ing -a!ue there+or0 +rom and the +urther +a t the instrument under the +o!!o/ing a that ommodation %arty, 2.=< Eulalio ;rudencio v &0 1+ =8#45#9, Aul "4, 6% Ra++y kne/ that at the time he took the SUGGESTED ANSWER: "arties2 Accommo6ation "art%and ()**:) 2) Buan :y is !iab!e to the e>tent o+ P40000 in 3onditions: 2hat it is om%!ete regu!ar u%on "4# s 3! instrument Borge had not re ei-ed any -a!ue 9es, Borge is !iab!e, :e 2F o+ the ;$? %ro-ides <or the %ur%ose o+ !ending his name /ithout the hands o+ a ho!der in due ourse &:e 3' its +a eH or onsideration o+ any kind +or that a ?o%e6 ommodation ishis !iab!enote0 on the -a!ue Pedro makes it a ;$?), $+ an Ben %aid the%arty %romissory 2 re ei-ing 2hat he be there+ore0 ame ho!der o+ it be+ore indorsement, $s Borge !iab!e# Dis uss, instrument to a ho!der +or -a!ue0 note +or P200000 %ayab!e to the order o+ Buan :y has the ob!igation to reimburse Ben /as o-erdue and /ithout noti e that it had I not/ithstanding the ho!der at the time o+ /ho in turn negotiates it to !atter ?o%e6 +or the amount %aid, $+ Buan :y %ays been %re-ious!y dishonored0 i+ 90 suthe h /as the 9 re Pedro o-er +rom Pedro i+ the taking said kne/ him to be on!y kno/ing is not a %arty +or!atter -a!ue, dire t!y to the instrument ho!der o+ the %romissory note0 +a 3, tH @ay that inter%oses the e o+ onsideration# :e%tember 340 2002 an a ommodation is the nature or he %ays Ben ?o%e6 %arty, +or the2his reimbursement 1 2hat he took itabsen in good +aith and +or &1() the essen eby o+ the a ommodation, o+ or the %ayment !atter to the ho!der0 -a!ueH "arties2 Accommo6ation "art% ()**)) "arties2 Accommo6ation "art% (2001) <or :u%%osing re $ hereby the same %romise +a ts0 to Pedro %ay the instrument is dis harged, ' 2, -a!ue 2hat atei-ed0 theunder time it /as negotiated to 9n June B !!0B o&taine2 a loan of P 00th from #B/ith paya&le Dagu! has a A business arrangement Buan :antos or order the sum o+ 2E; %ays the said P200000 may he re o-er him0 he had no noti e o+ any in+irmity in the SUGGESTED ANSWER: later than 20(ec !!0. # re1uire2!end A to issue him a chec$ <a not undo, 2he !atter /ou!d money to 27A8:A;D the same PE:A: amount &P300000) +rom thirty I# &2() &10) days instrument or de+e t in the tit!e o+ the %erson 3, 9es, 9 an re o-er +rom Pedro, Pedro is an for that amount to &e 2ate2 20(ec !!0. *ince he 2oes not another0 through Dagu!0 /hose name /ou!d +rom date hereo+, negotiating it, &:e %arty, 420 ;$?) a ommodation Absen e o+ have any chec$ing accountB AB 8ith the $no8le2ge of #B a%%ear in the %romissory note as the !ender, onsideration is in the nature o+ an re1ueste2 his frien2B CB immediate!y Presi2ent of *aa2 #an$ing Corp &:igned) Pedro *ru6 Dagu! /ou!d then indorse the a ommodation, De+ense o+ absen e o+ (*aa2) to accommo2ate him. C agree2B he signe2 a chec$ for note to <a undo, $s Dagu! an SUGGESTED ANSWER: onsideration annot be -a!id!y inter%osed by the aforesai2 amount 2ate2 20(ec !!0B 2ra8n against *aa2Gs to: Phi!i%%ine ;ationa! a ommodation %arty# E>%!ain, &2() a Es ommodation %arty against a ho!der in due account 8ith the A#C Bank o!ta0 @ani!a ourse, Bran h"

