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Printed Atty-Jimenez-Pre-Week-Notes-2011 Commercial PDF
Printed Atty-Jimenez-Pre-Week-Notes-2011 Commercial PDF
2
BAUTISTA,
Gerald
ANG,
Kira
Checked
in
carrier
liable
for
extraordinary
diligence
Hand
carry
carrier
liable
as
if
its
a
necessary
deposit
o A
taxi
company
is
liable
if
its
driver
stabbed
a
passenger.
o A
bus
company
is
not
liable
for
damages
for
injuries
to
a
passenger
when
a
bystander
threw
a
stone
at
the
bus
and
the
stone
hit
a
passenger
o Liability
for
injuries
Do
NOT
include
nominal
damages
INCLUDES:
medical
expenses,
loss
of
income,
moral
damages
in
case
of
BF
o Liability
for
death
Do
NOT
include
liquidated
damages
INCLUDES:
funeral
expenses,
medical
expenses,
loss
of
earning
capacity,
moral
damages
o Liable
for
damages
NOT
liable:
When
a
baggage
of
passenger
was
transported
at
a
later
flight
due
to
balance
and
weight
restrictions
LIABLE:
when
airline
company
did
not
assist
passenger
in
locating
missing
luggage,
baggage
of
passenger
sent
to
wrong
destination
Code
of
Commerce
o BOL
It
is
a
contract,
a
receipt,
a
symbol
of
the
goods
covered
by
it.
No
form
needed
for
its
validity.
If
BOL
does
not
undertake
to
deliver
within
a
particular
time,
there
is
still
delay
if
there
was
undelivery
after
a
reasonable
time
Consignee
cannot
refuse
to
take
delivery
on
the
ground
that
they
were
not
in
accordance
with
the
contract
of
sale.
Remedy
is
to
accept
the
delivery
and
just
sue
the
seller.
If
steel
pipes
transported
to
Davao
by
inter
island
vessel
arrived
in
damaged
condition
and
were
transshipped
to
the
consignee
in
San
Francisco
by
an
American
vessel.
The
period
to
file
a
claim
(24hrs)
should
be
counted
from
delivery
to
San
Francisco.
VALID
stipulation
in
BOL
limiting
filing
of
action
for
damages
to
60
days
according
to
a
case.
o Charter
Parties
In
bareboat
charter,
the
shipowner
has
NO
lien
on
the
cargoes
of
owners
who
contracted
the
vessel
when
the
charterer
does
not
pay
him
the
stipulated
freight.
In
bareboat
charter
if
the
vessel
is
a
common
carrier,
it
becomes
a
private
carrier.
In
bareboat
charter,
the
charterer
is
NOT
liable
for
dead
freight.
Dead
freight
is
only
relevant
in
voyage
charter.
In
latter,
the
charterer
is
supposed
to
make
money
by
soliciting
cargoes.
If
he
doesnt
get
enough
cargoes,
thats
dead
freight.
This
doesnt
apply
to
bareboat
charter
where
the
charterer
leases
the
entire
vessel.
o Liability
of
Shipowners
and
Shipping
Agents
ShipO
and
ShipA
not
liable
for
obligations
by
captain
in
excess
of
his
powers.
NOT
liable
also
for
acts
of
captain
in
bareboat
charter.
Liability
for
workmens
compensation
shouldered
under
Employee
Compensation
Commisson
o General
Average
Cash
invested
to
redeem
a
vessel
and
its
cargoes
captured
by
pirates
do
not
constitute
general
average
o Collision
Rules
of
collision
governs
maritime
tort;
rules
on
quasi
delict
do
NOT
apply
3
BAUTISTA,
Gerald
ANG,
Kira
Vessel
which
was
pursuing
a
wrong
course
and
the
2nd
vessel
which
did
not
take
evasive
action
at
an
early
stage
and
did
so
only
when
collision
was
near
are
BOTH
liable.
Principle
of
comparative
fault
do
NOT
apply
COGSA
o Failure
to
file
notice
of
loss
does
NOT
bar
action
against
the
common
carrier
o A
written
demand
does
NOT
interrupt
the
running
of
the
prescriptive
period
under
the
COGSA.
Because
public
policy
demands
that
maritime
claims
must
be
decided
expeditiously.
o An
action
under
COGSA
must
be
filed
within
one
year.
ONLY
applies
to
nondelivery
or
damage.
If
delay,
apply
the
Civil
Code
10
years,
based
on
written
contract.
o The
one
year
period
under
COGSA
is
not
interpreted
by
a
proposal
for
arbitration.
o Parties
can
agree
to
extend
the
1
year
period.
o The
1
yr
period
does
NOT
apply
to
a
customs
broker
who
delivered
the
goods
to
the
consignee.
o The
parties
can
actually
stipulate
that
the
liability
of
the
carrier
for
loss
or
damage
to
the
goods
be
less
than
$500
per
package.
The
liability
of
$500
under
COGSA
does
not
apply
to
loss
of
goods
due
to
collision
caused
by
the
fault
or
negligence
of
the
carrier.
Warsaw
Convention
o There
has
to
be
2
states
involved.
o If
theres
an
agreed
stopping
place
which
is
not
part
of
Convention,
but
the
place
of
departure
and
destination
are
in
a
country
which
is
part
of
the
Convention,
that
falls
under
Warsaw.
o Warsaw
Convention:
applies
to
all
international
transportation
by
aircraft
FOR
HIRE
or
GRATUITOUSLY
by
air
transportation
for
hire
o Per
passenger:
125,000
francs
o Per
checked
baggage:
250
francs
per
kg
o Per
hand
carried
baggage:
o Any
provision
fixing
a
lower
limit
than
what
is
in
the
Convention
is
NOT
valid.
o Carrier
cannot
avail
of
limitation
of
liability
when
the
damage
is
caused
by
its
willful
conduct.
o If
no
claim
stub
was
issued,
the
provision
on
limited
liability
cannot
apply
and
be
invoked
by
the
carrier.
Public
Service
Act
o A
shipyard
is
NOT
a
public
utility.
Petron
is
NOT
a
public
utility
when
it
refines
oil.
Because
to
be
a
public
utility,
you
must
be
refining
oil
for
SOMEONE
ELSE.
o Public
utility:
you
must
actually
render
service
to
the
public.
o A
legislative
franchise
is
required
for
telecommunications
companies,
radio
and
tv
stations,
and
power
companies.
But
it
is
NOT
required
for:
commercial
aviation,
tollway
operators.
o That
the
proposed
public
service
will
not
result
in
a
monopoly,
is
NOT
a
requirement
to
be
issued
a
CPC,
but
it
is
a
matter
of
DEFENSE.
o The
prior
operator
rule
cannot
be
applied
if
it
will
result
in
a
monopoly.
The
purpose
of
prior
operator
rule
is
to
prevent
ruinous
competition.
Mere
reduction
of
earnings
of
prior
operator
is
NOT
ruinous
competition
in
the
absence
of
showing
that
it
will
not
get
a
fair
return
on
its
investment.
o A
reasonable
return
is
12%
on
the
rate
base.
o Prior
operator
rule
does
not
apply
even
if
there
will
be
partial
overlapping
o The
income
tax
paid
by
public
utility
should
not
be
included
in
its
operating
expenses
bcause
it
is
not
an
expense
to
produce
profits.
o Kabit
system/Boundary
Boundary
system
is
illegal
lease
agreement
4
BAUTISTA,
Gerald
ANG,
Kira
The
actual
owner
of
the
motor
vehicle
registered
n
the
name
of
the
owner
of
a
CPC
can
sue
him
to
recover
the
motor
vehicles
The
registered
operator
and
the
actual
operator
of
the
MV
under
the
kabit
system
should
be
held
jointly
and
severally
liable
to
3rd
parties
who
were
injured
by
the
operation
of
the
MV.
