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Dean Nilo T. Divina

Faculty of Civil Law
University of Santo Tomas


A. Patents

1. Ownership of a Patent

The right of priority given to a patent applicant is only relevant when there are two or more
conflicting patent applications on the same invention. Because a right of priority does not
automatically grant letters patent to an applicant, possession of a right of priority does not
confer any property rights on the applicant in the absence of an actual patent.(E.I. Dupont
De Nemours And Co. (Assignee Of Inventors Carini, Duncia And Wong), Petitioner, -
Versus- Director Emma C. Francisco (In Her Capacity As Director General Of The
Intellectual Property Office), Director Epifanio M. Evasco (In His Capacity As The Director
Of The Bureau Of Patents), And Therapharma, Inc., Respondents.

B. Trademarks

The word "COFFEE" cannot be exclusively appropriated by either Nestle or Puregold since
it is generic or descriptive of the goods they seek to identify. (Societe Des Produits,
Nestle, S.A. V. Puregold Price Club, Inc.

The Madrid System for the International Registration of Marks (Madrid System), which is
the centralized system providing a one-stop solution for registering and managing marks
worldwide, allows the trademark owner to file one application in one language, and to pay
one set of fees to protect his mark in the territories of up to 97 member-states. The Madrid
System is governed by the Madrid Agreement, concluded in 1891, and the Madrid Protocol,
concluded in 1989.

There is no conflict between the Madrid Protocol and the IP Code. The IPOPHL actually
requires the designation of the resident agent when it refuses the registration of a mark.
Local representation is further required in the submission of the Declaration of Actual Use,
as well as in the submission of the license contract. The Madrid Protocol accords with the
intent and spirit of the IP Code, particularly on the subject of the registration of trademarks.

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The Madrid Protocol does not amend or modify the IP Code on the acquisition of
trademark rights considering that the applications under the Madrid Protocol are still
examined according to the relevant national law. In that regard, the IPOPHL will only grant
protection to a mark that meets the local registration requirements. (Intellectual
Property Association Of The Philippines Vs. Hon. Paquito Ochoa, In His Cap A City
As Executive Secretary, Hon. Albert Del Rosario, In His Capacity As Secretary Of The
Department Of Foreign Affairs, And Hon. Ricardo Blancaflor, In His Capacity As
The Director General Of The Intellectual Property Office Of The Philippines G .R.
No. 204605, July 19, 2016, Bersamin, J.)

1. Tests to determine confusing similarity between marks

Given that the "INASAL" element is, at the same time, the dominant and most distinctive
feature of the Mang Inasal mark, the said element's incorporation in the OK Hotdog Inasal
mark, thus, has the potential to project the deceptive and false impression that the latter
mark is somehow linked or associated with the former mark. (Mang Inasal Philippines,
Inc. V. Ifp Manufacturing Corporation G.R. No. 221717, June 19, 2017, Velasco, Jr., J.)

There is no colorable imitation between the marks LOLANE and ORLANE which would
lead to any likelihood of confusion to the ordinary purchasers. (Seri Somboonsakdikul
V. Orlane S.A. G.R. No. 188996, February 1, 2017, Jardeleza, J)

The test of dominancy is now explicitly incorporated into law in Section 155.1 of the
Intellectual Property Code which defines infringement as the "colorable imitation of a
registered mark x x x or a dominant feature thereof.

Under the dominancy test, if the competing trademark contains the main or essential
or dominant features of another, and confusion and deception is likely to result,
infringement takes place. Actual confusion is not required. Only likelihood of confusion
on the part of the buying public is necessary so as to render two marks confusingly similar
so as to deny the registration of the junior mark.

The scope of protection afforded to registered trademark owners is not limited to

protection from infringers with identical goods. The scope of protection extends to
protection from infringers with related goods, and to market areas that are the normal
expansion of business of the registered trademark owners. Respondent's mark is related to
a product, lechon sauce. Since petitioner's product, catsup, is also a household product
found on the same grocery aisle, in similar packaging, the public could think that petitioner
had expanded its product mix to include lechon sauce, and that the "PAPA BOY" lechon
sauce is now part of the "PAPA" family of sauces. Thus, if allowed registration, confusion of
business may set in, and petitioner's hard-earned goodwill may be associated to the newer
product introduced by respondent.