Page Page 50 53 5# 35 51 of 103 of 103 A /ho ga-e %assenger0 onni-es ourse hadhim ao+ /ith erti+i her the Pietro, B /ork note ate by /hi 2he o+ in the %ub!i %ayment heirs h %!ans A o+ o+ /i!! on-enien +or W$*, Pietro o++er t/o By +or sued herse!+ e a-ans sa!e to 9e!!o/ o%erate some o+ and ri*ab thru e, o+ auto-tru AB his *om%any asso there+ore se urities ks iates0 /ith +or%aid she and D7 B Port !egis!ati-e im%ortant her 2he number Area +unds reorgani6ed to +ran o+ under *a!amba0 +rom demand hise0 the business the i+dra/ee ?aguna, it !etters meets irabank, umstan sent 2o ti-ity a!! the arry to 2hus0 o+other Dra es WWW out /hen e0 in a!! /i!! +i>ed P3000 %ur damages0 buy routes hased them on the +rom but DAP atsame a the sto ertain ertain !atter date, ks to/ns a-ai!ab!e +i>ed re+used An :e%tember %ri in Bu!a to e0 at /ith %ay the an sto the 340k re5uirements, determining +aith+u!!y @2them *ommuni o+ $n-estment its unans/ered0 ob!igation his ations 2here ourse %resented $n is Di6on , nothing /ou!d o+ EA?0 a the sub tion not through in ontra the he in bethe k !a/ onsidered +or a ted !ight nor @akati the and 20020 e> heirs0 understanding Ri6a! hange insisting E< to dis @ani!a %ri o-ered ed that that and at it P20 a!though that /ithin is not %er the @ani!a, !iab!e share, note there be o+ When <irst!y0 /ou!d AB ause /as the!a/ o+ /ith %ayment0 a *onstitution0 su %ub!i Enri h +irm0 o+a uti!ity Reyes the tors +i!ed dra/ee /hi re5uiring the as ah de!i-ery indi om%!aint the bank aates +ran degree dishonored o+ that '00 hise +or sa aor o+ o!!e ks it, its tion he W$*Cs not Ba!do an !aimed a%%arent in tender is his not that %ossession its sa!e0 o++er the em%!oyee, ordinan A /as /i!! and announ retain he eReso!-e /as /ent the ed0 nu!! to DAP /ith and AB, $t !egis!ati-e s%e o+ the ?ater against erti+i i+i:oya ity0 on0 ate +ran Dra the bean /hen ore hise e>tent any /ith mea!, @2 other is$n-estment the ne o+ Aside Regiona! essary +orm its +rom di++eren o+or sued authori6ation the 2ria! re5uired e dri-er0 her0 *ourt +rom E-a o+ be SUGGESTED ANSWER: bene+i -oid /as sto reasons, beks ia! then ause0 .um%ed o/nershi% &2() that among E< to +ound P10 thereo+, other %er out things0 share, a) that $s the AB it 2hus in had e++e AB t +or @akati, in+ormation three raised +rom an ma!e entity the the Dra em%!oyees go-ernment, to genera!!y de+ense o%erate e0 through o+ o+ as a-ai!ab!e absen $t Reyes su%%!ier o/ns here rode !a/yer0 the o+ %re-ious!y0 o++a on e!e i!ities0 the +i!ed tri a 9e!!o/ *ab *om%any be !iab!e /ith arrangement amends a!ready earned his a made si6ab!e erti+i !a/+u!# %ayment ate %ro+it, &1() o+sha!! %ub!i $s b) on AB $+ the the !iab!e on-enien note, sa!e +or *an brea e0 E< h %o/er and tru but motion k onsideration0 its /ith and does nature to the !ight not dismiss and argo, o%erate to the its re!iabi!ity, Whi!e on +a he them, the tory k the ha-ing ground &:e and tru , its 10 been kthat /as 0 R:A) issued EA? on &a) Ba!do0 onh a so!idary basis0 +or the Re ocation o&se Certi&icate ()**3) 1 ,/as 2he %erson may be !iab!e tosudden!y 3) a she +ine o+ materia!i6es0 a thing sti!! and misuse /hi !aim %ayment /hat on!y o+ on+identia! the is it+rom Pub!i a!!ed# AB# :er-i or &2() Why# insider e death &1() o+ em%!oyees its mere!y /ay doing to ?aguna as !i-ing business urity /ithin t/o +or strangers in the the the om%ound, ring Phi!i%%ines that /ithout ou!d SUGGESTED ANSWER: SUGGESTED ANSWER: %assenger Pietro, Ba!do is an em%!oyee o+ $s Certi&icate o& "u.lic Con enience2 inse$ara.ilit% o& B, As a se5ue! to under the same +a ts narrated 3) Robert isand a ho!der o+ a erti+i ate o+ %ub!i not !ess than P4th nor more than P400th or *ommission in+ormation an gained do +rom :e her 3= em%!oyment# &m) o+ the sto%%ed not a !ise!!, ense the Does tru k E-a and /as ha-e hi.a there+ore a ked -a!id the de+ense# barred argo, +rom ;o, E-a does not ha-e a -a!id de+ense, <irst0 a) ;o, 2he arrangement is not !a/+u!, $t is an 9e!!o/ *ab under the boundary system, As certi&icate an6 essel ()**2) abo-e0 E<0 o+ %ity +or AB /ho had a!ready on-enien e to o%erate a than ta>i ab ser-i e in 2) im%risonment o+ not !ess 7 years nor Pub!i she :er-i a!so !iab!e eout A t, +or 8nder damages said se to se!!ers tion0 the or $n-estigation E>%!ain, bringing suit by the and %o!i &b) e -io!ated dis !osed the that :e one urities @2 $n-estment is a ho!der in due ourse and0 arti+i ia! mani%u!ation o+ the %ri e o+ su h0 the death o+ %assenger Pietro is brea Antonio /as granted a *erti+i ate o+ Pub!i %aid P30000,00 to D70 de ided to +orgi-e @ani!a suburbs, e-ening0 one and o+ more than 23 years0 1) Ane or both su h +ine *ommission buyers /ith is em%o/ered /hom she traded# to amend0 $+ so0 modi+y0 /hatAB is h o+ the Regu!ation hi.aand kers *ode /as by armed se!!ing /ith or a o++ering b!aded tohis se!! SUGGESTED ANSWER: as su h0 ho!ds the %ostdated he k +ree +rom se urities, 2his is %rohibited by the :e urities o+ ontra t o+ arriage0 making both the *on-enien e &*P*) in 3FG= to o%erate a +erry and instead go a+ter *D /ho indorsed the ta>i ab units /as boarded by three robbers im%risonment in the dis retion o+ the ourt, or re-oke the measure a erti+i o+ su ate1/+, h o+ damages# %ub!i on-enien E>%!ain e /ea%on se urities /hi!e the /ithin other the /as Phi!i%%ines unarmed, <or /ithout (Eernande> v/ 5olor, 2o/ "%7$6%, Auly #7, AB isin an insider &as de+ined in :ubse tion any de+e o+ tit!e o+ staging %rior %arties and +rom Regu!ation *ode, b) $+ the sa!e materia!i6es0 $+ the %erson is the a or%oration0 %artnershi%0 ommon arrier 9e!!o/ *ab and its bet/een and Batangas using the note b!ank to him, $s *Dond!y0 sti!! !iab!e to E< by as they est a%ed a+ter a ho!d-u%, a+ter brie+!y, noti e &4() and hearing, :e he +ai!ure registering to @indoro de!i-er the se '00 urities sa ks0 /ith <airgoods the Phi!i%%ine $774! 1,G&1) o+ the :esa!e urities Regu!ation *ode) de+enses a-ai!ab!e to %rior %arties among itontended is a!!ed a /ash simu!ated sa!e, asso iation or other .uridi a!in entity0 the em%!oyee0 Ba!do0 so!idari!y motor -esse! @N ?otus," 7e sto%%ed -irtue o+ the indorsement in!iab!e, b!ank# Why# Be ause o+ said in ident0 the ?2<RB re-oked that e-en i+ or the ordinan e /as sued :E* Di6on and+or thus damages, ame to Di6on ourt turn /ith set un u% !ean Carria'e2 ,reac# o& Contract2 "resum$tion o& SUGGESTED ANSWER: sin e she is an em%!oyee o+ the Bank0 the themse!-es, E-a an in-oke the de+ense o+ %ena!ty sha!! be im%osed u%on the o++i ers o+ o%erations in 3FGG due to unser-i eabi!ity o+ &2() the erti+i ate o+ %ub!i on-enien e o+ -a!id0 it is on!y the *ommission /hi +rom h an a 1rd hands," %arty EA? om%!aint o%%osed against the motion Reyes /hi to dismiss0 h Ne'li'ence ()**0) Securities Re'ulation Co6e2 "ur$ose ()**:) A, ;o, E< annot !aim %ayment AB, E< +inan ia! ad-iser o+ DAP0 and this re!ationshi% absen e o+ onsideration against @2 the or%oration0 etBasi!io , had res%onsib!e +or -esse!, $nthe 3FGF0 /as granted a the a Robert on ground that said o%erator re5uire om%!ian e /ith its %ro-isions under the !atter ontending registered that it on the ground ne-er estab!ished that the Peter so hai!ed a ta>i ab o/ned and SUGGESTED ANSWER: What is the %rin i%a! %ur%ose o+ !a/s and is not a ho!der o+ the %romissory note, 2o gi-es her a ess to materia! in+ormation $n-estment on!y i+ the !atter /as %ri-y to the -io!ation, And i+ +or su h an o++i Phi!i%%ines0 er is an a!ien0 he *P* +or the same route, A+ter aDid +e/ months0 +ai!ed to render sa+e0 %ro%er and ade5uate :e 37 &.) o+go-erning said A t and e the !oss %hysi /as due a! %resen to in ma.eure, the the and that o%erated by Bimmy *heng dri-en by ;o, 2he hi.a king ine this asehe annot beribed0 regu!ations se sin urities in the it make the %resentment +or and %ayment0 is about the issuer &DAP) and the !atterCs %ur%ose +or /hi h under the ks /ere issued sha!!0 in addition to the %ena!ties %res he dis o-ered that *ar!os /as o%erating on ser-i e as re5uired :e 3Fa o+ the im%!ementation o+ the ordinan e /as /ithout hi.a a!! king o+ the onstitute a ti-ities +or re!ated e ma.eure to one %!ainti++s to trading SUGGESTED ANSWER: 7ermie *orte6, Peter asked *orte6 to take onsidered +or e ma.eure, An!y o+ the Phi!i%%ines# &2() ne essary to e>hibit the instrument0 /hi h se urities &shares)0 /hi h in+ormation is not and0 there+ore0 not a ho!der in due ourse, be de%orted /ithout +urther %ro eedings hisin route under Antonios *P*, Bere-o ause Pub!i :er-i e A t, a!! a) Was the ation o+ san tion a%%ro-a! o+ the *ommission0 its e> u!%ate 8,:, Reyes se urities +rom any trans%ired !iabi!ity to outside Di6on# the 2he %rin i%a! %ur%ose o+ !a/s and regu!ations SUGGESTED ANSWER: him toor his o++i e in @a!ate, An the /ay to t/o hi.a kers /as armed /ith a b!aded E< annot do be ause he is not in %ossession genera!!y a-ai!ab!e to the %ub!i , A ording!y0 :e ond0 it is not a ground +or the dis harge a+ter ser-i e o+ senten e, &:e 4= R:A) Basi!io +i!ed a ate om%!aint +or i!!ega! o%erations the erti+i o+ %ub!i on-enien e o+ en+or ement /as unauthori6ed and i!!ega!, 3) Dis Phi!i%%ines, uss +u!!y, $+ o+ you are the .udge0 de ide go-erning se urities in is totion 2he grounds the motion to dismiss are @a!ate0 the ta>i ab o!!ided a %assenger /ea%on, As against the 'k ma!e em%!oyees o+ the 7nsi6er Tra6in'2 (ani$ulati e "ractices ()**3) thereo+, &.) o+ the Pub!i :er-i e the A t Phi!i%%ines it is/ith on!y the AB is gui!ty o+ insider trading under :e o+ the %ostdated he as against a ho!der in /ith the @aritime $ndustry Authority0 Antonio Robert .usti+ied# E>%!ain, b) When an the @ay the re!ian e o+ I on :e tion 3= &m) o+ motion to dismiss by ru!ing on the res%e ti-e %rote t the %ub!i against the ne+arious B, be as ause *D the instrument SUGGESTED ANSWER: both untenab!e, EA? is not doing business in *ommissioner .ee%ney0 aurities resu!t o+ re5uire /hi h Peter /as Reyes0 2 hi.a kers0 /ith on!y one o+ is them 3) Di-e a ase /here a %erson /ho notsa!e an as /hi h negotiated an om%!ian eh 27 ;o0 o+ the :e Regu!ation *ode0 /hi due ourse that itan /as issued mere!y and *ar!os .oint!y +i!ed a%%!i ation +or *ommission &Board) e>er ise its %o/er to the Pub!i :er-i e A t the be sustained# E>%!ain, ontentions o+ the %arties on the basis o+ the %ra ti es o+ uns ru%u!ous brokers and AB is a!so !iab!e +or damages to se!!ers or 3a) ;o, A sing!e ho!d-u% in ident /hi h does by de!i-ery, the Phi!i%%ines0 and it did not -io!ate the in.ured0 i,e,0 he +ra tured his !e+t !eg, Peter being armed /ith a b!aded /ea%on0 annot issuing or%oration0 dire tor or o++i er /ith the %ro-isions o+ ordinan e# re5uires dis !osure /hen trading in se urity, or 2he on!y grounds +or dis harge and trans+er o+re-oke Antonios *P* and sus%end erti+i ate o+ the %ub!i 2) Was I orre t in his ontention that under +a ts %resented abo-e, &30() sa!esmen in se!!ing se urities, SUGGESTED ANSWER: buyers /ith /hom she traded, 8nder not !ink ta>i ab annot benot :e urites A+or t0 be ause it /as se!!ing sued Bimmy +or damages0 based u%on a be onsidered e ma.eure, 2he hi.a kers thereo+0 or Roberts ao+ %erson ontro!!ing0 ontro!!ed by E>%!ain, se urities, o+ negotiab!e instruments are those set +orth substitution the -esse! @N ?otus" /ith on-enien e# Securities2 De&inition ()**4) :e tion 37 "lace o& "a%ment (2000) 3) ;o, 2he %o/er -ested in the Pub!i :er-i e :ubse tion =1,3 o+ the :e urities Regu!ation onstrued that he rendered a ser-i e that is se urities in the ountry, ontra t o+ arriage0 and Peter /on, Bimmy did not a t /ith gra-e or irresistib!e threat0 or under ommon ontro! /ith the issuing in :e 33F8ost o+ ,a''a'e the ;$? ando&none o+ those another o/ned by *ar!os, :hou!d Antonios De+ine se urities Carria'e2 8ia.ilit%2 or Acts "assen'ers 2he ontention o+ EA? is orre t0 be ause it P; is the ho!der o+ a negotiab!e %romissory *ommission under :e 3=m is subordinate to SUGGESTED ANSWER: *ode0 the damages a/arded ou!d be an unsa+e0 inade5uate and im%ro%er (*an>anal /anted to ha!!enge the de ision be+ore the -io!en e or +or e, or%oration0 is a!so onsidered an insider," grounds are a-ai!ab!e to E-a, 2he !atter may SUGGESTED ANSWER: and *ar!os .oint a%%!i a%%ro-ed# ()**+) ne-er did any business inbe the Phi!i%%ines, A!! 2he .oint a%%!i ation o+ation Antonio and *ar!os note /ithin the meaning o+tria! the ;egotiab!e the authority o+ the *ity o+ @ani!a under :e o+in amount not e> eeding tri%!e the amount v 0useJo "%4 s #%! :* on the ground that the ourt erred 2) $n :e urities ?a/0 /hat is a shorts/ing" not uni!atera!!y dis harge herse!+ +rom her :to ks0 bonds notes0 on-ertib!e debentures0 Di-er your reasons, "arties2 Eol6er intrans+er Due Course ()**:) 3b) 8nder :e 3Fa o+ the Pub!i :er-i e A t0 3FF7 &34) Antonio0 a %aying %assenger0 +or its the sa!e transa and tions o+ in Antonios 5uestion *P* /ere $nstruments ?a/ &A t 2013), 2he note /as 3G &hh) o+ its re-ised harter to su%erintend0 the transa tion %!us a tua! damages, not making an e>%ress +inding as to /hether transa tion, 1) $n insider trading0" /hat is y a o+ !iabi!ity by the mere e>%edien /arrants orANSWER: other do uments that re%resent SUGGESTED SUGGESTED I makes ANSWER: a %romissory note +or P300000 the *ommission &Board) an sus%end or boarded a bus bound +or Batangas *ity, 7e onsummated outside the Phi!i%%ines, and substitution o+ the -esse! @N ?otus /ith origina!!y issued by RP to I? as %ayee, I? in regu!ate or ontro! the streets o+ the ity o+ E>em%!ary damages may a!so be a/arded or not Bimmy /as res%onsib!e +or the o!!ision +a/ithdra/ing t o+ s%e ia! signi+i an +rom e"# the dra/ee bank, her +unds a share in athe om%any or a debt o/ned by a $ /i!! ounse! Bimmy to desist +rom Ten6er <&&er (2002) 3) $t may be ao/ned ase /here %erson0 /hose I?, 2he note mentions the %!a e o+ %ayment %ayab!e to A0 a minor0 to he!% him re-oke a erti+i ate o+ ro/0 %ub!i on-enien ebuy hose a seat at the +ront near the bus another -esse! by thea trans+eree indorsed note to P; +or goods bought by @ani!a, &?agman - *ity o+ @ani!a 37 s 47F) ase o+ bad +aith0 +raud0 ma!e-o!en e/ent or 2) and0 hen e0 i-i!!y !iab!e to Peter, 7e to (State .nvestments vdri-er &0 "7""%#, Aan "", om%any or go-ernment entity, E-iden es o+e ha!!enging the de ision, 2he a tion o+ Peter 2002 &=) re!ationshi% or +ormer re!ationshi% to the on the s%e i+ied maturity date as the o++i s hoo! books, A bus endorses the note to Be +or /hen the o%erator +ai!s to1+ %ro-ide ahad ser-i dri-er0 and to!d the that he shou!d not be a%%ro-ed, 2he erti+i ate o+ ;o, 2he %o/ers by !a/ u%on the /antonness inon+erred the -io!ation o+ the :e urities see you +or ad-i e, What /i!! you te!! him# 9# $"3s#$!/ ob!igations to or o+ rights to during being based on money u!