San Tieda College of Law 2009 CENTRALIZED BAR OPERATIONS: COMMERCIAL LAW Laws on Intellectual Property Special Laws Corporations Laws 4 Code of Commerce Negotiable Instruments Laws insurance Laws Transportation Laws Banking Lawsi Goan Meds College of Lats 2009 CENTRALIZED BAR OPERATIONS \ ADMINISTRATION DEAN VIRGILIO B. JARA VICE DFAN PABLITO P. PEREZ ADVISER ATTY. MARCIANO G. DELSON EXECUTIVE COMMITTEE HERBERT CALVIN ABUSAN overall chcir and chai academies operations | MANOLO ADEL SANTOS chalrhotel operations GRACE SARAH TRIA vie char for operations i JUAN CARLOS NUESTEO wiee chat for academics MAE ANGELIE ETANG vice chor for secretariat i ARISTINE ANNABELLEE HIPOS view chaefor finance | EIREENE XINA ACOSTA vice chai for ede ACE JELLO CONCEPCION vice chal for loses SUBIECT COMMITTEES BERNADETTE BATHAN political aw IMARINELLI MARTINEZ labor tow: FRANCESCA LOURDES SENGA eM law CLARIBELLE BAUTISTA toxatlon law PATRICK SARMIENTO commercial law ANDREW JOSHUA ALCANTARA erielnal lew BADR MOHAMMAD SALENDAS remedial law MA, MAHARANI LIWAYA SORIA egal ethics and oractical exercizesTABLE OF CONTENTS Laws on Intellectual Propercy sr special Laws Corporation Laws rans Code of COMMESCE.w-+ Negotiable Instruments Laws... Insurance LAWS... i wo 187 Transportation Laws... Bariking Laws. ‘tigi tho intellectual Property of the can Bedn Colloge of Law 2000 Centralized Bur Operatlonss unauthorized use and reproduction of this materials prohibitedTete SUBJECT CHAIR PATRICK SARMIENTO ASSISTANT SUBJECT CHAIR MA, KATRINA RICOLE CONTACTO EDP JAN MANUELLE REYES ‘SUBJECT HEADS JAY MASANGCAY laws on intaliactual aroperty IRISH TOBIANO special we MARICOR PuRIDO corpo aun laws DIOXENUS SULIT code of commarce NINA IFURUNG rgeabeinstcyent ows JADE MARQUEZ Insurance laws SEAN BUENSULESO transportation ws JOYFUL KIAMSON Laaking laws MEMBERS ‘carmela Sandoval John Sagabaen Rise lose Santos Kristine Paula Chu ‘Mark Magallanes ‘Anthony Menzon Tia Santos: ‘Aenusfo Pecundo Monfrey Wee Joey Alfonso ‘Agnes Pader ada Angeles Annie Donate Zeus Mendora Sheene Serrano ‘pil idurcle Rania Austla Gerwin Panghulen Rove Bejassa Sherry fane Gaspay ‘ensyl Tagua Cristal Fatth De Torres ‘Stephanle Narvaez Micaela Sta. Ana ADVISERS, DEAN JOSE R. SUNDIANG AITY, MA. ZARAH VILLANUEVA~ CASTRO AVIV. ANNA CHRISTINA ARIAS ~ SUMILONGBan Beda College of nwo MEMORY AID IN COMMERCIALLAW |} INTELLECTUAL PROPERTY CODE REPUBLIC ACT 829 Purpose: : To avengthen the intellectual and Industrial property system in tha Pallippines a2 mandated by the country's accension to tha Aprecmnont Estubtehing the Worle Trae Organization WTO) (Mipuri vs. CA, GR No, 114808, November 18, 1999) RENT 4. Patent Law (HA 165); 2., Trademark Law (Ra 166); 3. Copyright Law (PO 48); and 4, Aticles 188 8. 189 of the RPG Thase proparty rights which resul fron) the physical manustation of -origiwal thought (Ballantine's Law Dictionary). Note: There ore HO property sights protested by law in mere idee: ot, mental conceptions. When creations of minc. are put in tangible form, there is appropriate subject of property that Is protucted by law (634 Am Jie 3d; Property, Suction 5}, , INTELLECTUAL SROPERTY RIGHTS | (CoRa-PIMP-LG: Sopytight Related righis or neighboring rights of ‘copyright; Betants; 9g Mark: i yu dt9e Geographic ications; Industrial dastgris Layout desis, (lopagraphles) of integrated reas; 6, Protection of Undlclosed information (See, 4). 2 2 4 8 6. Exe COMMITTEE ‘COPYRIGHT Confined to leery or'attstio works wiiich are originas creatiens in the literary or artiste domal protected from the moment of thelr creation. PATENTABLE INVENTIONS Any technical solution of @ pioblem in arly fli ef human activity which Is new, Involves an Invent! stup and 1s hndusbialy apateable (Section 24, ro, TRADEMARK Any visible sgn capable of distinguishing the goods er services of an enterprise an still Include a stamped oF marked containar nf goosts (Section 121.1, IPC, and Elldad Kho ¥. Couit of Apperis, SR No, 116758, March 11, 2602), GEOGRAPHIC INDICATION One which identifies @ good as originating in te: territory of «TRIPS mombor, or @ rogion cr locality in that tortitory, where a given quot, reuan olen oe got gpeentan re hel oor 22, Wb lotus ASPOLIGe Intoveytea i) RONG SUO het). Me AN oe a te MOREA Interconnections of an integrated circuit, or such HENDERT CALVIN ADLCYA aera chal an chal cadens operas, MANCIO ADEL SANTOS ch hotel aprons, GRACE SARAM TRA itt (hal fr eparaton, JUAN CARLOS HUESTRO vaca aexshme, MAE ANGELL ETANG vk Cs or acrtari,KRSTINE ANMAREGLE FOS \enha for finenen, IREEME HINA ACOSTA Vi cal fe 0p, AEJELLO CONCEPCION ver ch le ght ‘consent: PATHISKSAINCETO sie tele MA KATRINA NICOLE CONTACTO asstn. sujet chm, JAN MANUFLLE REVS ep, JAY MASANGKA ne on Inelcta’ propery, MH TORIKNO spac laws, JOYFUL RAMON baelng ius, DIOXENOS SUNT cde a commer, NINA FURUNG necetaie Instruments, :ADE KAARQUEZ Insane nwa, SEM BULNSUCESOtarspevtnon laws, MARICOR PARIOG corpraion ws ensenss ‘Canty Sana ohn seenbapn i Sanco, Kes Chu, Mak Maan, Any Me vc, Sueto, Amy cand, Mostay ig, ey ‘fone, Ages Poder, Ash Bele. Arle Dons, 408 Mandath, Shen Strano, Agr Mure, Ramla Aut, Geren Pangivn, Roda Bs, Shar Jane Catpa Tesat agus, Ctl ah Oe Tres, than’ Nervoe, Me St, As2.12009 CerTRALIZED BAR OPERATIONS fivoe-dineraienot 4 fees 1 Integrated circult intended for manufacture (Sec. 1129}, RA. No, 8298, as amended) Note: For @ layout-design to be entitled to praicedsn rust berongsal In the seuve AMoug cleviuis OF layautUeEgiiD YH yii iy ‘and manufacturers of integrated circuits at the titae of their eroation, TECHNOLOGY TRANSFER ARRANGEMENTS Contracta or agreements involving the transfer of eystamatic knowledge for the manufacture of a product, the application of u process, or rendering of & servico Including management contracts; and the transfer, assignment oF licensing of all forms cf Intellectual property rights, Incivcing licensing ‘of computer software except coniputer software deveioped for mass mark3t (See. 4.2, IPC), UNDISCLOSED INFORMATION + nfo tian which; 4. Is u secretin the vonse that it ia not as a body or In the precise configuration and assombly of components, goneraly know, ‘among or roauily accessible to persons ‘within tne clriaa that normaly deal with the kind of Information in question; 2, han coramercial valve because It is secret; ‘end 3. has bseni subject to raasonable steps under tbe ecumstanices. by the person tewtully in contol of tne Information, (9 keep it secrel (let 9, TRIPS Agrecmentt esr mio eV beysove, nmueD ro THe anette OF an Beds Cattege of Bary In tre Philippines is suing as a perty of a veaty (o \which the Phillippines is a signctory, the fact that it is sving under Sec 3, RA 6203 need not be alleged anymore end the cout may take judiciat natieg of such fact an it ls embodied in and requirements of the aw (Puma Sportsanvabrixen Rudolf DasslenK.G. vs. JAC, GR 76067, Fat. 26, 1988), + ig anolner casa, Leviton industries, Inc. vs. Salvador, (GR No. 40163, June 19, 1982), the Cout he'd that failure to. allege reclpraclty Is fatal to forelgn corpdration's cause it Belny shown that it falad fo comply vwth the roquiremants of the law. PRINCIPI.E OF REVERSE RECIPROCITY Any condition, restriction, mitation, airinition, requirement, pensily or any similar burden imposed by the law of a foreign countly an a Philippine national seeking protection of Intallectuat oroperty rights In that country, shall reciprocally be enforceable upon nationals of said country within Pallppine jurisdiction (Soe, 291, PO. NATIONAL TREATMENT PRINCIPLE The Phillppines, upon becoming a member of the WTO, nas adhered to the Trade-Related Aspects of sntellectua’ Property Rights (TRIPS), which provides that protestion afforded to the member slate (with respect to lntellectua propery) must be extended to the nationals of other mon states. MCST-FAVORED NATION PRINCIPLE eee le grants tne Aifionals Js ROAM natcoang te2B Galego a 8, APPELLATE 1 Patent | Patten to ancel an lnvention, patent, lity | Tradamark raodel eogistration, Industrial asign cngiaratlon, oF ary | Action jam, | Inkingement 2.Fetltion for - compulscty Car elation of patent, utlity models, and industrial designs; Pet ans for compulsory licensing; Adtanistrative complaints for viola ion of fawe inveivirg Intellectual propiny cights where le total Garages claimed are not less than P200, 000, The Director of Lega Aflalia has the power te punish teentemnpl (Soe. 10, Ibid) 3, Dovumentation, Information and Technology Transfer Bureau Over disputes involving technology tranefer payments (See. 11.0), 4 Regular Courts (Soe. 225) URISDICTION ‘iveetor Ganoral ‘Ovar al declalen rendered by the: fh. Director of Legal fairs; b. Director of Patents; ©. Director af Trademarks; and d. Oirsclor of the Documentation, Infér-naton and Techrology Transfer (Sox 7,116). 2, Court of Appoals ‘Over deaielons ef tho Director Ganoral In the exciels9 of Nis oppeliate jurisdiction ‘ver the decibions of the 8, Dieetor of Legal Atars, D. Director of Patents, ©. Direntor of Trademarks (Soo, 7.4/0). 3, Becrotary of Trede and Industry a. Ove" -dacisions of the Director Geral in the exercise of his appoliate "jurisdiction, over the decisions of the Director of the Dovsimentation,’ Information and ‘Jachnology Tranis‘er (Sec. 7.110). b. Over dacisions of the Director Geroral In the axercise of his original Jurisdiction relating to terms of license fave-ving the author's right to public performance or other cotarrunicullon oF his work (See. 7. tle). eS SNe oro lleense Acris ae PRUETT VS MAN ELIE LL PTL Po cianno Unga lary wy Ce CLS SP MEMORY AID IN COMMERCIAL LAW! 3 Btradomark” Ggoselon agaieat the | Aation. fer unfair fegistintion of a math | competion published lor oppasiion, | > Peition (> cancel, the, PRINCIPLES 1 ‘Copyright is that system of legal protection fan suthor enjoys of the form of oxpresslon Of ideas (intatoctuel Proparly Low, Commants and Annotetions, Aquino, 2003). Rolator to artiete creations, such as book?, music, paintings, and sculptures, flmo ac fechnotegy-based. works as wall-as to the nin act which, in reapect of Kterary ant artistic creations, may be ‘ade only by the ‘author er his euthonzation (Understanding Copyright ond Related Rights, World Intellectual Property igantzation). ‘Works are protected by the sole fact of thelr creation, respective of thelr mede or form fof expression, a8 well ap their contort qually or purpose (Se. 172.2). Copyright If nol a right to do anything but to.slop others from doing something: k Ip therafore a negative: right (Sony? Undor the Intolloctual Property Goda, ‘Amador, V.. 199804). Pratonion extonds only to the exprussion of the Idea, not to, the idem Itsolf of 10 my piv 1 oparatiat, condal dal put 19 and an in the4 [2009 CENTRALIZED BA OPERATIONS PRIMARY PURPOSE CF COPYRIGHT Not to roward th: laber of authors, bit to aremote ths progress of science and useful atts (Copyright Undir tho intatoctual Property Cece, Ibi. REGUISITES FOR THE’ CREATION OF A COPYRIGHTABLE WORK 1, ORIGINALITY + It dosa not mean novelty or ingenuty: neltner unigueness nor creatty. tt simply’ meunu that the work "owas ts rigin to tne author.” Constituonts of originality: 8, Thg work 1 an independent creation of the author: "must NOT be coplag: and must Invnive some iteectuat tort 2. EXPRESSION + There must be “fixation”, To be fied", & work «ust be embodied ina mediun suificently permanent or stable to permit Ito be perceved, reproducsd, or olt.erwlse communteaied for # period of more than transitory duration. © Stety speaking, there Is no work for copyright purpose, unless there is something tangible. Is fixation that defines the thre trom when copyright subsists. Before the tine of fixation there can be no infiing2ment Single Croator Work consi UNIDENTIFIABLE por Foauthes jinly a8 co- Swnars, unleey hares fgreement tothe cor Jolot orator -eetemarttothe cian, IDENTIFIABLE pers: auihor ef each part one the pert “thet ho hos ferent | if tha orton PART ot nie uiar cules employer, unless ee Is | agreement tc Employee's Creation —— [litle OT. ene sywe Work got persos tera Commisstoned Work | Conyrignt erectar, naa there isa yiton Forel ltr purpowos producer, eulhor of the Scenarie, composer, fire ‘lnematograpihle Works San Bedn Collee of Lary were Fobkaken a6 daeriad representalve of the aur, nies he contrary appears peoudongm Gr Siopted same feaves no doubt a8 19 | the author's Identity; | oF author “slecloses |__ tie denty, | Caer ede tage ave waived his nah, Collasive Works | thleas he axprusely | toners 1 (Se. 198 | wer | Howaver, the court inay Authors their aubcaton | or dusemaion I ine pubic good or thw eat ‘of justice so requires | 1 a725, Now Civil Caay). | DURATION OF COPYRIGHT Anonyme an | noudunjmov works Lettere (S80, 213) ARETE TENTS SR iigtine of the croutor and Single Creation’ — | for 60 years after hie | death Titoumie” at The surviving coverealor and | for £0" years after tis | oa Joint Creation ie dais | ther fret pubtication, ‘xcept viners, belore the exokation of bald pesto, the authors iganty is Fovedled oF kno longer in | doubt, the 1" two Anonyinous ora peeudonymous work rmoctioned cues shal! apply, or if uepudishoa. | f froin Whew |fan Not from th the death or ofl fi Elemoais ‘oman unless directo willbe natural be ie [ee erat ‘Work crea ‘i "or Meant eat | Work pnspared by 2 or the undoretancing a it Inter under re own hate nnd. that contibu'kinn of Each a. couyright to hin” own | owners, ‘contribution. i Hieos So icy ot Low = he, torn: of protection shall ba counted he 1" day of January of the yea folowing ublicatlon (Seo, 274). ST TE Seperate elements merge ated 204 | inion uniod whoia ‘and under oF ether itt | more. ‘authove with the Intention. that thee contitvtons ‘be. merged ite ieevarab or interdependent peta of oraone wl HOT | &8 Ustary whe, wad alrcloned: ay tha szhor Fall ‘enjoy |Jolnt suthore. ehall be co Ce-ownership ane, Unless wal b expressly _reeerveu' his | 4° right, i is the putative | Sitlled bow author to whom tha work tre CUPUCE T Joint autho.s eral! be tobe Bcknowledged as authors ‘a tha work rout ————— WORKS PROTECTED: AO} 8 RIGINAL WORKS (D0*P?-CL’AIM-D'W) . Books, pamphiots, articles and other wltings Pariodiee!s end riewspapern Note. A pura news raport-no longer finds protection under tne new faw, BUT a cclumr or published comment wil, “When newszapors. and parioaicals Include works enjoying Independent copyrights, the works so inclucled continue enjoying the rights {or duration proper to them, Leoturns, "sermons, addresses, disserietions prepared for oral delivery, whather er mot récuoad in writing or other matorial arm falters Dramatic or _—_—_dramatico-mmusical sompositisns, choreagraphic werks or contetiainment in dumb shows oiypesitions, with ar without Works of crewing, painting, architecture, ‘sculpture, engraving, tthograpty or other works of ar: modwls er designs for works otart Driginal oinamental designs or models for articles of manufacture, vinether or not reg'sirable us an industal design, ard other works of applied an; ustrations,, maps, plans,’ sketches, charts ond thyae 'eimensional works rolativo 19° geography, topography, architecture or sclene MEMORY AID IN COMMERCIAL LAW) 8 7 10: Brawngs of plastic works of a cents br technical character, 11, Botographie works! Including works produced by a process analogous to photography lantern sidas; 12, Eudioviual works ard cinematograplile, ‘Woks and works produced by a procese analogous Jo clnematogrephy or any procots for’ “making auidiovisual fecordngs; 413, Betorisitusiraions and adversemur tn: +4 Gompuler programs; and 18. Othar iterary, echolarly, sclontite and ‘rtistie works (S00, 179). DERIVATIVE WORKS 4. Drainalzatione, transitions, adaplations, abridgnunts, drrangemants, and. othor altoratons of llerory or artiste works; ard 2. Collections of terary, scholarly or artiste works, and complains of ‘data and ‘thor materials which ere oiiginal by ‘teason of the selection or cocrdinatlon oF arangervent of their centenis (See 173), . Note: Derivative works shall bo protacted ac new works. Provided hewever, that «uch new works shall not = i affect the force of any subsisting copyright upon the’ original works employed oy any part thereat ibe censtrued fo imply eny right to such use of the original works, or to secure oF extend copyright In such orignal work (S20. 173.2) WORKS NOT PROTECTED: (PIN-DOO) 4, Idea, procedure, system, method or operation, concept,_ principle, discavery of Imposed prior t agoncy of office(_6 [009 CENTRALIZED BANOPERATIONS wherein the work le created shall be necessary for ‘exploitation of such work for profit, Such agency or ofa may, among other things, Impose as a cor:dition tha payment of royalties. Excoption: No prior apnroval or conditions shall be required fer the use of any purpose of statutes, rules ond regulations, and spagciss, lectures, sormons, ‘addresses, and dissertations, pronounced, read for rendeied in courts of justics, before adrinistatve —egences, in deliberative assemblios and In meclings of pubic character (Sev. 176), 5, Blandings; 8, Bclolona of coustr ond telbunets. They may therefore ba freely used or quoted. Note: This partans to the ‘orgival dec'sions" not the SCRA published volumes since these are protected under dorivallve works under S20, 173.1 (0) RIGHTS CONFERRED BY COPYRIGHT (CMO) 4. Coperight ot Econamic rights (See. 177): 2, Moral rights (Soo, 193); and 3. Right to participate in the gross proceeds of the sale or inage of the original work or droit a sulte (S00. 