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(Ufc Philippines, Inc. (Now Merged With Nutri-Asia, Inc., With Nutri-Asia, Inc. As
The Surviving Entity), Petitioner, V. Fiesta Barrio Manufacturing Corporation,
Respondent; G.R. No. 198889, January 20, 2016, Leonardo-De Castro, J.)

Doctrine of unrelated goods

Can the registrant of the trademark Kolin for household appliances preclude the adoption of
the same trademark for electronic products?

Whether or not the products covered by the trademark sought to be registered by Taiwan Kolin,
on the one hand, and those covered by the prior issued certificate of registration in favor of Kolin
Electronics, on the other, fall under the same categories in the NCL is not the sole and decisive
factor in determining a possible violation of Kolin Electronics’ intellectual property right should
petitioner’s application be granted. It is hornbook doctrine, as held in the above-cited cases, that
emphasis should be on the similarity of the products involved and not on the arbitrary
classification or general description of their properties or characteristics. The mere fact that one
person has adopted and used a trademark on his goods would not, without more, prevent the
adoption and use of the same trademark by others on unrelated articles of a different kind.

In accord with common empirical experience, the useful lives of televisions and DVD players last
for about five (5) years, minimum, making replacement purchases very infrequent. The same
goes true with converters and regulators that are seldom replaced despite the acquisition of new
equipment to be plugged onto it. In addition, the amount the buyer would be parting with cannot
be deemed minimal considering that the price of televisions or DVD players can exceed today’s
monthly minimum wage. In light of these circumstances, it is then expected that the ordinary
intelligent buyer would be more discerning when it comes to deciding which electronic product
they are going to purchase, and it is this standard which this Court applies herein in determining
the likelihood of confusion should petitioner’s application be granted. Taiwan Kolin Corporation,
LTD., vs. Kolin Electronics Co. Inc. G.R. No. 209843, March 25, 2015

2. Infringement and Remedies


Clearly, the determination of the lawful ownership of the trademark in the civil action was
not determinative of whether or not the criminal actions for unfair competition shall
proceed against Samson.

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Under the law, respondent's operative act of registering his Caterpillar trademark and the
concomitant approval/issuance by the governmental entity concerned, conferred upon him
the exclusive right to use said trademark unless otherwise declared illegal. (Caterpillar, Inc.,
Petitioner, - Versus - Manolo P. Samson, Respondent. G.R. No. 205972 And G.R. No.
164352, November 9, 2016, Fist Division)


C. Copyrights

1. Copyrightable Works

News or the event itself is not copyrightable. However, an event can be captured and
presented in a specific medium. News as expressed in a video footage is entitled to copyright
protection. (Abs-Cbn Corporation V. Felipe Gozon, Gilberto R. Duavit, Jr. Marissa L.
Flores, Jessica Soho, Grace Dela Pena-Reyes, John Oliver T. Manalastas, John Does
And Jane Does G.R. No. 195956, March 11, 2015, Leonen, J.)

No. Infringement under the Intellectual Property Code is malum prohibitum. The general
rule is that acts punished under a special law are malum prohibitum. "In an act which
is malum prohibitum, malice or criminal intent is completely immaterial." Unless clearly
provided in the law, offenses involving infringement of copyright protections should be
considered malum prohibitum. It is the act of infringement, not the intent, which causes
the damage. To require or assume the need to prove intent defeats the purpose of
intellectual property protection.


2. Non-Copyrightable Works

Copyright infringement is committed by any person who shall use original literary or
artistic works, or derivative works, without the copyright owner's consent in such a manner
as to violate the foregoing copy and economic rights. For a claim of copyright infringement
to prevail, the evidence on record must demonstrate: (1) ownership of a validly copyrighted
material by the complainant; and (2) infringement of the copyright by the respondent.

While both elements subsist in the records, they did not simultaneously concur so as to
substantiate infringement of LEC's two sets of copyright registrations.

Certificate of Registration Nos. I-2004-13 and I-2004-14

The respondent failed to substantiate the alleged reproduction of the drawings/sketches of

hatch doors copyrighted under Certificate of Registration Nos. I-2004-13 and I-2004-14.

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There is no proof that the respondents reprinted the copyrighted sketches/drawings
of LEC's hatch doors.