%a ontra tua!0 the A, What is or ain tender o++er# issuer gi-es ga-e him a ?otus ess to a /hi +a th o+ o+ the or%orate se retary o+ PI Bank -a!ue0 /ho turn endorses the note to *, * that is sa+e0 %ro%er or ade5uate0 and re+uses -a!uab!e items in his hand arried bag %ub!i on-enien e and @N are Pub!i :er-i e %ay *ommission /ere not designed Regu!ation *ode or its im%!ementing ru!es, E>%!ain, %arti i%ate in earnings and distribution arriers neg!igen e is %resumed u%on the B, $n /hat instan is a tender o++er re5uired s%e ia! signi+i an e es about the issuer or the banking hours, A; maturity date0 RPo+ /as at kno/s A is a minor, $+/hi * sues I on the note0 to render any ser-i e h an be he then %!a ed beside the dri-ers seat, ;ot inse%arab!e, 2he unser-i eabi!ity o+ the to deny su%ersede the regu!atory %o/er o+ 2he or ourt is a!so authori6ed to a/ard or%orate assets, $nstruments gi-ing to their brea h o+ ontra t, 2he burden o+ %roo+ be made# se to urity that is not genera!!y a-ai!ab!e0 or and a the a+oresaid o++i e ready to %ay the note an I set+or u% the de+enses o+ minority reasonab!y demanded and +urnished, ha-ing s!e%t 2' hours0 he ate re5uested the -esse! o-ered by the erti+i had !o a! go-ernments o-er motor tra++i in the attorneyCs +ees not e> eeding 10( o+ the SUGGESTED ANSWER: !ega! ho!ders rights to money instead /ou!d on Bimmy to other estab!ish that 7nsi6er Tra6in' Re ocation o&!earns Certi&icate ()**3) (=agman v &ity of!ie *anila "3 s or %erson0 /ho su hti-e a +a t shou!d +rom but P; did not sho/ u%, What P; !ater did !a k o+ onsideration# &1() dri-er to kee% an eye on the bag he o+ !ike/ise rendered ine++e the erti+i any ate streets sub.e t ()**1) to their ontro!, a/ard, 9es, A, 2ender * is not o++er a ho!der is a %ub!i in due !y ourse, announ 2he ed %ro%ertyH they are there+ore instruments des%ite an e>er ise o+ utmost di!igen e the 8nder the Re-ised :e urities A t0 it is 539! Pe%ay0 a ho!der o+ a erti+i ate o+ %ub!i the insiders0 /ith kno/!edge that the!ega!!y %erson /as (2ote to sueSec I? $a +orof the +a e -a!ue o+ the note0 do6e o++ during the tri%, Whi!e Antonio /as itse!+0 and the ho!der thereo+ may not the +evised Securities SUGGESTED ANSWER: %romissory intention o+ note a %erson is not a ting a a!one negotiab!e or in "u.lic utilities (2000) /hi h ha-e intrinsi -a!ue and are Certi&icate o& "u.lic Con enience2 Re5uirements ()**1) o!!ision ou!d not ha-e been a-oided, un!a/+u! +or an insider to se!! or buy a on-enien e0 +ai!ed to register to the +rom /hom he %assenger !earns the +a t0 isbag su h an %!us 0ct interest and osts, Wi!! the theterm suit %ros%er# as!ee%0 another took the trans+er the same to another, (&ohon v &0 does not really define Carria'e2 ,reac# o& Contract2 o& 9es, 2he suit /i!! %ros%er as +ar as the +a SUGGESTED ANSWER: instrument on ert /ith as other it is does %ersons not to ontain a 5uire any e5uity /ord 2) A shorts/ing" aRetransa tion /here a WWW *ommuni ations ,h is an eommer e re ogni6ed and used as $n su in the regu!ar What re5uirements must be met be+ore a se urity o+ the issuer i+ "resum$tion he kno/s a +a t o+e om%!ete number o+ units re5uired by her insider &:e 100 %ar &b) :e urities A t) E>%!ain, &4() a/ay and a!ighted at *a!amba0 ?aguna, "66 s 3"9!/ Qsecurities/I! Ne'li'ence ()**+) 9es, Ardinari!y0 the ommon arrier is not -a!ue o+ the note is on erned0 but not /ith o+ se negotiabi!ity0 urities o+ a %ub!i that is0 om%any, order or $t bear0 may a!so or %erson buys se urities and se!!s or dis%oses hanne!s om%any o+ /hose ommer %resent e, business a ti-ity is erti+i ate o+ %ub!i on-enien e may be s%e ia! signi+i an e /ith res%e t to the issuer erti+i ate, 7o/e-er0 she tried to .usti+y su h *ou!d the ommon arrier be he!d !iab!e by Securities2 Sellin'ase o& Securities2 (eanin' (2002) damages $n ourt in-o!-ing !aims !iab!e +or a ts o+ other %assengers, But the res%e t%ro-iding tourity the interest due subse5uent too+ the /ords be de+ined o+ simi!ar as aidents method meaning o+ or taking im%ort, o-er ;ot a o+ the same /ithin a :er-i %eriod o+ si> &=) !imited to its is!ients /ith +or a!! ty%es granted under the e A t# or a the se that not genera!!y a-ai!ab!e0 +ai!ure by the a Pub!i that a!!eged!y be+e!! Antonio +or the !oss# 2002 &3G) E5uity An!ine *or%oration &EA?)0 a arising +rom death and in.ury o+ bus A8TERNAT7>E ANSWER: SUGGESTED ANSWER: ommon arrier annot re!ie-e itse!+ +rom maturity o+ the note and the osts o+ being om%any a ho!der by asking in due sto ourse0 kho!ders * is to to se!! sub.e their t months, in+ormation te !osing hno!ogy hard/are, $t %!ans to /ithout su h +a t to the other her0 !aiming that she /as so sho ked and ;e/ 9ork dis or%oration0 has a se urities 2) $t+o!!o/ing is athe %ur hase any +or the %assengers0 ounse! +or the bus o%erator +i!es 2he are the re5uirements +or the !iabi!ity ommon arriers em%!oyees o!!e tion, RP /as ready and /i!!ing to %ay su shares h i+ %ersona! at a %ri de+enses e by higher o+ %erson minority than the and urrent !a k re-+o us its or%orate dire tion o+ gradua!!y %arty, 1,a) What does the term insider" burdened by the su essi-e a idents and brokerage ser-i e on the e $nternet a+ter A8TERNAT7>E ANSWER: B, $nstan es /here tender o++er is re5uired to be issuer or any %erson ontro!!ing0 ontro!!ed a demurrer to e-iden arguing that the granting o+ a erti+i ate o+ %ub!i ou!d ha-e %re-ented the a t or omission by the note at the s%e i+ied %!a e o+ %ayment o+ market onsideration, %ri e and * on is a a %arti mere u!ar assignee date, /ho is on-erting itse!+ into a +u!! on-ergen e mean as in the Re-ised :e and urities a t# mis+ortunes that she did not kno/ /hat she obtaining a!!used re5uisite 8,:, !i enses I annot u% the de+ense o+ the minority a) 2he %erson intends to a 5uire 34( or made: by0 orising under ommon ontro! /ith the issuer0 om%!aint be dismissed be ause the on-enien e0set to /it: a) e, 2he a%%!i ant must e>er due di!igen $n this ase0 the on the s%eshou!d i+ied maturity date0 but P; did sub.e t to a!! de+enses, organi6ation, 2o/ards this ob.e ti-e0 the 1,b) When is a +a t onsidered to be o+ /as doing0 she /as on+used and thro/n o++ %ermits to do so, EA?s /ebsite o+ A, De+ense o+ minority is a-ai!ab!e to the the e5uity share o+ a %ub!i om%any more a or%oration0 o-%artnershi% or or a %ur hase sub.e t to the ontro! o+ the %!ainti++s did not submit any e-iden e that be a iti6en o+ the Phi!i%%ines0 or %assenger asked the dri-er to kee% an a!/ays eye not sho/ u%, P; !ost his right to re o-er the om%any been a same 5uiring s%e ia!has signi+i anaggressi-e!y e" under the A t# tangent momentari!y0 a!though she &///,eon!ine,, om)0 /hi h is hosted by a on!y, hh de+ense is the not a-ai!ab!e to among to an:u bet/een %ursuant asso iation organi6ed under !a/s o+ inor issuer or any su %erson0 resu!ting the o%erator or itsbusinesses em%!oyees /ere neg!igent, on minor the bag /hi hagreement /as %!a edmade beside the interest due subse5uent to o+ the maturity o+ te!e ommuni ations and broad 1, ) What are the !iabi!ities a %erson /ho had the money and +inan ia! abi!ity to buy SUGGESTED ANSWER:enab!es $nternet users to ast ser-er in /ere <!orida0 I, %erson and one or more se!!ers, the the ia! Phi!i%%ines and at more !east =0( o+30( the o+ bene+i o/nershi% o+ than $+ you the .udge0 /ou!d you dismiss the dri-ers seat, $+ the dri-er e>er ised due the note and the osts o+ o!!e tion, media enter%rises0 and onso!idating their -io!ates the %ertinent %ro-isions o+ the ne/ tru ks and re%air the destroyed one, Are ;o,on-!ine $n the arriage o+ %assengers0 the +ai!ure I annot set u% the de+ense against *, ?a k trade in se urities !isted in the -arious Carria'e2 "ro#i.ite6 0 >ali6 Sti$ulations (2002) b) 2he %erson intends a 5uire 10( or SUGGESTED ANSWER: SUGGESTED ANSWER: sto k o+ %aid-u% a%ita! o+ /hi hto must any !ass o+ shares &:e 12 R :e A t) om%!aint# di!igen e0 he ou!d ha-e %re-ented the !oss or%orate stru tures, 2he u!timate %!an is to Re-ised :e urities A 3) t regarding the un+air the reasons gi-en by Pe%ay su++i ient o+ ommon to bring the o+ onsideration is athe %ersona! /hi sto k the e> hanges in arrier the 8,:, EA? buys and 1) $n insider the trading0" shares a+o!!o/ing o+ +a a %ub!i t de+ense o+ s%e om%any ia! h /ithin 1a, $nsider" means the issuer0 2) a ;o, 2he reasons by Pe%ay are not more o+e5uity Dis uss /hether or gi-en not be!ong to iti6ens o+ the Phi!i%%ines, &:e o+ the bag, ha-e on!y t/o organi6ations: one to o/n the use o+ inside in+ormation# grounds to e> use her +rom om%!eting Certi&icate o& $u.lic Con enience ()**:) %assengers sa+e!y to or their destination is on!y a-ai!ab!e bet/een immediate 8,:, !isted se er urities +or the a ounts o+ %eriod o+ 32 months, signi+i an e" is0 addition to being materia!0 dire tor or o++i o+0 a %erson ontro!!ing0 b) su++i 2he a a%%!i ant must %ub!i ient grounds to e> use her +rom sti%u!ations in a in ontra t o+%ro-e arriage o+ a %arties se!!s 3=a0 *A 3'=0 as amended) +a 2he i!ities o+ the ombined and to Batong Baka! *or%oration /ith the immediate!y raises the businesses %resum%tion that or against %arties /ho are not ho!ders in due ) sti%u!ation 2he %erson intends to a 5uire !ients a!! o-er the /or!d0 /ho +i!ed on-ey their 3 ) units# 2he a a%%!i ant !imiting must %ro-e the sum that that the may be its ne su h essity, +a tE>%!ain, as /ou!d !ike!y0 on being made ontro!!ed by0 or under ommon ontro! /ith0 om%!eting her units, 2he same ou!d be ommon arrier are -a!id: de-e!o% and %rodu e ontent materia!s0 and Board o+ Energy an a%%!i ation +or a su h +ai!ure is attributab!e to the arriers ourse, *s kno/!edge that A market is aother minor does e5uity shares o+ a or %ub!i om%any that and se!! instru tions to EA? through the or o%eration re o-ered o+ by the the %ub!i shi%%er ser-i e %ro%osed to F0( and o+ the buy genera!!y a-ai!ab!e0 to a++e to/ner the %ri e the issuer0 1) a %erson /hose re!ationshi% undertaken by her hi!dren or by another to o%erate the +aes0 i!ities and %ro-ide *erti+i ate o+ Pub!i *on-enien egi-es +or the +au!t or neg!igen e, $n the ase at bar0 the not %re-ent *to +rom being a/i!! ho!der inthan due $nternet, /ou!d resu!t in o/nershi% o+ more EA? has no o++i em%!oyees or the -a!ue authori6ation o+ the goods in doase business o+ e>tent0 !oss due %romote toPub the+t, o+ a se urity to a signi+i ant or /hi h +ormer re!ationshi% to the issuer or authori6ed re%resentati-es &:e 3=n mass media and ommer ia! %ur%ose o+ su%%!ying e!e tri %o/er and +a t o+ death and in.ury o+ the bus ourse, * took the %romissory note +rom a 40( o+ the said re%resentati-es outside 2heia! /ebsite the:er2 %ub!i a interest in that a shares, %ro%er in thes and e-ent suitab!e o+ !oss0 a reasonab!e %erson /ou!d onsider as ga-e him a ess to a the +a t8,:, o+ s%e Asti%u!ation tH 7a!i!i 7erras 30 7=F) te!e ations ser-i es, WWW !ights to the +a Course tory and its in em%!oyees !i-ing "arties2 Eol6er inmany Due ()**4) %assengers raises the %resum%tion +au!t or d) 2he a%%!i ant must be +inan ia!!y ho!der +or -a!ue0 B, has i ommuni ons +or ountries0 !uding an manner, destru tion &:e or 3=a deterioration *A 3'= as o+ amended) goods on a es ount es%e ia!!y im%ortant under the ir umstan signi+i an e about the issuer or the o+ se urity "arties2 Eol6er in Due Course2 7n6orsement in .lan*ommuni ations /i!! be the +!agshi% entity /ithin the om%ound, 2he a%%!i ation /as 3FF= 2,2) E-a issued to $me!da a he k in neg!igen e on the %art o+ the arrier, 2he a%ab!e o+ undertaking the %ro%osed ser-i e i on <or <i!i%ino 2raders" ontaining the o+ the de+e ti-e ondition o+ the -ehi !e used in in determining his ourse o+ a tion in the that is not genera!!y a-ai!ab!e0 or ') a %erson (2002) /hi h %ri /i!!es o/n the +a i!ities o+ the o%%osed by an E!e tri *or%oration the amount o+ P40th %ost-dated :e% 100 arrier must rebut su %resum%tion, and meeting the res%onsibi!ities in ident to its days o+su 8,:, !isted se urities e>%ressed the ontra t o+ arriage0 the arriers !iabi!ity is !ight o+ su h +a tors as the degree o+ /ho !earns hBu!a a +a th +rom any o+ the 7nsi6er (2003) A, AB issued a %romissory note +or P30000 ong!omerate and %ro-ide ontent to the ontending that the Batong Baka! 3FF40 as se urity a diamond ring to beother Ather/ise0 the on !usion an be %ro%er!y its o%eration, 8,:, do!!ars and+or their Phi!i%%ine %eso !imited to the -a!ue o+ the goods a%%earing in the in s%e i+i ity0 the e>tent o+ its di++eren e +rom +oregoing insiders /ith kno/!edge that the @s,o& AB /as em%!oyed in @A: $n-estment Carria'e2 /ortuitous E ent ()**1) ,oun6ar% S%stem (2001) %ayab!e to *D or his order on :e%tember 340 ne/ or%oration /hi h0 in turn0 /i!! o%erate 1b, $t is one /hi h0 in addition to being "o;ers t#e "u.lic Ser ice Commission ()**3) *or%oration has not se ured a +ran hise to h so!d on ommission, An :e% 340 3FF40 made that the arrier +ai!ed to e>er ise e5ui-a!ent, Dra e Don6a!es0 a resident o+ bi!! o+ !ading un!ess the shi%%er or o/ner de !ares in+ormation genera!!y a-ai!ab!e %re-ious!y0 %erson +rom /hom he !earns the +a t is su SUGGESTED ANSWER: Bank, W$*0 a dri-er medi a! drug om%any0 @, Di6on 2ru king entered into a hau!ing Ba!do is aindorsed o+ 9e!!o/ *ab *om%any 2002, *D the note in b!ank and those +a i!ities and %ro-ide the ser-i es, WWW (ani$ulati e "ractices (200)) materia!0 /ou!d be !ike!y to a++e t the market o%erate and maintain an e!e tri %!ant, $s the 2he *ity o+ @ani!a %assed an ordinan e $me!da negotiated the he k to e>traordinary di!igen e as re5uired by @akati0 is erti+i a regu!ar ustomer o+ @2 the /ebsite a higher -a!ue &4() and its nature and re!iabi!ity &:e 10 it %ar an insider &:e 10b0 R:A) ;o, A ate o+ %ub!i on-enien e !a/, may retained the Bank toto assess /hether is ontra t /ith <airgoods *o /hereby the under the boundary system, Whi!e ruising de!i-ered the same E<,se-era! D7 sto!e the note *ommuni ations seeks your %ro+essiona! :u%%ose A is the o/ner o+ ina ti-e %ri e o+ a se urity to a signi+i ant e>tent on o%%ositions ontention orre t# &4() banning %ro-in ia! buses +rom the ity, 2he in-estment /hi %aid the amount o+ P'0th and has been %ur hasing and se!!ing R:e A t) be granted toh Batong Baka! *or%oration0 desirab!e to make aE>%ress/ay0 tender o++er DAP +ormer bound itse!+ tothe hau! the !atters 2000 a!ong the :outh Ba!dos ab SUGGESTED +rom and on :e%tember 3'0 2002 ad-i e on ANSWER: /hether or not its the reorgani6ed se urities, 2o reate an a%%earan e+or o+ a ti-e being made genera!!y a-ai!ab!e0 or one ordinan eE< /as ha!!enged as in-a!id under to her, E-a +ai!ed to se!! ring0 so she se urities through EA? /ith use o+ her though not %ossessing a om%any0 a drug manu+a turer, AB sa ks o+ :oya bean mea! +rom @ani!a +igured in a o!!ision0 ki!!ing his AB %ayment, When asked business ti-ity /ou!d be onsidered a %ub!i trading +or:er-i su it hto se urities0 /hi an h it a reasonab!e %erson /ou!d onsider the%resented Pub!i eA t +or by I returned to $me!da on :e% 3F0 3FF4, Ameri E>%ress redit ard, Dra e has o-erheard in the by AB0 D7 said *D uti!ity re5uiring a +ran hise or erti+i ate or any es%e ia!!y 8nab!e to retrie-e her he k0 E-a /ithdre/ ne-er tra-e!ed outside the Phi!i%%ines, A+ter a other +orm o+ authori6ation +rom the series o+ erroneous sto k %i ks0 she had go-ernment, What /i!! be your ad-i e# E>%!ain in urred a net indebtedness o+ 8:O100000, &4() /ith EA?0 at /hi h time she an e!!ed her Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