Registered
operator
adjudged
to
pay
damages
may
recover
from
the
actual
operator
the
amount.
Since
the
arrangement
is
illegal,
pari
delicto.
Actual
owner
cant
run
after
the
operator.
o Sale,
Encumbrance,
Lease
Must
first
be
approved
by
the
proper
regulatory
agency
Before
approval
of
sale,
creditor
of
seller
can
still
levy
upon
properties
sold
CORPORATION
CODE
Concept
o If
stockH
of
a
corp
consist
of
several
tiers
of
corp,
the
nationality
of
stockH
can
be
traced
through
the
tiers
but
cant
be
traced
INDEFINITELY.
o On
the
basis
of
control
test,
the
nationality
of
a
corporation
is
determined
by
the
nationality
of
the
majority
of
its
outstanding
capital
stock.
o A
corporaton
can
be
awarded
damages
for
besmirched
rep.
o Under
grandf
rule,
if
a
corp
is
engaged
in
a
nationalized
area
of
business,
and
its
stockH
consist
of
holding
corps,
the
percentages
of
the
Fil
stockH
of
the
holding
corps
shall
be
computed
to
determine
if
the
corp
meets
the
required
minimum
Fil
ownership
of
its
capital
stock.
o Under
FIA,
if
a
corp
and
its
foreign
stockH
own
shares
in
a
Phil
corp,
at
least
60%
of
the
capital
stock
entitled
to
vote
in
each
of
the
two
corp
must
be
owned
by
the
Fil
and
at
least
60%
of
members
of
board
of
directors
of
both
corp
must
be
Fil
citizens
for
the
owned
corp
to
be
considered
a
Fil
national.
In
short
for
FIA,
DONT
apply
grandfather
rule.
If
youre
60%
here
in
FIA,
youre
considered
100%
Filipino.
o A
corporation
CAN
be
held
liable
for
a
quasi
delict
for
negligence
in
the
selection
and
supervision
of
its
employees
and
for
the
acts
of
its
officers,
BUT
a
corporation
CANNOT
be
held
liable
for
quasi
delict
committed
by
its
officers
if
it
had
no
relation
to
its
business.
o
A
corporation
CAN
be
held
criminally
liable,
just
that
its
penalty
will
be
a
fine
or
dissolution.
o A
holding
corp
which
exercises
control
over
the
mgt
and
operation
of
a
subsidiary
corp,
its
separate
juridical
personality
CANNOT
be
disregarded
just
for
that.
In
addition,
must
be
shown
that
it
is
using
that
power
of
control
to
commit
fraud.
Mere
control
is
NOT
sufficient.
o The
separate
juridical
personality
is
invoked
if
someone
is
a
majority
stockH,
NOT
if
he
is
a
minority
stockH.
o A
corporation
CANNOT
invoke
the
doctrine
of
piercing
the
veil
of
corp
fiction
in
its
favor.
Incorporation
and
Organization
o May
be
deprived
of
voting
rights:
ONLY
preferred
shares
and
redeemable
shares
o CANNOT
have
No-par
value
shares:
banks,
trust
companies,
insurance
companies,
public
utilities,
and
building
and
loan
associations
o Before
incorp,
a
promoter
is
NOT
personally
liable
if
it
is
understood
that
the
other
party
will
hold
only
the
future
corp
liable.
o After
incorp,
if
a
promoter
bound
himself
personally,
he
remains
liable
even
if
the
corp
became
liable.
o NOT
valid
consideration
for
shares:
PNs
and
future
services
Corp
Name
5
BAUTISTA,
Gerald
ANG,
Kira
o If
a
proposed
corp
name
is
similar
or
confusingly
similar
to
an
earlier
corp
and
they
are
engaged
in
same
line
of
business
(2
factors:
similarity
and
same
line
of
business),
that
corp
cannot
be
allowed
to
adopt
that
name.
De
Facto
and
Corp
by
Estoppel
o A
corp
formed
to
practice
a
profession
CANNOT
qualify
as
a
de
facto
corp.
There
is
no
law
authorizing
a
corp
to
practice
a
profession!
o Without
a
cert
of
reg
from
SEC,
a
corp
cannot
be
a
de
facto
corp.
There
must
also
be
assumption
of
powers
o Failure
to
execute
articles
of
incorp
will
PRECLUDE
a
de
facto
corp,
since
you
wont
be
able
to
get
the
cert
from
SEC
o Exercise
of
corp
powers:
Does
NOT
include
mere
signing
of
articles
of
incorp
o A
de
facto
corp
has
same
powers
and
liab
as
a
de
jure
corp.
Cannot
be
attacked
collaterally.
A
private
party
cannot
directly
attack;
only
SolGen
under
quo
warranto
o A
person
who
knows
that
the
company
he
represents
is
not
incorp
CANNOT
claim
that
the
other
party
who
sued
him
is
in
estoppel.
o A
person
who
represented
an
unicorp
organization
in
contracting
w/another
person
cannot
invoke
the
defense
of
corp
by
estoppels
if
the
other
party
sues
him.
By
Laws
o Effective:
Upon
approval
of
SEC,
not
agreement
of
parties
o If
did
not
file
by
laws
on
time,
considered
as
de
facto
Corporate
Powers
o An
express
power
can
also
be
an
incidental
power
of
corp.
Like
the
power
to
sue
or
be
sued,
to
contract
loan
o Implied
power
=
the
power
to
carry
out
an
express
power;
like
borrowing
money
executing
PNs
or
checks,
purchasing
property
of
debtors
at
an
execution
sale,
hiring
entertainers
at
hotel
o Pre
Emptive
Right
There
is
pre
emptive
right
UNLESS
otherwise
stipulated
otherwise.
General
rule
is
that
pre
emptive
right
always
exists.
Right
of
pre
emption
does
not
apply
when
shares
of
delinquent
stockholder
will
be
sold
at
public
auction,
or
issued
in
exchange
of
shares
as
payment
of
contracted
debt,
or
if
shares
issued
in
good
faith
with
approval
of
2/3
for
exchange
with
property
needed
for
corporation
Right
of
pre
emption
applies
to
ALL
issuance
of
shares
o Sell
or
Dispose
Corp
Assets
All
or
substantially
all
=
needs
2/3
votes
of
stockH
Will
no
longer
be
able
to
accomplish
its
business
for
which
purpose
it
was
incorporated
If
the
only
property
it
had
left
is
right
of
redemption,
even
sale
of
that
needs
stockholder
approval
Approval
applies
even
in
the
case
of
a
nonS
corporation.
Even
if
the
corporation
is
just
being
funded
from
donations,
the
sale
of
all
or
its
sole
stock
is
still
subject
to
approval.
o Can
Acquire
Shares
Can
acquire
its
redeemable
shares,
to
acquire
fractional
shares,
to
collect
or
compromise
indebtedness
These
cases
when
it
can
acquire
shares
is
NOT
exclusive
o Invest
Funds
Investing
in
secondary
purpose
must
be
with
approval
of
2/3
stockH
6
BAUTISTA,
Gerald
ANG,
Kira
San
Miguel
can
buy
brewery
in
HK
without
stockH
approval
because
in
line
with
its
business
o Power
to
Declare
Dividends
Must
have
retained
earnings;
creditors
can
sue
the
officers
who
declared
and
the
stockH
who
got
the
dividends
if
they
were
declared
without
retained
earnings
Paid
in
surplus
CANNOT
be
declared
as
dividends
if
there
is
cash
or
stock;
dividends
can
only
be
declared
from
earnings
from
operations,
NOT
from
capital
Treasury
shares
can
be
declared
as
dividends,
BUT
ONLY
as
property
dividends.
Stock
dividends
are
declared
from
authorized
but
unissued
shares.
Treasury
shares
are
already
issued
shares,
so
they
should
only
be
declared
as
property
dividends.
The
difference
is
related
to
tax
consequences.