LEC's copyright protection there under covered only the hatch door sketches/drawings and
not the actual hatch door they depict. To constitute infringement, the usurper must have
copied or appropriated the original work of an author or copyright proprietor, absent
copying, there can be no infringement of copyright.

The respondent claimed that the petitioners committed copyright infringement when they
fabricated/manufactured hatch doors identical to those installed by LEC. The petitioners
could not have manufactured such hatch doors in substantial quantities had they not
reproduced the copyrighted plans/drawings submitted by LEC to SK1-FB.

Ownership of copyrighted material is shown by proof of originality and copyrightability.

While it is true that where the complainant presents a copyright certificate in support of
the claim of infringement, the validity and ownership of the copyright is presumed. This
presumption, however, is rebuttable and it cannot be sustained where other evidence in
the record casts doubt on the question of ownership, as in the instant case.

A hatch door, by its nature is an object of utility. It is defined as a small door, small gate or
an opening that resembles a window equipped with an escape for use in case of fire or
emergency. It is thus by nature, functional and utilitarian serving as egress access during
emergency. It is not primarily an artistic creation but rather an object of utility designed to
have aesthetic appeal. It is intrinsically a useful article, which, as a whole, is not eligible for

A "useful article" defined as an article "having an intrinsic utilitarian function that is not
merely to portray the appearance of the article or to convey information" is excluded from
copyright eligibility. The only instance when a useful article may be the subject of copyright
protection is when it incorporates a design element that is physically or conceptually
separable from the underlying product. This means that the utilitarian article can function
without the design element. In such an instance, the design element is eligible for copyright

In the present case, LEC's hatch doors bore no design elements that are physically and
conceptually separable, independent and distinguishable from the hatch door itself. The
allegedly distinct set of hinges and distinct jamb, were related and necessary hence, not
physically or conceptually separable from the hatch door's utilitarian function as an
apparatus for emergency egress. Without them, the hatch door will not function. (Sison
Olaño, Sergio T. Ong, Marilyn O. Go, And Jap Fuk Hai, Petitioners, V. Lim Eng
Co,Respondent; G.R. No. 195835, March 14, 2016)

3. Limitations on Copyright

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A. Copyright Infringement

The mere sale of the illicit copies of the software programs was enough by itself to show the
existence of probable cause for copyright infringement. (Microsoft Corporation V.
Rolando D. Manansala And/Or Mel Manansala, Doing Business As Dataman
Trading Company And/Or Comic Alley G.R. No. 166391, October 21, 2015,)

Remedies in case of infringement


A. Common Carriers


1. Diligence Required Of Common Carriers

There are three (3) major rights of passengers under the Air Passenger Bill of Rights covered under
said issuance, namely: (a) right to be provided with accurate information before purchase of the
ticket; (b) right to receive the full value of the service purchased; and (c) right to compensation.

Right to be informed

The passenger is entitled to a full, fair and clear disclosure of all the terms and conditions of the
contract of carriage before he purchases his ticket..

The ticket or boarding pass should state either the complete terms and conditions of the contract
of carriage, or that such terms are readily available in the air carrier’s website upon request. In case
of online bookings, the consumer must be informed, at least twice, of such terms and conditions
prior to final submission of his or her purchase order. In addition, passengers must be verbally
apprised of such terms and conditions in English and Filipino, or in a language easily understood
by them.

Right to receive full value of service purchased

One, air carriers cannot refuse to process your check-in, provided that you reach the designated
check-in area at least an hour before your estimated time of departure (ETD). Check-in counters at
international airports must be open two hours before the ETD, and for other airports, at least one
hour before. There must be a priority lane for senior citizens, people with disabilities (PWDs), and
people who need special assistance, and a special counter must be opened for a flight nearing its
check-in deadline.

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Two, passengers have the right to board the aircraft for the purpose of the flight, except when there
is legal or other valid cause such as immigration issues, safety and security, health concerns and
non-appearance at the boarding gate at the appointed time, among others.

While it is an accepted practice for air carriers to overbook flights, no passenger may be bumped
off from the flight without his or her consent. The airline should look for volunteers willing to give
up their seats and give them appropriate compensation package.

