I.
Commented [R1]: It’s better to write item numbers at the
As the general counsel of the bank, I will not order the disclosure of the bank deposits of
Dragan Tankov.
The law provides that secrecy of bank deposits may be disregarded when the depositor is a
terrorist or is involved in financing terrorist activities.
Here, Dragan Tankov is only a suspected terrorist and no case has yet been filed against him.
Hence, his bank deposits should not be disclosed and the NBI Agents should not be allowed to
look into the said deposits.
II.
a. Mr. Dineros is liable for insider trading.
The Corporation Code provides that an insider is one who is in possession of a material
non-public information due to his position in the company or has received the said
information from those privy to it inside the company.
In this case, Mr. Dineros is the corporate secretary of the company. His position made
him privy to the material non-public information as shown by his immediate purchase of
shares when vast amounts of god were found in the exploration site.
Hence, Mr. Dineros has made use of the material non-public information and thus
should be charged with insider trading
III.
The SEC does not have jurisdiction over the petition.
PD 902-A has transferred the jurisdiction of the SEC to hear and decide intracorporate disputes
and fraud cases to the Regional Trial Courts.
In the case at bar, the petition against the validation of the proxies were based on the grounds
of fraud and irregularities.
Therefore, the case is outside the jurisdiction of the SEC.
center of the page.
Commented [R2]: If you will notice, there are Peso and Dollar
deposits, you must provide an answer for each. They are governed
by different rules.
Commented [R3]: It’s better if you will be particular in the first
paragraph based on the facts of the problem, e.g.
I would advise the TRIPOLITAN Bank to allow…
For others, i.e. motion, argument, indicate the motion or the
argument to guide the examiner in recalling the question and facts.
Commented [R4]: Be particular with your legal basis, ie.,
Securities Regulation Code, New Civil Code on Sales, Rules of Court
on Evidence.
If you are not sure whether the legal basis is in the code or
jurisprudence, you may say “Law on Securities”, Law on Sales, Law
on Evidence, Law on Contracts, etc.
Commented [R5]: As much as possible, use the exact
keywords/ legal terms provided under the law.
Commented [R6]: This implies that this is the only exception to
the secrecy of bank deposits. You can add “among others” to
convey that there are other grounds.
Commented [R7]: Since you mentioned insider trading in the
first paragraph, you must also discuss insider trading in the second
paragraph, not just the insider.
Commented [R8]: I encourage to use “here”, “based on the
problem”, “In the given facts” instead of “in this case”. The latter
may refer to a particular case decided by the SC especially if you
cited a jurisprudence in the second paragraph.
Commented [R9]: You can simplify this by saying “…the
corporate secretary of Philex Mining Corporation which made him
privy…”
Commented [R10]: There’s sub-question (b). As much as
possible, try to answer each question.
Commented [R11]: It’s better to spell out SEC. Avoid
abbreviations except in third paragraph when the problem provides
the abbreviation, e.g., RTC Makati.
Commented [R12]: It’s better to indicate the petition filed.
In first paragraph, indicate facts and/or answer to the issue which
can guide the examiner in checking your answer without him
looking at the questionnaire. First paragraph must give the
examiner an overview of the answer and the pertinent facts.
Commented [R13]: It is better to indicate also the title of this
law.
Commented [R14]: You can use “not within” instead of
“outside”.
IV.

A) The Corporation may not return Alex’s investment. Commented [R15]: Please refer to Comment No. 12

Under the Corporation Code, incorporated shares may not be removed outright since
the corporation would not be prejudiced from its removal especially if the corporation
has just been incorporated.

Alex’s 10 Million peso investment is part of the paid-up capital of the corporation. The
Corporation will be prejudiced upon its withdrawal and it would also run counter to the
Trust Fund Doctrine.
Commented [R16]: Observe interlocking key concepts. The
keywords in the second paragraph must be used in the third
paragraph when applying the law to the facts.

Legal term/principle must be mentioned in the second paragraph if

B) Yes, Scriptoria may be allowed to redeem the property. you will use it in the third.
Commented [R17]: Don’t forget to write your conclusion.

In extrajudicial foreclosures of land involving the corporation, the period of redemption

is six months from registration of the sale. Commented [R18]: The answer is incomplete. Always cite your
legal basis and apply the same to the facts even for sub-questions.

V.

ABC should be allowed to oppose the application of S. Commented [R19]: It’s better to say “I would allow the
opposition…” the question requires that you decide on the
opposition
The Intellectual Property Code provides that a universally well known mark of a foreign
company will be protected here in our jurisdiction even if the said mark has never been used or
registered here in our country.

Here, the mark of ABC is a generally accepted well known mark. Hence, ABC may oppose the Commented [R20]: Use specific facts according to the problem.

application of S. e.g. “…trademark GOODWILL for goods in class 25 is

generally accepted as a universally known or popular mark in
the world market….”

VI.

a) Argus can demand from Romulus that another check be issued to him or that Romulus
pay him P500,000.

The check having been stolen from Argus has not yet been encashed by him and thus
Romulus is still obliged to give P500,000. Commented [R21]: Try to discuss your answer by citing the
legal provision and applying the same to the facts.

b.) Yes, Romulus can demand that BPI should recredit his account.
 The business of banks is impressed with public interest and thus they should exercise
the highest diligence in the conduct of their business.

Here BPI did not send back the check after clearing. Hence it is also negligient.

C. BPI can recover the P500,000 from RCBC.

RCBC made a general indorsement at the back of the check, the effect of which, it
guarantees all prior indorsements in the instrument.

Hence, RCBC can be made liable for the P500,000 that BPI recredited to Romulus.