General
rule:
Directors
can
declare
cash
or
property
dividends
without
need
of
stockH
approval.
Stock
dividends
need
stockH
approval.
Stock
dividends
cannot
be
granted
to
a
company
who
is
not
a
stockH
but
has
a
mgt
contract
with
the
corp
as
part
of
its
compensation
Approval
for
declaration
of
cash
dividends
CAN
be
revoked
BEFORE
it
is
announced.
After
announcement,
CANT
revoke,
for
purpose
of
manipulating
market.
The
approval
of
stock
D
can
be
revoked
EVEN
AFTER
its
announcement
to
public
but
BEFORE
issuance
of
the
stock
certificate.
A
stockH
who
has
not
fully
paid
his
shares,
so
long
as
he
is
not
delinquent,
can
receive
dividends.
If
retained
surplus
has
been
invested
in
govt
bonds,
NOT
an
excuse
for
retention
of
100%
of
paid
up
capital.
o Mgt
Contracts
A
management
contract
CAN
be
renewed
indefinitely,
provided
the
renewal
does
not
exceed
5
years.
The
max
period
of
a
mgt
K
is
5
years
o Ultra
Vires
Acts
A
corp
engaged
n
business
as
lending
investor
cannot
engage
as
pawnbroker.
Mining
corp
cant
engage
in
real
estate
business.
StockH
may
ratify
an
ultra
vires
K,
but
not
if
contrary
to
law,
public
order,
public
morals,
public
policy
If
the
ultra
vires
K
of
a
corp
is
illegal,
neither
party
may
sue
to
enforce
it
If
fully
or
partially
performed,
either
party
may
sue
for
what
it
has
paid
(not
sure
bout
this)
If
NOT
ILLEGAL
and
NOT
PERFORMED
by
either
party
on
either
side,
neither
party
can
sue
to
enforce
Minority
stockH
cant
file
derivative
suit
on
ground
of
ultra
vires
K
o Exercise
of
Powers
The
board
of
directors
is
responsible
for
the
corp
policies
and
general
mgt
of
the
business
office.
The
officers
implement
these
policies,
but
they
also
have
latitude
in
running
the
business
operations.
The
stockH
have
residua
powers
over
fundamental
corp
changes
(exercise
of
voting
powers).
The
board
can
delegate
some
of
its
functions
StockH
and
Members
o Subscriptions
They
are
indivisible.
But
a
stockH
who
has
paid
in
full
may
transfer
part
of
his
subscription.
Trust
fund:
the
capital
stock,
the
properties,
the
assets
o Rights
of
stockH
7
BAUTISTA,
Gerald
ANG,
Kira
CANT
exercise
appraisal
in
the
amendment
of
by
laws
or
in
approval
by
majority
stockH
of
renewal
of
a
mgt
K
(because
this
does
not
involve
a
fundamental
act)
A
stockH
CANNOT
invoke
his
appraisal
right
if
the
corp
has
no
retained
earnings.
This
violates
trust
fund
doctrine.
But
in
close
corp,
a
stockH
can
ask
that
he
can
be
bought
out
ANYTIME
even
if
no
retained
earnings
The
right
of
inspection
applies
also
to
the
corps
wholly
owned
subsidiary.
This
is
in
keeping
with
protecting
rights
of
stockH.
Person
responsible
for
refusal
of
inspection
has
burden
of
proof
to
show
that
stockH
is
not
entitled
to
the
right.
Right
of
inspection
may
be
invoked
when
stockH
asking
for
list
of
stockH
for
purpose
of
proxy
right
against
mgt
and
when
the
inspection
is
being
requested
for
a
derivative
suit.
Valid
defenses
against
right
of
inspection:
if
stockholder
is
not
yet
record
stockH,
if
exercising
in
BF,
if
bought
only
one
share
to
be
able
to
pry
into
transactions
entered
before
he
became
a
stockH,
if
not
acting
for
a
legitimate
purpose
Derivative
suit:
an
action
brought
by
a
minority
stockH
in
name
of
corp
to
redress
wrongs
committed
against
corp
for
which
directors
refuse
to
sue
The
creation
of
several
corp
positions
and
the
reasonable
increase
in
the
emoluments
of
corp
officers
may
NOT
be
the
subject
of
a
derivative
suit.
This
falls
within
scope
of
BUSINESS
JUDGMENT.
The
appropriation
by
an
officer
of
corp
funds
for
his
own
benefit
can
be
the
subject
of
a
derivative
suit
Derivative
suit
(cause
of
acton
belonging
to
the
corp)
v.
individual
suit
(cause
of
action
is
violation
of
individual
stockholders
own
private
rights)
v.
representative
suit
(filed
by
group
of
stockH
for
a
wrong
to
them
as
a
group
like
the
violation
of
right
to
preference
of
preferred
stockH)
Denial
of
pre
emptive
right
of
a
stockH
CANNOT
be
the
subject
of
a
derivative
suit
since
thats
his
own
right
Heirs
of
a
stockH
whose
shares
were
fraudulently
transferred
to
some
of
heirs
and
some
did
not
get
what
they
claimed
was
their
inheritance
rights
CANNOT
file
a
derivative
suit.
They
is
their
own
right.
A
stockholder
whose
number
of
shares
is
merely
minimal
can
file
a
derivative
suit.
A
minority
stockH
can
JOIN
as
plaintiff
in
a
derivative
suit
against
corp
officers,
if
his
personal
rights
were
also
injured.
Here
there
are
two
causes
of
action.
1st
requisite:
there
is
a
cause
of
action
that
belongs
to
the
corporation.
Therefore
when
damages
are
awarded,
these
belong
to
the
corporation.
2nd
requisite:
The
stockH
MUST
be
a
stockH
at
the
time
the
acts
complained
of
occurred
unless
they
continued
after
he
became
a
stockH.
3rd
requisite:
exhaustion
of
intracorporate
remedies
unless
to
do
so
is
excused,
like
if
the
directors
themselves
committed
the
fraud
and
appeal
to
them
is
useless.
No
use
also
appealing
to
all
the
stockH
by
having
to
call
a
special
stockH
meeting
to
reverse
what
the
board
approved.
4th
requisite:
case
must
be
filed
in
the
name
of
corp
and
not
in
the
name
of
the
stockH
5th
requisite:
no
appraisal
rights
are
available
for
the
acts
complained
of
One
who
is
merely
holding
in
trust
the
shares
of
stock
in
his
name
CANNOT
file
a
derivative
suit.
If
a
minority
stockH
has
already
filed
a
derivative
suit,
another
minority
stockH
cannot
file
anymore
a
second
derivative
suit.
o Meetings
of
Stockholders
and
Members
8
BAUTISTA,
Gerald
ANG,
Kira
Notice
of
mtg
may
be
waived
Written
notice
is
required
for
regular
or
special
mtgs
A
majority
of
the
OCS
of
the
members
shall
constitute
a
quorum;
but
if
the
Corp
Code
or
by
laws
provide
for
diff
number
of
quorum,
such
provision
shall
control
Once
a
quorum
is
already
present
when
mtg
is
called
to
order,
the
mtg
CAN
continue
to
transact
business
even
if
some
stockH
or
members
leave
so
that
the
number
left
do
not
constitute
a
quorum
If
mtg
was
improperly
held
or
called,
all
proceedings
if
within
the
powers
of
the
corp
shall
be
valid
provided
all
stockH
or
members
are
present
or
duly
represented
Board
of
Directors
and
Trustees
o Not
all
directors
should
be
residents
of
the
Phil;
only
majority
only
is
required
o Directors
are
entitled
to
hold
over
until
their
successors
are
elected
and
qualified
o So
long
as
director
appears
in
the
books
as
to
own
a
share,
he
is
qualified,
even
if
legal
title
is
in
the
name
of
someone
else.
o By
laws
MAY
require
that
its
not
enough
for
director
to
only
own
one
share
but
must
own
a
certain
number
of
shares.
o MUST
be
a
stockH
at
the
time
of
the
election,
not
just
when
he
assumes
office,
because
of
the
wording
of
our
law.
