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Sales Case Digest Batch 2

Sales Case Digest Batch 2

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Published by: Francis Geronimo on Jul 28, 2014
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SOUTHWESTERN SUGAR & MOLASSES vs.

ATLANTIC GULF
FACTS:
On March 24, 1!", #$%$n#an&'a(($))an& A&)an&*c +ran&$# ()a*n&*,'a(($))$$ S-.&h/$s&$rn an
-(&*-n ($r*-# -% n*n$&0 #a0s &- 1.0 &h$ %-r2$rs 1ar+$ N-. 13 %-r &h$ s.2 -% 4"3,333. On Ma0
11 -% &h$ sa2$ 0$ar, S-.&h/$s&$rn C-2(an0 c-22.n*ca&$# *&s acc$(&anc$ -% &h$ -(&*-n &-
A&)an&*c &hr-.+h a )$&&$r, &- /h*ch &h$ )a&&$r r$()*$# &ha& &h$*r .n#$rs&an#*n+ /as &ha& &h$
5-,$r -% -(&*-n5 *s &- 1$ a cash &ransac&*-n an# &- 1$ $,$c&$# 5a& &h$ &*2$ &h$ )*+h&$r *s
ava*)a1)$.5 On 6.n$ 2!, A&)an&*c a#v*s$# &h$ S-.&h/$s&$rn C-2(an0 &ha& s*nc$ &h$r$ *s s&*))
%.r&h$r /-r7 %-r *&, &h$ 1ar+$ c-.)# n-& 1$ &.rn$# -v$r &- &h$ )a&&$r c-2(an0.
On 6.n$ 28, 1!", &h$ S-.&h/$s&$rn C-2(an0 9)$# &h*s ac&*-n &- c-2($) A&)an&*c &- s$)) &h$
1ar+$ *n )*n$ /*&h &h$ -(&*-n, #$(-s*&*n+ /*&h &h$ c-.r& a ch$c7 c-v$r*n+ &h$ s.2 -% 4"3,333,
1.& sa*# ch$c7 /as )a&$r /*&h#ra/n /*&h &h$ a((r-va) -% &h$ c-.r&. On 6.n$ 2, &h$ A&)an&*c
/*&h#r$/ *&s 5-,$r -% -(&*-n5 /*&h #.$ n-&*c$s &- S-.&h/$s&$rn C-2(an0 s&a&*n+ &ha& &h$
-(&*-n /as +ran&$# 2$r$)0 as a %av-r. Th$ A&)an&*c c-n&$n#$# &ha& &h$ -(&*-n &- s$)) *& 2a#$
&- S-.&h/$s&$rn C-2(an0 *s n.)) an# v-*# 1$ca.s$ sa*# -(&*-n &- s$)) *s n-& s.((-r&$# 10
an0 c-ns*#$ra&*-n.
Th$ &r*a) c-.r& +ran&$# h$r$*n ()a*n&*,'a(($))$$ S-.&h/$s&$rn C-2(an0:s ac&*-n %-r s($c*9c
($r%-r2anc$ an# -r#$r$# h$r$*n #$%$n#an&'a(($))an& A&)an&*c &- (a0 #a2a+$s $;.*va)$n& &-
< ($r c$n&.2 ($r ann.2 -n &h$ s.2 -% 4"3,333 %r-2 &h$ #a&$ -% &h$ 9)*n+ -% &h$ c-2()a*n&.
ISSUE:
Is A&)an&*c )*a1)$ %-r s($c*9c ($r%-r2anc$ an# &- (a0 #a2a+$s *n %av-r -% S-.&h/$s&$rn
C-2(an0=
HEL>:
Th$ S.(r$2$ C-.r& r$v$rs$# &h$ &r*a) c-.r&:s #$c*s*-n a(()0*n+ Ar&*c)$ 148 -% &h$ n$/ C*v*)
C-#$. Th$ C-.r& r$*&$ra&$# &ha& 5an acc$(&$# .n*)a&$ra) (r-2*s$5 can -n)0 hav$ a 1*n#*n+
$,$c& *% s.((-r&$# 10 a c-ns*#$ra&*-n, /h*ch 2$ans &ha& &h$ -(&*-n can s&*)) 1$ /*&h#ra/n,
$v$n *% acc$(&$#, *% sa*# -(&*-n *s n-& s.((-r&$# 10 an0 c-ns*#$ra&*-n. Th$ -(&*-n &ha&
A&)an&*c ha# (r-v*#$# /as /*&h-.& c-ns*#$ra&*-n, h$nc$, can 1$ /*&h#ra/n n-&/*&hs&an#*n+
S-.&h/$s&$rn C-2(an0:s acc$(&anc$ -% sa*# -(&*-n.
A2$r*can ?.r*s(r.#$nc$ h-)# &ha& an -,$r, -nc$ acc$(&$#, cann-& 1$ /*&h#ra/n, r$+ar#)$ss
-% /h$&h$r *& *s s.((-r&$# -r n-& 10 a c-ns*#$ra&*-n, 1.& &h$ s($c*9c (r-v*s*-ns -% Ar&*c)$
148 c-22an#s -&h$r/*s$. Wh*)$ .n#$r &h$ 5-,$r -% -(&*-n5 *n ;.$s&*-n a(($))an& A&)an&*c
has ass.2$# a c)$ar -1)*+a&*-n &- s$)) *&s 1ar+$ &- a(($))$$ S-.&h/$s&$rn C-2(an0 an# &h$
-(&*-n has 1$$n $@$rc*s$# *n acc-r#anc$ /*&h *&s &$r2s, an# &h$r$ a(($ars &- 1$ n- va)*# -r
?.s&*9a1)$ r$as-n %-r &h$ %-r2$r &- /*&h#ra/ *&s -,$r, &h$ C-.r& cann-& a#-(& a #*,$r$n&
a&&*&.#$ 1$ca.s$ &h$ )a/ -n &h$ 2a&&$r *s c)$ar.
ATAINS, AROLL an# CO., INC., v. CUA HIAN TEA
FACTS:
A&7*ns Ar-)) & C-. s$n& a )$&&$r &- B. C. H*anT$7 -n S$(&$21$r 1", 1!1, -,$r*n+ car&-ns -%
L.n$&a 1ran# Sar#*n$s s.1?$c& &- r$()0 10 S$(&$21$r 2", 1!1. H*anT$7 .nc-n#*&*-na))0
acc$(&$# &h$ sa*# -,$r &hr-.+h a )$&&$r #$)*v$r$# -n S$(&$21$r 21, 1!1, 1.& A&7*ns %a*)$#
&- #$)*v$r &h$ c-22-#*&*$s #.$ &- &h$ sh-r&a+$ -% ca&ch -% sar#*n$s 10 &h$ (ac7$rs *n
Ca)*%-rn*a.
H*anT$7, &h$r$%-r$, 9)$# an ac&*-n %-r #a2a+$s *n &h$ CFI -% Man*)a /h*ch +ran&$# &h$ sa2$
*n h*s %av-r.
A&7*ns h$r$*n c-n&$n#s &ha& &h$r$ /as n- s.ch c-n&rac& -% sa)$ 1.& -n)0 an -(&*-n &- 1.0,
/h*ch /as n-& $n%-rc$a1)$ %-r )ac7 -% c-ns*#$ra&*-n 1$ca.s$ *& *s (r-v*#$# .n#$r &h$ 2n#
(ara+ra(h -% Ar&*c)$ 148 -% &h$ N$/ C*v*) C-#$ &ha& 5an acc$(&$# .n*)a&a&$ra) (r-2*s$ &-
1.0 -r &- s$)) a #$&$r2*na&$ &h*n+ %-r a (r*c$ c$r&a*n *s 1*n#*n+ .(-n &h$ (r-2*s-r *% &h$
(r-2*s$ *s s.((-r&$# 10 a c-ns*#$ra&*-n #*s&*nc& %r-2 &h$ (r*c$.C A&7*ns a)s- *ns*s&$# &ha& &h$
-,$r /as a 2$r$ -,$r -% -(&*-n, 1$ca.s$ &h$ 59r2 -,$r5 /as a c-n&*n.*n+ -,$r &- s$)) .n&*)
S$(&$21$r 2".
ISSUE:
Wh$&h$r a c-n&rac& -% sa)$ /as c-ns&*&.&$# 1$&/$$n &h$ (ar&*$s -r -n)0 a .n*)a&$ra) (r-2*s$
&- 1.0.