Right to compensation

In case of flight cancellations at least attributable to the carrier, the passenger has the following
rights: (a) to be notified of the fact of cancellation; (b) be provided with sufficient refreshments,
hotel accommodation, transportation from airport to the hotel, free phone calls, texts or e-mails
and first-aid, if necessary; (c) be reimbursed of the value of the fare, including taxes and surcharges;
or (d) endorsed to another air carrier; or (e) rebooked to the next flight available without additional

As to flight delays, if the flight is delayed at least three hours after ETD, whether or not it is
attributable to the carrier, the passenger has the right to avail himself of refreshments or meals,
free phone calls, text or emails, and first aid, if necessary, rebook or refund his or her ticket, or be
endorsed to another carrier.

If the flight is delayed at least six hours after ETD, the passenger can consider the flight cancelled
for the purpose of availing himself the rights and amenities provided for in case of actual
cancellation. The passenger will receive additional compensation equivalent to at least the value of
the sector delayed. The affected passenger can also board the flight if he or she has not opted to
rebook and/or refund. And if the passenger encounters tarmac delay, a delay that occurs while
passengers are already on board the aircraft, he or she can avail of sufficient food and beverage.

Finally¸ as to delayed, lost or damaged baggage, the passenger has the right to be informed of the
fact of off-loading. For every 24 hours of delay, the passenger shall receive P2,000 compensation.
And if the baggage was not delivered within 24 hours from the arrival of the flight, the passenger
will be refunded of checked baggage fees. If the baggage is lost or suffered any damage, relevant
convention shall apply for international flights while for domestic flights, the passenger has the
right to a maximum amount equivalent to half of the amount in the relevant convention (for
international flights) in its peso equivalent.

The Air Passenger Bill of Right mandates that the airline must inform the passenger in
writing of all the conditions and restrictions in the contract of carriage. Purchase of the
contract of carriage binds the passenger and imposes reciprocal obligations on both the
airline and the passenger. The airline must exercise extraordinary diligence in the
fulfillment of the terms and conditions of the contract of carriage. The passenger, however,

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has the correlative obligation to exercise ordinary diligence in the conduct of his or her

Common carriers are required to exercise extraordinary diligence in the performance of its
obligations under the contract of carriage. This extraordinary diligence must be observed
not only in the transportation of goods and services but also in the issuance of the contract
of carriage, including its ticketing operations.

The common carrier’s obligation to exercise extraordinary diligence in the issuance of the
contract of carriage is fulfilled by requiring a full review of the flight schedules to be given
to a prospective passenger before payment. Based on the information stated on the contract
of carriage, all three (3) pages were recapped to petitioner Jose. (Alfredo Manay, Jr.,
Fidelino San Luis, Adrian San Luis, Annalee San Luis, Mark Andrew Jose, Melissa
Jose, Charlotte Jose, Dan John De Guzman, Paul Mark Baluyot, And Carlos S.
Jose, Petitioners, V. Cebu Air,Inc, Respondent. G.R. No. 210621, April 04, 2016,
Leonen, J.)

2. Liabilities Of Common Carriers

This extraordinary diligence, following Article 1755 of the Civil Code, means that common
carriers have the obligation to carry passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with due regard for all
the circumstances.

In case of death of or injury to their passengers, Article 1756 of the Civil Code provides that
common carriers are presumed to have been at fault or negligent, and this presumption
can be overcome only by proof of the extraordinary diligence exercised to ensure the safety
of the passengers.

Being an operator and owner of a common carrier, Sanico was required to observe
extraordinary diligence in safely transporting Colipano. When Colipano's leg was injured
while she was a passenger in Sanico's jeepney, the presumption of fault or negligence on
Sanico's part arose and he had the burden to prove that he exercised the extraordinary
diligence required of him. He failed to do this. (Sulpicio Lines, Inc. Vs. Napoleon
Sesante, Now Substituted By Maribel Atilano, Kristen Marie, Christian Ione,
Kenneth Kerrn And Karisna Kate, All Surnamed Sesante G.R. No. 172682, July 27,
2016, Bersamin, J.)

When an airline issues a ticket to a passenger confirmed on a particular flight, on a certain

date, a contract of carriage arises, and the passenger has every right to expect that he would
fly on that flight and on that date. If that does not happen, then the carrier opens itself to
a suit for breach of contract of carriage. In an action based on a breach of contract of
carriage, the aggrieved party does not have to prove that the common carrier was at fault

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or was negligent. All he has to prove is the existence of the contract and the fact of its non-
performance by the carrier, through the latter's failure to carry the passenger to its
destination. (Alfredo S. Ramos, Conchita S. Ramos, Benjamin B. Ramos, Nelson T.
Ramos And Robinson T. Ramos, Petitioners, - Versus - China Southern Airlines Co.
Ltd., Respondent. G.R. No. 213418, September 21, 2016, Third Division, Perez,J.)