The
director
should
be
elected
among
the
stockholders.
The
candidate
for
directorship
must
already
be
a
stockH.
o By
laws
may
impose
additional
disquafications
for
directors.
The
by
laws
may
also
disqualify
a
stockH
from
being
elected
director
if
he
is
a
director
of
competitor
business.
The
by
laws
however
MAY
NOT
provide
that
all
directors
of
corp
engaged
in
line
of
business
which
is
partly
nationalized
must
be
Fil
citizens.
Because
foreigners
who
are
stockH
in
partially
nationalized
business
are
entitled
to
have
representation
in
the
board.
o By
laws
CANNOT
prohibit
proxy
voting
and
cumulative
voting,
since
these
are
both
allowed.
o Voting
by
viva
voce
or
show
of
hands
is
valid.
o Proposal
to
remove
a
director
MUST
be
stated
in
the
notice
to
be
given
to
stockH
o As
a
rule,
director
can
be
removed
with
or
without
cause.
But
if
minority
representative,
may
only
be
removed
for
cause
o General
rule:
Any
vacancy
may
be
filled
up
by
remaining
directors
if
they
constitute
quorum.
EXCEPTION:
removal
of
director,
no
longer
constitute
quorum
o In
case
of
resignation
of
a
hold
over
director,
the
vacancy
shall
be
filled
up
by
election
of
stockH.
Remaining
directors
may
only
elect
replacement
if
vacancy
is
part
of
original
term,
not
the
hold
over
term.
o Additional
compensation
for
directors:
may
be
in
by
laws,
or
granted
by
bote
of
stockH
representing
majority
of
OCS.
Cannot
exceed
10%
of
corporate
net
income
before
income
tax
in
a
year.
But
directors
may
receive
in
excess
of
10%
of
the
corp
income
tax
if
they
are
holding
other
positions
also
o Directors
are
NOT
personally
liable
for
unlawful
dismissal
of
an
employee
of
the
corp,
unless
proven
that
they
acted
in
BF.
o Director
is
personally
liable:
gross
negligence,
he
bound
himself
solidarily
liable
o Acquisition
of
business
opportunity
for
himself
Director
must
turn
over
all
profits
to
the
corp
Rule
applies
even
if
director
risked
his
own
funds
StockH
owning
2/3
of
OCS
can
ratify
the
K
o Directors
and
officers
who
consented
to
issuance
of
watered
stock
and
who
having
knowledge
did
not
file
written
objections
are
jointly
and
severally
liabe
for
diff
bet
value
received
and
par
value
o A
K
between
2
corp
with
interlocking
directors
may
be
ratified
by
stockH.
o Meetings
of
Directors
9
BAUTISTA,
Gerald
ANG,
Kira
In
a
regular
mtg,
it
is
not
required
to
indicate
what
will
be
taken
up,
unless
it
is
one
of
those
which
law
requires
should
be
in
notice
Special
mtg,
must
only
take
up
what
is
in
the
notice,
unless
there
is
express
or
implied
waiver
Meetings
may
be
held
anywhere
in
Phil
or
abroad.
But
for
banks,
they
are
prohibited
from
holding
meetings
abroad.
Board
mtgs
can
be
held
by
teleconference
or
video
conference
Proxy
voting
is
NOT
valid
in
board
meetings.
ONLY
allowed
in
stockH
meetings.
An
abstention
during
a
voting
is
counted
as
a
vote
with
the
majority.
President
is
the
one
who
presides
at
board
meetings.
But
by
laws
can
provide
that
the
chairman
presides.
Capital
Stock
o Stock
Cert
It
is
quasi
negotiable,
because
the
shares
covered
by
it
can
be
transferred
by
indorsing
and
delivering
the
cert;
however,
unlike
negotiable
instruments,
a
buyer
in
GF
and
for
value
cannot
acquire
title
to
the
shares
if
the
indorsement
is
forged
Mere
indorsement
and
delivery
suffices
to
justify
transfer,
without
need
of
a
deed
of
sale.
But
if
not
indorsed
and
delivered
but
instead
is
notarized,
that
is
sufficient
to
transfer
title
also,
applying
the
Civil
Code
(tradition
is
one
of
ways
of
transferring
ownership)
Partial
payment
by
stockH
for
his
subscription
MAY
NOT
be
applied
as
full
payment
for
the
number
of
shares
corresponding
to
it;
stock
cert
cannot
be
issued
for
those
number
of
shares
paid.
Corp
secretary
is
custodian
of
records
and
make
entries
in
stock
and
transfer
book,
NOT
the
majority
of
stockH
Unpaid
claims
which
will
prevent
transfer
of
shares
in
the
books
of
a
corp
is
limited
only
to
the
unpaid
subscription
and
does
not
include
other
debts
outside
of
the
subscription
K,
even
if
the
corp
has
a
lien
over
these
debts.
Situs
of
shares
of
stock
for
purposes
of
attachment,
garnishment,
and
execution
and
for
purpose
of
registration
of
chattel
mortgage
on
them
and
for
purpose
of
liability
of
estate
tax
is
the
principal
office
of
the
corp.
Articles
of
Incorp
prevails
in
case
of
conflict
bet
AIC
and
the
stock
and
transfer
book
as
to
identities
of
the
stockH
and
the
number
of
outstanding
shares
o Payment
of
Balance
of
Subscription
Balance
becomes
due:
When
board
makes
call
Corp
is
insolvent
If
subscription
K
provides
when
it
will
be
paid
A
call
for
payment
must
be
uniform.
Failure
to
pay
unpaid
subscription
on
date
specified
in
K
or
call
Renders
entire
balance
due
and
payable
Make
stockH
liable
for
interest
based
on
rate
in
by
laws
or
legal
rate
If
within
30
days
from
date
payment
was
due
and
no
payment
made,
the
shares
shall
become
delinquent
and
subject
to
sale
Rights
of
delinquent
stockH
are
suspended,
except
for
the
right
to
get
excess
of
sale
of
the
shares.
Cash
dividends
will
be
applied
to
unpaid
subscription.
Stock
cert
will
be
withheld
Dodge
method
of
bidding
(not
sure
if
I
heard
right):
Shares
sold
to
bidder
offering
to
pay
the
full
amount
due
for
the
least
number
of
shares.
If
there
is
no
bidder,
the
10
BAUTISTA,
Gerald
ANG,
Kira
corp
may
bid
for
the
shares.
If
the
corp
bids,
the
total
amount
due
shall
be
deemed
paid
in
FULL.
Instead
of
auctioning
shares,
corp
can
actually
choose
instead
to
file
a
collection
case.
o Alienation
of
Shares
Allowable
restrictions/Stipulations
Right
of
pre
emption
That
a
corp
has
right
of
first
option
to
buy
shares
at
a
fixed
price
That
a
share
given
to
officer
must
sell
it
back
to
corp
upon
termination
A
stockH
cannot
sell
the
shares
if
only
partly
paid,
UNLESS
with
consent
of
corporation,
because
it
involves
novation
by
substitution
of
debtors.
A
buyer
of
shares,
even
if
fully
paid
and
covered
by
stock
cert
in
name
of
seller
cannot
compel
corp
to
issue
stock
cert
to
his
name,
if
he
has
not
yet
been
registered
in
stock
and
transfer
book
as
stockH.
Chattel
M
over
the
shares
need
not
be
registered
in
STB
since
it
is
not
an
alienation
Attachment
on
shares
registered
in
STB
revails
over
their
sale
which
has
not
been
recorded
in
the
STB.