HEL>:
SC h$)# &ha& &h$r$ /as a c-n&rac& -% sa)$ 1$&/$$n &h$ (ar&*$s. ATAIN:s ar+.2$n& ass.2$#
&ha& -n)0 a .n*)a&$ra) (r-2*s$ ar-s$ /h$n &h$ r$s(-n#$n& acc$(&$# &h$ -,$r *s *nc-rr$c&
1$ca.s$ a 1*)a&$ra) c-n&rac& &- s$)) an# &- 1.0 /as cr$a&$# .(-n HIAN TEA:s acc$(&anc$.
C.a H*an T$7:s )$&&$r'r$()0 &- A&7*ns *n#*ca&$# &ha& h$ acc$(&$# 5&h$ 9r2 -,$r %-r &h$ sa)$.
A%&$r acc$(&*n+ &h$ (r-2*s$ an# 1$%-r$ h$ $@$rc*s$s h*s -(&*-n, &h$ h-)#$r -% &h$ -(&*-n *s
n-& 1-.n# &- 1.0. In &h*s cas$ a& 1ar, h-/$v$r, .(-n TEA:s acc$(&anc$ -% h$r$*n ATAINDs
-,$r, a 1*)a&$ra) (r-2*s$ &- s$)) an# &- 1.0 $ns.$#, an# &h$ r$s(-n#$n& ha# *22$#*a&$)0
ass.2$# &h$ -1)*+a&*-ns -% a (.rchas$r.
SANCHEE v. RIGOS
FACTS:
On A(r*) ", 1<1, ()a*n&*, N*c-)as Sanch$F an# #$%$n#an& S$v$r*na R*+-s $@$c.&$# an'
*ns&r.2$n& $n&*&)$# GO(&*-n &- 4.rchas$,C /h$r$10 R*+-s Ga+r$$#, (r-2*s$# Han# c-22*&&$#
&- s$))C &- Sanch$F a& &h$ s.2 41,!13.33 a (arc$) -% )an# s*&.a&$# *n San 6-s$, N.$va Ec*?a,
#$scr*1$# *n TCT N-. NT'12!2I, /*&h*n &/- J2K 0$ars %r-2 sa*# #a&$ /*&h &h$ .n#$rs&an#*n+
&ha& sa*# -(&*-n sha)) 1$ #$$2$# G&$r2*na&$# an# $)a(s$#,C *% GSanch$F sha)) %a*) &- $@$rc*s$
h*s r*+h& &- 1.0 &h$ (r-($r&0C /*&h*n &h$ s&*(.)a&$# ($r*-#. Inas2.ch as s$v$ra) &$n#$rs -%
(a02$n& -% &h$ s.2 -% 4I,!13.33, 2a#$ 10 Sanch$F /*&h*n sa*# ($r*-#, /$r$ r$?$c&$# 10 Mrs.
R*+-s, -n March 12, 1<", &h$ %-r2$r #$(-s*&$# sa*# a2-.n& /*&h &h$ CFI -% N.$va Ec*?a an#
c-22$nc$# a+a*ns& &h$ )a&&$r &h$ (r$s$n& ac&*-n, %-r s($c*9c ($r%-r2anc$ an# #a2a+$s.
A%&$r &h$ 9)*n+ -% #$%$n#an&:s ans/$r L a#2*&&*n+ s-2$ a))$+a&*-ns -% &h$ c-2()a*n&, #$n0*n+
-&h$r a))$+a&*-ns &h$r$-%, an# a))$+*n+, as s($c*a) #$%$ns$, &ha& &h$ c-n&rac& 1$&/$$n &h$
(ar&*$s G*s a .n*)a&$ra) (r-2*s$ &- s$)), an# &h$ sa2$ 1$*n+ .ns.((-r&$# 10 an0 va).a1)$
c-ns*#$ra&*-n, 10 %-rc$ -% &h$ N$/ C*v*) C-#$, *s n.)) an# v-*#C L -n F$1r.ar0 11, 1<4, 1-&h
(ar&*$s, ass*s&$# 10 &h$*r r$s($c&*v$ c-.ns$), ?-*n&)0 2-v$# %-r a ?.#+2$n& -n &h$ ()$a#*n+s.
Acc-r#*n+)0, -n F$1r.ar0 2I, 1<4, &h$ )-/$r c-.r& r$n#$r$# ?.#+2$n& %-r Manch$F, -r#$r*n+
Mrs. R*+-s &- acc$(& &h$ s.2 ?.#*c*a))0 c-ns*+n$# 10 h*2 an# &- $@$c.&$, *n h*s %av-r, &h$
r$;.*s*&$ #$$# -% c-nv$0anc$. Mrs. R*+-s /as, )*7$/*s$, s$n&$nc$# &- (a0 4233.33, as
a&&-rn$0:s %$$s, an# -&h$r c-s&s. H$nc$, &h*s a(($a) 10 Mrs. R*+-s.
ISSUE:
Wh$&h$r -r n-& R*+-s sh-.)# acc$(& &h$ (a02$n& an# $@$c.&$ &h$ #$$# -% c-nv$0anc$.
HEL>:
N$s. Ar&*c)$ 148 -% &h$ C*v*) C-#$ (r-v*#$s &ha& a (r-2*s$ &- 1.0 an# s$)) a #$&$r2*na&$
&h*n+ %-r a (r*c$ c$r&a*n *s r$c*(r-ca))0 #$2an#a1)$. An acc$(&$# .n*)a&$ra) (r-2*s$ &- 1.0 -r
&- s$)) a #$&$r2*na&$ &h*n+ %-r a (r*c$ c$r&a*n *s 1*n#*n+ .(-n &h$ (r-2*s-r *% &h$ (r-2*s$ *s
s.((-r&$# 10 a c-ns*#$ra&*-n #*s&*nc& %r-2 &h$ (r*c$.
An -(&*-n *s .n*)a&$ra)' a (r-2*s$ &- s$)) a& &h$ (r*c$ 9@$# /h$n$v$r &h$ -,$r$$ sh-.)#
#$c*#$ &- $@$rc*s$ h*s -(&*-n /*&h*n &h$ s($c*9$# &*2$. A%&$r acc$(&*n+ &h$ (r-2*s$ an#
1$%-r$ h$ $@$rc*s$s h*s -(&*-n, &h$ h-)#$r -% &h$ -(&*-n *s n-& 1-.n# &- 1.0. H$ *s %r$$ $*&h$r
&- 1.0 -r n-& &- 1.0 )a&$r. In &h*s cas$, h-/$v$r, .(-n acc$(&*n+ h$r$*n ($&*&*-n$r:s -,$r a
1*)a&$ra) (r-2*s$ &- s$)) an# &- 1.0 $ns.$#, an# &h$ r$s(-n#$n& *(s- %ac&- ass.2$# &h$
-1)*+a&*-n -% a (.rchas$r. H$ #*# n-& ?.s& +$& &h$ r*+h& s.1s$;.$n&)0 &- 1.0 -r n-& &- 1.0. I&
/as n-& a 2$r$ -(&*-n &h$nO *& /as a 1*)a&$ra) c-n&rac& -% sa)$.
GI% &h$ -(&*-n *s +*v$n /*&h-.& a c-ns*#$ra&*-n, *& *s a 2$r$ -,$r -% a c-n&rac& -% sa)$, /h*ch *s
n-& 1*n#*n+ .n&*) acc$(&$#. I%, h-/$v$r, acc$(&anc$ *s 2a#$ 1$%-r$ a /*&h#ra/a), *&
c-ns&*&.&$s a 1*n#*n+ c-n&rac& -% sa)$, $v$n &h-.+h &h$ -(&*-n /as n-& s.((-r&$# 10 a
s.Pc*$n& c-ns*#$ra&*-n. S*nc$ &h$r$ 2a0 1$ n- va)*# c-n&rac& /*&h-.& a ca.s$ -r
c-ns*#$ra&*-n, &h$ (r-2*s-r *s n-& 1-.n# 10 h*s (r-2*s$ an# 2a0, acc-r#*n+)0, /*&h#ra/ *&.
4$n#*n+ n-&*c$ -% *&s /*&h#ra/a), h*s acc$(&$# (r-2*s$ (ar&a7$s, h-/$v$r, -% &h$ na&.r$ -r
an -,$r &- s$)) /h*ch, *% acc$(&$#, r$s.)&s *n a ($r%$c&$# c-n&rac& -% sa)$.