VII.

a.) The counterclaim against Lopez Inc. is not proper. Commented [R22]: You may indicate the counterclaim filed to
guide the examiner recall the facts and the question.

Lopez, Inc. and Sky Inc. are two different companies. This is also evidenced by the mere
33% share of Lopez Inc. in Sky. Commented [R23]: Don’t forget to cite your legal basis.

Hence, Velarde’s counterclaim is without merit since the two companies are separate
and distinct.

b. No, my answer will not be the same if Lopez Inc. owns 99% of the shares of Sky Vision
Inc. since there is a presumption that the two companies are the same. Commented [R24]: There is no presumption under the law.

Always explain fully your answer.

VIII.

The Comelec resolution is not valid.

Under the law, it is the Central Bank which shall have the power to regulate matters pertaining
to the conduct of banks and other monetary matters.

Here, the Comelec has encroached upon the power of the Central Bank. Hence, the issued
resolution is not valid.

IX.

a. The insurer’s refusal to pay the proceeds of the policy is not justified.
The Incontestability Clause in our insurance Code provides that any claim of fraud of
misrepresentation by the insurer may no longer be entertained if it is outside the 2 year period
starting from the effectivity of the contract as mandated by the Incontestability Clause.

Here, 2 years had already elapsed when Brenda killed herself. Therefore, the refusal of the
insurer to pay is not justified.

b. Yes, the incontestability clause would still apply even if the policy was attached and
there is a stipulation that the policy and the application constitute the contract between
the parties.

The insurer should still pay the proceeds since Brenda died outside the prescribed 2 year
period.

X.

Yes, Will can enforce the note against Simon.

Under the Shelter Rule in the Negotiable Instruments Law, a party, although not a holder in due
course, may still enjoy the privilege of being one if he got hold of the instrument from a holder
in due course.

Here, Will received the note from Dave who is a holder in due course. Hence, Will can enforce
the note against Simon.

XI.

a) The franchise agreements and the corresponding management contracts are not
securities.

The nature of the said agreements cannot be said to be securities since it is akin to that
of opening a business or shop and letting another person manage the business.

b. The officers of Acme Corporation are not criminally liable.

It was not shown that Acme used fraud or any ill motive. They may however be liable for
the said breach of contract.
XII.

Yes, Mr. X is liable.

The No Vessel No Liability Rule should not be given application in the case at bar since it was
shown that the Queen Donna was not equipped properly in order for it to navigate safely.

The negligience of Mr. X should negate his defense and that he should be made liable for the
collision.

XIII.

The argument of Giri that he cannot be jointly and severally liable with AGI is incorrect.

The Corporation Code provides for exceptions to the rule that a corporate officer will not be
held liable solidarily with the corporation in the light of the Doctrine of Separate Juridical
Personality. An example is when the officer was negligient in directing the affairs of the
corporation.

Here, Giri materially revised the plans and deviated from it without informing the Spouses
Steiner. Therefore, Giri should be made personally liable with the corporation.

XIV.

a) Acme Corporation will lose its registration over the mark.

The Intellectual Property Code provides that the non-use of the mark within 5 years
from its registration will result to its cancellation.

b) Acme Corporation can retain protection over the mark by filing another registration of
the mark together with an explanation of non-use.

XV.

a) The stipulation that limits the required diligence of the bus company is invalid.
 The Law on Transportation provides that common carriers should exercise extraordinary
diligence in the carriage of passengers and they should carry them safely to their
destination.

b) The passenger is bound by the value stated in the ticket.

He should not be allowed to claim more than the value stated therein since he did not
indicate the actual value of the baggae and he did not pay the corresponding charge
thereon.

XVI.

The motion to dismiss should be granted.

Fortius Holdings should still make a tender offer to Gawsengsit even if it is a foreign corporation
since the law does not prohibit such and that Gawsengsit could file the necessary action in
order to protect its interests in Bumblebee Corp.

The SEC may also grant the prayed for affirmative relief since it is an implied power given to it in
relation to its power to investigate and impose fines for the violation of the tender offer rule.

XVII.

a) Caloy can enforce the note against Mario to the original amount of P30,000.

Under the Negotiable Instruments Law, a holder is deemed to be a holder in due course
if there is no evidence to the contrary. Hence, Bugoy who issued the note to Caloy is
considered a Holder in Due Course.

Applying the Shelter Rule, although Caloy had knowledge of the alteration, he can still
enforce it to its original tenor.

b) Yes, Caloy can enforce the note against Bugoy.

Bugoy need not be given a Notice of Dishonor since Mario had already refused to pay
the instrument that Bugoy had indorsed.

The contention that Caloy is not a holder in due course should also not hold water since
Bugoy had endorsed the instrument to Caloy making him liable thereon.
XVIII.

No, the bank cannot file a case for estafa against Mr. Ko.

Under the Doctrine of Separate Juridical Personality, the officers may not be held liable
solidarily with the corporation absent any showing that merit the imposition of such liability.

Here, Mr. Koh only signed in his capacity as President and he was not making himself personally
liable. Hence, a case of estafa may not be filed against him.

XIX.

Malakas may recover against ABC Insurance based on the Fire Policy.

Under the Insurance Code, the payment of premium is required for the effectivity of the
contract unless there is a stipulation or agreement to the contrary.

In this case, there was an agreed 60 day credit term to renew the policy. When the fire took
place, it was still within the agreed 60 day credit term. Notwithstanding the fact that ABC
Insurance called up Malakas to inform him that the company was cancelling the insurance,
because Malakas Department Store did not reply to the said cancellation as required by the
law.

Hence, the insurance policy was still in effect and Malakas may still claim from it.