200) A Copyright or Economic Rights Exclusive right to (@) gary out, (b) guthorizo er (€) prevent the foliovang acts (Cary: “1. Roprodustion ct the work or substantial partion ole works 2. Crometizatlor, translation, ‘adaptation, absidgment, urrangement ‘or olhertransformetion ofthe work, 3, Flesc public distibution of the orginat ‘and each copy of the viork; 4, nial of sha original or a copy of an, ‘audiovisual or cinematographic wer 5, Puble display of the criginal or @ copy of he work 6, Publle performance cf the work; and 7. Other communication te the pubic of the wore (See. 172) 8, Absignmant of the copyright and! ut "tho materiel object in wale orn part Note: Economia rights allowe the owner ta derive financial reward from the use ai hie worke by athers WIPO, Undorstencing Copyright and Related Rights, p 2), San Beds College of unto A. Moral Rights 4. Right of Paternity ~ To require thet the authorship of the worke be attributed to him, ina prominent way ‘on the copies, ard with the public use ofthe work; 2. To meke any alterations of his works prior 1, of to withhold it from publication 3, Right of integrity ~ To object to any ictericn, mutilation or other modification of, or other derogatory ation In relation tc, hls work which ‘would be prejudicial to his honor or reputation’ and 4, To restrain the a0 of his name with Faspect to any work not of his awn ateation or In a dletorted version of bis work (See. 193), a, These rights are_distinet from economic rights and remain with the author ever after he has fansterred or assigned to ‘ailother “other rights of copyright” (WPO, 215). ¢. Moral rights’ allow the author to lake certain actions to preserve the personal link between himself ‘ani the work (WIPO, Understanding Copyright and Related Rights, p.9). © Torm/Duration Lifetime of the author and 60 years after his deat, And is NOT. ‘assignable or subject to license (Sec. 198). ‘+ Those rights may be waived by: nent (See. colectivegen Bans Lollegg gt aly 2 Workn HOT covsrad: Prints; : Etet ings: Engravings; Werks pf rpplind at; and Similar wares wherein tie wuthor prtsarly derives go's trom the proceeds of reproductions (Sec: 207,. TRANSFER OR ASSIGNMENT OF COPYRIGHT The transior or assigrment of the copyright shall ot Itself constitute a transfer of the niatortal object, A transfer o- assignnisnt of the copyright of the sole vopy of ef one or sevarul copies of the work ehall not Imp y transfor or aselgnment of copyright (S90 181), FIRST SALE DOCTRIN Alter the rirat eale of the lawhily. made copy of the copyilghted work, anyone who Is the owner of that copy can sell 0° dispose ot thal copy In any way without ani lability fer copyright Intingument, The first sate cf an authorized copy ff the work exhausts the author's right to control distribution of copies Limiiavions 70 THE RIGHTS OF COPYRIGHT ' (GF-PARRY) 1. General imitans (Soe, 1845; 2. Beir use (See, 499); 3, In the case of « Work of gretitecturs, the right to centol tre reconstruction or rahabitation in the samo syle a8 the orginal of the bulldng (Soo. 166): 4, Privata reproduction af published work ba a ingle copy by'a natural person for reseaich ane private stud) (S0c. 167)" |b. Reprographie rearoduction ina sinnia copy ty nonprott Herles, under’ certain circumstances “Sav. 188); 8. Keprouuction, under dertaln clrcumstances, oF 2 computer preaam In one back-up copy by the lawful owe of thy program (Soc, 16%): 7. mpottaion for persunal purpuses under ‘ceitain conditior s (Sea. 192), GENERAL LIMITATIONS (R‘QP*LMU") ‘Acts that do not itcinge copyright: 1. Rootulion of puvtormance ef a work: () riade ‘accosalble tothe publi, (i) privately dane, (i) free of chargo, (Wv) stialy for @ charable or religious inettiton; 2, Making of quotations from a pubiched work: () compaille vith falr use, fl) tort Is justified by the purpose, il) source and name Of the euhor, appaaring on work, must be mertioned; MEMOAY AID IN COMMERCIAL LAW| 7 Reproduction or communication to the public by mass mada of articles on current politcal, social, economlo, sclentife ot religious toplo, lectures, adresses and other work dolivered ia publle: (I) for Informatio purposes, (I) Not expressly reserved, and (il) source js already indicated; Reproavetion Public of teraty, sclentifc or artistic works aa part of reports of cutrent everits by moans of photography, cinematography or brosdonating to the extent necessary for tha purpose; Jnelualon of work In a publication, broadeast fr other communccatfon to the public, sound recording oF sim If made by way of iluatratlon {or teaching purposes compatible with falr use fang the source and the name of the author appearing onwork, must be mentioned: Recording mace in schools, universities, of educations! inatitutione of a work Included In m broadcast for the use of schools, universities fof educational, institutions, Such recording must be deleted with in a reasonable period; such recording may not be made from auel visual Works which are part of the generat Cinema, repertolre of feature fms except of brief excerpts of the work; ‘Making of aphemeral recordings, () by 2 * Eroadeasting organization, (i) by means of its work of fadlitins, (Hi) for use In its oom broadcast; 1. Use made of a work by or under the direction €F control af the goveinntent for public interest compatbte with fai us Public performance or the communication to the publ of a work Ina place where oo admission {20 La charged by a club on insttation for charitable or _educallonai purpose only and the aim fs not prof-making;, nal or a copy of tha Kofaa. fim, clita, Phscoen cs by if8 12409 CENTRALIZED BAN OPERATIONS > Examples 4. Criicking, commenting, ané news reporting; bo Using for Insinsctional purposes, including producing multiple copies for classroom use, for "scholarship, research and similar purposes ©. Besompilation = tne reprocuction of {he code and translation of the forms fof the computer program to achieve the —inter-aprabiity ofan Independently created computer program with thar computar Programs (Sec. 185), Criteria to dotermino whether uso te falr or not: 4.” Purposa and the charactar of tha use; 2. Nature of the copyrighted work; 3, Amount:and substantiaity of the portions “used; 43 Effect of the use upon the potential market of the copyilghted work (Sea. 188), Note: Concept of fair use only applies to ‘copyiighted Werk arid NOT to non-copyrightable matertu, + Quotations from a published work If they are wompatble with fair use and only to the extent justiled by the purpcse, ineluaing quotations from newspaper articles, and Perlodicals in she form of press summeries fra allowed provided that the source and the name of the author, appearing on the work, fe mentioned (Habana v. RoDies, GR No, 191822, July 19, 1999). INFRINGEMENT OR PIRACY Any vilalion of the owner's oxclusive rights conferred by law (Pendect of Commercial ‘av ‘and Jurisprudence, Justize Josa Vitug, 2008ed). ‘+ AR approcriation of & copyrighted wark by another who Is not authorized (Black's Law Dictionary). +The doing by any person, without tha consent of the owner , Cefanidant J. Ohectintinger; of 4 Contributory Intinger (Sec, 247). oret bookstrre and magazine store that vends pirated cnpies'of a work is in fact Violating tha copyright owner's right to exchitively distribute his woik, Such store wold theretore. be. inringing. The printer who. thougn dating under instructions. from another, sete’ Isto motion. the legal reproduction of protected materiel would, in fact, be infringing copyiight, MEMORY AID IN COMMERCIALLAWL9 2. _Proseripiive Period 4 yeas ton Te time the: cause of action arose (Sau. 226) subjest tothe genoral rules of Proscsiion "of crimes. | Petition for | rone 7 [injunctive reot _4 Pailion for the [here Himpoundag and dostuctin of infinglng matorie RELATED RIGHTS OR NEIGHBORING RIGHTS, OF COPYRIGHT (Secs, 202-211) Rights akin to but differant from copyright, granted by the taw to = ‘Av Performers, who are: Natlovals of the Phillpinos 2. NOT hatwnal of te Bitppinos bat whasa performances: a, Take place in the Philppinus; 1, “Ate incorporated In sound recordings protected under the —Intelluctuel Property Code; and ©, Viich hae not been fixed In sound recording but are carried by brendeast qualifying for_ protection under the Code (Secs, 203-207), ‘Action for damages Crieninat action Eee 8. Producers of sound recordings (Socs. 208- 270) wher eke ‘Sound recordings the proclucers of which are nationais of the Philippines (Snction 223.1); 2 Sound recordings that wera first publahed . Philippines (Section| { | +20 12009 CENTRAUZED RAR OPERATIONS ©, Broadcasting orgentzations (Sec. 211) ‘Scope’ of Right: exclusive right to cany out, ‘authorize oF prevant any of the folowing acts: 4. Tho rebrandcasting of their broadcast 2. The recording in any manner including the makiog of films or the use 2f video stlape, of their Lroadcasts for the purpose ‘of communication to tre public of lalovision broadcasts of the same; aad The use of such records for fresh ‘transmissions or for tresh secording. Application of rights: 4. Broadcasts of briadcastl.g organizations the feadkuarters of which are situated in the Philippines; Broadcasts transnittad from trensmiters ‘iluated in tha P>lippines; 8." Broadcasia by organizations which are to he protected by vitue of anc in ‘acecidance with ‘any. Intemational convendon or other intemational ‘agreement to which the Philippines isa party (Section 224). ‘Tho fight granted to an Inventor by the State, or by. the regional office acting for severai States, ‘which’allows the invenior to exclude anyone alse from commerciatly expicling his icventio. for a limited period” (World Intellectual Proparty Organization, Undersiaading industrial Property, po). A patent Is'a statutory monopoly which protects against unlicensed use of the paterted device or Process ‘even by one wha ciscovers It Froperly ‘through independent research (60 .Ar1 Jur 2d, Patents, Section 6). PURPOSES 4. The patent law seeks'to fester and reward Invertlon; 2." It promolen disclosures of Inventions to atimulate furtner innovation and ‘0 permit the publle to practice the invention once the Patent expies; 3, Tha sirngent. requirements ior patent Protection seeks to ensure that kieas in the Publlo domain remain thera for the free use .9f the publle (Paw & Dean (Phit), inc. v. Shoomart, Lie, GR No. 148222, August 15, 2003}, PRINCIPLES: 4._- Tost of Non-Obviousnass ~ If any perion Possessing ordinary sill In the art was abie to draw tho inferences and the constructs Soa Bedy Caltege of Law that the supposed Inventor drew: trom prior at, then the fater did NOT really Lwvent. 2 Unity of Invention — The application shall felate 10 one Irvertisn only orto a group of inventions forming a single general Inventive step (Sao, 38.1), 3. Ar applicant may NOT fie 2 applications for the same subject, one for utlty ‘model registration’ and the other for the grant of & patent whelher simultaneously or successively (Parallel Appication, Sep. 111}. 4, Whatever right ene has to the invention covered by the patent arises alone from the ‘grant oF patent (Creser. Pracision Systems Vs. CA, GRNo. 118708, February 2, 1998). 5. Patents “or apniication for patents and Invention to which they relate, shalt be protected In the same way es the righta of ‘other property Lnder the Civil Code (Sec, 103.1). : person, by lndependnat ©“ resoareh eves al the samo Product or that Is already. Patented, he ig restrained by the an ofthe law fom expoithng such an Invention by reason af Sie patent granted the earler alscoveres i may be vested to Work cksely simian or ‘even Hontcal to an arler, or already pateniad work, provided that the former Is truly orignal Le, i owes is (existence tots orzater, COMTTANE « eed ‘Non-patentable inventions may be subject ofa copytah erences ihe Discoveries, eerie thoares ard y angireratica mato ‘Useful machine 2. Aprodut 5. Aprocnsa_ Bx Beda Coli geo nw Note: Incase of drugs. and medicines, non- patentable produids include the mero dlsccvery of 8 new form or ne\s property of a known substance Which dova net rocuit In the enhancamant of the Known effescy ef that suit stanea, a7 tha mera Uscovery of a now,property ar new use for Known substance or tha ciere use of the known process Unless such knova process results In a new prodiict that amp ys at leart one new reactant {Soe 5 RA 9607). i ‘ay vompootion 1 Hes ox hae ty ives Sivotaiona orn nate oF fat stood wih Hon or 1 See orev ha auch man of *prnethal utili” (ef | Sop tion or foc Foserev ch. GR in| SB86e1 Appenrance 12 en Tiben,"Srch” 13 | gan aac #9 ates 100 | [fonder (so 124) ‘Naw (Novel}= Thatwhich | 2, Industialy ddoos natform | | Appifeatio partofapeor | | fat (See. 73); 2 Invnalvo ~An fnvration Involves an Inwentive siep iheving ‘gard ‘0 prior ack ts not ‘obvieus to a person. skilled Inthe att the tine of the fitng dato of preety data of ho ‘appcaton aiming tha lnventica (Sec. 20), 8, Tedusiily ppalentable = ‘An'nvention thet can be produced und fated nany Industry S00, No inventive e aap step {ndusttlly sia Tysaretomina (5. Yan's rem Mesos ot ‘at of tha 4 cessoniia requisites 0 years or ho {si ste of the Seeeeeeeeeeet MEMORY AID IN-COMMERCIAL LAW] 11 Tar ticaiiony [potest ‘om Wey non-renewable | application, which renewable fr ‘not _ move then | 2 conseoutve periods of 5 | re (eH 1a ‘Sees, 112-120 Sova, 100-141 | and” cortaln ‘arid “provisions | provisions on | ‘on patonis | patents applying mutats | spplying mutend Sees, 20.107 REQUISITES OF PATENTABILITY (Soc. 24) 4. Technical Solution of a problem In any flotd of human activity, 2. New (Novelty) = an invention shall nat be considered new If It forme: part of w prior art 4 Prior Art (S00. 24) «= That which hos been made avallapia to tha _publle anywhere in the wodle BEFORE the fling date ck the priotly date of the application; General Rule: . That which forms part of an” application whether for patent, utlity meade! or induiswlal design, effective in the Philippines, provided that 1. the laventors or applicants ara not the sama 2. the content of. the applizalion ace published im accordanea. with the requirements of patent application rules; 3, tho fing date ofthe prior artis eater Ragionahsn wo Her Betcation ie0; oF ANN as nbnths precoding iTy 442 /2009 CENTRALIZED BAR OPERATIONS Involv an invontive Step Mavantivenoss) an lnventlon Involves Inventive step of, having ragerd to prior ert, tt Ig not obvlols lo @ person ekilied in the ert at the lime of the fling date oF. prlorty date of the application claltaing the Invention {(Sootion 27). 4, Industrlally Applicable ~ an invention that ‘ean be producad ano used In any Industry (Section 26). PERSONS WHO MAY FILE AN APPLICATION FOR A PATENT IN THE PHILIPPINES: CRM CR PLE Re ac i so a aver Sno i SOM BRUNT Cie a TO foie Yoana en ., Flipino Hates; 2. Foreign Natsnuls or Yose omialnd or have a ron) and ‘ffetive eomnnresn! ‘establiatant he country ‘which is bound by Wroaty {euch 98 the Parla CCorwortfon an the TRIPS ‘Agteamen) to grant Flipinas the same righty & grunts > is own oatianals: fat, 2, Assignee of the invents 3, Feraign avian whoae court say gerap tho ion ct Note:. To ba ‘able to vifectively and legally preclude others fram copying and profiting ‘rom fhe invention, ® patent is @ pimordial requirement, NOPATENT, NO PROTECTION ‘Tho uliniate’ geal ot a patent system Is to bring new designs and technologies Into the cuble domain Uvough disclosure, Idues, orice disclosed fo tho public without the protection of @ valle patort, are subject to appropriation without agian conve ‘(Pearl & Dean (PIL) sposniart, GR No, 148222, August 18, 2003) SEIRST-TO-FILE" RULE/ SYSTEM ‘This le tho ayster of patent regletration adopted tundér the IPG In Kew of the firstto-invent systim. Right to Prlority of en oarlter-filed forelga ‘application (See. 97) Roquisites: 4. tha. loval application expressly. clalms © prloetys Fr Rad thin 12 menthe from the date of ‘the earliest foralgn application; ety eee Say Beds College of Law | 4, Fillng within 6 monihs from the certified copy ‘of the forelgn application, with an English {tanslation, rom the date -of. the local application. REQUIREMENTS FOR FILING APPLICATIONS (Secs. 32-39) ey apolicetlon shall relate to one Inventive bla only of 0 2 gtcup of inventions forming tingle general Inventiva stop The potent appliction shall be In Filipino or English and ehall consist of the folowing: 9. Araquest containing the following: 1, paiilon fr the grant a patent, I, namo snd other data of the applicant, Inventor (if he Ts fot the applicant) end the agent, and Lite af invention. b. Disclosure of the Invention in a manner ‘sulficlentiy clear and complete for It to 02 tariled out by a person skilled In the art Description ofthe invention; Drawings; (One of mere siaims In clear and concise fanguage defhing the matter for whicn protection Is sought {An abstract of technical Information ‘consisting of @ concise summary of {he disclowure, clams and drawings in preferably not more'than 150 words; 9. Appointment ofan agent oF Tepresontative in the Philippines by @ honvesident ~ applicant upon whom holiges or process for judicial or Sdministrative procedure relating to the patent may be served; ang ho At tha. aquest of the Director, the ‘applicant shall furnish him with the dale and numberof ication for a ‘employment LLHan Beda Col egs of Ama Kmmplayts = If tho invention the reauil of the pertsrmence af hia tequiedy sasigned dues" vnlors agreed a shherwins (Seo. 3), REQUIREMENTS TO GFT A FILING DATE (S2e, 40) i Gh receipt of the ehplication, an exaininer crecks If the application Includes the following requizementy 1. Roarest for a Philpp'ne patant; 2. Name and avidrace of tha applicant; and 3. Description ad eaims of the Invention in English ar Fitpino (the extent of protection. onterrad by. patent Is determined by the lava), + Peyrment of th: filing fee Is nol includad. The date of fling Is very Important because It seriea to debymine who has the right to the patent in cas of a dispute witli another ‘applicant for thy same Invention. ANNUAL FEES ‘To maintain the patent epelication of patont, an ‘annual feo shall be paid upor, the expiration of 4 years trom the ‘date tho application vias published, end of ite eubsequont anniversary of ‘ouch date. fnent taaybe made within 3 the annual fee Is not paid, the patent epplication shai te deemed withdrawa cr the patent considered ns lapsed from the day fol'cwing the expiration of the parlod with in, which the annual foas wore due. J, grave period of 6 months snail be granted for ithe payment of anual fee (Ser. 65). CONCEPT OF DIVISIGNAL APPLICATIONS When two or mora Inventions ara claimed In a single application-but are of such a nature that @ single patent may not be Iseued for them. The applicant la thus requirod "to civide* or limit the dleims to whlcxevor the invention he-may elect, whereas thote lnvent'ons not elaciod may be made, the subject of separate applications which ‘are called “divistial_ applications* (Smith lina Aeakinan Garp. v. Court-of Appeals, GR No. 126627, Aisgusl 1, 2003, cted in Reviewer on Commeretal Lavi, Sundiang anc! Aquino, 200600), RIGHTS GONFER2Z0 TO AN APPLICANT All the rights of 2 patentee in, relaticn to the invention climed in the published patent application if ha hat: 4. (a) actual knowledge that the invention was the Subject mater of a publiched application; or (©) recolved writen notice that the Invention wes the subject matter of a-published application; and had not flad tho action until afer tha grant of @ patent and within 4. years. from the Cortlain ef th aoa oped ot (Sea, 40 RIGHTS GONFERRED BY PATENT (S00. 