,.'li! Servi!e Law

Trans%ortation Law Se!.rities Reg.lation

Ameri an E>%ress redit ard, A+ter a

Page

5/ of 103

3 2he sti%u!ation is onsidered unreasonab!e0 un.ust and ontrary to %ub!i %o!i y under Arti !e 37'4 o+ the *i-i! *ode, 2 2he sti%u!ation !imiting the arriers !iabi!ity to the -a!ue o+ the goods a%%earing in the bi!! o+ !ading un!ess the shi%%er or o/ner de !ares a higher -a!ue0 is e>%ress!y re ogni6ed in Arti !e 37'F o+ the *i-i! *ode,

SUGGESTED ANSWER:

Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Page Page 50 5$ of 103 of 103 AnI one dido not asion0 de !are Reyna!do a greater

%erson turned /ho out /ants that the to ride ti ket the/as same inad-ertent!y to signa! his intention ut and /rong!y to board, /orded, A %ub!i PA? uti!ity em%!oyees bus0 on manning e it sto%s0 the is air%orts in e++e t making ground ser-i a es ontinuous ne-erthe!ess o++er s to hedu!ed bus riders, her to $t is +!y the t/o duty hours o+ !ater ommon aboard arriers theiro+ %!ane, %assengers :he agreed to sto% and their arri-ed on-eyan in 7ongkong es +or a sa+e!y, reasonab!e 2he air !ength ra+t o+ used time byin <ar order East to Air!ines a++ord de-e!o%ed %assengersengine an o%%ortunity troub!e0 and to board did not and make enter0 it to and 7ongkong they arebut !iab!e returned +or in.uries to @ani!a, su++ered Ni-ian by boarding sued both air!ines0 %assengers PA? and <ar resu!ting East0 +or +rom damages the sudden be ause o+ SUGGESTED ANSWER: starting her ha-ing u% or .erking unab!e to o+ their take the on-eyan <ar East es +!ight, &%er dondee) ;o0 there /as brea h o+ /hi!e *ou!d they either are doing or both so,air!ines :antiago0 be he!d by !iab!e to ontra :rans t and &o that she9556$ /as a ,ct ommodated (5angwa v &0 3,9" ste%%ing Ni-ian# and Why# standing &=() on the %!at+orm o+ the /e!! /ith the assistan e o+ PA? em%!oyees to $7$s534! bus0 is a!ready onsidered a %assenger and is take Carrier2 the +!ight undue de!ay, Common Dut%/ithout to E9amine ,a''a'es2 Rail;a% entit!ed to Carrier2 a!! theDe&enses rights and %rote tion (2002) an6Common Airline ()**2) %ertaining to a ontra o+ t o+ arriage, Why /as is the de+ense due e in the @arino a %assenger on a di!igen train, Another se!e tion and su%er-ision o+ an em%!oyee %assenger0 Buan ho0 had taken a ga!!on o+ not a-ai!ab!e to a a %!asti ommon &2() gaso!ine %!a ed in bagarrier# into the same SUGGESTED ANSWER: oa h /here @arino /as riding, 2he gaso!ine 2he de+ense o+ due di!igen e in the se!e tion ignited and e>%!oded ausing in.ury to @arino and su%er-ision o+ an em%!oyee is not /ho +i!ed a i-i! suit +or damages against the a-ai!ab!e to a ommon arrier be ause the rai!/ay om%any !aiming that Buan ho degree o+ di!igen e re5uired o+ a ommon shou!d ha-e been sub.e ted to ins%e tion by arrier is not the di!igen e o+ a good +ather o+ its ondu tor, 2he rai!/ay om%any a +ami!y but e>traordinary di!igen e0 i,e,0 dis !aimed !iabi!ity resu!ting +rom the di!igen e o+ the greatest ski!! and utmost e>%!osion ontending that it /as una/are o+ Common Carrier2 De&enses2 /ortuitous E ents ()**3) +oresight, the@arites0 ontents o+ the %!asti bag and in-oking a %aying bus %assenger0 /as hit theabo-e right o+ Buan to %ri-a y, a) :hou!d her !e+t ho eye by a stone hur!ed atthe the rai!/ay om%any be he!d !iab!e +or damages# bus by an unidenti+ied bystander as the bus b) $+ it /ere an air!ine om%any in-o!-ed0 /as s%eeding through the ;ationa! 7igh/ay, SUGGESTED ANSWER: /ou!d your ans/er be the same# E>%!ain 2he bus o/ners %ersonne! !ost no time in a) ;o, 2he rai!/ay om%any is not !iab!e +or brie+!y, bringing @arites to trans%ortation0 the %ro-in ia! hos%ita! damages, $n o-er!and the /here she /as on+ined and treated, @arites ommon arrier is not bound nor em%o/ered /antsan to e>amination sue the bus on om%any +or damages to make the ontents o+ seeks your ad-i /hether she an %a and kages or bags0 %arti e u!ar!y those SUGGESTED ANSWER: !ega!!y ho!d bus om%any !iab!e, What hand arried bythe %assengers, @arites an !ega!!y ho!d the bus om%any b) $+ it /ere an not air!ine /i!! you ad-ise her# om%any0 the ommon !iab!e, 2here is no sho/ing anyo+ su h arrier shou!d be made !iab!e, that $n ase air in ident %re-ious!y ha%%ened so as to arriers0 it is not !a/+u! to arry +!ammab!e im%osein an ob!igationair on ra+ts0 %art o+ the materia!s %assenger and air!ine %ersonne! o+ the bus om%any to /arn the om%anies may o%en and in-estigate %assengers and toand take argoes the ne &RA essary sus%i ious %a kages =214) %re aution, :u ()**4) h hur!ing o+ a stone Common Carrier2 Test onstitutes +ortuitous e-ent in/hether this ase, What is the test +or determining or 2he Common Carrier2 De&enses2 8imitation o& 8ia.ilit% v ()**:) is not arrier# an insurer, (;ilapil &0 notbus one om%any is a ommon I took a %!ane +rom @ani!a bound +or Da-ao SUGGESTED ANSWER: "67 s #4%! -ia *ebu /here there /hether /as a hange o+ 2he test +or determining or not one %!anes, I arri-ed Da-ao sa+e!y but to his is a ommon arrier in is /hether the %erson or dismay0 his t/o suit ases /ere !e+t entity0 +or some business %ur%ose and behind /ith in *ebu, 2he air!ine!iente!e0 om%any assured I that genera! or !imited o++ers the ser-i ethe suit ases /ou!d ome in the ne>t +!ight but o+ arrying or trans%orting %assengers or they ne-er !aimed P20000 +or the !oss goods or both did, +or I om%ensation, Common Carriers2 ()**4) o+ both suit De&enses ases0 but the air!ine /as /i!!ing 3) A@ 2ru on!y king0 a sma!! om%any0 o%erates to %ay P400 be ause the air!ine ti ket t/o tru ks +orthat hireun!ess on se!e ti-e basis, $t /as sti%u!ated a higher -a!ue aters on!y to a +e/ ustomers0 itse> trueed ks de !ared0 any !aim +or !oss and annot do P240 not make regu!ar s hedu!ed $t +or ea h %ie or e o+ !uggage,tri%s, I reasoned does not e-en ha-e a sign erti+i ate o+ %ub!i and in out that he did not the sti%u!ation on-enien e, +a t had not e-en read it,

