Chanrobles Internet Bar Review: Chanrobles Professional Review, Inc

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ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
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a n I.
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Is there a constitutional provision prohibiting Congress from passing a law creating a
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private corporation?
Answer:
b l
Yes, Section 16 of Art XII of the 1987 Constitution provides that “the Congress shall
corporations”.
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not, except by general law, provide for the formation, organization, or regulation of private
a n II.
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Carlos L. Puno (Carlos), who died on June 25, 1963, was an incorporator of Puno
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Enterprises, Inc. On March 14, 2003, Joselito Puno (Joselito), claiming to be an heir of
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Carlos, initiated a complaint for specific performance against Puno Enterprises Inc. (PEI)
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Joselito averred that he is the son of Carlos with the latter's common-law wife,
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Amelia Puno. As surviving heir, he claimed entitlement to the rights and privileges of his
late father as stockholder of PEI. Joselito thus prayed that PEI allows him to inspect its
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corporate book, render an accounting of all the transactions it entered into from the death
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of his father, and give him all the profits, earnings, dividends, or income pertaining to the
shares of Carlos.
a n
Is Joselito correct in claiming entitlement to the rights and privileges of his late
father as stockholder of PEI?
Answer:
C h s
e
No, Joselito is not a stockholder of the corporation but was merely claiming rights as
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an heir of Carlos L. Puno, an incorporator of the corporation. He is not entitled to the rights
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of a stockholder.
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Upon the death of a shareholder, the heirs do not automatically become
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stockholders of the corporation and acquire the rights and privileges of the deceased as
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shareholder of the corporation. The stocks must be distributed first to the heirs in estate
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proceedings, and the transfer of the stocks must be recorded in the books of the
corporation. Section 63 of the Corporation Code provides that no transfer shall be valid,
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except as between the parties, until the transfer is recorded in the books of the corporation.
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During such interim period, the heirs stand as the equitable owners of the stocks, the
executor or administrator duly appointed by the court being vested with the legal title to
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the stock. Until a settlement and division of the estate is effected, the stocks of the decedent
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are held by the administrator or executor. Consequently, during such time, it is the
administrator or executor who is entitled to exercise the rights of the deceased as
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stockholder.
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III.
b l
In a stockholder’s meeting, Mr. Mareklamo dissented from the corporate act converting
preferred voting shares to non-voting shares. Thereafter, Mr. Mareklamo submitted his
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certificates of stock for notation that his shares are dissenting. The next day, Mr.
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Mareklamo transferred his shares to Mr. Maangal to whom new certificates were issued.
Now, Mr. Maangal demands from the corporation the payment of the value of his shares.
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a. Explain the concept of stockholder’s appraisal right.
b. Can Mr. Maangal exercise his right of appraisal in this case? Why?
a r
h
Answer:
B
C e s
a) It is the right of a stockholder to withdraw from the corporation and demand in
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writing, payment of the fair value of his shares after registering his dissent from
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certain specified corporate acts involving fundamental changes in corporate
structures provided that the corporation has sufficient unrestricted retained
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earnings. (Section 81, Commercial Code of the Philippines)
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b) No. If the shares represented by the certificates bearing such notation are
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transferred, and the certificates consequently cancelled, the rights of the transferor
as a dissenting stockholder shall cease and the transferee shall have all the rights of
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a regular stockholder. (Section 86, Corporation Code). Mr. Maangal cannot exercise
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the right of appraisal because the certificates containing the notation of Mr.
Mareklamo’s dissent have been canceled. Upon such cancellation, Mr. Mareklamo’s
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rights as a dissenting stockholder have ceased. In such a case, a new certificate
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without notation will be issued to T, who will be treated as a regular stockholder.