74) 1 2. 3 ‘To rostralry prohiblt/ prevent; ‘a, Subject matters PRODUCT To restrain, prohibit, and prevent any unnuthorized person ot ently from mating, using, offering for, ale, seliing ér importing that product, b. Subject matter is PROCESS To rostrain,: prevent of prohibit any unauthorized: person or enilty from using the process, and from manufacturing, dealing In, using. auilng of offering for anle, ot sporting eny product obtained directly or Indirectly from such process, To ausign or transfor; and To conclude licensing contracts LIMITATIONS ON RIGHTS CONFERRED BY PATENT 1 Genoral Limitattons (0s. 72) The owner of @ patent has no right to prevent third partes. from performing, without is authorization, tha folowing acts: 5 Using of 8 patented product which has been put on the market inthe Pippines by the owner of the product, ar wilh his ‘exproas coneant be, Explataton of the patent done privately and en a noncommercial suale of under ay (See, 7 RA i MEMORY AID IN COMMERCIAL LAW| 13,14 ]2709 CENTRALIZED HAR OPERATIONS PERATIONS a aaeermen ane 2. Uae by Prior Use (S0e. 73) {A person other than tha applicant, who have farted using In good fat the Invention in the Philpplnes, or undertaken serious reparations to use the same, before the {ing date oF priory dale of the application that have the ight 10 continue the use thereof hut his rigit may only be transierred for avaigned further wih his ente:prise or business, by itimay use the patina yariedis oaitcony © the patent owner If ‘a. Fubliclnterast so vequires; 5, The manner of exploitation by the fownar of the patert is anti-competitive ©, Incase of drugs and medicines, there is ‘a national emergency or other Croumstanee of eyreme urgency Fequlring the use of the invention. c. Incase of drugs ahd medicines, thera Is 8 publle rons commercial use of the patent by the patentee, without ‘allsfactory reason fe. In case of drugs and medicines, the demand for the patented article in the Philppines Is not being met to an adequate extent and under reasonable terms (Sac. 8 RA 9502). CANCELLATION OF PATENT © Formalitios Jpon petition, wlth notica and hearing + Effect Tennlnation of rights canferred by the potent | Boo. 66. > Grounsts: . What ig clamed as the invention 1s not new or patentable; 2. Potent docs not ciscloce the Invention In @ manner sufficiently lost and coniplete for itto be carrled ‘ut by any peison skilled In the art; and 3. Patent te contrary to publle order oF morality (Soc. 67). INFRINGEMENT (Seo. 76.1) ‘The neklag ‘offering for sala, seling, oF Importing '@ patented product or @ product obiainec directly of Indirectly from a patented [rocoas, of tha use of a patented process without the authortetilon of the patentee, sar Theda College of Lew GUNTHIBUTORY INFRINSER Gne who actively Induces the infingement of @ patent or provides the infringer with a component Of a patented product or of a product produced Soeause of 2 patented process Knowing it 10 be especialy adopted for nfringing and not sutabla for suostantial nor-intinging. He is Jointy and severely able with the infringe DOCTRINE OF PATENT EXHAUSTION Tr capousos that the fotentee who has already {hye hvention ead hae reneived all tre royally ‘The Invention thus bezcnies oven Iw Wis ww the purchaser without further restriction (Adams v. Burke, fod In Notes on Solecod Commercial Jaws’ A, Guide for Sar Reviewoos, Cating'g, 2003ed). ‘TESTS OF PATENT INFRINGEMENT. 4. Economic Interast test Wan the process-discoverers economic interests are compromised, /.0., when others Gan import the products that result from tho process, an acts said to be pronibited. 2. Literal Infringement test Resort, in the fist Instance, must be hed te the "Words" of the claln, If the accused matter clearly falls within the | clsin infringement Is made ott and that is the end fit ‘The claims of, patent. and the accused product must be juxtaposed within the Sverall context of clalms end specification (Godines v. CA GR 97943, Seplombur 13. 1993). ng pegenot be Ginapistaniion 8 pee ne cin BSH SunaanaSan jBeda College of Law eee DOGTRINE OF Fi! WRAPPER ESTOPPEL Balances the docirino of equivalents, Patentee is precluded from slaiming as part of patented product {nat whirl he nad to excise or modify fn Corder 19 avold cétont office relection, and he may cemit any additions fe was cornpelied to add by patent office regulations, DEFENSES INACTION FOR INFRINGEMENT. (Soc. 81) 4. Invaildty of patent or claim; and 2, Exlstonce of yrounc for cancellation REMEDIES FOR INFRINGEMENT 1. Action for es © Umttetia . Ty ‘acts 2! Infringement committed within 4 yeers before Institution ef action (S80. 79); b. Dam ges cannot be rece verud if the Infinger did not krow. or hed no renscirable. grounds to know, of the patent (Sac. 20). 2. Infunetion (Sa. 76) 4. Disposal or dostruction by coua’s order of ‘the Infringing goods, materials and Implernents, without compénsation (Soe. 76) 4, Criminal astlcn for repetition of infringement (Sou. 84). | Nota: The institulon of an Inter Partes case for canceliavion of a mar with the Bureau of Legal ‘Affairs, IPO dees not bar the adverse putty rom fling & subseque-t action for infigement with the regular courts of Justice In connection with the sama ragistered. mark. ‘This is because the ‘ertticate’ of tegistration upon which the sinfingement case is basad, remains valld and | subsisting for as tong es it has not been cancelled by ‘he Bureau (Shingrla Irtensatiorel Hote! Mct.. tio, v. Court of Appeals, GR No. 111580. line 21, 2001). REMEDIES OF FERSONS NOT HAVING THE RIGHT TO A PATENT (S2e, 67) Ifa person other then tho applicant is declared by final court order or duelslon a3 having tho right to the patent, he may within 3 months after such decision has become final (a) prorecute the tion £8 hi OW, (0) Me a itaW patert arpieation, (<) request that tho application be refuses; or (d) seek cancelation of the patent, Note: Appiles to pending application and even when patent is alteady granted. Tino to file: 4 yecr from aate of putication of the application (Sec, 70), MEMORY AID IN COMMERCIAL LAW| 355 ASSIGNMENT AND TRANSFER Inventions and ény vight, tls, oF interest In and to patents and Invantiens covered thereby, may ba assigned or transmitted by Inheritance of bequest or may be. the subject of @ license contract (Section 103.2). LICENSING May be Voluntary (Secs. Compulsory (93-102, IPC). 80-62, (PC) oF A, VOLUNTARY (Secs. 65-92) The grant by the patent, owner to a third person of the right to expllt a patented Invention, Prohibited Clauses (Seo. 67) 4, Those which impse upon the lleenses the obligation to nequire fro spectic source capa! Intermediate products, raw matarlals, and other technologies, oro) permanently employing | personnel Inalcated by the tlean aor; 2, Those pursuant fo which the leur reserves the right to fix the tule or resale prices of the prexiuals manufactured on the basis of the ‘ieerse; 3. Those that’ contain» resticiione regarding the volume and etructura 2 production; 4, Those thot prot.ibit the use of compatitve techaclogles. In a riot exclusive technology’ transfer arrangement, 8 Those thal eétablish full or pastin se Cthe use of the after the Te16 |200 CENTRALIZED BAR OPERATIONS 10. 1 12. 13. 14, 16, arrangenient, except in cases of early termination of the technology transfer arrangemant due to reason(s) attributable to the luersee; These which require payments for petents and other Industial property fights ater their expiration or termination of the technology transfor rangement; Those which require that the ‘echnology recipient ehll not contest the validty of any of the patents of the tecrnclogy supplier, Those wr'ch restrict the reeearch and davelopment activities of the licensee designed to ebsoth and adapt tne trannferred technology 10 local conditions of to Initiate research end davelopment programs ip connection with new products, processes or equipment; Those which prevent the licensee from adapting the Imported technology to local ‘conditions, er Introducing Innavation tt, as long as it does not Impalr the standards prescribed by tne Aleancor; and ‘Those whieh exempt the licensor from Hiabilty for on-tutfiiment of his responsiblties- under the technology transfer sreange ment andlor tubilty ‘arising from third party suts brought about by the use of the licensed oduct cr the licensed technciogy, and COthor canes with equivatent effects. Mandatory Provisions (Soc. #8) ie “That the laws of the Phillppines shall govern the Interpretation of the agreement ard inthe evant of Itigation, the venue shall bo the proper court in the placo where ths censes hhaa its principal otice: Continued accnss to improvements In tovhniques and processes relctea to the technology shail be mao ava lable during tna period of the technelocy trnnsfer arrangement tn the event the technology transfer arrangemsnt shall provide for arbitration, the Procecure of Arbitration of the AlcHration Law of tha Phiippines or the Arbitration Lew of {the Urited Nations Commission on International Trade Low (UNCITRAL) er the Rules of Conciliation and Avbliralon of the Interiatlonat Chamber of Commerce shall apply san Meda College of Kaw and tie verue of arbitration shall-be ‘the Phillppines or any neutral country; and 4. The Philippine taxes on all payments Felating lo the technalogy transfer arrangemen, shall be borne by the Hcensor, COMPULSORY (800s. 93-102) ‘The grant by the Cirector of Lagat Affairs of a license to exploit a patented Invention even without the agreement of the patent owner in favor of any person who has shown his capability to exploit the Invention under certain circumstances. Torma and Conulitions for Compulsory License: 1. The scope and duration of such ileense shall be limited to the purpose for whlch it waa authorizee: 2. Non exclusive license; 3, Non assignable license; 4. Uso of the subject matter of the license shal he devated predominantly to the supply of the Philippine market; 5, May bo terminated if tha circumstances which led to Its grant have ceased; and 6. The patentes shall be paid adequate remuneration Grounds: 1. National — emergency or __ other circumstances of extreme emergancy; 2 When public interest requires; 3, Manner of exploltaiion of patent is ante ‘competitive; 4. Public non-commerdial use of the patent, and Patented invention is not belng worked in Code and is has bearSan Beds Collrye of ay MEMORY AID IN| COMMERCIAL LAW] 17. Note: The date of fling is vary important under the resent “frsto-fle! system because ft earves to Setarmino, in casi of a cigpute win another appleant for the Lave Invention, who has the right to the patent. 3, Clasalfcatlen and Search ‘An application-which hae complied vith (8 fornval requirements shall be clagsifiec ard a search concLgiee to determine prior at (See. 43). 4, Publleation ir. the OS ‘The search er he claselficadon of the fiald of technology to ‘hich the Invention is eatigned wi be publiched in tha IPO Gezelte afc’ tha expiration of 12 months from the fing date or priority date (Soe. 44). Note: Aer the pt lication ef the applleation, any penan may. prcvent observations in writing Concerning the pétontabilty of the Invention, Such Cheervafon hal be communicated to the applicant who may gorament on them, 6 Request for Substantive Examination Budstantive examinalicn ig conducted upon request, Tha tequent for substantive exainination of the application must be filed within six @l,mvanths from the date of the publcatian. the application 1s considered fallncrewn i Go. request Is rads within that period (Soe. #2). Jclaion to Grant Patent Roglstration oF Daclsion of etusal Ite examiner finds no reason for refusal of the applcalicn, arf the note of reason for fausal is anlistactorly complied with by fameniment or corection, the examiner fssuies. a’ decision to grant the patent registration, Othervdsa, the examiner rofuses the applcallen, 7. Inspection of Racords It anall bo published in the (PO Gazette within six (6) montns, Any Irterested party Fray. Inspect, the complete description, Galms,-ane drawings of the patent on fe with the Offs, APPEAL Every applicant ‘ay erspeai to the Director of Patents the final refusal of the examiner to grant the patont withir fo (2) months from the maling ale of the final rufucal, The decison of order of the Director shall beccme final and executory fifteen (13) days! ater receipt of a copy by the appellant uatest within the sam peciod, @ mation (ia Ui {or reconsideration ts fled with the Director or a ‘appeal to the Director General ia filed tonethor with the payment ofthe required foe. The’ decision ‘of the Director General mey be appesied to the Court of Appaaie ifthe applicant is stil not gatisflad with the decision of the Court of Apes, he ray silt appeal to the Supreme ur, ia ; TAA oaanieat i an nue nai, “The IPC dees NOT naymore provide for prlor use ‘as.a condition for ownarehip of a mark (Seo, 122). REGISTRATION [S THE SOLF BASIS, Howaver, trade name or business ame may be acovired bw prior use and naed not be regitered, PRINCIPLES: The right to the nuark fs separate and distinct from the business using auch mark, (S. 149.1), 2, Tho right of rogistvation belongs to the ove cof tha inark (Unio Conimercial Entorpr!n0s, inc. . Goreral Milling Corp., GR 20554, February 24, 1983). TRADEMARK ‘any visible sign capable of distinguishing tre goods (trademerk} or services (service mark) OF Sn enterprise and shall include a stamped or frarked container of goods..{n relation thereto, a trade name moans the name or designation dentfying of dstingulahing an enterpriso (Eldod Kho v. Court of Appoals, GR No, 118758, March 11, 2002). Basle Requitemar‘wn}2,12009 CENTRALIZED BAR OPERATIONS Acquisition ‘Acgtiréd through registretion. Registration Is moessary botgre one can fle on action for lnfingement (Ruviowar on Commercial Law, Sundisng and Aquino, 200€ed). Prior use In the Philppines Is not required before registration. However, there must be an actual usw afer registration because Sections 142.2 and 15i[3] of the Intellectual Property Code sequires that the registrent shal fla a duclealion of actual use of the mark with evidence within 3 years from the filing date of application, therwise, it would bo cuncstled For the requiemant of "actual use in commerce in the Philippines" betore one may rogistor a trademark, trace-name and service mur: under the tu pertains 10 the temiorial Juriadiction of the Mulippines and Is not oly Confined to a certain ruglon, province, oty oF harangay (MzLonatd’s Corporation v. Wodoy Fastfood Corporation, GR No. 166116, Fobructy 2, 2007) Registration fa not necossary to file a ease for unfair competion (S00. 166.1 & 2) What may NOT be ragistared (Se. £93) nmoral and daceptive matter; 2 Nelonel {ag or insignin 3. Name, portrait of signature of ‘tiving person oi deceased President; Mark ortrade name infringing another; Mack constituting reproduction of Interationaly wal-known mark, whether or not registered tnare: 6.. Mark: Iontical with well-known mark, on onscampeting goods, registered hare; 7. Mark ilkely to mistead the public; 8. Mark coasiating exclusively ‘of signs ‘generic for tho goods or services; 8 Mark consisting ax:tusbvely of signs or of Indications which are customary or usual to designate yoods or services in everyday language or bona fide and ‘qatabllaned waco precilces} 40. Mark consleting of s.gns oF of indications sed In trade; 14. Mark consisting of shapes; 42. Mark consiating of color e'une, uniess defined by form, 4%, Contrary to publio erder or morally Note: More geographisel names are ordinarily regarded ag common proverty, and It isa general. rule that the semo cannot be appropriated ae the subject of nn exclusive vadematk or trads name (Ang Si Hong v. TF Savi Wrda College of Law \Wsttogton Dapariment Store, GR No, L-4531, Jamary 10, 1953} TRADE NAME, Any individual name or surname, firm name, device or word used by _ menufacturers, industialiste, merehente, and others to idently ther businesses, vocations or eccupations (Conversa Rubber Corp., 4 Universal Rubber Products, inc, GR io, L-27425, 2-30505, Apni 28, 1980), me ‘Any visble sign dosignsted a0 such inthe ‘Any visible sign \whistis adepled “nt used to Tocntly tha ) ditlngusting | appreation source of origin | the services of | regisvation anv ot goods, urd | an enterprise | capable of ‘whichis capable | from. the | distinguishing the ‘distinguishing | servea of | origin or any olnes thom from | oar ‘common | goods fentarprces, | characioristo, | emanating from inckding te a ccmpettor guclty of gucde or services of siferent enterprises: which use the sign Under tho corto! | of the registere| | | owner of tha Ties on existence dial from the axistence of te Attached to the natural or ree coin tuetneas | vila person wna does poison dolng business ean ee bed pet rhusiness and prodSo Meda College ot Law maa Right which protecie the {ntarosia. of produasra In thelr marke and In tse goodwill ear Ropuiaion end ublc, ontidene’: “that ruslnesavantire hon eames vor gy peed Merely 6am38\ wht is Designod to tearity the | witnin the container Usererorign. | parkage: may or may not Note: In practice, a word, a name cr a phrase, coupled wih Indicators of tusinass expanizatisn, such aa ‘inc’, "Corp or "Co." will NOT be registered as tad nari of service snarks, REQUIREMENTS 10 GET A FILING DATE “On recelpt of the iapetion, an examiner checks it” the applica in Includes the» folowing requiroment Ae Request for w /hlippine registration of mark; E. Ident of aps Foant: 3. Indications suticlentto contact the applicant; 4. Reproduet'an ef thn mar; end 5. Ust of goods or services Note: No fillng dats until (ie required fos Is paid. PRIORITY RIGHT ‘An apclication for fegistration of mark fied in the Philippines by & perscn who qualifies under the reclorocity mul und who previously filed an application for registratizn of the sama mark in ‘one cf thoce coun'tios shall bo considered ae filed {88 of the day the «pplication was first filed in the. foreign country(See: 124). Significance of Pricrity Right ,APhiligpine application fled by another applicant ‘after tha prlotity date ut eartior than the foreign applicants etal fling may ba refed regisietion fi ip identical (9 the mark with a oily ste (ha Law, on Tiadomark, Infringement and Uniair Competition, Agualo, 20000). ‘Condit'on 4. The Bpptcatizn rust bo fled within 6 months from the date of earliest foreign application, Its certified copy parsed win 3 mos. tram tho date offi tn the ehilppines. 