Dissolution
o Voluntary
Dissolution
Approved
by
majority
of
Board
and
2/3
of
stockH
Approved
by
SEC
(not
ministerial
for
SEC
to
approve)
o Involuntary
Dissolution
Expiration
of
term
Failure
to
organize
and
commence
within
2
ys
from
date
of
incorp
Continuous
non
operation
for
at
least
5
yrs
Violation
of
provisions
of
Corp
Code
Violations
of
Sec
6(e)
of
PD
No.
902-a
Deadlocks
in
close
corporation
Petition
of
a
minority
stockH
for
illegal
acts
and
gross
mismanagement
by
the
directors
and
officers
o Liquidation
For
voluntary
dissolution,
3
yr
period
is
counted
from
approval
of
SEC
Liquidation
can
be
through:
board,
board-appointed
trustee,
appointment
of
receiver
Close
Corporations
Non
Stock
Corp
Religious
Corp
o Corporation
sole
as
NO
nationality.
In
determining
however
if
a
parcel
of
land
can
be
registered
in
its
name,
the
nationality
of
the
constituents
of
the
diocese
that
should
be
considered
o A
corp
sole
does
NOT
own
the
temporalities
he
is
administering
Foreign
Corp
o If
it
is
doing
business
in
Phil
but
has
no
license:
Cannot
sue
Cannot
intervene
in
a
case
Mergers
and
Consolidation
o Merger-
one
corp
absorbs
the
other
or
others
o Consolidation
form
a
new
consolidation.
Orig
corps
cease
to
exist
o There
must
be
a
plan
approved
by
majority
board
and
2/3
of
stockH
11
BAUTISTA,
Gerald
ANG,
Kira
o The
surviving
bank
in
case
of
merger
must
pay
the
promissory
note
payable
to
the
absorbed
bank
even
if
it
was
signed
after
the
merger.
o The
rights
of
creditors
and
any
lien
upon
the
property
of
any
constituent
corporation
shall
not
be
extinguished;
like
pledge
or
mortgage
on
one
of
the
absorbed
corporation
SECURITIES
AND
REGULATION
CODE
Definition
o Covers
trading
both
inside
and
outside
the
trading
market
o The
English
common
law
believed
in
caveat
emptor;
when
the
stock
market
crashed,
Congress
passed
the
Securities
Act
to
regulate
operations
of
stock
exchange
o What
are
securities:
shares
of
stock,
bonds,
debentures,
evidence,
asset
backed
securities,
investment
contracts,
fractional
undivided
interest
in
oil,
derivatives
(it
is
a
financial
instrument
whose
value
depends
on
the
fluctuation
of
another
financial
instrument),
proprietary
or
non
proprietary
membership
certificates
in
corporation
o What
are
not
securities:
letter
of
credit,
trust
receipt
Registration
o Exempt
from
registration:
Central
Bank
bills,
shares
sold
by
receiver
in
bankruptcy,
derivatives
issued
by
banks,
any
other
securities
added
by
SEC
o NOT
exempt
from
registration:
time
shares
(shares
in
lets
say
Baguio
Country
Club
where
you
dont
use
it
the
entire
year
but
just
specific
periods
of
time
in
a
year),
securities
issued
by
a
GOCC
organized
under
Corp
Code
o Securities
exempt
from
registration:
Generally
are
securities
issued
by
Govt
or
those
regulated
by
another
agency
o Exempt
transactions:
judicial
sales,
foreclosure
sales,
sale
as
per
right
of
conversion,
brokers
transactions,
subscription
prior
to
incorporation
or
increasing
capital
stock
o NOT
exempt
transaction:
sale
to
employees
of
a
corporation,
sale
to
relatives
of
stockH,
sale
to
distributors
of
a
manufacturer
o Transactions
exempt:
Generally,
those
regulated
by
court
Grounds
for
Rejection
o Issuer
judicially
declared
insolvent,
issued
violated
SEC
rules,
engaged
in
fraudulent
transactions
o NOT
a
ground
for
rejection:
issued
involved
in
litigation,
issue
or
any
officer
or
underwriter
has
been
convicted
of
an
offense
Manipulation
and
Insider
Trading
o Valid
defenses
for
an
insider:
information
not
gained
from
insider
relationship,
he
disclosed
information
to
the
other
party,
had
reason
to
believe
that
the
other
party
was
in
possession
of
the
information
o NOT
a
valid
defense
for
an
insider:
that
the
one
who
traded
in
the
security
was
his
spouse
or
relative
by
consanguinity
or
affinity
within
the
2nd
degree
o NOT
an
insider
:
a
mere
minority
stockH,
employee
of
the
issuer
who
retired
before
the
material
information
came
into
existence
o NOT
a
material
information:
the
finance
manager
told
the
board
of
directors
if
corp
that
sells
bakery
products
that
he
expects
the
price
of
flour
to
increase
because
of
shortage
of
wheat
worldwide
o Material
information:
labor
served
a
notice
of
strike
upon
the
mgt
Protection
of
Investors
o Tender
Offer
Publicly
announced
intention
to
acquire
equity
securities
of
a
public
company
If
the
tender
offer
is
oversubscribed
the
total
of
the
equity
securities
to
be
acquired
shall
be
proportionately
distributed
among
the
selling
stockH
12
BAUTISTA,
Gerald
ANG,
Kira
If
a
person
will
acquire
a
block
of
shares
of
stock
in
a
holding
company
to
qualify
the
acquisition
for
a
tender
offer,
a
stockH
of
a
subsidiary
of
the
holding
company
is
entitled
to
ask
that
the
tender
offer
be
extended
to
him.
Court
said
to
implement
the
intention
to
the
law,
it
should
apply
not
just
to
actual
stock
but
also
to
the
subsidiary
stockH
o Proxy
Solicitation
Valid
up
to
5
years
A
stock
broker
cannot
give
a
proxy
for
any
security
carried
for
the
account
of
a
customer
without
the
express
written
authorization
of
customer
o Disclosure
Issuer
must
file
annual
report,
and
current
reports
on
significant
developments
and
must
report
if
it
is
obtaining
a
new
loan
and
is
mortgaging
all
its
properties
to
secure
its
payment
o Civil
liability
False
registration
statement:
the
issuer
and
every
person
who
signed
the
registration
statement,
every
director,
every
auditor
who
certified
the
financial
statements
used
in
connection
with
the
respective
statement
NOT
liable
for
the
false
registration
statement:
the
selling
stockH
Liable
for
damages:
insider,
one
who
engages
in
any
fraudulent
transaction
or
regulation,
one
who
willfully
participated
in
the
manipulation
o
security
prices
NOT
liable
for
damages:
the
customer
who
bought
the
shares
by
insider
trading
NEW
CENTRAL
BANK
ACT
The
BSP
has
regulatory
power
even
over
non
bank
financial
institutions:
investment
houses
Main
Role
of
BSP:
maintain
stability
of
price
Banks
in
Distress:
o Conservator
The
bank
is
not
insolvent.
Its
assets
exceed
its
liabilities,
but
the
problem
is
with
its
liquidity
Conservator
cant
revoke
perfectly
valid
contract
Lasts
up
to
1
year.
Within
1
year
the
MB
should
decide
if
bank
now
can
reopen.
o Receivership
The
bank
is
insolvent.
It
is
not
required
that
it
should
have
first
been
placed
under
conservatorship
Even
if
the
examination
of
the
supervising
and
examining
dept
of
the
BSP
has
not
yet
been
completed,
a
receiver
may
STILL
be
designated
by
the
MB
Designating
receiver:
MB
decides
summarily
and
without
prior
hearing
A
bank
is
not
entitled
to
be
given
a
copy
of
the
report
of
the
examination
of
the
bank
before
its
submission
to
the
MB
for
its
possible
closure
A
receiver
can
file
cases
to
effect
payment
of
loans.
This
is
pursuant
to
powers
of
administration
over
the
bank.