IV.
b l
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Steelcase, Inc. (Steelcase) is a foreign corporation existing under the laws of Michigan,
U.S.A., and engaged in the manufacture of office furniture with dealers worldwide. DISI is a
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domestic corporation and is engaged in the furniture business, including the distribution of
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furniture.
b l
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Sometime in 1987, Steelcase and DISI orally entered into a dealership agreement whereby
Steelcase granted DISI the right to market, sell, distribute, install, and service its products to
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end-user customers within the Philippines. The business relationship continued smoothly
until it was terminated sometime in January 1999 after the agreement was breached with
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neither party admitting any fault.
a B a
On January 18, 1999, Steelcase filed a complaint for sum of money against DISI. In its
Answer, DISI sought the dismissal of the complaint. DISI alleged that, by appointing a
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distributor in the Philippines, Steelcase was doing business in the Philippines. Since
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Steelcase does not have a license to do business in the Philippines, DISI argued that
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Steelcase lacks legal capacity to sue in Philippine courts.
b
Is DISI correct? Why?
Answer:
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No. Steelcase’s appointment of DISI is not condidered as “doing business”.
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Under the Foreign Investment Act, the following acts shall not be deemed “doing
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business” in the Philippines:
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1. Mere investment as a shareholder by a foreign entity in domestic corporations
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duly registered to do business, and/or the exercise of rights as such investor;
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2. Having a nominee director or officer to represent its interest in such corporation;
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3. Appointing a representative or distributor domiciled in the Philippines
which transacts business in the representative's or distributor's own name
and account;
V.
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a n
On March 17, 2004, the SEC sent V Bank a letter, informing it that it qualifies as a public
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company. The SEC said that V Bank has assets exceeding P50,000,000.00 and has 395,998
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shareholders. Thus, it is required to comply with the reportorial requirements set forth in
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Sec. 17.1 of the SRC.
V Bank claimed that it is not a public company under the SRC because its shares can be
owned only by a specific group of people, particularly, World War II veterans and their
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widows, orphans and compulsory heirs, and is not open to the investing public in general.
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a) Under the SRC, when is a corporation considered a public company?
b) In the case at bar, is the argument of V Bank correct? Why?
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Answer:
b l
R o a) Rule 3(1)(m) of the Amended Implementing Rules and Regulations of the SRC
defines a public company as any corporation with a class of equity securities listed on an
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Exchange or with assets in excess of Fifty Million Pesos (P50,000,000.00) and having two
hundred (200) or more holders, at least two hundred (200) of which are holding at least
a a
one hundred (100) shares of a class of its equity securities.
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b) The SRC is very clear that a public company is not limited to a company whose
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shares of stock are publicly listed; even companies like the Bank, whose shares are offered
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only to a specific group of people, are considered a public company, provided they meet the
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requirements enumerated above. The records establish, and the Bank does not dispute, that
the Bank has assets exceeding P50,000,000.00 and has 395,998 shareholders. It is thus
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in Section 17.1 of the SRC.
b
considered a public company that must comply with the reportorial requirements set forth
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(Phil. Veterans Bank vs. Justina Callangan, et. al., G.R. No. 191995, August 3, 2011)
a n VI.
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h B
Explain the fictitious-payee rule and how it affects the liability of the drawee bank?
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Answer:
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b
considered a fictitious payee and the check is a bearer instrument.
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If the payee is not the intended recipient of the proceeds of the check, the payee is
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In a fictitious-payee situation, the drawee bank is absolved from liability and the
drawer bears the loss. When faced with a check payable to a fictitious payee, it is treated as
a bearer instrument that can be negotiated by delivery. The underlying theory is that one
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cannot expect a fictitious payee to negotiate the check by placing his indorsement thereon.
a
And since the maker knew this limitation, he must have intended for the instrument to be
negotiated by mere delivery. Thus, in case of controversy, the drawer of the check will bear
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the loss. This rule is justified for otherwise, it will be most convenient for the maker who
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desires to escape payment of the check to always deny the validity of the indorsement. This
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despite the fact that the fictitious payee was purposely named without any intention that
the payee should receive the proceeds of the check.
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VII.
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How does the commercial bad faith rule serves as an exception to the fictitious-payee rule?
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(5%)
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Answer:
a
B a
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However, there is a commercial bad faith exception to the fictitious-payee rule. A
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showing of commercial bad faith on the part of the drawee bank, or any transferee of the
check for that matter, will work to strip it of this defense. The exception will cause it to bear
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the loss. Commercial bad faith is present if the transferee of the check acts dishonestly, and
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is a party to the fraudulent scheme.
a a
The commercial bad faith exception to the fictitious-payee rule is applicable when
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the transferee acts dishonestly where it has actual knowledge of facts and circumstances
that amount to bad faith, thus itself becoming a participant in a fraudulent scheme.
