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BAR EXAMINATION QUESTIONS SUGGESTED Baby for P300,000. Again, the check was
ANSWERS dishonored because of insufficient funds. Ben
2014 sued Bong and Baby on the dishonored BPI
check. Bong interposed the defense that the
BPI check was discharged by novation when
2014 BAR EXAMINATION Ben accepted the crossed DBP check as
replacement for the BPI check. Bong cited
Section 119 of the NIL which provides that a
1. Carlo and Bianca met in the La Boracay negotiable instrument is discharged “by any
festivities. Immediately, they fell in love with other act which will discharge a simple contract
each other and got married soon after. They for the payment of money.” Is Bong correct?
have been cohabiting blissfully as husband and
wife, but they did not have any offspring. As the Answer:
years passed by, Carlo decided to take out an No. Bong is not correct. While Section 119 of
insurance on Bianca’s life for P1 M with him the NIL in relation to Article 1231 of the Civil
(Carlo) as sole beneficiary, given that he did not Code provides that one of the modes of
have a steady source of income and he always discharging a negotiable instrument is by any
depended on Bianca both emotionally and other act which will discharge a simple contract
financially. During the term of the insurance, for the payment of money, such as novation, the
Bianca died of what appeared to be a acceptance by the holder of another check
mysterious cause so that Carlo immediately which replaced the dishonored bank check did
requested for an autopsy to be conducted. It not result to novation.
was established that Bianca died of a natural
cause. More than that, it was also established There are only 2 ways which indicate the
that Bianca was a transgender all along—a fact presence of novation and thereby produce the
unknown to Carlo. Can Carlo claim the effect of extinguishing an obligation by another
insurance benefit? which substitutes the same. First, novation
must be explicitly stated and declared in
Answer: unequivocal terms as novation is never
Yes. Carlo can claim the insurance benefit. If presumed. Secondly, the old and the new
a person insures the life or health of another obligation must be incompatible on every point.
person with himself as beneficiary, all his rights,
title and interests in the policy shall In the instant case, there was no express
automatically vest in the person insured. Carlo, agreement that the holder’s acceptance of the
as the husband of Bianca, has an insurable replacement check will discharge the drawer
interest in the life of the latter. Also, every and endorser from liability. Neither is there
person has an insurable interest in the life and incompatibility because both checks were given
health of any person on whom he depends precisely to terminate a single obligation arising
wholly or in part for support. The insurable from the same transaction.
interest in the life of the person insured must
exist when the insurance takes effect but need
not exist when the loss occurs. Thus, the 3. Under the Financial Rehabilitation and
subsequent knowledge of Carlo, upon the death Insolvency Act (FRIA), the filing of a petition for
of Bianca, that the latter is a transgender does voluntary rehabilitation must be approved by:
not destroy his insurable interest on the life of
the insured. a. A majority vote of the Board of Directors and
authorized by the vote of the stockholders
representing at least a majority of the
2. Bong bought 300 bags of rice from Ben for outstanding capital stock.
P300,000. As payment, Bong indorsed to Ben a b. A majority vote of the Board of Directors and
BPI check issued by Baby in the amount of authorized by the vote of the stockholders
P300,000. Upon presentment for payment, the representing at least 2/3 of the outstanding
BPI check was dishonored because Baby’s capital stock.
account from which it was drawn has been c. 2/3 vote of the Board of Directors and
closed. To replace the dishonored check, Bong authorized by the vote of the stockholders
representing at least a majority of the a. From the date the application for
outstanding capital stock. incorporation is filed with the SEC.
d. 2/3 vote of the Board of Directors and b. From the date the SEC issues a certificate of
authorized by the vote of the stockholders incorporation under its official seal.
representing at least 2/3 of the outstanding c. 30 days after the date the application for
capital stock. incorporation is filed with the SEC.
d. 30 days after the date the SEC issues a
Answer: certificate of incorporation under its official
b. A majority vote of the Board of Directors and seal.
authorized by the vote of the stockholders
representing at least 2/3 of the outstanding Answer:
capital stock. b. From the date the SEC issues a certificate of
incorporation under its official seal.