ontra -a!ue ted des%ite A@ tothe trans%ort +a t that +orthe a +ee0 !erk 300 had sa ks a!!ed o+ ri his e attention +rom @ani!a to the to 2ar!a sti%u!ation , 7o/e-er0 in the A@ti +ai!ed ket, De to de!i-er ide the the ase argo0 &4()be ause its ANSWER: truSUGGESTED k /as hi.a ked /hen the dri-er sto%%ed E-en i+ he not the ti ket0 I is bound in Bu!a an to did -isit hissign gir!+riend, by that any !aim +or !oss a) the sti%u!ation @ay Reyna!do ho!d A@ !iab!e as a annot e> eed P240 +or ea h !uggage, 7e arrier# ommon did !are higher -a!ue, is entit!ed b) not de @ay A@aset u% the hi.a I king as a de+ense to P400 +or the t/o !uggages !ost, de+eat Reyna!dos !aim# to Common Carrier2 o& 8ia.ilit% (200)) SUGGESTED ANSWER: Carria'e2 >aluation o&De&enses2 Dama'e6 8imitation Car'o ()**3) a) Reyna!do may 2ru king !iab!e as :u%%ose A /as ho!d riding on an air%!ane o+ a A shi%%ed thirteen %ie A@ es o+ !uggage through a ommon arrier, 2he ts that A@ /hen the +a a to ident ha%%ened ?D ommon Air!ines arrier +rom 2eheran @ani!a as 2ru king o%erates on!y t/o tru ks $n +or hire on and A su++ered in.uries, an a tion e-iden ed by ?D serious Air Waybi!! /hi h dis !osed a se!e ti-e basis0 aters on!y tothe a !atter +e/ by A against the ommon arrier0 that the a tua! gross /eight o+ the !uggage ustomers0 does not make regu!ar or !aimed that 3) there /as a sti%u!ation in the /as 3G0 kg, P did not de !are an in-entory o+ s hedu!ed tri%s0 and does not ha-e a ti ket issued to A abso!ute!y e>em%ting the the ontents or the -a!ue o+ the 31 %ie es o+ the+rom !a/ does distinguish bet/een erti+i ate o+ %ub!i on-enien e o+ are o+ no arrier !iabi!ity +rom the %assengers !uggage, A+ter the not said %ie es !uggage one /hose %rin i%a! business a ti-ity is the by moment as death or in.uries ad noti es /ere %osted arri-ed in @ani!a0 the onsignee /as ab!e to arrying o+ %ersons or goods or both and the +rom ommon dis%ensing /ith the es0 !aim the arrier argo broker on!y 32 %ie anyone /ho /eight does suo+ h 37' arrying on!y as an e>traordinary di!igen e o+ the arrier0 and /ith a tota! kg, I ad-ised the2) an i!!ary ti-ity0 A /as gi-en a dis on the his %!ane +are air!ine o+ a the !oss o+ ount one o+ 31 %ie es o+ thereby redu ing the !iabi!ity o+ distin the E++orts ommon the !a/ a-oids making any tion !uggage and o+ the ontents thereo+, arrier /ith res%e teto A inmissing %arti u!ar, a) Are bet/een a %erson or enter%rise o++ering o+ the air!ine to tra the !uggage those -a!id de+enses# &3() b) What are the trans%ortation ser-i a regu!ar or /ere +ruit!ess, :in e e on the air!ine +ai!ed to de+enses a-ai!ab!e to any arrier to som%!y hedu!ed basis one o++ering h ser-i e /ith the and demand o+ Iommon to su %rodu e the SUGGESTED ANSWER: !imit or e>em%t it +rom !iabi!ity# &'() on an o asiona!0 e%isodi or uns hedu!ed missing I not +i!ed an a tion +or be brea h a) ;o,!uggage0 2hese are -a!id de+enses ause basis0 and o+ they ontra t /ith damages against Air!ines, are ontrary to !a/ as they?D are in the !a/ re+rains +rom making a $n -io!ation its ans/er0 ?De>traordinary Air!ines a!!eged that o+ the di!igen e the distin tion bet/een a/hi arrier o++ering Warsa/ *on-ention h !imits theits !iabi!ity re5uired o+ ommon arriers, &Arti !e 37470 ser-i esarrier0 to the genera! %ub!i and /ho to o+ the i+ any0 /ith res%e t one to argo 374G ;e/ *i-i! *ode) b) 2he a-ai!ab!e to any ommon o++ers ser-i es or so!i itsor business on!y +rom a a sum o+ de+enses O20 %er ki!o OF,07 %er %ound0 arrier to !imit orthe e>em%t +rom !iabi!ity narro/ segment o+ genera! %o%u!ation un!ess a higher -a!ue is de it !ared in ad-an are: e 3 ANSWER: obser-an e o+ e>traordinary and additiona! harges are %aid by the SUGGESTED di!igen e0the ontents 9es, 8n!ess the o+ o+ a the argo aret %assenger and onditions ontra 2 +orth or %ro>imate o+ the de or the ontents a ause !ost e>%ress!y !uggage as !ared set inthe the air o+ /aybi!!0 inthe ident is a +ortuitous +or argo ee are by the satis+a tory or e-iden sub.e%ro-ed t ontra t o+ the e-ent arriage o+ ma.eure0 other than the se!+-ser-ing de !aration o+ one to the Warsa/ *on-ention, @ay the 1 a t or o+ thesustained# shi%%er or %arty0 the o+ ontra t omission shou!d be en+or ed as it a!!egation ?D Air!ines be o/ner o+ the goods0 is the on!y reasonab!e basis to arri-e at a E>%!ain, ' the ter o+ the or is .ust a/ard, 2he hara %assenger or goods shi%%er de+e ts in the %a king or in the bound by the terms o+ the %assenger ti ket Common Carrier ()**4) ontainers0 and v +apadas $79 s %3! or the /aybi!!, (;anama De+ine4 a ommon order arrier# or a t o+ om%etent %ub!i Common Carrier2 Duration 8ia.ilit% ()**4) arrier SUGGESTED ANSWER: authority0 /ithouto& the ommon A A ommon arrier is a %erson0 or%oration0 bus o+ D? 2ransit on its /ay Da-ao e being gui!ty o+ e-en sim%!eto neg!igen +irm sto%%ed or asso to iation enab!e engaged a %assenger in the to a!ight, business At &Arti !e 371'0 ;**), o+ that arrying or trans%orting %assengers moment0 :antiago0 /ho had been or goods /aiting or +or both0 a ride0 by boarded !and0 /ater the bus, or 7o/e-er0 air +or om%ensation0 o++ering ser-i es to /ho the the bus dri-er +ai!ed toits noti e :antiago %ub!i /as&Art sti!! 37120 standing *i-i! on *ode) the bus %!at+orm0 and Common Carrier2 Dama'es (2003) ste%%ed on,reac# the a o& Contract2 e!erator, Be ause o+ the Ni-ian @artin /as booked by PA?0 /hi sudden motion0 :antiago s!i%%ed and +e!! h a ted as a ti keting agent o+ <ar East do/n su++ering serious in.uries, @ay :antiago SUGGESTED ANSWER: Air!ines0 +or a round tri% +!ight on the !atters ho!d D? 2ransit !iab!e +or brea h o+ ontra t may ho!d D? 2ransit !iab!e +or2he air :antiago ra+t0 +rom @ani!a-7ongkong-@ani!a, o+ arriage# E>%!ain, brea h o+ ontra t o+ arriage, o+ $t /as ti ket /as ut by an em%!oyee PA?,the 2he duty o+ the dri-er0 /hen he sto%%ed the bus0 %,m, on 04 Banuary 2002 aboard <ar Easts ti ket sho/ed that Ni-ian /as s hedu!ed to to do no a at t that ha-e the e++e t o+ <!ight <007, Ni-ian arri-ed at the ;inoy !ea-e @ani!a 4:10/ou!d in reasing the %eri!Air%ort to a %assenger h as A5uino $nternationa! an hour su be+ore he /as attem%ting to board the:antiago time s /hi!e hedu!ed in her ti ket0 but /as the same, a <!ight bus is <007 not in had motion to!d that <ar When Easts !e+tthere at is no ne $t essity +or a 32:30 %,m,

Mercantile Law Bar Examination Q & A (1990-2006)

sardines and kidna%%ed the dri-er and his he!%er0 re!easing them in *ebu *ity on!y 2 days !ater, Pedro Rabor sought to re o-er +rom A!e.andro the -a!ue o+ the sardines, 2he !atter ontends that he is not !iab!e there+ore be ause he is not a ommon arrier under the *i-i! *ode and0 e-en granting +or the sake o+ argument that he is0 he is not !iab!e +or the o urren e o+ the !oss as it /as due to a ause beyond his ontro!, $+ you /ere SUGGESTED ANSWER: the .udge0 /ou!d you sustain the ontention $+ $ /ere the Budge0 $ /ou!d ho!d A!e.andro as o+ A!e.andro# ha-ing engaged as a ommon arrier, A %erson /ho o++ers his ser-i es to arry %assengers or goods +or a +ee is a ommon arrier regard!ess o+ /hether he has a erti+i ate o+ %ub!i on-enien e or not0 /hether it is his main business or in identa! to su h business0 /hether it is s hedu!ed or uns hedu!ed ser-i e0 and /hether he o++ers his ser-i es to the genera! %ub!i or to a $ /i!! ho/e-er0 sustain the ontention o+ !imited +e/ (5e 1u>man v &0 1+ 436$$ A!e.andro that he is not !iab!e +or the !oss o+ $35ec"966! the goods, A ommon arrier is not an insurer o+ the argo, $+ it an be estab!ished that the !oss0 des%ite the e>er ise o+ e>traordinary di!igen e0 ou!d not ha-e been a-oided0 !iabi!ity does not ensue against the arrier, 2he hi.a king by 1 armed men o+ the tru k used by A!e.andro is one o+ su h ases (5e Common s!&0 "ri 1+ ate 436$$ Carrier2 $35ec"966!/ De&enses (2002) 1u>man v (;edro de 1u>man v &0 =8436$$ 5ec $$,66 ;ame t/o &2) hara teristi s /hi h "%6s%"$! di++erentiate a ommon arrier +rom a %ri-ate SUGGESTED ANSWER: SUGGESTED ANSWER: arrier, &1(), b) A@ 2ru king may not set u% the hi.a king 2/o &2) hara teristi s that di++erentiate a as a de+ense to de+eat Reyna!dos !aim as ommon arrier +rom a %ri-ate arrier are: the +a ts gi-en do not indi ate that the same 3 A ommon arrier o++ers its ser-i e to the /as attended by the use o+ gra-e or %ub!i H a %ri-ate arrier does not, irresistib!e threat0 -io!en e0 or +or e, $t /ou!d 2 A ommon arrier is re5uired to obser-e a%%ear that the tru k /as !e+t unattended by e>traordinary di!igen eH a %ri-ate arrier is not so its dri-er and /as taken /hi!e he /as -isiting re5uired, his gir!+riend, &;edro de 1u>man v &0 =8436$$ Common Carriers2 8ia.ilit% 5ec $$,66 "%6 scra %"$&or ), 8oss ()**)) A!e.andor *ama!ing o+ A!egria0 *ebu0 is engaged in buying o%ra0 har oa!0 +ire/ood0 and used bott!es and in rese!!ing them in *ebu *ity, 7e uses 2 big $su6u tru ks +or the %ur%oseH ho/e-er0 he has no erti+i ate o+ %ub!i on-enien e or +ran hise to do business as a ommon arrier, An the return tri%s to A!egria0 he !oads his tru ks /ith -arious mer handise o+ other mer hants in A!egria and the neighboring muni i%a!ities o+ Badian and Dinati!an, 7e harges them +reight rates mu h !o/er than the regu!ar rates, $n one o+ the return tri%s0 /hi h !e+t *ebu *ity at G:10 %,m, 3 argo tru k /as !oaded /ith se-era! bo>es o+ sardines0 -a!ued at P300th0 be!onging to one o+ his ustomers0 Pedro Rabor, Whi!e %assing the 6ig6ag road bet/een *ar ar and Bari!i0 *ebu0 /hi h is mid/ay bet/een *ebu *ity and A!egria0 the tru k /as hi.a ked by 1 armed men /ho took a!! the bo>es o+