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VIII.
b
Engr. Santos loaned the amount of P2.5M to PLUS Corp., through its Manager, Ambot. The
loan was evidenced by a Promissory Note dated July 1, 2003, issued by Ambot in behalf of
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PLUS Corp. To further guaranty the payment of the note, Ambot issued and delivered to
Santos eleven (11) post-dated personal checks drawn from her own demand account
maintained at Metrobank. Ambot is a major stockholder of PLUS Corp.
a n
Upon presentment of the aforesaid checks for payment, the same checks were dishonored
by the bank for having been drawn against insufficient funds. Santos thus demanded
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payment from PLUS Corp. and Ambot for the face value of the checks. Ambot maintained
B
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that she could not personally be made liable for issuing her own eleven (11) post-dated
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checks to Santos, since she did so in behalf of her employer, PLUS Corp., the true borrower
and beneficiary of the loan. Ambot further argued that Engr. Santos is fully aware of this
arrangement.
Is Ambot correct? Why?

b l
Answer:
R o
n
No. Ambot is an accommodation party and therefore liable to Santos.
a
The facts below present a clear situation where Ambot, as the manager of PLUS,
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agreed to accommodate its loan to Santos by issuing her own post-dated checks in payment
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thereof. She is what the Negotiable Instruments Law calls an accommodation party.
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An accommodation party is one who has signed the instrument as maker, drawer,
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indorser, without receiving value therefor and for the purpose of lending his name to some
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other person. Such person is liable on the instrument to a holder for value, notwithstanding
such holder, at the time of the taking of the instrument knew him to be only an
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accommodation party. In lending his name to the accommodated party, the accommodation
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party is in effect a surety for the latter. He lends his name to enable the accommodated
party to obtain credit or to raise money. He receives no part of the consideration for the
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instrument but assumes liability to the other parties thereto because he wants to
accommodate another.
R o IX.
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In December 1992, Robert issued several checks to a syndicate posing as owners of
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several parcels of land in Cebu City, among them is a Metrobank check in the amount
of P1,000,000.00. It was made payable to Vivencia Consing and/or Fe Lobitana postdated
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dated February 13, 1993.
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When Robert realized that he had been deceived by the syndicate, he advised the
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bank to stop payment of his check.
b l
Meanwhile, Lobitana was able to negotiate and indorsed the check to Maria in
exchange for cash in the sum of P948,000.00. Maria borrowed the amount from Metrobank
and charged against her credit line. Before she accepted the check, she first inquired from
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Metrobank if the check was sufficiently funded, to which it answered in the
positive. However, when she deposited the check, the same was dishonored for reason
PAYMENT STOPPED.
a n
Maria filed a collection suit against Robert and Lobitana. In her Complaint, she
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alleged, among other things, that she is a holder in due course and for value of Metrobank r
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check and that she had no prior information concerning the transaction between Robert
and Lobitana. The trial court ruled in favor of Maria and declared her due course holder of
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the subject check. The Court of Appeals affirmed the trial courts finding that she is a holder
in due course.
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a) When is a holder deemed a holder in due course? (5%)
b l
b) In this case, is the Court of Appeals correct in holding Maria as holder in due
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course? (5%)
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Answer:
following conditions:
a n
a) Under the law, a holder in due course is one who has taken the instrument under the
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(1) That it is complete and regular upon its face;
(2) That he became the holder of it before it was overdue, and without notice that it
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has been previously dishonored, if such was the fact;
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(3) That he took it in good faith and for value;
(4) That at the time it was negotiated to him, he had no notice of any infirmity in the
instrument or defect in the title of the person negotiating it.
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b) No. The Court of Appeals was not correct in holding Maria as holder in due course b
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In the case of a crossed check, (a) may not be encashed but only deposited in
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the bank; (b) may be negotiated only once to one who has an account with a bank;
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and (c) warns the holder that it has been issued for a definite purpose so that the
holder thereof must inquire if he has received the check pursuant to that purpose;
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otherwise, he is not a holder in due course.