In Air France v. Gillego, the Court ruled that in an action based on a breach of contract of
carriage, the aggrieved party does not have to prove that the common carrier was at fault or
was negligent; all that he has to prove is the existence of the contract and the fact of its
nonperformance by the carrier. In this case, both the trial and appellate courts found that
respondents were entitled to First Class accommodations under the contract of carriage, and
that petitioner failed to perform its obligation. (Cathay Pacific Airways, Ltd., Petitioner,
- Versus - Spouses Arnulfo And Evelyn Fuentebella, Respondents. G. R. No. 188283,
First Division, July 20, 2016, Sereno, Cj)

B. Vigilance Over Goods

A customs broker – whose principal business is the preparation of the correct customs
declaration and the proper shipping documents – is still considered a common carrier if it
also undertakes to deliver the goods for its customers. The law does not distinguish
between one whose principal business activity is the carrying of goods and one who
undertakes this task only as an ancillary activity.

That TMBI does not own trucks and has to subcontract the delivery of its clients’ goods, is
immaterial. As long as an entity holds itself to the public for the transport of goods as a
business, it is considered a common carrier regardless of whether it owns the vehicle used
or has to actually hire one.

Theft or the robbery of the goods is not considered a fortuitous event or a force majeure.
Nevertheless, a common carrier may absolve itself of liability for a resulting loss: (1) if it
proves that it exercised extraordinary diligence in transporting and safekeeping the goods;
or (2) if it stipulated with the shipper/owner of the goods to limit its liability for the loss,
destruction, or deterioration of the goods to a degree less than extraordinary diligence.

While it is undisputed that the cargo was lost under the actual custody of BMT (whose
employee is the primary suspect in the hijacking or robbery of the shipment), no direct
contractual relationship existed between Sony/Mitsui and BMT. If at all, Sony/Mitsui’s
cause of action against BMT could only arise from quasi-delict, as a third party suffering
damage from the action of another due to the latter’s fault or negligence, pursuant to
Article 2176 of the Civil Code. In the present case, Mitsui’s action is solely premised on
TMBI’s breach of contract. (Torres-Madrid Brokerage, Inc. Vs. Feb Mitsui Marine
Insurance Co., Inc. And Benjamin P. Manalast As, Doing Business Under The Name
Of Bmt Trucking Services G.R. No. 194121, July 11, 2016, Brion, J.)

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As expressly provided in Article 1753 of the Civil Code, "the law of the country to which the
goods are to be transported shall govern the liability of the common carrier for their loss,
destruction or deterioration."

According to the New Civil Code, the law of the country to which the goods are to
be transported shall govern the liability of the common carrier for their loss,
destruction or deterioration. The Code takes precedence as the primary law over the
rights and obligations of common carriers with the Code of Commerce and COGSA
applying suppletorily.

Petitioner asserts that the shortage was caused by bad weather, which must be considered
either a storm under Article 1734 of the Civil Code or a peril of the sea under the Carriage of
Goods by Sea Act (COGSA). Not all instances of bad weather may be categorized as "storms"
or "perils of the sea" within the meaning of the provisions of the Civil Code and COGSA on
common carriers.

With respect to storms, this Court has explained the difference between a storm and
ordinary weather conditions in Central Shipping Co. Inc. v. Insurance Company of North

According to PAGASA, a storm has a wind force of 48 to 55 knots, equivalent to

55 to 63 miles per hour or 10 to 11 in the Beaufort Scale. The second mate of the
vessel stated that the wind was blowing around force 7 to 8 on the Beaufort Scale.
Consequently, the strong winds accompanying the southwestern monsoon
could not be classified as a "storm." Such winds are the ordinary vicissitudes
of a sea voyage.