Receiver
cant
dispose
of
property
because
this
is
an
act
of
ownership.
A
bank
is
not
liable
for
the
payment
of
interest
accruing
on
the
deposits
of
its
customers
from
the
time
of
its
closure
until
reopening.
Receivership
cannot
be
longer
than
90
days
o Liquidation
The
NLRC
has
jurisdiction
over
the
labor
claims
of
an
employee
of
the
bank,
not
the
liquidation
court.
Once
an
employee
obtains
final
judgment,
thats
when
he
files
his
claim
with
the
liquidation
court.
13
BAUTISTA,
Gerald
ANG,
Kira
The
liquidation
of
a
bank
which
incurred
overdrafts
in
its
current
account
with
the
BSP
and
experienced
heavy
withdrawals,
because
it
extended
unlimited
financial
support
to
a
related
company
is
valid.
The
insolvency
court
does
not
have
jurisdiction
over
an
action
filed
by
a
borrower
of
the
bank
for
annulment
of
the
mortgage
executed
to
secure
the
payment
of
his
loan.
A
final
judgment
by
payment
of
damages
awarded
against
a
bank
cannot
be
enforced
by
levying
and
executing
upon
its
properties.
Legal
Tender
o Only
BSP
can
issue
currency.
All
notes
issued
by
BSP
are
legal
tender
o P100
5c,
10c
and
25c
o P1000
P1,
P5,
P10
Monetary
Policies
o MB
may
rely
on
its
moral
influence
to
recommend
that
instead
of
lending
money
to
businesses,
to
instead
buy
bonds
from
govt
o BSP
may
buy
and
sell
foreign
notes
and
coins;
may
impose
emergency
restrictions
with
vote
of
5
members
of
MB
and
approval
of
President
o May
subject
all
transactions
in
gold
and
forex
to
license
o MB
may
NOT
restrict
withdrawal
of
foreign
currency
deposits;
but
foreign
exchange
deposits
can
be
subject
to
reserve
requirements
o MB
my
require
banks
to
sell
their
surplus
holdings
of
forex
o All
banks
are
required
to
maintain
reserves
against
their
deposit
liabilities
LAW
ON
SECRECY
OF
BANKING
TRANSACTIONS
RA
1405
o Prohibition
applies
to
govt
bonds
and
trust
accounts
o NOT
an
exception
to
the
secrecy
of
bank
deposits:
examination
is
made
by
an
independent
auditor
hired
by
the
bank
to
conduct
a
regular
audit,
a
buyer
of
T-bills
who
sued
the
seller
for
specific
performance
can
examine
the
bank
account
in
which
the
payment
was
deposited,
garnishment
of
the
bank
account
to
satisfy
a
judgment
against
the
depositor
Foreign
Currency
Deposit
Act
o Exempt
from
attachment,
garnishment,
or
any
other
process
of
court
or
admin
agency
o The
heirs
of
a
deceased
who
opened
a
foreign
currency
deposit
can
look
into
the
deposit,
because
they
are
now
the
owners.
o All
foreign
currency
deposits
are
absolutely
confidential
o Where
the
funds
deposited
in
a
joint
account
belonged
exclusively
to
one
of
the
depositors
but
the
other
depositor
closed
the
account
and
transferred
the
funds
to
his
own
personal
account,
the
owner
of
the
funds
can
have
withdrawals
from
the
account
enjoined.
GENERAL
BANKING
LAWS
Disclosure
of
information
relative
to
funds
or
properties
(safety
deposit)
in
the
custody
of
the
bank
belonging
to
private
individual
cannot
be
done
Common
exceptions
to
confidentiality
of
banking
transaction
o CIR
can
examine
bank
accounts
of
deceased
in
order
to
determine
gross
estate,
etc
o The
PDIC
or
the
BSP
may
examine
deposit
accounts
if
there
is
a
finding
of
unsafe
or
unsound
banking
practice
GENERAL
BANKING
ACT
A
bank
cannot
engage
in
warehousing.
14
BAUTISTA,
Gerald
ANG,
Kira
While
Civil
Code
says
renting
safety
deposit
box
is
lease.
This
is
still,
under
the
General
Banking
Act,
one
of
fiduciary
character.
The
relationship
between
the
customer
who
rented
out
the
safety
deposit
box
and
a
bank
is
that
of
depositor
and
depository.
It
is
void
to
limit
liability
of
banks
over
safety
deposit
box
to
ordinary
diligence.
An
interest
of
3%
per
month
or
higher
in
a
month
on
bank
loan
is
unconscionable.
Rate
of
interest
is
an
important
consideration
in
a
loan.
Escalation
clause
is
not
per
se
valid,
but
there
must
be
a
stipulated
reference
rate
agreed
upon
by
the
parties,
for
the
clause
not
to
violate
the
mutuality
of
contracts.
A
provision
giving
bank
authority
to
increase
interest
solely
on
its
own
determination
is
void.
Single
Borrowers
Limit:
25%
o Loans
fully
guaranteed
by
the
Phil
Govt
are
excluded
in
computing
the
total
amount
of
loan
and
loans
to
the
extent
that
they
are
covered
by
marginal
deposits
DOSRI
Loans
o Procedurial
Reqts:
(1)
approved
by
majority
of
directors,
excluding
the
directors
concerned,
(2)
approval
entered
upon
records
of
the
bank,
(3)
copy
of
entry
shall
be
submitted
to
BSP
o Substantive
Reqts:
(1)
terms
given
are
same
terms
given
to
3rd
parties,
(2)
amount
loaned
limited
to
unencumbered
deposits
and
paid-in
capital
stock,
(3)
loans
considered
as
non
risk
by
the
MB
shall
be
excluded
from
the
limit
o Mere
act
of
president
of
a
bank
of
obtaining
loan
from
bank
without
the
approval
of
majority
of
directors
constitutes
a
violaton
of
the
law.
Mere
failure
to
comply
with
one
of
the
reqts
constitutes
a
violation.
o President
who
obtained
loan
from
a
bank
and
falsely
made
it
appear
that
somebody
else
applied
for
the
loan
is
liable
for
estafa
thru
falsification
of
a
commercial
document.
PDIC
deposits
do
not
include
safety
deposit
box
Not
included
from
coverage:
investment
products,
deposit
accounts
that
are
unfunded
P500,000
per
depositor
is
the
maximum
coverage
In
determining
such
amount,
all
deposits
in
the
same
right
and
capacity
for
the
benefit
of
the
depositor
in
his
own
name
or
in
the
name
of
others
shall
be
added
together
But
joint
accounts
treated
separately
from
individual
account
Holding
an
account
in
trust
for
another
corporation,
that
is
not
included
in
balance
of
his
own
deposit
The
aggregate
of
the
interests
of
each
co
owner
over
several
joint
accounts,
whether
owned
by
the
same
or
diff
combinations
of
individual
or
juridical
entities
shall
be
subject
to
the
max
coverage
If
you
owe
bank
something,
that
will
be
deducted
from
the
maximum
coverage
If
depositor
fails
to
file
claim
within
2
year
from
actual
takeover
of
closed
bank
or
does
not
enforce
his
claim
within
2
years
after
the
2
year
period
to
file
a
claim,
all
his
rights
against
the
PDIC
are
barred.
Can
still
go
against
the
bank,
just
not
PDIC
anymore.
The
determination
of
the
PDIC
as
to
the
insurance
coverage
shall
be
final
and
executory
unless
set
aside
by
court
on
certiorari
filed
within
30
days
from
notice
of
denial
of
the
claim
Once
PDIC
pays,
it
will
be
subrogated
to
rights
of
depositor.
Payments
made
to
insured
depositor
shall
be
treated
as
preferred
credit,
and
shall
be
treated
as
liability
for
tax
under
the
provisions
on
concurrence
and
preference
of
credits.