R Based on the foregoing, respondents had the duty to ascertain the indorsers,
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in this case Lobitanas, title to the check or the nature of her possession. This
a a
respondents failed to do. Respondents verification from Metrobank on the funding
of the check does not amount to determination of Lobitanas title to the check. Failing
B
in this respect, respondents are guilty of gross negligence amounting to legal
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absence of good faith,[15] contrary to Section 52(c) of the Negotiable Instruments
Law.
l e
In this case, there is no question that the payees of the check, Lobitana or
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Consing, were not the ones who presented the check for payment. Lobitana
negotiated and indorsed the check to respondents in exchange for P948,000.00. It
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was respondents who presented the subject check for payment; however, the check
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was dishonored for reason PAYMENT STOPPED. In other words, it was not the payee
who presented the check for payment; and thus, there was no proper
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presentment. As a result, liability did not attach to the drawer. Accordingly, no right
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of recourse is available to respondents against the drawer of the check, petitioner
herein, since respondents are not the proper party authorized to make presentment
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of the subject check.
C X.
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b l
Loreto procured life insurance policies from Insular Life and Grepalife. He designated Eva,
his concubine, and their three illegitimate children as beneficiaries. When Loreto died and
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the insurance claims were filed, the insurers learned that Eva was not his legal wife. Thus,
the insurers disqualified her as a beneficiary and divided the proceeds of Loreto’s life
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insurance policies among the three illegitimate children, as the remaining designated
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beneficiaries.
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Vicenta, the legal wife of Loreto, protested the action of the insurers. She argued that with
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the disqualification of Eva, her share in the insurance proceeds of Loreto should not have
been distributed to the illegitimate children of Loreto with Eva but, instead, awarded to her
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and her children with Loreto, they being the legitimate heirs of the insured deceased, in
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accordance with law and jurisprudence. For these reasons, she moved for the revocation
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and/or reduction of insurance proceeds awarded to the illegitimate children of Loreto with
Eva for being void and/or inofficious.
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a) Are the insurers correct in disqualifying Eva as beneficiary despite the fact that
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she was expressly designated by the insured as one of his beneficiaries in his
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policies?
a
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b) Is Vicenta correct in demanding that the shares of the illegitimate children in the
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proceeds of Loreto’s policies be returned to his estate in accordance with the law
on succession?
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c) Assume that the disqualification of Eva as a beneficiary is correct, is it proper to
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distribute her share in the insurance proceeds to the illegitimate children
designated in the policy?
a n Answer:
a r
B
a) Yes, the insurers are correct in disqualifying Eva as beneficiary despite the fact
that she was expressly designated by the insured as one of his beneficiaries in his
policies.
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Under the law, any person who is forbidden from receiving any donation under
b
Article 739 cannot be named beneficiary of a life insurance policy of the person
who cannot make any donation to him, according to said article (Art. 2012, Civil
o
Code).
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Since Eva Verna De Guzman is a concubine of the insured, she cannot validly
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receive the proceeds of Loreto’s insurance policy.
a
b) No, Vicenta is not correct in demanding that the shares of the illegitimate
B a
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children in the proceeds of Loreto’s policies be returned to his estate in
accordance with the law on succession.
C e s
There is no legal proscription in naming as beneficiaries the children of illicit
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relationships by the insured. The law does not disqualify illegitimate children
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from becoming beneficiaries in a life insurance policy of their parents.
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c) Yes, it is proper to distribute the share of the disqualified beneficiary in the
insurance proceeds to the illegitimate children designated in the policy.
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The revocation of Eva as a beneficiary in one policy and her disqualification as
such in another are of no moment considering that the designation of the
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illegitimate children as beneficiaries in Loretos insurance policies remains valid.
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Because no legal proscription exists in naming as beneficiaries the children of
illicit relationships by the insured, the shares of Eva in the insurance proceeds,
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whether forfeited by the court in view of the prohibition on donations under
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Article 739 of the Civil Code or by the insurers themselves for reasons based on
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the insurance contracts, must be awarded to the said illegitimate children, the
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designated beneficiaries, to the exclusion of petitioners. It is only in cases where
the insured has not designated any beneficiary, or when the designated
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beneficiary is disqualified by law to receive the proceeds, that the insurance
policy proceeds shall redound to the benefit of the estate of the insured.