SERRA v. CA
FACTS:
4$&*&*-n$r *s &h$ -/n$r -% a "84 s;.ar$ 2$&$r (arc$) -% )an# *n Mas1a&$, Mas1a&$. S-2$&*2$
*n 18!, (r*va&$ r$s(-n#$n& R*Fa) C-22$rc*a) Ban7*n+ C-r(., *n *&s #$s*r$ &- (.& .( a 1ranch
*n Mas1a&$, Mas1a&$, n$+-&*a&$# /*&h ($&*&*-n$r %-r &h$ (.rchas$ -% &h$ &h$n .nr$+*s&$r$#
(r-($r&0. On Ma0 23, 18!, a c-n&rac& -% )$as$ /*&h -(&*-n &- 1.0 /as c-n&rac&$# 10 &h$
(ar&*$s. 4.rs.an& &- sa*# c-n&rac&, a 1*n#*n+ an# -&h$r *2(r-v$2$n&s /$r$ c-ns&r.c&$# -n
&h$ )an# /h*ch h-.s$# &h$ 1ranch -Pc$ -% RCBC *n Mas1a&$, Mas1a&$. W*&h*n &hr$$ 0$ars
%r-2 &h$ s*+n*n+ -% &h$ c-n&rac&, ($&*&*-n$r c-2()*$# /*&h h*s (ar& -% &h$ a+r$$2$n& 10
hav*n+ &h$ (r-($r&0 r$+*s&$r$# an# ()ac$# .n#$r &h$ TORRENS SNSTEM, %-r /h*ch OCT /as
*ss.$# 10 &h$ R$+*s&$r -% >$$#s -% &h$ 4r-v*nc$ -% Mas1a&$.
4$&*&*-n$r a))$+$s &ha& as s--n as h$ ha# &h$ (r-($r&0 r$+*s&$r$#, h$ 7$(& -n (.rs.*n+ &h$
2ana+$r -% &h$ 1ranch &- $,$c& &h$ sa)$ -% &h$ )-& as ($r &h$*r a+r$$2$n&. I& /as n-& .n&*)
S$(&$21$r 4, 1I4, h-/$v$r, /h$n &h$ r$s(-n#$n& 1an7 #$c*#$# &- $@$rc*s$ *&s -(&*-n an#
*n%-r2$# ($&*&*-n$r, -% *&s *n&$n&*-n &- 1.0 &h$ (r-($r&0 a& &h$ a+r$$# (r*c$ -% n-& +r$a&$r
&han 4213.33 ($r s;.ar$ 2$&$r -r a &-&a) -% 48I,4"3.33. B.& 2.ch &- &h$ s.r(r*s$ -% &h$
r$s(-n#$n&, ($&*&*-n$r r$()*$# &ha& h$ *s n- )-n+$r s$))*n+ &h$ (r-($r&0.
H$nc$, a c-2()a*n& %-r s($c*9c ($r%-r2anc$ an# #a2a+$s /$r$ 9)$# 10 r$s(-n#$n& a+a*ns&
($&*&*-n$r. In &h$ c-2()a*n&, r$s(-n#$n& a))$+$# &ha& #.r*n+ &h$ n$+-&*a&*-ns *& 2a#$ c)$ar &-
($&*&*-n$r &ha& *& *n&$n#s &- s&a0 ($r2an$n&)0 -n (r-($r&0 -nc$ *&s 1ranch -Pc$ *s -($n$#
.n)$ss &h$ $@*+$nc*$s -% &h$ 1.s*n$ss r$;.*r$s -&h$r/*s$. As*#$ %r-2 *&s (ra0$r %-r s($c*9c
($r%-r2anc$, *& )*7$/*s$ as7$# %-r an a/ar# -% 4!3,333.33 %-r a&&-rn$0:s &$$s 4IOO,OOO.OO
as $@$2()ar0 #a2a+$s an# &h$ c-s& -% &h$ s.*&.
ISSUES:
1. Wh$&h$r -r n-& &h$ #*s(.&$# c-n&rac& *s a c-n&rac& -% a#h$s*-n. 2. Wh$&h$r -r n-& &h$
($&*&*-n$r 2a0 1$ c-2($))$# &- $@$rc*s$ &h$ -(&*-n &- 1.0 1$%-r$ &h$ &*2$ $@(*r$s. ".
Wh$&h$r -r n-& &h$r$ /as n- c-ns*#$ra&*-n &- s.((-r& &h$ -(&*-n, #*s&*nc& %r-2 &h$ (r*c$,
h$nc$ &h$ -(&*-n cann-& 1$ $@$rc*s$#.
HEL>:
1. N-. A c-n&rac& -% a#h$s*-n *s -n$ /h$r$*n a (ar&0 .s.a))0 a c-r(-ra&*-n, (r$(ar$s &h$
s&*(.)a&*-ns *n &h$ c-n&rac& /h*)$ &h$ -&h$r (ar&0 2$r$)0 aP@$s h*s s*+na&.r$ -r h*s a#h$s*-n
&h$r$&-. Th$s$ &0($s -% c-n&rac& ar$ as 1*n#*n+ as -r#*nar0 c-n&rac&s. B$ca.s$ *n r$a)*&0, &h$
(ar&0 /h- a#h$r$s &- &h$ c-n&rac& *s %r$$ &- r$?$c& *& $n&*r$)0 a)&h-.+h &h*s C-.r& /*)) n-&
h$s*&a&$ &- r.)$ -.& 1)*n# a#h$r$nc$ &- &$r2s /h$r$ %ac&s an# c*rc.2s&anc$s /*)) sh-/ &ha& *&
*s 1as*ca))0 -n$'s*#$#.
W$ #- n-& 9n# &h$ s*&.a&*-n *n &h$ (r$s$n& cas$ &- 1$ *n$;.*&a1)$. 4$&*&*-n$r *s a h*+h)0
$#.ca&$# 2an, /h-, a& &h$ &*2$ -% &h$ &r*a) /as a)r$a#0 a C4A'La/0$r, an# /h$n h$ $n&$r$#
*n&- &h$ c-n&rac&, /as a)r$a#0 a C4A, h-)#*n+ a r$s($c&a1)$ (-s*&*-n /*&h &h$ M$&r-(-)*&an
Man*)a C-22*ss*-n. I& *s $v*#$n& &ha& a 2an -% h*s s&a&.r$ sh-.)# hav$ 1$$n 2-r$ ca.&*-.s
*n &ransac&*-ns h$ $n&$rs *n&-, (ar&*c.)ar)0 /h$r$ *& c-nc$rns va).a1)$ (r-($r&*$s. H$ *s a2()0
$;.*(($# &- #r*v$ a har# 1ar+a*n *% h$ /-.)# 1$ s- 2*n#$# &-.
2. N-. In a .n*)a&$ra) (r-2*s$ &- s$)), /h$r$ &h$ #$1&-r %a*)s &- /*&h#ra/ &h$ (r-2*s$ 1$%-r$
&h$ acc$(&anc$ 10 &h$ cr$#*&-r, &h$ &ransac&*-n 1$c-2$s a 1*)a&$ra) c-n&rac& &- s$)) an# &-
1.0, 1$ca.s$ .(-n acc$(&anc$ 10 &h$ cr$#*&-r -% &h$ -,$r &- s$)) 10 &h$ #$1&-r, &h$r$ *s
a)r$a#0 a 2$$&*n+ -% &h$ 2*n#s -% &h$ (ar&*$s as &- &h$ &h*n+ /h*ch *s #$&$r2*na&$ an# &h$
(r*c$ /h*ch *s c$r&a*n. In /h*ch cas$, &h$ (ar&*$s 2a0 &h$n r$c*(r-ca))0 #$2an# ($r%-r2anc$.
6.r*s(r.#$nc$ has &a.+h& .s &ha& an -(&*-na) c-n&rac& *s a (r*v*)$+$ $@*s&*n+ -n)0 *n -n$ (ar&0
QL &h$ 1.0$r. F-r a s$(ara&$ c-ns*#$ra&*-n (a*#, h$ *s +*v$n &h$ r*+h& &- #$c*#$ &- (.rchas$
-r n-&, a c$r&a*n 2$rchan#*s$ -r (r-($r)0, a& an0 &*2$ /*&h*n &h$ a+r$$# ($r*-#, a& a 9@$#
(r*c$. Th*s 1$*n+ h*s (r$r-+a&*v$, h$ 2a0 n-& 1$ c-2($))$# &- $@$rc*s$ &h$ -(&*-n &- 1.0
1$%-r$ &h$ &*2$ $@(*r$s.