2, Tae following shoud concur. (a) the foreign country | county of origin hae allowed the mark ond (b) the county of origin is the applicants dovicie or has @ bona fide commercial estabislimant 3, The owner of the Philppive Regletretion may not sue pila” fo tho granting of the MEMORY AID IN COMMERCIALLAW] 19) registration, unloss the mark Is considered well-enown a3 provided for th IP Code. 4. The priority right may nol be basod upns a foreign apnteation thet-has baan withdrew abandanad, oF athewise disposed of In the country of origin (Rule 202, Trademark Lav). CERTIFICATE OF REGISTRATION It shall be a prima facie evidence of Validity of rogletration; Rogietrant’s ownership ofthe mark; and The regiauant's exclusive right to ute tho same in connection with the goodt of services and trove that are related thereto (Seo, 136), Gonoral Rule The trademark protection exteuids only to gvods or services related to those speclied in. tho cartiicate. Excoption Expansion of Business Rule ~ siso to those goods or terloes that’ aro related thoreto specified I the certticate (Soe, 198), + Al cases In which the use by the junior approprlatcr 18 Ikly to lnad to a confusion of scutes #8 where prospective buyers would ba misled into thinking thal the complaining party has extended his buslneas Into another eld (Sle. Ave v. Malhvat, GR 23023, August 31, 1968). DECLARATION OF ACTUAL USE OR NON: USE BRS SIT Ree penueinM rnvorsy ef te dio of reeegisvaten of tho Aaa Ta od TU12-20 12009 CENTRALIZED BAR OPERATIONS 2. In e080 ofa rogistatod wall-known mark: Exclusive ght to rosttain/ prahibl prevent third persons from usirg Identical or sisllar signs ven for dlsalniiar or unrelated goods oF sorvces, provided that the nse wll indicate 2 connection hatwron the goods and the ‘owner of the mark und thet the intarest of the ‘owner would likely he damaged (Sec. 147.2). DOCTRINE / PRINCIPLE OF RELATED GOODS OR SERVICES ‘Taere Is infingemont whan there Is use of similar ‘marks on goods that are so rolated that the public inay be, or Is acluslly deceived, and misied that the goods come trom the same maker or ‘manufacturer (Ess Staridard Eastem inc. v. CA, 116 GRN 29971, August 31, 1982). ‘An EXCEPTION to thls dorting Is the additional fight gruntad to @ registered well-known mark. WELL-KNOWN MARK ‘A inark which a competent. authorily of the Philppines has designated to be well-known Intamalenally and In the Philippines th. determinng wheth > a mar is velkknown, the knowledge of the ralevent sector of *he oublic, rather than the public at targa, including knowledge In the Philppines whict: has been obtained as a result of the proracion ofthe mark, shall be pertinent, Determinants: ‘Iv. The duration, extent and geographical area of any use of the mark; 2. The market share In the Pbillppines and fF countries o! the goods/services. to ‘whieh the mark upples: 3. Tha degies of tho Inherent or acquired ‘istination of the mark; 4; The qualty-Image ur reputation acquired by «the mor; ‘5, Tne extent to which the mark has been fegitered 'n the world; 6, Tho oxclusivity of the ragistratien attained by the mark in the world; 7, Ths extent of use of the mark in the world; Toa exclutey ofusa in ie wok a ‘commernial vulve attributed to the marc Inthe warld; 40, The record ef succevatut protection of the fights In the mark; 41. The outcome of litigations deating with the lesue of whalber the mark Is well-known, and 42. Tha prnsunce or absence of Identical or similar marks vallély rogistored or used on almlar goods (Rule on Trademarks, 102). San Beda College of Lats Blghaa Right to be protected whethar or not it Is rogistarad In the Philippines; 1! roplstered, extension of protection to goods and senices which are not similar to those in respect of which the mark Is registered, provded that: a The use of the mark in relation to unrelated or dissinilar goods or services would indicate a connection between those goods or services and the owner of the mark; and b. The interests of the owner of the registered mark are tkely to be damaged by such use. (Exception fo the rlocirine of related goods) NICE CLASSIFACT.ON This is. the system by which trademark applications are classified, There are 34 classes (of gv0c's and 8 classes of businesses or services, DIVISIONAL APPLICATIONS ‘An initial appilcaticr may be divided by the applicant into two or mere applications. However, ‘a single clasa shall not be suLoivided, Tne divisioral application must be submitted ‘within 2 months from the mailing date of the 1 action of the Bureeu of Trademarks. A new application number shall be issued, and the pilority right of the Initial. application shall be preserved. ‘An existing’ rugistration may also be subdivided Upor request. by oath and wring. A new certificate shal! be issved but a single class shall also not be subdivided (Sec, 129). BOGTRINE OF SECONDARY MEANING Indicative or 123.1) oe ery person camaged by the: ‘0been Col geah Hae poynant of hy foe M6 an oppttion to Sepleston Form: 4. inwatting 2 Vorites 3. Spectind grants 4 Slatement of acts Timo to fie: 20 days. after publication ‘of ‘appliestion; Wf unverified, the verified oopostinn must he fled within.2.months from such fing BUT Ray be axtenvled for + inonth and maxirum pperlod does not excued 4 months from publication ‘of application (Se> 134) CANCELLATION . Soe. 161) + Uper patiten, with due notice and CRRA RN jeg ; era q ‘Belet thet togistersd mark hea gamage oF vil "Becoming the genaric nana for the goods or services for which Is damage thy} registarses petitioner 2, Abandonment, 3 Iiagal or trauduent | ogistratcn, 4. Use by, oF with tho permies’on of the fagisicart 90 a8 to misrepresent the source ‘of tha goods or srvices in connection wh which the mark's weed 5. Nonwro for an uninterrupted period of 3 yonra withou' lagiienat feason Note: Actual use may ba dene by substantie! compliance (Sve, 482.2). Exempting clrcumstarices: those _ arising Indepencently of the will of the ‘rademierk owner (Sec. 162.1), stich as prohibitien of sale by government regulation, military coup, o* political changes thal impede eammerce. Note; Regietration Is an’ administrative act declaratory of a pr3-axisting right that dees Act, of self, perfect a vedernark. It fs actual use which ppoctocts 0 tracomerk. NON-USE OF A MARK WHEN EXCUSED 4. if cauesd by circumstances ar'sing independently of the will af the owner, Lack of funds not exct sed, MEMORY AID IN COMMLRCIAL LAW| 21 2. A use walch dogs not alter its dlatinetive character though the us is different from the form in which itis ragisterod, 3. Use of marin connection with one or moro of the goode/asrvleen belongicg to the class In which tho rnark is registered. 4, Tha use of @ mark by a company (elated to the appllcarvrepistrant 5. Tha Uae of a mark by's pdraon contalied by the roalstrart (See. 182). INFRINGEMENT (S00. 186) 4, Reproduction. oF colorable Inttation of a registered maik or a dominant feature thereot and epplelion “ot auch répreduction of imitation of ba's, ete. Intendad to be uaed In commerce, of usa ia. commurce ot ay reproduction er colorable Imitation of a {registered mark or 8 dominant feature tereot in‘connecton with the sala or advertising of {goods or serv 2, Likelood tb cause confusion or mistakes ka the mind of he publlo or deceive purchecurs Note: This is pteeumad In cago’ of the use it an identical sign for Identical goods or seratces. There is infringement of trademark wher the Use of tho mark Involved would be likely to cause confusion or mistake in the mind of the public of to devolve purchasers as to the cofigin of the source of the commodity (Put ‘of the Loom, Ine, v..Court of Appaals aut Ganeral Garments, Corp., GR Ne L-32747), Action fot inftingemant may be miaintoled ‘without proof of anything more tan the right to the exclusive use ofthe registered mari ot trade name und tat the defendant tat Violated t, No aliggalion oF proof of frau ¢1 iy (Comal flee Claas, 0 By Apale f AN nfrin2212009 CENTRALIZED BAR OPERATIONS ELEMENTS OF INFRINGEMENT 4. Regletration of trademark in IPO; and 2 Trademane — is reproduced, ‘counterfeited o- colorably imitated. corie, Colerabte tmnitation Such similarity in forms, corten', words, Sound, meining, specie! arrangement of General appearancn of tho mark of trade ame with that of the othar mark of trade fame in thelr ovarall presentation or in their essential, substantive or cistinctive parts ac Would likely mislead or confuse persons in the ordinary course nf purchasing the genuine article. Donotes such a "close ingen'ous initation’ as to ba culoultted to deceive ordinary persons, or such resemblance to the original es to deceive an ordinary purchaser, giving such attention as 2 Purchacer usually givot, ard to causs him to Burchasa tha one auppesing it to be the other (Elopha A.0, v. Divartor of Patents and Westmont Pharmaceuticals, Inc, GR Mo, L-20835, March 21, 1966), {tls used In connection wit the sala, or itis offsring for aie or adventsirg of yootls, servinus of business or applied to labels signs, wrappers. etc intended to be uszd 11 connection with such gords, services or business, 4. Thera is, in the use or application a Fketthood of confusiun, {Leck of content on the part of the registered 1 owner or their assignee (The Law on t Trademark, —Intringamant’” and Unle'r Compaiition, Agate, 20008, Thare shall be no in‘ringement of trademarks (oF trade names of Imported! or rokt rugs anc madicino ag defined in Sec./2.1 of the Act as well e Imprited or sold off. patent crugs and ‘ medicines (Seo, 14 RA 9592) Exists ‘hen one pasty product ar service though aiferen fom that of ancthes, is such’ as might Feasonably be aaeuined to ‘origins frory tha lite fd tho pute v ouid t be deca inte the out rat thers a some ‘connection between the Patios, whic infact Is Exseot Conitusingy Srnlay maT ‘are employed in diferent Tor Fen-compating A person's goods’ or Servlcos are purchasset as these of another and th . poorer qually ef formar rehteris adversely ‘nthe eters reputation, Sontusingly simier marks ara uged on the sina nts of goedaerslees San Meds College of Laws IDEM SONAMS RULE Two trademarks used on Identical or colated goods may be confusingly similar if tney have similar sour.d cr pronunciation, Note: Simiterty of sound or pronunciation speling may 22 sufficient (o make two marks conlusingiy similar when upplied to merchandise Of the same descriptive properties, Evamip ‘Salonpas® and *Lionpas” bath for medica! plaster (Marvox Commerclel Co, ¥, Petra Hawa aid Co,, GR 19287, Dacemter 22, 1956). Likelihood of confusion or mistake is grnater when Identicul or closely simitar marks are used on nen= competing but related and common houselicio ‘toms because they ae purchased by ordinary Purchasers who usually Know them by thelr ames or trademarks. a SORTER TE va ee Re ane RG 623), The use of the same, without apparent permission com the trademark owners thereot, shall be prima facie presumption that such possession or use is Ger go0ang, Hf aRS Pale ate 4 % Fe NERD ae ts bale ee ieSean Tied College of Lady LLU EAST SS Say An} Foouses on the siniianty ciety tha entraty f the main, easertia, | of the mazks in question dominant, of sevaloat | must be cnnalgares In fesivras ofa meek otermicingy coniuslng emiarly. Exnet_ duplicai2) ot imitation Is not necessary, | “This taat ia Incorper aad in ‘tho. Intulioetuat” -oparty fo EXAMPLES Ol CASES EXPLAINING THE Tests. DONS ML 1. E, Salnner 3d 0, 3. Neues HLoneian The use ef Wigan* for kal Cop. (Gk No, 311380, Jlantiry 13, MEMORY Alb IN COMMERCIAL LAW [23 2007} 3 MeDonaids Corporation and MeSeorge Foor! Industrien, Ino, vs, LO. Bg Mak Burger, ne, (GR No. 143983, ‘August Big Mac ve. Big Mok 48, 2003) 76, MeDonalde Corporation va, Macoy Fastfood | McDonalds ve. Corporation (GR | Macdoy No. 136118, Februsty 2, 2007) WoLIstic THET % lg Comp. va. CA (GR hn. 1060%0, Docommn® 28, 1995) 2 Brio! Mrera (GR No, L-23023, | Flonnan v3, Flormes Augus' 31, 1956) ents (GR No, f= | Hen Stand va. Macka Orr of Patonte | Botorin ve. Butlr both 6072, Octobor 34, | Menok | (GR No. 1-21504, | for medicine: 1956) 7 Hl Moy 18,1900). | eee Sta, Ana va, Matwat Same Cyanamide Co. vs. Dir of Patents {GR Not-23984, ‘Sulmetine vs, Sulmet both for veterinery medicine 1997) ae faba) cof BEER PALE PLSCM ana uot fhe siete tle ve See PALE BLSENL ‘ith Revenpuor Mat snd Hepa Design 6 Asia Breviery , tne., V8, Court of Appeals (GR No, "1013543, sly 5, 1999) ‘In, leit | Gold Tox va. Gold Peatody 60.5 ino. | Yop (GR No. 180300 % Sodele Des Produits Nestle, | Master Roa! SA. vs. Sout of | Master Blen Appenis (GM -No, | Flavor Master 442072, Agrt_4, & Pappire Mtt otenters. Cockle Apr 28,1972) __ | ndustry ves Si | ii | | Wad donnson' pga oon aad ace Brands (GR No.l. | osnuts v8. Pil Hee VeOR2e | Alaska for milk and Alacta 2s “iy | ae cot va, Vin 8 | er poyered halts 1975). pet aera zt, 2903)” | mie He & Converse Pubber | H Comp vs, Universal | Universal Converse | REMEDIES FOR INFRINGEMENT Rubber (GR No | Delco va, Converse | 1, Action fordamagon, | 22008, Jamicry 8, | Rubber Corp. Gonoral have beor omitted th knowledge that24 12009 CENTRALIZED BAR OPERATIONS such lnnitatlon Is likely to cause contusion, or {0 couse nilstehy or to deceive (Seo. 154), + The Infingement cage can and should proceed indemandently tram the cencotaton case with the Buraay $0 as to afferd the owner of tha cortiicates of registration ‘dress and Injunctive writs (Shangitle laternational Hotel Hy, Inc, ¥. Court of Appesls, GR No. 111560. Juno 21, 2003). + Pry foreign natlone}, whe qualifies under the principle on reciprocity and does act engage In business in the Philippines, whather or not itis licensed to da butisiess in the Philippines, ‘may oring civ o adiniristrative avtion for: a. Opposition ® Cancellallyn & nfringement Unfair compettion ® Falso detignation of origin or false doseriptlon (Sac, 160) UMITATIONS = ON ACTION FOR, INFRINGEMENT (!.00, 159) 1. Right of Prior Uisor ~ fRegisterod mark snail by without effect against any person whe, in good faith, before the: fling or priority date, Was using the matk for purposes of his buslness, Roliof against Printor ~ Injunction ayainst futira printing against an Innovert Infringer who is engaged sclely in the business of printing the mark, Rallof against aowspeper ~ Injunction ‘against the prusentation of advertisiig Taatter in future issues cf the newspaper, ‘magazine or In etectinle communications in case she inflingemiant complained of is Ccontelined lt or Is part of paid advertisement Ins such matertats, UNFAIR COMPETITION ‘The employmant by a person of dece.tion ur any olhier means contrary to good faith by which he. asrea ot! the goods manufactured by him or in ‘which-he deui, or his business or uerioas, for those of gnothar person who hes established ‘goodwill! In the goods euch person manufactures OF deals In, oF hie business or sarvices, or who. shall.commit ery acts calculated to produce sald result, whether or nat reylstered mark is ‘employed (Section 1€8.2), + In particular, the folowing shall be deenied guity of unfair compolition: 8. “Any peraen who Is oaling kis quocs and ‘alves them the general appearance of goods of anoitier manufacturer or dealsr of who olnarvisa ciothes tha goods with such > 3 Wege of Zawy nee EMME ge Of Eat Zan Beda ‘gppearance as shall deceive the public and defraud another of his legllimate trade, of ‘any euksequent vendor of such good or any gant of any vendor engaged In:selling such oads with a like purpose; ‘Any person who by any artifice, oF device or who amploys any other means ealeulated 10 Induce the ‘alse bellef that such’ person Is offering the services of another who has Identited such sarvices in the mind of tha ublie or; ‘Any person who shall make any false ‘satement In the course of trade or who shall commit any other act contrary to good faith i a nature calculated to discredit the goods, business or services of another (Section 169.3). TEST: Whether cetlain goods have been Intentionally ciothed wth an appearance which i Ikciy 19 decalve the ordinary purchaser exercising, ordinary care, and no! whether a certain limited class of purchasers with special knowledge not Pousessed by the ordinary purcharer could avoid mistake by the exercise of this special knowledge (US. v. Monual, 7 Phil 221, GR 1999, Dacombor 2, 906), Unauinsrzod use of ¢ | trademark iF Pro regetralon of the | trademare Fraudulent inient is cessertlat LETT Registration: ‘is prerequisite to an action, ees c by Sinus RIL Rysipally stands as the Injure? party, ‘The complainant's capacity to suefan Bebe Gale of Fo auch casa becomes imnsteral (idattarose Sasui, at ai, vs. People of the Philippines, GR 198, rn 29, 2008). While foreign corporations may have ‘he capacity fo sue for infringement irrespective of fark of businoss activi in the Philippinge but the question of whether inay have an exclusive right over the symibal as to justly issuance of an injunctive writ wi depend on actual use of thelr trademarks in the Philpplies. To be entitled to an injunctive wri, @lorelgy corporation must show that there existe’ right to be protected and that the fact against which Injunction Is directed are violative of auch right (Philp Maids, ot al. vs, Fortune Tobacr) Corporation, GR No, 158589, ‘lune 27, 2008). Sale la not an |1dinpensable element In aa action for infriagemen or unfair compatitiun (Pra Line Sporta v. CA, GY 118192, October 23, 1997). MEMORY A'D IN COMMERCIAL LAW] 25=. 