Page Page 53 51 of 103 of 103 re%o!i ei-ed y and +or shi%ment" there+ore -oid and and ontained ine>istent, an entry &Art, 3'0FW3X0 indi ating *i-i! transshi%ment *ode) seeming!y inade5uate des%ite its e++orts o+ Trust Recei$ts 8a;2 8ia.ilit% &or 2rans%ortation0 esta&a ()**)) in 7ongkong, 2he President o+ BR2 %ersona!!y im%ro-ing the same, Pasok ;ob!e0 as +or the President o+ re ei-ed and signed the bi!! o+ !ading and $n @r, ,0 no/ a%%!ies the issuan e toAB* it by 2rading the Ha.it S%stem2 A'ent o& t#e Re'istere6 <;ner $n 2rans%ortation e>e uted a trust ei%t and in +a-or o+ BP$ des%ite the entries0 he de!i-ered the (2001) ?and <ran re hising Pro o%io %ur hased an $su6u %assenger Bank to se ure the im%ortation by his orres%onding he k in %ayment o+ the Regu!atory Board o+ a erti+i ate o+ %ub!i .ee%ney +rom Enteng0 a ho!der o+ a erti+i ate om%any o+ ertain goods, A+ter re!ease and +reight, 2he shi%ment /as de!i-ered at the on-enien e +or the same @ani!a-2ar!a o+o+ %ub!i on-enien +or the o%eration o+ sa!e route, o+ the im%orted the dis harge but thee buyer re+used to @ani!a *ou!d Bayan goods0 Bus ?ines0 $n%ro ,0 eeds %ort SUGGESTED ANSWER: uti!ity -ehi !e be %!ying the *a!amba-?os +romthe the sa!e o%erator" /ere not ru!es turned o-er to BP$, a %ub!i e%t the anaha/ +ans ause there /as in-oke %rior against &%er Dondee) ;o0 Busin ?ines0 $n a,0 ase +or SUGGESTED ANSWER: route, Whi!e and Pro o%io/asontinued Wou!d BP$ be Bayan .usti+ied +i!ing no BaZos on-board bi!! o+ !ading0 there Pasok 2rans%ortation0 $n ,# Why# &=() BP$ /ou!d be .usti+ied in +i!ing a ase +or annot in-oke the %rior o%erator" ru!es o++ering the +or /ere %ub!i trans%ort esta+a against ;ob!e# transshi%ment sin.ee%ney e the goods esta+a under PD 334 against 2he +a t against Pasok 2rans%ortation0 $n ;ob!e, , be ause ser-i es0 in he did not ha-e registration trans+erred 7ongkong +rom the @N Pa i+i 0 the o+ the trust re ei%t /as issued in +a-or su that h Prior or A!d A%erator Ru!e" under the o+ a the -esse!0 -ehi !e to trans+erred in a his name, ;either +eeder @N Arienta!0 mother bank0 instead o+ a se!!er0asto se ure Pub!i :er-i e A t on!y a%%!ies a %o!i y o+ the did he se ure that +or the himse!+ erti+ibe ate o+ -esse!, BR2 argued samea annot o+ the goods did not %re theim%ortation !a/ o+ the Pub!i :er-i e *ommission to !ude %ub!i on-enien e +orbe itsause o%eration, 2hus0 onsidered transshi%ment both theaa%%!i ation o+ %ub!i the 2rust Re ei%t e ?a/, issue erti+i ate o+ on-enien to a&PD %er the re ords o+ the shi%%ing ?and 2rans%ortation -esse!s be!ong to the same 8nder the !a/0%rior any o%erator o++i er oris em%!oyee se 334) ond o%erator /hen <ran hising and Regu!atory Board0 Enteng om%any, 3) Was there transshi%ment# o+ a or%oration +or the -io!ation rendering su++i ient0res%onsib!e ade5uate and remained its registered o/ner and o%erator, E>%!ain 2) BR2 +urther argued that assuming A8TERNAT7>E ANSWER: o+ a tory trust re ei%t is /ho sub.e t to the %ena! satis+a ser-i e0 and in a!! things Ane day0 /hi!e the .ee%ney /as tra-e!ing that there /as transshi%ment0 it annot be 2he +i!ing o+ a ase +or esta+a under the %ena! !iabi!ity (Sia /ith v ;eople "%%s%55! and res%e thereunder ts is om%!ying the ru!e and southbound0 it o!!ided /ith a ten-/hee!er deemed to ha-e agreed thereto e-en i+ it %ro-isions o+ the RP* /ou!d not be .usti+ied, regu!ation o+ the *ommission, $n the +a ts o+ tru k o/ned Emmanue!, 2hesu dri-er o+ the the bi!! o+by !ading ontaining h entry $t has been he!d in Sia v ;eople ("%" s %55! signed Pro o%io sued Emmanue! +or damages0 but the ase at bar0 Bayan Bus ?ines ser-i e k admitted res%onsibi!ity +or shi%%ing the a ident0 ause it /as made kno/n to the that or%orate o++i ers and dire tors are not be tru the !atter mo-ed to dismiss the ase on the be ame seeming!y inade5uate des%ite its e>%!aining that the tru k !ost its brakes, +rom the that transshi%ment /as in rimina!!y !iab!e +or a -io!ation o+ said *ode, 2 !ines SUGGESTED ANSWER: ground thatstart Pro o%io is not the rea! %arty e++orts o+ im%ro-ing the same, 7en e0 in the under the !etter o+ redit and Re'istere6 <;ner2are Conclusi e "resum$tion ()**0) 3) 9es, 2ransshi%ment is the a t o+ taking onditions re5uired be+ore a or%orate %rohibited interest sin e he is not the registered that0 o/ner interest o+ %ro-iding e++i ient %ub!i trans%ort it had intention tomotion a!!o/ Bohnny o/ns a be :arao .ee%ney, 7e asked argo out.ee%ney, o+ one no shi% and !oading it in /ith o++i er may rimina!!y !iab!e +or anhis o++ense there+ore0 o+ the Reso!-e the ser-i es0 use o+ must the C%rior and 3 the be ao%eratorC s%e i+i said %ro-ision o+ transshi%ment o+ the sub.e t argo, $s the SUGGESTED ANSWER: neighbor Nan 2here i+ he ou!d o%erate the another, $t is immateria! /hether or not the ommitted by the or%orationH -i6: reasons, &1() the C%riority o+ +i!ingC ru!es sha!! is untenab!e !a/ mandating a or%oration to a t or not to argument 2he motion to or dismiss shou!d tenab!e# Reason, .ee%ney under Nans erti+i ate o+ %ub!i same %erson0 +irm0 entity o/ns the be t/o denied n this a ase, tH and be ause Pro o%io0 as the rea! o/ner o+ the on-enien e, Nan agreed and0 a ording!y0 -esse!s, &@age!!an - *A 203 s 302) 2 2here must be an e>%!i Nan it statement in 2) ;o, BR2 is is bound by the terms o+ the bi!! o+ .ee%ney0 the rea! %arty in interest, Pro o%io Bohnny registered his .ee%ney under the !a/ itse!+ that0 in ase o+ su h -io!ation by !ading /hen it a e%ted the bi!! o+ !ading +a!!s under the Jabit system, 7o/e-er0 the name, An Bune 300 3FF00 one o+ the a or%oration0 the o++i ers /ith +u!! kno/!edge o+ its ontents h system !ega! restri tion as regards the /hi Jabit %assenger .ee%neys o%erated by and Nan dire tors thereo+ are to be %ersona!!y and in does !uded transshi%ment 7ongkong, not a%%!y in in this ase be ause the bum%ed 2omas, 2omas /as in.ured and rimina!!y in !iab!e A %ub!i e%tan at e under h ir umstan es in-o!-ed, !arge su is not de ei-ed nor due time0 hethere+ore, +i!ed a om%!aint +or damages makes o+ !ading a binding t, (=imthe v/ bi!! &ourt of 0ppeals, 1/+/ ontra 2o/ "$56"3, against Nan and his dri-er +or the in.uries he &@age!!an *a 203 s 302) Aanuary-"%, $77$, citing Baliwag :ransit v/ su++ered, 2he ourt rendered .udgment in $n any of e-ent0 Pro o%rio is deemed be Kthe &ourt 0ppeals, 1/+/ 2o/ 5349#, to Aanuary 3, +a-or o+ 2omas and ordered Nan and his agentK o+ the registered o/ner, "963! dri-er0 .oint!y and se-era!!y0 to %ay 2omas Trust Recei$ts 8a;2 Acts 0 <missions2 Co ere6 (2004) (-irst 2he :heri++ !e-ied on the .ee%ney be!onging *alayan =easing v/ &ourt of 0ppeals, 1/+/ a tua! and mora! damages0 attorneys +ees0 5!at a.ts or o-"ss"ons are penal"De9 to Bohnny but registered in the name o+ Nan, 2o/ 9"#36, Aune 9,"99$< and )-) :ransit &o/, and osts, un9er t!e /rust Re.e"pts 2a?7 )2.58+ Bohnny +i!ed a 1rd %arty !aim /ith the :heri++ .nc/ v/ ANSWER( 2=+&, 1/+/ 2os, 66"9589%, Aanuary SU++ESTE6 (aritime Commerce2 ,are.oat (2003) a!!eging o/nershi% o+ the .ee%ney !e-ied $3, "994! 2he 2rust Re ei%ts ?a/ &P,D, ;o, 334) <or the trans%ortation itsgoods argoor +rom the u%on and stating that the .ee%ney /as de !ares the +ai!ure to turn o+ o-er Port o+ @ani!a to the Port o+ Jobe0 registered in the name o+ Nan mere!y to %ro eeds rea!i6ed +rom sa!e thereo+0 as a Ba%an0 Asa/a M *o,0 under hartered bareboat" enab!e Bohnny to make use o+ Nans rimina! o++ense Art, 134&!)&b) o+ @LN $!og o+ Ha.it S%stem (2001) Jaragatan *or%oration, @LN $!og met a sea erti+i ate o+ %ub!i on-enien e, @ay the Re-ised Pena! *ode, 2he !a/ is -io!ated Dis uss the kabit system" in !and SUGGESTED ANSWER: a ident resu!ting in the !oss o+ the argo and :heri++ %ro eed /ith the %ub!i au tion o+ /hene-er the entrustee or %erson to /hom trans%ortation and its !ega! es, 9es0 the :heri++ may %ro eed /ith onse5uen the the death o+ some o+ the seamen manning the Bohnnys .ee%ney, Dis uss /ith reasons, trust re ei%ts /ere issued +ai!s to: &a) return SUGGESTED ANSWER: au &2() tion sa!e o+ Bohnnys .ee%ney, $n -esse!, Who shou!d bear the !oss o+ the argo (*etropolitan Ban' v/ :onda, 1/+/ 2o/ "#44#%, 0ugust 2he kabit system an arrangement /here a the goods ANSWER: o-ered by the trust re ei%tsH or ontem%!ation o+ !a/is as regards the %ub!i "%,SUGGESTED $777!/ and thethe death o+ the o+ seamen# Why# &'() %erson granted a erti+i ate o+ %ub!i &b) return %roAsa/a eeds the *o, sa!e o+ said &%er Dondee) and sha!! bear the and third %ersons0 the -ehi !e is onsidered Is la.$ of "ntent to 9efrau9 a bar to t!e on-enieno+ e the a!!o/s other %ersons to o%erate goods !oss be ause under a demise or bareboat the %ro%erty registered o%erator prose.ut"on of t!ese a.ts or o-"ss"ons7 theirvmotor -ehi !es under his !i ense0 Trans?S#i$ment2 ,ill o& 8a6in'2 .in6in' contract ()**3) +or a harter0ANSWER( the harterer &Asa/a M *o,) mans (Santos Sibug "74 S 5$7! SU++ESTE6 )2.58+ %er entage o+ their earnings (=im v/ BR2+ee $n or entered into a ontra t /ith * *o o+ the -esse! his o/n and be omes0 ;o, 2he 2rust /ith Re ei%ts ?a/%eo%!e is -io!ated &ourt 0ppeals and 1on>ale>, 1/+, at 2o/ "$56"3, Ba%an to of e>%ort anaha/ +ans -a!ued in e++e t0 the o/ner +or the -oyage oro-er ser-i e /hene-er the entrustee +ai!s to: &3) turn AanuaryAs "%, $77$, citing Baliwag :rannit O210000, %ayment thereo+0 a !etter o+ v/ &ourt sub.e t to +or or damages thesti%u!ated0 %ro eeds o+ the sa!e o+!iabi!ity the goods0 &2) of 0ppeals, 1/+/ to 2o/ 5349#, Aanuary 3, 2he "963! 2he redit /as issued BR2 by the buyer, aused neg!igen e, by the trust return the by goods o-ered !a/ en.oining the kabit system aims to "rior <$erator Rule (2003) !etter o+ redit re5uired the issuan e o+ an re ei%ts i+ the goods are not so!d, 2he mere identi+y %erson res%onsib!e Bayan had been o%erating on-board bi!! the o+ !ading and %rohibited the+or an +ai!ure to a Bus ount ?ines or return gi-es rise to the a ident in order to %rote t the riding %ub!i , satis+a tori!y a bus ser-i e o-er the transshi%ment, 2he President o+ BR2 then rime /hi h is ma!um %rohibitum, 2here is route 2he !a/ does not %ena!i6e the %arties to a 2he %o!i y has no +or e /hen the %ub!i at @ani!a to 2ar!a and -i e -ersa -ia the ontra a shi%%ing agent to shi% the kabitted agreement, But the kabit system is no re5uirement to %ro-e intent to de+raud !arge is neither de ei-ed nor in-o!-ed, @ Arthur 7igh/ay, With the u%grading o+ anaha/ +ans through &&hing v/ Secretary of Austice, 1/+/ 2o/ "%4#"3, the ontrary to %ub!i A *ontainers ?ines0 ne/ %, ;orth Bayan Bus ?ines s%e i+ying the re5uirements o+ the !etter o+ -ebruary $77%<E>%ress/ay0 &olinares v/ &ourt of 0ppeals, ser-i e be ame redit, 7o/e-er0 the bi!! o+ !ading issued by 1/+/ 2o/ 976$6, September 5, $777< ,ng v/ &ourt the shi%%ing !ines bore the notation of 0ppeals, 1/+/ 2o/ ""9656, 0pril $9, $77#!/ Mercantile Mercantile LawLaw Bar Bar Examination Examination Q &Q A& (1990-2006) A (1990-2006)

Tr.st Re!ei%ts Law

Mercantile Law Bar Examination Q & A (1990-2006)

Page

b, 2he interest annot be onsidered usurious, 2he 8sury ?a/ has been sus%ended in its a%%!i ation0 and the interest rates are made +!oating,"

Ware"o.se Re!ei%ts Law

,ill o& 8a6in' ()**:) 3, What do you understand by a bi!! o+ 2, E>%!ain the t/o-+o!d hara ter o+ a bi!! o+ !ading#" &2() !ading," &1()
SUGGESTED ANSWER:

3,

A bi!! o+ !ading may be de+ined as a /ritten a kno/!edgement o+ the re ei%t o+ goods and an agreement to trans%ort and to de!i-er them at a s%e i+ied %!a e to a %erson named therein or on his order, 2, A bi!! o+ !ading has a t/o-+o!d hara ter0 name!y0 a) it is a re ei%t o+ the goods to be trans%ortedH and b) it onstitutes a ontra t o+ arriage o+ the goods,

2hese onditions are not met in the %ena! %ro-isions o+ the RP* on trust re ei%ts, Trust Recei$ts 8a;2 8ia.ilit% &or Esta&a ()**+) A buys goods +rom a +oreign su%%!ier using his redit !ine /ith a bank to %ay +or the goods, 8%on arri-a! o+ the goods at the %ier0 the bank re5uires A to sign a trust re ei%t be+ore A is a!!o/ed to take de!i-ery o+ the goods, 2he trust re ei%t ontains the usua! !anguage, A dis%oses o+ the goods and re ei-es %ayment but does not %ay the bank, 2he bank +i!es a rimina! a tion against A +or -io!ation o+ the 2rust Re ei%ts ?a/, A asserts that the trust re ei%t is on!y to se ure his debt and that a rimina! a tion annot !ie against him be ause SUGGESTED ANSWER: that /ou!d be hisis onstitutiona! ;o, Nio!ation o+ -io!ati-e a trust reo+ ei%t rimina! as right against im%risonment +or non%ayment it is %unished as esta+a under Art 134 o+ theo+ a debt," $s he orre t# %o!i y in-o!-ed /hi h RP*, 2here is a %ub!i is to assure the entruster the reimbursement o+ the amount ad-an ed or the ba!an e thereo+ +or the goods sub.e t o+ the trust re ei%t, 2he e>e ution o+ the trust re ei%t or the use thereo+ %romotes the smooth +!o/ o+ ommer e as it he!%s the im%orter or buyer o+ the goods o-ered thereby,