". N$s. A (r*c$ *s c-ns*#$r$# c$r&a*n *% *& *s s- /*&h r$%$r$nc$ &- an-&h$r &h*n+ c$r&a*n -r /h$n
&h$ #$&$r2*na&*-n &h$r$-% *s )$%& &- &h$ ?.#+2$n& -% a s($c*9$# ($rs-n -r ($rs-ns. An#
+$n$ra))0, +r-ss *na#$;.ac0 -% (r*c$ #-$s n-& a,$c& a c-n&rac& -% sa)$. C-n&rac&s ar$ &- 1$
c-ns&r.$# acc-r#*n+ &- &h$ s$ns$ a*1# 2$an*n+ -% &h$ &$r2s /h*ch &h$ (ar&*$s &h$2s$)v$s
hav$ .s$#. In &h$ (r$s$n& #*s(.&$, &h$r$ *s $v*#$nc$ &- sh-/ &ha& &h$ *n&$n&*-n -% &h$ (ar&*$s
*s &- ($+ &h$ (r*c$ a& 4213 ($r s;.ar$ 2$&$r.
ROMAN v. GRIMALT
FACTS:
4$#r- R-2an, &h$ -/n$r, an# An#r$s Gr*2a)&, &h$ (.rchas$r, ha# 1$$n %-r s$v$ra) #a0s
n$+-&*a&*n+ %-r &h$ (.rchas$ -% &h$ sch--n$r San&a Mar*na L %r-2 &h$ 1"&h &- &h$ 2"# -%
6.n$, 134. Th$0 a+r$$# .(-n &h$ sa)$ -% &h$ v$ss$) %-r &h$ s.2 -% 1,!33 ($s-s, (a0a1)$ *n
&hr$$ *ns&a))2$n&s, (r-v*#$# &h$ &*&)$ (a($rs &- &h$ v$ss$) /$r$ *n (r-($r %-r2. I& *s s- s&a&$#
*n &h$ )$&&$r /r*&&$n R10 &h$ (.rchas$r &- &h$ -/n$r -n &h$ 2"r# -% 6.n$.
Th$ v$ss$) /as s.n7 *n &h$ 1a0 -n &h$ a%&$rn--n -% &h$ 2!&h -% 6.n$, 134, #.r*n+ a s$v$r$
s&-r2 an# 1$%-r$ &h$ -/n$r ha# c-2()*$# /*&h &h$ c-n#*&*-n $@ac&$# 10 &h$ (r-(-s$#
(.rchas$r, &- /*&, &h$ (r-#.c&*-n -% &h$ (r-($r (a($rs sh-/*n+ &ha& &h$ ()a*n&*, /as *n %ac&
&h$ -/n$r -% &h$ v$ss$) *n ;.$s&*-n.
On 6.)0 2, 134, ($&*&*-n$r R-2an 9)$# a c-2()a*n& *n &h$ CFI a+a*ns& An#r$s Gr*2a)&,
(ra0*n+ &ha& ?.#+2$n& 1$ $n&$r$# *n h*s %av-r an# a+a*ns& &h$ #$%$n#an& J1K %-r &h$
(.rchas$ (r*c$ -% &h$ sch--n$r San&a Mar*na, &- /*&, 1,!33 ($s-s -r *&s $;.*va)$n& *n
4h*)*((*n$ c.rr$nc0, (a0a1)$ 10 *ns&a))2$n&s *n &h$ 2ann$r s&*(.)a&$#O J2K %-r )$+a) *n&$r$s&
-n &h$ *ns&a))2$n&s #.$ -n &h$ #a&$s s$& %-r&h *n &h$ c-2()a*n&O J"K %-r c-s&s -% (r-c$$#*n+sO
an# J4K %-r s.ch -&h$r an# %.r&h$r r$2$#0 as 2*+h& 1$ c-ns*#$r$# ?.s& an# $;.*&a1)$.
ISSUE:
Wh$&h$r -r n-& &h$ #$%$n#an& *s .n#$r &h$ -1)*+a&*-n &- (a0 &h$ (r*c$ -% &h$ v$ss$)
HEL>:
N-. Th$ sa)$ -% &h$ sch--n$r /as n-& ($r%$c&$# an# &h$ (.rchas$r #*# n-& c-ns$n& &- &h$
$@$c.&*-n -% &h$ #$$# -% &rans%$r %-r &h$ r$as-n &ha& &h$ &*&)$ -% &h$ v$ss$) /as *n &h$ na2$
-% -n$ 4a.)*na G*r-n an# n-& *n &h$ na2$ -% 4$#r- R-2an, &h$ a))$+$# -/n$r. I% n- c-n&rac&
-% sa)$ /as ac&.a))0 $@$c.&$# 10 &h$ (ar&*$s &h$ )-ss -% &h$ v$ss$) 2.s& 1$ 1-rn$ 10 *&s
-/n$r an# n-& 10 a (ar&0 /h- -n)0 *n&$n#$# &- (.rchas$ *& an# /h- /as .na1)$ &- #- s- -n
acc-.n& -% %a*).r$ -n &h$ (ar& -% &h$ -/n$r &- sh-/ (r-($r &*&)$ &- &h$ v$ss$) an# &h.s $na1)$
&h$2 &- #ra/ .( &h$ c-n&rac& -% sa)$. Th$ #$%$n#an& /as .n#$r n- -1)*+a&*-n &- (a0 &h$
(r*c$ -% &h$ v$ss$), &h$ (.rchas$ -% /h*ch ha# n-& 1$$n c-nc).#$#. Th$ c-nv$rsa&*-ns ha#
1$&/$$n &h$ (ar&*$s an# &h$ )$&&$r /r*&&$n 10 #$%$n#an& &- ()a*n&*, #*# n-& $s&a1)*sh a
c-n&rac& s.Pc*$n& *n *&s$)% &- cr$a&$ r$c*(r-ca) r*+h&s 1$&/$$n &h$ (ar&*$s.
NORAIS >ISTRIBUTORS v. CA
FACTS:
4$&*&*-n$r N-r7*s >*s&r*1.&-rs, Inc. *s &h$ #*s&r*1.&-r -% Na2aha 2-&-rc0c)$s *n N$+r-s
Occ*#$n&a). On S$(&$21$r 23, 18, (r*va&$ r$s(-n#$n& A)1$r&- N$(a)$s 1-.+h& &r-2 &h$
N-r7*sQ Bac-)-# 1ranch a 1ran# n$/ Na2aha W-n#$r1*7$ 2-&-rc0c)$ M-#$) NL2>S. Th$
(r*c$ -% 48,!33.33 /as (a0a1)$ 10 2$ans -% a L$&&$r -% G.aran&0 %r-2 &h$ >B4, /h*ch N-r7*s
a+r$$# &- acc$(&. Cr$#*& /as $@&$n#$# &- N$(a)$s %-r &h$ (r*c$ -% &h$ 2-&-rc0c)$ (a0a1)$ 10
>B4 .(-n r$)$as$ -% h*s 2-&-rc0c)$ )-an. As s$c.r*&0 %-r &h$ )-an, N$(a)$s /-.)# $@$c.&$ a
cha&&$) 2-r&+a+$ -n &h$ 2-&-rc0c)$ *n %av-r -% >B4. 4$&*&*-n$r *ss.$# a sa)$s *nv-*c$ /h*ch
N$(a)$s s*+n$# *n c-n%-r2*&0 /*&h &h$ &$r2s -% &h$ sa)$. In &h$ 2$an&*2$, h-/$v$r, &h$
2-&-rc0c)$ r$2a*n$# *n N-r7*s: (-ss$ss*-n. On 6an.ar0 22, 1I3, &h$ 2-&-rc0c)$ /as
#$)*v$r$# Q&- a c$r&a*n 6.)*an N$(a)$s, a))$+$#)0 &h$ a+$n& -% A)1$r&- N$(a)$s. Th$
2-&-rc0c)$ 2$& an acc*#$n& -n F$1r.ar0 ", 1I3 a& B*na)1a+an, N$+r-s Occ*#$n&a). An
*nv$s&*+a&*-n c-n#.c&$# 10 &h$ >B4 r$v$a)$# &ha& &h$ .n*& /as 1$*n+ #r*v$n 10 a c$r&a*n
Eacar*as 4a01a a& &h$ &*2$ -% &h$ acc*#$n&. Th$ .n*& /as a &-&a) /r$c7 /as r$&.rn$#.