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a n
B a
e s XI.
b l
X Insurance Co issued a personal accident policy to Totoy Bibo with a face value of
P500th. In the evening of Sep 5, 1992, after his birthday party, Bibo was in a happy mood
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but not drunk. He was playing with his hand gun, from which he previously removed the
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magazine. As his secretary was watching television, he stood in front of her and pointed the
gun at her. She pushed it aside and said that it may be loaded. He assured her that it was not
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and then pointed it at his temple. The next moment, there was an explosion and Bibo
a a
slumped to the floor lifeless.
B
The wife of the deceased sought payment on the policy but her claim was rejected.
The insurance company agreed that there was no suicide. However, it was the submission of
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the insurance company that there was no accident. In support thereof, it contended a) that
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there was no accident when a deliberate act was performed unless some additional,
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unexpected, independent and unforeseen happening occur which produces or brings about
b
the injury or death; and b) that the insured willfully exposed himself to needless peril and
thus removed himself from the coverage of the insurance policy.
Answer:
R o
Are the two contentions of the insurance company tenable? Explain.
a n a
No. These two contentions are not tenable. The insurer is liable for injury or death
even due to the insured‘s gross negligence. The fact that the insured removed the magazine r
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from the handgun means that the insured did not willfully expose himself to needless peril.
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At most, the insured is only guilty of negligence (Sun Ins v CA 211 s 554)
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XII.
o b
Jelina took out a policy to insure her commercial building against fire. The broker for the
insurance company agreed to give a 15-day credit within which to pay the insurance
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premium. Upon delivery of the policy on May 15, 2006, Jelina issued a postdated check
payable on May 30, 2006. On May 28, 2006, a fire broke out and destroyed the building
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owned by Jelina.
a
a. May Jelina recover on the insurance policy? Why?
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b. Would your answer in (a) be the same if it was found that the proximate cause of the
fire was an explosion and that fire was but the immediate cause of loss and there is
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no excepted peril under the policy? Why?
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c. If the fire was found to have been caused by Jelina's own negligence, can she still
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recover on the policy?
Answer:
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a. Yes, Jelina can recover on the insurance policy. Although Section 77 of the Insurance
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Code provides that in fire insurance, payment of premium is necessary for validity of
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the policy (also known as “cash and carry” provision), nonetheless, the rule has been
modified by the decisions of the Supreme Court after the promulgation of the
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Insurance Code. Thus, in UCPB General Insurance v. Masagana Telemart, G.R. No.
137172, April 4, 2001, it was held that the insured should be allowed to recover on
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payment was received by the insurer during the credit period given to the insured.
(See also South Sea Surety v. Court of Appeals, G.R. No. 102253, June 2,
a B a
1995; American Home Assurance v. Chua, G.R. No. 130421, June 28, 1999) where the
Supreme Court ruled that is the check payment for premium was received by the
insurer prior to the loss or within the credit period, the insured was allowed to
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recover.
l e
b
b. Yes, recovering under an insurance contract is allowed if the cause of the loss was
either the proximate or the immediate cause as long as an expected peril was not
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the proximate cause of the loss. (Section 86, Insurance Code of the Philippines.) The
fire being the immediate cause for the loss of the commercial building, would
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warrant recovery under the policy.
a n a r
c. Yes, he can still recover. The doctrine of contributory negligence does not in any
way apply to rights under a contract of insurance, unless it is a case of willful act.
h B
(Section 87, Insurance Code of the Philippines)
C XIII.
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b l
Spouses Nilo and Stella Cha are lessees CKS Dev. Corp. (CKS). Their lease contract
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states: “The LESSEE shall not insure against fire the chattels, merchandise, textiles, goods
and effects placed at any stall or store or space in the leased premises without first
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obtaining the written consent and approval of the LESSOR. If the LESSEE obtain(s) the
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insurance thereof without the consent of the LESSOR then the policy is deemed assigned
and transferred to the LESSOR for its own benefit”.
a
Despite such stipulation in the lease contract, the Cha spouses insured against loss
h
by fire their merchandise inside the leased premises for Five Hundred Thousand
s
(P500,000.00) with the United Insurance (United) without the written consent of CKS. On
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the day that the lease contract was to expire, fire broke out inside the leased premises.