36 12009 CENTRALIZED BAR OPERATIONS Dan Beds College of Lato DISTINGTIONS ON COPYRIGHT PATENT AND MARK pean Tait ‘Ao exclusive ight Beau ‘over an invention, to Ts that syalom of legal protection an author wnajoys inthe, forin af expression of Ideas (Vong Intslertua! Proverty Organization papop, ‘An Intangible, Incomporest ight granted by talute 19 the author or originator of eartain whetive for commerce Industy, Refers to elthor the giant 4. Originality; and 2 Expression problem in any. flld human activity Which es 4. New or 340 2 Inventive: and |S Indust Thiet ;mporal~ The owner ated bythe forms of alg 2° Tontesiliysographicn — The owner ie pro%e.sed uy the [aw of 3 For vloatone in ancinir county, ea ea 7 thes bh Se ncee CGRTA LOWEN Gis OPER use and make the same lMorary er aniatic productions, whereby he is | rights, OR the Instrument Invested, for a tivited period, with the sole | (sometines vale letters exclusive priviegs of mutsiing copies of the | patent) cxntaining the grant, ‘seme and publishing and sellay them (Black's | Gling a1. Inventor a Law Dietanary), mongpoly on the Inventor's Invention fora Hmited . faa eee es saa ‘Not only to reward To. ‘org or (generet pubic geod; and the Individual, But ‘ownership of artes to which 2. To promote the progress of sclance and the «advancement thoy are sttechad; usaf at, Of the arta anc} 2, To” guarentee ‘Ihat those sciences; anicles come up to @ 2 To ade te the sim Certain kind of quaily, uselul| 3. To adverliso artes they Fovige an symbolize; 3 To enicourage’| 4. To assure the pubic that they |- dissemination of sre producing genuine article; Information ‘and oncerning 5. To protect the manufacturer | discoveries and ‘against substtution and sale | inventions, ‘of an inferior and diferent fy tbc eh ote ied [Any visible sign sal, | distinguishing tho goods ef an rise (\rademark) or the services or temprise (service mark), and 2 siamped or marked ontsiner of goods (Sea, 127.1), tot aricle of Must be rogistabie (Soe, 123.1) ‘Absolutely non-reglstrablo ~ (ext) & (m) of Sec. 123.4, Quaifdly registrabie ~(),(K) (of See. 123.4; Doctrine of secondary moaning (Soa, 123.2) 78 from appilestion: foePURPOSE To prevent’ he difrausiig of creditors by 2 In bulk of ‘or substantially all nf a merchant's stock af gocds Im bulk unbi the cracitor of the seer stall have aocret a'e cr cle:)9sal or mortg | boent pale in ful, © The Jusiifcaticr: of the law is the police power Monrirm, GR No. Le of the State (/.ivanag v. 47508, June 26. 1841), ‘+ The law Is penal In mature and In deragation: FORMAL REQUIREMENTS (SPINR) « ‘The genoral echemne of the jaw is fo\dociare tuch bulk sales. FRAUDULENT. AND VOID AS_TO GREOITORS OF THE VENDOR | UNLESS specified formaltios aro cbserved, to wit 4, Sworn wellen statement of the names and faddreee3n of all creditors. of the nollor and Teszectiva amounts of debin to be: furnished the buyet! rertgagee. (See. 9 & 2); 2. Prowata opolicalan of the Broceec’s to the bona fide claim of creditors as shown In the vetlied statement (Sec 4); 8, Detaled Inventory of stock to be sold or mortgaged (See. ): 4, Notice to the creditors at loast 10 days bolore fof she right 0 alienete pioperty without the sale or tanster (Son. 8); restriction. Thus, ts provisions must be strict 8. Registration of the documents in Buren of ‘construed against the Stete and liberally In Domestle Tade/DTh. favor of the accused (Comments and Cases on Seles and Lease, Hostor §. Do Leon, 2008). SALE IN BULK Any sale, trenstiy, assignment, falth (FOB); 4, of a.stock 0° gocds, wares, merchandise provisions, of materials othar than in the "|, Ordinary courte ef trade or buialnes trade: 3. of all or substantially all of ‘equipment Philippine Lev on Salus, © 19980d), Note: BSL applies only to merchants and NOT to manufacturers or those lavelved in lease of services (People +.Wong, 60 OG 1867) or morlgaye, ragaidiees of intect. whether dona in ood erbad ‘of wl er substandally ali of the Business or Fndures and ed in the Dusiness (Soc. 2; Villanueva, ‘Non-compliance with any of the following renders the transaction vole, Note: ‘Non-compliance with requirements { of 28 with criminal pliance with 2S aR PT Teafidatirhiehowle) ep adel ee Yara ua Teerve COMMITTEE FEFDERT CAQIN ABUGN overt cha and he wees ops, AANOLO ABEL SANTOS chao mpatons GRACE SARA Hw thal frcperatons JUIN CARLOS NUEETRO lech fv nn we Wie ANGEUE ETANG ve tafe seratarit,RLSTINE ANBABEALL 2 (Teac for fnanes, LENE XINAACOSTA ice chal od, ALE JELLO CO® CEPCION ve charles commetcit ui atm SAnsanTO Inet procerty, Hos xODIAO spect 1 er MA. RATIINA ICO! CONTACTO asta aoc cha JAN MANLELLE REVES a JAY MASANGCAY fe Fey aYPOLEIAHISON Ling ows, LOXENOS ULI code ol commares, MINA IFURUNG oe (Parents ns, ALE AROUE2 netance ly, SAN DUENSUCESD seat lows, MARCH "ANDO comnraion a> « ess: Corals ‘Afonso, Aes Pader, Ass Angeles. Anne Oona, Zeus lord sly “iubsen, lo Sans ie Chi, Mark Magnes, Annony Mee Bo Sans, veo Pecan, Monta Nowy Shean Seren, Ml Nu la un Geran Para, Ra Hes Sherey Jone Gasp, ered Tagua, itt Fabte Tres, Stephani ares, Mie St28 {2009 CENTRALIZED BAR OPERATIONS 2,° MERCHANDISE it must be construed to mean such things es até usully bought and sold in trad) by merchents. (People's Savings Bank v, Ban Allshurg, 131 NW. Ot) It means somethirg' that Is sold everyday, and is constantly going out'o" the store and being replaced by otner goods (Bo'se Credit Man's Assoc, v. Elle, 133 Pac, 6). 3, FIXTURES Ht fefeia to such articles of merchandise usually poscussad und ennexed (0 tho promises oceuplert by’ marchants to enable ‘them battsi fo store, handle, and display thelr wares alliough refnovable without material Injury to the promises at or before the end of tenangy (drown ¥. Quigley, 130 N.\Y. 690), Nota: Lands. and qulldings are NOT “goods, ‘merchandleg and filures" and therefore not ‘coverad by the GSL (Comments and Casos on Sales, De Leon, Hi, 200ced), CREDITORS: All of tha sallern-ctaditors at the time of the sale! mortgage + Need not be judgment ereaiters +The claim nead not be dus + Creditore whose slaims came inco existence subsequent to the sale are tot entitled fo the benefiis of the statute (37 CUS. 1532, 1555). + Creditors may waive the right to the benefit cf the sla(ute oF estop themselves to claim that the s.le was invalid (31 C J.3. 1328) EFFECTS OF FA(SE STATEMENTS IN THE ‘SCHEDULE OF GREDITORS: wil be protected, Z| creditor's Famedy Ia NOT ‘againal the goods hut to prosecute the Seminal ‘Tre vendes aocepte Ta | ia. pet The aaa is VAUD” between he vendor ord. the verdes Dut VOI as against the ‘elie [Winn “Wrantecge “or | Imeutod “knowedje of suyer VE such creditors, whether teal emialan wee ~ Fipoat WS” “an | Purchaser feascontpurchisir_ fr | proteies, Howover ‘ Luh vt Han Beds College of Low ae Te notice. 7 oiaser eanainiaine EFFECTS OF VIOLATION OF BSL. [-f Boinaon the parfos [VALID CONTRAST 2 Bonen persone OTHER than. the | VALID CONTRACT A i Ste VOID CONTRACT “& Puichaser acts as 8 TRUSTEE OR RECEIVER for Other Violations: « ‘14 Transfer in-buk without consideration or for & ‘suminal consideration only (Se0. 7) 2. In.omplete oF false or untrue sworn writen statenient (See. 6). toe bo ht] propery we | tie“ prn | pals mong | Gaver |. Fie octon| | pe opens tne | Sonagee | thermacasgr a.nas 9'rgnt | oboe nae ee |e Bot propery ‘32.70. caket_ 20 | feat oe | tha teat sti tonto mongecors | Seer ands Godiae | stnch or ua feorany | atau | tous nuraned sine the some alll porting. to ‘dubine“criminal REMEDIES AVAILABLE, TO CREDITORS: 1. The crecitor’s proper remedy is one against the goods te Subject them to payment of a debt, such “a8 executon, — atlaclsnent, gemishnient ct by a proceeding Ih equity (37° : CdS, 1366). |. 2 An cordinary itotion to obtain monay judgment aysinst the purchaser by the creditors. In Violation of BEL. IF purchasar has disposed of the property {vr intrest | Ban ede Co lege of Lan | i REMEDIES AVA'LABLE TO SELLER/ MORTGAGOR IH CAGE OF SALE IN BULK TO AVOIO LIABILITY UNDER BSI 4. Comply with the formalities specified under BSL, or 2. Obtain a writtys walver from ALL creditors, Resciesiole ~ valid unt ‘et aaicie by competent PURPOSES 4. Torregulate the sletus, rights and jiailties of i the parting in.n warehousing contract 2. To pice! thase who, In good falth and for \ vaue, auquire’ negotiable warehouse recaipts by negotiation | 13, Torencer tne:ite to, anid right of possession ol, property stored in warescusss rrore easly i cenvertibe, | 4, Torfasitate the use of warehouse rweeipis ns i documents of ie 8. Inordar to accemplish these, to place a much ' ‘greater responsibly on the weranousean, | APPLICASILITY The WRL applies to ALL warshouses, whether ‘utile or private, bercied or not. In all other cases whore recalpts are no, issued bya warehousumisn, tha CIVIL. CODE (Ans. 1607-1626) applies WAREHOUSEMAN A person lawtully engaged in the business of © A duly authorized officer or agent of a MEMORY AID IN COMMERCIAL LAW| 29 warehouse receipt (Natlobal Bank v, Producer's Warehouse Association, GR No, 116510, Jenuary 8, 1922). WAREHOUSE ‘Tae butiding oF place where goods are deposited ‘and stored for proft WAREHOUSE RECEIPT (WR). Written acknowledgement by @ waréhouseman that he has received end holds certain goods {herein described In his warehouse for the person fo whom itis Issued Under Ar. 1898, NGC, Wis a documant of thin fogocds,andah auch i-has trea fonctions, fo wi ‘It le & CONTRACT — smplo contract evidencing the. underlying contract of epoaiter of caring Evidanee of RECEIPT of goods Reprasanie. the goods and_thereforo operates transferable DOCUMENT OF TITLE that caves with contro over the goots (Reviewer on Commercial Law, Sundiang and Aquino, 2006ed). Note: The Supreme Court in a number of cases limited the funcions to the tworfold functions, that Ja, tis a contract and a receipt (Tolengtan Aros. & Sons v. GA, GF No. L+110561, September 21, 1984), WR is NOT a negetiable.Insirment becouse it ‘does not cumriy with Seo, 1 (b) of the NIL (Act 2034), which requires an uncondltlonal promise ot ordar to pay a sum certain In money. However, the receipt may be Issued In negotiable for. TER AER EN 3 chai eae NS grata ECAC a mn Mamet mt a il t ve if pS sear nip aa ie ‘de wich | WE recctaing hat) ‘wTefi] 2009 CONTTRALIZED 1 ESSENTIAL TERMS OF WR (L‘ORDS SiN) 4. Location of the warehouse where tne Goods are sla; 2._ Date of seve of racelp; 3. Consecutive Number of cece'pt 4, Slatornent whethor goods wil be delivered to ‘he bearer, tou specified parson ur lo a ecified person ov his order, ate af storage chneges; Besrrion et the goods or the peckages contaling ther: 7 Signature of thn warehouseman or his ‘aitharlzed agent 8, Warehouseman's Ownership of or interest in goods 9. Statement of advances mado anc tiabittios Tneuted for whlen the warehouseman claims Lien, The \WR indicates prima facie (4) the DATE wher the contract af deposi is parfectod and wren th storago chargos shall Login to run against the depcstior and (2) the PERSON or persons who are entitled lavully. to the possession of the goat's feposited (Commmunts and Cases on Creuit Transactions, De Lon, 20063). The’ mare fact that the goods deposited are Incorrectly described uoes not make ineffective the receipt vihen the Ide of the goods Is fully established by evidence. Thus, its Indorsement and delivery shall conslitute a sufficient transfer the title of the goods (American Foraign Banking Com. v. Horilgo, GR No, L-21005, Decembor 2, 19% Effects of omission of any of tho essential terms: (VDNC) 4. Validity of receipt nut affected: 2. Warehouseman liable for Damages; A Hegutiabilly of receipts not atfected: 4, Contract is Converted to ordinary deposit (Gonzales v. Go Flong & Luzon Svrety Co, GR No, 91774, Aug. 20, 1958), Terms that eannut be Included: 4. Thote contrary to the provisions.of the WRL, 2. Those which may mpair the obiig.ton of the warehousoman to exaicise that degree of are” In “tho: safgkeeping cl the goude entrusted to him which a reaconebly careful men would exercise In regard tc similar goods of his own, Those contrary. tc ‘law, morals, good ustoms, public order or pubile pc icy, 4. Those exempttag the waruhouserren trom Slahitty “for misdalivery or for not giving statutory notice In cane of sale of goods, 5. Those exempting the warchouseman ‘rom Lnbilty for negligance, KINDS OF WR: 1. NECOTIABLE — whero the goods are deliverable to bearer or to the order of the person specified (Sec, 8). +A provision in-a negotiable WR that the Instrument is non-negotiable is VOID (See. 5). + When more than one negotiable receipt i issued for the same goods, the word “Duplicate” shall be plsinly placed upon the face of every such receipt, EXCEPT {he frst one Issued. A warehouseman shall be fable forall damages caused by hig fellwe to do so to any one who Purchased the subsequent receipt for Value supposing It to be an original, even though the purchase Is made AFTER ne dollvery at the goods by the warshouscman to the holder of tne ‘original receipt (See 6). 2, NON-NEGOTIABLE ~ the goods recelved will be delivered tp the depositor or to any specified parson (See. 4), + The roceipt should ba stamped on Its fece ‘non-negollabie’, otherwise a holver believing it 10 be:negotiabie may traat the receipt as negotiable (Soe. 7), Ea EEE | May be acquited thougn | May be acquired tau aegotiaton teanater 01 asvig Righte ef The peisor 1S] Rights of the tra storee whan it is negotiated | 1.1 8 goods, as (neler: ‘ageinst the transleror ‘Title 10 the goods =F the | (merely steps ints the person negotiating the | _ shoes), | Feoopt and tiie of tne | 2Rignt to nouty tke ersun to whose erder | warehouseman of the lransfer and acquire tha diet ob’gation of the goods wore te ba delivered: AD the mean Meu College of avy aoe 2. Zalluro to mark *noi-negotiable” shall inake it hagotebia (if ig Holger purchased I for value Supposing to 38 rngotiatie) NEGOTIATION ANG TRANSFER OF WR. A, NEGOTIABLE WR 1.” How neg tiated: a, By Dalvery (Sov 97) Whon sha yoods ae delivercble to the BEARER, or where cellvarabie to a spo. ‘led prgon or wider end the Tatior ar" subsequent inJorsee Indors +3 tn BLANK or to PEAPER, Note: A be..rar document of tile Is NOT ALINAYS A BEARER DOCUMENT In the ‘eonse that special Indorsemont has te effect of converti.g the bearer Inatrul.ient Into an o1cer Instrument (Reviewer aa Commerc: Law, Sundleng e.rd Aculno, 20060d), b. Indorsement coupled with dollvery (Soe 37) If the srecelpt Is indorsed tow spucifis! parson, It be :omes an order recelp| and neyotiaion cun only be effecte; by the Indorsement of such person’ In blank, to bearer or to another speuifed person. Delivery atone Is not sufficient. Note: If the indorsement is necesscry hut the nagotiaie receipt was only dollvered: + the trars/areo acquires le against the tranateror: + _ there if n0 direct obligation of the ‘worehowsemany and ) tthe censferme can compel the {ransfe?o¢ to complete the negotiation by Indireing the Instrument (Soe 43). Negotiation takes effect on the date of Indorsprnent only. 2, Who may nigotiste: 8. Ownet thereof; or 'b. Any perion 19 whom the possession ‘or cusiedy of the recelni has eon entrust], by the owner, H, by the tering 1 the recelot, the goods ere deliveruile to the order of thy paroon to wharn tha posseesion or custody of receipt has been entrusted or in such form vit I may be nogotlatec! by delivery ‘Seo 40). Note: Urcer paragraph (b) of ebove, ‘even a thief of the receipt or one who defrauds another can negotiate the reselpt but it should be in such a form MEMORY Alb ty COMMERCIAL LAW] 33 that he need NOT forge any signature (Reviower on Commercial Luvs, Sundiong and Aquino, 20060). + Fora thief or finder to acquire tile fas against tho oviner-of the blank ‘WR, such owner must have, ser cencorsing I! In blank and leaving it with bis agent, put It in the power of such agont to'slenl and negotiate It (Communts end Casas on Crodit Transactions, De Leon, 206d). 3, Effects of Nogotiattor ‘8, Nagatlallon cf the document has thw ‘effect of manual delivery 80 8 10 cconaitute the transfaree the owner cf the goods, 6, Negallaton carries with i both the {hie to ar possession of the proparty (Phiippina Trust Compeny— v. Phitigg ne National Bank, GR Mo. Ls 16483, Dacembor 7, 1921), 4, Rights Acquired by Indorst ‘8, Buch fill to the goods as the person negollating had or such fife ae the dopositor hed the ability to convey », The dict obligation of the warchouseman to hold possession of the goods for him, 5, Warranties on Bato of WR: (GLKM) A yorson who, for value, negotiates o- transfors a receipt by Indorsement of delivery, including one wid assigns for valvo a claim secured by a receipt, unloss a contrary Intent’on appears warrants fa, That the recelptis Ganulng; MEER detects Hint32 [2009 CENTRALIZED BAR OPERATIONS of the receipt nov the quality or quantity of the gocds deseribed therein (See 46). PLEDGE OF RECEIPT Negetlation of a raveipt may also bé oy way of piedge. The SC ruled in BP v. JR. Horridga (GR Nes. “1-21000, 21092-21004, and 24006, December 20, 1924), that as to the legal tile to the property covered by a WR, # preugee is on the samo footing at vendea except that the former Is under obligation of surrendering bis this over tha goods upon payinant of the debt securaé (Raviawor on Commercias Low, Sundiang and Aquino, 200680), Hawevir, the SC ruled In PND v. Sayo, Jr. (OR No. 12979,.July 2, 1996), that where a WR Is transferred to secure payment of a loen by way of Pledge or raortgage, the piadgee or mortgagee does.nct automaticaly becoma the owner cf the goods but merely relaiae tne right to keep and with the consent of the ovnar to soll tham so as to satisfy the obligation from the giocseds for the simple mason that the transzction Is not a sale but ony a mortgage or pledge. Likunise, If the properly Is lost without the fault or negligence of the mortgagee or piedgee, then sald coors are to bbe ragerded as lost on accaunt of the real owner, ‘mortgagor or plaugor. VENDOR'S LIEN ‘Tranoter af file te the purchaser in good falth and fot value is not, affected by the rights uf a vensor (S07 49), Musteaiion: 8 (eller) ‘old on credit certain ‘goods to B (buyer), who deposited the seme to W. (warohousoman} for which the latter issued a agotiable WR, & subsequently negotiated the rocelpt.to P (purchasor i good falth and for valuo). 