On March 23, 1I3, >B4 r$)$as$# &h$ (r-c$$#s -% (r*va&$ r$s(-n#$n&:s 2-&-rc0c)$ )-an &-
N-r7*s *n &h$ &-&a) s.2 -% 48,!33. As &h$ (r*c$ -% &h$ 2-&-rc0c)$ )a&$r *ncr$as$# &- 48,I2I *n
March, 1I3, N$(a)$s (a*# &h$ #*,$r$nc$ -% 4"2I an# #$2an#$# &h$ #$)*v$r0 -% &h$
2-&-rc0c)$. Wh$n N-r7*s c-.)# n-& #$)*v$r, h$ 9)$# an ac&*-n %-r s($c*9c ($r%-r2anc$ /*&h
#a2a+$s a+a*ns& N-r7*s *n &h$ RTC -% N$+r-s Occ*#$n&a). H$ a))$+$# &ha& N-r7*s %a*)$# &-
#$)*v$r &h$ 2-&-rc0c)$ /h*ch h$ (.rchas$#, &h$r$10 ca.s*n+ h*2 #a2a+$s. N-r7*s ans/$r$#
&ha& &h$ 2-&-rc0c)$ ha# a)r$a#0 1$$n #$)*v$r$# &- (r*va&$ r$s(-n#$n& 1$%-r$ &h$ acc*#$n&,
h$nc$, &h$ r*s7 -% )-ss -r #a2a+$ ha# &- 1$ 1-rn$ 10 h*2 as -/n$r -% &h$ .n*&.
ISSUE:
Wh$&h$r -r n-& &h$r$ has 1$$n a &rans%$r -% -/n$rsh*( -% &h$ 2-&-rc0c)$ &- A)1$r&- N$(a)$s
HEL>:
N-.Th$ *ss.anc$ -% a sa)$s *nv-*c$ #-$s n-& (r-v$ &rans%$r -% -/n$rsh*( -% &h$ &h*n+ s-)# &-
&h$ 1.0$r. An *nv-*c$ *s n-&h*n+ 2-r$ &han a #$&a*)$# s&a&$2$n& -% &h$ na&.r$, ;.an&*&0 an#
c-s& -% &h$ &h*n+ s-)# an# has 1$$n c-ns*#$r$# n-& a 1*)) -% sa)$. In a)) %-r2s -% #$)*v$r0, *& *s
n$c$ssar0 &ha& &h$ ac& -% #$)*v$r0 /h$&h$r c-ns&r.c&*v$ -r ac&.a), 1$ c-.()$# /*&h &h$
*n&$n&*-n -% #$)*v$r*n+ &h$ &h*n+. Th$ ac&, /*&h-.& &h$ *n&$n&*-n, *s *ns.Pc*$n&. Wh$n &h$
2-&-rc0c)$ /as r$+*s&$r$# 10 N-r7*s *n &h$ na2$ -% (r*va&$ r$s(-n#$n&, N-r7*s #*# n-&
*n&$n# 0$& &- &rans%$r &h$ &*&)$ -r -/n$rsh*( &- N$(a)$s, 1.& -n)0 &- %ac*)*&a&$ &h$ $@$c.&*-n -%
a cha&&$) 2-r&+a+$ *n %av-r -% &h$ >B4 %-r &h$ r$)$as$ -% &h$ 1.0$r:s 2-&-rc0c)$ )-an.
Ar&*c)$ 14< -% &h$ C*v*) C-#$ /h*ch (r-v*#$s &ha& G*n &h$ a1s$nc$ -% an $@(r$ss ass.2(&*-n
-% r*s7 10 &h$ 1.0$r, &h$ &h*n+s s-)# r$2a*n a& s$))$r:s r*s7 .n&*) &h$ -/n$rsh*( &h$r$-% *s
&rans%$rr$# &- &h$ 1.0$r,C *s a(()*ca1)$ &- &h*s cas$, %-r &h$r$ /as n$*&h$r an ac&.a) n-r
c-ns&r.c&*v$ #$)*v$r0 -% &h$ &h*n+ s-)#, h$nc$, &h$ r*s7 -% )-ss sh-.)# 1$ 1-rn$ 10 &h$ s$))$r,
N-r7*s, /h*ch /as s&*)) &h$ -/n$r an# (-ss$ss-r -% &h$ 2-&-rc0c)$ /h$n *& /as /r$c7$#. Th*s
*s *n acc-r#anc$ /*&h &h$ /$))Q 7n-/n #-c&r*n$ -% r$s ($r*& #-2*n-.
SOUTHERN MOTORS INC. v. MOSCOSO
FACTS:
4)a*n&*, S-.&h$rn M-&-rs, Inc. s-)# &- #$%$n#an& An+$) M-sc-s- -n$ Ch$vr-)$& &r.c7 -n
*ns&a))2$n& 1as*s, %-r 4<,44!.33. U(-n 2a7*n+ a #-/n (a02$n&, &h$ #$%$n#an& $@$c.&$# a
(r-2*ss-r0 n-&$ %-r &h$ s.2 -% 44,1!.33, r$(r$s$n&*n+ &h$ .n(a*# 1a)anc$ -% &h$ (.rchas$
(r*c$ &- s$c.r$ &h$ (a02$n& -% /h*ch, a cha&&$) 2-r&+a+$ /as c-ns&*&.&$# -n &h$ &r.c7 *n
%av-r -% &h$ ()a*n&*,. O% sa*# acc-.n&, &h$ #$%$n#an& ha# (a*# a &-&a) -% 4!!3.33, -% /h*ch
4113.33 /as a(()*$# &- &h$ *n&$r$s& an# 4433.33 &- &h$ (r*nc*(a), &h.s )$av*n+ an .n(a*#
1a)anc$ -% 44,48!.33. Th$ #$%$n#an& %a*)$# &- (a0 " *ns&a))2$n&s -n &h$ 1a)anc$ -% &h$
(.rchas$ (r*c$.
4)a*n&*, 9)$# a c-2()a*n& a+a*ns& &h$ #$%$n#an&, &- r$c-v$r &h$ .n(a*# 1a)anc$ -% &h$
(r-2*ss-r0 n-&$. U(-n ()a*n&*,:s ($&*&*-n, a /r*& -% a&&ach2$n& /as *ss.$# 10 &h$ )-/$r c-.r&
-n &h$ (r-($r&*$s -% &h$ #$%$n#an&. 4.rs.an& &h$r$&-, &h$ sa*# Ch$vr-)$& &r.c7, an# a h-.s$
an# )-& 1$)-n+*n+ &- #$%$n#an&, /$r$ a&&ach$# 10 &h$ Sh$r*, an# sa*# &r.c7 /as 1r-.+h& &-
&h$ ()a*n&*,:s c-2(-.n# %-r sa%$ 7$$(*n+. A%&$r a&&ach2$n& an# 1$%-r$ &h$ &r*a) -% &h$ cas$
-n &h$ 2$r*&s, ac&*n+ .(-n &h$ ()a*n&*,:s 2-&*-n %-r &h$ *22$#*a&$ sa)$ -% &h$ 2-r&+a+$#
&r.c7, &h$ 4r-v*nc*a) Sh$r*, -% I)-*)- s-)# &h$ &r.c7 a& (.1)*c a.c&*-n *n /h*ch ()a*n&*, *&s$)%
/as &h$ -n)0 1*##$r %-r 41,OOO.OO. Th$ &r*a) c-.r& c-n#$2n$# &h$ #$%$n#an& &- (a0 &h$
()a*n&*, &h$ a2-.n& -% 44,48!.33 /*&h *n&$r$s& a& &h$ ra&$ -% 12T ($r ann.2 %r-2 A.+.s& 1<,
1!8, .n&*) %.))0 (a*#, ().s 13T &h$r$-% as a&&-rn$0s %$$s an# c-s&s. H$nc$, &h*s a(($a) 10
&h$ #$%$n#an&.
ISSUE:
Wh$&h$r -r n-& &h$ a&&ach2$n& ca.s$# &- 1$ )$v*$# -n &h$ &r.c7 an# *&s *22$#*a&$ sa)$ a&
(.1)*c a.c&*-n, /as &an&a2-.n& &- &h$ %-r$c)-s.r$ -% &h$ cha&&$) 2-r&+a+$ -n sa*# &r.c7.