Answer:
No. The planholders is not correct. On
November 21, 2000, the Court approved the Answer:
Interim Rules of Procedure on Corporate The action of the Executive Committee with
Rehabilitation of 2000 (Interim Rules), which regard to the purchase of a delivery van for use
took effect on December 15, 2000. The Interim in the corporation’s retail business, declaration
Rules apply to petitions for rehabilitation filed by and approval of the 13th month bonus, purchase
corporations, partnerships, and associations of an office condominium unit at the Fort, and the
pursuant to PD 902-A, as amended. Under the declaration of P10.00 per share cash dividend is
Interim Rules, “claim” shall include “all claims or valid, as such matters were taken by a majority
demands of whatever nature or character vote of all its members, on such matters within
against the debtor or its property, whether for the competence of the board and as delegated
money or otherwise.” “Creditor” shall mean “any to it in the by-laws.
holder of a claim.” Hence, the claim of the
planholders from PA is included in the definition
of “claims” under the Interim Rules. 14. On September 25, 2013, Danny Marcial
(Danny) procured an insurance on his life with
a face value of P5 M from RN Insurance
12. To constitute a quorum for the transaction of Company (RN), with his wife Tina Marcial (Tina)
corporate business, only a majority of the as sole beneficiary. On the same day, Danny
number of Board of Directors is required: issued an undated check to RN for the full
amount of the premium. On October 1, 2013,
a. As fixed by the corporate by-laws RN issued the policy covering Danny’s life
b. As fixed in the articles of incorporation insurance. On October 5, 2013, Danny met a
c. Actually serving in the board tragic accident and died. Tina claimed the
d. Actually serving in the board but constituting insurance benefit, but RN was quick to deny the
a quorum claim because at the time of Danny’s death, the
check was not yet encashed and therefore the
Answer: premium remained unpaid.
b. As fixed in the articles of incorporation
Is RN correct? Will your answer be the same if
the check is dated October 15, 2013? a. Trademark infringement
b. Copyright infringement
Answer: c. Patent infringement
No. RN is not correct. After the issuance of d. Unfair competition
the check by Danny for the full amount of the
premium, the unconditional delivery of an Answer:
insurance policy of RN to Danny corresponding a. Trademark infringement
to the terms of the application ordinarily
consummates the contract, and the policy as
delivered becomes the final contract between 17. On December 1, 2010, Kore A Corporation
the parties. Where the parties, so intend, the shipped from South Korea to LT Corporation in
insurance becomes effective at the time of the Manila some 300,000 sheets of high-grade
delivery of the policy notwithstanding the fact special steel. The shipment was insured against
that the check was not yet encashed. My all risk by NA Insurance (NA). The carrying
answer will still be the same even if the check is vessel arrived at the Port of Manila on January
dated October 15, 2013 since an 10, 2011. When the shipment was discharged,
acknowledgment in a policy of the receipt of it was noted that 25,000 sheets were damaged
premium is conclusive evidence of its payment and in bad order. The entire shipment was
for the purpose of making the policy binding. turned over to the custody of ATI, the arrastre
operator, on January 21, 2011 for storage and
safekeeping, pending its withdrawal by the
15. A, B, C, D and E were members of the 2003- consignee’s authorized customs broker, RVM.
2004 Board of Directors of FLP Corporation. At
the election for the 2004-2005 Board of On January 26 and 29, 2011, the subject
Directors, not one of them was elected. They shipment was withdrawn by RVM from the
filed in court a derivative suit on behalf of FLP custody of ATI. On January 29, 2011, prior to
Corporation against the newly-elected the withdrawal of the last batch of the shipment,
members of the Board of Directors. They a joint inspection of the cargo was conducted
questioned the validity of the election as it was per the Request for bad Order Survey (RBO)
allegedly marred by lack of quorum, and prayed dated January 28, 2011. The examination
for the nullification of the said election. The report showed that 30,000 sheets of steel were
2004-2005 Board of Directors moved to dismiss damaged and in bad order.
the complaint because the derivative suit is not
proper. Decide. NA Insurance paid LT Corporation the amount
of P30 M for the 30,000 sheets that were
Answer: damaged, as shown in the Subrogation Receipt
The derivative suit is not proper. The party- dated January 13, 2013. Thereafter, NA
in-interest are the petitioners as stockholders, Insurance demanded reparation against ATI for
who were members of the 2003-2004 Board of the goods damaged in its custody, in the
Directors of FLP Corporation. The cause of amount of P5 M. ATI alleged that the COGSA
action devolves on the petitioners, not on FLP applies in this case since the goods were
Corporation, which did not have the right to shipped from a foreign port to the Philippines.