When CKS learned of the insurance earlier procured by the Cha spouses (without its
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consent), it wrote the insurer a demand letter asking that the proceeds of the insurance
contract (between the Cha spouses and United) be paid directly to CKS, based on its lease
contract with Cha spouses.
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United refused to pay CKS. Hence, the latter filed a complaint with the RTC against
the Cha spouses and United. The RTC rendered a decision in favor of CKS and ordered
a n
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United to pay the insurance proceeds to CKS. On appeal, the Court of Appeals affirmed
decision of the RTC.
R o Was the decision of the RTC that was affirmed by the Court of Appeals correct?
Answer with legal reason.
a n Answer:
a r
B
No, the decision of both the RTC and the Court of Appeals is wrong.
s
Under the law, no contract or policy of insurance on property shall be enforceable
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except for the benefit of some person having an insurable interest in the property insured.
b l
In the present case, it cannot be denied that CKS has no insurable interest in the
goods and merchandise inside the leased premises. Therefore, CKS cannot, under the
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Insurance Code , be validly a beneficiary of the fire insurance policy taken by the Sps. Cha
over their merchandise. This insurable interest over said merchandise remains with the
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insured, the Cha spouses. The automatic assignment of the policy to CKS under the
provision of the lease is void for being contrary to law and/or public policy. The proceeds
a n
The insurer (United) cannot be compelled to pay the proceeds of the fire insurance policy
a r
of the fire insurance policy thus rightfully belong to the spouses Nilo Cha and Stella Uy-Cha .
B
to CKS who has no insurable interest in the property insured.
C h XIV
s
l e
Sps. Remondeulaz insured with Paramount Insurance Corp. (Paramount) their 1994
b
Toyota Corolla sedan under a comprehensive motor vehicle insurance policy. During the
effectivity of the policy, the insured car was unlawfully taken. Hence, they immediately
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reported the theft to the Traffic Management Command of the PNP who made them
accomplish a complaint sheet. In said complaint sheet, Sps. Remondeulaz alleged that a
certain Ricardo Sales took possession of the subject vehicle to add accessories and
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improvements thereon, however, Sales failed to return the subject vehicle within the agreed
a
three-day period. As a result, Sps. Remondeulaz notified Paramount to claim for the
reimbursement of the value of their lost vehicle. However, Paramount refused to pay.
h
Accordingly, respondents lodged a complaint for a sum of money against Paramount before
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the RTC of Makati City praying for the payment of the insured value of their car plus
damages.
C e
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Paramount argued that the theft clause shall not apply since the loss of the insured
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vehicle is not a peril covered by the policy. It maintained that it was not liable for the loss,
since the car cannot be classified as stolen since Sps. Remondeulaz voluntarily entrusted
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the possession thereof to another person.
Is the argument of Paramount correct? Answer with legal reason.

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a n
B a
Answer:
e s
b l
The argument of Paramaount Insurance is wrong.
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Records would show that respondents entrusted possession of their vehicle only to the
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extent that Sales will introduce repairs and improvements thereon, and not to permanently
deprive them of possession thereof. Since, Theft can also be committed through
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misappropriation, the fact that Sales failed to return the subject vehicle to respondents
a a
constitutes Qualified Theft.
B
Hence, since respondents’ car is undeniably covered by a Comprehensive Motor Vehicle
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Insurance Policy that allows for recovery in cases of theft, petitioner is liable under the
policy for the loss of respondents vehicle under the "theft clause."
l e
All told, Sales act of depriving respondents of their motor vehicle at, or soon after the
b
transfer of physical possession of the movable property, constitutes theft under the
insurance policy, which is compensable
R o XV
n r
What is a covered transaction under AMLA?
Answer:
a B a
h
Covered transaction is a transaction in cash or other equivalent monetary
C s
instrument involving a total amount in excess of Five Hundred Thousand Pesos
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(P500,000.00) within one banking day.
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(Sec. 3, paragraph (b) of R.A. No. 9160, as amended by R.A. 9194)
What are suspicious transactions under AMLA?