HEL>:
N-.Ar&*c)$ 14I4 -% &h$ C*v*) C-#$ (r-v*#$s &ha& *n a c-n&rac& -% sa)$ -% ($rs-na) (r-($r&0 &h$
(r*c$ -% /h*ch *s (a0a1)$ *n *ns&a))2$n&s, &h$ v$n#-r 2a0 $@$rc*s$ an0 -% &h$ %-))-/*n+
r$2$#*$s: JIK E@ac& %.)9))2$n& -% &h$ -1)*+a&*-n, sh-.)# &h$ v$n#$$ %a*) &- (a0O J2K Canc$) &h$
sa)$, sh-.)# &h$ v$n#$$:s %a*).r$ &- (a0 c-v$r &/- -r 2-r$ *ns&a))2$n&sO an# J"K F-r$c)-s$
&h$ cha&&$) 2-r&+a+$ -n &h$ &h*n+ s-)#, *% -n$ has 1$$n c-ns&*&.&$#, sh-.)# &h$ v$n#$$:s
%a*).r$ &- (a0 c-v$r &/- -r 2-r$ *ns&a))2$n&s. In &h*s cas$, h$ sha)) hav$ n- %.r&h$r ac&*-n
a+a*ns& &h$ (.rchas$r &- r$c-v$r an0 .n(a*# 1a)anc$ -% &h$ (r*c$. An0 a+r$$2$n& &- &h$
c-n&rar0 sha)) 1$ v-*#.
Th$ ()a*n&*, ha# ch-s$n &h$ 9rs& r$2$#0. Th$ c-2()a*n& *s an -r#*nar0 c*v*) ac&*-n %-r
r$c-v$r0 -% &h$ r$2a*n*n+ .n(a*# 1a)anc$ #.$ -n &h$ (r-2*ss-r0 n-&$. Th$ ()a*n&*, ha# n-&
a#-(&$# &h$ (r-c$#.r$ -r 2$&h-#s -.&)*n$# 10 S$c. 14 -% &h$ Cha&&$) M-r&+a+$ La/ 1.&
&h-s$ (r$scr*1$# %-r -r#*nar0 c*v*) ac&*-ns, .n#$r &h$ R.)$s -% C-.r&. Ha# &h$ ()a*n&*, $)$c&$#
&h$ %-r$c)-s.r$, *& /-.)# n-& hav$ *ns&*&.&$# &h*s cas$ *n c-.r&O *& /-.)# n-& hav$ ca.s$# &h$
cha&&$) &- 1$ a&&ach$# .n#$r R.)$ !, an# ha# *& s-)# a& (.1)*c a.c&*-n, *n &h$ 2ann$r
(r$scr*1$# 10 R.)$ ". Tha& &h$ ()a*n&*, #*# n-& *n&$n# &- %-r$c)-s$ &h$ 2-r&+a+$ &r.c7, *s
%.r&h$r $v*nc$# 10 &h$ %ac& &ha& *& ha# a)s- a&&ach$# &h$ h-.s$ an# )-& -% &h$ a(($))an& a&
San 6-s$, An&*;.$.
W$ ($rc$*v$ n-&h*n+ .n)a/%.) -r *rr$+.)ar *n ()a*n&*,:s ac& -% a&&ach*n+ &h$ 2-r&+a+$# &r.c7
*&s$)%. S*nc$ &h$ ()a*n&*, has ch-s$n &- $@ac& &h$ %.)9))2$n& -% &h$ a(($))an&:s -1)*+a&*-n, *&
2a0 $n%-rc$ $@$c.&*-n -% &h$ ?.#+2$n& &ha& 2a0 1$ %av-ra1)0 r$n#$r$# h$r$-n, -n a))
($rs-na) an# r$a) (r-($r&*$s -% &h$ )a&&$r n-& $@$2(& %r-2 $@$c.&*-n s.Pc*$n& &- sa&*s%0 s.ch
?.#+2$n&. I& sh-.)# 1$ n-&$# &ha& a h-.s$ an# )-& a& San 6-s$, An&*;.$ /$r$ a)s- a&&ach$#.
N- -n$ can s.cc$ss%.))0 c-n&$s& &ha& &h$ a&&ach2$n& /as 2$r$)0 an *nc*#$n& &- an -r#*nar0
c*v*) ac&*-n. Th$ 2-r&+a+$ cr$#*&-r 2a0 r$c-v$r ?.#+2$n& -n &h$ 2-r&+a+$ #$1& an# ca.s$
an $@$c.&*-n -n &h$ 2-r&+a+$# (r-($r&0 an# 2a0 ca.s$ an a&&ach2$n& &- 1$ *ss.$# an#
)$v*$# -n s.ch (r-($r&0, .(-n 1$+*nn*n+ h*s c*v*) ac&*-n.
4ASCUAL v. UNIUERSAL MOTORS COR4ORATION
FACTS:
4)a*n&*,'a(($))$$ s(-.s$s L-r$nF- 4asc.a) an# L$-n*)a T-rr$s Js(-.s$s 4as;.a)K $@$c.&$# &h$
r$a) $s&a&$ 2-r&+a+$ s.1?$c& 2a&&$r -% &h*s c-2()a*n& -n >$c$21$r 14, 1<3 &- s$c.r$ &h$
(a02$n& -% &h$ *n#$1&$#n$ss -% 4>4 Trans*&, Inc. J4>4 Trans.K %-r &h$ (.rchas$ -% ! .n*&s -%
M$rc$#$s B$nF &r.c7s, /*&h a &-&a) (.rchas$ (r*c$ -r (r*nc*(a) -1)*+a&*-n -% 41!2,!3<.!3
/h*ch /as &- 1$ar *n&$r$s& a& 1T ($r 2-n&h s&ar&*n+ &ha& #a0, 1.& &h$ ()a*n&*,sD +.aran&$$ *s
n-& &- $@c$$# 4!3,333.33 /h*ch *s &h$ va).$ -% &h$ 2-r&+a+$. Th$ 4>4 Trans., as &h$
s(-.s$s 4as;.a)Ds (r*nc*(a), (a*# &- #$%$n#an&'a(($))an& Un*v$rsa) M-&-rs C-r(-ra&*-n
JUn*v$rsa) M-&-rsK &h$ s.2 -% 42,<4.1 -n A(r*) !, 1<1 %-r &/- -% &h$ 9v$ M$rc$#$s B$nF
&r.c7s an# -n Ma0 22, 1<1 %-r &h$ r$2a*n*n+ &hr$$, &h.s )$av*n+ a 1a)anc$ -% 4<I,<41.<
*nc).#*n+ *n&$r$s& #.$ -n F$1r.ar0 I, 1<!.
On March 1, 1<!, Un*v$rsa) M-&-rs 9)$# &h*s c-2()a*n& /*&h &h$ CFI -% Man*)a a+a*ns& &h$
4>4 Trans. &- c-))$c& &h$ 1a)anc$ #.$ .n#$r &h$ Cha&&$) M-r&+a+$s an# &- r$(-ss$ss a)) &h$
.n*&s s-)# &- 4>4 Trans. as &h$ s(-.s$ 4asc.a):s (r*nc*(a), *nc).#*n+ &h$ ! .n*&s +.aran&$$#
.n#$r &h$ s.1?$c& R$a) JEs&a&$K M-r&+a+$. >.r*n+ &h$ h$ar*n1+, Un*v$rsa) M-&-rs a#2*&&$#
&ha& *& /as a1)$ &- r$(-ss$ss a)) &h$ .n*&s s-)# &- &h$ )a&&$r, *nc).#*n+ &h$ ! .n*&s +.aran&$$#
10 &h$ s.1?$c& r$a) $s&a&$ 2-r&+a+$, an# &- %-r$c)-s$ a)) &h$ cha&&$) 2-r&+a+$s c-ns&*&.&$#
&h$r$-n, r$s.)&*n+ *n &h$ sa)$ -% &h$ &r.c7s a& (.1)*c a.c&*-n. As &h$ r$a) $s&a&$ 2-r&+a+-rs,
&h$ s(-.s$s 4asc.a) 9)$# an ac&*-n /*&h &h$ CFI -% V.$F-n C*&0 %-r &h$ canc$))a&*-n -% &h$
2-r&+a+$ &h$0 c-ns&*&.&$# -n 2 (arc$)s -% )an# *n %av-r -% &h$ Un*v$rsa) M-&-rs &- +.aran&$$
&h$ -1)*+a&*-n -% 4>4 Trans. &- &h$ a2-.n& -% 4!3,333. Th$ sa*# CFI r$n#$r$# ?.#+2$n& *n
%av-r -% &h$ s(-.s$s 4asc.a) an# -r#$r$# &h$ canc$))a&*-n -% &h$ 2-r&+a+$.