Trusts Recei$t 8a; (2003) PB M *o,0 $n ,0 a manu+a turer o+ stee! and stee! %rodu ts0 im%orted ertain ra/ materia!s +or use by it in the manu+a ture o+ its %rodu ts, 2he im%ortation /as e++e ted through a trust re ei%t arrangement /ith AB Banking or%oration, When it a%%!ied +or the issuan e by AB Banking *or%oration o+ a !etter o+ redit0 PB M *o,0 $n ,0 did not make any re%resentation to the bank that it /ou!d be se!!ing /hat it had im%orted, $t +ai!ed to %ay the bank, When demand /as made u%on it to a ount +or the im%ortation0 to return the arti !es0 or to turn-o-er the %ro eeds o+ the sa!e thereo+ to the bank0 PB M *o,0 $n ,0 a!so +ai!ed, 2he bank sued PB M *o,s President /ho /as the signatory o+ the trust re ei%t +or esta+a, 2he President %ut u% the de+ense that he ou!d not be made !iab!e be ause there /as no de eit resu!ting in the -io!ation o+ the trust re ei%t, 7e a!so SUGGESTED ANSWER: submitted that there /as no -io!ation o+ 2he the ;o0 the de+enses are not sustainab!e, trust the ra/ /ere !a k re o+ ei%t de be eit ause shou!d not materia!s be sustained not so!d the but mere used by the to or%oration in the be ause +ai!ure a ount +or manu+a ture or o+return its %rodu ts, !es Wou!d those im%ortation0 the arti onstitutes de+enses be o+ sustainab!e# Why# &=() rime o+ the abuse on+iden e in the esta+a, 2he +a t that the goods arent so!d but are used in the manu+a ture o+ its %rodu ts is immateria! be ause a -io!ation o+ the trust re ei%ts !a/ ha%%ened /hen it +ai!ed to a ount +or the goods or return them to the Bank u%on demand, Usur% 8a; ()**) Borro/er obtained a !oan +rom a money !ending enter%rise +or /hi h he issued a %romissory note undertaking to %ay at the end o+ a %eriod o+ 10 days the %rin i%a! %!us interest at the rate 4,4( %er month %!us 2( %er annum as ser-i e harge, An maturity o+ the !oan0 borro/er +ai!ed to %ay the %rin i%a! debt as /e!! as the sti%u!ated interest and ser-i e harge, 3 e0 he /as 7o/ sued, /ou!d you dis%ose o+ the 7en issues raised by the borro/er# 2 2hat the sti%u!ated interest rate is e> essi-e and un ons ionab!e# &1() 1 $s the interest rate usurious# &1()

55 of 103

Us.ry Law

+ecommendation Since the subJect matter of these two ($! questions is not included within the scope of the Bar Kuestions in *ercantile =aw, it is suggested that whatever answer is given by the examinee, or the lac' of answer should be given full credit/ .f the SUGGESTED ANSWER: examinee gives a good answer, he should be a, 2he rate o+ interest o+ 4,4( %er month is given additional credit/

e> essi-e and un ons ionab!e,

Page

100 of 103

1, and readiness and /i!!ingness to sign /hen the goods are de!i-ered i+ so re5uested by the /arehouseman &:e G Warehouse Re ei%ts ?a/), Garnis#ment or Attac#ment o& Goo6s ()***) A Warehouse *om%any re ei-ed +or sa+ekee%ing 3000 bags o+ ri e +rom a mer hant, 2o e-iden e the transa tion0 the Warehouse *om%any issued a re ei%t e>%ress!y %ro-iding that the goods be de!i-ered to the order o+ said mer hant, A month a+ter0 a reditor obtained .udgment against the said mer hant +or a sum o+ money, 2he sheri++ %ro eeded to !e-y on the ri e and dire ted the Warehouse *om%any to 3 ad-i /i!! you gi-e de!i-er What to him the e de%osited ri e, the Warehouse *om%any# E>%!ain &2() 2 Assuming that a /eek %rior to the !e-y0 the re ei%t /as so!d to a ri e mi!! on the basis o+ /hi h it +i!ed a !aim /ith the sheri++, Wou!d the ri e mi!! ha-e better rights SUGGESTED ANSWER: to the ri e than the reditor# E>%!ain your Deli er% o& Goo6s2 Re5uisites ()**:) 3 2he 3000 bags o+ ri e /ere de!i-ered ans/er, &2() ?u6on Warehousing *o re ei-ed +rom Pedro to the Warehouse *om%any by a mer hant0 200 a-ans o+ ri e +or de%osit in its and a negotiab!e re ei%t /as issued there+or, /arehouse +or /hi h a negotiab!e re ei%t /as 2he ri e annot therea+ter0 /hi!e in the issued, Whi!e the goods /ere stored in said %ossession o+ the Warehouse *om%any0 be /arehouse0 *i ero obtained a .udgment atta hed by garnishment or other/ise0 or be against Pedro +or the re o-er o+ a sum o+ !e-ied u%on under an e>e ution un!ess the money, 2he sheri++ %ro eeded to !e-y u%on re ei%t be +irst surrendered to the the goods on a /rit o+ e>e ution and dire ted /arehouseman0 or its negotiation en.oined, the /arehouseman to de!i-er the goods, $s 2he Warehouse *om%any annot be SUGGESTED ANSWER: the /arehouseman under ob!igation to om%e!!ed to de!i-er the a tua! %ossession o+ ;o, 2here /as a -a!id negotiab!e re ei%t as om%!y /ith the sheri++s order# &4() the ri e unti! the re ei%t is surrendered to it or there /as a -a!id de!i-ery o+ 200 a-ans o+ im%ounded by the ourt, ri e +or de%osit, $n su h ase0 the 2 9es, 2he ri e mi!!0 as a ho!der +or /arehouseman &?W*) is not ob!iged to -a!ue o+ the re ei%t0 has a better right to the de!i-er the 200 a-ans o+ ri e de%osited to ri e than the reditor, $t is the ri e mi!! that any %erson0 e> e%t to the one /ho an 3 surrender the re ei%t o+ /hi h he is a an surrender the re ei%t /hi h is in its om%!y /ith se G o+ the Warehouse %ossession and an om%!y /ith the other Re ho!derH ei%ts ?a/0 name!y: 2 /i!!ing to sign a re ei%t +or the de!i-ery re5uirements /hi h /i!! ob!ige the o+ the goodsH and /arehouseman to de!i-er the ri e0 name!y0 to 1 %ays the /arehousemans !iens that is0 sign a re ei%t +or the de!i-ery o+ the ri e0 and his +ees and ad-an es0 i+ any, to %ay the /arehousemans !iens and +ees 2he sheri++ annot om%!y /ith these and other harges, re5uisites es%e ia!!y the +irst0 as he is not the ho!der o+ the re ei%t, Deli er% o& t#e Goo6s ()**)) When is a /arehouseman bound to de!i-er the goods0 u%on a demand made either by the ho!der o+ a re ei%t +or the goods or by SUGGESTED ANSWER: the de%ositor# 2he /arehouseman is bound to de!i-er the goods u%on demand made either by the ho!der o+ the re ei%t +or the goods or by the de%ositor i+ the demand is a om%anied by 3 an o++er to satis+y the /arehousemans !ien0 2 an o++er to surrender the re ei%t0 i+ negotiab!e0 /ith su h indorsements as /ou!d be ne essary +or the negotiation thereo+0

Mercantile Q Law Bar Examination Q & A (1990-2006) Page Mercantile Law Bar Examination &A (1990-2006)

this additiona! 2here /as no duty0 misde!i-ery the urrent by!o/ the %ri arrier e o+ sin e the sugar in the argo /or!d /as market onsidered /i!! sure!y onsigned %u!! the to the :ugar%rientra! domesti e to !e-e!s %er the !o/er :hi%%ers than theArder" ost &Eastern to %rodu :hi%%ing er domesti ?ines sugar - *A E 3F0 a situation s 432) that A8TERNAT7>E ANSWER: ou!d s%e!! the demise o+ the Phi! sugar Ener'% Re'ulator% Commission: 0 "o;er 2here /as misde!i-ery, 2he o+ BL? /as a industry, a) Dis uss theJuris6iction -a!idity this (2003) negotiab!e do ument o+ tit!e be ause it /as %ro%osa! to im%ose an additiona! !e-y on *D0 a ustomer0 sued @ERA?*A in the @@ to the :hi%%ers Arder," 7en e0 the ommon im%orted sugar &1() b) Wou!d the %ro%osa! Regiona! 2ria! *ourt to dis !ose the the basis o+the arrier shou!d ha-e de!i-ered argo to be onsistent /ith the tenets o+ the Wor!d the*entra! om%utation o+ the %ur hased %o/er on!y u%on surrender o+ the BL?, 2he 2rade Argani6ation &W2A)# &1() ad.ustment 2he tria! ourt had to Re&PPA), ommendation: :in e ru!ed the sub.e t non-surrender o+ the BL? /i!! make itit!iab!e o+ourse, these &2) be 5uestions no ho!ders .urisdi matter tion o-er the t/o ase ause0 is asnot in due <;ners#i$ Goo6s Store6 ()**2) in o& !uded the s the o%e ustomer o+ the Bar ontended by the /ithin de+endant0 2o guarantee Questions the %ayment in @er anti!e o+ a !oan ?a/0 obtained it not on!y demanded a breakdo/n o+ is suggested that /hate-er ans/er isbut gi-en +rom a bank0 %!edged 400 ba!es @ERA?*ACs bi!! Rau! /ith res%e t to PPAo+ by the e>aminee0 or the !a o+ ans/er toba o de%osited inim%osition a /arehouse to said 5uestioned as /e!! the o+ k the PPA0 shou!d be gi-en +u!! redit, bank and in b!ank a matter toendorsed be de ided by the the /arehouse Board$+ o+the e>aminee gi-es a good ans/er0 he shou!d re ei%t, Be+ore Rau! agen ou!d %ay +or h the !oan0 SUGGESTED ANSWER: Energy0 the regu!atory y /hi shou!d SUGGESTED ANSWER: be gi-en additiona! redit, the toba o disa%%eared +rom the suit, $s a) 2he %ro%osa! to o-er im%ose an additiona! duty a!so ha-e .urisdi tion instant 2he tria! ourtCs ru!ing is the orre t, As he!d in /arehouse, Who shou!d bear the !oss E the on im%orted sugar on to% o+ the urrent tari++ the tria! ourtCs ru!ing orre t or not# Reason @ani!a SUGGESTED E!e ANSWER: tri *om%any -, *ourt o+ A%%ea!s0 %!edgor the bank# Why# %rohibited by the rate &4() is or -a!id0 not being brie+!y, 2he %!edgor shou!d the bear the !oss, $n the 273:*RA '37 &3FF7)0 Board o+ Energy *onstitution, $t /ou!d enab!e %rodu ers to %!edge o+ a /arehouse ei%t o/nershi% had the %o/er to regu!ate re and +i> the %o/er rates rea!i6e reasonab!e %ro+its0 and /ou!d a!!o/ goods /ith e!e de%ositor or his to o+ be the harged byremain +ran hised tri uti!ities the sugar industry o+ the ountry to sur-i-e, trans+eree, Any ontra t or rea! se urity0 !ike @ERA?*A, $n +a t %ursuant to E>e uti-e b) ;o, 2he %ro%osa! /ou!d not be onsistent among them a %!edge0 does not amount to Arder ;o, '7G &A%ri! 370 3FFG)0 this %o/er has /ith the tenets o+ the W2A /hi h a!! +or the or resu!t in an assum%tion o+ risk o+ !oss by been trans+erred to the Energy Regu!atory !ibera!i6ation o+ trade, 7o/e-er0 su h the reditor, 2he Re ei%ts ?a/ Board &no/ the Energy Regu!atory %ro%osa! may beWarehouse a e%tab!e /ithin the did not de-iate +rom:e this ru!e,the *ommission), 8nder tion '1&u) W2A o+ the a!!o/ab!e %eriod under +or Ri'#t to t#e Goo6s (2001) E!ead.ustment tri Po/er o+ $ndustry Re+orm A t o+ 20030 the !o a! industry de%osited se-era! artons o+ goods /ith theBo.o Energy Regu!atory has:; "o;er o& t#e State: Re'ulatin' o&*ommission Domestic Tra6e (2003) Warehouse *or%oration, 2he orres%onding origina! and e> tion o-er a!! $n its "ro.lems e>er ise !usi-e o+ %o!i .urisdi e %o/er and business /our AC7D "#ili$$ine (2004) /arehouse re o& ei%t /as Ju6iciar% issued to the order o+ ases ontesting %o/er rates, regu!ation0 the !egis!ature o+ ?N@ :tate $n se-era! y addresses e>tensi-e!y Bo.o, 7e%o!i endorsed the /arehouse re ei%t to EB %assed a !a/ %rohibiting a!iens +rom /ho %aid the -a!ue goods de%osited, o-ered by media sin e o+ his the a%%ointment on engaging in domesti timber trade, Nio!ators /ithdra/ the @e! De Be+ore emberEB 230 ou!d 20040 *hie+ Busti e goods0 Artemio N, hor in !uding :; dummies /ou!d0 a+ter %ro%er tria!0 in+ormed Warehouse *or%oration that the Panganiban -o/ed to !ea-e a .udi iary be +ined and im%risoned or de%orted, @rs, goods be!onged to him and /ere hara teri6ed by K+our $nsK and to +otaken us in by Bo.o B*0 a iti6en o+ ?N@ but married to P*0 an /ithout onsent, @e! hor /ants so!-ing thehis K+our A*$DK %rob!ems that to get the a!ien mer hant o+ P;D0 +i!ed suit to in-a!idate goods0 but EBhas a!so /ithdra/ same, Y Who a /ants betterto right goods# orrode the administration o+ .ustito ethe in the our the !a/ or e>em%t +rom its o-erage their SU++ESTE6 ANSWER( SUGGESTED ANSWER: &4() E>%!ain this K+our $nsK and K+our Why# ountry, :he ontended that o++i thee0!a/ is0 inter a!ia0 8%on timber assuming business, his *hie+ Busti e EB has a better right to the goods0 being A*$DK %rob!ems, gra-e!y o%%ressi-e and dis riminatory, $t Panganiban to !ead a .udi o-ered by-o/ed a negotiab!e do ument o+iary tit!e0 -io!ated the 8ni-ersa! De !aration o+ 7uman hara teri6ed by the K+our $ns:Kissued $ntegrity0 name!y the /arehouse re ei%ts to the Rights &8D7R) %assed in 3F'G by the $nde%enden e0 $ndustry eH 8nited one o+ Korder o+ Bo.o,K 8nder and the $nte!!igen :a!es %ro-isions ;ations0 o+ /hi h ?N@ is to a member0 she said0 that is mora!!y ourageous resist e0 o+ the *i-i! *ode on negotiab!e doin+!uen uments as /e!! e0 as indi++eren the re i%ro ity %ro-isions o+ the inter+eren e and inso!en e, 7e tit!e0 and under the %ro-isions o+ the Wor!d 2rade Argani6ation &W2A) Agreement en-isions a .udi Re iaryei%ts that is?a/0 im%er-ious the Warehouse /hen to goods o+ 3FF'0 o+ /hi h P;Deand ?N@ are %arties, %!ague o+ undue in+!uen brought about de%osited /ith the bai!ee are o-ered by a Aside +rom denying them e5ua! %rote tion0 kinshi%0 re!ationshi%0 negotiab!e do ument +riendshi% o+ tit!e0 and the a ording to B*0 the !a/ /i!! a!so de%ri-e her +e!!o/shi%, 7e a!!s the .udi batt!e endorsement andon de!i-ery o+iary the to do ument +ami!y their !i-e!ihood /ithout due %ro ess thetrans+ers K<our A*$DK %rob!ems our o/nershi% o+ the orroding goods to the nor .ust om%ensation, Assuming that the .usti e system: &3) a ess o+ to .usti e by SUGGESTED ANSWER: trans+eree, By !imited o%eration !a/0 the !ega! system o+ ?N@ is simi!ar to ours0 /ou!d the@rs, %oorH &2)obtains orru%tionH &1) ttenab!e, in om%eten B*Cs ontention not <irst0 the trans+eree theis dire ob!igation o+eH the @rs, ontention be tenab!e or not# and &') B*Cs de!ay in the de!i-ery o+ 5ua!ity 8D7R does not %ur%ort to !imit the right bai!ee to ho!d the goods in his name,K &Art, (2,:0 BE2E .t is o+ Reason brie+!y, &4() .udgments, 2he .udi ia! de%artment shou!d states ?N@) to regu!ate domesti trade, 34310 &!ike *i-i! *odeH :e tion '30 Warehouse respectfully suggested dis:e harge +un tions trans%aren ond0 the W2A Agreement in-o!-es Re ei%ts its ?a/) :in e EB/ith is the ho!der o+ y0 the that all Bar &andidates $+ :; Warehouse *or%oration is a Y ountabi!ity and dignity, internationa! trade bet/een states or /arehouse re ei%t0 receive he has a the $/5% better bonus right for to un ertain as not to the /ho is entit!ed to the above question go-ernments0 domesti trade in timber or the goods, :; Warehouse is ob!iged to ho!d %ro%erty0 /hat is the %ro%er re ourse o+isthe regardless of the answer! other ommodities, 2hird0 nationa!ity an the goods in his name, SUGGESTED ANSWER: E>%!ain, aor%oration# e%ted norm +or making !assi+i ations that do not run ounter to the