'n such case, P has a beter right the goods against the unpaid S tecause Seo. 49 provides that ‘no sella lien or right of stoppage. ip transi shal defeat the tights of any purchas=r for valve in good faith to whom such "eceip. has boon nesilated.* W cannot be cbiged to delker the goods to an lunpald eller unless the receipt 's first validly ‘surrendered for cancaslation (Suc 49). (1993 Bar) B NON-NEGOTIABLE WR A nonnegotianie ‘recuipt shall havo plalsly placod upor. ie face by tee wurehoueaman Iseuing It nonsnegetinbia' er ‘not negotianl’ In case of warunawsurnan’s talure to 49 £0, & holder of the recalet who purchased it for Value oupposing It to be nagovable, may, st is cption, treat sucn receipt as Imposing upon the warahouseman the seme liabilties % Ben Weda College of Labs he would have incurred had the receipt been negotiable (Sve, 7} A non-negotiable WR, cannot be negotiated but it can be transferred or assigned by dovery to the transferee accompanied by a died of assignimert, donation or other form of trostor Etfoct: Even if the receist Is Indorsed, the transferee asquires no addilonal right (See 39). Rights of Transteree of Non-Negotlablo Wt (Soe. 42) ‘acquires litle of the goods subject to the terms of the agreernent with the lransteror, 2, the right to netity the warehouseman of the transfer to him of such receipt; and 3. the fight, thereafter, to acquire the obligation of the warehouseman to hold ha goods for-him according to the terms of the recolpt Note: Prior to. the “notification of the ‘warehouseman by the transferor or translerec of a ron-negotiable racelpt, the title of the lrensferee 10 the gaods and the right to require the ebligasian of te warehouseman may be defeated: + by levy of an attachment or execution upon the gocds by @ crediter of the transferor; or + by a notifcatio’ to the warehouseman by the transferor or @ subsequent purchaser from the trans eror of @ subsequent sale ‘of the goods by the transferor. RULES ON ATTACHMENT! EXECUTION OF s00Ds ae ty SSE y nf oi Mdbened of iy Cor sisi ¥Son do College of Zn b. Actions far ‘Seavery or marual delivery of {goods by the real owner; or 6, Whure cttachment Is made prior te the ‘gguance of araipt The fiphte azquired by attaching credltors tannot be dented by the issuance of @ negotiable facelst of ttle thereafter flaterational Broudlyy Co. v. Torininel 'Norahouse Cc, 128 Al, 902), 2. NON-NEGOTISBLE RECEIPT ‘The goods cévi ba atlaosed, provided it Is dene prior 13 the notification of the warehouseman of tne transfer (Sec, 42), Reason: Abodnt auch netics, both the wereheuseman anci the sherit heve a right to assume thet the goods are stil owned Ly the ereon whase “ane appears inthe recelpt RIGHTS AND OBLIGATIONS OF THE WAREHOUSEMAN | oe d ETD WT Tolssue a wii in the F rae 1. Tobe pale 2.in case of non required fer for goods payment, to {acelved, exerci his fun 24, | 2 To take care ofthe goods. - the goods deposited with ordinary and deposited; and rezannable dilgenca: a Toreiuse duivery | % To alive te goods tothe inprener taal person lewfly ented, ciumeianves. | 4, Noto cormingle tha goods depesied, ulesr goods ars fungi and tre | Sere Hing and rode fing ce to coowners {ver commingled mas): 4. Thinsure the goods Ir ‘| proger creumstanens t \ 6, Tomark a nonsneaatiable i WR as suca, 7. Toman as sucn tne duplesies of a negotiable Wr: 8, To aive the prover notice in case of nal: of the goods ft provided in he WAL, ant |, Tetako up and cancel the WA when the goods ere doivares Le OBLIGATIONS OF THE WAREHOUSEMAN DUTY 10 DELIVER, Upon a DEMAND inade by the holder of a rocelpt of by the depositbr, urless there Is a legal excuses if such demand |s accompanied with 4, Offer to satisly the warehouseman’s lien: 2, Offer to suirencier the receipt, if negotiable, with such endorsement a9 would be i MEMORY AID Ite COMMERCIAL LAWL 33 necessary for the negotiation of thy raceint fang 3, Rencinest and wllingness to sign an acknowiengment when the gous are delivares, if such signature Is requested by the warehouseman (Soc. 6). GENERAL RULE A damand should be made on the warehousanan Ih order that tha duly to deliver the goods wil aise. EXCEPTION When tha warerouseman has rendered It bayond. his power to deliver the yoods, demand may bo dispensed with (Art, 1969/3), NCC). Porson to whom goods must bo delivered: Person ‘awfully enitled to possession of goods of his agent (person to: whom a competzsnt cour hes ordered delivery of goods; allaohing credits, purchaser); 2. Person entiied to delivery under a non ‘egotiable receipt or with wrttan uthorlty; or 3. Person in possession of a negotiable receipt Instances when warchouseman may legally refuse to éellver goods: (CRIS-BAG-FALL) 1 When the folder af the recelpt does NOT salsty the Gonaiens preserined in Section & of tie Act, 2, When the warenouseman has Legal tite In himself on the goods, such tile or right being derived drvety oF Indrecly from the vansfer made by the depositor atthe time -or subacquent 0 the deposi for storage, oF tron the warehousemar's fen (Soc, 16); 3. Ifthe warehov-seman had been Requested by ‘person favtuly antiled toa right of properly or possansisnishie fg gn tO. make eter aT Nae very YK iene cen gu rade wastiotdna entitieg, sessiyniotdnes go cif Oh pci attr gocestiSecel 8 a KG 2 aber | a cietior wnat i cline era is negotiate Shp guloly docu Impaunsed IS34 2909 CENTRALIZED HAR OPERATIONS 10, Whare the docunent of tle is Atiacned by 2 ‘rediar (See. 26); end 11. failure vas not due to any faut on the pert of tha warenousemen (57 C.. 522) CONVERSION ‘An unauthorized assumption end oxercise of the fight of ownership var goods bulonging to fanatner through ihe altara‘ion of thelr condition a tha exehision of the owners right (Bouvler’s Law Diction: ry), Instances whon warchouseman is tlatte for conversion: 1. Where the delivery is otherwise than as authorized by subsuctons (b) and (c) of Sectinr. 9 (See. 10); 2. Even if delivered to persons entitled: under ‘Secilon &, ha may stil be liable for conversion It prior to delivery. 2, He had been requ delivery, of b, He had’ received notice of tha adverse claim or tile of a third person (See 10), 16 not to make such Ettacts of Altorat'on (Sec. 13) ‘Alteration. (Whesher fraudulent or not Inimateriat | authorized or not, werenouseman Is ble on the’ altered ieceipt according tits ORIGINAL tener |S Aiwraiion — | Uabis” aeesr aig Toe Taras aS Matocal But Aushorized Ta Alteration Inneeently do “FMatora ALTERED. according 10 ts ORIGINAL Us tenor. bia Bee AGT tha OPIGHAT | Alturation | tenar to. purchesor of eezeit for | Fraudilantly | vaiuo without notise and even tothe Mado siterer and Rutsequart purchasers wth dco (excapt that laity wath fespoct tothe allover and {svbaequert purereare with noise fe imited only to delvary as ho 18 sxesad tomeny taal) | Note A Waudatent alt acinct divest the ile of the owner of the stored goods und warehousoman Ig Hable to return them to the owner (Comments ant! Cases on Credit Transactions, Ov Laon, 4, 200680). Losé/ DestRoveD WR Whore negolable receipt has been Kest or Uastoyen, a cauit of competent Jurisd ‘order the delivery of the goods onty: 1. upon proct of ths joss or desirustion of the receipt; and + 2, upon the glving of a pond with sufficient sureties to be approved by the court 37 Foan Beda Collen of Lavy However, the warehousernan is stil lable to a holder of the recelpt for value without police of the * proceedings or cf the delvery of the goods since the warehougeman can secure himself on the bond given (Soe 14), DUTY To INSURE GooDs 1, Vinere the law provides: 2, Where twas an inducement for the depositor to enter into the contract; 3, Eslaplisred practice; or 4, Where the WR contains a reprasentation to that effect, RIGHT TO HE PAID 4. EXTENT OF WAREHOUSEMAN’S LIEN a. all Inwlul charges for storage and preservation of tne goods; b. all lawful claims for money advances; and 6 ullreesonabile charges and expenses for notice and aevertisement ofthe sale, and the sale of goods (Seo, 27). + In case of a NEGITIABLE rezeipt, the charges that are present at the time of he issuance of the receipt MUST BE STATED ir the receipt with the amoun's thereof specified; otherwise, the vererouseman shall have no lien thereon, EXCEPT only for charges for storage of those goods subsequent 3 the dave of he receipt (Sea 20). 2. ENFORCEMENT OF WAREHOUSEMAN'S Cen: 2) BY relusing t» deliver the goods untl his lien is satisfied (See. 31); or > By cusig erode ale of be property aldRaBlyfoljane, proceeds to yy facts Ie ne 13 & 34), ettoct® OrfPSt baa: Te eeoageyna yn onalivaly a i oie' San Body Collyg Lot Mw tho enforcement of a tien against personal p aperty (Ser. 29). PROPERTY SUBECT TO LIEN ‘a Against thn goods of the der outer who Is lable to 118 worehouseman av dobtor whenever rich goods are devosited: and b. Against geeds of othor persone stored by the’ dopesior who Is tindle to tne verehoustinan as debtor with authority to make 3 valid pledge. 4. LOSS OF THELIEN 2. By surrencering possession thereof; or b. By refusing to. dalivar tha goods when a Geraaed is made vith whien he :s bound to comply (ee. 29), The warehousemans ion is possessory In nature (PNB: Se, de, GR Yo 119231, april 16, 1996) Involuntary parting with possession of goods cerdinarly does noi «seul! in 'oss of his lien by a warehouseman (99 1S. 69). A wareheriseman sho has released his lien by the surrender of the goods may tol thereafter claim a sien on other goods of the save depositor for unpaid charges onthe gcods surrendered if the goods were delivefed to him under different balments (covered ty neparate receipts) The loss of the warehouseman's lien does not necessarily mean the extinguishment of the depusitor's oblgation to pay the warenousing fees. ‘and charges which sucsists: 10 he a personal liabiity, fl What Warehousen|n an 00 \(Socs. 17 & 10) 1, REPU Yer the goods to anyone of thom until he's had ceasunalie time to ancertait the v:ihdlty of the various calms; he Is not excused ‘Yor labilty in rase he mates stake {Coinmnents and Qasas on Crscit Transactions, Le Lwon, 206d). 1 Case of 2, Onginal actiys or counterclaim for INTERPLEACEF!, whichever Is. appropriate Ty euch cage, tha watehouroman will be relieved from lit ilty in delivering the goods to the person “ound by the cuutt 19 have a Dettor Fight (bie Note: Section 19 des not aprly to cares where the waretrouseman flmself makes a dali fo the goods (57 Gu 53. spinal ies MEMORY AID IN COMMERCIALLAW) 35 ‘Gonoges | 1 racelpte sullered by reason | goods not recelved (S20, 62) | ‘of falure to comply | 2leauance of receipt ‘wath gal datos ‘containing falso stetement (See. 61); Bilasuarce of dupteata ‘negotiable WR not marred eh (84.82) A.Teauance af a negoticble WR for goods of which ie is en ‘oumer without stating euch fac of ownership (S06, 2 B.Dellvery of goods wiuut | obtaining negetlabia’ WH See 54) RAIL SOOT Negation al Wit avec (0 martgages gocds wth nin to Other Acts for Which Warshouseman is Lape: 1. Failure to stamp ‘duplicate’ on copios ot nogotiahle receipt (Sac. 6); 2, Failure to place ‘non-negotiable’ or ‘not negotiable" on a non-negotiable receipt (Soc 7 | Viisdelivery of the goods (See. 10); Fallure to elfect cancellation of a negotiable receipt upon delivery of the goods (See. 17); 5, Issuing essipt for non-existing gocds or misdescrived goods (Sec. 20); 8. Failure to tose care of the goods (Svo.21); 7. Failure to gve notice in case of sale of goods to satisty lian (Sec. 33) or benause the gous ‘are perishable or sazardous (Sec 34). ee ain} protect Uti SAD iro, Again EAB BONG useren-~gogam got Ih38 | 2009.CENTRALIZED BAR OPERATIONS ra Proscrins ths mutust cues and lgnta of & waiehouseman wine Iaaves owarshoune receipts, and [ss ‘duposton. and cowie alt Regulates end supervises warehauses ‘which put up a bond werehouses whaler bor'ded or ral ‘APPLICABILITY ‘The GEWA applies to & warehouseman engaged iy the business ot receiving commodity for storago, including contracts or transactions: 4. Whatein the warehousernan is obligated to ratum tha very same commodity dalvered to hen or te pay its valve, Vireroin the commodity delivered Is to be tniled for anid an egoount of Its owner 0: 8, Wherein commedity delivered Is commingind uth commodity dalivered by or belonging to other persons, ancl the Werchousernan is obligated to return commodity of the same Kind oF to pay its value (See. 2). Note: Tha kinds of commocity to be deposited must bu those, which may be trated or dealt in openty and legally. This, ilega: and protibited (goods may not by validly received (Sec. 2) SALIENT FEATURES: . License from the. Bureau of Domestic Trade required; 2. Arount of bond Is 33 1/3% of the value of the 00d Intended to’be stored Inthe warehouse: 3. Depositor given a clvect recouts3 against the ‘bond fled by the warehousernam: and 44, All goods are hisured against fre for tier fll value. Nolo: Compliance with: the WRL is NOT mandatory and indispensable. A inere formal elect of abseuce of a warehouse recelpt in accordance with the WRL does not preclude the application of the GBWA. Howaver, tis deslabie ‘that a bonded warshouseman Issue ¢ werehouse ‘gee pt which eontorne to provielons of the WRL (Gonasies v, Go Tiong, GR No, L-1177€, August 50, 1958). DUTIES. CF A COVERED WAREHOUSEMAN {SRIRRO) 4, Secure the required license froin DTi (See. 3); 2. lve the necessary Bond which Is of te following nature (Sv0. ‘8, The hond may ulthar be a cach band or @ bond secured by real estate, or a bond Iseued by @ duly authorized bonding company; b, Tha amount of the bond must NOT be loss than 331/336 of the market value of tye maximum quart, of the Sean Beds College of Lary commodity tu be recelved by the ‘warenouseman, and It shal be 60 conchionad as to respond for the market value of tho commodity aictually dalivered and received at any. timo by ho warehouseman In casa the latter Is unable to return the commodity ‘orto pay is valus, 3. Insure against fre the commodity received and stored (See. 6); 4. Receive, whrout _alscrimination, any Commodity for storage povided: 3, They are cf the kind specified in his fcense; >. They ere Ine eultable condhlon for warencusing; and ¢. There ls suficlent space in tho warehquse to accommedate the samo (See. d). Pynalty: Fine for double the market yalua of the commodity 0 received in excess af ie authorized quantty (See.12). 5. Keep a complele Record of all commodities received by lim, of the feceipts issued therefore, of the withdrawals, ofthe liquidation, and of all recelpis returned to and ca.celed by him: 6. Qbserve rules and regulations of the Bureau of Dumestic Trade (Sec. 9) Note: A person injured by the breach of the werehouseman may'sue of: the boad put up by the warehousemnn to recover damages he may have sustained on account of such breach. in caro the bond is Insufficient to cover the full market valve of the commedty stored, he may of he law frogp ahi an aolf Son Beda College of Lars Pe PURPCSES 4, To punluh tte dishonasty and buse of coniidenee in ing handling of manay or goods to the prejusen of another regardless. of whether or ict tha latter is the owner (Golineres v. CA, GR No. 90820, Sopt. 5, 2690), 2, -To enzourags and promote the use of TR as ‘an additional snd convenient ald to commniarce ‘and trade; 3. To regulate trust reeaict transactions in order to ansure the sruluction of the fights and the enforcement st the obligations of the panies Involved therein 4, To declara the mistisa or miszppropriation of geods ur the procneds realized from the wale of goods releeved under trust receipts as an offense punishable under Art. 315 of he RPC (S30. 