ISSUE:
Was Ar&*c)$ 14I4 -% &h$ N$/ C*v*) C-#$ a(()*ca1)$ *n &h$ cas$ a& 1ar=
HEL>:
Th$ S.(r$2$ C-.r& aPr2$# &h$ )-/$r c-.r&:s #$c*s*-n. A(($))an& Un*v$rsa) M-&-rs ar+.$s
&ha& Ar&*c)$ 14I4 *s n-& a(()*ca1)$ &- &h$ cas$ a& 1ar 1$ca.s$ &h$r$ *s n- $v*#$nc$ -n r$c-r#
&ha& &h$ (.rchas$ 10 4>4 Trans. -% &h$ ! &r.c7s /as (a0a1)$ *n *ns&a))2$n&s an# &ha& &h$ 4>4
Trans. ha# %a*)$# &- (a0 &/- -r 2-r$ *ns&a))2$n&s. Un*v$rsa) M-&-rs a)s- c-n&$n#s &ha& /ha&
Ar&*c)$ 14I4 (r-h*1*&s *s %-r &h$ v$n#-r &- r$c-v$r %r-2 &h$ (.rchas$r &h$ .n(a*# 1a)anc$ -%
&h$ (r*c$ a%&$r h$ has %-r$c)-s$# &h$ cha&&$) 2-r&+a+$ -n &h$ &h*n+ s-)#, 1.& n-& a r$c-.rs$
a+a*ns& &h$ s$c.r*&0 (.& .( 10 a &h*r# (ar&0.
Th$ S.(r$2$ C-.r& c-nc).#$# &- &h$ c-n&rar0, sa0*n+ &ha& &h$ 9rs& *ss.$ /as /h$&h$r -r n-&
&h$ sa)$ /as -n$ -n *ns&a))2$n&s. Th$ )-/$r c-.r& %-.n# &ha& *& /as, an# &ha& &h$r$ /as
%a*).r$ &- (a0 &/- -r 2-r$ *ns&a))2$n&s, a 9n#*n+ /h*ch *s n-& s.1?$c& &- r$v*$/ 10 &h$
S.(r$2$ C-.r&.
Th$ n$@& c-n&$n&*-n *s &ha& /ha& ar&*c)$ 14I4 /*&hh-)#s %r-2 &h$ v$n#-r *s G&h$ r*+h& &-
r$c-v$r an0 #$9c*$nc0 %r-2 &h$ (.rchas$r a%&$r &h$ %-r$c)-s.r$ -% &h$ cha&&$) 2-r&+a+$,C
an# n-& a Gr$c-.rs$ &- &h$ a##*&*-na) s$c.r*&0 (.& .( 10 a &h*r# (ar&0 &- +.aran&$$ &h$
(.rchas$rDs ($r%-r2anc$ -% h*s -1)*+a&*-n.C B.& &h$ S.(r$2$ C-.r& &- s.s&a*n &h*s ar+.2$n&
-% &h$ a(($))an& /-.)# 1$ &- *n#*r$c&)0 s.1v$r& an# (.1)*c (-)*c0 -v$r&.rn &h$ (r-&$c&*-n
+*v$n 10 Ar&*c)$ 14I4.
FILINUEST CRE>IT COR4. v. COURT OF A44EALS
FACTS:
H$r$*n (r*va&$ r$s(-n#$n&s s(-.s$s 6-s$ S0 Ban+ an# I).2*na#a Tan /$r$ $n+a+$# *n &h$
sa)$ -% +rav$) (r-#.c$# %r-2 cr.sh$# r-c7s an# .s$# %-r c-ns&r.c&*-n (.r(-s$s. Th$0
*n&$n#$# &- 1.0 r-c7 cr.sh$r %r-2 R*Fa) C-ns-)*#a&$# C-r(-ra&*-n /h*ch carr*$# a cash (r*c$
&a+ -% 4!!3,333.33. Th$0 a(()*$# %-r 9nanc*a) ass*s&anc$ %r-2 h$r$*n ($&*&*-n$r F*)*nv$s&
Cr$#*& C-r(-ra&*-n, /h- a+r$$# &- $@&$n# 9nanc*a) a*# -n &h$ c$r&a*n c-n#*&*-ns.
A c-n&rac& -% )$as$ -% 2ach*n$r0 J/*&h -(&*-n &- (.rchas$K /as $n&$r$# *n&- 10 &h$ (ar&*$s
/h$r$10 &h$ (r*va&$ r$s(-n#$n&s a+r$$# &- )$as$ %r-2 &h$ ($&*&*-n$r &h$ r-c7 cr.sh$r %-r
&/- 0$ars s&ar&*n+ %r-2 6.)0 !, 1I1, (a0a1)$ as %-))-/s: 413,333.33 L 9rs& " 2-n&hs,
42",333.33 L n$@& < 2-n&hs, 424,I33.33 L n$@& 1! 2-n&hs. I& /as )*7$/*s$ s&*(.)a&$# &ha& a&
&h$ $n# -% &h$ &/-'0$ar ($r*-#, &h$ 2ach*n$ /-.)# 1$ -/n$# 10 &h$ (r*va&$ r$s(-n#$n&s.
Th.s &h$ (r*va&$ r$s(-n#$n& *ss.$# *n %av-r -% &h$ ($&*&*-n$r a ch$c7 %-r 41!3,!!3.33, as
*n*&*a) r$n&a) J-r +.aran&0 #$(-s*&K, an# 24 (-s&#a&$# ch$c7s c-rr$s(-n#*n+ &- &h$ 24
2-n&h)0 r$n&a)s. In a##*&*-n, &- +.aran&$$ &h$*r c-2()*anc$ /*&h &h$ )$as$ c-n&rac&, &h$
(r*va&$ r$s(-n#$n& $@$c.&$# a r$a) $s&a&$ 2-r&+a+$ -v$r &/- (arc$)s -% )an# *n %av-r -% &h$
($&*&*-n$r. Th$ r-c7 cr.sh$r /as #$)*v$r$# &- &h$ s(-.s$s.
H-/$v$r, " 2-n&hs )a&$r, &h$ s-.s$s s&-(($# (a02$n& /h$n ($&*&*-n$r ha# n-& ac&$# -n &h$
c-2()a*n&s -% &h$ s(-.s$s a1-.& &h$ 2ach*n$. As a c-ns$;.$nc$, ($&*&*-n$r $@&ra?.#*c*a))0
%-r$c)-s$# &h$ r$a) $s&a&$ 2-r&+a+$. Th$ s(-.s$s 9)$# a c-2()a*n& 1$%-r$ &h$ RTC. Th$ RTC
r$n#$r$# a #$c*s*-n *n %av-r -% (r*va&$ r$s(-n#$n&. Th$ ($&*&*-n$r $)$va&$# &h$ cas$ &- CA
/h*ch aPr2$# &h$ #$c*s*-n *n &-&-. H$nc$, &h*s ($&*&*-n.
ISSUES:
1. Wh$&h$r -r n-& &h$ na&.r$ -% &h$ c-n&rac& *s -n$ -% a c-n&rac& -% sa)$. 2. Wh$&h$r -r n-&
&h$ r$2$#*$s -% &h$ s$))$r (r-v*#$# %-r *n Ar&*c)$ 14I4 ar$ c.2.)a&*v$.
HEL>:
1. N$s. Th$ *n&$n& -% &h$ (ar&*$s &- &h$ s.1?$c& c-n&rac& *s %-r &h$ s-'ca))$# r$n&a)s &- 1$ &h$
*ns&a))2$n& (a02$n&s. U(-n &h$ c-2()$&*-n -% &h$ (a02$n&s, &h$n &h$ r-c7 cr.sh$r, s.1?$c&
2a&&$r -% &h$ c-n&rac&, /-.)# 1$c-2$ &h$ (r-($r&0 -% &h$ (r*va&$ r$s(-n#$n&s. Th*s %-r2 -%
a+r$$2$n& has 1$$n cr*&*c*F$# as a )$as$ -n)0 *n na2$.
S$))$rs #$s*r-.s -% 2a7*n+ c-n#*&*-na) sa)$s -% &h$*r +--#s, 1.& /h- #- n-& /*sh -($n)0 &-
2a7$ a 1ar+a*n *n &ha& %-r2, %-r -n$ r$as-n -r an-&h$r, hav$ %r$;.$n&)0 r$s&-r$# &- &h$
#$v*c$ -% 2a7*n+ c-n&rac&s *n &h$ %-r2 -% )$as$s $*&h$r /*&h -(&*-ns &- &h$ 1.0$r &- (.rchas$
%-r a s2a)) c-ns*#$ra&*-n a& &h$ $n# -% &$r2, (r-v*#$# &h$ s-'ca))$# r$n& has 1$$n #.)0 (a*#,
-r /*&h s&*(.)a&*-ns &ha& *% &h$ r$n& &hr-.+h-.& &h$ &$r2 *s (a*#, &*&)$ sha)) &h$r$.(-n v$s& *n
&h$ )$ss$$. I& *s -1v*-.s &ha& s.ch &ransac&*-ns ar$ )$as$s -n)0 *n na2$. Th$ s-'ca))$# r$n&
2.s& n$c$ssar*)0 1$ r$+ar#$# as (a02$n& -% &h$ (r*c$ *n *ns&a))2$n&s s*nc$ &h$ #.$ (a02$n&
-% &h$ a+r$$# a2-.n& r$s.)&s, 10 &h$ &$r2s -% 1ar+a*n, *n &h$ &rans%$r -% &*&)$ &- &h$ )$ss$$.