Even assuming that the inclement weather encountered by the vessel amounted to a
"storm" under Article 1734(1) of the Civil Code, there are two other reasons why this Court
cannot absolve petitioner from liability for loss or damage to the cargo under the Civil
Code. First, there is no proof that the bad weather encountered by M/V Meryem Ana was
the proximate and only cause of damage to the shipment. Second, petitioner failed to
establish that it had exercised the diligence required from common carriers to prevent loss
or damage to the cargo. (Transimex Co. Vs. Mafre Asian Insurance Corp.; G.R. No.
190271, September 14, 2016, Sereno, CJ.)

Under "Shipper's Load and Count" arrangement means that the shipper was solely responsible
for the loading of the container, while the carrier was oblivious to the contents of the
shipment. Protection against pilferage of the shipment was the consignee's lookout. The
arrastre operator was, like any ordinary depositary, duty-bound to take good care of the
goods received from the vessel and to turn the same over to the party entitled to their
possession. The arrastre operator was not required to verify the contents of the container

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The relationship between an arrastre operator and a consignee is similar to that between a
warehouseman and a depositor, or to that between a common carrier and the consignee
and/or the owner of the shipped goods. Thus, an arrastre operator should adhere to the
same degree of diligence as that legally expected of a warehouseman or a common carrier
as set forth in Section 3[b] of the Warehouse Receipts [Act] and Article 1733 of the Civil
Code. As custodian of the shipment discharged from the vessel, the arrastre operator must
take good care of the same and turn it over to the party entitled to its possession.
(Marina Port Services, Inc. V. American Home Assurance Corporation; G.R. No.
201822, 12 August 2015, Second Division (Del Castillo, J.)

Both the arrastre and the carrier are, therefore, charged with and obligated to deliver the
goods in good condition to the consignee." Asian Terminals, Inc. V. Allied Guarantee
Insurance, Co., Inc. G.R. No. 182208, 14 October 2015, Third Division (Peralta, J.)

C. Safety Of Passengers
1. Liability For Acts Of Others
A. Other Passengers And Strangers

A common carrier is responsible for injuries suffered by a passenger on account of the

willful acts or negligence of other passengers or of strangers, if the common carrier's
employees through the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission.

The law does not make the common carrier an insurer of the absolute safety of its

In this case, Battung's death was neither caused by any defect in the means of
transport or in the method of transporting, or to the negligent or willful acts of petitioner's
employees, namely, that of Duplio and Daraoay, in their capacities as driver and conductor,
respectively. Instead, the case involves the death of Battung wholly caused by the
surreptitious act of a co-passenger who, after consummating such crime, hurriedly alighted
from the vehicle. Thus, there is no proper issue on petitioner's duty to observe
extraordinary diligence in ensuring the safety of the passengers transported by it, and the
presumption of fault/negligence against petitioner under Article 1756 in relation to Articles
1733 and 1755 of the Civil Code should not apply.

Operator not driver liable for the breach of contract of carriage

D. Bill of Lading

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E. Maritime Commerce

1. Charter Parties


M/V Ricky Rey was converted into a private carrier notwithstanding the existence of the Time
Charter Party agreement with Northern Transport since the said agreement was not limited
to the ship only but extends even to the control of its crew. (Federal Phoenix Assurance
Co., Ltd. V. Fortune Sea Carrier, Inc. G.R. No. 188118, 23 November 2015, Third
Division (Reyes, J.)

Dela Torre

2. Liability of Ship Owners and Shipping Agents

It was categorically stated in the Bill of Lading that the carrier shall in any event be
discharged from all liability whatsoever in respect of the goods, unless suit is brought in
the proper forum within nine (9) months after delivery of the goods or the date when they
should have been delivered. The same, however, is qualified in that when the said nine-
month period is contrary to any law compulsory applicable, the period prescribed by the
said law shall apply.

Strictly applying the terms of the Bill of Lading, the one-year prescriptive period under the
COGSA should govern because the present case involves loss of goods or cargo. (Pioneer
Insurance And Surety Corporation Vs. Apl Co., Pte. Ltd. G.R. No. 226345, August 2,
2017, J. Mendoza)

One year period under cogsa not applicable to arrastre operator

In Abueg v. San Diego, it was ruled that the limited liability rule found in the Code of
Commerce is inapplicable in a liability created by statute to compensate employees and
laborers, or the heirs and dependents, in cases of injury received by or inflicted upon them
while engaged in the performance of their work or employment.