Answer:
o b
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Suspicious transactions are transactions with covered institutions, regardless of the
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amounts involved, where any of the following circumstances exist:
a
1. There is no underlying legal or trade obligation, purpose or economic
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justification;
2. The client is not properly identified;
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3. The amount involved is not commensurate with the business or financial capacity
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of the client;
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4. Taking into account all known circumstances, it may be perceived that the client's
transaction is structured in order to avoid being the subject of reporting
requirements;
o
5. Any circumstances relating to the transaction which is observed to deviate from
the profile of the client and/or the client's past transactions with the covered
b
R
institution;
a n
B a
e s
b l
6. The transactions is in a way related to an unlawful activity or offense that is
o
about to be, is being or has been committed; or
7. Any transactions that is similar or analogous to any of the foregoing."
R
n r
(Sec. 3 paragraph b-1 of R.A. No. 9160, as amended by R.A. 9194)
a XVI
B a
s
Explain the nature of Trust Receipt Transaction.
Answer:
l e
b
In a trust receipt transaction, the entrustee has the obligation to deliver to the
entruster the price of the sale, or if the merchandise is not sold, to return the merchandise
o
to the entruster.
R
There are, therefore, two obligations in a trust receipt transaction: the first refers to
money received under the obligation involving the duty to turn it over to the owner of the
n r
merchandise sold, while, the second refers to the merchandise received under the
a a
obligation to "return" it to the owner.
h B
(BSP vs. Agustin Libo-on, G.R. No. 173864, Nov. 23, 2015)
C XVII
e s
b l
In intellectual property cases, is it necessary for the copyright owner to prove that the
seller was the one who copied the pirated item?
Answer:
R o
a n
No. 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. There was no need for
h
the copyright owner to still prove who copied, replicated or reproduced the software
s
programs.
C
(Microsoft Corporation vs. Rolando D. Manansala, G.R. No. 166391, October 21, 2015)
e
XVIII
b l
What is the Cram Down Rule under FRIA?
R o
n
Answer:
a
B a
e s
b l
This is the rule which states that a Rehabilitation Plan and its provisions shall be
binding upon the debtor and all persons who may be affected by it, including the creditors,
o
whether or not such persons have participated in the proceedings or opposed the
Rehabilitation Plan or whether or not their claims have been scheduled.
R (BPI vs. Sarabia Manor Hotel Corp., G.R. No. 175844, July 29, 2013)
a n a r
B
XIX
s
Explain the “Close Now, Hear Later” Doctrine under the New Central Bank Act.
Answer:
l e
o b
It provides that if circumstances warrant it, the Monetary Board may forbid
a bank from doing business and place it under receivership without prior notice and
hearing.
R
Sec. 30 of R.A. No. 7653 entrusts to the Monetary Board the appreciation and
a n
determination of whether any or all of the statutory grounds for the closure and
receivership of the erring bank are present.
a r
h B
(Alfeo D. Vivas, et. al. vs. The Monetary Board , et. al.,, G.R. No. 191424, August 07,
C s
2013)
e
XX.
What is the "independence principle" in letters of credit?
Answer:
b l
R o
As the principle's nomenclature, the obligation under the letter of credit is
independent of the related and originating contract.
a n
In brief, the letter of credit is separate and distinct from the underlying transaction.
Under this principle, banks assume no liability or responsibility for the form, sufficiency,
accuracy, genuineness, falsification or legal effect of any documents, or for the general
C h
and/or particular conditions stipulated in the documents or superimposed thereon, nor do
they assume any liability or responsibility for the description, quantity, weight, quality,
s
e
condition, packing, delivery, value or existence of the goods represented by any documents,
l
or for the good faith or acts and/or omissions, solvency, performance or standing of the
consignor, the carriers, or the insurers of the goods, or any other person whomsoever.
Thus, the engagement of the issuing bank is to pay the seller or beneficiary of the credit
once the draft and the required documents are presented to it.
o b
R
(PNB vs. San Miguel Corp., G.R. No. 186063, Jan. 15, 2014)
a n

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Is Ambot correct? Why?

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What are suspicious transactions under AMLA?

What is the "independence principle" in letters of credit?

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