vote. Hence, the complaint filed by A, B, C, D NA Insurance claims that the COGSA does not
and E is a direct action by the petitioners, who apply, since ATI is not a shipper or carrier. Who
were the members of the Board of Directors of is correct?
the corporation before the election, against
respondents, who are the newly-elected Board Answer:
of Directors. Under the circumstances, the NA Insurance is correct. ATI should be
derivative suit filed by petitioners in behalf of ordered to pay NA Insurance notwithstanding
FLP is improper. the lapse of the one year prescriptive period for
filing a suit under the COGSA. The term
“carriage of goods” under Section 1 in COGSA,
16. In intellectual property cases, fraudulent intent covers the period from the time when the goods
is not an element of the cause of action except are loaded to the time when they are discharged
in cases involving: from the ship infer that the period of time when
the goods have been discharged from the ship dominant feature of the trademark is stylized “S”
and given to the custody of the arrastre operator as it is precisely the stylized “S” which catches
is not covered by the COGSA. The COGSA the eye of the purchaser.
does not mention that an arrastre operator may
invoke the prescriptive period of one year;
hence, it does not cover the arrastre operator. 19. Guetze and his wife have 3 chidren: Neymar,
25, who is now based in Rio de Janeiro, Brazil;
Muelter, 23, who has migrated to Munich,
18. Skechers Corporation sued Inter-Pacific for Germany; and James, 21, who resides in
trademark infringement claiming that Inter- Bogota, Colombia. Neymar and Muelter have
Pacific used Skechers’ registered “S” logo mark since renounced their Philippine citizenship in
on Inter-Pacific’s shoe products without its favor of their country of residence. Nearing 70
consent. Skechers has registered the years old, Guetze decided to incorporate his
trademark “SKECHERS” and the trademark “S” business in Binondo, Manila. He asked his wife
(with an oval design) with the Intellectual and 3 children to act as incorporators with 1
Property Office (IPO). share of stock each, while he owned 999,996
shares of the 1,000,000 shares of the capital
In its complaint, Skechers points out the stock.
following similarities: the color scheme of the
blue, white and gray utilized by Skechers. Even a. Assuming all other requirements are met,
the design and “wave-like” pattern of the mid- should the SEC accept or reject the Articles
sole and outer sole of Inter-Pacific’s shoes are of Incorporation? Why?
very similar to Skechers’ shoes, if not exact b. Being the control freak and micro-manager
patterns thereof. On the side of Inter-Pacific’s that he is, Guetze asked you—his astute
shoes, near the upper part, appears the stylized legal adviser—if he can serve as Chairman
“S” placed in the exact location as that of the of the Board of Directors, as President, and
stylized “S” the Skechers shoes. On top of the as General Manager of the corporation, all at
“tongue” of both shoes, appears the stylized “S” the same time. Please advise Guetze.
in practically the saem location and size. c. Assuming the corporation has been properly
registered, may the Articles of Incorporation
now be amended to reduce the number of
In its defense, Inter-Pacific claims that under the directors to two—Guetze and his wife—to
Holistic Test, the following dissimilarities are reflect the real owners of the shares of stock?
present: the mark “S” found in Strong shoes is
not enclosed in an “oval design”; the word Answer:
“Strong” is conspicuously placed at the a. Yes, the SEC should accept the Articles of
backside and insoles; the hang tags labels Incorporation. If the Articles of Incorporation
attached to the shoes bear the word “Strong” for substantially comply with the statute and all
Inter-Pacific and Skeckers U.S.A.” for other requirements are met, the SEC has no
Skechers; and, Strong shoes modestly priced discretion, but may be compelled by
compared to the cost of Skechers shoes. mandamus to file them. The discretion
exercised by SEC does not extend to the
Under the foregoing circumstances, which is merits of an application for incorporation,
the proper test to be applied—Holistic or although it may be exercised as to matters of
Dominancy Test? Decide. form.
Answer:
c. A promissory note which contains in addition
a promise to paint the portrait of the bearer.
Answer:
KK did not commit copyright infringement.
Under the “first sale” doctrine, the owner of a
particular copy or phonorecord lawfully made is
entitled, without the authority of the copyright
owner, to sell or otherwise dispose of the
possession of that copy or phonorecord. Hence,
there is no infringement by KK since the said
doctrine permitted importation and resale
without the publisher’s further permission.