CHATTEL
MORTGAGE
Property
is
not
delivered
to
mortgagee
If
the
proceeds
of
the
loan
whose
payment
is
being
secured
by
chattel
M
were
not
released,
the
chattel
M
is
unenforceable.
15
BAUTISTA,
Gerald
ANG,
Kira
An
unemancipated
minor
cannot
mortgage
property
he
owns.
He
does
not
have
capacity,
no
free
disposal
of
property
A
deaf
mute
who
can
write
can
mortgage
property.
Goods
covered
by
a
trust
receipt
cannot
be
the
subject
of
a
chattel
mortgage
Chattel
M
over:
Aircraft
must
be
registered
with
CAAP
and
ROD;
trademark
must
be
registered
in
IPO
and
ROD;
copyright
must
be
registered
with
National
Lib
and
ROD
A
chattel
M
cannot
secure
a
credit
line
granted
by
a
bank
Foreclosure:
Mortgagor
and
mortgagee
may
stipulate
on
the
place
where
the
sale
will
be
held
A
junior
mortgagee
has
equity
of
redemption
in
foreclosure
of
chattel
M
Even
if
the
property
covered
by
a
chattel
is
actually
real
property,
the
foreclosure
sale
should
be
conducted
in
accordance
with
Act
No.
3135
FORECLOSURE
OF
REAL
ESTATE
MORTGAGE
A
petition
for
extraJ
foreclosure
of
the
REM
should
be
filed
still
with
the
Executive
Judge
even
if
you
will
ask
a
notary
public
and
not
a
sheriff
to
foreclose.
If
the
stipulated
rate
of
interest
is
unconscionable,
the
foreclosure
is
premature
and
void,
because
the
mortgagor
had
no
obligation
to
pay
the
unconscionable
interest
Unconscionable
interest
=
more
than
3%
per
month
Notice
should
be
published
once
a
week
for
3
consecutive
weeks
Even
if
posting
is
not
done,
publication
is
sufficient
The
publication
of
a
notice
of
sale
is
not
valid
if
the
newspaper
is
not
circulated
in
the
place
of
sale
If
it
is
stipulated
that
the
mortgagor
must
be
given
personal
notice,
then
that
must
be
followed
Typographical
errors
in
the
name
of
the
mortgagor
and
the
technical
description
of
the
property
in
the
notice
of
sale
will
NOT
nullify
the
sale.
If
several
parcels
of
land
were
mortgaged,
they
are
not
required
to
be
sold
separately
one
at
a
time.
They
may
be
sold
as
a
whole.
Second
sale
is
not
required
if
there
is
only
one
bidder
in
the
sale.
This
is
only
in
pledge
Void
to
stipulate
that
mortgagor
waives
his
right
to
redemption
The
filing
of
action
for
redemption
within
the
redemption
period
is
not
sufficient
unless
the
redemption
price
is
tendered
as
soon
as
it
is
determined
The
mortgagor
and
mortgagee
can
agree
to
extend
the
redemption
price.
Acceptance
of
tendered
price
beyond
redemption
period
is
considered
as
waiver
on
part
of
mortgagee
If
a
REM
secured
payment
of
two
loans
which
was
already
due
when
the
bank
filed
application
for
extraJ
foreclosure
on
only
the
1st
loan,
the
payment
for
the
2nd
loan
should
not
be
included
in
the
redemption
price
Writ
of
possession
is
ministerial.
It
is
enough
to
verify
the
pleading,
no
need
to
submit
evidence.
Right
to
file
petition
for
a
writ
of
possession
is
not
prescriptible
The
buyer
at
the
sale
cannot
ask
for
writ
of
P
if
the
buyer
leased
the
property
to
the
mortgagor
and
the
mortgagor
defaulted
to
pay
rent,
because
the
rights
of
the
parties
are
governed
by
lease.
File
an
ejectment
case
instead.
Writ
of
P
can
be
enforced
against
3rd
parties
whose
rights
are
dependent
upon
the
rights
of
the
mortgagor.
If
the3rd
party
is
enforcing
rights
ADVERSE
to
the
mortgagor,
the
writ
of
P
cant
be
enforced
against
him.
TRUTH
IN
LENDING
ACT
The
creditor
cannot
charge
handling
charges
for
loans
or
increase
the
penalty
if
no
disclosure
was
made
to
the
debtor
16
BAUTISTA,
Gerald
ANG,
Kira
Law
does
not
apply
only
to
banks
and
non
banking
financial
institutions
but
also
to
private
individuals
engaged
in
the
business
of
granting
loans
(mga
Bombay
na
nagccharge
ng
interest
sa
palengke)
Contract
remains
valid
and
enforceable
and
debtor
still
pays.
ANTI
MONEY
LAUNDERING
ACT
Does
not
cover
real
estate
dealers
(Thats
why
some
crooked
politicians
are
buying
lots.)
Car
dealers
are
also
not
covered
Covered
institutions
do
not
have
to
automatically
furnish
the
AMLC
records
of
suspicious
transactions.
NOT
suspicious
transactions:
client
is
rushing
the
transactions,
a
document
is
lacking
AMLC
cannot
order
the
closure
of
any
establishment
engaged
in
money
laundering
or
to
conduct
an
administrative
investigation
of
any
public
officer
for
violation
of
the
AMLA
FOREIGN
INVESTMENTS
ACT
Who
is
a
Philippine
national?
o Citizen
of
Phil
or
domestic
partnership
wholly
owned
by
citizens
of
the
Phil
o Trustee
of
funds
or
pension
of
employees
where
the
trustee
is
a
Phil
national
and
at
least
60%
of
funds
will
accrue
to
the
benefit
of
the
Phil
nationals
o Corporation
60%
of
capital
stock
outstanding
and
entitled
to
vote
General
rule:
foreigners
can
invest
in
any
sector
of
economy
o Except
for
those
under
List
A
and
B
List
A
reserved
only
to
Filipinos
under
the
Constitution
List
B
regulated
areas
of
business
(manufacturer
of
bullets,
ammunition)
or
those
with
implication
on
public
health
and
morals
(massage
parlors,
sauna
baths)
o Outside
of
businesses
in
List
A
and
B,
a
foreigner
should
put
up
a
business
with
at
least
$200,000
capital.
Leave
small
and
medium-sized
domestic
market
enterprises
with
paid
in
equity
capital
less
than
$200,000
alone,
which
are
reserved
to
Phil
nationals.
Except
if
at
least
$100,000
paid
in
capital,
with
50
employees,
and
involving
introduction
of
technological
advancements
INTELLECTUAL
PROPERTY
CODE
Patents
o NOT
patentable:
theory
of
relativity,
mere
discovery
of
new
forms
or
properties
in
medicines
o Durability
is
not
a
condition
of
patentability
o Patents
belong
to
the
inventor.
Two
persons
who
jointly
make
an
invention
belong
to
them
jointly.
The
person
who
commissioned
the
work
will
own
the
patent;
however,
if
the
contract
provides
otherwise,
the
person
who
was
commissioned
a
work
will
own
the
patent.
o The
employer
does
not
own
the
patent
for
an
invention
which
his
employee
made
as
a
result
of
the
performance
of
his
regularly
assigned
duties
if
there
was
an
agreement
to
the
contrary.
o Earliest
filing
time
on
the
basis
of
days.
If
you
both
filed
on
the
same
day,
you
will
both
own
the
patent.
This
is
the
first-to-file
rule.
The
earlies
filing
time
is
not
on
the
basis
of
minutes.
This
is
not
the
same
as
registration
in
Torrens
System
where
seconds
can
make
a
difference
as
to
who
registered
first.
o A
patent
can
be
cancelled
if
it
includes
matters
outside
the
scope
of
the
disclosure
in
the
application.
o A
patent
inventor
does
not
have
the
right
to
have
the
invention
attributed
to
him.