2) TRUST RECEIPY A written or prined document sigaed by the fentrustaa in faver of the entiuster vnereby the lutter raleases the gcods to the pussession of the former upon the eutrustze’s promise to Holi said (goods in trust for the entruster, to sel or dispaso ‘of the goods, and (o relum the prozseds thereof to the extent of the amount owing to the encrustor, of to return the good, If unsold cr not otherwis0 disposed of (Sec. 4). FORM & CONTENTS OF TR: Trust recnipt need mot be in ary particutar form, but every such reeedpt mst substarialy contain: (UvD) WR Desciplio, of the gcods, documnen's oF instruments 8 1soet ef the tt saceip . The total inveleg Waive af the goods and the amount of th8, dreft to be paid by the + entrust 3. An Underiatiig or a commitment of the enirisice: a, To hold In dust for.the enituster the goods Gocumen's, of | instruments therein described bd, Yo dispots of them In the manner provided f° in the trust receipt; and ¢. To turn over the proceeds of the sale of the goods, doot ments of instrumants 10 the enirutlar {9 the wxtent of the amount ‘owing fo {9 ontuster of a8 appears i the trust recut of to return thie goods, documents'or instruments in the event of thelr non-sale within, tie perlod specified ‘herein (S42, 8). MEMORY AID IN COMMERCIAL LAW} 37, ‘TRUST RECEIPT TRANSACTION A separete and Indapendent security tranaac‘ion Intended to eld in financing Importers and retall dealers who da nol have sufficient funds to fleance the Importatlonipurchases and who may nol be able te acquire eradit except through Utlizetion,. a9 collateral, of the merchandise Impartedipurchased (Nacu v. CA, GR No, l= 108638, March 11, 1994). A tripartite arrangement under which the buyer (entruster) purchases goods from a seller, with the financing carried by a lendar (entruster) (63A Am. Jr). ‘The antecodont acts in a trust receipt trannaction consist of tha application rnd approval of the Teller of credit, the making of the marginal deposit end the affective Importation of goods throug! the efferis of tha Inponer (Sia v, Paople, GR No. 149695, April 28, 2004), Nature of a Trunt Recalpt Transaction The nature o’ a Wrusl receipt zon bost bo Mustrated in a letlar of credittrust rocelpt arrangement, whare a bank extends to a borrower ‘loan cov sed by tha letter of croc, wit the ust feceipt as sooufly of the loan. i has @ dun feature, namoly, @ loan feotcre and a security foaturo (Necu ¥. CA, Ibid, Vintola v. IBAA, GIt No. 78671, Mavi 26, 1986). The money feom the foan wit then be used by the entluste> to purchase goods from a seler in a soperate contract of sale, + The Cout consistently declared. that: IRL. does nat violuto she —_co-stitullonrt poscription against imprisonment for ron. payment af cebls, TRL Is a deciaration by the legislative authority that. as A mattor ot public potay, the fallure of a person to rn oo TSU apa rr us i wed pee vo fe A AER CATAL 1899 aking pcitateme ed LUY CENTRALIZED BAR OPERATIONS No agoncy rolationship escablishou ‘An ordrustee’s breach of trust, however, subjacts ‘la t9 criminal and civ lablity for estat. ‘The enactment nt PO 145 with its penal sanction fs, In eally, merely confimmatory of existing Jurspcudence on aktiations covered by At. 318 (1) (©) of te RPC. Thus, an entrustea who failed te account for tha proceeds uf the goads sold or fo return the. goods, as the caso may bo, Is quily of astafa even where the offence was comrntog before promulgation of PD 118 on Jure 29, 1973. (Peoplo v. Cuore, GR No, 27607, May 7, 1981), ‘Coverage of TR Traneaction ‘Tho TRL applies to ems: Destined for sata; + Provasiud ae a component of @ product ulimately gold (manufacture); and & Used to repair and maintain equipment used 'n business (Allied v. Ordonsz, GR No. 62496, December 10, 1996. * The law does NOT cover the sale of goods, documents of jauirumenits by a person in the dusiness of ‘seling goods, cocumerts or Instriments for profit whe has’ generat Property rights In such goods, documents or instaliments OR who sells the came to the buyer on cradit retaining tile or other interest 8 security for the payment of ‘no purchase prise (Sac 4). + There Is no TR transaction If te arrangement 's for mere consignment of geods with the Pbligaon on the part of the peraon to whom it {a dollvered to remit proceeds of the sale or to Four the same when unsold ‘Robles v. CA, GR No, 59840, 1997). Goods fi Incl. te chattors and rorsonal preperty other than: money, things tn action, or things so elfixed to land 98 to baccme a part thereot, ‘Security Interust A eopeny. interest in yoods, documents or Wnatruments to secure performance of some obligations of the entrustee or of suma 3” Persons ta the whether or not wnenever sucht fotalned for securly only, ntruster snd. includ a San Peta College of Lay net Met College of Katy GRUST RECEPT TRANSACTION Vis.Avis QTHER TRANSACTIONS (Notes on Selects — Ccomarcial Laws A Guide Yor Bar Reviewoes, Tasian Catindig, 200300) eR aah meant finarcer | Personiranced} PLeooe | possenens | ponsosacsthe {he pooaty_| ropay meets | There ts na ane ot ConoiTionAL | S89 | Te repay ant SALE | propery rom | tng arta the thebyer? | envustee | cuarren | Sib rosie coun] MORTGAGE | PP" I°®. | overt propony_| 1 Bipartiie | 7. Tiparite E Genaignr | ¢: Beier doa not | contonasir | hein roa to | Gunerstip ot | the pry — lwerpronerty | PARTIES IN ATR TRANSACTION 1. ENTRUSTER © Lenderinancler + Parson holding tile over the guods, documents or Instruments subject of a ust “receipt traneaction; eles: Possession of the goods urcn execu of test racelpt + Not the ownar of the goods, but merely a holder cf security interest. + Mitts mace to appear in the trust receipt {8 the owner of the goods purchased, iis merely theoretical, an artficiel expedient fand more of fitlon tnan fact (Vintola v. IBAA, GR No, 78071, ‘March 25, 1988 PRB v, Phoda, GR No. 46685, Ita, 12, 1991), Note: See, view of Prof, v. CA (38Sour Feds Collet of Hato MEMORY AID IN COMMERCIAL LAW| 3) tuss of thei goods under the doctine of ——_Altornativn Obiigations of Entrustoet *Ros port s3mino". 4. Obligation to return to the entevstor tho PROCEEDS. of the sole of the goods 3., SELLER OF THEGCODS {ontrogerto); a0 Net sirety ans actualy 2 oarty (0 the (rust 2, Obligation fo ratum the GOODS themsulvos receipt Manavs‘lon; but a parly to the to the ectalar, In case the goods are not Contrect of rile with thy buyarlmporter fed or alapoud of (devolve). (entusies) Effect of nen-cempllunce: RIGHTS AND OB {._ Gtim'nal liabily for ESTAFA under both the TRL and thoRPC} 2. Liable for DAMAGES under Art, 33. of tho NCC, without need of proving intent io aaa | proceeus from the nate: from tha publle sale defraud because It Is malum profibiumn | ee gouee, sccureni | (See. 7) (Pradontat v.1AG, (bid) 2 emeeeas ay | "te gasses contion gonds, ate. In oases. of for fis Habitty under the Effect of compllanc bs Fee tremor v. 3A, OR Before criminal chargo ~ no exinine! tabi. | a Tereae an omer | AGT fOeIny “May 40, | b. After charge, before | conviction ~ | fonts -eaniarod on | 1896. ‘extinguishment ot ermine! lab, bin under tna TRS : a Broa of eetaty + P.O. 115 expressly allows the bank to take jon of the goods covored by tha trust 8, Ab agalnst inact ent ‘Thus, even though the bank took ‘urehesor for vive recelp 7 ret possession af the goods covered by'the frist wooo vee rocetpa, Ine entustoes REMAINED lable fr '. As agains erections the enlio amount of the loans covered by the of enttusise trust recelpss (Phi. Blooming v. CA, GR No. peforea (S00 142381, Odober 16, 2003). 5.to. cancel the sus + in the evant of dotaut by the entrustoe, I's | iho. possuasion of | rot necessary that the on suster cance! the Gooas, end fae he trust snd loka possession ofthe goods «9 be | ganda ina publ able to enforea his rghls thereunder, Ho hao | © Lettay purchase st tho the discretion to avail of such right or seek Intended puble vale, any separate action, auch as third party clam (See, or separate ell action (South Cy Homes v. Ne BA Finance Corp, GR No. 136462, Doo 7, 1 fe [HeTo Wa posseusion of | 1. To nels the goods othe 2001), i tho’ geass to. tha | "sae proceeds invust for | «The breach of obligation under a trust receipt il, etieeiee the entrevr, agreement is sepataie and distinct (ran any 2.To gla least’ deys | 2. To curly wit) hs rotice fo the entiusing | alternative obligation: Of the intention to set | 3, To insur against lose, ths gooes a -on| the goods for their to.) Intendad publ 83) valuer 4,T> Koop the goods or fale procecds senarute ard ideniebia, 8, To cbserva | all tho eondiions of the trust Tocelpt not contrary to tie provisions ef the "RL ‘Not liable a princical oF vendor under any ito oF | Risk of loss of the goods | ‘contrast to soll mes by | (Ser. 19) ‘sha enirustea.(S feet i Tecelpt for tho corporation’ ly ablo. with the tenirustee-cofforation “Wr the civil Inbilty40 | 2009 CENTRAUZED BAR OPERATIONS arising from the eriinal offense (Edvvard Ong ¥. G8 GRNo, 159058, Apri 29,2003), PAT ee CHAVTEL MORTGAGE : ‘A convact by virtua of which personal property fs recorded In the Chattal Mortgage Regis er 95 seculy for the perlormance of an obligation (Ait 2140, NCO). The old view that a chattel mortgage Is a coriitlonal gale was expressly repudiated by A. 2140. NCC (Serra v, Rodrigus2, GR No. L-25546, Apnl 22, 1974), Regt Mortgage anesaary for vali PRM URNGLC LID 1 Prneadure for the sata | Procedare [3 found in {ound in See, 14 of Act No. | Art, 2112 of the Civi Tieotnr 1s not lethe property Is foreclosed, | the excess unless 1 is the exocus aver the amount | otherwise agreed or Se gees tah gebior | oxen the cass of 2 por Creditor GR INOT Gredior nisy recover any Gofeioncy except =M ls 8 socury fr tha purchase of | recover deficiency even persenal property I | Wegreed upon ' ie coaerarieet 8 frerara = MOVABLE ‘propery. Alug, OWNERSHIP of morig.gor ie an es cL All 2005(2)_ J “Tie to tho ‘subject mater is Tite tw the thing | He yondoa 2 gaged NOT | Hanseried t,he, vendo, 2 transferred vendor, wr “Affduvit in good fatty HOT ng | en ui oa OO Thing merigaged must be Thing_mongaged. mus, os real or immovable property ‘9 personel oF ‘Morigagor zlanate the “thing | ining mortgaged witout ‘moitgaged without the | consent of the. morgog ‘written consent of the | ond any such pontoon is oid redemption In extrajudical foreciowure end in judical foreclosure >y benks. NO fight of redemption NOT required ‘SHARACTERISTIOS OF CM (FUA): 1, hecorsory contract ~ the purpose of which is to secure tho performance of a principal obligation, 2, Formal contract ~ registration in the Chattel Morigage Register Is indispensable; and >. Unilateral Gontract = it produces only ‘obligations on tha part of the creditor to tree the thing from the encumbrance pan fulfilment of the obligation (Commants and Cases on Creat Transections, De Loon, 2008cd), ESSENTIAL REQUISITES (SAFP}: 1. ILmust be conatiluted to Secure he fulfilment ‘ofa principal obligation (Art 2005, NCC), Genoral Rule CM can cover only obligations existing at the conslitutian of mortgage.Sun fieds College of Haw . Wortgugor is Absolute owner of the thing morigagud. Note: Third a done who are not pares to the principe! oblgs ion may socura said obligation by pledging 0° mertgnging thelr own pronaity. Tho tabisty cf the wi-pany mortggore extends onl to the pcoparty mortgayed, Should there tw any deficiency, the creditor has recourse 91 the prinsipal dabtor ‘Carne v, CA, OR No. L!8350, March 3. 1099). Mortgagor nas Free disposal of Sis property coche Is hagall, /Gthorized for the purposs. ‘The preperty :ndet ba Borsonal property such : (BIAB_VNB) ars of lock nw corporate; 3. Interest in tusines., Hischiner‘Weated by the partes as personal proprrty subsequently Instelied en leased land ~ ONLY ‘lf any of the folowing is ABSENT: (1) Installed by the ‘owner, (2) ‘ntonded by the owner of che tanemiant far an (duetry or work being cattled on sh @ building oF plece of land and (8) which tend directly to meet the needs of the said industry or works (Art 418 (b), WE), Thus, machinery installed by the lessee on the Inased premises, ay be the subject of a chaltel mortoags (Davao Sewmill-v. Castilo, BR No. L= 40417, August 7, 1995). 4. Standing crops consideroa under GML as personal property; 2. Vessels whurn mortgage fs recorded with the Martime Industry Authority to be elfective as: to third parsons; not necessary to be recorced in the Ofice of the Rogistr/ of Dzeds; 1, Motor Vehicles where mortgage registored «1 LTY (Jor vehicles used for public servisas); a Buildings =" a8 a rule,. they cannot be Proper subject of a Cl, However, « OM over a bulldiig Is velld an between the parties on the basis of estoppi! bul NOT against 3 persons (Evangelista v. Alto Suroty:& Ins Co, GR Wo, L-11139, Apil 23, 1988), EM shall be de doseribed there, and NOT fixe or substituted property therea tyr acquired (500.7 (4); Ts ¥. CA, GR No, 19093, October 2, 2001), Exeoptions: (PAE) 1, Goods whic are Perishable or suibjact to Inevitable wear and (ear (Poopla's Bank MEMORY AID IN COMMERCIAL LAW| 44 and Trust Co. v. Dates Lumbar Co., GR No, 17600, Mey 16, 1967): When tuch future property Is a Renewal ct, oF in substitution for goods-on hand when the morgage was exacuted, oF Ip purchased with the protaeds of sole of such goeda. This fe exemplified ln etoras, open to publi for rete! busihass where ‘ne: goods are constantly sold and substituted with new stock (Torres v. Limjap, GR No. 24386, Septomber 21, 1931): ‘Those in an Express stinulation and in a prlomant ee morgane subsea execuld in seat comple ath te CML: SPECIAL. REQUISITES (RA): 1, The morgage must be Reg! fod In the Chaltel Mortgage Registry In the registry of deeds (KOD) of the province where: The mortgagor reside ‘The property Is situated if ha is a non: resluent BOTH, I the property Is sltuated in a ‘front province from that In whlch the mortgagor resides (Sao 4, Cl.) Effects of registration: Note: Unregtstoy the. portegge tN cata ‘apie CINERGY Shing of ve SOY ERS A gMdnBAthe uote Werentes areal righl or a il vitich, being. recorded folows’ tho” chit wwhoneve 9038; ahd Wt sdde nothing 10 tho Inalrument. considered “as '& source” of tle ahd attects nobody fights excapt as a Specins of notte (Standerd OH Co. of Now York v. Jaramillo, GR No. L-20529, Idarch 18, 1923).42 |2009 CENTRALIZED BAR OPER TIONS Purposes for requiring an Affidavit of Good Faith: @ Te guard against the making of fraudulent or fictiious mortgages which ‘would enable the morigagor to retain possesclon of the property and set his creditors, I merely glvas the mortgage a preferred status, enjoys preference of the claim af third persons, Note; The absence of tha affidavit viiates ‘mortgage ONLY as against thed persons without notice, ke creditors and subsequent ‘ercumbrancers ({.llus ¥; Manila Ralvoaa Co., GR No. 42551, Soplombor 4, 1935). + Th opecial atfigavit Is required only for the ‘puipos0 of tranefoming an already vad mortgage Into “profeired mortgage." Thus, i {e riot nevass ny for the validty of the CM but only 10 give Rt @ preferred: status (Cebu International Finance Corp. v. GA, GR No, 107534, Fovmiary 13, 1997}. EQUITY OF REDEMPTION under CML The sight of the mortgagor or a person hokling a subsequent mortgage or a subsequen attaching ‘rodltor to extingulsh the mortgage by paying or delivering to the mongagee the amcunt due on ‘such mortgage and the reasonable costs and oxpanses Incurred, Tho Right of Redemption applies io real properties, NOT to personal prope-ties, sold on ‘execution (Paray v Rodriquaz, GR No, L-132287, January 24, 2006)... Thus, therv Is NO RIGHT OF REDEMPTION in CM." There iz “ONLY AN EQUITY OF REDEMPTION, 41 Pérlod within which equity of redomption may be exercised Frora the date the condition of the OM is broken bul BEFORE the forachosure sale of {ne collateral thoreot, + Tho 30-day peri to forectoca a CM Is the ‘minimum period. alter violation of the Tmongage ‘condilon for. the. mortgage sraditor to vause ihn sels at public auction of tna mortgaged chattel AND is e period ff grace fel the mortgage: to discharge the mertgege obligation | (Cabral Evangellsia, GR No. 26860, -Iuy £0, 1963). 22 Amount to be Pal 8, {09 arnount due +b, the coste'and axpensas Incirred by such breaca of conuitton before the safe therecr (Sne. 13, “ct No. 1508) a Persona entitled to rédoem &. Morigagor; B.A person mortgage; + After @ CM Is executed, there remaing In the morlgager a mere right of redemetion and only this right passes to the tecond mortgagee in case ot 3 second mortgage, ©. Asubsequert attaching creditor. + IF the only tevlabla or attachatia Interest of a chattel mortgagor is his right of redemption, it follows that the judgment creditor wo purchased the properly could not acquire anything xcept such right of redemption. 6 is not onittad to:the actual possession and dsiivory of the property without frst peying the mortgage debt (Northem Mctors, Inc. v. Coquia, GF No, 40018, March 21, 1978). Thus, an aitaching creditor ‘who redeerns shall be subrogated to tha. rights of the mertgagee and entived to foreclose the mortgage (See. 73). holding a subsequont REMEDIES OF MORTGAGEE IN CASE OF DEFAULT BY THE MORTGAGOR ‘These remedios are ALTERNATIVE; that is, resort to one Is a Weiver of the other remedy. 4. Original action for collection of mongy; or 2, Extra judicial foreclosure (Rule 68, 2uies of Court not applicable) a RIGHT OF MORTGAGEE TO POSSESSION 4, Before dofault ~ mortgayee Is NOT entitled to possession upon execution of the CM: ‘otl.arvise, I becamas a pledge. 2. Altar dofautt < when dofaul occurs and the fight of the EY propery ing San Beda College of LayBan Bede College of Zao RULE ON RECOVERY OF DEFICIENCY AFTER FORECLOSURE Gonerat Rute: Action for rocover! of deficlaney in ail mortgages. ALLOWED. Reayon: Morigag. « a8 nccessory contracts serve only @s sucurting and not for the sallfaction of the pineal obliget.on Prescriptive peri: 10 yoars, under Anicle 1142 of te Chil Code fi:rn tho tine tho cause cf action fcerues cven if 161 upcn a wilten contra because tha oblpalion to poy deficleney ia on Ermutns by law ae he asta [gin the nature of & mortgage ection in. naded to enforce the mortgage aulon (O8P 'v, "Tamoldan GR No. L81269, Novembar 17, 198% Excoption: ‘When tha morteagad chatta! Is subjact of the sale ‘on installment by 129rigagee ‘to the mortyspor, foreclosure of the chaital mortgage on tha thing sold shall BAR secovery of any deficiency (Atuclos 1494 & 1-08 of the Chil Gade / RECTO LAY). APPLICATION OF PROCEEDS OF SALE ‘The proceeds of tho'sale are to ve applied 1or paymanitin the followed order (COSMO): 4. Gosts and expenses of keeping and sul 2. Payment of 'he gbligation secured by the mortgage; 3, Claims of persons holding subseqvent mortgages in thelr order, ard 4. Tho balance, if uny, shall be pald to the mertgagor, or persen hnlding undor hina (Coo, 14, Ato, 1808), q CRIMINAL LIABILY 1. Knowingly renwving-any personal property mortgegad unvlur tie Chattal Mortgage Lav {o any srovinea or city other than the one in which it was “ocated at the tine of the execution of the mortgage with aus the vitten ‘eansent of the mortgagee; 2, Salling er platy hg poreonal property already mertgagéd or any art thereof! under tha terme of the CGiattel Mortgage Law without ine consent of the: morigages wiliten on the back cf the mo'(yage and duly recorded In the chattel moriga 3 register (At, 318, Revised Ponal Code), Note: The mortgavor Is not relleved of criminal liabiily even if tix: morgage indebtedness is thereafter pald In ail (U.E. v. Kilayko, GR No L- 10081, August 18, «916), or the "norlgagor-scller MEMORY AID IN COMMERCIAL LAWI.A3 | Informed the futchasar thal the thing sold had hoon mortgansd (People v. Alvaras, GR No. L - 70446, Januery 31, 1909), PURPOSE: To protect debtors’ from abuses committed by creditors APPLICABILITY! 