2. N-, *& *s a)&$rna&*v$. Th$ s$))$r -% 2-va1)$ *n *ns&a))2$n&s, *n cas$ &h$ 1.0$r %a*)s &- (a0 2
-r 2-r$ *ns&a))2$n&s, 2a0 $)$c& &- (.rs.$ $*&h$r -% &h$ %-))-/*n+ r$2$#*$s: J1K $@ac&
%.)9))2$n& 10 &h$ (.rchas$r -% &h$ -1)*+a&*-nO J2K canc$) &h$ sa)$O -r J"K %-r$c)-s$ &h$
2-r&+a+$ -n &h$ (.rchas$# (r-($r&0 *% -n$ /as c-ns&*&.&$# &h$r$-n. I& *s n-/ s$&&)$# &ha&
&h$ sa*# r$2$#*$s ar$ a)&$rna&*v$ an# n-& c.2.)a&*v$, an# &h$r$%-r$, &h$ $@$rc*s$ -% -n$ 1ars
&h$ $@$rc*s$ -% &h$ -&h$rs. In#.1*&a1)0, &h$ #$v*c$ L c-n&rac& -% )$as$ /*&h -(&*-n &- 1.0 L *s
a& &*2$s r$s-r&$# &- as a 2$ans &- c*rc.2v$n& Ar&*c)$ 14I4, (ar&*c.)ar)0 (ara+ra(h J"K
&h$r$-%. Thr-.+h &h$ s$&'.(, &h$ v$n#-r, 10 r$&a*n*n+ -/n$rsh*( -v$r &h$ (r-($r&0 *n &h$
+.*s$ -% 1$*n+ &h$ )$ss-r, r$&a*ns, )*7$/*s$ &h$ r*+h& &- r$(-ss$ss &h$ sa2$, /*&h-.& +-*n+
&hr-.+h &h$ (r-c$ss -% %-r$c)-s.r$, *n &h$ $v$n& &h$ v$n#$$')$ss$$ #$%a.)&s *n &h$ (a02$n&
-% &h$ *ns&a))2$n&s. Th$r$ ar*s$s &h$r$%-r$ n- n$$# &- c-ns&*&.&$ a cha&&$) 2-r&+a+$ -v$r &h$
2-va1)$ s-)#. M-r$ *2(-r&an&, &h$ v$n#-r, a%&$r r$(-ss$ss*n+ &h$ (r-($r&0 an#, *n $,$c&,
canc$)*n+ &h$ c-n&rac& -% sa)$, +$&s &- 7$$( a)) &h$ *ns&a))2$n&s'c.2'r$n&a)s a)r$a#0 (a*#.
RIU>A> v. FILI4INAS INUESTMENT AN> FINANCE COR4.
Fac&s:
Th$ s(-.s$s R*#a# (.rchas$# %r-2 &h$ S.(r$2$ Sa)$s >$v$)-(2$n& C-r(-ra&*-n &/- J2K
1ran# n$/ F-r# C-ns.) S$#ans c-2()$&$ /*&h acc$ss-r*$s. T- s$c.r$ (a02$n& &h$r$-%,
()a*n&*,s $@$c.&$# -n &h$ sa2$ #a&$ a (r-2*ss-r0 n-&$ c-v$r*n+ &h$ (.rchas$ (r*c$ an# a
#$$# -% cha&&$) 2-r&+a+$ n-& -n)0 -n &h$ &/- v$h*c)$s (.rchas$# 1.& a)s- -n an-&h$r car
JCh$vr-)$&K an# &h$*r %ranch*s$ -r c$r&*9ca&$ -% (.1)*c c-nv$n*$nc$ +ran&$# 10 &h$ #$%.nc&
4.1)*c S$rv*c$ C-22*ss*-n %-r &h$ -($ra&*-n -% a &a@* W$$& /*&h F*)*(*nas Inv$s&2$n&.
>.$ &- &h$ %a*).r$ -% &h$ ()a*n&*,s &- (a0 &h$*r 2-n&h)0 *ns&a))2$n&s as ($r (r-2*ss-r0 n-&$,
F*)*(*nas Inv$s&2$n& %-r$c)-s$# -n &h$ cha&&$) 2-r&+a+$ -n &h$ F-r# C-ns.) S$#ans. Th$
%-r$c)-s.r$ sa)$ ha# a #$9c*$nc0. C-ns$;.$n&)0, &h$ c-r(-ra&*-n %-r$c)-s$# &h$ 2-r&+a+$
c-ns&*&.&$# -n &h$ JCh$vr-)$&K an# &h$*r %ranch*s$ -r c$r&*9ca&$ -% (.1)*c c-nv$n*$nc$.
Iss.$:
Wh$&h$r F*)*(*nas Inv$s&2$n& *s (r$c).#$# %r-2 %-r$c)-s*n+ &h$ s$c-n# 2-r&+a+$ &- r$c-v$r
&h$ #$9c*$nc0 -n &h$ 9rs& 2-r&+a+$
H$)#:
N-. Th$ v$n#-r -% ($rs-na) (r-($r&0 s-)# -n &h$ *ns&a))2$n& 1as*s *s (r$c).#$#, a%&$r
%-r$c)-s*n+ &h$ cha&&$) 2-r&+a+$ -n &h$ &h*n+ s-)# %r-2 hav*n+ a r$c-.rs$ a+a*ns& &h$
a##*&*-na) s$c.r*&0 (.& .( 10 a &h*r# (ar&0 &- +.aran&$$ &h$ (.rchas$r:s ($r%-r2anc$ -% h*s
-1)*+a&*-n -n &h$ &h$-r0 &ha& &- s.s&a*n &h$ sa2$ /-.)# -v$r)--7 &h$ %ac& &ha& *% &h$
+.aran&-r sh-.)# 1$ c-2($))$# &- (a0 &h$ 1a)anc$ -% &h$ (.rchas$ (r*c$, sa*# +.aran&-r /*))
*n &.rn 1$ $n&*&)$# &- r$c-v$r /ha& h$ has (a*# %r-2 &h$ #$1&-r'v$n#$$, an# .)&*2a&$)0 *& /*))
1$ &h$ )a&&$r /h- /*)) 1$ 2a#$ &- 1$ar &h$ (a02$n& -% &h$ -% &h$ 1a)anc$ -% &h$ (r*c$,
#$s(*&$ &h$ $ar)*$r %-r$c)-s.r$ -% &h$ cha&&$) 2-r&+a+$ +*v$n 10 h*2, &h$r$10 *n#*r$c&)0
s.1v$r&*n+ &h$ (r-&$c&*-n +*v$n &h$ )a&&$r.
I% &h$ v$n#-r .n#$r s.ch c*rc.2s&anc$ *s (r-h*1*&$# %r-2 hav*n+ a r$c-.rs$ a+a*ns& &h$
a##*&*-na) s$c.r*&0 %-r r$as-ns &h$r$*n s&a&$#, &h$r$ *s n- +r-.n# /h0 s.ch v$n#-r sh-.)# n-&
)*7$/*s$ 1$ (r$c).#$# %r-2 %.r&h$r $@&ra?.#*c*a))0 %-r$c)-s*n+ &h$ a##*&*-na) s$c.r*&0 (.& .(
10 &h$ v$n#$$s &h$2s$)v$s, as *n &h$ *ns&an& cas$, *& 1$*n+ &an&a2-.n& &- a %.r&h$r ac&*-n !
&ha& /-.)# v*-)a&$ Ar&*c)$ 14I4 -% &h$ C*v*) C-#$, %-r &h$n *s ac&.a))0 n- 1$&/$$n an
a##*&*-na) s$c.r*&0 (.& .( 10 &h$ v$n#$$ h*2s$)% an# s.ch s$c.r*&0 (.& .( 10 a &h*r# (ar&0
*ns-%ar as h-/ &h$ 1.r#$n /-.)# .)&*2a&$)0 %a)) -n &h$ v$n#$$ h*2s$)% *s c-nc$rn$#.

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