That
is
a
moral
right
in
copyrights.
o A
government
agency
or
any
private
third
party
has
the
right
to
import
drugs
and
medicines.
17
BAUTISTA,
Gerald
ANG,
Kira
There
can
be
no
infringement
of
patent
if
no
patent
has
been
granted
or
the
patent
has
o
expired.
In
literal
infringement,
the
challenged
matter
falls
within
the
literal
meaning
of
the
patent
claims.
In
doctrine
of
equivalents,
if
the
device
still
performs
substantially
the
same
function
and
substantially
the
same
way
to
come
out
with
substantially
the
same
product,
even
if
something
was
changed,
there
is
still
infringement.
o Civil
action
for
infringement
can
be
filed
even
if
there
is
a
pending
petition
for
its
cancellation.
o A
foreign
national
may
bring
an
action
for
infringement
of
patent,
despite
lack
of
icense
to
do
business
in
Phil,
IF
its
country
is
a
party
to
a
convention
or
treaty
to
which
the
Phil
is
also
a
party.
o A
licensee
of
the
infringer
is
NOT
liable
unless
the
license
is
voluntary
and
he
colluded
with
the
infringer.
o Contributory
infringement
the
product
must
be
such
that
it
is
not
capable
of
any
other
usel
except
for
the
purpose
of
infringement.
If
the
device
can
be
used
for
legitimate
purposes,
there
is
no
infringement.
o DEFENSES
to
infringement
action:
No
damages
can
be
recovered
if
the
infringement
was
committed
more
than
4
years
before
the
filing
of
the
civil
action.
Patent
is
contrary
to
public
morals
Not
described
sufficiently
in
the
application
It
is
not
new
or
patentable
o A
compulsory
license
can
still
be
granted
even
if
a
voluntary
license
has
been
granted.
Competition
is
encouraged
to
bring
down
the
price.
The
grounds
for
granting
compulsory
license
need
not
all
exist
concurrently.
o If
ground
is
not
being
worked
in
commercial
scale
may
only
be
granted
after
4
years
from
date
of
filing
or
3
years
from
date
of
registration,
whichever
is
later
Trademark
o Use
in
trade
or
commerce
is
required
to
acquire
ownership
of
a
trade
name.
But
if
it
is
a
trademark,
use
is
no
longer
required
to
acquire
ownership.
It
is
valid
registration
which
vests
ownership,
even
if
you
have
not
used
it.
However,
if
you
dont
use
it
for
3
years,
your
registration
will
be
cancelled.
Every
5
years
you
submit
an
affidavit
of
use.
o A
trademark
consisting
exclusively
of
a
generic
sign
CANNOT
be
registered.
Pale
pilsen
is
generic.
It
is
a
type
of
beer
that
came
from
Pilsen.
Ginebra
San
Miguel
cannot
Lucio
Tan
from
using
Ginebra
de
Manila.
Ginebra
is
Spanish
word
for
gin,
that
is
generic.
The
suffix
tussin
when
used
as
part
of
cough
syrup
is
merely
generic.
The
word
Isabela
cannot
be
registered
as
a
trademark
for
cigars.
o Trademark
consisting
exclusively
of
signs
customary
to
designate
the
goods
or
services
in
everyday
language
cannot
be
registered.
Color
alone
cannot
be
registered
as
a
trademark,
uness
it
is
defined
by
a
given
form.
o Two
Tests:
Holistic
Test
consider
trademark
in
its
entirety
to
determine
if
trademarks
are
similar
Dominancy
Test
if
questioned
trademark
contains
the
main
features
of
another
trademark
by
reason
of
which
deception
is
likely
to
result,
infringement
of
trademark
takes
place
o Dominancy
Test
is
what
should
be
used.
This
is
already
in
our
IP
Code.
o Likelihood
of
confusion:
great,
if
the
goods
are
cheap
commodities;
remote,
if
expensive
articles
are
being
purchased
or
medicines
cannot
be
bought
without
a
prescription
o It
is
not
required
that
the
two
products
should
be
placed
side
and
side
and
compared
before
they
can
be
determined
to
be
confusingly
similar
18
BAUTISTA,
Gerald
ANG,
Kira
oTwo
types
of
confusion:
Confusion
of
goods
the
products
are
the
same
Confusion
of
origin
the
products
are
different,
but
public
is
misled
to
believe
that
the
product
belongs
to
the
same
manufacturer
as
another
product
o Internationally
well-known
trademarks
need
not
be
registered
in
the
Phil
to
be
protected
o Elements
of
infringement
of
trademark:
(1)
validity
of
trademark
of
plaintiff,
(2)
ownership
of
trademark
of
the
plaintiff,
(3)
likelihood
of
confusion
as
a
result
of
the
use
of
the
trademark
or
its
colorable
imitation
by
the
defendant
o Infringement
of
trademark
takes
place
even
if
there
is
no
actual
sale
of
the
goods
using
the
infringing
trademark
(like
if
a
raid
was
conducted
while
the
defendant
was
in
the
course
of
manufacturing
the
goods
with
the
infringing
trademark)
o Defenses
to
Infringement:
(1)
plaintiff
not
entitled
to
the
registration
of
the
TM,
(2)
no
damages
may
be
recovered
after
4
years
from
the
time
the
cause
of
action
accrues,
(3)
laches,
estoppel,
acquiescence
o Pending
action
for
cancellation
of
the
TM
is
not
a
defense.
o Damages
=
profits
plaintiff
would
have
made
if
defendant
had
not
infringed
his
TM;
or
the
earnings
of
the
defendant
o Elements
of
Unfair
Competition:
(1)
confusing
similarity
in
general
appearance
of
the
goods,
and
(2)
intent
to
deceive
the
public
and
defraud
a
competitor
o Registration
is
only
prima
facie
evidence
of
ownership.
Fraudulent
intent
is
not
required
to
be
proven
in
trademark
infringement,
only
in
unfair
competition.
Copyright
o Literary
and
artistic
works
are
protected
from
the
moment
of
creation,
without
need
of
registration.
o Requirement
to
give
2
copies
to
National
Library
and
to
SC
Library
is
not
for
protection
of
your
rights
but
only
to
complete
their
libraries.
o For
the
work
to
be
protected,
it
must
be
original.
It
must
be
an
independent
creation
of
the
author
and
was
not
copied
totally
or
substantially
from
another.
o Trademarks
cannot
be
copyrighted
because
these
are
not
artistic
works.
Blank
forms
for
recording
information
is
not
an
artistic
work.
o Aside
from
original
works,
derivative
works
are
also
protected.
o Even
if
employee
used
the
time,
facilities,
and
materials
of
the
employer,
if
the
creation
of
the
work
is
not
part
of
the
regular
duties
of
the
employee,
the
latter
still
owns
the
copyright.
But
if
part
of
regular
duties,
employer
owns
the
copyright.
o Doctrine
of
Fair
Use:
(1)
for
criticism
and
comment,
(2)
for
news
reporting,
(3)
for
teaching,
scholarship,
research
purposes.
A
satirical
version
of
a
song
is
fair
use
of
the
original
song.
o Four
Factors
to
determine
if
there
is
fair
use:
(1)
Purpose
of
use
for
commercial
profit
or
charitable
purpose,
(2)
Nature
of
copyrighted
work,
(3)
Amount
or
portion
used
infringement
requires
substantial
copying,
(4)
Effect
upon
the
market
o Defenses
to
copyright
infringement:
fair
use,
the
copyright
is
just
a
concept,
the
action
is
barred
by
prescription
of
4
years
o NOT
a
defense:
defendant
had
no
intention
to
infringe
the
copyright
o An
injunction
may
be
issued
to
restrain
the
infringement.
Defendant
may
be
liable
to
pay
actual
damages,
as
well
as
moral
and
exemplary
damages.
Good
luck!
-
END
-
19
BAUTISTA,
Gerald
ANG,
Kira