Mis!ellaneo.s

101 of Page 103 103 10# :; Warehouse e5ua! of 103 %rote tionan o+ +i!e !a/ an !ause $;2ERP?EADER the *hie+ *onstitution, to e om%e! <ourth0 there and @e! is no hor to 2, o+ 2he Busti a!so EB said that the !itigate im%airment against o+ due ea h %ro other ess +or here the be o/nershi% ause .udi iary must Ksa+eguard the !ibertyK and o+ the goods, -io!ators o+ the :e !a/ , 37 /i!! o+be the %unished Warehouse on!y Knurture the %ros%erityK o+ our %eo%!e, Re ei%ts a+ter K%ro%er ?a/ tria!,K states0 <i+th0 K$+ more the than one o+o+ K.ust E>%!ain this %hi!oso%hy, *ite Deissue isions the %erson om%ensationK !aimsim%!ementing the does tit!e not orarise0 %ossession ause o+ the the :u%reme *ourt ea be h o+ these SU++ESTE6 ANSWER( goods0 %ro%erty the o+o+ /arehouse @rs, is not may0 being either e>%ro%riated, as a t/in bea ons theB* *hie+ Busti e, &2,4() 2he *hie+ %hi!oso%hy K:a+eguarding de+ense An the Busti ontrary0 to an eCs a tion as abrought iti6en o+ against ?N@0 @rs, him B* +or ?iberty0 ;urturing Pros%erityK embodies the non-de!i-ery is +ree!y a!!o/ed o+ the to engage goods or in as domesti an origina! :u%reme *ourtCs h in de re5uire ision-making suit0 /hi timber trade he-er ina%%roa ?N@, is a%%ro%riate0 a!! in Tari&& the e>er ise o+ its onstitutiona! %o/er an6 Customs Co6e: >iolation o& Customs 8a;s o+ kno/n !aimants to inter%!ead,K .udi ia! Seller2 re-ie/ /hi ho& t#e %ro-ides: $n ases Un$ai6 Ne'otiation Recei$t ()**3) (2003) in-o!-ing !iberty0 the a!esordered o+ .usti e shou!d A %ur hased :s 340 a-ans o+the %a!ay on 2he *o!!e tor+rom o+ *ustoms sei6ure /eight hea-i!y against go-ernment andes in redit, A de%osited the %a!ay in Ws and +or+eiture o+ ne/ e!e troni a%%!ian +a-or o+ by the the the /arehouse, W %oor0 issued A ao%%ressed0 negotiab!e+or shi%%ed 2A; *or%,to +rom 7ongkong margina!i6ed0 dis%ossessed and /eakH /arehouse re ei%t in!a/s the name o+ the A, -io!ation o+ the ustoms be ause they /ere and thatde!a/s and a tion that restri t 2herea+ter0 A negotiated the e re ei%t to B /ho +a!se!y !ared as used o++i e5ui%ment and +undamenta! rights ome to the ourt K/ith %ur hased the said re%ur%oses ei%t +or -a!ue and ina then under-a!ued +or o+ ustoms hea-y %resum%tion against theirbe+ore onstitutiona! good +aith, Who a better right the to the duties, 2A;3) +i!ed a has om%!aint @@ -a!idity, An:0 the other hand0 as aor genera! de%osit0 the un%aid -endor b0 the ru!e0 Regiona! 2ria! *ourt +or re%!e-in0 a!!eging that the :u%reme *ourt must ado%t a de+erentia! %ur haser o+ the ei%t +orin -a!ue and in good the *ustoms o++i re ia!s erred the or res%e t+u! attitude to/ards a tions taken by +aith# Why# 2) When an the !assi+i ation and -a!uation o+/arehouseman its shi%ment0 SUGGESTED ANSWER: the go-ernmenta! agen ies that ha-e be ob!iged tothe de!i-er the %a!ay to A# %rimary as /e!! as in issuan e o+ the /arrant o+ 3) B has a better right than :, 2he right o+ res%onsibi!ity +or thetor e mo-ed onomi to de-e!o%ment sei6ure, 2he *o!!e dismiss the the un%aid se!!er0 :0 to the goods /as o+ ountryH and on!y /hen an a %art t haso+ been suit +or !a k o+ .urisdi tion on the the Dethe isions im%!ementing Ksa+eguarding o+ SUGGESTED ANSWER: de+eated by the a t o+the A in endorsing the !ear!y made or e>e uted /ith gra-e abuse o+ tria! ourt, :hou!d the *o!!e torCs motion be !ibertyK 2he *o!!e in B, torCs !ude motion those shou!d in-o!-ing be granted, the re ei%t to dis retion does the *ourt get in-o!-ed granted or denied# Reason brie+!y, &4() 2) 2he :e /arehouseman be ob!iged 8nder tion o+ =02&g) o+ an the 2ari++ and to in onstitutiona!ity Presidentia! Pro !amation %o!i y issues, de!i-er the %a!ay to Bureau A i+ B1/+/ negotiates bahas k ;o, *ustoms 3037 (5avid *ode0 v/ the 0rroyo, o+ *ustoms 2o/ "3"#97,

the re ei%t to A, validity $n that of ase0 A be sei6ure omes a e>#, !usi-e origina! .urisdi tion o-er *ay $77%!< the &alibrated ;re8 ;A2E: &2his 5uestion is outside the o-erage o+ ho!der again o+ the re ei%t0 and A an emptive and +or+eiture +esponseases (&;+! under and B/;/ the tari++ Big/ 667 and or E>aminations, $tWarehouse is there+ore re ommended the om%!y /ith :e G o+ the !a/s, the ustoms ;ublicBar 0ssembly 0ct (Bayan v/ Ermita, /hate-er made by the andidate shou!d that >ali6it% o& sti$ulations e9cusin' Re2o/ ei%ts ?a/, ans/er 1/+/ "%9646, 0pril $5, ;are#ouseman $77%!< and&rom the gi-en +u!! redit,) be ne'li'ence (2000) legality of Executive ,rder 2o/ 4%4 and the : stored hard/are in the bonded ;resident(s exercise materia!s of Executive ;rivilege An the other hand0 ases that re!ate to /arehouse o+ W0 a !i ensed /arehouseman (Senate of the ;hilippines v/ Ermita, 1/+/ 2o/ Knurturing the %ros%erityK o+ the %eo%!e under the Denera! Bonded Warehouse ?a/ "%9333, 0pril $7, $77%!/ in &A !ude the 5uestion the W onstitutiona!ity o+ t 1GF1 as amended), issued the the orres%onding @ining ?a/ (=a Bugal8B(=aan v/in +amos, /arehouse re ei%t the +orm 1/+/ 2o/ "$366$, 5ec/ ", $774 ) and the he ordinari!y uses +or su h %ur%ose in W2A the Go ernment s! "ri atiDation o& an""6$95, 7n6ustr% Agreement :anada v/ 0ngara, ourse Dere'ulation o+&his business, A!! the1/+/ essentia! terms (2003) *ay $,"993), re5uired under :e tion 2 o+ the Warehouse What the ?a/ di++eren e bet/een go-ernment Re is ei%ts &A t 2317 as amended) are Ne'otia.le Documents o& Title ()**2) deregu!ation and the %ri-ati6ation o+ re an embodied in the +orm, $n addition0 the ei%t SUGGESTED <orissued a ANSWER: argo o+ ma hinery shi%%ed +rom industry# E>%!ain brie+!y, &2() to : ontains a sti%u!ation that W Do-ernment deregu!ation is the re!a>ation or abroad a be sugar entra! inthe Dumaguete0 /ou!dto not res%onsib!e +or !oss o+ a!!or or remo-a! o+ regu!atory onstraints on +irms ;egros Arienta!0 the Bi!! o+ ?ading &BL?) any %ortion o+ the hard/are materia!s indi-idua!s0 /ith a order0" -ie/ to %romoting sti%u!ated shi%%ers /ith noti e is o+ o-eredto by the market-oriented re ei%t e-en i+ su h !oss om%etition and a%%roa hes arri-a! to be addressed to the *entra!, 2he aused bying0 the neg!igen e o+ W or his to/ard %ri entry0 and argo arri-ed at out%ut0 itsem%!oyees, destination and other /as re%resentati-es or : endorsed re!ated e to onomi de isions, re!eased the *entra! /ithout surrender o+ and negotiated theindustry /arehouse re ei%t B0 Pri-ati6ation o+the an re+ers to to the the/ho BL? on basis o+ the !atters demanded de!i-ery o+ the goods, W trans+er o+ o/nershi% and arrier ontro! by and the undertaking to ho!d +ree ou!d not de!i-er be the ause the goods /ere SUGGESTED ANSWER: go-ernment o+ assets0 +irms and o%erations :ubse5uent!y0 a Bank to /hom the entra! harm!ess +rom any !iabi!ity, no/here to to be +ound in his /arehouse, 7e ;o, $ do not agree /ith the ontention o+ W, in an industry %ri-ate in-estors, /as indebted0 !aimed the argo and !aims he is not !iab!e be ause o+ the +ree"olitical 8a;2 WT< ()***) 2he sti%u!ation that W /ou!d not be %resented the origina! o+ the BL? stating that +rom-!iabi!ity !ause sti%u!ated in the%ortion re ei%t, Do-ernment %!ans to!oss im%ose an additiona! +or the o+ a!! or any theres%onsib!e *entra! had +ai!ed to sett!e its ob!igations Do you agree /ith Ws E>%!ain, duty on im%orted sugar on ontention# to% o+ the by urrent o+ the hard/are materia!s o-ered the /ith the Bank, &4() tari++ rate, 2he i+ intent is that the re there ei%t e-en su h !oss isensure aused by Was misde!i-ery byto the arrier tothe the !anded ost e o+o+ sugar not non-surrender be !o/er or than neg!igen W or sha!! his re%resentati-e sugar entra! onsidering the SUGGESTED ANSWER: PG00 %er bag, 2his 2he is the e at that /hi a h em%!oyees is -oid, !a/ %ri re5uires o+ the BL?# Why# !o a!!y %rodu ed sugar /ou!d be so!d in order /arehouseman shou!d e>er ise due di!igen e to inenab!e %rodu to rea!i6e the are sugar and ustody o+ers the things reasonab!e %ro+its, Without de%osited in his /arehouse,