Based on Section 176 of the Insurance Code, casualty insurance may cover liability or loss
arising from accident or mishap. In a liability

Akin to the death benefits under the Labor Code, death benefits under the POEA-SEC are
given when the employee dies due to a work-related cause during the term of his contract.
(Phil-Nippon Kyoei, Corp. Vs. Rosalia T. Gudelosao, On Her Behalf And In Behalf
Of Minor Children Christy Mae T. Gudelosao And Rose Elden T. Gudelosao, Carmen
Tancontian, On Her Behalf And In Behalf Of The Children Camela B. Tancontian,

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Beverly B. Tancontian, And Ace B. Tancontian G.R. No. 181375, July 13, 2016, Jardeleza,




The notice of the availability of the check, by itself, does not produce the effect of payment of the
premium. (Jaime T. Gaisano V. Development Insurance And Surety Corporation)

There is no dispute that the check was delivered to and was accepted by respondent's agent, Trans-
Pacific, only on September 28, 1996. No payment of premium had thus been made at the time of
the loss of the vehicle on September 27, 1996. While petitioner claims that Trans-Pacific was
informed that the check was ready for pick-up on September 27, 1996, the notice of the availability
of the check, by itself, does not produce the effect of payment of the premium. At the time of loss,
there was no payment of premium yet to make the insurance policy effective.

Petitioner also failed to establish the fact of a grant by respondent of a credit term in his favor, or
that the grant has been consistent.


C. Classes
1. Life


I. Incontestability Clause

The date of last reinstatement mentioned in Section 48 of the Insurance Code pertains to the date that
the insurer approved' the application for reinstatement. However, in light of the ambiguity in the
insurance documents to this case, this Court adopts the interpretation favorable to the insured in
determining the date when the reinstatement was approved. (The Insular Life Assurance
Company, Ltd., Petitioner, V. Paz Y. Khu, Felipe Y. Khu, Jr., And Frederick Y.
Khu, Respondents.; Del Castillo, J.)

After the two-year period from the effectivity of a life insurance contract lapses, or when the
insured dies within said period, the insurer must make good on the policy, even though the policy was
obtained by fraud, concealment, or misrepresentation. (Sun Life Of Canada (Philippines), Inc.,
Petitioner, V. Ma. Daisy's. Sibya, Jesus Manuel S. Sibya III, Jaime Luis S. Sibya, And The
Estate Of The Deceased Atty. Jesus Sibya, Jr., Respondents.; Reyes, J.)

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Given the provisions of the Insurance Code, which is a special law, the applicable
rate of interest shall be that imposed in a loan or forbearance of money as imposed
by the Bangko Sentral ng Pilipinas (BSP), even irrespective of the nature of insurer's
liability. In the past years, this rate was at 12% per annum. However, in light of Circular No.
799 issued by the BSP on June 21, 2013 decreasing interest on loans or forbearance of money,
the CA's declared rate of 12% per annum shall be reduced to 6% per annum from the time
of the circular's effectivity on July 1, 2013. The Court explained in Nacar v. Gallery
Frames that the new rate imposed under the circular could only be applied
prospectively, and not retroactively. (Stronghold Insurance Co., Inc., Petitioner,
V. Pamana Island Resort Hotel And Marina Club, Inc., Respondent.; Reyes, J.)

The fraudulent intent on the part of the insured must be established to entitle the insurer to rescind
the contract. Misrepresentation as a defense of the insurer to avoid liability is an affirmative defense
and the duty to establish such defense by satisfactory and convincing evidence rests upon the insurer.
For failure of Manulife to prove intent to defraud on the part of the insured, it cannot validly sue for
rescission of insurance contracts. (Manulife Philippines, Inc., Petitioner, -Versus -
Hermenegilda Ybanez, Respondent.; G.R. No. 204736, Second Division, November 28,2 016,
Del Castill.O, J.)

There is no merit at all in Manulife's Complaint for rescission of the subject insurance policies
because it utterly failed to prove that the insured had committed the alleged misrepresentation/s
or concealment/s. The medical records that might or could have established the insured's
misrepresentation/s or concealment/s were inadmissible for being hearsay, because Manulife did
not present the physician or doctor, or any responsible official of the CDH, who could confirm the
due execution and authenticity of its medical records. CA affirmed the decision of RTC.

Presentation of policy not necessary for subrogation

One Year to file suit from rejection

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