4. Sale of personal property, the price of which 's payable intwo or more instalment 2. Contracts purporting to be leases of personal property wih eption ts biy (Ad. 1488, NCO), Note: There must be a sete of personal propery {0} payable In hstalmenta ond there has been (9) failure to pay two or more installments, It does not contemplate @ sale on straight term In which tho Ealance, afer payment of Incl sum shows be pal Inte totaty at the tine specited in the Bronissory note (Levy Harmanes io. vs. Lazaro Elas Gervaci, GR No. 46306, October 27, 1939). ‘The law is alined at those saleu: where the price is payable in several installments as such gonoraily consist in relatively small amounts, constituting a {great temptation for Improvident purchasers. to buy beyond ther means, There Is no such temptation ‘whore ine price Is to be paid In cash or parlly in cash and partly In one term for in the Tatter case, partial payments ara not so small os to place purchasers off thelr guard and dlido them fo miscaleuation of their ability to pay (Ibid), SELLER'S REMEDIES IN CASE OF BUYER'S DEFAULT ACTION FOR IgRE MANGE: Sea ass yore A a DA Avertorah Rist ces Sh cqn-iid='0 Fir ot aJ temadiaa shail bar the vend: “#4 ]2009 CENTRALIZED BAR OFEKATIONS recever frou the purchaser ihe uspai balance of the prive, if any (Tujariangt v ‘Southom Motors, inc, GR No, 10799, tay 28, 1987), 2. RESCISSION Genvel the sala, should the vendes's failure to pay cover two of more tnstaliments. + Tha vancew car. demand the return of payment aheady mada unlesr thore 's stipulation about forleture (Art 1486, Nec): + Iwas alae held that by this ect, the Vendor oxervisud Its option to cancal the contract of sale, barring it from ‘xacling pryment of the balance of t purchase price (Nonato Intermeulate Avcellate Court, GR No. +07 101, November 22, 1885). 3, FORECLOSURE Forectore the chuttet mortgage on the thing sold, should the vndae's felure.to pay cover {wo or more instalinents. # The vendor is NOT obliged to retuin to ‘tha vendes the amount of the instalments already. pald should thero be an apreament fo that effect. But he shal have NO furter uction against the andes for the recovery of eny unpald balance of tho piice reinalning atter the foreclosure and actual sale of the mortgaged chattel, and any acreemant to the contrary is VOID (Zayas, ur. v. Luneta Motor Company, GR No L 130583, Octobor 28, 1382). * Neltier can the vendor after the forecioaure of" the chattel morgege proceed agalnat the guarantor (Crus v. Filpinas myosiniens, GR No. 24772, Moy 27, 1968): Note: Tha theae remodies are ALTERNATIVE and ‘are sublect to thy VERTICAUHORIZONTAL BARRING RULE, The Vartical Bartiag Rul gonorally stateu thut, recourse to any of the from availing of the ‘OTHER two, (0.2 recourse (0 #1 bars recourse ta #2 oF #3 uptown}. ‘The Hortzontal Barring Rule appins only to remedies 2 and 43, wherein rescission ov forocianura bars the vasdor from FURTHER ‘recovering the baianca of the purchaso price. However, recovery of property through “epievin cae preparatcry to foreclosure wil NOT bar the ‘thar remadies if there was NO actual foreclosure (Reviewer on Cominorcial Law, Sundiang & Aguinn, 20060d). if suller-mortgagee opts 10 San Beda College of Law exercise altemative #1, ho shall be deenied to have waived his right as a mortgagee but may sti levy en the mortgaged property (1b) RECOVERY OF FORECLOSURE 4. In cage tharo Is no other secuity, actual foreclosure BARS racovery of any deficiency, DEFICIENCY AFTER Reason: To prevent mortgages from selzing the, mortgaged property, buying it at fordclosure sale for a low price and than bringing sult against mortgagor for deficiency judgement. The almost invariable reault of this procedure was. thal the mortgagor found himeeif minva the propery and sili owing practically the ful: antount of his original Indebtedness {Bachrach Motors Co. v. Kian, GR No, 42256, April 26, 1938). 2. In caso thord is an acidittonal security other than the chattal morigage, 0.9. real property mortage or chattel mortgage not covered by the Recto Law 2. Foreclosure of addlticnal security Joes NOT bar recovery of deficiency because the sallermorgagee is in effect availing (of the reinady’ of exacting fulfilment ot the obligation rathar than foreclosure of morgage (Reviewor on Corsmercial Luv, Sundiang end Aquino, 200631) b. 1 orecisure on the ‘main chate! mortgage covered by the Recto Law PROHIBS foreclosure on the additional security even if provided by a thied:party (Orvz v. Filpinas favestmont, GR No, L-24772, May 27, 1963: Pascual v, Unlversal Motors, GR No. L-27#62, November 20, 1974). pa ce an as Seon DoW Gee & iva = yjrsele or Uifegaymients en's but fder’s rignt 10 ‘default in case o* a aoan, Beds Lollegy of Law RIGHTS OF A BUYER IN CASE OF DEFAULT OF PAYMENT. OF SUCCEEDING INSTALLMENTS: A. WHERE BUYEIt HAS PAID AT LEAST 2 YEARS OF INE“ALLMENT 1. To pay, wiliout addiional interns, the unpaid insta‘ments due within the total grace peloil’sarncd by him fixed at the Fale of 1 maith grace partod for avary year of instetiment payments mac. ‘= This right shal be oxarcised ONLY once In every 8 yuars of tha iia of thn ccontrrct and ity extensions, h any. 2, the contrast In-canestie, the soler shall refund to thu buyer the cash eurrender value of the payments on the property equivalant t2 80% of the total payinents made and, #fier 9 years of installments, 2n scdilone! BY, every year bul NOT to ‘excead YO% ofthe total paymenis made + Actual qinsoltation of contract shail take place, a, AFTER 30 days from receipt by ‘uyer of the oticn af canzeltation OR the dumand fos rencission of the contract by a notarlal act AND. b, upon FULL payment of ine cash surrender value ta the buyer. 3. To sell his right oF to assign tie same or {o relnetate the contract by updating the account ducing the grace period ard before actus: cancellation af the contiact (Sec. 5), 4. To pay in e:ivance any unpaid installment anytime witiout interest and (0 in.ve such {ful paymant of the purchase price annotated 12 the cortificats of tile covering tie property (Sea. 6). Note: Dar, payments, deposits or options on ihe contract shall be Includnd in the comei.tation vf the total number of Installmer.t paymunts made, 8. WHERE BUYER HAS PAID LESS THAN 2 YEARS OF INSTALLMENTS To pay, «ttheut additional Interest, the dnpeid insaitmante dua satin @ grace period of AO days from the date the inetatimentbeceme duo. +H buyet fulla to pay the instatinients due st the explestion of the grace period, the seller may cancel the contract AFTER 30 days Irom roceipt by tha buyer of the aatice of cancellation or the demand. for MEMORY Alb IN COMIMERCUM. LAW] 45 resciyston of tho contract oy @ rolaral act ‘To sell his right oF to essign the sama ot to reinstate tho contract by updating the account during the “grace period and bofora actual esncaliation of the contmnct (Soe. 8); 3, To pay In edve.ice any Unpaid Installment anytime without inlerast and to have such fully payment of the purchase priew annotated In tne coriiicate of thin covering the property (Sac. 6. Note: Any stipulation in any eontrnct contrary to provisions of RIBPA abril be NULL and VOID. JUBIOIAL FORECLOSURE'OF REAL! con ‘ Hf En aoe PURPOSE: To regulate, the sale of property under special powers inserted In or annexed to a reat exial morigage (REM), and redemption thereat. APPLICABILITY: 1 Ife special pewer to axtraludiclaly foreciose the mortgage is Ingorted or aiteshed to REM contract, Act Na. 3136 applies. {fthe REM contract Is silant es to the manner af forectosing the mortgage, Rule 68 of Rules of Court appiies. REAL ESTATE MORTGAGE ‘A contract whereby the debtor securas to the Creditor the fullilment of a principal obligation ‘specially subjecting to such securlty immovable property or real rights, over Imn.ovable proprity “nen a % jal Cort baw a54g 12009 CENTRALIZED DAR OPERATIONS PROCEDURE | FOR EXTRAJUDICIAL, FORECLOSURE SALE OF REM 1 7 Filing of ° application. for extrajudicial forecionura with the Executive Judge through the Clerk of Court who Is also the Ex-officio Sherif (A.M, No, 99-10-05-00). * Fling foes shall be pald to the clerk of ‘cour, who stall in turn Issue a certificate of payment and an officiel recefpt. ‘12 locaed in ing {ce shall 36 sifferent are collected. * Application shall be raffled among all sheriffs. Venuo: place wherw sach of the inortgaged property is locates, Il cannot be helt outside te oroviace where the properly is slivated unless alipulated, Should a place witnin the province be a subject of alipilation, the sele shall be held al the stiptlated place OF in tha municipal building of the municipality where the Property cr pait thereof is situal sd (See. 2 Act 3138). I ths stipulation of ine parties as to venue does NOY contain: “restricive word: ‘indicating exclusivity of venue, the stipulated place Is considered only as an ‘adathional, not a limiting venue (Lengraan V UCP6, GR No, L-199437, Decomber 8 2000), Publication and Posting of Notice ‘+ Notice shail be glven by POSTING notves cf sale fer NOT less than 20 days in at feast 3 putile laces of the municipality or ely whore ploporty Is: situated (Shortt's ‘Office, Assossor's Office, Register of Devds). If the property is worth more, than. 400.00, such “riolice shai also be PUBLISHED once a woek for ot least 3 consecutive. wooks Ina newspaper of general circulation in tha “cly of municlpallty (See. 3, Act 3138}. The Clerk ‘of Geust must tee (0 I that there has Been, mortgage wae net violated or the sala was not mads in accordance with Act 3136. if the peilien is mmerrrigus, the bend shall be disposed of in tivior'of the deter Either jorty may appeal tre order of the. judge in accordance wh PD 1628 but the orter of possession shel continue in effect during the pendency of the spveat (Sec. 0) 2. Alter the lepse /f radumption peri + Morigagce it divested of hie rights to the reortgages property anc! the vendes's Tight’ of igssession of tie froparty becomns ‘tnsl, Consolidation of tio becomes & mailer of right on the:part of purehaser and the Issuance of cerificate Br thle in his taver becomes minateral pan the Ragistry of Deeds. + To obtain pyissnsston, the purcnesor may either ask fat a.writ cf possession oF bring an iidepondont aciion such 98 Suil for ejdztment (Vuveloss v. CA, GR ‘No, L-124272, Docembor 10, 1996). RIVA TARR Cs Eee PURPOSE: Ls) 4, To effect aa exiitahie disfbutton of ussets of i an innivant debtor among bis creditors |}. 2, "Ta benoft the individual debtor In discharging him froin his iabiitles and enobiing bm to Start anew with the preperty set apart to him i ae chempt (Weraza \, Alforque, GR No. L- : 27944, May 21, 1974). \ the Insolvency eve to apply there must be proceedings in inst lvency in the proper RTC. The law does not apply’ to all Insolvent debtors. CONCERTS OF INSOLVENCY |, 1. Aetate of natty of a person to pay his debts at maturity (ooulty tos). 2 relative c.rAdition of a delitor's assets and faviltine thet the former, if all made immadiately £\allable, would not be sufficient to discharge {13 la'tor ;balance sheet tost). 8, The insulfclercy of the ontire property and apects of an bidividuat to pay his dbts, REMEDIES OF AN INSOLVENT DEBTOR UNDER THE INSCILVENCY LAW (SD) nthe eaurt to Suepend payments of 0 _____-MEMORY AID IN COMMENCIAL LAW. 49. 2. To be Bisctarged from his deble and liabitties by voluntary . of involuntary Insolvency precead'nigs (See. 4}. The dobor haa miov gh assels to mect_ his “ables, but cannot 7 Nay be iniiated bY Credtars or olher parses fn whieh | case Is Tvoluntary of by tne ddobior himealf in voluntary To payment of éebis In order fo ‘grovice the debior a fiven peried to. cohort Fome of bis proportion to all debts, whethor duo or to. secure tlscharpe (vom ‘amount of ass not ‘atfecied, only the te for them is The rectors rocalve loss then whet dey tre ened to, oF some creditors may not even ale ern mA CT ne nurbor of ewe | oct, 1; Mowat Is immatera: tenet realied A. SUSPENSION OF PAYMENTS A remedy yaliable to the deblor who, ” possessing sufficient property to covor ait his Betis forseses the Impossibility of meting thom when thay rsspactively fall due, and, therefor al to pay his0.12009 CENTRALIZED DAR OPERATIONS Who may filo the potion: 4. indlviduat dentor; or 2. Corporation, Partnersinip, or Association dabtor (CP.A) a naa a Y Linco RR BAA ‘Act No. 1868, a meat 0 PO 972-8 and RA, 739 RAT CS A a RIC(RA.6709 PRS FP Ht Dobtor "es auticant [a.CLPA. wich possesses property but forosges | witiownt property to cover the mpossibity "ot | ais debts but frerees the meeting tnam. wan | impessiily of meeting thay respectively tal | thom when thoy ue ‘eepectvely fat da; OR EA ‘has no sulfelent tsets to covers obiies bit is under management of 4 Rehiabiliation Racaiver or tanagument Comite | 1900 88, 2.0.902-4) Steps In Suspension of Paymonts: (FIF- MAD.) . 1. Bling of the pettian by the debtor (See, ai +The pettion Isto be fed by a dettor (a) possessing sufficient property to cover all his debts, (b) foreseeing the impossibility of moeting thont winan they respectively fall due, and (6) pottoning that he be declared In the state of suspension of payments + tmust include en annex (a) a statement of assets end iiaditios, (0) ¢ proposed Sarvement with crectors, (c) & veriied inventory of unsets with ts vaiue, fcstion and encumbrances, and (@) @ verlied ‘nd dataliod schedule of setts, amounts and due devas with lst of crediors (See ‘earl Etfact® of fling the petition: (RPE) a, No Disposition in any miarner of his fonarty may Be mnede by the pattonst axqupt Insofar AB concerns ihe ordinary operations of conimerce or of Industry in ‘which he Is en id (Seo, 3 par, 2); No Baymont may ba niage by pettioner sexcopt in tha ordinary course. of his ‘busliieas or liduetry; * Upon: ruquast to tha court, all pending Execulore against the debtor choll be 1 “fuspended “xcept “execution gait Property atpeciniy mergaged (Sec 6) Noto: ‘the rulo ts different with respect to socured crediiure (le., mortjagees) of ‘omperutios undar PO No, 902-4 A elaine Ban Beds Colleye of Zan fare row suspended Including the claims of cured creditors, Thus even foreciosires «£0 suspanded (81 v. CA, GR_ No, 97178, January 10, 1964) 2, Issuance by the court of an order calling 2 ‘meeting of creditors (Sec. 3); + The court order is Issued upon the filng of the petition and is for the purpose of calling’ a meeting of ‘rogitors who are in the schedulo; + Creditors who are NOT affocted by ‘rear of suspension of payments: a, Those haying claims for personal labor, maintenance, expenses of {he last iliness end funeral of wite (oF child of debtor, incurred during ‘the 60 days immedlstely preceding {he fling of the petition; and b, “These having legal or covtractual mortgages (Seo. 8). ‘+ Only cradtors included in the schedule filed by tha debtor shall be cited to appear afd take par in the meeting of eradiio-s, They ‘are required to ring Proof of thelr respective clainis, ‘otherwise, they are not ellowed 19 Paricloate (Sae.s). 3. Publication of the order end service of ‘surnmons (Soe, 4) 4. Meeting of creditors for the consiveralion Cf the ceblor's proposition; » To hold a valid meeting, the creditors representing at least 3/5 of the liabiities of the debtor must be present (Soe. 8). 5 ree he creditors of the debtor's a Und OLIN GE GRE STAM “and represent at least meaning P8OOk, coBean Bet College o" Raby 4, Qblections any, to the decision whic! Trust be mide win 1€ days following the meetin (Sou. 11); and + Ground: for abjaction (DCC): 8. Dolecte in the call for tho meeing,.in the holding thereof, and ln the deliberations which pre}diced the rights of the creditors; b. Frauduloht Gennivance between one oF mote ctediiors ond the debi to. vate in favor of the proaased ayreernert; and ¢. Fraudulent Conveyance of claims for ine puroone of obteniig a majesty (Seo. 12). Issuance 0! ceurt order dleacting that the agreement 24 cariied ut In case the decision Is declared valid, or when no objection ti sald derision has beon presented. When petidicn for wusponsion “of payments doomdd REJECTED (81. 19): 4. When the number of creditors representing at least three-fiths of the fablities dos NOT attend (Sec. 6 and 10); or 2. Wien the two majorities require are net Infavor cftne proposes agreement, © If the deciston of the meeting be tuntavorable inthe proposed agreement cr If na dec sion is had ‘n defauit of suck nuinber oF of such ajoriles, the proceeding shall be terminated wihcut Taonurse Faust case, he partes | Goa Sol be at Toc te ene Ee signie ws eerenpend ren (307 11), SUSPENSION OF |*AYMENT UNDER: NS ry REAL plcsich a Ree io aliar a fhieas er Gia azlan MWY © CPA | ALN TN ‘Suspensive affect co. unsecured oredtore ONLY, and net secured crediices Suspensive oflect covers fecursd and unecured rualtora ‘Rosent aly agrrenvont among crediisra, ‘automatic etey fer 3 monthe ‘Agresment fy subject (2 | No need to obtain approval guatiyng majeny wotey | eheredtors MEMORY AID IN COMMERCIAL LAW] 51 B. INSOLVENGY PROCEEDINGS 1, Voluntary Involvency ~ the state of a debtor who, having debts _excoading 7,000.06, cannot dlacharge all of ther: ‘wit all of hie existing aveets and who 23 fa consequence voluntarily goes to court to have himself dociared as an Insolvent so that his ansets may bé, equitably distributed among his creditors. 2. Involuntary Insolvency ~ tha state to ‘which a debtor may be piacod by the patillon of 8 or more ereditars, none of Whom became ereditor by asalgnment ‘within 30 daye prior tu fling of petiion and whose aggregate credit Is not less than P1,000.00, because “of hit commission of ‘one ,or more acte of Insolvcney ¢et forth in See, 20. ONE ns PAB R SLR CIR ys ARUN UE RATS One creditor Is suelant LEAL Ee No requrement crodhers a. Residents: of Phiippines: be thelr erode or demand ust have accrued In the Philippines; and must not have boen Tesided 8 mos, prior (9 | residenco or has aslo piace of businuss eigisicaion Aoatingy aT